bebe stores, inc.

INSIDER TRADING POLICY

I.              All Employees, Officers, Directors and their Family Members and Affiliates Are Subject to this Policy

                This Policy applies to all directors, officers, employees and consultants of the bebe stores, inc. (the “Company”) and entities (such as trusts, limited partnerships and corporations) over which such individuals have or share voting or investment control.  For the purposes of this Policy, officers, outside directors and consultants are included within the term “employee.”  This Policy also applies to any other persons whom the Company’s Insider Trading Compliance Committee may designate because they have access to material nonpublic information concerning the Company, as well as any person who receives material nonpublic information from any Company insider.  Employees, officers and directors are responsible for ensuring compliance by family members and members of their households and by entities over which they exercise voting or investment control.

II.             Trading in Company Securities While in Possession of Material Nonpublic Information is Prohibited

                The purchase or sale of securities by any person who possesses material nonpublic information is a violation of federal and state securities laws.  Furthermore, it is important that theappearance, as well as the fact, of trading on the basis of material nonpublic information be avoided.  Therefore, it is the policy of the Company that any person subject to this Policy who possesses material nonpublic information pertaining to the Company may not trade in the Company’s securities, advise anyone else to do so, or communicate the information to anyone else until such person knows that the information has been disseminated to the public.

                No director, officer, employee or consultant of the Company who is aware of material nonpublic information relating to the Company may, directly or through family members or other persons or entities,

  • buy or sell securities of the Company, other than pursuant to a trading plan that complies with Rule 10b5-1 promulgated by the Securities and Exchange Commission (“SEC”).
  • engage in any other action to take personal advantage of that information, or
  • pass that information on to others outside the Company, including friends and family (a practice referred to as “tipping”).

In addition, it is the policy of the Company that no officer, director, employee or consultant who, in the course of working for the Company, learns of material nonpublic information of another company with which the Company does business, such as a customer or supplier, may trade in that company’s securities until that information becomes public or is no longer material.

III.            Directors, Officers and Certain Employees Are Subject to Additional Restrictions

                A.    Section 16 Insiders.  The Company designates certain persons as the directors and officers who are subject to the reporting provisions and trading restrictions of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the underlying rules and regulations promulgated by the SEC.  Each person so designated is referred to herein as a “Section 16 Insider” and will be notified by the Company upon such designation. 
                B.    Insider Employees.  The Company has designated those additional employees designated on Exhibit A attached hereto as employees who have frequent access to material nonpublic information concerning the Company (“Insider Employees”).  The Company will amend Exhibit A from time to time as necessary.
                C.    Additional Restrictions.  Because Section 16 Insiders and Insider Employees are more likely than other employees to possess material nonpublic information about the Company, and in light of the reporting requirements to which Section 16 Insiders are subject under Section 16 of the Exchange Act, Section 16 Insiders and Insider Employees are subject to additional restrictions set forth in Appendix I hereto.  For purposes of this Policy, Section 16 Insiders and Insider Employees are collectively referred to as “Insiders.”
IV.             Insider Trading Compliance Committee

                The Company has an Insider Trading Compliance Committee, consisting of the Chief Executive Officer, the Chief Financial Officer, and the General Counsel.

                The duties of the Insider Trading Compliance Committee will include the following:

                        1.    Administering this Policy and monitoring and enforcing compliance with all policy provisions and procedures.

                        2.    Responding to all inquiries relating to this policy and its procedures.

                        3.    Designating and announcing special trading blackout periods during which no employees may trade in Company securities.

                        4.    Providing copies of this Policy and other appropriate materials to all current and new directors, officers and employees, and such other persons as the Insider Trading Compliance Committee determines have access to material nonpublic information concerning the Company.
                        5.    Administering, monitoring and enforcing compliance with federal and state insider trading laws and regulations; and assisting in the preparation and filing of all required SEC reports relating to trading in Company securities, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G.
                        6.    Selecting designated brokers through which Section 16 Insiders are authorized to trade Company securities.
                        7.    Revising the Policy as necessary to reflect changes in federal or state insider trading laws and regulations.
                        8.    Maintaining as Company records originals or copies of all documents required by the provisions of this Policy or the procedures set forth herein, and copies of all required SEC reports relating to insider trading, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G.
                        9.    Maintaining the accuracy of the list of Insider Employees as set forth on Exhibit A, and updating such list periodically as necessary to reflect additions or deletions.

                In fulfilling its duties under this Policy, the Insider Trading Compliance Committee shall be authorized to consult with the Company’s outside counsel.

V.              Applicability of This Policy to Transactions in Company Securities
                A.    General Rule.  This Policy applies to all transactions in the Company’s securities, including common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. For purposes of this Policy, the term “trade” includes any transaction in the Company’s securities, including gifts and pledges.
                B.    Employee Benefit Plans

                Stock Option Plans.  The trading prohibitions and restrictions set forth in this Policy do not apply to the exercise of stock options for cash, but do apply to all sales of securities acquired through the exercise of stock options.  Thus, this Policy does apply to the “same-day sale” or cashless exercise of Company stock options.

                Employee Stock Purchase Plans.  The trading prohibitions and restrictions set forth in this Policy do not apply to periodic contributions by the Company or employees to employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan) which are used to purchase Company securities pursuant to the employee’s advance instructions.  However, no officers or employees may alter their instructions regarding the level of withholding or the purchase of Company securities in such plans while in the possession of material nonpublic information.  Any sale of securities acquired under such plans is subject to the prohibitions and restrictions of this Policy.

VI.             Definition of “Material Nonpublic Information”
                A. “Material”.  Information about the Company is “material” if it would be expected to affect the investment or voting decisions of a reasonable shareholder or investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company.  In simple terms, material information is any type of information which could reasonably be expected to affect the market price of the Company’s securities.  Both positive and negative information may be material.  While it is not possible to identify all information that would be deemed material, the following types of information ordinarily would be considered material:
  • Financial performance, especially quarterly and year-end earnings, and significant changes in financial performance or liquidity.
  • Company projections and strategic plans.
  • Potential mergers or acquisitions, the sale of Company assets or subsidiaries or major partnering agreements.
  • New major contracts, orders, suppliers, customers or finance sources or the loss thereof.
  • Significant changes or developments in supplies or inventory, including significant product defects, recalls or product returns.
  • Significant pricing changes.
  • Stock splits, public or private securities/debt offerings, or changes in Company dividend policies or amounts.
  • Significant changes in senior management or membership of the Board of Directors.
  • Significant labor disputes or negotiations.
  • Actual or threatened major litigation or the resolution of such litigation.
                B.    “Nonpublic”. Material information is “nonpublic” if it has not been widely disseminated to the general public through a report filed with the SEC or through major newswire services, national news services or financial news services.  For the purpose of this Policy, information will be considered public after the close of trading on the secondfull trading day following the Company’s widespread public release of the information.
                C.    Consult the Insider Trading Compliance Committee When in Doubt. Any employees who are unsure whether the information that they possess is material or nonpublic must consult the Insider Trading Compliance Committee for guidance before trading in any Company securities.
VII.            Employees May Not Disclose Material Nonpublic Information to Others or Make Recommendations Regarding Trading in Company Securities

                No employee may disclose material nonpublic information concerning the Company to any other person (including family members) where such information may be used by such person to his or her advantage in the trading of the securities of companies to which such information relates, a practice commonly known as “tipping.”  No employee or related person may make recommendations or express opinions as to trading in the Company’s securities while in possession of material nonpublic information, except such person may advise others not to trade in the Company’s securities if doing so might violate the law or this policy.

VIII.           Employees May Not Participate in Chat Rooms

                Employees are prohibited from participating in chat room discussions or other Internet forums regarding the Company’s securities or business.

IX.             Only Designated Company Spokespersons Are Authorized to Disclose Material Nonpublic Information

                The Company is required under the federal securities laws to avoid the selective disclosure of material nonpublic information.  The Company has established procedures for releasing material information in a manner that is designed to achieve broad dissemination of the information immediately upon its release.  Employees may not, therefore, disclose material information to anyone outside the Company, including family members and friends, other than in accordance with those established procedures.  Those procedures are fully explained in the Company’s FD Disclosure Policy, which is posted on the Company’s website (www.bebe.com) in the Investor Relations, Governance Section.  All employees are instructed hereby to read and be familiar with the Company’s FD Disclosure Policy.  Any inquiries from outsiders regarding material nonpublic information about the Company should be forwarded to the Chief Executive Officer.

X.              Certain Types of Transactions Are Prohibited
                A.    Short Sales. Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects.  In addition, short sales may reduce the seller’s incentive to improve the Company’s performance.  For these reasons, short sales of the Company’s securities are prohibited by this Policy. In addition, Section 16(c) of the Exchange Act expressly prohibits officers and directors from engaging in short sales.
                B.    Publicly Traded Options. A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that the employee is trading based on inside information.  Transactions in options also may focus the employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company’s stock, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”)
                C.    Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the employee to continue to own the covered securities, but without the full risks and rewards of ownership.  When that occurs, the employee may no longer have the same objectives as the Company’s other shareholders.  Therefore, such transactions involving the Company’s securities are prohibited by this Policy.
                D.    Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin call.  Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan.  Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, employees are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.  An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.  Any person wishing to enter into such an arrangement must first receive pre-approval for the proposed transaction from the Insider Trading Compliance Committee in accordance with the pre-approval procedures set forth in Appendix I.  If the person wishing to enter such an arrangement is the CEO or a holder of more than 5% of the outstanding stock of the Company, pre-approval will also be conditioned on approval by the Governance Committee.
XI.             The Company May Suspend All Trading Activities by Employees

                In order to avoid any questions and to protect both employees and the Company from any potential liability, from time to time the Company may impose a “blackout” period during which some or all of the Company’s employees may not buy or sell the Company’s securities.  The Insider Trading Compliance Committee will impose such a blackout period if, in its judgment, there exists nonpublic information that would make trades by the Company’s employees (or certain of the Company’s employees) inappropriate in light of the risk that such trades could be viewed as violating applicable securities laws. 

