Code of Business Conduct and Ethics
This Code of Business Conduct and Ethics (the “Code”) sets forth legal and ethical standards of conduct for directors, officers and employees of Aspect Medical Systems, Inc. (the “Company”). This Code is intended to deter wrongdoing and to promote the conduct of all Company business in accordance with high standards of integrity and in compliance with all applicable laws and regulations. This Code applies to the Company and all of its subsidiaries and other business entities controlled by it worldwide.
If you have any questions regarding this Code or its application to you in any situation, you should contact your manager or the Chief Financial Officer.
It is the policy of the Company to comply with all applicable laws and regulations; to act fairly, impartially, and in an ethical and proper manner. The Company is committed to promoting integrity and maintaining the highest standard of ethical conduct in all of its activities. It is essential that the highest standards of conduct be observed in all contacts made by Company employees with customers, stockholders, suppliers, governmental officials, fellow employees and the general public. To further this objective, the Company has set forth in this Code standards of conduct to be used in conducting the business affairs of the Company.
This Code is applicable to all directors, officers and employees of the Company.
The following documents should be reviewed by all employees, officers and directors in conjunction with this Code:
- Document No.
003-0003 Employee Handbook (required for employees and officers only)
- Document No. 007-0001 Corporate Communication Policy and Procedures
- Document No. 007-0002 Policy Against Trading on the Basis of Insider Information
- Document No. 007-0003 Message Board, Chat Room and Public Disclosure Policy
These documents are available on the R drive for review or a copy can be obtained from the Corporate Controller.
5.1 Equal Employment/Anti-Discrimination
It is the Company's policy to ensure equal employment and advancement opportunity for all qualified individuals without distinction or discrimination because of age, color, national origin, race, religion, sex, physical or mental disability or veteran status. This policy applies to all employees and applicants for employment and to all aspects of the employment relationship, including recruitment, hiring, compensation, benefits, training, transfer, and any other terms and conditions of employment.
5.2 Sexual Harassment
The Company promotes a workplace that is free of sexual harassment and that respects the rights of all employees, customers, and visitors to the facility. Sexual harassment of employees occurring in the workplace is unlawful and will not be tolerated.
The Company prohibits any retaliation against an individual who complains about sexual harassment, and prohibits retaliation against individuals for cooperating with an investigation of sexual harassment. Any such retaliation is in violation of the law and will not be tolerated. Any employee found to have retaliated against such an employee will be subject to immediate disciplinary action including, at the discretion of the Company, immediate termination. All complaints of sexual harassment will be responded to in a prompt manner. Any investigation into a sexual harassment complaint will be treated with confidentiality to the greatest extent possible.
While it is not possible to provide an exhaustive list of conduct that violates the Company's sexual harassment policy, the following are examples of conduct that, if unwelcome, may constitute sexual harassment depending upon the totality of the circumstances including the severity of the conduct and its pervasiveness.
· Unwelcome sexual advances whether they involve physical touching or not.
· Sexual epithets, jokes, written or spoken references to sexual conduct, gossip regarding one's sex life, comments on an individual's body, comments about an individual's sexual activity, deficiencies, or prowess.
· Displaying sexually suggestive objects, pictures, cartoons etc.
· Unwelcome leering, whistling, brushing against the body, sexual gestures, suggestive or insulting comments.
· Inquiries into one's sexual experiences and/or discussion of one's sexual activities.
5.3 Drug and Alcohol Policy
The Company's policy prohibits the unlawful manufacture, possession, distribution, or use of illegal narcotics, drugs, or controlled substances on the Company's premises or in the course of Company business. Employees are prohibited from reporting to work under the influence of illegal drugs, narcotics, or controlled substances.
5.4 Workplace Violence
Employees should have a safe place in which to work. Workplace violence, including threats, threatening behavior, harassment, intimidation, assaults and similar conduct, will not be tolerated. Any threats or concerns about your safety or the safety of others should be immediately reported to your manager.
5.5 Confidentiality of Employee Information
The Company is committed to maintaining the confidentiality of personal information provided by you or others to the Company. We restrict access to this information and use it only as necessary for legitimate business purposes such as the administration of human resources programs. Our maintenance and use of personal data and information will comply in all respects with the law.
