CODE OF BUSINESS CONDUCT AND ETHICS
SHOLODGE, INC. AND ITS SUBSIDIARIES
Overview
The following principles support and guide our leadership in establishing the strategic direction of ShoLodge, Inc. and its subsidiaries (“ShoLodge”). Our directors, officers and employees are expected to conduct their business in accordance with these ethical principles. We must do more than be compliant with laws, regulations and policies; we must work according to our ethical principles and endeavor to conduct ourselves in a manner beyond reproach. Any employee who ignores or violates any of ShoLodge’s ethical standards, or who penalizes a subordinate for trying to follow these ethical standards, will be subject to corrective disciplinary action, including immediate dismissal. Our reputation is based on the personal integrity of each of our employees and those with whom we do business. A dedicated commitment to ethical behavior is the right thing to do, is good business and is the surest way for ShoLodge to remain a business leader, employer of choice and good corporate citizen.
Ethics
ShoLodge and each of its directors, officers and employees, wherever they may be located, must conduct their affairs with uncompromising honesty and integrity. Business ethics are no different than personal ethics. The same high standard applies to both. ShoLodge personnel are expected to be honest and ethical in dealing with each other, with clients, vendors and all other third parties. Doing the right thing means doing it right every time.
You must respect the rights of your fellow employees and third parties. Your actions must be free from discrimination, libel, slander or harassment. Each person must be treated with dignity and respect and accorded equal opportunity, regardless of age, race, sex, sexual preference, color, creed, religion, national origin, marital status, veteran’s status, handicap or disability.
Misconduct cannot be excused because it was directed or requested by another. In this regard, you are expected to alert management whenever an illegal, dishonest or unethical act is discovered or suspected. You will never be penalized for reporting your discoveries or suspicions.
ShoLodge conducts its affairs consistent with the
applicable laws and regulations of the
The following statements concern frequently raised ethical concerns. A violation of standards contained in this Code of Business Conduct and Ethics will result in corrective disciplinary action, including possible dismissal.
Conflicts of Interest
You must avoid any personal activity, investment or association which could appear to interfere with good judgment concerning ShoLodge’s best interest. You may not exploit your position or relationship with ShoLodge for personal gain. You should avoid even the appearance of such a conflict. Therefore, if you are related in any way to a vendor, customer or other provider, you should not be the one to decide whether ShoLodge will do business with that person.
As other examples, there is likely a conflict of interest if you:
· Cause ShoLodge to engage in business transactions with you or your relatives or friends or entities controlled by you or them;
· Use nonpublic ShoLodge, customer or vendor information for personal gain by you, relatives or friends (including securities transactions based on such information);
· Have more than a modest financial interest in ShoLodge’s vendors, customers or competitors;
· Receive a loan, or guarantee of obligations, from ShoLodge or a third party as a result of your position at ShoLodge; or
· Compete, or prepare to compete, with ShoLodge, while still employed by ShoLodge.
There are other situations in which a conflict of interest may arise. If you have concerns about any situation, follow the steps outlined in the section of this Code of Business Conduct and Ethics entitled “Reporting Violations.”
To ensure that material transactions and relationships involving a potential conflict of interest for any officer or director are in the best interests of ShoLodge, the Board of Directors must approve in advance all transactions and relationships in which an officer or director, or any member of any such person’s family, may have a personal interest or other potential conflict of interest. Not director, officer or employee may, on behalf of ShoLodge, authorize or approve any transaction or relationship, or enter into any agreement, in which any director, officer or any member of his or her immediate family, may have a personal interest without such Board of Director approval.
Gifts, Bribes and Kickbacks
Other than for modest gifts given or received in the normal course of business ( including travel or entertainment), neither you nor your relatives may give gifts to, or receive gifts from, ShoLodge’s customers or vendors. Other gifts may be given or accepted only with prior approval of our senior management. In no event should you put ShoLodge or yourself in a position that would be embarrassing if the gift was made public.
Dealing with government employees is often different than dealing with private persons. Many governmental bodies strictly prohibit the receipt of any gratuities by their employees, including meals and entertainment. You must be aware of and strictly follow these prohibitions.
Any ShoLodge personnel who pays or receives bribes or kickbacks will be immediately terminated and reported, as warranted, to the appropriate authorities. A kickback or bribe includes any item intended to improperly obtain favorable treatment.
Improper Use or Theft of ShoLodge Property
Every employee must safeguard ShoLodge property from loss or theft, and may not take such property for personal use. ShoLodge property includes physical resources and property, as well as its proprietary and confidential information, software, computers, office equipment, and supplies. You must appropriately secure all ShoLodge property within your control to prevent its unauthorized use.