XII.            Violations of Insider Trading Laws or This Policy Can Result in Severe Consequences

                A.    Civil and Criminal Penalties.  The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge the profit made or the loss avoided by the trading, pay civil penalties up to three times the profit made or loss avoided, face private action for damages, as well as being subject to criminal penalties, including up to 20 years in prison and fines of up to $5 million.  The Company and/or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties.
                B.    Company Discipline. Violation of this Policy or federal or state insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause.
                C.    Reporting Violations. Any person who violates this Policy or any federal or state laws governing insider trading, or knows of any such violation by any other person, must report the violation immediately to the Insider Trading Compliance Committee or the Audit Committee of the Company’s Board of Directors.  Upon learning of any such violation, the Insider Trading Compliance Committee or Audit Committee, in consultation with the Company’s legal counsel, will determine whether the Company should release any material nonpublic information or whether the Company should report the violation to the SEC or other appropriate governmental authority.
XIII.           Every Individual Is Responsible

                Every employee has the individual responsibility to comply with this Policy against illegal insider trading. An employee may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the material nonpublic information and even though the employee believes that he or she may suffer an economic loss or forego anticipated profit by waiting.

XIV.            This Policy Continues to Apply Following Termination of Employment

                The Policy continues to apply to transactions in the Company’s securities even after termination of employment.  If an employee is in possession of material nonpublic information when his or her employment terminates, he or she may not trade in the Company’s securities until that information has become public or is no longer material.

XV.           The Insider Trading Compliance Committee Is Available to Answer Questions about this Policy

                Please direct all inquiries regarding any of the provisions or procedures of this Policy to the Insider Trading Compliance Committee.

XVI.             This Policy Is Subject to Revision

                The Company may change the terms of this Policy from time to time to respond to developments in law and practice.  The Company will take steps to inform all affected persons of any material change to this Policy.

XVII.              All Employees Must Acknowledge Their Agreement to Comply with This Policy

                Upon its adoption, this Policy will be delivered to all Section 16 Insiders and Insider Employees.  It will be delivered to all new Section 16 Insiders and Insider Employees at the start of their employment or relationship with the Company.  Upon first receiving a copy of the Policy or any revised versions, each employee must sign an acknowledgment (an electronic acknowledgment and/or signature is sufficient) that he or she has received a copy and agrees to comply with the Policy’s terms.  This acknowledgment and agreement will constitute consent for the Company to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy. 

 


APPENDIX I

Special Restrictions on Transactions in Company Securities by Officers, Directors and Insider Employees

 

I.              Overview

             To minimize the risk of apparent or actual violations of the rules governing insider trading, we have adopted these special restrictions relating to transactions in Company securities by Section 16 Insiders and Insider Employees.  As with the other provisions of this Policy, such Insiders are responsible for ensuring compliance with this Appendix I, including restrictions on all trading during certain periods, by family members and members of their households and by entities over which they exercise voting or investment control.  Insiders should provide each of these persons or entities with a copy of this Policy.

II.            Trading Window

             In addition to the restrictions that are applicable to all employees, any trade that is subject to the Insider Trading Policy by a Section 16 Insider or an Insider Employee will be permitted only during an open “trading window.”  The trading window is closed during the first month of each fiscal quarter. The trading window generally opens on the second trading day following the date of the public issuance of the Company’s earnings release and remains open for approximately four (4) weeks as shown on the Insider Trading Calendar attached as Exhibit B.  In addition to the times when the trading window is scheduled to be closed, the Company may impose an additional special blackout period during a previously scheduled closed or open window period, at its discretion, due to the existence of material nonpublic information that may be widely known among employees.  Even when the window is open, Insiders (as well as all other employees) are prohibited from trading in the Company’s securities while in possession of material nonpublic information.  The Company’s Insider Trading Compliance Committee will advise Insiders when the trading window opens and closes. Following termination of employment or other service, Insiders will be subject to the trading window, as well as any special blackout period in effect at the time of termination, for one full fiscal quarter thereafter.

III.           Pre-Clearance of Trades

              As part of the Company’s Insider Trading Policy, all purchases and sales of equity securities of the Company by Section 16 Insiders, other than transactions that are not subject to the Policy or transactions pursuant to a Rule 10b5-1 trading plan approved by the Insider Trading Compliance Committee, must be pre-cleared by the Insider Trading Compliance Committee, and in the case of a purchase or sale of equity security by the CEO or holder of more than 5% of the company stock, by the Chairman of the Company’s Governance Committee.   The decision on whether to clear such transaction shall be made on the basis of whether or not material, non-public information exists. The intent of these requirements is to prevent inadvertent violations of the Policy, avoid trades involving the appearance of improper insider trading, facilitate timely Form 4 reporting and avoid transactions that are subject to disgorgement under Section 16(b) of the Exchange Act.  The Company may as a courtesy, but is not required to, file certain forms with the SEC (such as Forms 3, 4 and 5s) on behalf of the Section 16 Insider.  However, the Section 16 Insiders acknowledge the filing and accuracy of such forms with the SEC is the responsibility of the Section 16 Insider, and the Company can only act with the best information it has available.

              Requests for pre-clearance must be submitted to the Insider Trading Compliance Committee at least two business days in advance of each proposed transaction.  The request must be submitted to the Insider Trading Compliance Committee either in writing or in an email addressed to either the Chief Executive Officer, Chief Financial Officer, or the General Counsel. If the Insider submits the request by email and does not receive a response from the Insider Trading Compliance Committee within 24 hours, the Section 16 Insider will be responsible for following up to ensure that the message was received.

              A request for pre-clearance should provide the following:

  • The nature of proposed transaction and the expected date of the transaction.
  • Number of shares involved.
  • If the transaction involves a stock option exercise, the specific option to be exercised.
  • Contact information for the broker who will execute the transaction.
  • A completed and signed Checklist for Purchase/Sale of Company Stock by Directors and Officers that accompanies this memorandum.

              Once the proposed transaction is pre-cleared, the Section 16 Insider may proceed with it on the approved terms, provided that he or she complies with all other securities law requirements, such as Rule 144 and prohibitions regarding trading on the basis of inside information, and with any special trading blackout imposed by the Company prior to the completion of the trade.  The Insider and his or her broker will be responsible for immediately reporting the results of the transaction as further described below.

              In addition, pre-clearance is required for the establishment of a Rule 10b5-1 trading plan.  All Rule 10b5-1 trading plans must be established during open window periods.  Pre-clearance will not be required for individual transactions effected pursuant to a Rule 10b5-1 trading plan that specifies or establishes a formula for determining the dates, prices and amounts of planned trades.  Of course, the results of transactions by Section 16 Insiders effected under a trading plan must be reported immediately to the Company since they will be reportable on Form 4 within two business days following the execution of the trade, subject to an extension of not more than two additional business days where the Section 16 Insider is not immediately aware of the execution of the trade.

              Notwithstanding the foregoing, any transactions by a member of the Insider Trading Compliance Committee shall be subject to pre-clearance by the Chief Financial Officer or, in the event of his or her unavailability, the Chairman of the Board of Directors.

IV.          Designated Brokers

            Each market transaction in the Company’s stock by a Section 16 Insider, or any person whose trades must be reported by that Section 16 Insider on Form 4 (such as a member of the Section 16 Insider’s immediate family who lives in that Insider’s household), must be executed by a broker designated by the Company unless the Section 16 Insider has received authorization from the Insider Trading Compliance Committee to use a different broker.

            A Section 16 Insider and any broker that handles the Section 16 Insider’s transactions in the Company’s stock will be required to enter into an agreement whereby:

  • The Section 16 Insider authorizes the broker to immediately report directly to the Company the details of all transactions in Company equity securities executed by the broker in the Section 16 Insider’s account and the accounts of all others designated by the Section 16 Insider whose transactions may be attributed to the Section 16 Insider.
  • The broker agrees not to execute any transaction for the Insider or any of the foregoing designated persons (other than under a pre-approved Rule 10b5-1 trading plan) until the broker has verified with the Company that the transaction has been pre-cleared.
  • The broker agrees to immediately report the transaction details (including transactions under Rule 10b5-1 trading plans) directly to the Company and to the Section 16 Insider by telephone and in writing (by fax or email).

            Should a Section 16 Insider wish to use a broker other than one of the Company’s designated brokers, the Section 16 Insider should submit a request to use that broker to the Insider Trading Compliance Committee.

V.            Reporting of Transactions

            To facilitate timely reporting under Section 16 of the Exchange Act of transactions in Company stock, Section 16 Insiders are required to (a) report the details of each transaction immediately after it is executed and (b) arrange with persons whose trades must be reported by the Section 16 Insider (such as immediate family members living in the Insider’s household) to immediately report directly to the Company and to the Section 16 Insider the details of any transactions they have in the Company’s stock.

            Transaction details to be reported include:

  • Transaction date (trade date).
  • Number of shares involved.
  • Price per share at which the transaction was executed (before addition or deduction of brokerage commission and other transaction fees).
  • If the transaction was a stock option exercise, the specific option exercised.
  • Contact information for the broker who executed the transaction.

The transaction details must be reported to the Insider Trading Compliance Committee, with copies to the Company personnel who may assist the Section 16 Insider in preparing his or her Form 4.

VI.          Transactions That Are Prohibited Under This Policy

                As described in the Insider Trading Policy, Insiders are prohibited from engaging in the following types of transactions:

                A.          Short Sales.  Insiders are prohibited from engaging in short sales of the Company’s securities.
                B.          Publicly Traded Options.  Insiders are prohibited from engaging in transactions in publicly traded puts, calls or other derivative securities involving the Company’s stock.
               
                C.          Hedging Transactions. Insiders are prohibited from engaging in hedging or monetization transactions, such as zero-cost collars or forward sale contracts, involving the Company’s securities.
                D.          Margin Accounts and Pledges. Insiders are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.  An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.
VII.         Nominating and Corporate Governance Committee

             The Nominating and Corporate Governance Committee (the “Governance Committee”) will be responsible for monitoring and recommending any modification to the Insider Trader Policy, if necessary or advisable, to the Board of Directors.

VIII.        Persons Subject to Section 16

              Most purchases and sales of Company securities by its directors, officers and greater-than-10% stockholders are subject to Section 16 of the Exchange Act. The Governance Committee will review, at least annually, those individuals who are deemed to be officers for purposes of Section 16 and will recommend any changes regarding such status to the Board of Directors.  A Section 16 officer is generally defined as the president, principal financial officer, principal accounting officer or controller, any vice president in charge of a principal business unit, division or function or any other officer or person who performs a policy making function.

