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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 31, 2004
ARROWHEAD RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-21898 46-0408024
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
150 S. Los Robles, Ste. 480, Pasadena, CA 91101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (626) 792-5549
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
Changes in the Composition of the Board of Directors
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Arrowhead Research Corporation (the "Company") has previously filed a
Registration Statement on Form S-3 with the Securities and Exchange Commission,
for the purpose of registering for resale under the Securities Act of 1933, as
amended (the "Securities Act") all of the outstanding shares of the Company's
common stock and common stock purchase warrants that were issued without
registration under the Securities Act in connection with the transactions that
resulted in the January 12, 2004 change in control of the Company's ownership
and plan of operations. The Registration Statement on Form S-3 has not yet
become effective, and none of the securities may publicly be sold nor may offers
to buy be accepted prior to the time the Registration Statement becomes
effective. This Current Report on Form 8-K shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of the
securities covered by the Registration Statement on Form S-3 in any State in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such State.
An application is being submitted to The NASDAQ Stock Market for the
approval of the Company's common stock and stock purchase warrants for
quotation on The NASDAQ SmallCap Market as of such time as the Registration
Statement becomes effective under the Securities Act. Among other conditions to
a listing on The NASDAQ SmallCap Market, the Company must have a majority
of "independent directors," as defined in the NASDAQ Marketplace Rules.
Accordingly, on March 31, 2004, Drs. Charles Patrick Collier and Marc W.
Bockrath resigned from the Company's Board of Directors, in order to create
vacancies on the Board of Directors that could be filled by individuals who
would meet the "independent director" requirement for a NASDAQ listing. Prior to
their resignations from the Board of Directors, there were no disagreements
between the Company and either of Drs. Collier and Bockrath on any matter
relating to the Company's operations, policies or practices.
On April 5, 2004, Charles P. McKenney was elected by the Company's Board of
Directors to fill one of the two vacancies on the Board created by the
resignations of Drs. Collier and Bockrath. As a result of his election as a
director, the Company's Board of Directors currently is comprised of five
individuals, three of whom, Edward W. Frykman, LeRoy Rahn and Mr. McKenney, are
"independent" for purposes of the proposed listing on The NASDAQ SmallCap
Market.
Mr. McKenney, age 65, has maintained a government affairs law practice in
Pasadena, California since 1989, representing businesses and organizations in
their relations with government regarding their obligations under state and
local land use and trade practices laws. From 1973 through 1989, he served as
Attorney for Corporate Government Affairs for Sears, Roebuck and Co., helping
organize and carry out Sears' Western state and local government relations
programs. Mr. McKenney has served two terms on the Pasadena, California City
council, on several city boards and committees in Pasadena, including three city
Charter Reform Task Forces, and as Pasadena's first appointee to the Santa
Monica Mountains Conservancy Advisory Committee. He has been granted an option
to purchase, at the price of $1.00, up to 25,000 shares of the Company's common
stock under the Company's 2000 Stock Option Plan.
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Establishment of an Audit Committee.
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With the addition of Mr. McKenney to the Board of Directors, an Audit
Committee of the Board of Directors has been established, comprised of the three
independent directors, Messrs. Frykman, Rahn and McKenney. The Audit Committee
is responsible for retaining, evaluating and, if appropriate, recommending
the termination of the Company's independent accountants and is primarily
responsible for approving the services performed by the Company's independent
accountants and for reviewing and evaluating the Company's accounting
principles, financial reporting practices, and its system of internal accounting
controls. The Audit Committee is also responsible for maintaining communication
between the Board of Directors and the Company's independent accountants. The
Board of Directors has determined that Mr. Frykman is an "audit committee
financial expert" as defined in Item 401(e) of Regulation S-B under the
Securities Exchange Act of 1934.