Our offices, equipment, supplies and other resources may not be used for activities which are not related to your employment with ShoLodge, except for any activities that have been approved in writing by us, or for personal usage that is minor in amount and reasonable.
Use of ShoLodge’s electronic communications systems must conform with our corporate policies and procedures.
Maintaining Accurate and Complete Company Records; Covering Up Mistakes
ShoLodge is required under U.S federal securities laws and generally accepted accounting principles to keep books, records and accounts that accurately reflect all transactions, to provide an adequate system of internal accounting and controls. ShoLodge also is required to provide full, fair, accurate, timely and understandable disclosure in reports and documents that it files with, or submits to the SEC and in all its other public communications. ShoLodge expects all personnel to ensure that those portions of our books, records and accounts for which they have responsibility are valid, complete, accurate and supported by appropriate documentation in certifiable form. Similarly, ShoLodge expects all personnel to ensure that all reports and documents filed with the SEC and all of the public communications for which they are responsible provide full, fair, accurate and understandable disclosure and that the same are filed on a timely basis.
All employees who exercise supervisory duties over ShoLodge assets or records are expected to establish and implement appropriate internal controls over all areas of their responsibility. This will help ensure the safeguarding of ShoLodge’s assets and the accuracy of our financial records and reports. From time to time, ShoLodge will adopt various types of internal controls and procedures as required to meet internal needs and applicable laws and regulations. The Company expects all personnel to follow these controls and procedures to assure the complete and accurate recording of all transactions.
Any accounting entries or adjustments that materially depart from generally accepted accounting principles must be approved by our Board of Directors’ Audit Committee and reported to our independent auditors. No one may interfere with or seek to improperly influence (directly or indirectly) the review or auditing of our financial records by ShoLodge’s independent auditors.
If a director, officer or employee becomes aware of any questionable transaction or accounting practice concerning ShoLodge or its assets, or material off-balance-sheet transactions, arrangements and obligations, contingent or otherwise, and other ShoLodge relationships with unconsolidated entities or other persons that may have material current or future effects on the Company’s financial conditions or results of operations, ShoLodge expects the matter to be reported immediately to a member of the Audit Committee of the Board of Directors.
Mistakes should never be covered up, but should be immediately fully disclosed and corrected. Falsification of any ShoLodge, customer or third party records is prohibited.
Protection of ShoLodge, Customer and Vendor Information
No one may use or reveal to others ShoLodge, customer or vendor confidential or proprietary information. Additionally, all personnel must take appropriate steps to prevent unauthorized access to such information. Proprietary and/or confidential information, among other things, includes: business methods, pricing and marketing data, strategy, computer code, forms, and information about, or received from, ShoLodge’s customers, vendors and employees.
Any requests for confidential information arising through a legal process (e.g., subpoena or court order) must be processed through the designated avenues within the Company and should be promptly reported to the Chief Financial Officer.
Competitive Information, Defamation and Misrepresentation
No one may improperly use or disclose to others the confidential information of ShoLodge’s competitors. When obtaining competitive information, personnel must no violate ShoLodge’s competitor’s rights. Never ask a person to violate a non-compete or non-disclosure agreement. Aggressive sales and marketing should not include misstatements, innuendo or rumors about ShoLodge’s competition or their products, services or financial condition.
Use of ShoLodge and Third Party Software
ShoLodge and third party software may be distributed and disclosed only to employees authorized to use it. ShoLodge and third party software may not be copied without specific authorization and may only be used to perform assigned responsibilities.
Fair Competition and Antitrust Laws
ShoLodge must comply with all applicable fair competition and antitrust laws. These laws attempt to ensure that businesses compete fairly and honestly and prohibit conduct seeking to reduce or restrain competition. If you are uncertain whether a contemplated action raises unfair competition or antitrust issues, the Company’s legal counsel can assist you.
Securities Trading
It is illegal to buy or sell securities using material information not available to the public. Persons who give such undisclosed “inside” information to others may be as liable as persons who trade securities while possessing such information. Securities laws may be violated if a director, officer or employee, or any of their relatives or friends trade in securities of ShoLodge, or any entity with whom ShoLodge conducts or proposes to conduct business, while possessing “inside” information.
All news inquiries or analyst calls should be directed to the Chief Financial Officer.
Political Contributions
No company funds may be given directly to political candidates. Directors, officers and employees may, however, engage in political activity with their own resources on their own time.