IX.          Form 4 Reporting

            Under Section 16, most trades by certain officers or directors are subject to reporting on Form 4 within two business days following the trade date (which in the case of an open market trade is the date when the broker places the buy or sell order, not the date when the trade is settled). To facilitate timely reporting, all transactions that are subject to Section 16 must be reported to the Company on the same day as the trade date, or, with respect to transactions effected pursuant to a Rule 10b5-1 plan, on the day the Section 16 Insider is advised of the terms of the transaction.

X.            Named Employees Considered Insiders

            The Committee will review, generally annually, those individuals deemed to be “Insiders” for purposes of this Appendix I.  Insiders shall include persons subject to Section 16 and such other persons as the Committee deems to be Insider Employees.  Generally, Insider Employees shall be any person who by function of their employment is consistently in possession of material nonpublic information or performs an operational role, such as head of a division or business unit, that is material to the Company as a whole.

XI.          Special Guidelines for 10b5-1 Trading Plans

            Notwithstanding the foregoing, an Insider will not be deemed to have violated the Insider Trading Policy if he or she effects a transaction that meets all of the enumerated criteria below.

            A.           The transaction must be made pursuant to a documented plan (the “Plan”) entered into in good faith that complies with all provisions of Rule 10b5-1 (the “Rule”), including, without limitation:
                          1.            The Plan must be in the form of a written, binding contract that:
                                         a.            specifies the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; or

                                         b.           includes a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold.
                          2.           In any case, the Plan must prohibit the Insider and any other person who possesses material nonpublic information from exercising any subsequent influence over how, when, or whether to effect purchases or sales.
            B.          The Plan must be approved prior to the effective time of any transactions under such Plan by the Insider Trading Compliance Committee.  The Company reserves the right to withhold approval of any Plan that the Insider Trading Compliance Committee determines, in its sole discretion,
                          1.           fails to comply with the Rule, or
                          2.           exposes the Company or the Insider to liability under any other applicable state or federal rule, regulation or law, or
                          3.           creates any appearance of impropriety, or
                          4.           fails to meet the guidelines established by the Company, or
                          5.           otherwise fails to satisfy review by the Insider Trading Compliance Committee for any reason, such failure to be determined in the sole discretion of the Insider Trading Compliance Committee.
            C.          The Plan must:
                          1.           be established at a time when the Insider is not aware of material nonpublic information about the Company or the securities covered by the Plan;
                          2.           be established at a time when the trading window is open;
                          3.           be established in good faith an not as part of a plan or scheme to evade the insider trading rules; and
                          4.           require that no transactions be made until thirty (30) days following the establishment of the Plan.
            D.          The Plan must contain the following representations, warranties and covenants by the Insider:
                          1.           As of the date the Plan is established, the Insider is not aware of any material nonpublic information concerning the Company or the securities covered by the Plan.
                          2.           The Insider is entering into the Plan in good faith and not as part of a plan or scheme to evade compliance with federal or state securities laws.
                          3.           While the Plan is in effect, the Insider agrees not to enter into or alter any corresponding or hedging transaction or position with respect to the securities covered by the Plan.
                          4.           The Insider agrees not to alter or deviate from the terms of the Plan.
                          5.           The Insider agrees that he or she shall not, directly or indirectly, communicate any information relating to the securities or the Company to any broker, dealer, financial advisor, trustee or any other third party who is involved, directly or indirectly, in executing the Plan at any time while the Plan is in effect.
                          6.           The Insider agrees not to take, and agrees to cause any person or entity with which the Insider would be required to aggregate sales of securities pursuant to paragraph (a)(2) or (e) of Rule 144 not to take, any action that would cause the sales made under the Plan not to meet all applicable requirements of Rule 144.
                          7.           The Insider agrees to timely make all filings required under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
                          8.           The Insider acknowledges and agrees that the Insider does not have, and shall not attempt to exercise, any influence over how, when or whether to effect purchases or sales of securities pursuant to the Plan.
                          9.           The Insider agrees that any modifications to the Plan must be made in good faith at a time when the Insider is not aware of any material nonpublic information concerning the Company or the securities covered by the Plan and at a time when the trading window is open.
                          10.         The Insider agrees that termination of the Plan prior to its expiration pursuant to the terms of the Plan will be made in good faith.
                          11.         The Insider agrees that the Company may, in its sole discretion, make public announcements regarding the Plan in any press release or filings with the SEC such as the Company’s proxy statement, Form 8-K or other SEC filings, including, among other things, information as to existence or adoption of the Plan and, to the extent required or advisable under applicable law, information as to the timing of the transactions and the amount and price of the securities to be sold.
                          12.         The Insider agrees to return any securities not sold pursuant to the Plan to the Company for relegending.
            E.          Any modifications to the Plan, deviations from the Plan or terminations of the Plan without prior approval of the Insider Trading Compliance Committee will result in a failure to comply with the Insider Trading Policy.  Any such modifications or deviations are subject to the approval of the Insider Trading Compliance Committee in accordance with Section B above.
            F.           The Plan must provide appropriate mechanisms to ensure that the Insider complies with all rules and regulations, including Rule 144, Rule 701 and Section 16(b), applicable to securities transactions under the Plan by the Insider.
            G.          The Plan must provide for the suspension of all transactions under such Plan in the event that the Company, in its sole discretion, deems such suspension necessary and advisable, including suspensions necessary to comply with trading restrictions imposed in connection with any lock-up agreement required in connection with a securities issuance transaction or other similar events.
            H.          None of the Company, the Insider Trading Compliance Committee nor any of the Company’s directors, officers, employees or other representatives shall be deemed, solely by their approval of an Insider’s Plan, to have represented that any Plan complies with the Rule or to have assumed any liability or responsibility to the Insider or any other party if such Plan fails to comply with the Rule.

 


EXHIBIT A

INSIDERS EMPLOYEES

SUBJECT TO TRADING WINDOW

(as of April 2007)

 

 

 

 

            In addition to the Section 16 Insiders, the Insider Employees subject to the trading windows described in the Company’s Insider Trading Policy are all employees of the Company except:

 

(a)        Employees working in the Company’s Distribution Center below the position of Director

 

(b)        Store line employees up to and including the level of store manager

 

 

 


EXHIBIT B

INSIDER TRADING CALENDAR

 

Available Upon Request

 

 

 

CERTIFICATION

bebe stores, inc.

Re:      Acceptance of the Company’s Insider Trading Policy

Ladies and Gentlemen:

Enclosed is a copy of the Insider Trading Policy of bebe stores, inc. (the “Company”). PLEASE READ IT VERY CAREFULLY.  As it indicates, the consequences of insider trading can be drastic to both you and the Company.

Once you have read the Insider Trading Policy and all other related grant information, click accept on the view/accept grant webpage. Such acceptance by you will certify that:

  • you have read, understand and agree to comply with and be bound by the Insider Trading Policy;
  • you will be subject to sanctions that may be imposed by the Company, in its discretion, for violation of the Company’s policy including but not limited to termination of employment;
  • and the Company may give stop-transfer and other instructions to the Company’s transfer agent against the transfer of Company securities by you in a transaction that the company considers to be in contravention of its policy.

If you have any questions in the meantime, please do not hesitate to contact any member of the Insider Training Compliance Committee.

bebe stores, inc.

INSIDER TRADING POLICY

I.              All Employees, Officers, Directors and their Family Members and Affiliates Are Subject to this Policy

This Policy applies to all directors, officers, employees and consultants of the bebe stores, inc. (the “Company”) and entities (such as trusts, limited partnerships and corporations) over which such individuals have or share voting or investment control.  For the purposes of this Policy, officers, outside directors and consultants are included within the term “employee.”  This Policy also applies to any other persons whom the Company’s Insider Trading Compliance Committee may designate because they have access to material nonpublic information concerning the Company, as well as any person who receives material nonpublic information from any Company insider.  Employees, officers and directors are responsible for ensuring compliance by family members and members of their households and by entities over which they exercise voting or investment control.

II.            Trading in Company Securities While in Possession of Material Nonpublic Information is Prohibited

The purchase or sale of securities by any person who possesses material nonpublic information is a violation of federal and state securities laws.  Furthermore, it is important that theappearance, as well as the fact, of trading on the basis of material nonpublic information be avoided.  Therefore, it is the policy of the Company that any person subject to this Policy who possesses material nonpublic information pertaining to the Company may not trade in the Company’s securities, advise anyone else to do so, or communicate the information to anyone else until such person knows that the information has been disseminated to the public.

No director, officer, employee or consultant of the Company who is aware of material nonpublic information relating to the Company may, directly or through family members or other persons or entities,

  • buy or sell securities of the Company, other than pursuant to a trading plan that complies with Rule 10b5-1 promulgated by the Securities and Exchange Commission (“SEC”).
  • engage in any other action to take personal advantage of that information, or
  • pass that information on to others outside the Company, including friends and family (a practice referred to as “tipping”).

In addition, it is the policy of the Company that no officer, director, employee or consultant who, in the course of working for the Company, learns of material nonpublic information of another company with which the Company does business, such as a customer or supplier, may trade in that company’s securities until that information becomes public or is no longer material.

III.           Directors, Officers and Certain Employees Are Subject to Additional Restrictions
A.           Section 16 Insiders.  The Company designates certain persons as the directors and officers who are subject to the reporting provisions and trading restrictions of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the underlying rules and regulations promulgated by the SEC.  Each person so designated is referred to herein as a “Section 16 Insider” and will be notified by the Company upon such designation. 
B.           Insider Employees.  The Company has designated those additional employees designated on Exhibit A attached hereto as employees who have frequent access to material nonpublic information concerning the Company (“Insider Employees”).  The Company will amend Exhibit A from time to time as necessary.
C.           Additional Restrictions.  Because Section 16 Insiders and Insider Employees are more likely than other employees to possess material nonpublic information about the Company, and in light of the reporting requirements to which Section 16 Insiders are subject under Section 16 of the Exchange Act, Section 16 Insiders and Insider Employees are subject to additional restrictions set forth in Appendix Ihereto.  For purposes of this Policy, Section 16 Insiders and Insider Employees are collectively referred to as “Insiders.”
IV.          Insider Trading Compliance Committee

The Company has an Insider Trading Compliance Committee, consisting of the Chief Operating Officer, the Chief Financial Officer, and the General Counsel.