Adoption of Code of Corporate Conduct
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The Company's Board of Directors also has adopted a Code of Corporate
Conduct that applies to all of the Company's employees, including its chief
executive officer, chief financial and accounting officer, president and any
persons performing similar functions. A copy of the Code of Corporate Conduct is
filed herewith as an Exhibit to this Current Report on Form 8-K, and shortly
will be available on the Company's internet website at www.arrowres.com, or by
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written request addressed to the Company at 150 S. Los Robles Avenue, Suite
480, Pasadena, California 91101.
Formation of a Scientific Advisory Board
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Concurrent with their resignations from the Company's Board of Directors,
Drs. Bockrath and Collier were elected to serve on the Company's newly
established Scientific Advisory Board. The Scientific Advisory Board will be
comprised of individuals who can provide consultation to the Company's
Management on scientific matters.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits. The following document is filed as an exhibit to this
Current Report on Form 8-K:
Exhibit No. Description Page Number
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14 Code of Corporate Conduct 5
ITEM 10. AMENDMENTS TO THE REGISTRANT'S CODE OF ETHICS, OR WAIVER OF A
PROVISION OF THE CODE OF ETHICS.
Please see Item 5 above.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 5, 2004
ARROWHEAD RESEARCH CORPORATION
By: /s/ R. Bruce Stewart
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R. Bruce Stewart, President
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ARROWHEAD RESEARCH CORPORATION
CODE OF CORPORATE CONDUCT
Arrowhead Research Corporation ("Arrowhead") strives to conduct its business in
accordance with the highest ethical standards and in compliance with all
applicable governmental laws, rules and regulations. Arrowhead believes that is
imperative that its officers, directors and employees act at all times in an
honest and ethical manner in connection with their service to Arrowhead. The
principles of integrity, accountability and fair dealing are the cornerstone of
Arrowhead's business, and are critical to its future success.
The following information constitutes Arrowhead's Code of Corporate Conduct,
which applies to all Arrowhead officers, directors and employees. This Code of
Conduct is intended to meet the requirements for a code of ethics under the
Sarbanes-Oxley Act of 2002 and NASDAQ listing standards, and is specifically
applicable to Arrowhead's principal executive officer, principal financial and
accounting officer and controller or persons performing similar functions. Any
waiver of this Code of Corporate Conduct for any of Arrowhead's executive
officers or directors may be made only by the Board of Directors and must be
promptly disclosed to stockholders, as required by applicable law.
All references to "Arrowhead" or the "Company" in this Code of Conduct should be
read to include Arrowhead's subsidiaries. This Code of Corporate Conduct cannot
anticipate every possible situation or cover every topic in detail. If you have
a question about a topic covered in this Code of Corporate Conduct or a concern
regarding any illegal or unethical conduct, please contact your immediate
supervisor. If you are uncomfortable talking with your immediate supervisor,
you may contact any member of Arrowhead's senior management with concerns or
questions regarding this Code of Corporate Conduct.
I. COMPLIANCE WITH APPLICABLE LAWS
Arrowhead is committed to conducting its business in strict compliance with all
applicable governmental laws, rules and regulations, including but not limited
to laws, rules and regulations related to securities, labor, employment and
workplace safety matters. All Arrowhead officers, directors and employees are
expected at all times to conduct their activities on behalf of Arrowhead in
accordance with this principle. Any violation of applicable laws, rules or
regulations by an Arrowhead employee, officer or director should be reported
immediately to Arrowhead's General Counsel or another member of Arrowhead's
senior management.
As a public reporting company, we are subject to regulation by the Securities
and Exchange Commission ("SEC") and compliance with Federal securities laws and
regulations, as well as state and local laws. Arrowhead insists on strict
compliance with the spirit and the letter of these laws and regulations.
II. CONFLICTS OF INTEREST
A "conflict of interest" exists any time employees, officers or directors face a
choice between what is in their personal interest (financial or otherwise) and
the interest of Arrowhead. A
conflict of interest also exists when an employee, officer or director takes
actions or has interests that make it difficult to perform effectively his or
her duties on behalf of Arrowhead. When a conflict of interest arises, it is
important that employees act with great care to avoid even the appearance that
their actions were not in Arrowhead's best interests. This obligation applies
to both business relationships and personal activities. If you find yourself in
a position where your objectivity may be questioned because of individual
interest or family or personal relationships, notify Arrowhead's General Counsel
immediately.