Employees, officers and directors must act in the best interests of the Company. Employees, officers and directors must deal with any third party transacting business with or on behalf of the Company in a manner that avoids a “conflict of interest” or even the appearance of a “conflict of interest.” This requirement applies equally to business relationships and personal activities. A conflict of interest occurs when your private interests interfere in any way — or even appear to interfere — with the interests of the Company as a whole. A conflict of interest can arise when you take on outside work, make a financial investment or have an interest that makes it difficult for you to perform your Company duties and responsibilities honestly, objectively and effectively. Conflicts of interest also arise when you or family members receive personal, unearned benefits as a result of your position in the Company.
6.1 Outside Activities
No employee, officer or director shall perform services as a consultant, employee, officer, director, advisor or in any other capacity for, or have a financial interest in, a direct competitor of the Company, other than services performed at the request of the Company and other than a financial interest representing less than one percent (1%) of the outstanding shares of a publicly-held company. Nor should any employee, officer or director use his or her position with the Company to influence a transaction with a supplier or customer in which such person has any personal interest other than a financial interest representing less than one percent (1%) of the outstanding shares of a publicly-held company.
It is your responsibility to disclose any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest to the Chief Financial Officer or, if you are an officer or director, to the Board of Directors, who shall be responsible for determining whether such transaction or relationship constitutes a conflict of interest.
There are cases, however, where Company employees start their own outside businesses, or take on additional part-time work with organizations that are neither competitors, suppliers, nor customers. This in itself does not constitute a conflict of interest. It is the employee's responsibility to ensure that the second job does not conflict with the interests of the Company. This means, for example, ensuring that the two activities are strictly separated:
· That you do not do the other organization's work on the Company's time,
· That customers and colleagues from your outside activity do not contact you at the Company,
· That you do not use Company equipment, supplies, know-how or technology nor the time of any Company personnel, for your outside work,
· That you do not promote products or services from your outside business to other Company employees during working hours, and
· That you do not attempt to sell products or services from your outside work back to the Company
In order to avoid any uncertainty, you should let your manager know and approve of the outside work prior to commencing it. The Company shall, in its sole discretion, determine whether such additional job or additional part-time work presents a conflict of interest.
6.2 Gifts and Entertainment
It is the Company's policy that any employee, officer or director and members of such individual's immediate family may not accept or give gifts if such gifts would influence or appear to influence business decisions or judgments by anyone doing business with or regulating the Company.
Business gifts and entertainment are courtesies designed to build understanding and goodwill among business partners. In some cultures they play an important role in business relationships. The problem arises when they begin to compromise — or even appear to compromise — our ability to make objective and fair business decisions. Offering or receiving any gift, gratuity, or entertainment that might be perceived to unfairly influence a business interaction places you in a conflict of interest situation.
For this reason, Company employees must not accept gifts and gratuities from suppliers or potential suppliers, except for promotional items of limited value (such as inexpensive pens, mugs, and calendars that bear the company's name). Any gifts that are not of nominal value should be returned immediately and reported to your manager. If immediate return is not practical, they should be given to the Company for charitable disposition or such other disposition as the Company believes appropriate in its sole discretion. The same standards apply to the Company's dealings with its customers: the Company does not offer gifts and gratuities to employees of customers or potential customers, except for modest items for promotional purposes.
Common sense and moderation should prevail in business entertainment engaged in on behalf of the Company. Employees, officers and directors should provide, or accept, business entertainment to or from anyone doing business with the Company only if the entertainment is infrequent, modest and intended to serve legitimate business goals.
As these guidelines cannot cover every eventuality, the onus is on individual employees, officers and directors to use good judgment. "Everyone else does it" is not sufficient justification. If you are having difficulty determining whether a specific gift or entertainment offer lies within the bounds of acceptable business practice, ask yourself these guiding questions and/or consult with your manager:
· Is it clearly related to the conduct of business?
· Is it moderate, reasonable, and in good taste?
· Would I feel comfortable owning up to the giving or receipt of this gift in front of other customers and suppliers? Other employees? My manager? My family? The media?
· Do I feel any pressure to reciprocate or grant special favors as a result of this gift? (Or, conversely, am I trying to put pressure on someone else to reciprocate or grant favors?) `
· Am I certain the gift does not violate any law or business regulation?