Retention of Business Records
ShoLodge business records must be maintained for the periods specified in ShoLodge’s record retention policies as they may be adopted and revised from time to time. Records may be destroyed only at the expiration of the pertinent period. In no case may documents involved in a pending or threatened litigation, government inquiry or under subpoena or other information request, be altered, discarded or destroyed, regardless of the periods specified in the applicable retention policy. In addition, no one should ever destroy, alter, or conceal, with an improper purpose, any records or otherwise impede any official proceeding, either personally, in conjunction with, or by attempting to influence, another person.
A Healthy and Safe Workplace; No Harassment
ShoLodge is committed to protecting the health and safety of our employees, the public, our customers, suppliers and visitors. ShoLodge’s policy is to maintain a secure workplace where all employees are attentive to hazard prevention and avoidance of accidents and injuries. Posted safety regulations, statistics and warnings are guides to help everyone stay out of harm’s way. Observed accidents, injuries or hazards should be immediately reported to company leadership.
ShoLodge does not tolerate harassment of our employees. The Company does not tolerate any retaliation against a person reporting harassment.
Waivers
The Code of Business Conduct and Ethics applies to all ShoLodge officers and employees and the members of the Board of Directors. There will be no waiver of any part of the Code for any officer or director except by a vote of the Board of Directors, which will ascertain whether a waiver is appropriate and ensure that the waiver is accompanied by appropriate controls designed to protect ShoLodge. Waivers of any part of the Code for any other employee may be granted by the Chairman, Chief Executive Officer or the Chief Financial Officer.
In the event that any waiver is granted for any officer or director, the waiver, and the reasons for it, will be posted on the ShoLodge website, and a report concerning the waiver will be filed under cover of Form 8-K with the SEC within five business days, thereby allowing ShoLodge’s shareholders to evaluate the merits of the particular waiver.
Reporting Violations
Each person’s conduct can reinforce an ethical atmosphere and positively influence the conduct of one’s fellow employees. If an employee is powerless to stop suspected misconduct or discovers it after it has occurred, he or she must report it to a supervisor at his or her location. That supervisor must promptly forward all such complaints to ShoLodge’s Chief Financial Officer, who will ensure that they are further forwarded to the Chairperson of the Audit Committee of the Board of Directors.
All ShoLodge directors, officers and employees are required to report, or cause to be reported, information known to them, and assist in any investigation by any regulatory or law enforcement agency, elected officials or others responsible for such matters, concerning the following:
· Violation of any federal, state or local laws, regulations or rules by any ShoLodge director, officer, employee or agent in connection with ShoLodge or its business;
· Questionable accounting, internal controls and auditing matters concerning ShoLodge;
· The conduct of any ShoLodge director, officer, employee or agent in connection with ShoLodge or its business that is not honest and ethical;
· Conflicts of interest which have not been reported as required by this Code;
· Disclosures in ShoLodge’s SEC reports and other public disclosures that are not full, fair, accurate, timely and understandable; and
· Violations of this Code of Business Conduct and Ethics.
If an employee is still concerned after speaking with his or her local supervisor, or feels uncomfortable speaking with them (for any reason), he or she may speak with, or send a detailed note, with relevant documents to ShoLodge’s Chief Financial Officer, the Audit Committee of ShoLodge’s Board of Directors, or to the Company’s outside legal counsel, as follows:
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ShoLodge Chief Financial Officer |
ShoLodge Audit Committee |
Boult, Cummings,
Conners & Berry PLC |
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Attention: Chairman |
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Attn: Patrick Alexander |
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No Retaliation; Confidentiality
Part of your job at ShoLodge is to “do the right thing.” ShoLodge will not take any personnel or other action against someone who reports or otherwise tries to stop suspected wrongdoing.
More specifically, ShoLodge will not – and no employee may - retaliate against anyone who provides, or causes to be provided, information, or who files, causes to be filed, certifies, participates in, or otherwise assists in a proceeding regarding any matter covered in the preceding section entitled “Reporting Violations.” The anonymity of a reporting person and the confidentiality of the information that is reported will be maintained if such person so requests; however, the identity of the person and the information reported may be disclosed to the extent necessary to conduct an effective investigation. Any person who believes that the or she has been subject to retaliation by the Company, or any officer or employee, as a result of a report, testimony, assistance in a proceeding or otherwise, should report such retaliation to a member of the Board’s Audit Committee. The Audit Committee will conduct an appropriate investigation and take such action as it determines necessary to effect compliance with this Code and applicable law.