PERSONAL BUSINESS RELATIONSHIPS AND ACTIVITIES
Arrowhead's employees, officers and directors must plan personal relationships
and business affairs so as to avoid situations that might lead to actual or
perceived conflicts between the self-interest of such individuals and their
obligations and duties to Arrowhead and its stockholders. Any financial
interest held by an Arrowhead employee, officer or director in a financial
institution or other entity with whom Arrowhead has business dealings, or an
Arrowhead competitor (other than interests of less than 2% of the outstanding
securities of competitors whose securities are publicly traded) must be
disclosed to and approved in advance by Arrowhead's Board of Directors.
Conflicts of interest also arise when an Arrowhead employee, officer or
director, or a member of his or her family, receives improper benefits as a
result of his or her position with Arrowhead. An example of such an improper
benefit would be a loan or loan guarantee from Arrowhead or any of its
subsidiaries to any Arrowhead employee, officer or director. Such loans or loan
guarantees, as well as other similar conflicts of interest, are prohibited by
this Code of Corporate Conduct.
Arrowhead's Board of Directors will determine if a proposed transaction or
relationship would involve a conflict of interest. If it is appropriate to grant
an exception from this Code of Corporate Conduct, the exception will be promptly
disclosed to the public as required by applicable law and regulation.
ORGANIZATIONAL RELATIONSHIPS
Arrowhead employees, officers and directors may not:
- - Acquire a direct or indirect financial interest in the business of any
financial institution or other entity with whom Arrowhead has business
dealings, or an Arrowhead competitor (other than de minimus interests of
less than 2% of the outstanding securities of competitors whose securities
are publicly traded) unless such interest is disclosed to and approved in
advance by Arrowhead's General Counsel.
- - Enter into a business relationship on Arrowhead's behalf with an immediate
family member or with a company that the employee or immediate family
member has a substantial financial interest unless such relationship is
disclosed to and approved in advance by Arrowhead's Board of Directors.
Immediate family member includes the employee's spouse or domestic partner,
the employee's and/or the employee's spouse's
or domestic partner's grandparents, parents, siblings, children,
grandchildren, aunts, uncles, nephews and nieces.
- - Accept, directly or indirectly, anything (including gifts) of a nature or
value that could create the appearance that the person providing the gift
is receiving or will receive favorable prices, terms, and conditions of
sale, purchase orders, or other preferential treatment from Arrowhead. This
extends to financial institutions, vendors, entities or individuals
currently doing or seeking to do business with Arrowhead or any Arrowhead
entity.
- - Participate in other employment (including self-employment) or serve as an
officer, director, partner or consultant for other organizations unless
such activity is disclosed to and approved by Arrowhead's General Counsel.
Such activity is prohibited under any circumstances if it interferes with
your ability to act in the best interests of Arrowhead, requires you to use
proprietary, confidential or non-public information, procedures, plans or
techniques of Arrowhead, or creates an appearance of impropriety.
CORPORATE OPPORTUNITIES
Arrowhead's employees, officers and directors owe a duty to Arrowhead to advance
its legitimate interests when the opportunity to do so arises. For this reason,
such persons are prohibited from taking "corporate opportunities" for
themselves. Accordingly, Arrowhead's employees, officers and directors are
prohibited, without the prior consent of Arrowhead's Board of Directors, from
(i) taking for themselves personally opportunities that are discovered through
the use of Arrowhead property, information or position, or (ii) competing with
Arrowhead. Such persons are also prohibited from using Arrowhead property,
information or position for personal gain.
