Vendors

Sears Hometown and Outlet Vendor Guidelines

Code of Vendor Conduct (April 22, 2015)

I. Introduction
Sears Hometown and Outlet Stores, Inc. and its subsidiaries (together “Sears Hometown”) are committed to conducting business in accordance with the highest ethical standards, a regard for human rights, and in compliance with all applicable laws. Sears Hometown expects the same commitments from each of its vendors and suppliers (“Vendors”) and expects its Vendors to demand similar standards in its entire supply chain including pre-assembly and production processes.

This Code of Vendor Conduct (“Code”) describes the minimum standards of conduct that Sears Hometown insists that its Vendors, regardless of their country of domicile or origin, comply with scrupulously and without exception as a condition to doing business with Sears Hometown. This Code is mandatory, and if a Vendor does not comply with it Sears Hometown may terminate immediately its business relationship with the Vendor and take all other actions that Sears Hometown deems appropriate under the circumstances. If this Code establishes a standard of legal conduct or business ethics that is higher than local legal or business-ethics requirements, this Code will always control and apply to Vendors that desire to do business with Sears Hometown. Each Vendor shall provide training about this Code to all of its employees who will conduct business with Sears Hometown.

When we refer to “Vendors” in this Code we mean each business enterprise, regardless of its form (such as a corporation or limited liability company, partnership, or sole proprietorship) that engages or participates, directly or indirectly, in the sale, consignment, or other provision of goods or services to Sears Hometown. The term “vendors” includes agents, subcontractors, and other third parties, and vendors cannot avoid the responsibilities and obligations imposed by this Code by using, or associating with, agents, subcontractors, or other third parties. When we refer to “applicable” law in this Code we mean the law, including regulations, judicial decrees, and other governmental actions that have the force of law, in effect at each location where a Vendor conducts operations with respect to, or that affect, the Vendor’s business with Sears Hometown.

II. Vendor Requirements
A. No Improper Influence. Vendors shall not attempt to influence a Sears Hometown associate, agent, or representative (each a “Sears Hometown Representative”) with respect to any business arrangement through bribery, kickbacks, favors, gifts, sporting or entertainment events, offers of future employment, or similar conduct. This prohibition means that Vendors shall not engage in an action if it is intended to improperly influence, or could create the appearance of improperly influencing, a Sears Hometown Representative. This prohibition extends to the relatives of a Sears Hometown Representative and to each other person with whom a Sears Hometown Representative has a significant personal relationship. Any Vendor’s cash payment, or the Vendor’s giving of a non-cash item with a value of $50 or more, to a Sears Hometown Representative for personal use will violate this prohibition.

B. No Conflicts of Interest. Vendors shall not enter into any relationship with a Sears Hometown Representative that creates, or reasonably could be expected to create, an actual or a potential conflict of interest for the Sears Hometown Representative. For purposes of this Code a conflict of interest arises, or reasonably could be expected to arise, when a material personal interest of the Sears Hometown Representative is inconsistent with, or adverse to, the Sears Hometown Representative’s responsibilities to Sears Hometown. Vendors shall not assign any employee, agent, or representative to conduct business with a Sears Hometown Representative if the assigned employee, agent, or representative was employed by Sears Hometown within the preceding twelve months.

C. No Unfair Business Practices. Vendors shall not engage in bid collusion or customer or market allocation with other Sears Hometown Vendors. Vendors shall comply with all applicable antitrust, trade-regulation, and competition laws.

D. No Unauthorized Activities. Vendors shall not engage in any activity on behalf of Sears Hometown, including without limitation projects, transactions, political contributions, charitable donations, lobbying, and appearances before government entities, officials, and representatives.

E. Confidentiality. Vendors may have access to Sears Hometown’s confidential (non-public) information, such as historical sales results, sales projections, customer information, and agreed pricing for merchandise or services offered or sold to Sears Hometown. Vendors shall hold this confidential information in the strictest confidence and shall not (except as required by law) disclose it to anyone without Sears Hometown’s approval and then only on a need-to-know basis. Sears Hometown retains exclusive ownership of its confidential information. Vendors shall not buy or sell Sears Hometown’s equity securities based on, or otherwise take advantage of, material non-public information relating to Sears Hometown or its businesses.

F. Sears Hometown Code of Conduct. Vendors shall familiarize themselves with, and support, the Sears Hometown Code of Conduct (Click Here) and the obligations and responsibilities of Sears Hometown’s associates under the Sears Hometown Code of Conduct. Vendors shall not take any action, or refrain from taking any action, that the Vendor reasonably could expect would result in, or would facilitate or assist the commission of, a violation by a Sears Hometown associate of the Sears Hometown Code of Conduct.

G. Other Compliance. Vendors shall comply with all other Sears Hometown policies, processes, and procedures applicable to Vendors. Vendors shall not attempt to subvert Sears Hometown’s procurement policies, processes, or procedures including without limitation by making unauthorized contact with Sears Hometown Representatives. Vendors shall comply with all other laws that may be applicable to business with Sears Hometown including without limitation the U.S. Foreign Corrupt Practices Act, UK Bribery Act 2010, or other applicable anticorruption law.

H. Global Compliance Program Requirements. While Sears Hometown recognizes that different cultural, legal and ethical systems exist in the countries which manufacture merchandise for Sears Hometown, these Global Compliance Program Requirements (in addition to those provided by Sears Hometown’s third party sourcing services provider) set forth certain basic and fundamental requirements that all domestic and international facilities must satisfy as a condition of doing business with us.

