California Transparency in Supply Chain Act of 2010

UNDER THE CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT OF 2010

In accordance with the California Transparency in Supply Chains Act of 2010 (SB 657), effective as of January 1, 2012, Nautica makes the following disclosure of its efforts to eradicate slavery and human trafficking from its direct supply chain for its goods offered for sale:

1. ENGAGES IN VERIFICATION OF PRODUCT SUPPLY CHAINS TO EVALUATE AND ADDRESS RISKS OF HUMAN TRAFFICKING AND SLAVERY. Nautica will not do business with a vendor or manufacturer that is unable to comply with Nautica’s Code of Conduct and Guidelines. The Code of Conduct requires, among other things, that vendors and manufacturers not use “any form of forced labor including, but not limited to, slave labor, prison labor, indentured labor, bonded labor or labor derived from human trafficking, or permit their suppliers to do so”. As part of the factory evaluation process, all factories are subject to a third-party social compliance audit. Nautica’s internal Social Compliance Manager evaluates third-party audits to ensure compliance with Nautica’s Code of Conduct.

2. CONDUCTS AUDITS OF SUPPLIERS TO EVALUATE SUPPLIER COMPLIANCE WITH COMPANY STANDARDS FOR TRAFFICKING AND SLAVERY IN SUPPLY CHAINS.
Nautica has engaged Intertek to conduct third-party social compliance audits of factories manufacturing Nautica products to ensure compliance with Nautica’s Code of Conduct and Guidelines. The third-party social compliance audit includes questions which specifically address slavery and human trafficking. The factory is given an audit window of two-weeks and the audit can occur anytime within that two-week period.

3. REQUIRES DIRECT SUPPLIERS TO CERTIFY THAT MATERIALS INCORPORATED INTO THE PRODUCT COMPLY WITH THE LAWS REGARDING SLAVERY AND HUMAN TRAFFICKING OF THE COUNTRY OR COUNTRIES IN WHICH THEY ARE DOING BUSINESS. Nautica’s Code of Conduct and Guidelines are part of Nautica’s Master Sourcing Agreement (“MSA”). All Nautica vendors and manufacturers sign the MSA which includes a representation that the vendors and their factories will comply with all applicable laws and Nautica’s Code of Conduct, including, but not limited to, not using any form of forced labor including, but not limited to, slave labor, prison labor, indentured labor, bonded labor or labor derived from human trafficking, or permit their suppliers to do so. The Code of Conduct must also be displayed in the local language of each factory producing Nautica products.

4. MAINTAINS INTERNAL ACCOUNTABILITY STANDARDS AND PROCEDURES FOR EMPLOYEES OR CONTRACTORS FAILING TO MEET COMPANY STANDARDS REGARDING SLAVERY AND TRAFFICKING. Nautica’s Social Compliance Manager reviews all Nautica third-party audits. In the event a factory receives a non-passing audit score for a finding of “forced labor” which includes slavery and human trafficking, Nautica’s appropriate executive team members are alerted. The factory is required to take immediate action and provide a corrective action plan. The corrective action plan must include: (i) the immediate action that will be taken, (ii) persons responsible for action, (iii) the date of completion and (iv) the root cause of the issue and change in system that will prevent reoccurrence. The factory will also be required to undergo a reaudit. If the reaudit reveals continued noncompliance, production will be removed from the factory.

5. PROVIDES COMPANY EMPLOYEES AND MANAGEMENT, WHO HAVE DIRECT RESPONSIBILITY FOR SUPPLY CHAIN MANAGEMENT, TRAINING ON HUMAN TRAFFICKING AND SLAVERY, PARTICULARLY WITH RESPECT TO MITIGATING RISKS WITHIN THE SUPPLY CHAINS OF PRODUCTS. Nautica employees and management that are directly involved in Nautica’s social compliance must be familiar with Nautica’s Code of Conduct and receive regular updates on applicable laws.