III. COMMUNICATION OF FALSE OR DEROGATORY INFORMATION
The communication of false or derogatory information about Arrowhead, entities
with whom it has business dealings or employees is also a violation of corporate
policy, federal and state law and possibly laws of other jurisdictions.
Arrowhead has business relationships and other involvements and communications
with financial institutions, investors, suppliers, vendors, and government
authorities. In all interactions and communications, Arrowhead employees,
officers, and directors must always be truthful and:
- - Never make dishonest statements, misrepresentations or statements intended
to mislead or misinform.
- - Always respond promptly and accurately to requests for information or
documents from government agencies. These requests should immediately be
brought to the attention of Arrowhead's General Counsel and authorized
prior to providing documentation to outside parties.
- - Direct all media requests for information or statements to Arrowhead
Investor Relations.
- - Apply the same principles of honesty to all aspects of internal
communications and record keeping. Falsification, alteration, or
unauthorized destruction of any document, or misrepresentation of any
information could result in termination of employment, as well as referral
to appropriate authorities.
All documents whether originals, drafts, or duplicates, including all computer
files, disk drives, hard disks, floppy disks, CD-ROMs, or any other media must
be retained in accordance with applicable law and Arrowhead's policies with
respect to retention and preservation of documents. No document may be
destroyed, altered, or removed from any file or premise in which it is now
stored without prior approval.
IV. FAIR DEALING
Arrowhead expects its employees, officers and directors to deal fairly with
Arrowhead's financial institutions, suppliers, vendors, competitors, agents and
employees, to base business relationships on lawful, efficient and fair
practices and to use only ethical practices when dealing with actual or
potential financial institutions, vendors, competitors, agents, employees and
other parties. It is the obligation of every Arrowhead employee to conduct
business in a manner that avoids even the appearance of ethical or legal
impropriety and is consistent with all applicable laws and regulations.
Specifically, no Arrowhead employee, officer or director should do any of the
following:
- - Give or accept anything of value from any current or potential financial
institutions, supplier or vendor as an inducement for or in return for
business or preferential treatment; or
- - Take advantage of any financial institution, supplier, competitor or
employee through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts, or any other unfair
business practice.
V. CONFIDENTIAL INFORMATION
All Arrowhead employees, officers and directors are required to maintain the
confidentiality of all non-public information (including electronic information)
that they receive or have access to during their employment or service with
Arrowhead, except when disclosure is authorized or legally mandated. This
obligation applies not only to confidential information about Arrowhead, but
also to confidential information about its financial institutions, suppliers,
business partners and employees. You are also prohibited from disclosing
confidential information that you obtained at a previous employer, including,
but not limited to, trade secrets.
During and following your employment at Arrowhead, you shall not directly or
indirectly publish, disclose, describe or communicate confidential information,
or authorize anyone else to do so for any purpose other than legitimate
corporate purposes. Even within Arrowhead, you
shall only disclose confidential information to those employees who have a
business-related "need to know". You are responsible for avoiding the release of
nonpublic information. Should you have any questions regarding your
confidentiality obligations, you should seek guidance from Arrowhead management
or Arrowhead's General Counsel.
VI. INSIDE INFORMATION AND SECURITIES TRADING
In the course of your relationship with Arrowhead, you may receive non-public
information about Arrowhead, its customers, suppliers, licensees or acquisition
targets. It is a violation of federal law, and prohibited by Arrowhead policy,
for any Arrowhead employee, officer or director to purchase or sell Arrowhead' s
securities based on knowledge of material non-public information. This
prohibition extends to any trading in the securities of any of Arrowhead's
customers, suppliers, licensees or other entities with which Arrowhead has a
business relationship while in possession of material nonpublic information
learned in the course of your employment with Arrowhead.
"Material" information is information of such importance that it can be expected
to affect the judgment of investors as to whether or not to buy, sell, or hold
the securities in question. "Nonpublic" means it is not generally available to
the public. Examples of material nonpublic information include, but are not
limited to, financial results, projections of future earnings or losses,
significant litigation exposure due to actual or threatened litigation, news of
a pending or proposed acquisition or merger, corporate partnerships,
acquisitions or strategic alliances, news of the disposition of assets, new
equity or debt offerings, changes in senior management.