Bribes and kickbacks are criminal acts, strictly prohibited by law. No Company employee, officer or director may offer, give, solicit or receive any form of bribe or kickback anywhere in the world. Bribes shall be interpreted in the broadest sense to include any type of preferential treatment secured by providing, directly or indirectly, an individual or his or her family members (as defined in Section 6.3 below) or associates with personal gain in relation to business conducted by or on behalf of the Company.
While conflict of interest guidelines are not intended to unduly interfere with an employee's, officer's or director's family or personal life, there are situations where the actions of “family members” (as defined below) of an employee, officer or director may constitute a conflict of interest for the employee, officer or director, as applicable. For example, any gifts or other benefits offered to such family members by suppliers or potential suppliers are considered business gifts subject to the gifts and entertainment guidelines of Section 6.2 of this Code. If your spouse or other family member is an employee of or has a substantial interest in a business seeking to provide goods and services to the Company, you must ensure that you do not attempt to use your position in the Company to influence the bidding process or negotiation in any way. If you are directly involved in purchasing functions, you must declare this conflict of interest to your manager immediately.
The potential for conflict of interest clearly exists if your spouse also works at the Company and is in a reporting relationship to you. Employees should not supervise nor be in a position to influence the hiring, work assignments or assessments of someone who is a family member.
For the purposes of Section 6.2 and this Section 6.3, the term “family member” shall mean any spouse, parent, sibling, child, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law of any employee, officer or director or any person living in the same home as the employee, officer or director.
6.4 Insider Trading
During the course of your employment with the Company, you may receive or be aware of material information that is not yet publicly available ("inside information") about the Company or about other publicly traded companies with which the Company has business dealings. Because of your access to this information, you may be in a position to profit financially by buying or selling or in some other way dealing in Company stock or stock of another publicly traded company. Or you may be in a position to benefit financially or otherwise by passing this information on to some other person.
For anyone to use such information in order to gain personal benefit is illegal. Use of material inside information to gain personal benefit is as illegal with respect to a few shares of stock as it is with respect to a large number of shares. Furthermore, it is important that the appearance as well as the fact of insider trading in stock be avoided.
Employees, officers and directors who are aware of material inside information about the Company or other companies, including our suppliers and customers, as a result of their relationship with the Company are prohibited by law and Company policy from trading in securities of the Company or such other companies, as well as from communicating such information to others who might trade on the basis of that information.
As a practical matter, it is sometimes difficult to determine whether you are aware of material inside information. The key to determining whether nonpublic information you possess about a public company is "material inside information" is a) is the information not generally known to the public, and b) whether dissemination of the information would be reasonably likely to affect the market price of the Company's stock or would be reasonably likely to be considered important by investors who are considering trading in that company's stock. Certainly, if the information makes you want to buy or sell, it would probably have the same effect on others. If you possess "material inside information," you must refrain from trading in a company's stock, advising anyone else to do so or communicating the information to anyone else until you know that the information has been disseminated to the public.
Either positive or negative information may be material and considered “material inside information”.
To help ensure that you do not engage in prohibited insider trading and avoid even the appearance of an improper transaction, the Company has adopted an Insider Trading Policy, which is available on the R drive in the following folder: R:\007-Admin\0002 InsiderInfo or from the Corporate Controller upon request.
If you are uncertain about the legal constraints on your purchase or sale of any Company securities or the securities of any other company that you are familiar with by virtue of your relationship with the Company, you should consult with the Chief Financial Officer before making any such purchase or sale.
Employees, officers and directors must maintain the confidentiality of confidential information entrusted to them by the Company or other companies, including the Company's suppliers and customers, except when disclosure is authorized by a manager or legally mandated. Unauthorized disclosure of any confidential information is prohibited. Additionally, employees should take appropriate precautions to ensure that confidential or sensitive business information, whether it is proprietary to the Company or another company, is not communicated within the Company except to employees who have a need to know such information to perform their responsibilities for the Company.
