Selectis Health, Inc 8-K, filed Jul 29, 2022
Selectis Health, Inc. (GBCS)
About this 8-K
Selectis Health, Inc filed this 8-K on July 29, 2022, reporting on events of July 25, 2022.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
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(State or other jurisdiction of incorporation) |
Commission File Number |
(I.R.S. Employer Identification number) |
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Registrant’s
telephone number, including area code:
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| Written communications pursuant to Rule 425 under the Securities Act | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| ITEM 5.02: | ADOPTION OF COMMITTEE CHARTERS AND APPOINTMENT OF COMMITTEE MEMBERS |
On July 25, 2022 the Board of Directors of Selectis Health, Inc, a Utah corporation (the “Company”) approved and adopted the following committee charters and policies:
Audit Committee Charter
Nominating and Governance Committee Charter
Compensation Committee Charter
Code of Conduct and Ethics Policy
Document Retention Policy
Whistleblower Policy
Copies of the above-noted charters and policies are filed herewith as Exhibits 10.1 through 10.6 respectively.
Also on July 25, 2022, the Board of Directors approved the following appointments to the Board’s standing committees:
Audit Committee:
David Furstenberg: Chairman and Audit Committee Financial Expert
Clifford Neuman
Adam Desmond
Compensation Committee
Clifford Neuman: Chairman
David Furstenberg
Adam Desmond
Nominating and Governance Committee
Adam Desmond: Chairman
David Furstenberg
Clifford Neuman
| ITEM 9.01: | EXHIBITS |
| Item | Title | ||
| 10.1 | Audit Committee Charter | ||
| 10.2 | Nominating and Governance Committee Charter | ||
| 10.3 | Compensation Committee Charter | ||
| 10.4 | Code of Conduct and Ethics Policy | ||
| 10.5 | Document Retention Policy | ||
| 10.6 | Whistleblower Policy | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Selectis Health, Inc | ||
| (Registrant) | ||
| Dated: July 29, 2022 | /s/ Lance Baller | |
| Lance Baller, CEO |
Exhibit 10.1
SELECTIS HEALTH, INC.
AUDIT COMMITTEE CHARTER
As adopted by the Audit Committee and Board of Directors
on July 25, 2022
I. RESPONSIBILITY
The Selectis Health, Inc.’s (“Selectis”) Audit Committee (“Committee”) was established to assist the Board of Directors (the “Board”) in carrying out its oversight compliance with laws responsibilities that relate to Selectis’ accounting and financial reporting processes, audits of Selectis’ financial statements, internal controls, and regulations and ethics. This policy reaffirms that the Committee’s duties are oversight in nature and that the primary responsibility for financial reporting, internal control, and compliance with laws, regulation, and ethics standards rests with Selectis’ executive management and that Selectis’ external auditors are responsible for auditing Selectis’ financial statements. The foregoing notwithstanding, the Committee, in its capacity as the audit committee of the Board, has direct responsibility for the appointment, compensation and oversight of the work of any registered public accounting firm employed by Selectis (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The Committee does not provide any expert or special assurances as to Selectis’ financial statements or any professional certification as to the external auditor’s work.
The Committee has the power to conduct or authorize investigations into any matters within the Committee’s scope of responsibilities and to establish procedures concerning the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and confidential, anonymous employee submissions of concerns regarding questionable accounting or auditing matters. The Committee is empowered to retain independent counsel, accountants, or others to assist it in the conduct of any investigation. The Chief Executive Officer, the President, the Chief Financial Officer or the Corporate Secretary of Selectis shall provide, or arrange to provide, such other information, data and services as the Committee may request. The Committee shall conduct such interviews or discussions as it deems appropriate with personnel of Selectis, and/or others whose views would be considered helpful to the Committee.