The duties of the Insider Trading Compliance Committee will include the following:

1.            Administering this Policy and monitoring and enforcing compliance with all policy provisions and procedures.
2.            Responding to all inquiries relating to this policy and its procedures.
3.            Designating and announcing special trading blackout periods during which no employees may trade in Company securities.
4.            Providing copies of this Policy and other appropriate materials to all current and new directors, officers and employees, and such other persons as the Insider Trading Compliance Committee determines have access to material nonpublic information concerning the Company.
5.            Administering, monitoring and enforcing compliance with federal and state insider trading laws and regulations; and assisting in the preparation and filing of all required SEC reports relating to trading in Company securities, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G.
6.            Selecting designated brokers through which Section 16 Insiders are authorized to trade Company securities.
7.            Revising the Policy as necessary to reflect changes in federal or state insider trading laws and regulations.
8.            Maintaining as Company records originals or copies of all documents required by the provisions of this Policy or the procedures set forth herein, and copies of all required SEC reports relating to insider trading, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G.
9.            Maintaining the accuracy of the list of Insider Employees as set forth on Exhibit A, and updating such list periodically as necessary to reflect additions or deletions.

In fulfilling its duties under this Policy, the Insider Trading Compliance Committee shall be authorized to consult with the Company’s outside counsel.

V.            Applicability of This Policy to Transactions in Company Securities
A.          General Rule. This Policy applies to all transactions in the Company’s securities, including common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. For purposes of this Policy, the term “trade” includes any transaction in the Company’s securities, including gifts and pledges.
B.          Employee Benefit Plans

Stock Option Plans.  The trading prohibitions and restrictions set forth in this Policy do not apply to the exercise of stock options for cash, but do apply to all sales of securities acquired through the exercise of stock options.  Thus, this Policy does apply to the “same-day sale” or cashless exercise of Company stock options.

Employee Stock Purchase Plans.  The trading prohibitions and restrictions set forth in this Policy do not apply to periodic contributions by the Company or employees to employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan) which are used to purchase Company securities pursuant to the employee’s advance instructions.  However, no officers or employees may alter their instructions regarding the level of withholding or the purchase of Company securities in such plans while in the possession of material nonpublic information.  Any sale of securities acquired under such plans is subject to the prohibitions and restrictions of this Policy.

VI.          Definition of “Material Nonpublic Information”
A.          “Material”.  Information about the Company is “material” if it would be expected to affect the investment or voting decisions of a reasonable shareholder or investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company.  In simple terms, material information is any type of information which could reasonably be expected to affect the market price of the Company’s securities.  Both positive and negative information may be material.  While it is not possible to identify all information that would be deemed material, the following types of information ordinarily would be considered material:
  • Financial performance, especially quarterly and year-end earnings, and significant changes in financial performance or liquidity.
  • Company projections and strategic plans.
  • Potential mergers or acquisitions, the sale of Company assets or subsidiaries or major partnering agreements.
  • New major contracts, orders, suppliers, customers or finance sources or the loss thereof.
  • Significant changes or developments in supplies or inventory, including significant product defects, recalls or product returns.
  • Significant pricing changes.
  • Stock splits, public or private securities/debt offerings, or changes in Company dividend policies or amounts.
  • Significant changes in senior management or membership of the Board of Directors.
  • Significant labor disputes or negotiations.
  • Actual or threatened major litigation or the resolution of such litigation.
B.          “Nonpublic”. Material information is “nonpublic” if it has not been widely disseminated to the general public through a report filed with the SEC or through major newswire services, national news services or financial news services.  For the purpose of this Policy, information will be considered public after the close of trading on the secondfull trading day following the Company’s widespread public release of the information.
C.          Consult the Insider Trading Compliance Committee When in Doubt. Any employees who are unsure whether the information that they possess is material or nonpublic must consult the Insider Trading Compliance Committee for guidance before trading in any Company securities.
VII.         Employees May Not Disclose Material Nonpublic Information to Others or Make Recommendations Regarding Trading in Company Securities

No employee may disclose material nonpublic information concerning the Company to any other person (including family members) where such information may be used by such person to his or her advantage in the trading of the securities of companies to which such information relates, a practice commonly known as “tipping.”  No employee or related person may make recommendations or express opinions as to trading in the Company’s securities while in possession of material nonpublic information, except such person may advise others not to trade in the Company’s securities if doing so might violate the law or this policy.

VIII.        Employees May Not Participate in Chat Rooms

Employees are prohibited from participating in chat room discussions or other Internet forums regarding the Company’s securities or business.

IX.          Only Designated Company Spokespersons Are Authorized to Disclose Material Nonpublic Information

The Company is required under the federal securities laws to avoid the selective disclosure of material nonpublic information.  The Company has established procedures for releasing material information in a manner that is designed to achieve broad dissemination of the information immediately upon its release.  Employees may not, therefore, disclose material information to anyone outside the Company, including family members and friends, other than in accordance with those established procedures.  Those procedures are fully explained in the Company’s FD Disclosure Policy, which is posted on the Company’s website (www.bebe.com) in the Investor Relations, Governance Section.  All employees are instructed hereby to read and be familiar with the Company’s FD Disclosure Policy.  Any inquiries from outsiders regarding material nonpublic information about the Company should be forwarded to the Chief Operating Officer.

X.            Certain Types of Transactions Are Prohibited
A.          Short Sales. Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects.  In addition, short sales may reduce the seller’s incentive to improve the Company’s performance.  For these reasons, short sales of the Company’s securities are prohibited by this Policy. In addition, Section 16(c) of the Exchange Act expressly prohibits officers and directors from engaging in short sales.
B.          Publicly Traded Options. A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that the employee is trading based on inside information.  Transactions in options also may focus the employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company’s stock, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”)
C.          Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the employee to continue to own the covered securities, but without the full risks and rewards of ownership.  When that occurs, the employee may no longer have the same objectives as the Company’s other shareholders.  Therefore, such transactions involving the Company’s securities are prohibited by this Policy.
D.          Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin call.  Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan.  Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, employees are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.  An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.  Any person wishing to enter into such an arrangement must first receive pre-approval for the proposed transaction from the Insider Trading Compliance Committee in accordance with the pre-approval procedures set forth in Appendix I.  If the person wishing to enter such an arrangement is the CEO or a holder of more than 5% of the outstanding stock of the Company, pre-approval will also be conditioned on approval by the Governance Committee.
XI.          The Company May Suspend All Trading Activities by Employees

In order to avoid any questions and to protect both employees and the Company from any potential liability, from time to time the Company may impose a “blackout” period during which some or all of the Company’s employees may not buy or sell the Company’s securities.  The Insider Trading Compliance Committee will impose such a blackout period if, in its judgment, there exists nonpublic information that would make trades by the Company’s employees (or certain of the Company’s employees) inappropriate in light of the risk that such trades could be viewed as violating applicable securities laws. 

XII.         Violations of Insider Trading Laws or This Policy Can Result in Severe Consequences
A.          Civil and Criminal Penalties.  The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge the profit made or the loss avoided by the trading, pay civil penalties up to three times the profit made or loss avoided, face private action for damages, as well as being subject to criminal penalties, including up to 20 years in prison and fines of up to $5 million.  The Company and/or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties.
B.          Company Discipline. Violation of this Policy or federal or state insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause.
C.          Reporting Violations. Any person who violates this Policy or any federal or state laws governing insider trading, or knows of any such violation by any other person, must report the violation immediately to the Insider Trading Compliance Committee or the Audit Committee of the Company’s Board of Directors.  Upon learning of any such violation, the Insider Trading Compliance Committee or Audit Committee, in consultation with the Company’s legal counsel, will determine whether the Company should release any material nonpublic information or whether the Company should report the violation to the SEC or other appropriate governmental authority.
XIII.        Every Individual Is Responsible

Every employee has the individual responsibility to comply with this Policy against illegal insider trading. An employee may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the material nonpublic information and even though the employee believes that he or she may suffer an economic loss or forego anticipated profit by waiting.

XIV.       This Policy Continues to Apply Following Termination of Employment

The Policy continues to apply to transactions in the Company’s securities even after termination of employment.  If an employee is in possession of material nonpublic information when his or her employment terminates, he or she may not trade in the Company’s securities until that information has become public or is no longer material.

XV.        The Insider Trading Compliance Committee Is Available to Answer Questions about this Policy

Please direct all inquiries regarding any of the provisions or procedures of this Policy to the Insider Trading Compliance Committee.

XVI.       This Policy Is Subject to Revision

The Company may change the terms of this Policy from time to time to respond to developments in law and practice.  The Company will take steps to inform all affected persons of any material change to this Policy.

XVII.      All Employees Must Acknowledge Their Agreement to Comply with This Policy

Upon its adoption, this Policy will be delivered to all Section 16 Insiders and Insider Employees.  It will be delivered to all new Section 16 Insiders and Insider Employees at the start of their employment or relationship with the Company.  Upon first receiving a copy of the Policy or any revised versions, each employee must sign an acknowledgment (an electronic acknowledgment and/or signature is sufficient) that he or she has received a copy and agrees to comply with the Policy’s terms.  This acknowledgment and agreement will constitute consent for the Company to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy. 

 

APPENDIX I

 

Special Restrictions on Transactions in Company Securities by

Officers, Directors and Insider Employees

 

I.              Overview

To minimize the risk of apparent or actual violations of the rules governing insider trading, we have adopted these special restrictions relating to transactions in Company securities by Section 16 Insiders and Insider Employees.  As with the other provisions of this Policy, such Insiders are responsible for ensuring compliance with this Appendix I, including restrictions on all trading during certain periods, by family members and members of their households and by entities over which they exercise voting or investment control.  Insiders should provide each of these persons or entities with a copy of this Policy.

II.            Trading Window

In addition to the restrictions that are applicable to all employees, any trade that is subject to the Insider Trading Policy by a Section 16 Insider or an Insider Employee will be permitted only during an open “trading window.”  The trading window is closed during the first month of each fiscal quarter. The trading window generally opens on the second trading day following the date of the public issuance of the Company’s earnings release and remains open for approximately four (4) weeks as shown on the Insider Trading Calendar attached as Exhibit B.  In addition to the times when the trading window is scheduled to be closed, the Company may impose an additional special blackout period during a previously scheduled closed or open window period, at its discretion, due to the existence of material nonpublic information that may be widely known among employees.  Even when the window is open, Insiders (as well as all other employees) are prohibited from trading in the Company’s securities while in possession of material nonpublic information.  The Company’s Insider Trading Compliance Committee will advise Insiders when the trading window opens and closes. Following termination of employment or other service, Insiders will be subject to the trading window, as well as any special blackout period in effect at the time of termination, for one full fiscal quarter thereafter.

