Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Kindercare Annual Report 75 376K
2: EX-10.CC FY 2005 Management Bonus Plan Letter 3± 13K
3: EX-10.X Amendment No. 3 to Nqdcp 1 8K
4: EX-14.A Code of Business Conduct 17 79K
5: EX-21 Kindercare Subsidiaries 1 7K
7: EX-23 Consent of Deloitte & Touche 1 6K
6: EX-31.A Certification per Sarbanes-Oxley Act (Section 302) 2± 10K
8: EX-31.B Certification per Sarbanes-Oxley Act (Section 302) 2± 10K
9: EX-32.A Certification per Sarbanes-Oxley Act (Section 906) 1 7K
10: EX-32.B Certification per Sarbanes-Oxley Act (Section 906) 1 7K
EX-14.A — Code of Business Conduct
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KINDERCARE LEARNING CENTERS, INC.1
CODE OF BUSINESS CONDUCT
Table of Contents
Letter from the Chairman and Chief Executive Officer of KinderCare 1
Acknowledgment Process 2
Purpose of our Code of Business Conduct 2
Summary of Responsibilities 2
Employee Responsibilities 2
Manager Responsibility 3
Responsibility for Guidance and Interpretation of this Code 3
Responsibility to Investigate Reports of Misconduct 3
Corrective Action 3
Responsibility for Monitoring 3
Discipline 4
Regulatory Compliance 4
Mandatory Reporting of Child Abuse and Neglect 4
Workplace Conduct and Employment Practices - You and Your Job at KinderCare 4
Equal Employment Opportunity 4
Harassment and Other Prohibited Conduct in the Work Environment 5
Dealing with Customers, Suppliers and Others 5
Safety and Health; Workplace Violence 5
Personal or Non-Business Related Uses of Company Resources 5
Relationships with Suppliers, Subcontractors and Others 6
Doing Business with the Government 6
Relationships with Customers 7
Gifts and Business Courtesies 7
Foreign Corrupt Practices Act 8
Business Information and Systems 8
Financial Controls and Records 8
Disclosure of Confidential Company Information 9
Direct Requests for Information 10
Accuracy, Retention and Disposal of Documents and Records 10
Electronic Media 10
Copyrights 11
Political Activities and Contributions 11
Federal Elections Contributions 11
State and Local Election Contributions 11
Employees Serving in Public Office 11
Unfair Competition 12
Gathering Information About Competitors 12
Marketing and Advertising 13
Environmental Compliance 13
Conflicts of Interest 13
Outside Employment 13
Interest in Competitors; Other Business Interests 13
Prohibitions on Personal Loans to Directors and Executive Officers 14
Failure to Comply; Waiver 14
Employee Acknowledgment 15
Dear KinderCare, Mulberry and KC Distance Learning Employees:
KinderCare Learning Centers, Inc. is the largest for-profit provider of
early childhood education and care in the United States and has a reputation for
providing uncompromisingly high quality care. KinderCare has achieved this
position in part by establishing a reputation for high ethical standards in the
conduct of its business. It is the long-standing policy of KinderCare to comply
with all laws and governmental rules and regulations affecting the company and
its employees and to consistently strive to achieve for itself and its employees
the highest possible standard in business and personal ethics. These principles
also apply to all employees of KinderCare's subsidiary companies, Mulberry Child
Care Centers, Inc. and KC Distance Learning, Inc.
This Code of Business Conduct is intended to help each of you act legally
and ethically in the performance of your work every day and to help KinderCare,
Mulberry, KC Distance Learning and their employees maintain the respect of
customers, vendors, government regulators, other employees and the general
public. Simply stated, acting ethically means being fair and honest and acting
in accordance with the law. This Code of Business Conduct contains information
to help you resolve any questions you may have about appropriate conduct in the
workplace. It is important that you review it carefully and understand it so
that you can use it as a tool to help you make the right choices every day.
If you have questions regarding this Code of Business Conduct or encounter
any situation that you believe violates provisions of this Code of Business
Conduct, you should immediately consult your supervisor, Human Resources, the
KinderCare Corporate Ethics Director (who is also the Director of Internal
Audit), the KinderCare Legal Department or the KinderCare Internal Audit
Department. Reports may be submitted confidentially and anonymously. You may
also call the KinderCare Human Resources Hotline at 1-888-525-2472 (or Extension
2602 from within the KinderCare Corporate office) and follow the prompts until
you reach the Ethics Hotline. You have my personal assurance that there will be
no retribution for asking questions or raising concerns about this Code of
Business Conduct or for reporting conduct that you reasonably believe is
improper.
KinderCare, Mulberry and KC Distance Learning are committed to and expect
all of their employees to adhere to the principles set forth in this Code of
Business Conduct. However, this Code of Business Conduct cannot address every
circumstance that may present an ethical or legal dilemma and cannot substitute
for our own internal sense of fairness, honesty and integrity. If you encounter
a situation or are considering an action which appears to be technically within
the guidelines of this Code of Business Conduct, but you are concerned that the
action doesn't feel right, please discuss the situation with one of the persons
or departments identified above.
Our decision to hire you means that we have placed our trust in you and
view you as a valuable member of our organization. We ask you to assist us in
supporting the values set forth in this Code so that we can all continue to take
pride in our work and be regarded highly by our fellow employees and those
outside the company who are so important to our success.
Sincerely,
David J. Johnson, Chairman and Chief Executive Officer
KinderCare Learning Centers, Inc.