Arrowhead prohibits "insiders" from disclosing or trading on "inside
information" and further requires all directors, officers and certain employees
of Arrowhead to obtain approval from Arrowhead's General Counsel prior to
trading in Arrowhead securities. Those persons who are subject to this
requirement are identified in Arrowhead's Insider Trading Policy and may be
obtained from Arrowhead's General Counsel. EMPLOYEES, OFFICERS AND DIRECTORS
ARE EXPECTED TO HAVE READ AND BE FAMILIAR WITH ARROWHEAD'S INSIDER TRADING
POLICY, AND TO COMPLY FULLY WITH ITS RULES AND GUIDELINES. All questions
regarding securities trading should be directed to Arrowhead's General Counsel.
VII. FINANCIAL REPORTING AND ACCURACY OF COMPANY RECORDS
As a public company, Arrowhead is required by law to make full, fair, accurate,
timely and understandable disclosure in the reports and documents that Arrowhead
files with, or submits to the SEC and in all other public communications it
makes.
In order for Arrowhead to comply with its public disclosure obligations, it has
adopted the following principles:
- - Business transactions must be properly authorized and be completely and
accurately recorded on Arrowhead's books and records in accordance with
generally accepted accounting practices, and established Arrowhead
financial policy.
- - Each Arrowhead employee, officer and director must help to maintain the
integrity of Arrowhead's record keeping and reporting systems and is
responsible for maintaining complete and accurate records, accounting
entries and classifications.
- - Arrowhead employees, officers and directors are expected to comply fully
and accurately with all audits, requests for special record keeping or
retention of documents, documents or other material from or on behalf of
Arrowhead' s auditors, Arrowhead's General Counsel or Arrowhead management.
- - Each employee is responsible for maintaining complete and accurate records,
accounts, entries and classifications and for accuracy in expense account
vouchers reflecting legitimate business expenses. Misapplication or
improper use of corporate funds or property or false entry to records by
employees or others must be reported to Arrowhead's General Counsel and may
result in discipline up to and including termination.
VIII. INTELLECTUAL PROPERTY
Arrowhead's name, logo, formulae, inventions, trade secrets, business, marketing
and financial plans, databases, records, unpublished financial data and reports
and other intellectual property are valuable assets of Arrowhead and their
protection is critical to our success. Arrowhead expects others to respect its
intellectual property rights and expects its employees, officers, and directors
and agents to respect the intellectual property rights of others. The rules
with respect to trademark, trade secret, patent and copyright laws are complex,
so you should seek advice from Arrowhead's outside legal counsel if any
questions should arise.
All intellectual property including, but not limited to, trade secrets,
inventions, technical innovations, plans, products, discoveries and systems that
any employee designs or conceives while employed at Arrowhead which relates to
Arrowhead business must be disclosed to Arrowhead and, at Arrowhead's option,
shall become the sole property of Arrowhead.
Without limitation, all Arrowhead employees, officers and directors are
responsible for understanding the following types of intellectual property
rights and taking the listed steps to protect such rights:
COPYRIGHTS protect works like articles, drawings, photographs, video, music and
software and generally prohibit unauthorized copying or downloading of these
works.
- - Do not copy these materials without first determining that the company has
obtained permission from the copyright holder or that other limited copying
is legally permitted.
- - Consult with Arrowhead's General Counsel if you have questions.
- - Do not copy or distribute software or related documentation without
reviewing the license agreement.
TRADEMARKS AND SERVICE MARKS are words, names and symbols which help consumers
recognize a product or service and distinguish it from those of competitors.
Our name and logo and those of our subsidiaries are among Arrowhead's most
valuable assets. The use of Arrowhead's or its subsidiaries' trademarks or
service marks must be properly authorized or licensed.
- - Requests for use of the name, service marks and trademarks of Arrowhead or
its subsidiaries are reviewed by Arrowhead's General Counsel.
- - Do not use a third party's trademark or service mark without permission.
PATENTS permit inventors to exclude others from making, using or selling their
inventions. Report any unauthorized use of the patents held by Arrowhead or its
subsidiaries.
- - Only use inventions patented by third parties within the terms of a license
agreement.
A TRADE SECRET is valuable information that creates a competitive advantage for
Arrowhead or its subsidiaries by being kept secret. Examples include information
about customers, like their buying patterns and needs; and financial, planning,
marketing and strategic information about Arrowhead's current and future
business plans.
- - Treat as trade secrets and keep confidential all commercially sensitive and
important business information of Arrowhead and its subsidiaries and all
similar information of other companies and persons that Arrowhead has
received under a confidentiality agreement.
If you observe practices that are inconsistent with these directives, please
contact Arrowhead's General Counsel.
IX. DEALINGS WITH PUBLIC OFFICIALS AND GOVERNMENT ENTITIES
Arrowhead also expects employees to base relationships with public officials and
government entities on lawful, efficient and fair practices and to use only
ethical practices when dealing with these and other parties. It is the
obligation of every Arrowhead employee to conduct business in a manner that
avoids even the appearance of impropriety and is consistent with all applicable
laws and regulations.
Do not directly or indirectly promise, offer or make payment in money or
anything of value to anyone, including a government official, agent or employee
of a government, political party, labor organization or business entity or a
candidate of a political party, with the intent to induce favorable business
treatment or to improperly affect business or government decisions. Pay special
attention to the treatment of public officials and employees of governmental
agencies whose conduct with respect to gifts and meals is controlled by laws and
regulations which must be complied with at all times. These laws and
regulations are complex and can vary from country to country - and even within a
country (e.g. local versus national officials).
Arrowhead employees involved in sales or other transactions with governmental
customers should take steps to ensure that such transactions comply with all
applicable laws and regulations and avoid even the appearance of impropriety.
Contact Arrowhead's General Counsel with specific questions or situations.
X. USE OF COMPANY RESOURCES
OWNERSHIP OF COMPANY PROPERTY
Arrowhead's property, including but not limited to its communication equipment,
facilities, computers, software, e-mail, voice mail, conferencing equipment and
office supplies is owned by Arrowhead or operated on its behalf to advance its
business strategy and objectives. Arrowhead's company property is in place to
enable its employees to perform business- related duties required by their
positions. The use of company property is for the sole purpose of conducting
business-related tasks.
A limited exception to the "business-only" rule is when conducting "incidental
personal business" and is consistent with the following guidelines:
- - Is limited in duration or extent.
- - Does not detract from the user's attention to or completion of job duties
or job performance.
- - Does not subject Arrowhead to any significant incremental cost.
- - Is not used to unlawfully obtain, copy, download, distribute software,
electronic files, or other materials protected by copyright.
- - Does not otherwise violate this Code of Corporate Conduct including but not
limited to, provisions related to conflicts of interest and/or disclosure
of confidential information.
COMPUTER RESOURCES
Arrowhead invests in and uses computer resources (computer hardware, software,
supporting infrastructure, network connections and telecommunications equipment)
to advance its business strategy and objectives.
- - Computer software (computer programs, databases and related documentation)
whether purchased from a supplier or developed by Arrowhead is protected by
copyright and may also be protected by patent or as a trade secret.
Employees are expected to strictly follow the terms and conditions of the
license agreements, including provisions not to copy or distribute
materials covered by these agreements. These protected materials may not be
reproduced for personal use.