III.           Pre-Clearance of Trades

As part of the Company’s Insider Trading Policy,all purchases and sales of equity securities of the Company by Section 16 Insiders, other than transactions that are not subject to the Policy or transactions pursuant to a Rule 10b5-1 trading plan approved by the Insider Trading Compliance Committee, must be pre-cleared by the Insider Trading Compliance Committee, and in the case of a purchase or sale of equity security by the CEO or holder of more than 5% of the company stock, by the Chairman of the Company’s Governance Committee.   The decision on whether to clear such transaction shall be made on the basis of whether or not material, non-public information exists. The intent of these requirements is to prevent inadvertent violations of the Policy, avoid trades involving the appearance of improper insider trading, facilitate timely Form 4 reporting and avoid transactions that are subject to disgorgement under Section 16(b) of the Exchange Act.  The Company may as a courtesy, but is not required to, file certain forms with the SEC (such as Forms 3, 4 and 5s) on behalf of the Section 16 Insider.  However, the Section 16 Insiders acknowledge the filing and accuracy of such forms with the SEC is the responsibility of the Section 16 Insider, and the Company can only act with the best information it has available.

Requests for pre-clearance must be submitted to the Insider Trading Compliance Committee at least two business days in advance of each proposed transaction.  The request must be submitted to the Insider Trading Compliance Committee either in writing or in an email addressed to either the Chief Operating Officer, Chief Financial Officer, or the General Counsel. If the Insider submits the request by email and does not receive a response from the Insider Trading Compliance Committee within 24 hours, the Section 16 Insider will be responsible for following up to ensure that the message was received.

A request for pre-clearance should provide the following:

  • The nature of proposed transaction and the expected date of the transaction.
  • Number of shares involved.
  • If the transaction involves a stock option exercise, the specific option to be exercised.
  • Contact information for the broker who will execute the transaction.
  • A completed and signed Checklist for Purchase/Sale of Company Stock by Directors and Officers that accompanies this memorandum.

Once the proposed transaction is pre-cleared, the Section 16 Insider may proceed with it on the approved terms, provided that he or she complies with all other securities law requirements, such as Rule 144 and prohibitions regarding trading on the basis of inside information, and with any special trading blackout imposed by the Company prior to the completion of the trade.  The Insider and his or her broker will be responsible for immediately reporting the results of the transaction as further described below.

In addition, pre-clearance is required for the establishment of a Rule 10b5-1 trading plan.  All Rule 10b5-1 trading plans must be established during open window periods.  Pre-clearance will not be required for individual transactions effected pursuant to a Rule 10b5-1 trading plan that specifies or establishes a formula for determining the dates, prices and amounts of planned trades.  Of course, the results of transactions by Section 16 Insiders effected under a trading plan must be reported immediately to the Company since they will be reportable on Form 4 within two business days following the execution of the trade, subject to an extension of not more than two additional business days where the Section 16 Insider is not immediately aware of the execution of the trade.

Notwithstanding the foregoing, any transactions by a member of the Insider Trading Compliance Committee shall be subject to pre-clearance by the Chief Financial Officer or, in the event of his or her unavailability, the Chairman of the Board of Directors.

IV.          Designated Brokers

Each market transaction in the Company’s stock by a Section 16 Insider, or any person whose trades must be reported by that Section 16 Insider on Form 4 (such as a member of the Section 16 Insider’s immediate family who lives in that Insider’s household), must be executed by a broker designated by the Company unless the Section 16 Insider has received authorization from the Insider Trading Compliance Committee to use a different broker.

A Section 16 Insider and any broker that handles the Section 16 Insider’s transactions in the Company’s stock will be required to enter into an agreement whereby:

  • The Section 16 Insider authorizes the broker to immediately report directly to the Company the details of all transactions in Company equity securities executed by the broker in the Section 16 Insider’s account and the accounts of all others designated by the Section 16 Insider whose transactions may be attributed to the Section 16 Insider.
  • The broker agrees not to execute any transaction for the Insider or any of the foregoing designated persons (other than under a pre-approved Rule 10b5-1 trading plan) until the broker has verified with the Company that the transaction has been pre-cleared.
  • The broker agrees to immediately report the transaction details (including transactions under Rule 10b5-1 trading plans) directly to the Company and to the Section 16 Insider by telephone and in writing (by fax or email).

Should a Section 16 Insider wish to use a broker other than one of the Company’s designated brokers, the Section 16 Insider should submit a request to use that broker to the Insider Trading Compliance Committee.

V.            Reporting of Transactions

To facilitate timely reporting under Section 16 of the Exchange Act of transactions in Company stock, Section 16 Insiders are required to (a) report the details of each transaction immediately after it is executed and (b) arrange with persons whose trades must be reported by the Section 16 Insider (such as immediate family members living in the Insider’s household) to immediately report directly to the Company and to the Section 16 Insider the details of any transactions they have in the Company’s stock.

Transaction details to be reported include:

  • Transaction date (trade date).
  • Number of shares involved.
  • Price per share at which the transaction was executed (before addition or deduction of brokerage commission and other transaction fees).
  • If the transaction was a stock option exercise, the specific option exercised.
  • Contact information for the broker who executed the transaction.

The transaction details must be reported to the Insider Trading Compliance Committee, with copies to the Company personnel who may assist the Section 16 Insider in preparing his or her Form 4.

VI.          Transactions That Are Prohibited Under This Policy

As described in the Insider Trading Policy, Insiders are prohibited from engaging in the following types of transactions:

A.          Short Sales.  Insiders are prohibited from engaging in short sales of the Company’s securities.
B.          Publicly Traded Options.  Insiders are prohibited from engaging in transactions in publicly traded puts, calls or other derivative securities involving the Company’s stock.
C.          Hedging Transactions. Insiders are prohibited from engaging in hedging or monetization transactions, such as zero-cost collars or forward sale contracts, involving the Company’s securities.
D.          Margin Accounts and Pledges. Insiders are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.  An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.
VII.         Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee (the “Governance Committee”) will be responsible for monitoring and recommending any modification to the Insider Trader Policy, if necessary or advisable, to the Board of Directors.

VIII.        Persons Subject to Section 16

Most purchases and sales of Company securities by its directors, officers and greater-than-10% stockholders are subject to Section 16 of the Exchange Act. The Governance Committee will review, at least annually, those individuals who are deemed to be officers for purposes of Section 16 and will recommend any changes regarding such status to the Board of Directors.  A Section 16 officer is generally defined as the president, principal financial officer, principal accounting officer or controller, any vice president in charge of a principal business unit, division or function or any other officer or person who performs a policy making function.

IX.          Form 4 Reporting

Under Section 16, most trades by certain officers or directors are subject to reporting on Form 4 within two business days following the trade date (which in the case of an open market trade is the date when the broker places the buy or sell order, not the date when the trade is settled). To facilitate timely reporting, all transactions that are subject to Section 16 must be reported to the Companyon the same day as the trade date, or, with respect to transactions effected pursuant to a Rule 10b5-1 plan, on the day the Section 16 Insider is advised of the terms of the transaction.

X.            Named Employees Considered Insiders

The Committee will review, generally annually, those individuals deemed to be “Insiders” for purposes of this Appendix I.  Insiders shall include persons subject to Section 16 and such other persons as the Committee deems to be Insider Employees.  Generally, Insider Employees shall be any person who by function of their employment isconsistentlyin possession of material nonpublic informationorperforms an operational role, such as head of a division or business unit, that is material to the Company as a whole.

XI.          Special Guidelines for 10b5-1 Trading Plans

Notwithstanding the foregoing, an Insider will not be deemed to have violated the Insider Trading Policy if he or she effects a transaction that meets all of the enumerated criteria below.

A.           The transaction must be made pursuant to a documented plan (the “Plan”) entered into in good faith that complies with all provisions of Rule 10b5-1 (the “Rule”), including, without limitation:
1.            The Plan must be in the form of a written, binding contract that:
a.            specifies the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; or
b.           includes a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold.
2.           In any case, the Plan must prohibit the Insider and any other person who possesses material nonpublic information from exercising any subsequent influence over how, when, or whether to effect purchases or sales.
B.          The Plan must be approved prior to the effective time of any transactions under such Plan by the Insider Trading Compliance Committee.  The Company reserves the right to withhold approval of any Plan that the Insider Trading Compliance Committee determines, in its sole discretion,
1.           fails to comply with the Rule, or
2.           exposes the Company or the Insider to liability under any other applicable state or federal rule, regulation or law, or
3.           creates any appearance of impropriety, or
4.           fails to meet the guidelines established by the Company, or
5.           otherwise fails to satisfy review by the Insider Trading Compliance Committee for any reason, such failure to be determined in the sole discretion of the Insider Trading Compliance Committee.
C.          The Plan must:
1.           be established at a time when the Insider is not aware of material nonpublic information about the Company or the securities covered by the Plan;
2.           be established at a time when the trading window is open;
3.           be established in good faith an not as part of a plan or scheme to evade the insider trading rules; and
4.           require that no transactions be made until thirty (30) days following the establishment of the Plan.
D.          The Plan must contain the following representations, warranties and covenants by the Insider:
1.           As of the date the Plan is established, the Insider is not aware of any material nonpublic information concerning the Company or the securities covered by the Plan.
2.           The Insider is entering into the Plan in good faith and not as part of a plan or scheme to evade compliance with federal or state securities laws.
3.           While the Plan is in effect, the Insider agrees not to enter into or alter any corresponding or hedging transaction or position with respect to the securities covered by the Plan.
4.           The Insider agrees not to alter or deviate from the terms of the Plan.
5.           The Insider agrees that he or she shall not, directly or indirectly, communicate any information relating to the securities or the Company to any broker, dealer, financial advisor, trustee or any other third party who is involved, directly or indirectly, in executing the Plan at any time while the Plan is in effect.
6.           The Insider agrees not to take, and agrees to cause any person or entity with which the Insider would be required to aggregate sales of securities pursuant to paragraph (a)(2) or (e) of Rule 144 not to take, any action that would cause the sales made under the Plan not to meet all applicable requirements of Rule 144.
7.           The Insider agrees to timely make all filings required under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
8.           The Insider acknowledges and agrees that the Insider does not have, and shall not attempt to exercise, any influence over how, when or whether to effect purchases or sales of securities pursuant to the Plan.
9.           The Insider agrees that any modifications to the Plan must be made in good faith at a time when the Insider is not aware of any material nonpublic information concerning the Company or the securities covered by the Plan and at a time when the trading window is open.
10.         The Insider agrees that termination of the Plan prior to its expiration pursuant to the terms of the Plan will be made in good faith.
11.         The Insider agrees that the Company may, in its sole discretion, make public announcements regarding the Plan in any press release or filings with the SEC such as the Company’s proxy statement, Form 8-K or other SEC filings, including, among other things, information as to existence or adoption of the Plan and, to the extent required or advisable under applicable law, information as to the timing of the transactions and the amount and price of the securities to be sold.
12.         The Insider agrees to return any securities not sold pursuant to the Plan to the Company for relegending.
E.           Any modifications to the Plan, deviations from the Plan or terminations of the Plan without prior approval of the Insider Trading Compliance Committee will result in a failure to comply with the Insider Trading Policy.  Any such modifications or deviations are subject to the approval of the Insider Trading Compliance Committee in accordance with Section B above.
F.           The Plan must provide appropriate mechanisms to ensure that the Insider complies with all rules and regulations, including Rule 144, Rule 701 and Section 16(b), applicable to securities transactions under the Plan by the Insider.
G.          The Plan must provide for the suspension of all transactions under such Plan in the event that the Company, in its sole discretion, deems such suspension necessary and advisable, including suspensions necessary to comply with trading restrictions imposed in connection with any lock-up agreement required in connection with a securities issuance transaction or other similar events.
H.          None of the Company, the Insider Trading Compliance Committee nor any of the Company’s directors, officers, employees or other representatives shall be deemed, solely by their approval of an Insider’s Plan, to have represented that any Plan complies with the Rule or to have assumed any liability or responsibility to the Insider or any other party if such Plan fails to comply with the Rule.