1
ACKNOWLEDGMENT PROCESS
All employees of KinderCare, Mulberry and KC Distance Learning are required to
sign an acknowledgment confirming that they have received this Code and
understand that it represents mandatory policies of KinderCare and its
subsidiaries. New employees will be required to sign the acknowledgment as a
condition of employment and current employees will be required to sign the
acknowledgment as a condition of continued employment. Employees will also be
required to sign such an acknowledgment on an annual basis.
PURPOSE OF OUR CODE OF BUSINESS CONDUCT
This Code of Business Conduct applies to all officers and other employees of
KinderCare, Mulberry and KC Distance Learning and is intended to assist us in
carrying out our daily activities within appropriate ethical and legal
standards. These obligations are mandatory and apply to our relationships with
customers, vendors, suppliers, government agencies, one another and with anyone
else with whom we come in contact in performing our work each day. This Code is
an important part of KinderCare's overall Corporate Compliance Program, which
applies to KinderCare and all subsidiaries, and has been developed to ensure
that we meet our ethical standards and comply with applicable laws and
regulations. References to KinderCare or the Company in this Code include
Mulberry and KC Distance Learning, as applicable.
This Code is intended to be comprehensive and easily understood. However,
situations may arise that do not appear to be covered or in which this Code is
unclear as to the appropriate course of action to be taken. Some of the subjects
addressed by this Code are very complex and may require persons with special
expertise to advise us on whether a particular course of action is permitted
under the law. Accordingly, we encourage you to seek such guidance whenever you
have a question about whether a certain action is legal or ethical.
SUMMARY OF RESPONSIBILITIES
The key to ethical business conduct is to make sure that you and those working
with you act honestly and fairly, do not violate laws or company policies, and
that you do not compromise yourself or the company by making decisions that will
cause others to question your honesty or integrity. Although each of KinderCare,
Mulberry and KC Distance Learning has its own policies and procedures, which
differ in some respects, the following principles represent consistent elements
of the policies of all three companies.
Employee Responsibilities
Company policies and procedures give you specific responsibilities. However,
there are also basic obligations common to all employees:
o Learn the details of policies applicable to your work. You should have a
basic understanding of issues covered by each policy and a more detailed
understanding of policies that apply to your job.
o Seek assistance from your supervisor, Human Resources, the KinderCare
Corporate Ethics Director, the KinderCare Legal Department or the
KinderCare Internal Audit Department when you have questions about the
specific application or meaning of policies.
o Promptly report any concerns that you may have about possible violations or
requests to violate a policy. Your immediate supervisor is the first person
to contact with your concerns. However, if you feel that you cannot report
your concerns to that individual, you may report your concerns to your
direct supervisor's manager or another manager in the company, Human
Resources, the KinderCare Corporate Ethics Director, the KinderCare Legal
Department or the KinderCare Internal Audit Department. If you feel you do
not receive an adequate response to your concern, you should report the
matter to one of the other designated persons or departments.
You may report your concerns on an anonymous and confidential basis to the
KinderCare Corporate Ethics Director by using the Ethics Hotline (dial
1-888-525-2472 or Extension 2602 from within the KinderCare Corporate Office and
follow the prompts) which will allow you to reach a voice mailbox at any time.
The KinderCare Corporate
2
Ethics Director is KinderCare's Director of Internal Audit. If you prefer to
write, send a letter to: Corporate Ethics Director, KinderCare Learning Centers,
Inc., 650 NE Holladay, Suite 1400, Portland, OR 97232. All communications will
be kept highly confidential to the extent possible consistent with our need to
investigate the situation. You should understand that it may be necessary at
some point in certain types of investigations to reveal the identity of the
accuser. If you would like a response, please remember to indicate how you
prefer to be contacted.
No one's job or career will suffer merely as a result of raising an ethical
concern or questioning a company practice. However, an employee making
accusations of misconduct that he or she knows to be false will be subject to
discipline up to and including immediate termination.
Manager Responsibility
Managers have additional responsibilities. We expect our managers to set an
example for other employees and to ensure that those reporting to them have
sufficient information to comply with laws and policies that apply to them. To
achieve this, managers must: (a) lead by example; (b) for each policy, identify
those employees whose activities may involve issues covered by that policy; (c)
with the assistance of Human Resources, the KinderCare Legal Department and the
KinderCare Internal Audit Department, provide education, training and counseling
to promote policy compliance; (d) create a culture which promotes compliance and
encourages employees to raise their policy questions and concerns; (e) promptly
report possible policy violations; (f) take prompt remedial action when
required; and (g) gather feedback from employees and others to evaluate and
continually improve policy compliance.
Responsibility for Guidance and Interpretation of this Code
This Code of Business Conduct, and other sources of information distributed by
KinderCare, Mulberry or KC Distance Learning regarding conduct in specific
situations (including employee manuals and policies and procedures manuals), do
not cover all laws, regulations and rules or address every possible situation.
If you have a question or concern about a particular situation, you should seek
assistance from your supervisor, Human Resources, the KinderCare Corporate
Ethics Director, the KinderCare Legal Department or the KinderCare Internal
Audit Department.
Responsibility to Investigate Reports of Misconduct
KinderCare is committed to investigating all reported violations of this Code
promptly and confidentially to the extent possible. Appropriate personnel from
Human Resources, the KinderCare Legal Department or the KinderCare Internal
Audit Department will conduct or supervise the investigation, will coordinate
any findings with the KinderCare Corporate Ethics Director and will recommend
appropriate action. All employees are required to cooperate with such
investigation efforts.
