1.1 The Board of Directors of MEDIROM Healthcare Technologies Inc., a corporation with limited liability organized under the laws of the Japan (together with its subsidiaries, the “Company”) are committed to conducting the businesses of the Company in accordance with applicable laws, rules and regulations and the highest standards of business conduct. This Code of Ethic and Business Conduct (this “Code”) covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide all directors, corporate auditors, officers, and employees of the Company. The Company has adopted this Code in order to:
1.2 All directors, corporate auditors, officers and employees are required to be familiar with this Code, comply with its provisions and report any suspected violations as described below in Section 12. All directors, corporate auditors, officers and employees are required to sign and return an Acknowledgment of Receipt and Review of this Code set forth on Appendix A attached hereto to the Human Resources Group of the Company.
2. Honest and Ethical Conduct.
2.1 The Company’s policy is to promote high standards of integrity by conducting its affairs honestly and ethically. This Code applies to all directors, corporate auditors, officers and employees of the Company, whether they work for the Company on a full-time, part-time, consultative or temporary basis.
2.2 Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job.
3. Conflicts of Interest.
3.1 A conflict of interest occurs when an individual’s private interest (or the interest of a member of his or her family) interferes, or even appears to interfere, with the interests of the Company as a whole. A conflict of interest can arise when an employee, officer or director (or a member of his or her family) takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest also arise when an employee, officer or director (or a member of his or her family) receives improper personal benefits as a result of his or her position in the Company. In general, the following are considered conflicts of interest:
3.2 Whether or not a conflict of interest exists or will exist can be unclear. Conflicts of interest should be avoided unless specifically authorized as described in Sections 3.3 and 3.4.
3.3 Persons other than directors, corporate auditors, and executive officers who have questions about a potential conflict of interest or who become aware of an actual or potential conflict should discuss the matter with, and seek a determination and prior authorization or approval from the General Affairs Group. A supervisor or an officer may not authorize or approve conflict of interest matters or make determinations as to whether a problematic conflict of interest exists without first providing the General Affairs Group with a written description of the activity and seeking the General Affairs Group’s written approval. If the supervisor or officer is himself involved in the potential or actual conflict, the matter should instead be discussed directly with the General Affairs Group.
3.4 Directors, corporate auditors, and executive officers must seek determinations and prior authorizations or approvals of potential conflicts of interest exclusively from the Board of Corporate Auditors.
4.1 Employees, officers, corporate auditors, and directors should comply, both in letter and spirit, with all applicable laws, rules and regulations in the cities, states and countries in which the Company operates.
4.2 Although not all employees, officers, corporate auditors, and directors are expected to know the details of all applicable laws, rules and regulations, it is important to know enough to determine when to seek advice from appropriate personnel. Questions about compliance should be addressed to the General Affairs Group.
5.1 The Company strives to ensure that the contents of and the disclosures in any reports and documents that the Company files with the SEC or other regulatory authorities, and other public communications, shall be full, fair, accurate, timely and understandable in accordance with applicable disclosure standards, including standards of materiality, where appropriate. Material information with respect to the Company must be promptly disclosed.
5.2 The Company’s periodic reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and SEC rules.
5.3 Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel.
5.4 Each director, officer and employee who is involved in the Company’s disclosure process must:
6. Insider Trading.
The U.S. federal and applicable Japanese securities laws are built on the premise that a purchaser and a seller of securities should have equal access to important information regarding the company whose securities they are trading. Consequently, securities laws generally forbid an investor from purchasing or selling securities based upon inside information not available to the other party.
The consequences of insider trading violations can be severe. Directors, corporate auditors, officers and employees who trade on inside information, or who communicate (or tip) this information to others so that they may trade on it, may face a civil penalty of up to three times the profit gained (or loss avoided), a substantial criminal fine and a jail term of up to twenty years. Additionally, if the Company or its senior officers do not take appropriate steps to prevent a director, officer or employee from insider trading, the Company may also face severe legal consequences, including, among other things, substantial criminal penalties.
6.1 Policy Statement.
6.2 Further Explanation.
7. Protection and Proper Use of Company Assets.
7.1 All directors, corporate auditors, officers and employees should protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability and are prohibited.
7.2 All Company assets should be used only for legitimate business purposes. Any suspected incident of fraud or theft should be reported for investigation immediately
7.3 The obligation to protect Company assets includes the Company’s proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business and marketing plans, engineering and manufacturing ideas, designs, databases, records and any nonpublic financial data or reports. Unauthorized use or distribution of this information is prohibited and could also be illegal and result in civil or criminal penalties. All inventions, creative works, computer software, and technical or trade secrets developed by a director, officer or employee in the course of performing such person’s duties or primarily through the use of the Company’s assets or resources while working at the Company are the property of the Company.
8. Company Records.
All company records must be complete, accurate and reliable in all material respects. There is never an acceptable reason to make false or misleading entries. Undisclosed or unrecorded funds, payments or receipts are strictly prohibited. Directors, corporate auditors, officers and employees are required to understand and comply with the Company’s recordkeeping policy. Directors, corporate auditors, officers and employees should contact the General Affairs Group if he/she has any questions regarding the recordkeeping policy.
Directors, corporate auditors, officers and employees should maintain the confidentiality of information entrusted to them by the Company or by its customers, suppliers or partners, except when disclosure is expressly authorized or is required or permitted by law. Confidential information includes all nonpublic information (regardless of its source) that might be of use to the Company’s competitors or harmful to the Company or its customers, suppliers or partners if disclosed.
10. Fair Dealing.
Each director, officer and employee must deal fairly with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No director, officer or employee may take unfair advantage of anyone through manipulation, concealment, abuse or privileged information, misrepresentation of facts or any other unfair dealing practice. Directors, corporate auditors, officers and employees should contact the General Affairs Group if he/she has any questions regarding the Fair Dealing policy.
11. Compliance with Laws and Regulations.
Each director, officer and employee have an obligation to comply with the laws of the cities, states and countries in which the Company operates. This includes, without limitation, laws covering commercial bribery and kickbacks, patent, copyrights, trademarks and trade secrets, information privacy, insider trading, offering or receiving gratuities, employment harassment, environmental protection, occupational health and safety, false or misleading financial information, misuse of corporate assets and foreign currency exchange activities. Directors, corporate auditors, officers and employees are expected to understand and comply with all laws, rules and regulations that apply to their positions at the Company. If any doubt exists about whether a course of action is lawful, the employee should seek advice immediately from the General Affairs Group.
12. Discrimination and Harassment.
The Company is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any discrimination or harassment based on race, ethnicity, religion, gender, age, national origin or any other protected class. For further information, directors, corporate auditors, officers and employees should consult the Human Resources Group.
13. Health and Safety.
The Company strives to provide each employee with a safe and healthy work environment. Each director, officer or employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions. Violence and threatening behavior are not permitted. Directors, corporate auditors, officers and employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of illegal drugs in the workplace will not be tolerated. Directors, corporate auditors, officers and employees should contact the Welfare Group if he/she has any questions regarding the recordkeeping policy.
14. Reporting and Enforcement.
14.1 Reporting and Investigation of Violations.
14.4 Prohibition on Retaliation.
The Company does not tolerate acts of retaliation against any director, officer or employee who makes a good faith report of known or suspected acts of misconduct or other violations of this Code.