 

EXHIBIT A

INSIDERS EMPLOYEES

SUBJECT TO TRADING WINDOW

 

 

 

 

            In addition to the Section 16 Insiders, the Insider Employees subject to the trading windows described in the Company’s Insider Trading Policy are all employees of the Company except:

 

(a)        Employees working in the Company’s Distribution Center below the position of Director

 

(b)        Store line employees up to and including the level of store manager

 

 

 

EXHIBIT B

INSIDER TRADING CALENDAR

 

Available Upon Request

CERTIFICATION

bebe stores, inc.

Re:      Acceptance of the Company’s Insider Trading Policy

Ladies and Gentlemen:

Enclosed is a copy of the Insider Trading Policy of bebe stores, inc. (the “Company”).

PLEASE READ IT VERY CAREFULLY.  As it indicates, the consequences of insider trading can be drastic to both you and the Company.

Once you have read the Insider Trading Policy and all other related grant information, click accept on the view/accept grant webpage. Such acceptance by you will certify that:

  • you have read, understand and agree to comply with and be bound by the Insider Trading Policy;
  • you will be subject to sanctions that may be imposed by the Company, in its discretion, for violation of the Company’s policy including but not limited to termination of employment;
  • and the Company may give stop-transfer and other instructions to the Company’s transfer agent against the transfer of Company securities by you in a transaction that the company considers to be in contravention of its policy.

If you have any questions in the meantime, please do not hesitate to contact any member of the Insider Training Compliance Committee.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rev. 6/16

bebe stores, inc.

INSIDER TRADING POLICY

I.              All Employees, Officers, Directors and their Family Members and Affiliates Are Subject to this Policy

This Policy applies to all directors, officers, employees and consultants of the bebe stores, inc. (the “Company”) and entities (such as trusts, limited partnerships and corporations) over which such individuals have or share voting or investment control.  For the purposes of this Policy, officers, outside directors and consultants are included within the term “employee.”  This Policy also applies to any other persons whom the Company’s Insider Trading Compliance Committee may designate because they have access to material nonpublic information concerning the Company, as well as any person who receives material nonpublic information from any Company insider.  Employees, officers and directors are responsible for ensuring compliance by family members and members of their households and by entities over which they exercise voting or investment control.

II.            Trading in Company Securities While in Possession of Material Nonpublic Information is Prohibited

The purchase or sale of securities by any person who possesses material nonpublic information is a violation of federal and state securities laws.  Furthermore, it is important that theappearance, as well as the fact, of trading on the basis of material nonpublic information be avoided.  Therefore, it is the policy of the Company that any person subject to this Policy who possesses material nonpublic information pertaining to the Company may not trade in the Company’s securities, advise anyone else to do so, or communicate the information to anyone else until such person knows that the information has been disseminated to the public.

No director, officer, employee or consultant of the Company who is aware of material nonpublic information relating to the Company may, directly or through family members or other persons or entities,

  • buy or sell securities of the Company, other than pursuant to a trading plan that complies with Rule 10b5-1 promulgated by the Securities and Exchange Commission (“SEC”).
  • engage in any other action to take personal advantage of that information, or
  • pass that information on to others outside the Company, including friends and family (a practice referred to as “tipping”).

In addition, it is the policy of the Company that no officer, director, employee or consultant who, in the course of working for the Company, learns of material nonpublic information of another company with which the Company does business, such as a customer or supplier, may trade in that company’s securities until that information becomes public or is no longer material.

III.           Directors, Officers and Certain Employees Are Subject to Additional Restrictions A.           Section 16 Insiders.  The Company designates certain persons as the directors and officers who are subject to the reporting provisions and trading restrictions of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the underlying rules and regulations promulgated by the SEC.  Each person so designated is referred to herein as a “Section 16 Insider” and will be notified by the Company upon such designation.  B.           Insider Employees.  The Company has designated those additional employees designated on Exhibit A attached hereto as employees who have frequent access to material nonpublic information concerning the Company (“Insider Employees”).  The Company will amend Exhibit A from time to time as necessary. C.           Additional Restrictions.  Because Section 16 Insiders and Insider Employees are more likely than other employees to possess material nonpublic information about the Company, and in light of the reporting requirements to which Section 16 Insiders are subject under Section 16 of the Exchange Act, Section 16 Insiders and Insider Employees are subject to additional restrictions set forth in Appendix Ihereto.  For purposes of this Policy, Section 16 Insiders and Insider Employees are collectively referred to as “Insiders.”IV.          Insider Trading Compliance Committee

The Company has an Insider Trading Compliance Committee, consisting of the Chief Operating Officer, the Chief Financial Officer, and the General Counsel.

The duties of the Insider Trading Compliance Committee will include the following:

1.            Administering this Policy and monitoring and enforcing compliance with all policy provisions and procedures. 2.            Responding to all inquiries relating to this policy and its procedures. 3.            Designating and announcing special trading blackout periods during which no employees may trade in Company securities. 4.            Providing copies of this Policy and other appropriate materials to all current and new directors, officers and employees, and such other persons as the Insider Trading Compliance Committee determines have access to material nonpublic information concerning the Company. 5.            Administering, monitoring and enforcing compliance with federal and state insider trading laws and regulations; and assisting in the preparation and filing of all required SEC reports relating to trading in Company securities, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G. 6.            Selecting designated brokers through which Section 16 Insiders are authorized to trade Company securities. 7.            Revising the Policy as necessary to reflect changes in federal or state insider trading laws and regulations. 8.            Maintaining as Company records originals or copies of all documents required by the provisions of this Policy or the procedures set forth herein, and copies of all required SEC reports relating to insider trading, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G. 9.            Maintaining the accuracy of the list of Insider Employees as set forth on Exhibit A, and updating such list periodically as necessary to reflect additions or deletions.

In fulfilling its duties under this Policy, the Insider Trading Compliance Committee shall be authorized to consult with the Company’s outside counsel.

V.            Applicability of This Policy to Transactions in Company SecuritiesA.          General Rule. This Policy applies to all transactions in the Company’s securities, including common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. For purposes of this Policy, the term “trade” includes any transaction in the Company’s securities, including gifts and pledges.B.          Employee Benefit Plans

Stock Option Plans.  The trading prohibitions and restrictions set forth in this Policy do not apply to the exercise of stock options for cash, but do apply to all sales of securities acquired through the exercise of stock options.  Thus, this Policy does apply to the “same-day sale” or cashless exercise of Company stock options.

Employee Stock Purchase Plans.  The trading prohibitions and restrictions set forth in this Policy do not apply to periodic contributions by the Company or employees to employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan) which are used to purchase Company securities pursuant to the employee’s advance instructions.  However, no officers or employees may alter their instructions regarding the level of withholding or the purchase of Company securities in such plans while in the possession of material nonpublic information.  Any sale of securities acquired under such plans is subject to the prohibitions and restrictions of this Policy.

VI.          Definition of “Material Nonpublic Information”A.          “Material”.  Information about the Company is “material” if it would be expected to affect the investment or voting decisions of a reasonable shareholder or investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company.  In simple terms, material information is any type of information which could reasonably be expected to affect the market price of the Company’s securities.  Both positive and negative information may be material.  While it is not possible to identify all information that would be deemed material, the following types of information ordinarily would be considered material:
  • Financial performance, especially quarterly and year-end earnings, and significant changes in financial performance or liquidity.
  • Company projections and strategic plans.
  • Potential mergers or acquisitions, the sale of Company assets or subsidiaries or major partnering agreements.
  • New major contracts, orders, suppliers, customers or finance sources or the loss thereof.
  • Significant changes or developments in supplies or inventory, including significant product defects, recalls or product returns.
  • Significant pricing changes.
  • Stock splits, public or private securities/debt offerings, or changes in Company dividend policies or amounts.
  • Significant changes in senior management or membership of the Board of Directors.
  • Significant labor disputes or negotiations.
  • Actual or threatened major litigation or the resolution of such litigation.
B.          “Nonpublic”. Material information is “nonpublic” if it has not been widely disseminated to the general public through a report filed with the SEC or through major newswire services, national news services or financial news services.  For the purpose of this Policy, information will be considered public after the close of trading on the secondfull trading day following the Company’s widespread public release of the information.C.          Consult the Insider Trading Compliance Committee When in Doubt. Any employees who are unsure whether the information that they possess is material or nonpublic must consult the Insider Trading Compliance Committee for guidance before trading in any Company securities.VII.         Employees May Not Disclose Material Nonpublic Information to Others or Make Recommendations Regarding Trading in Company Securities

No employee may disclose material nonpublic information concerning the Company to any other person (including family members) where such information may be used by such person to his or her advantage in the trading of the securities of companies to which such information relates, a practice commonly known as “tipping.”  No employee or related person may make recommendations or express opinions as to trading in the Company’s securities while in possession of material nonpublic information, except such person may advise others not to trade in the Company’s securities if doing so might violate the law or this policy.