Corrective Action
Where an internal investigation substantiates a reported violation of this Code,
it is company policy to initiate corrective action, including, as appropriate,
notifying the appropriate government agency, instituting appropriate
disciplinary action and implementing procedures to prevent similar violations
from occurring in the future.
Responsibility for Monitoring
KinderCare is committed to monitoring compliance with its policies and the laws
and regulations affecting its business, including the business of its
subsidiaries. Much of this monitoring effort is provided by the KinderCare
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Internal Audit Department and the KinderCare Legal Department, which routinely
conduct audits of issues that have regulatory or compliance implications.
DISCIPLINE
All violators of this Code will be subject to appropriate disciplinary action.
The form of discipline will depend on the nature, severity and frequency of the
violation and may result in any of the actions specified in the applicable
employee discipline policy, up to and including immediate termination of
employment. Actions taken by KinderCare, Mulberry or KC Distance Learning
pursuant to this Code or the applicable company policies relating to employee
discipline and terminations will not constitute a waiver of the company's right
to pursue appropriate legal action against the violator.
Adherence to and support of this Code and participation in related activities
and training will be considered in decisions regarding hiring, promotion and
compensation of all employees.
REGULATORY COMPLIANCE
KinderCare and its subsidiaries provide educational and childcare services in
many states. These services generally may only be provided pursuant to
applicable federal, state and local laws and regulations. Such laws and
regulations include subjects such as confidential reporting of suspected child
abuse or injury, licenses, permits, accreditation, recordkeeping, and access to
records as well as regulations relating to participation in government sponsored
reimbursement programs such as Child Care Assistance (CCA) and the Federal Food
Program.
KinderCare and its subsidiaries will comply with all applicable laws and
regulations. All employees must be knowledgeable about all laws and regulations
applicable to their job functions and should immediately report violations or
suspected violations in the manner discussed above under "Employee
Responsibility."
KinderCare and its subsidiaries will be forthright and courteous in responding
to requests for information from representatives of government authorities
(e.g., state licensing authorities) and will provide them with all information
to which they are entitled during an inspection.
During a government inspection or investigation, you must never conceal, destroy
or alter any documents, lie or make misleading statements to the government
representative, nor should you ever encourage anyone else to do so. If you
receive a request for information from an attorney, investigator or any law
enforcement officer and it concerns company business, you should refer the
request to the KinderCare Legal Department immediately.
MANDATORY REPORTING OF CHILD ABUSE AND NEGLECT
All states in which KinderCare and Mulberry operate child care centers have laws
requiring mandatory reporting of child abuse and neglect by employees of child
care providers. Although these laws vary from state to state, they typically
require any person who reasonably suspects that a child has been abused or
neglected to make a report to the appropriate regulatory agencies. KinderCare
and Mulberry also have policies and procedures in effect that require immediate
reporting of any such incident.
WORKPLACE CONDUCT AND EMPLOYMENT PRACTICES - YOU AND YOUR JOB
Equal Employment Opportunity
KinderCare and its subsidiaries are committed to providing an equal opportunity
work environment where everyone is treated with fairness, dignity and respect.
We will comply with all laws, regulations and policies related to
nondiscrimination in all of our personnel actions, including hiring, transfers,
terminations, evaluations, recruiting, compensation, discipline and promotion.
4
Harassment and Other Prohibited Conduct in the Work Environment
Employees should foster professionalism, cooperation and teamwork among
co-workers. Each employee of KinderCare, Mulberry and KC Distance Learning has
the right to work in an environment free of harassment. Among the types of
behavior that will not be tolerated are sexual advances, actions, comments, or
any other conduct in the workplace that creates, in the judgment of company
management, an intimidating or otherwise offensive environment. Similarly, the
use of racial or religious slurs, the ridicule of employees, or any other
remarks, jokes, false or misleading statements or conduct that encourages or
permits an offensive work environment will not be tolerated. Harassment of any
kind is strictly prohibited. Harassment of an employee by a customer or supplier
is also prohibited and should be brought to the attention of a manager. All
employee complaints of harassment will be investigated promptly.
Some of the other activities that are prohibited in the workplace are: (1)
threats or violence; (2) the possession of weapons of any type; and (3) the use,
sale, possession of or being under the influence of alcohol or drugs, except for
approved medical purposes. This list is not complete. Please see your company's
Employee Manual and, specifically, the company's policies regarding employee
discipline and terminations for other examples of prohibited conduct.
Dealing with Customers, Suppliers and Others
The policies regarding conduct and behavior that employees must adhere to when
dealing with each other in the workplace also apply when employees deal with
customers or suppliers of KinderCare or its subsidiaries and the public in
general. In dealing with customers, suppliers and other third parties, we do not
discriminate on the basis of race, sex, color, religion, disability or any other
classification prohibited by law. We must take care to treat everyone with
courtesy, respect and in a professional manner consistent with the provisions of
this Code and other policies of KinderCare and its subsidiaries.
Safety and Health; Workplace Violence
KinderCare, Mulberry and KC Distance Learning are committed to providing a safe
and healthy environment for their customers and employees. It is their policy to
comply with both the letter and the spirit of all federal, state and local
health and safety laws and regulations and to develop a cooperative attitude
with inspection and enforcement personnel. It is up to the company and employees
to maintain this environment. Employees should report to their supervisor
conditions which they believe to be unsafe or unhealthy. If an employee believes
that the situation is not being adequately addressed by the employee's
supervisor, the employee should report the situation directly to KinderCare's
Risk Management Department at 1-800-352-4466. Employees responsible for
recordkeeping should keep all documents and records required by applicable
health and safety laws and all employees should be truthful in reporting all
workplace accidents or incidents.
KinderCare, Mulberry and KC Distance Learning are also committed to promoting
and maintaining a work environment free from violence, threats of violence,
intimidation and/or aggressive behavior. All employees share responsibility for
ensuring the safety of our workplace. In any case where you perceive a risk of
bodily harm to any person, contact the local police immediately by dialing 911
and immediately alert the KinderCare Legal Department and KinderCare Risk
Management Department for guidance on other appropriate safety measures.
Personal or Non-Business Related Uses of KinderCare Resources
Each employee of KinderCare, Mulberry and KC Distance Learning has a
responsibility to preserve company assets, including time, materials, supplies,
equipment and information, for the company's benefit. As a general rule,
personal use of any company asset without the prior approval of your supervisor
is prohibited. Any community or charitable use of any company location
(including any KinderCare or Mulberry center) or other company resources must be
approved in advance by an officer of the company. Any use of company resources
for personal financial
5
gain unrelated to company business is strictly prohibited. KinderCare and
Mulberry have specific policies relating to personal use of company vans or
buses and other company-owned vehicles.
Relationships with Suppliers, Subcontractors and Others
It is the policy of KinderCare and its subsidiaries to manage its subcontractor
and supplier relationships in a fair and reasonable manner, consistent with all
applicable laws and regulations, and to award and accept business without
favoritism. Suppliers, which include all individuals or business organizations
that furnish or offer any products, rights or services to KinderCare and its
subsidiaries, are to be selected based upon objective criteria, including
quality, technical excellence, price, delivery, adherence to schedules, service,
reputation and maintenance of adequate resources. Purchasing decisions will be
made on the basis of the supplier's ability to meet our needs and not on the
basis of personal relationships or friendships. Employees with responsibility
for procurement of construction, renovation or other goods and services are
prohibited from using their positions to favor individuals or organizations
providing such goods or services to the company. Whenever practical, competitive
bids should be solicited for purchases of materials and services. Independence
of judgment is essential to maintain this policy.
No transaction between KinderCare or its subsidiaries and an outside business
that furnishes property, goods, or services to the company should be influenced
by an employee's personal interests or relationships. Therefore, you must avoid
any type of interest in or relationships with third parties that might influence
your actions in carrying out your responsibilities to the company, or that might
be reasonably misunderstood by others to do so. For example, you should not
accept gifts of goods from suppliers, and you should not ask suppliers to
provide products free of charge for use by the company except in accordance with
company policy on accepting gifts and business courtesies, as described below.
Under unusual circumstances, KinderCare or one of its subsidiaries may enter
into contracts with employees or employee-owned suppliers. Any such contract
must be pre-approved in writing by the KinderCare Legal Department. Copies of
the request to enter into such a contract and written approval must also be
furnished to the KinderCare Internal Audit Department.
Doing Business with the Government
Employees have special obligations when conducting business with federal, state,
or local governments or governmental agencies.
Employees must not disclose to anyone whether the company has or will be
submitting a proposal or bid for a government contract prior to the award of the
proposal or opening of the bid, subject only to such limited disclosure as may
be necessary to obtain quotations from potential subcontractors. Employees must
not disclose rates related to government business to anyone not directly
involved in the transaction. Employees must accurately and truthfully comply
with all reporting obligations associated with any government contracts.
In addition, federal law prohibits the offering, promising or giving of anything
of value to an employee, agent or official of the federal government if the gift
or gratuity is made with an intent to influence such individual in the
performance of an official act, or because of an official act performed or to be
performed by the public official. Most state and other government bodies and
foreign governments have similar policies. No gifts, entertainment, refreshment
or meals may be provided to a government employee, agent or official unless
expressly authorized by law or the agency's stated policy.
In dealing with government employees, agents or officials, it is always
important to avoid even the appearance of impropriety. Federal, state and local
public agencies have developed detailed guidelines on when a government
contractor may properly provide a public official with gifts, entertainment,
refreshments or meals. To avoid any appearance of impropriety, KinderCare
employees must obtain prior written approval from the KinderCare Corporate
Ethics Director before promising or making any gift to any government employee,
agent or official.
6
Relationships with Customers
The guidelines provided in this policy with respect to suppliers are also
applicable to major customers who either directly or through their agents and
representatives provide significant business opportunities to KinderCare or its
subsidiaries.
Gifts and Business Courtesies
Employees must exercise care in deciding to accept gifts or favors from persons
or firms with whom KinderCare maintains or may establish a business
relationship. Those employees who award contracts or influence the decision to
grant business or concessions must be particularly careful to avoid acceptance
of gifts or favors that create the appearance of favoritism or other conflict of
interest. Such gifts or favors may include, but are not limited to, meals,
drinks, entertainment, hospitality, recreation, transportation, discounts,
tickets, or passes.
Employees should follow these general rules:
o Reasonable and appropriate entertainment of or by selected business
associates (e.g. business meals) is generally permissible.
o Entertaining suppliers or customers at events that are sponsored by the
company is permissible.
o Subject to the requirement that you should not give or accept a gift of any
value when the gift could create an actual or apparent conflict of
interest, you may generally give or accept gifts of nominal value (under
$200) or of items that are promotional in nature and typically distributed
widely as a promotional item to others. Such gifts should be infrequent and
given or accepted in situations where such gifts are common business
practice (e.g. holiday gifts to or from vendors or celebration of a
business success). Giving of gifts by employees of KinderCare or its
subsidiaries at company expense also requires manager level approval.
o Giving of gifts by employees of KinderCare or its subsidiaries to employees
of KinderCare or its subsidiaries at company expense is prohibited. Any
exception must have approval of an officer of the Company.
o It is generally inappropriate for an employee to accept a gift from a
customer, except items of nominal value (e.g. handmade gifts from children
or parents).
o Attendance at supplier or customer-sponsored seminars (e.g. for educational
purposes) where attendance is offered to other companies on an equal basis
is generally permissible. Acceptance of other expense-paid trips by present
or potential suppliers, whether for business or pleasure, is generally not
permissible, unless approved as an exception in the manner provided below.
o Employees must not give gifts of any nature or value to government
employees in connection with government business. Gifts include such things
as meals, entertainment, transportation or discounts. Specifically, you
should not (i) offer employment or business opportunities which could
personally benefit government officials; (ii) offer or provide gratuities
or gifts in connection with government contract activity, or (iii) solicit
or obtain confidential information concerning the selection process for
government business. There are no exceptions to this policy.
o No Employee may give or accept, even indirectly, bribes, "kickbacks", loans
or money. There are no exceptions to this policy.
Exceptions to the foregoing rules (other than those relating to government
business, employees or bribes, kickbacks, loans or money) can be approved by the
appropriate Vice President to whom the employee reports or, if the recipient is
a Vice President level employee, by the Chief Executive Officer of KinderCare.
EMPLOYEES WHO ARE OFFERED A PROHIBITED GIFT MUST DECLINE THE OFFERED GIFT AND
IMMEDIATELY REPORT SUCH AN OFFER TO THEIR SUPERVISOR OR THE KINDERCARE CORPORATE
ETHICS DIRECTOR.
7
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act and other laws prohibit the payment of any
money or anything of value to any foreign official, foreign political party or
party official, or candidate for political office for the purpose of obtaining,
retaining or directing of business.
BUSINESS INFORMATION AND SYSTEMS
Financial Controls and Records
Employees should record and report all information accurately and honestly. You
should seek payment from customers for all services provided in accordance with
rates established by the company for such services and promptly deposit all
funds received. Whether you are filling out a time sheet, recording a customer
payment, preparing a purchase order or reporting on the financial status of the
company, you are required to strictly follow the accounting, reporting and
control procedures the company has put in place.
KinderCare maintains its books and records in accordance with generally accepted
accounting principles and standards. KinderCare's books, records and accounts
must be created and maintained so that they at all times accurately, fairly and
in reasonable detail reflect all transactions involving the receipt and/or
disposition of company assets. The documentation evidencing each company
transaction shall accurately reflect the identity of the parties to the
transaction and the business purpose of the transaction. All transactions should
be classified as to the accounts or accounting periods to which they relate. No
entries may be made in KinderCare's books or records that intentionally conceal
or disguise the true nature of any KinderCare transaction. KinderCare policy
prohibits any employee from directly or indirectly falsifying or causing others
to falsify any company or client documentation. Under no circumstances shall any
asset of KinderCare be used for an unlawful or improper purpose.
The company is obligated to provide full, fair, accurate, timely and
understandable disclosure in periodic reports and documents required to be filed
by the company. It is the policy of the company to fully and fairly disclose the
financial condition of the company in compliance with all applicable accounting
principles, laws, rules and regulations.
The integrity of KinderCare's financial statements and internal controls is
vital to its success. Compliance with KinderCare's system of internal accounting
controls is required. No information should be concealed from internal or
independent auditors. It is important that financial statements and related
disclosures be free of material errors. KinderCare policy prohibits any employee
from knowingly making or causing others to make a materially misleading,
incomplete, or false statement to an accountant or an attorney in connection
with an audit or any filing with any governmental or regulatory entity (such as
the Securities and Exchange Commission). An employee must not omit or cause
others to omit any material fact that is necessary to prevent a statement made
in connection with any audit, filing, or examination of KinderCare's financial
statements from being misleading. Employees are prohibited from opening or
maintaining any undisclosed or unrecorded corporate account, fund, or asset or
any account with a misleading purpose.
The business of KinderCare and Mulberry involves reimbursement under government
programs (e.g. Child Care Assistance (CCA), Federal Food Program and Head Start)
which require the submission of certain reports and information to government
agencies or other third parties administering these programs in support of
reimbursement requests. We will take great care to assure that all billings to
such agencies or third parties are true and accurate and that they conform to
all pertinent federal and state laws and regulations. Any employee who knowingly
submits or causes to be submitted a claim for reimbursement which is false,
fictitious or fraudulent will be subject to immediate termination of employment
and prosecution to the fullest extent of the law. We will comply with all
federal and state laws and the requirements of any contracts to which we are a
party relating to participation in these programs and submission of requests for
reimbursement. These laws, regulations and contracts define what costs are
allowable and specify the appropriate method to claim reimbursement for the cost
of services provided to persons participating in the programs. Because these
laws and regulations and the requirements of specific contracts
8
can be complex, you should consult with the personnel in the KinderCare CCA,
Federal Food Program or Internal Audit Departments when you have questions about
submission of a reimbursement request.
During a government audit, KinderCare will be forthright and courteous in
responding to requests for information and will furnish all information to which
the auditors are legally entitled. However, if you receive notice of a
government audit, you should immediately notify the KinderCare Internal Audit
Department.
