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• INVESTORS
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• ▪ Board Members
• ▪ Code of Conduct

CODE OF CONDUCT

It is the policy of Ceres, Inc.  (“Ceres”) that its operations be conducted according to the highest standard of business integrity, and that its directors, officers and employees shall not engage in activities which might conflict with their responsibilities on behalf of the Company.  This Code of Conduct contains guidelines which are intended to assist directors, officers and employees in making honest and ethical decisions on behalf of Ceres and avoiding conflicts of interest.  No guidelines can be all-inclusive, however, and responsibility for proper conduct rests with each director, officer and employee.  There is no substitute for personal integrity and good judgment.  A director, officer or employee faced with deciding a difficult situation should consider whether he or she would feel comfortable if the decision became public knowledge.  If the decision could be criticized from a legal or ethical standpoint, then the decision is probably incorrect.

Each director, officer and employee is accountable for his or her adherence to this Code of Conduct.  Therefore, it is vital that this Code of Conduct is thoroughly understood.  Each director, officer and employee is encouraged to seek answers to any questions regarding the interpretation or application of this Code of Conduct prior to taking any action of which he/she is uncertain.  Employees should not hesitate to ask their supervisor or a more senior manager if they have questions concerning this policy.  The General Counsel - who will refer questions to the Audit Committee as appropriate - should also be consulted regarding interpretation or applicability of this policy in general, or with regard to a specific situation. 

While it is not possible to describe every situation which may violate this Code of Conduct, the following guidelines are deemed to be particularly important and are examples of matters covered by this Code of Conduct.

BUSINESS CONDUCT

Payments to Customers or Suppliers:

No effort may be made, directly or indirectly, to influence improperly a Ceres customer, prospective customer or supplier.  The payment of bribes, payoffs, kickbacks or other benefits which may improperly influence business relationships between Ceres and its customers or suppliers is prohibited.

Political Contributions:

No corporate funds or other assets may be paid or furnished, directly or indirectly, to a political party or political candidate or incumbent, except if legally permissible and if approved in advance.  All requests must be presented in writing to the General Counsel, who will submit the request to the Audit Committee.  No political contributions by individual employees may be made in the name of Ceres or be reimbursed by it, directly or indirectly.

Gifts and Entertainment:

Gifts, favors or entertainment may not be provided by or on behalf of Ceres to a prospective customer, customer, supplier, or other person or organization, unless all the following criteria are met:

• the item is consistent with normal and accepted business ethics;

• it does not violate the applicable laws;

• if a gift, it has only a nominal value, and if a favor or entertainment, it is reasonable and not excessive;

• it cannot, under the surrounding circumstances, be reasonably construed as a bribe, payoff or kickback; and under no circumstances may gifts be made of cash or cash equivalents.

Agents, Brokers and Consultants:

Payments to agents, brokers, consultants, professionals or other parties representing Ceres must be limited to reasonable compensation for services rendered plus reimbursement for legitimate expenses incurred.  No such party may be engaged by Ceres to make payments or take action which would be in conflict with any provisions of this Code of Conduct.

Competition and Competitive Products:

It is Ceres’ policy to market its products and technology on their merits.  Ceres’ directors, officers, employees, representatives and agents should not disparage or make negative comments about its competitors, or their products, technologies and services.  No comments should be made regarding competitors’ relations with their customers, suppliers or government agencies, or the financial condition of competitors.

Accounting Procedures:

All transactions must be properly recorded on Ceres’ books and records.  No unrecorded bank accounts, corporate funds or assets may be maintained, and all entries made in any corporate books or records must be accurate and comply with Ceres’ policies and procedures.  Therefore, in all of Ceres’ operations, it is against Ceres’ policy, and may also be illegal, for any director, director, officer or employee to cause our books and records to be inaccurate in any way.

Documentation:

Corporate funds may not be paid with the intent or understanding that any part of such payment is to be used for a purpose other than that described by the documents supporting such payment.

Compliance with Laws:

It is the policy of Ceres to comply with the laws of all jurisdictions in which it does business.  It is therefore the responsibility of each director, officer and employee that Ceres’ business be conducted in a manner that complies with laws and governmental regulations relating to genetically engineered plants, environmental laws, antitrust law, tax laws and all other laws and regulations of all jurisdictions that may be applicable to its business.

Reporting:

Ceres is committed to providing complete and accurate information, in all material respects, about the financial condition and results of operations of Ceres in accordance with the applicable laws.  Ceres strives to ensure that the reports and documents that Ceres submits to U.S. regulatory agencies and other public communications made by Ceres include full, fair, accurate, timely and understandable disclosure.  To the extent consistent with an officer’s or employee’s duties and responsibilities, the officer or employee must take the following steps to ensure full, fair, accurate, timely and understandable disclosure in such reports and documents and in other public communications made by Ceres:

• carefully review drafts of reports and documents Ceres is required to file or submit before they are filed or submitted and press releases or other public communications of Ceres before they are released to the public, with particular focus on disclosures the officer or employee does not understand or agree with and on information known to the officer or employee that is not reflected in the report, document, press release or public communication,

• take steps to ensure that disclosure controls and procedures are established and maintained that are designed to ensure that material information is included in each report, document, press release or public communication in a timely fashion,

• consult with the Audit Committee of Ceres on a regular basis to determine whether members thereof have identified any weaknesses or concerns with respect to internal controls,

• when relevant, confirm that the internal auditors and outside accountants of Ceres are not aware of any material misstatements or omissions in the draft report or document, and

• bring to the attention of the Audit Committee of Ceres any matters that the officer or employee feels could compromise the integrity of the financial reports of Ceres.

