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      SUPPLY CHAIN TRANSPARENCY

      For many years, 99 Cents Only Stores has had in place a policy against purchasing any merchandise manufactured as a result of human trafficking or slavery and, in fact, as a result of any coercive, abusive, or unlawful practice.

      In 2004, 99 Cents Only Stores adopted the following policy, which has been on its intranet at all times since:

      “It is the Company’s policy not to purchase products known to be manufactured using exploitive or unfair labor practices. This means not purchasing products known to be manufactured by the use of: forced labor, abusive labor practices, child labor, or other practices that are illegal in the place at which the products being offered are manufactured.”

      Given the largely closeout nature of much of the Company’s merchandise, its price points, and the ever-changing nature and composition of the merchandise it purchases and offers for sale, it is not feasible for the Company to comprehensively verify product supply chains or audit supplier compliance, but the Company does send its own employees to a number of the overseas factories from which it buys product for tours and announced inspections. Further, the Company also requires its direct suppliers to certify, in writing, that their products sold to the Company are not the result of any proscribed practices and that the supplier complies with the laws of all countries in which the supplier does business. In fact, the Company’s vendor contracts contain the following requirement:

      “It is Purchaser’s policy not to purchase products manufactured using exploitive or unfair labor practices, such as forced labor, abusive labor practices, or child labor. Neither will Purchaser buy merchandise made as a result of any practices that are illegal in the place at which the products being offered are manufactured. By signing or shipping under 99 Cents’ PO, Seller attests to the fact that after a diligent inquiry, Seller has ascertained that no product that is the subject of this Purchase Order has been manufactured using any such forced, involuntary, exploitive, or unfair labor practices.”

       Any supplier found to have falsely certified its compliance with the Company’s policy will no longer be used by the Company as one of its vendors. The Company’s buyers are also expected to comply with this policy, although it is not feasible for the Company to maintain a formal accountability program or to provide regular training on these topics to employees and managers operating in these areas, for the same reasons explained above.