The Committee’s prior approval is required for all auditing services and non-audit services. However, in the event the aggregate amount of non-audit services constitutes 5% or less of the total revenues paid by Selectis to its external auditor during the fiscal year in which non-audit services are provided, if Selectis did not recognize that these services were non-audit services at the time of the engagement and the Committee is promptly notified of this fact by Selectis, if the Committee (or one or more members of the Committee who are also members of the board to whom approval authority has been delegated by the Committee) approves such non-audit services prior to their completion, the requirement for Committee pre-approval may be waived. The Committee believes its policies and procedures should remain flexible in order to best react to changing conditions and that the following duties of the Committee are set forth as a guide with the understanding that the Committee may diverge from this guide as appropriate given the circumstances:
| A. | Financial Reporting |
Committee procedures shall include:
| 1. | Selection of Independent Public Accountants |
The Committee and the Board have the ultimate authority and responsibility to select, evaluate, and where appropriate, replace the outside auditor. The independent accountants are ultimately accountable to the Audit Committee and the entire Board for such accountant’s review of the financial statements and controls of Selectis. On an annual basis, the Audit Committee should review and discuss with the accountants all significant relationships the accountants have with Selectis to determine the accountants’ independence. The Committee shall review senior management’s recommendation on the annual selection of the external auditors. The Committee shall submit its recommended appointment (or reappointment) or termination of external auditors to the Board for their approval.
The Committee’s review shall include:
| ● | Review and prior approval of all auditing services and non-audit services. (In the event the Committee approves an audit service within the scope of an auditor’s engagement, that audit service shall be deemed to have been preapproved.) | |
| ● | Opinions on the performance of the external auditors by appropriate management. | |
| ● | Inquiring if the external auditors face any significant litigation or disciplinary actions by the Securities and Exchange Commission (the “Commission”) or others. | |
| ● | Inquiring whether the chief executive officer of Selectis’ external auditors was employed by a registered independent public accounting firm and participated in any capacity in Selectis’ audit during the one-year period preceding the commencement of an audit of Selectis. | |
| ● | Obtaining written disclosure from the external auditors describing all relationships between the external auditors and Selectis that bear on independence and objectivity. | |
| ● | Receiving from the accountants, on a periodic basis, a formal written statement delineating all relationships between the accountants and Selectis consistent with Independence Standards Board Statement 1 (“ISB No. 1”); | |
| ● | Discussing auditor independence with its external auditors and recommending that the Board take appropriate action regarding any independence issues. | |
| ● | Discussing with Selectis’ Chief Executive Officer and Chief Financial Officer certifications in Selectis’ periodic reports concerning disclosures of significant control deficiencies and any fraud by management. | |
| ● | Auditor engagement letters and estimated fees. |
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| ● | Consideration of the report of the external auditor’s latest peer review conducted pursuant to a professional quality control program. | |
| ● | Review of management’s letter of representation and consideration of any significant operational or reporting issues that may affect the financial statements. | |
| ● | Proposed non-audit services and consideration of the possible effect that these services could have on the independence of the external auditors. | |
| ● | Facilitating and maintaining an open avenue of communication with Selectis’ external auditors. | |
| ● | Ensuring the Committee is informed in a timely manner by Selectis’ independent auditor of (1) all critical accounting policies and practices the independent auditor intends to use for the audit; (2) discussion with Selectis’ management of all alternative treatments of financial information within generally accepted accounting principles, the ramifications of the use thereof and the preferred the independent auditor’s preferred treatment; and (3) other material written communications between the independent auditors and Selectis’ management to include any management letter or schedule of audit adjustments. |
| 2. | Meeting with Selectis’ general counsel, if any, and outside counsel when appropriate, to discuss legal matters that may have a significant impact on Selectis’ financial statements. | |
| 3. | Regarding Selectis’ financial statements, the Committee will: |
| ● | Review Selectis’ audited annual financial statements and independent auditors’ opinions with respect to the statements, including the nature of any changes in accounting principles or their application. | |
| ● | Review Selectis’ interim quarterly financial statements and independent auditors’ opinions with respect to the statements, including the nature of any changes in accounting principles or their application. | |
| ● | Review significant accounting policies, policy decisions and changes, along with significant accounting, reporting or operational issues. | |
| ● | Review the financial statements to be issued with management and with the independent auditors to determine whether the independent auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders prior to the release of the each quarterly financial report to shareholders. | |
| ● | Make a recommendation to the Board regarding the inclusion of interim and annual financial statements in Selectis’ Commission filings based on its review of such financial statements with management and the independent auditors. | |
| ● | Ensure that management maintains reliability and integrity of accounting policies and financial reporting and that management establishes and maintains processes to assure adequate systems of internal control. |
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| ● | Disclose in Selectis’ annual proxy or information statement, the existence of the Committee and the Committee charter and the extent to which the Committee has satisfied its responsibilities during the prior year in compliance with its charter. | |
| ● | Disclose the Committee’s approval of any non-audit services in Selectis’ periodic reports filed with the Commission. | |
| ● | