California Transparency in Supply Chains Act (SB 567)

On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) (“Act”) went into effect in the State of California. The Act seeks the elimination of slavery and human Trafficking from product supply chains and requires that companies disclose their efforts to ensure that their supply chains are free from slavery and human trafficking.

We are providing you with details of our efforts to address the issue of slave labor and human trafficking in our supply chain. We, at Reeds Jewelers, do not believe that child forced or traffic labor should be utilized in the manufacture of any goods that we sell. We are committed to protecting workers here and abroad by promoting ethical and lawful employment practices. Accordingly, we expect our business partners and suppliers to comply with all applicable domestic and international employment laws and regulations, as well as the following specific requirements.

We have undertaken the following efforts to ensure the absence of slavery and human trafficking in our supply chain:

1. Supplier Requirements. Our suppliers are expected, at a minimum, to conduct business in a socially responsible and ethical manner to comply with all applicable laws and regulations. Our vendor agreement provides, among other things, our expectation that our suppliers comply with all national and international laws and regulations regarding their employment practices and policies. Specifically, no supplier should use forced labor (prison labor, bonded labor or indentured servitude) or child labor, and all suppliers and contractors must pay their employees at least minimum wage, including using overtime only when each employee is fully compensated according to local law. Suppliers should inform each employee at the time of hiring if mandatory overtime is a condition of employment and, on a regularly scheduled basis, provide one day off in seven. Suppliers should require no more than 60 hours of work per week, or comply with local limits if they are lower. Our suppliers are required to maintain on file all documentation needed to demonstrate compliance with our code of business conduct and ethics and required laws. We reiterated our commitment to protecting workers, here and abroad, by promoting ethical and lawful employment practices in our revised vendor agreement.
2. Supplier Audits. We are not equipped to perform audits at supplier production facilities where we are the importer of record with respect to merchandise produced at such facilities. We do deal with only reputable companies and do not deal with any companies where there would be a high risk for slave labor and human trafficking.
3. Certification by Direct Suppliers. Our vendor agreement in place with our merchandise suppliers requires them to certify and warrant that (i) the goods they provide to us comply with all applicable laws regarding slavery and human trafficking, and (ii) forced and child labor was not utilized in the manufacture of these products.
4. Internal Accountability Standards. If we believe that a supplier is not in compliance with our requirements then we will suspend our business relationship with such supplier until the supplier meets our standards. We will provide such supplier with an opportunity to remedy any actual or potential noncompliance through the implementation of a corrective action plan and demonstrated remediation.
5. Employee Training. Our merchandise director and each person in the buying and merchandising department has been advised as to our supplier requirements which are aimed to ensure that child or forced labor is not utilized in the manufacture of goods that we sell. In addition, we will periodically communicate these requirements to our vendors.

From a practical standpoint, we are not aware of any jewelry supplier that utilizes slavery, human trafficking or forced and child labor.

1. Reporting. If anyone is aware of any violations in our supply chain status, please report them directly to our president at:

• Reeds Jewelers, Inc.
• Attn: President RE: Supply Chain Standards
• Post Office Box 2229
• Wilmington, North Carolina 28402
• Email: supplychain@reeds.com