Third parties may ask you for information concerning the Company. Employees, officers and directors, other than the authorized spokespersons, should not discuss internal Company matters with, or disseminate internal Company information to, anyone outside the Company, except as required in the performance of their Company duties and after an appropriate confidentiality agreement is in place. This prohibition applies particularly to inquiries concerning the Company from the media, market professionals (such as securities analysts, institutional investors, investment advisers, brokers and dealers) and security holders. All responses to inquiries on behalf of the Company must be made only by the Company's authorized spokespersons. If you receive any inquiries of this nature, you must decline to comment and refer the inquirer to your manager or one of the authorized spokespersons. The Company's policies with respect to public disclosure of internal matters are described more fully in the Company's Corporate Communication Policy and Procedures, which is available on the R drive in the following folder: R:\007-Admin\0001 Corp.Comm.PP or from the Corporate Controller upon request .
Any employee, officer or director also must abide by any lawful obligations that you have to a former employer. These obligations may include restrictions on the use and disclosure of confidential information, restrictions on the solicitation of former colleagues to work at the Company and non-competition obligations.
Each employee, officer and director should endeavor to deal honestly, ethically and fairly with the Company's suppliers, customers, competitors and employees. Statements regarding the Company's products and services should not be untrue, misleading, deceptive or fraudulent. You should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice.
8.1 Customer Relationships
The Company's credibility with its customers depends on its ability to fulfill the Company's commitments. The Company must not make promises unless it is reasonably confident that it will be able to keep them. All sales and promotional efforts must be free from deliberate misrepresentation. If unforeseen circumstances do make it impossible to meet a commitment, the Company will let the customer know as soon as possible. The Company's commitment to fair competition and high ethical standards forbids it from such inappropriate practices as refusing to sell, service, or maintain equipment because the customer is also buying products from the Company's competitors. This commitment also prevents the Company from offering to customers any benefits or rewards that violate applicable laws for responsible and generally accepted business practices. Company employees must respect and protect any confidential or proprietary information shared with the Company by a customer.
Refer to Document 002-0008 Revenue Recognition Policy and Document 002-0002 Sales Orders and Contracts Policy and Procedures which are available on the R drive in the following folder: R:\002-Acct_Fin\0008 - Revenue Recognition, R:\002-Acct_Fin\002-RR_SO Contract Pol or from the Corporate Controller upon request.
8.2 Supplier Relationships
The Company's commitment to dealing fairly and honestly with the Company's suppliers means that employees responsible for buying or leasing materials and services on behalf of the Company must consciously and consistently guard their objectivity. In practice, this means that no employee will accept or solicit any benefit from a supplier or potential supplier that might compromise or even appear to compromise, his or her objective assessment of the supplier's product and prices. The Company's policy is to select suppliers fairly on the basis of price, quality, performance, and suitability of their product or service for the overall benefit of the Company. Promotional items of modest value are acceptable, as is moderately scaled entertainment within the limits of responsible and generally accepted business practices. Company employees must respect and protect any confidential or proprietary information shared with us by a supplier.
Refer to Document 002-0001 Purchasing Policy and Procedures which is available on the R drive in the following folder: R:\002-Acct_Fin\0001 - Purch P_P or from the Corporate Controller upon request.
8.3 Gathering Competitive Information
Company employees, officers and directors will not use improper means of gathering information about competitors. Theft, illegal entry and electronic eavesdropping are unacceptable means of searching for competitive intelligence. In addition, you must not misrepresent yourself or your situation in order to convince somebody to release information to you (by posing as a customer, for example), or commission a third party to do so. You must not offer a bribe or a gift in exchange for competitors’ information, nor solicit confidential information from a competitor’s ex-employee now working for the Company.
attention must be paid when dealing with government officials, whether
officials of the
Business courtesies or entertainment that might be appropriate when you are dealing with private parties, like paying for lunch or dinner, are often not appropriate or legal when you are dealing with government officials, whether in the U.S. or elsewhere. Gifts and courtesies not appropriate for private parties are also inappropriate for government officials. You may never offer money, favors, or anything else of value to a government official in order to influence or reward an official decision, either directly or through an intermediary.
“government official” is applied very broadly under
Company employees conducting business internationally are required and expected to comply with all applicable laws and regulations. Compliance with such laws, as well as Company standards, including this Code, is required even if they seem inconsistent with global practices or seem to place the Company at a competitive disadvantage. We will walk away from business that cannot be achieved ethically and legally.
will comply with the antitrust laws of every jurisdiction in which the Company
does business, both within and outside the
The antitrust laws are complicated and voluminous, and cannot be covered here in their entirety. Examples of some prohibited activities include agreements with competitors to fix prices, boycotts of customers or third parties, or other agreements to restrain or restrict competition.
Employees, officers and directors must honestly and accurately report all business transactions. You are responsible for the accuracy of your records and reports. Accurate and reliable internal records and reports are critical to the corporate decision-making process, to the management of data, and to the proper performance of the Company's financial, legal and reporting obligations.
All Company books, records and accounts shall be maintained in accordance with all applicable regulations and standards and accurately reflect the true nature of the transactions they record. The financial statements of the Company shall conform to generally accepted accounting rules and the Company's accounting policies. No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in the Company's books or records for any reason, and no disbursement of corporate funds or other corporate property shall be made without adequate supporting documentation.
The Company has set up accounting procedures to protect company assets and ensure the accuracy and reliability of its financial reports so that they may be reviewed by outside auditors. The integrity of the Company's financial and operational information is the responsibility of management, accountants, and all other employees involved in the preparation and/or distribution of this information.
You should not, and no employee should ever ask you to deviate from the Company's commitment to record necessary information truthfully and accurately.
No employee, officer or director shall, directly or indirectly, make or cause to be made a materially false or misleading statement to an accountant in connection with (or omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which such statements were made, not misleading to, an accountant in connection with) any audit, review or examination of the Company's financial statements or the preparation or filing of any document or report with the SEC. No employee, officer or director shall, directly or indirectly, take any action to coerce, manipulate, mislead or fraudulently influence any independent public or certified public accountant engaged in the performance of an audit or review of the Company's financial statement.
It is the policy of the Company to provide full, fair, accurate, timely and understandable disclosure in reports and documents filed with, or submitted to, the Securities and Exchange Commission and in other public communications.
All employees, officers and directors should seek to protect the Company's assets. Theft, carelessness and waste have a direct impact on the Company's financial performance. Employees, officers and directors should use Company assets solely for the legitimate business purposes of the Company and only by authorized employees or their designees. This includes both tangible and intangible assets.
Employees, officers and directors of the Company must advance the Company's legitimate interests when the opportunity to do so arises. No employee, officer or director may take for personal benefit any opportunities that are discovered through your position with the Company or the use of property or information of the Company.
Employees with concerns regarding questionable accounting or auditing matters or complaints regarding accounting, internal accounting controls or auditing matters may confidentially, and anonymously if they wish, submit such concerns or complaints to the Company's Chief Executive Officer or Chief Financial Officer using any of the following procedures:
· By sending a letter or other writing to the Company's principal executive offices;
· By confidential voice mail, using the following toll-free telephone number - 1-800-372-6314;
· By e-mail.
The Audit Committee will evaluate any concerns or complaints received by it and authorize such follow-up actions, if any, as it deems necessary or appropriate to address the substance of the concern or complaint.
The Company will not discipline, discriminate against or retaliate against any employee who reports a complaint or concern (unless the employee is found to have knowingly and willfully made a false report).
While some of the policies contained in this Code must be strictly adhered to and no exceptions can be allowed, in other cases exceptions may be possible. Any employee or officer who believes that an exception to any of these policies is appropriate in his or her case should first contact his or her immediate manager. If the manager agrees that an exception is appropriate, the approval of the Chief Financial Officer must be obtained. The Chief Financial Officer shall be responsible for maintaining a complete record of all requests for exceptions to any of these policies and the disposition of such requests. Any executive officer or director who seeks an exception to any of these policies should contact the Chief Financial Officer. Any waiver of this Code for executive officers or directors or any change to this Code that applies to executive officers or directors may be made only by the Board of Directors of the Company and will be disclosed as required by law or stock market regulation.