VIII.        Employees May Not Participate in Chat Rooms

Employees are prohibited from participating in chat room discussions or other Internet forums regarding the Company’s securities or business.

IX.          Only Designated Company Spokespersons Are Authorized to Disclose Material Nonpublic Information

The Company is required under the federal securities laws to avoid the selective disclosure of material nonpublic information.  The Company has established procedures for releasing material information in a manner that is designed to achieve broad dissemination of the information immediately upon its release.  Employees may not, therefore, disclose material information to anyone outside the Company, including family members and friends, other than in accordance with those established procedures.  Those procedures are fully explained in the Company’s FD Disclosure Policy, which is posted on the Company’s website (www.bebe.com) in the Investor Relations, Governance Section.  All employees are instructed hereby to read and be familiar with the Company’s FD Disclosure Policy.  Any inquiries from outsiders regarding material nonpublic information about the Company should be forwarded to the Chief Operating Officer.

X.            Certain Types of Transactions Are ProhibitedA.          Short Sales. Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects.  In addition, short sales may reduce the seller’s incentive to improve the Company’s performance.  For these reasons, short sales of the Company’s securities are prohibited by this Policy. In addition, Section 16(c) of the Exchange Act expressly prohibits officers and directors from engaging in short sales.B.          Publicly Traded Options. A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that the employee is trading based on inside information.  Transactions in options also may focus the employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company’s stock, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”)C.          Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the employee to continue to own the covered securities, but without the full risks and rewards of ownership.  When that occurs, the employee may no longer have the same objectives as the Company’s other shareholders.  Therefore, such transactions involving the Company’s securities are prohibited by this Policy.D.          Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin call.  Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan.  Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, employees are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.  An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.  Any person wishing to enter into such an arrangement must first receive pre-approval for the proposed transaction from the Insider Trading Compliance Committee in accordance with the pre-approval procedures set forth in Appendix I.  If the person wishing to enter such an arrangement is the CEO or a holder of more than 5% of the outstanding stock of the Company, pre-approval will also be conditioned on approval by the Governance Committee.XI.          The Company May Suspend All Trading Activities by Employees

In order to avoid any questions and to protect both employees and the Company from any potential liability, from time to time the Company may impose a “blackout” period during which some or all of the Company’s employees may not buy or sell the Company’s securities.  The Insider Trading Compliance Committee will impose such a blackout period if, in its judgment, there exists nonpublic information that would make trades by the Company’s employees (or certain of the Company’s employees) inappropriate in light of the risk that such trades could be viewed as violating applicable securities laws. 

XII.         Violations of Insider Trading Laws or This Policy Can Result in Severe ConsequencesA.          Civil and Criminal Penalties.  The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge the profit made or the loss avoided by the trading, pay civil penalties up to three times the profit made or loss avoided, face private action for damages, as well as being subject to criminal penalties, including up to 20 years in prison and fines of up to $5 million.  The Company and/or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties.B.          Company Discipline. Violation of this Policy or federal or state insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause.C.          Reporting Violations. Any person who violates this Policy or any federal or state laws governing insider trading, or knows of any such violation by any other person, must report the violation immediately to the Insider Trading Compliance Committee or the Audit Committee of the Company’s Board of Directors.  Upon learning of any such violation, the Insider Trading Compliance Committee or Audit Committee, in consultation with the Company’s legal counsel, will determine whether the Company should release any material nonpublic information or whether the Company should report the violation to the SEC or other appropriate governmental authority.XIII.        Every Individual Is Responsible

Every employee has the individual responsibility to comply with this Policy against illegal insider trading. An employee may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the material nonpublic information and even though the employee believes that he or she may suffer an economic loss or forego anticipated profit by waiting.

XIV.       This Policy Continues to Apply Following Termination of Employment

The Policy continues to apply to transactions in the Company’s securities even after termination of employment.  If an employee is in possession of material nonpublic information when his or her employment terminates, he or she may not trade in the Company’s securities until that information has become public or is no longer material.

XV.        The Insider Trading Compliance Committee Is Available to Answer Questions about this Policy

Please direct all inquiries regarding any of the provisions or procedures of this Policy to the Insider Trading Compliance Committee.

XVI.       This Policy Is Subject to Revision

The Company may change the terms of this Policy from time to time to respond to developments in law and practice.  The Company will take steps to inform all affected persons of any material change to this Policy.

XVII.      All Employees Must Acknowledge Their Agreement to Comply with This Policy

Upon its adoption, this Policy will be delivered to all Section 16 Insiders and Insider Employees.  It will be delivered to all new Section 16 Insiders and Insider Employees at the start of their employment or relationship with the Company.  Upon first receiving a copy of the Policy or any revised versions, each employee must sign an acknowledgment (an electronic acknowledgment and/or signature is sufficient) that he or she has received a copy and agrees to comply with the Policy’s terms.  This acknowledgment and agreement will constitute consent for the Company to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy. 

 

APPENDIX I

 

Special Restrictions on Transactions in Company Securities by

Officers, Directors and Insider Employees

 

I.              Overview

To minimize the risk of apparent or actual violations of the rules governing insider trading, we have adopted these special restrictions relating to transactions in Company securities by Section 16 Insiders and Insider Employees.  As with the other provisions of this Policy, such Insiders are responsible for ensuring compliance with this Appendix I, including restrictions on all trading during certain periods, by family members and members of their households and by entities over which they exercise voting or investment control.  Insiders should provide each of these persons or entities with a copy of this Policy.

II.            Trading Window

In addition to the restrictions that are applicable to all employees, any trade that is subject to the Insider Trading Policy by a Section 16 Insider or an Insider Employee will be permitted only during an open “trading window.”  The trading window is closed during the first month of each fiscal quarter. The trading window generally opens on the second trading day following the date of the public issuance of the Company’s earnings release and remains open for approximately four (4) weeks as shown on the Insider Trading Calendar attached as Exhibit B.  In addition to the times when the trading window is scheduled to be closed, the Company may impose an additional special blackout period during a previously scheduled closed or open window period, at its discretion, due to the existence of material nonpublic information that may be widely known among employees.  Even when the window is open, Insiders (as well as all other employees) are prohibited from trading in the Company’s securities while in possession of material nonpublic information.  The Company’s Insider Trading Compliance Committee will advise Insiders when the trading window opens and closes. Following termination of employment or other service, Insiders will be subject to the trading window, as well as any special blackout period in effect at the time of termination, for one full fiscal quarter thereafter.

III.           Pre-Clearance of Trades

As part of the Company’s Insider Trading Policy,all purchases and sales of equity securities of the Company by Section 16 Insiders, other than transactions that are not subject to the Policy or transactions pursuant to a Rule 10b5-1 trading plan approved by the Insider Trading Compliance Committee, must be pre-cleared by the Insider Trading Compliance Committee, and in the case of a purchase or sale of equity security by the CEO or holder of more than 5% of the company stock, by the Chairman of the Company’s Governance Committee.   The decision on whether to clear such transaction shall be made on the basis of whether or not material, non-public information exists. The intent of these requirements is to prevent inadvertent violations of the Policy, avoid trades involving the appearance of improper insider trading, facilitate timely Form 4 reporting and avoid transactions that are subject to disgorgement under Section 16(b) of the Exchange Act.  The Company may as a courtesy, but is not required to, file certain forms with the SEC (such as Forms 3, 4 and 5s) on behalf of the Section 16 Insider.  However, the Section 16 Insiders acknowledge the filing and accuracy of such forms with the SEC is the responsibility of the Section 16 Insider, and the Company can only act with the best information it has available.

Requests for pre-clearance must be submitted to the Insider Trading Compliance Committee at least two business days in advance of each proposed transaction.  The request must be submitted to the Insider Trading Compliance Committee either in writing or in an email addressed to either the Chief Operating Officer, Chief Financial Officer, or the General Counsel. If the Insider submits the request by email and does not receive a response from the Insider Trading Compliance Committee within 24 hours, the Section 16 Insider will be responsible for following up to ensure that the message was received.

A request for pre-clearance should provide the following:

  • The nature of proposed transaction and the expected date of the transaction.
  • Number of shares involved.
  • If the transaction involves a stock option exercise, the specific option to be exercised.
  • Contact information for the broker who will execute the transaction.
  • A completed and signed Checklist for Purchase/Sale of Company Stock by Directors and Officers that accompanies this memorandum.

Once the proposed transaction is pre-cleared, the Section 16 Insider may proceed with it on the approved terms, provided that he or she complies with all other securities law requirements, such as Rule 144 and prohibitions regarding trading on the basis of inside information, and with any special trading blackout imposed by the Company prior to the completion of the trade.  The Insider and his or her broker will be responsible for immediately reporting the results of the transaction as further described below.

In addition, pre-clearance is required for the establishment of a Rule 10b5-1 trading plan.  All Rule 10b5-1 trading plans must be established during open window periods.  Pre-clearance will not be required for individual transactions effected pursuant to a Rule 10b5-1 trading plan that specifies or establishes a formula for determining the dates, prices and amounts of planned trades.  Of course, the results of transactions by Section 16 Insiders effected under a trading plan must be reported immediately to the Company since they will be reportable on Form 4 within two business days following the execution of the trade, subject to an extension of not more than two additional business days where the Section 16 Insider is not immediately aware of the execution of the trade.

Notwithstanding the foregoing, any transactions by a member of the Insider Trading Compliance Committee shall be subject to pre-clearance by the Chief Financial Officer or, in the event of his or her unavailability, the Chairman of the Board of Directors.

IV.          Designated Brokers

Each market transaction in the Company’s stock by a Section 16 Insider, or any person whose trades must be reported by that Section 16 Insider on Form 4 (such as a member of the Section 16 Insider’s immediate family who lives in that Insider’s household), must be executed by a broker designated by the Company unless the Section 16 Insider has received authorization from the Insider Trading Compliance Committee to use a different broker.

A Section 16 Insider and any broker that handles the Section 16 Insider’s transactions in the Company’s stock will be required to enter into an agreement whereby:

  • The Section 16 Insider authorizes the broker to immediately report directly to the Company the details of all transactions in Company equity securities executed by the broker in the Section 16 Insider’s account and the accounts of all others designated by the Section 16 Insider whose transactions may be attributed to the Section 16 Insider.
  • The broker agrees not to execute any transaction for the Insider or any of the foregoing designated persons (other than under a pre-approved Rule 10b5-1 trading plan) until the broker has verified with the Company that the transaction has been pre-cleared.
  • The broker agrees to immediately report the transaction details (including transactions under Rule 10b5-1 trading plans) directly to the Company and to the Section 16 Insider by telephone and in writing (by fax or email).

Should a Section 16 Insider wish to use a broker other than one of the Company’s designated brokers, the Section 16 Insider should submit a request to use that broker to the Insider Trading Compliance Committee.

V.            Reporting of Transactions

To facilitate timely reporting under Section 16 of the Exchange Act of transactions in Company stock, Section 16 Insiders are required to (a) report the details of each transaction immediately after it is executed and (b) arrange with persons whose trades must be reported by the Section 16 Insider (such as immediate family members living in the Insider’s household) to immediately report directly to the Company and to the Section 16 Insider the details of any transactions they have in the Company’s stock.

Transaction details to be reported include:

  • Transaction date (trade date).
  • Number of shares involved.
  • Price per share at which the transaction was executed (before addition or deduction of brokerage commission and other transaction fees).
  • If the transaction was a stock option exercise, the specific option exercised.
  • Contact information for the broker who executed the transaction.

The transaction details must be reported to the Insider Trading Compliance Committee, with copies to the Company personnel who may assist the Section 16 Insider in preparing his or her Form 4.

VI.          Transactions That Are Prohibited Under This Policy

As described in the Insider Trading Policy, Insiders are prohibited from engaging in the following types of transactions:

A.          Short Sales.  Insiders are prohibited from engaging in short sales of the Company’s securities.B.          Publicly Traded Options.  Insiders are prohibited from engaging in transactions in publicly traded puts, calls or other derivative securities involving the Company’s stock.C.          Hedging Transactions. Insiders are prohibited from engaging in hedging or monetization transactions, such as zero-cost collars or forward sale contracts, involving the Company’s securities.D.          Margin Accounts and Pledges. Insiders are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.  An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.VII.         Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee (the “Governance Committee”) will be responsible for monitoring and recommending any modification to the Insider Trader Policy, if necessary or advisable, to the Board of Directors.

VIII.        Persons Subject to Section 16

Most purchases and sales of Company securities by its directors, officers and greater-than-10% stockholders are subject to Section 16 of the Exchange Act. The Governance Committee will review, at least annually, those individuals who are deemed to be officers for purposes of Section 16 and will recommend any changes regarding such status to the Board of Directors.  A Section 16 officer is generally defined as the president, principal financial officer, principal accounting officer or controller, any vice president in charge of a principal business unit, division or function or any other officer or person who performs a policy making function.

IX.          Form 4 Reporting

Under Section 16, most trades by certain officers or directors are subject to reporting on Form 4 within two business days following the trade date (which in the case of an open market trade is the date when the broker places the buy or sell order, not the date when the trade is settled). To facilitate timely reporting, all transactions that are subject to Section 16 must be reported to the Companyon the same day as the trade date, or, with respect to transactions effected pursuant to a Rule 10b5-1 plan, on the day the Section 16 Insider is advised of the terms of the transaction.

X.            Named Employees Considered Insiders

The Committee will review, generally annually, those individuals deemed to be “Insiders” for purposes of this Appendix I.  Insiders shall include persons subject to Section 16 and such other persons as the Committee deems to be Insider Employees.  Generally, Insider Employees shall be any person who by function of their employment isconsistentlyin possession of material nonpublic informationorperforms an operational role, such as head of a division or business unit, that is material to the Company as a whole.

XI.          Special Guidelines for 10b5-1 Trading Plans

Notwithstanding the foregoing, an Insider will not be deemed to have violated the Insider Trading Policy if he or she effects a transaction that meets all of the enumerated criteria below.

A.           The transaction must be made pursuant to a documented plan (the “Plan”) entered into in good faith that complies with all provisions of Rule 10b5-1 (the “Rule”), including, without limitation: 1.            The Plan must be in the form of a written, binding contract that: a.            specifies the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; orb.           includes a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold.2.           In any case, the Plan must prohibit the Insider and any other person who possesses material nonpublic information from exercising any subsequent influence over how, when, or whether to effect purchases or sales.B.          The Plan must be approved prior to the effective time of any transactions under such Plan by the Insider Trading Compliance Committee.  The Company reserves the right to withhold approval of any Plan that the Insider Trading Compliance Committee determines, in its sole discretion,1.           fails to comply with the Rule, or2.           exposes the Company or the Insider to liability under any other applicable state or federal rule, regulation or law, or3.           creates any appearance of impropriety, or4.           fails to meet the guidelines established by the Company, or5.           otherwise fails to satisfy review by the Insider Trading Compliance Committee for any reason, such failure to be determined in the sole discretion of the Insider Trading Compliance Committee.C.          The Plan must:1.           be established at a time when the Insider is not aware of material nonpublic information about the Company or the securities covered by the Plan;2.           be established at a time when the trading window is open;3.           be established in good faith an not as part of a plan or scheme to evade the insider trading rules; and4.           require that no transactions be made until thirty (30) days following the establishment of the Plan.D.          The Plan must contain the following representations, warranties and covenants by the Insider:1.           As of the date the Plan is established, the Insider is not aware of any material nonpublic information concerning the Company or the securities covered by the Plan.2.           The Insider is entering into the Plan in good faith and not as part of a plan or scheme to evade compliance with federal or state securities laws.3.           While the Plan is in effect, the Insider agrees not to enter into or alter any corresponding or hedging transaction or position with respect to the securities covered by the Plan.4.           The Insider agrees not to alter or deviate from the terms of the Plan.5.           The Insider agrees that he or she shall not, directly or indirectly, communicate any information relating to the securities or the Company to any broker, dealer, financial advisor, trustee or any other third party who is involved, directly or indirectly, in executing the Plan at any time while the Plan is in effect.6.           The Insider agrees not to take, and agrees to cause any person or entity with which the Insider would be required to aggregate sales of securities pursuant to paragraph (a)(2) or (e) of Rule 144 not to take, any action that would cause the sales made under the Plan not to meet all applicable requirements of Rule 144.7.           The Insider agrees to timely make all filings required under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.8.           The Insider acknowledges and agrees that the Insider does not have, and shall not attempt to exercise, any influence over how, when or whether to effect purchases or sales of securities pursuant to the Plan.9.           The Insider agrees that any modifications to the Plan must be made in good faith at a time when the Insider is not aware of any material nonpublic information concerning the Company or the securities covered by the Plan and at a time when the trading window is open.10.         The Insider agrees that termination of the Plan prior to its expiration pursuant to the terms of the Plan will be made in good faith.11.         The Insider agrees that the Company may, in its sole discretion, make public announcements regarding the Plan in any press release or filings with the SEC such as the Company’s proxy statement, Form 8-K or other SEC filings, including, among other things, information as to existence or adoption of the Plan and, to the extent required or advisable under applicable law, information as to the timing of the transactions and the amount and price of the securities to be sold.12.         The Insider agrees to return any securities not sold pursuant to the Plan to the Company for relegending.E.           Any modifications to the Plan, deviations from the Plan or terminations of the Plan without prior approval of the Insider Trading Compliance Committee will result in a failure to comply with the Insider Trading Policy.  Any such modifications or deviations are subject to the approval of the Insider Trading Compliance Committee in accordance with Section B above.F.           The Plan must provide appropriate mechanisms to ensure that the Insider complies with all rules and regulations, including Rule 144, Rule 701 and Section 16(b), applicable to securities transactions under the Plan by the Insider.G.          The Plan must provide for the suspension of all transactions under such Plan in the event that the Company, in its sole discretion, deems such suspension necessary and advisable, including suspensions necessary to comply with trading restrictions imposed in connection with any lock-up agreement required in connection with a securities issuance transaction or other similar events.H.          None of the Company, the Insider Trading Compliance Committee nor any of the Company’s directors, officers, employees or other representatives shall be deemed, solely by their approval of an Insider’s Plan, to have represented that any Plan complies with the Rule or to have assumed any liability or responsibility to the Insider or any other party if such Plan fails to comply with the Rule.

 

EXHIBIT A

INSIDERS EMPLOYEES

SUBJECT TO TRADING WINDOW

 

 

 

 

            In addition to the Section 16 Insiders, the Insider Employees subject to the trading windows described in the Company’s Insider Trading Policy are all employees of the Company except:

 

(a)        Employees working in the Company’s Distribution Center below the position of Director

 

(b)        Store line employees up to and including the level of store manager

 

 

 

EXHIBIT B

INSIDER TRADING CALENDAR

 

Available Upon Request

CERTIFICATION

bebe stores, inc.

Re:      Acceptance of the Company’s Insider Trading Policy

Ladies and Gentlemen:

Enclosed is a copy of the Insider Trading Policy of bebe stores, inc. (the “Company”).

PLEASE READ IT VERY CAREFULLY.  As it indicates, the consequences of insider trading can be drastic to both you and the Company.

Once you have read the Insider Trading Policy and all other related grant information, click accept on the view/accept grant webpage. Such acceptance by you will certify that:

  • you have read, understand and agree to comply with and be bound by the Insider Trading Policy;
  • you will be subject to sanctions that may be imposed by the Company, in its discretion, for violation of the Company’s policy including but not limited to termination of employment;
  • and the Company may give stop-transfer and other instructions to the Company’s transfer agent against the transfer of Company securities by you in a transaction that the company considers to be in contravention of its policy.

If you have any questions in the meantime, please do not hesitate to contact any member of the Insider Training Compliance Committee.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rev. 6/16