Disclosure of Confidential Company Information
General. Confidential information about company strategies and operations is a
valuable asset. Although you may use confidential information to perform your
job, it must not be shared with others outside of the company or your department
unless such disclosure has been approved by a company officer and the
individuals to whom the disclosure is made have a legitimate need to know this
information and have agreed to maintain its confidentiality. Confidential
information is information which is not available to the public at large, but
becomes available to you because you are an employee of KinderCare or one of its
subsidiaries. This information includes identifying information about our
customers; personal, confidential, business and medical information about our
customers; personal, confidential and medical information about employees; and
payroll, financial, accounting, personnel, marketing, legal and other
information about the finances and operations of our business.
It is very important that employees not disclose confidential information except
as may be specifically authorized by the company. You must provide adequate
safeguards to prevent the loss of such information. The obligation not to
disclose confidential information is in effect even though material may not be
specifically identified as private or confidential and the obligation continues
both during and after your employment with the company. The information should
be considered private unless it has been made public by authorized personnel of
the company. If there is any question, ask your supervisor or one of the other
persons identified above. These restrictions are not intended to restrict any
employee from disclosing information regarding terms or conditions of employment
that the employee has a right to disclose under applicable law.
Customer Information. Customers of KinderCare and its subsidiaries are also
entitled to expect appropriate confidentiality and respect for their privacy. We
collect information about children and parents in order to provide children with
our services. We realize the sensitive nature of this information and are
committed to maintaining its confidentiality. We do not release or discuss
customer-specific information with others unless it is necessary to serve the
customer or required by law. Customers should be able to expect that their
privacy will be protected and that customer-specific information will be
released only with consent of the customer or as otherwise required by law.
Inadvertent Disclosure. The unintentional disclosure of confidential information
can be just as harmful to the company as intentional disclosure. To avoid
unintentional disclosure, never discuss confidential information with any
unauthorized personnel. Furthermore, you should not discuss this information
even with authorized company employees if you are in the presence of others who
are not authorized - for example, in a public area such as a lobby, elevator or
airplane. This also applies to discussions with family members or with friends,
who might innocently or mistakenly pass the information on to others.
Use of Confidential Company Information. Confidential company information is not
to be used for an employee's personal gain regardless of the nature of the
information or the manner in which the information is acquired. A few examples
of prohibited uses of this information are: (a) selling confidential company
information including customer lists or vendor price lists; (b) knowingly using
a company business opportunity for personal gain; (c) using, disclosing, or
transmitting confidential company information in the course of outside
employment or employment by a different employer following employment with the
company; (d) using, disclosing or transmitting confidential company information
in connection with trading or dealing in stock, or other securities.
Inside Information and Securities Trading. In the course of your employment, you
may become aware of nonpublic information about KinderCare or a subsidiary
material to an investor's decision to buy or sell KinderCare's securities or the
securities of a subsidiary. Nonpublic, material information may include plans
for mergers, marketing strategies, financial results or other business dealings.
You may not discuss this information
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with anyone outside of the company. Within the company, you should discuss this
information on a strictly "need to know" basis only with other employees who
require the information to perform their jobs.
Securities laws and company policies prohibit individuals from trading in the
marketable securities of a publicly held organization or influencing others to
trade in such securities on the basis of nonpublic, material information. These
restrictions are meant to ensure that the general public has complete and timely
information on which to base investment decisions.
All employees are required to comply with the specific requirements of
KinderCare's Insider Trading Policy.
Direct Requests for Information
If someone outside the company asks you questions about KinderCare, Mulberry, KC
Distance Learning or their business activities, either directly or through
another person, do not attempt to answer them unless you are the person
specifically authorized to do so. All media inquiries must be referred to
KinderCare's Public Relations Department.
If you are not authorized to provide requested information, refer the person to
the appropriate source within the company. If you receive requests for financial
information about the company, you should refer them to KinderCare's Chief
Financial Officer. If you receive a request for information or a request to be
interviewed from an attorney, investigator, or any law enforcement officer, and
it concerns company business, you should immediately refer the request to the
KinderCare Legal Department. Similarly, unless you have been specifically
authorized to talk to reporters, or to anyone else writing about or otherwise
covering the company, direct the person to the Public Relations Department. If
you do not know where to direct a question, ask your immediate supervisor.
Accuracy, Retention and Disposal of Documents and Records
Each employee is responsible for the integrity and accuracy of company documents
and records. This is important not only to comply with regulatory and legal
requirements, but also to ensure that records are available to defend our
business practices and actions. No one may alter or falsify information on any
record or document. Business documents and records are retained in accordance
with the law and company records retention policies. Such documents include
paper documents such as letters and memoranda, computer-based information such
as e-mail or computer files on disk or tape, and any other medium that contains
information about the organization or its business activities. It is important
to retain and destroy records appropriately according to our policies. You must
not tamper with records, nor remove or destroy them prior to the date specified
in the applicable policy. If you have questions about the required retention
period of a document, please contact the Manager of Records Management in the
KinderCare Legal Department.
Electronic Media
All communication systems (including electronic mail, intranet, Internet access,
voice mail and fax transmission) are the property of the company and are to be
primarily used for business purposes. Very limited reasonable personal use of
such systems is permitted in accordance with the applicable company's Electronic
Communications and Technology Policy, but you should always assume that these
communications are not private. All employees should carefully review the
contents of the Electronic Communications and Technology Policy.