The Company requires that all employees, officers and directors comply with all laws, rules and regulations applicable to the Company wherever it does business. You are expected to use good judgment and common sense in seeking to comply with all applicable laws, rules and regulations and to ask for advice when you are uncertain about them. It is each employee's personal responsibility to bring violations or suspected violations of any law, rule, regulation or of this Code by any officer, employee, director or a third party doing business on the Company's behalf to the attention of their manager, member(s) of senior management or human resources representative, as appropriate. While it is the Company's desire to address matters internally, nothing in this Code should discourage you from reporting any illegal activity, including any violation of the securities laws, antitrust law, environmental laws or any other federal, state or foreign law, rule or regulation to the appropriate federal, state or foreign regulatory authority. Furthermore, managers and senior management have an additional responsibility to create and sustain a work environment in which employees, business partners, suppliers, and consultants know that ethical and legal behavior is expected of them. Such an environment requires frank, open, and honest communications, as well as alertness to indications that unethical or illegal conduct has occurred. This means allowing and encouraging employees to ask questions, make suggestions, and report errors and wrongdoing. Employees, officers and directors shall not discharge, demote, suspend, threaten, harass or in any other manner discriminate or retaliate against an employee because he or she in good faith reports any such violation. This Code should not be construed to prohibit you from testifying, participating or otherwise assisting in any state or federal administrative, judicial or legislative proceeding or investigation.
You may report violations of this Code, confidentially, and anonymously if you wish, by submitting such violations to the Company's Chief Financial Officer using any of the following procedures:
· By sending a letter or other writing to the Company's principal executive offices;
· By confidential voice mail, using the following toll-free telephone number - 1 - 800-372-6314;
· By e-mail.
If the Chief Financial Officer receives information regarding an alleged violation of this Code, he shall, as appropriate, (a) evaluate such information, (b) if the alleged violation involves an executive officer or a director, inform the Chief Executive Officer and, as appropriate the Board of Directors or the audit committee or other committee to whom such authority is delegated by the Board, of the alleged violation, (c) determine whether it is necessary to conduct an informal inquiry or a formal investigation and, if so, initiate such inquiry or investigation and (d) report the results of any such inquiry or investigation, together with a recommendation as to disposition of the matter, to the Chief Executive Officer for action, or if the alleged violation involves an executive officer or a director, report the results of any such inquiry or investigation to the Board of Directors or a committee thereof. Employees, officers and directors are expected to cooperate fully with any inquiry or investigation by the Company regarding an alleged violation of this Code. Failure to cooperate with any such inquiry or investigation may result in disciplinary action, up to and including discharge.
The Company shall determine whether violations of this Code have occurred and, if so, shall determine the disciplinary measures to be taken against any employee who has violated this Code. In the event that the alleged violation involves an executive officer or a director, the Chief Executive Officer and the Board of Directors, respectively, shall determine whether a violation of this Code has occurred and, if so, shall determine the disciplinary measures to be taken against such executive officer or director.
Failure to comply with the standards outlined in this Code will result in disciplinary action including, but not limited to, reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, discharge and restitution. Certain violations of this Code may require the Company to refer the matter to the appropriate governmental or regulatory authorities for investigation or prosecution. Moreover, any manager who directs or approves of any conduct in violation of this Code, or who has knowledge of such conduct and does not immediately report it, also will be subject to disciplinary action, up to and including discharge.
This Code shall be distributed to each new employee upon commencement of his or her employment and annually to each employee, officer and director of the Company, and each such employee, officer and director shall certify that he or she has received, read and understood the Code and has complied with its terms.
The Company reserves the right to amend, alter or terminate this Code at any time for any reason. The most current version of this Code can be found on the Company's intranet, on the R drive in the following folder: R:\007-Admin\0004 - CodeConduct or from the Corporate Controller upon request.
This document is not an employment contract between the Company and any of its employees, officers or directors and does not alter the Company's at-will employment policy.
do hereby certify that:
(Print Name Above)
1. I have received and carefully read the Code of Business Conduct and Ethics of Aspect Medical Systems, Inc.
2. I understand the Code of Business Conduct and Ethics.
3. I have complied and will continue to comply with the terms of the Code of Business Conduct and Ethics.
EACH EMPLOYEE, OFFICER AND DIRECTOR IS REQUIRED TO SIGN, DATE AND RETURN THIS CERTIFICATION TO THE HUMAN RESOURCE DEPARTMENT WITHIN 15 DAYS OF ISSUANCE.