CONFLICT OF INTEREST

General:

A “conflict of interest” exists when a person’s private interest interferes in any way, or even appears to interfere, with the interests of Ceres.  A conflict situation can arise when a director, officer or employee takes actions or has interests that may make it difficult to perform his or her work for Ceres objectively and effectively.  Conflicts of interest also arise when a director, officer or employee, or a member of his or her family, receives improper personal benefits as a result of his or her position in Ceres.

Conflicts of interest are prohibited as a matter of Ceres policy.  Each director, officer or employee is expected to avoid any outside activity, financial interest or relationship that may present a possible conflict of interest or the appearance of a conflict.  Each person is required to promptly disclose any such conflict of interest to the General Counsel, and no person may engage in an activity that involves any such conflict except with the specific prior approval in writing of the Audit Committee, to which the General Counsel will refer relevant cases.

Gifts and Entertainment:

No director, officer or employee may accept a gift, favor or entertainment from a customer, vendor or other person or organization in connection with Ceres unless all the following criteria are met:

• the item is consistent with normal and accepted business ethics;

• it does not violate any applicable law;

• if a gift, it has only a nominal value, and if a favor or entertainment, it is reasonable and not excessive;

• it cannot, under the surrounding circumstances, be reasonably construed as a bribe, payoff or kickback; and under no circumstances may gifts be received of cash or cash equivalents. 

Outside Employment:

An officer or employee may not engage in employment outside Ceres (whether employment with a third party or self-employment) if such employment competes with or provides services or assistance to a competitor, customer or supplier of Ceres, or interferes with the officer or employee’s assigned duties with Ceres.  Examples of such interference would be the requiring of Company time or facilities to perform the outside employment, or if the outside employment impairs the officer or employee’s ability to give full attention to his or her position with Ceres during normal working hours.

Outside Directorships and Investments:

A director, officer or employee serving as a director of or having a business or financial interest in a company, firm or other entity or person having current or prospective dealings with Ceres (i.e., as a customer, supplier, landlord, tenant or merger/acquisition candidate) or which is a competitor of Ceres must disclose that fact to the General Counsel, who will submit the case to the Audit Committee in order to determine whether the situation presents a conflict of interest.  The business or financial interests of members of a director’s, officer’s or employee’s family living with the director, officer or employee shall also be considered to be the business or financial interests of the director, officer or officer or employee.  Any subsequent approval to continue or engage in such outside directorship or investment must be in writing.  The ownership of not more than one percent (1%) of a publicly traded company’s securities will be presumed not to be a conflict of interest and need not be disclosed.

Confidentiality of Inside Information:

No director, officer or employee may disclose, or use for personal gain, confidential information relating to Ceres.  Confidential information is any information not generally known about Ceres’ business such as, but not limited to, information relating to research and development or inventions or other proprietary data, unpublished financial data, procedures, business, marketing, financial or other plans.  The same obligation applies with respect to confidential information of a third party available to Ceres.  A director, officer, employee or other person who uses confidential information for personal benefit, or who discloses it to persons other than those within Ceres whose positions require them to know it, violates this policy.

The foregoing is in addition and without prejudice to any obligations directors, officers and officer or employees may have under agreements with Ceres or under applicable laws.

Acting Against Ceres Interests:

No director, officer or employee may take personal advantage of, or make available to others, any business opportunity in which it is known or could reasonably be known that Ceres would be interested, such as a purchase of real estate or other property, or any interest in a company in which Ceres is known to have an interest in acquiring.  In no event may a director, officer or employee deal for his or her own account in activities performed by Ceres.  Directors, officers and employees owe a duty to the Company to advance its legitimate interests to the best of their abilities. 

Dishonesty:

No director, officer or employee shall commit or contribute to acts of dishonesty against Ceres such as fraud, theft, embezzlement or misappropriation of corporate assets.  In addition to appropriate disciplinary action, a criminal complaint will be filed against the offending director, officer or employee when the evidence, circumstances and Ceres’ interests so warrant.

IMPLEMENTATION

All managers shall, within their areas of responsibility, arrange for the distribution and explanation of this Code of Conduct so as to assure officer or employee knowledge and compliance.  Managers are also responsible for enforcement of this Code of Conduct within their areas of responsibility.  Written certification concerning Code of Conduct compliance will be periodically required from those directors, officers and officer or employees designated by the Audit Committee of Ceres.

Any actual or contemplated conduct which a director, officer or employee reasonably believes may constitute a violation of this policy must be promptly reported to the General Counsel who will communicate the facts to the Audit Committee.

ENFORCEMENT

Violation of this Code of Conduct will result in disciplinary action, and may include termination of employment.  Legal proceedings will also be commenced, if necessary, to recover the amount of any improper expenditures, any profits realized by the offending director, officer or employee, and any financial detriment sustained by Ceres.  If a director, officer or employee believes that anyone at Ceres is or may be involved in any activity that violates this Code of Conduct, Ceres assures that it will not tolerate threats or acts of retaliation or retribution against any director, officer or employee for reporting a violation or suspected violation.

Any waivers of this Code of Conduct granted to directors or executive officers must be approved by the Board of Directors, and any such waivers will be disclosed in accordance with applicable law.

APPLICATION

Reference to Ceres or the Company in this Code of Conduct shall mean not only that Corporation but also any Affiliates (over 50% control), Divisions and Subsidiaries.

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