  1. Compliance with the Law. Vendors will only produce merchandise in facilities that Sears Hometown considers reputable and whose business and labor practices conform to the requirements of applicable law and our requirements. Where our requirements set a higher standard, it will prevail.
  2. Health and Safety. All production and residential facilities must be structurally safe, and factory conditions must be consistent with all applicable laws, regulations, and the Sears Hometown requirements.
  3. Fire Safety Risk. All production and residential facilities must take all possible precautions to reduce the risk of fire, and have adequate plans to protect the lives of the workers in the event of a fire. Facilities must adhere to all applicable fire safety laws and regulations in the counties where they operate, as well as the Sears Hometown requirements.
  4. Forced/Slave Labor, Human Trafficking. Vendors must not use human trafficking or forced / coerced labor, whether in the form of prison labor, indentured labor, or bonded labor. Overtime hours must be voluntary. Migrant workers should be provided with contracts, treatment, and wages that equal those of local workers. For purposes of this Code, human trafficking and slavery includes forced, bonded, indentured, involuntary convict or compulsory labor, by any of the following means:
    1. by means of force, threats of force, physical restraint, or threats of physical restraint to that person or another person;
    2. by means of serious harm or threats of serious harm to that person or another person;
    3. by means of the abuse or threatened abuse of law or legal process;
    4. by means of any scheme, plan, or pattern intended to cause the person to believe that, if that person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint; or,
    5. by means of acts involved in the recruitment, abduction, transport, harboring, transfer, sale or receipt of persons within national or across international borders, through force, coercion, fraud or deception, to place persons in situations of slavery or slavery-like conditions, forced labor or services such as domestic servitude, bonded sweatshop labor or other debt bondage.
  5. Child Labor. Vendors must comply with laws prohibiting illegal child labor, including compliance with all minimum age requirements as determined by applicable local laws and regulations and by not producing goods for Sears Hometown with:
    1. the sale and trafficking of children;
    2. debt bondage and serfdom;
    3. forced or compulsory labor;
    4. use, procuring, or offering of a child for illicit; or,
    5. work which is likely to harm the health or safety of children
  6. Materials. Materials incorporated into the products Vendors provide to Sears Hometown must comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business and not contain materials which would violate either applicable import or export laws.
  7. Harassment or Abuse. No worker shall be subject to any physical, sexual, psychological, or verbal harassment or abuse.
  8. Discrimination. Discrimination in employment, including recruitment, hiring, training, working conditions, job assignments, pay, benefits, promotions, discipline, termination, or retirement on the basis of any protected status is prohibited.
  9. Working Hours. Except in extraordinary business circumstances, workers shall not be required to work (inclusive of overtime) more than the legally prescribed limits. Production facilities shall comply with applicable laws that entitle workers to vacation time, leave periods and holidays.
  10. Wages and Benefits. Wages are essential for meeting the basic needs of workers. Workers will be compensated by wages, including overtime pay and benefits which satisfy all applicable laws and regulations.
  11. Freedom of Association. All workers must have the right to establish and join a legal organization of their own choosing, without being penalized for the non-violent exercise of these rights.
  12. Environmental Compliance. Adherence to all local laws protecting the environment is required. Factories must conduct business so as to minimize the impact on the environment, including reducing waste and maximizing recycling initiatives.
  13. Factory Security. Factories must implement minimum security criteria and best practices to help secure our supply chain from terrorist activity based on a set of recommendations developed as a result of the Customs-Trade Partnership Against Terrorism (C-TPAT) initiative with US importers.
  14. Audits. As a condition of becoming or remaining a Sears Hometown Vendor, Vendor further agrees to:
    1. Consent to due diligence, background checks and vetting as permitted by applicable law;
    2. Periodically evaluate, address and recertify this Code;
    3. Maintain accurate books and records regarding all transactions with and on behalf of Sears Hometown or with regard to its products and services;
    4. Permit Sears Hometown, or an independent third party, to conduct onsite audits of Vendor’s records, policies and facilities which audits may be announced or unannounced;
    5. Permit Sears Hometown, or an independent third party, access to Vendor’s employees for the purposes of interviewing them regarding compliance with the above standards;
    6. Promptly provide written disclosure to Sears Hometown if Vendor discovers that a prior certification is no longer accurate; and,
    7. Not retaliate against any person who in good faith reports or participates in any investigation into known or suspected improper Vendor or Sears Hometown behavior.

III. Reporting of Violations
It is Sears Hometown’s clear expectation that all Vendors shall inform their own employees of Vendors’ obligations of this Code, and that Vendors promptly will report to Sears Hometown any suspected violations of this Code. Vendors may do so by contacting Sears Hometown’s Chief Compliance Officer at 847-286-7795 or by anonymously contacting Sears Hometown’s Governance Hotline at 855-233-8091 or www.tnwgrc.com/shos.

IV. No Conferral of Rights
This Code does not confer, nor shall it be deemed to confer, any right on the part of third parties, including any third party beneficiary rights. For example, no employee of any Vendor shall have any rights against Sears Hometown by virtue of this Code, nor shall such employees have any rights to cause Sears Hometown to enforce any provision, the decisions with respect to any such action being reserved by Sears Hometown in its sole discretion.