KinderCare and its subsidiaries reserves the right to periodically access,
monitor and disclose the contents of any information sent or received using any
company communication systems. Access and disclosure of individual employee
messages may only be done in accordance with the Electronic Communications and
Technology Policy and must be obtained by the Officer in charge of the
employee's department and the Senior Vice President of Human Resources.
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Copyrights
Both federal law and company policy require employees to respect the copyrights
of others and to honor our contractual commitments. This means that you are
prohibited from making any unauthorized copies of copyrighted materials. Only
company-owned or company-provided software may be installed on company
equipment. Employees may not copy any company-owned or company-provided
software, including copying software to install on other company-owned
equipment, except in accordance with the company's software policy. Unauthorized
or undocumented software may not be maintained on a hard disk or be otherwise
accessible for use by employees.
Willful infringement of a copyright may result in criminal penalties, and
willful violation of the terms of a software license may expose the company and
the individual to substantial damages.
If you have questions about whether copying of material is authorized, please
consult the KinderCare Legal Department.
POLITICAL ACTIVITIES AND CONTRIBUTIONS
Federal Elections Contributions
There is a complete and absolute legal prohibition against any corporation
making political contributions to any federal election campaign. No such
contribution, whether by cash, donation of property or services, the purchase of
tickets to fundraising events or otherwise, may be made by or in the name of the
company.
State and Local Election Contributions
State and local political contributions by the company may or may not be
prohibited. To ensure compliance with state and local laws and regulations,
political contributions made by or on behalf of the company must receive the
prior written approval of the Chief Executive Officer of KinderCare and the
KinderCare Corporate Ethics Director.
Employees Serving in Public Office
Employees who are active and interested in politics may consider accepting a
public position or running for office. KinderCare, Mulberry and KC Distance
Learning encourage such individual involvement in political activity. However,
an employee who becomes involved in such activity does so as an individual
citizen, not as a representative of the company, and must be aware of company
policy and public policy regarding conflicts of interest.
If you speak out on public issues, make sure that you do so in your individual
capacity and not as an employee. Do not give the appearance that you are
speaking or acting on the company's behalf. As soon as possible after deciding
to accept a public position or run for public office, the employee must inform
the KinderCare Corporate Ethics Director.
Generally, public officials may not act on matters in which they have a direct
or indirect personal interest. For example, as a public official, you may not be
able to act on a decision involving KinderCare or its subsidiaries. If you have
any questions or concerns, you should get advice from the civic organization's
lawyer and from KinderCare's Legal Department. If a potential conflict exists,
the KinderCare Legal Department will inform the employee of any action
considered necessary to avoid the conflict.
Employees who are seeking or acting in public office must not make use of
company materials or property and may not pursue these activities on company
time. This includes, but is not limited to, such things as company stationery,
copy machines, telephones and mailing services.
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UNFAIR COMPETITION
Antitrust and unfair trade practices laws are designed to promote fair
competition. Compliance with the antitrust and unfair trade practices laws is
both mandatory and consistent with the overall policy of KinderCare and its
subsidiaries to conduct its affairs honestly, directly and fairly.
A wide range of transactions or practices are prohibited under such laws. Among
other things, such laws prohibit: (a) agreements among competitors to fix
prices, allocate markets or types of customers, exclude certain types of
customers, eliminate competition by such means as agreeing with suppliers that
they will not sell to our competitors, or agreements that otherwise restrain
trade; and (b) methods of competition, such as false advertising and other
similar practices, designed to give the company an unfair advantage in the
marketplace.
The antitrust laws are criminal statutes and any violation can subject the
company and the employee engaging in the prohibited conduct to significant
fines, penalties, and civil or criminal liabilities. It is imperative that you
conduct yourself on behalf of the company in a manner consistent with these
laws.
The provisions of the antitrust statutes apply to both formal and informal
communications. Employees involved in trade association or other activities
which allow for less formal communication among competitors, customers or
suppliers must be especially alert to the requirements of the law.
In the absence of specific legal advice on a matter, adherence to the guidelines
set forth below will minimize the risk of an antitrust violation:
1. Do not discuss company prices with competitors.
2. Avoid any discussions with competitors about whether we will or will not
deal with any particular customer, bid on any particular sale, or similar
matters.
3. Avoid any discussion with competitors about where we will or will not
market or sell our services.
4. Do not encourage competitors to refuse to deal with any third party.
5. Do not disclose to competitors, at meetings or otherwise, information which
may be competitively sensitive.
6. If you are present when any discussion described above takes place, and you
are unable to prevent such a discussion, you should remove yourself from
the meeting and announce the reasons for your removal.
Interpretation of these laws and their application to a specific set of facts
often require highly specialized knowledge. If you are considering action you
believe may have antitrust implications, or if you identify a potential business
opportunity of benefit to the company but fear it may involve antitrust
violations, you must seek advice promptly from the KinderCare Legal Department.
There is no substitute for early consultation.
Gathering Information About Competitors
From time to time, we may need to gather information about our competitors'
rates for the purpose of analyzing what rates we must charge to be competitive.
Such efforts are permissible when we obtain the information through legal means
and where we do not attempt to agree on prices as part of the inquiry.
Do not ask our competitors about their prices under circumstances where the
competitor might interpret the request as an invitation to agree about what
prices should be charged to customers. Generally, this means the inquiry should
be anonymous. You should never knowingly discuss our prices with our
competitors. It is not unusual to obtain information about other organizations,
including our competitors, through legal and ethical means such as public
documents, public presentations, articles and other publicly available
information. However, it is not acceptable for you to obtain proprietary or
confidential information about a competitor through illegal or improper means.