- - Use of the Internet and electronic mail should be in support of and to
advance Arrowhead's business success. Any personal use of these
technologies should not create additional costs for Arrowhead, interfere
with work duties or violate any company policies, including policies
related to defamatory, offensive or threatening messages, gambling,
pornography, viruses, chain letters, executable 'ready to run" files,
"hacking," etc. All communications, data or information received, sent or
obtained using Arrowhead property while employed at Arrowhead are not
private communications. Unless prohibited by local law, the use of this
technology, including electronic mail and the internet, is subject to
monitoring by Arrowhead.
XI. MEDIA RELATIONS AND PUBLIC INQUIRIES
All communications with the news media, regulatory agencies and other entities
by Arrowhead and its employees are potentially important and reflect upon
Arrowhead's image. In addition, Arrowhead is subject to various legal
requirements with respect to the public dissemination of material or significant
events related to its business. It is crucial that communications from
Arrowhead be handled in a consistent manner, and that all regulatory and legal
obligations with respect to disclosure of information be fulfilled.
Communication with the news media is an important part of Arrowhead's ongoing
marketing and investor relations programs. Communications with the news media
about "material events" and "significant public events" should be directed to
Arrowhead's Investor Relations office. All inquiries from regulatory agencies
and all inquiries about current or former employees of Arrowhead or its
subsidiaries should be directed to Arrowhead's General Counsel. All such
communications will be forthright, responsible and in keeping with Arrowhead's
legal policies and obligations.
XII. REPORTING
REPORTING VIOLATIONS AND MAKING COMPLAINTS
Possible violations of the Code of Conduct should be reported immediately.
Violations of the Code of Corporate Conduct can expose individuals and Arrowhead
to criminal actions, fines and other serious legal qualifications.
If you observe a situation that may violate this Code of Corporate Conduct, you
should report it to Arrowhead's General Counsel. Employees may contact the
General Counsel to ask questions concerning or to report violations or suspected
violations of the Code of Corporate Conduct or any law or regulation.
Subject to applicable law, regulation or legal proceedings, your contact will be
handled confidentially and, to the extent possible, anonymously. Once your call
is received, the information you provide will be referred to the appropriate
Arrowhead authority and resolved as expeditiously as possible. Please understand
that it is more difficult to resolve anonymous complaints.
Our General Counsel and responsible Arrowhead management will treat your
information as confidentially as possible in an effort to address your concerns
and work with you towards resolution.
In no event will adverse action be taken against you for making a good-faith
report to Arrowhead.
If the matter involves an accounting or auditing matter, you may report it in
writing on a confidential, anonymous basis to the Chairman of the Audit
Committee or contact the General Counsel.
NO RETALIATION
Employees, officers and directors may bring their concerns forward without fear
of retribution or punishment. Arrowhead will not retaliate against any employee
for reporting suspected violations of laws, regulations or company policies.
This means that Arrowhead will not terminate, demote, transfer to an undesirable
assignment, or otherwise discriminate against an employee for calling attention
to suspected illegal or unethical acts. This protection extends to anyone
giving information in relation to an investigation. However, Arrowhead reserves
the right to discipline anyone who knowingly makes a false accusation, provides
false information to Arrowhead or has otherwise acted improperly.
XIII. DISCIPLINE
Failure to follow this Code of Corporate Conduct can have substantial
consequences. Not only may you be personally liable for the legal or ethical
violation (which may result in fines or even jail time), you may also be subject
to disciplinary proceedings, including termination.
XIV. WAIVERS OF THE CODE OF CORPORATE CONDUCT
Any waiver of this Code of Corporate Conduct for executive officers or directors
may be made only by the Board of Directors or a Board Committee and will be
promptly disclosed as required by law or by SEC or NASDAQ regulations. Waivers
of this Code for a non-officer employee may be made by the President or General
Counsel only upon the employee making full disclosure in advance of the
transaction in question. The Code of Corporate Conduct may be amended or
modified at any time by the Board of Directors.
XV. ACKNOWLEDGEMENT
Employees, officers and directors will be asked annually to sign a statement
affirming that they have read and understood this Code of Corporate Conduct and
that they are in compliance with the Code of Corporate Conduct.