It is also not acceptable to seek proprietary or confidential information when
doing so would require anyone to violate a contractual agreement, such as a
confidentiality agreement with a prior employer.
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Marketing and Advertising
KinderCare and its subsidiaries present only truthful, informative and
non-deceptive information in its marketing and advertising materials and
announcements.
ENVIRONMENTAL COMPLIANCE
It is the policy of KinderCare and its subsidiaries to fully comply with all
federal, state and local laws relating to the protection of the environment as
they relate to our business and to operate each of our facilities with the
necessary permits, approvals and controls. KinderCare and its subsidiaries will
employ proper procedures in the handling, use and storage of potentially
hazardous chemicals or materials.
All wastes which are generated must be stored, recycled or disposed of as
required by federal, state or local law and at state or federally approved
facilities which have also been approved by KinderCare. Employees seeking
guidance in this area should call the KinderCare Facilities Department or the
KinderCare Risk Management Department. Employees must immediately report to
their supervisor, the KinderCare Corporate Ethics Director or the KinderCare
Legal Department all circumstances in which they believe hazardous materials or
waste disposal have been improperly handled or where a potential violation of
law exists.
CONFLICTS OF INTEREST
A conflict of interest occurs when an individual's personal interest interferes
in any way - or even appears to interfere - with the interests of the company.
Employees should avoid any situation that does or may involve a conflict between
their personal interest and the interest of the company. Some examples of
potential conflicts of interest include: outside work that interferes with an
employee's performance at the company; financial investments that lessen an
employee's impartiality; acceptance of gifts that influence business decisions;
and doing business with companies owned by an employee or by family members.
Conflicts of interest also arise when an employee or officer or a member of his
or her family, receives improper personal benefits as a result of his or her
position in the company. Loans to, or guarantees of obligations of, such persons
are of special concern.
Outside Employment
Except as otherwise provided below, employment outside the company, whether
self-employment or employment by another, is acceptable, but must be considered
and treated as additional employment and must not interfere with the employee's
duties on behalf of the company. As it applies to employment, the primary
loyalty and interest of all employees must at all times remain with the company.
o Employees must not work in any outside business that might create a
conflict of interest with their responsibilities to the company, or that
might embarrass or discredit the company.
o Employees must not work in any outside business that conflicts with
scheduled hours, overtime hours when required, or the performance of
company assignments.
o Employees may not perform outside work or solicit such business on company
premises or while working on company time. Also, employees are not
permitted to use company equipment, materials or resources for any outside
work.
Interest in Competitors; Other Business Interests
Employees shall not have a direct or indirect ownership interest in any
privately held business that competes with KinderCare or its subsidiaries.
In addition, "key" employees, including Officers, Senior Directors, Directors,
Area Managers and Regional Directors of Operations, shall not have a direct or
indirect ownership or financial interest in any business, whether publicly or
privately held, if such ownership might affect their objectivity in carrying out
their responsibilities to the company, or might conflict with the best interest
of the company. A financial interest is improper if the combination
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of your job, the amount of your investment, and the particular company in which
you invested could, when viewed objectively by another person, influence your
actions as an employee of KinderCare or a subsidiary.
Prohibitions on Personal Loans to Directors and Executive Officers
The Sarbanes-Oxley Act of 2002 and KinderCare policy prohibit KinderCare from
extending any personal loan or making any other extension of credit to its
directors, executive officers and equivalent persons, guaranteeing any
indebtedness of its directors, executive officers or equivalent persons, or
arranging for any other party to make a loan or extend credit in any form to any
of KinderCare's directors, executive officers or equivalent persons.
Failure to Comply; Waiver
A failure by any employee to comply with the laws or regulations governing the
company's business, the Code of Business Conduct or any other company policy or
requirement may result in disciplinary action, up to and including immediate
termination of employment and, if warranted, may subject the employee to legal
proceedings.
Only the Board of Directors or a designated committee of the Board of Directors
may waive application of any part of this Code of Business Conduct to
KinderCare's principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. In
the event that a waiver is granted to any these persons, KinderCare will
promptly disclose the waiver. Only the KinderCare Corporate Ethics Director may
waive application of this Code of Business Conduct to any other employee of
KinderCare. A waiver will be granted only if a determination is made that the
waiver is appropriate and after implementation of any controls that are
necessary or appropriate to protect KinderCare.
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EMPLOYEE ACKNOWLEDGMENT
I acknowledge that I have read the Company's Code of Business Conduct and that I
agree to comply with the Code of Business Conduct.
_________________________________________________
EMPLOYEE NAME (PRINTED) DATE
_________________________________________________
EMPLOYEE SIGNATURE
_________________________________________________
CENTER/DEPARTMENT DATE
_________________________________________________
SUPERVISOR NAME (PRINTED) DATE
_________________________________________________
SUPERVISOR SIGNATURE DATE
_________________________________________________
INTREPRETED BY (PRINTED) DATE
_________________________________________________
INTREPRETER SIGNATURE (PRINTED) DATE
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KinderCare Learning Centers, Inc.
650 NE Holladay Street
Suite 1400
Portland, Oregon 97232
Telephone: 1.800.633.1488
Mulberry Child Care Centers, Inc.
650 NE Holladay Street
Suite 1400
Portland, Oregon 97232
Telephone: 1.866.750.0062
KC Distance Learning, Inc.
420 West 5th Street
Bloomsburg, Pennsylvania 17815
Telephone: 1.800.255.4937
Human Resources Hotline: 1.888.525.2472
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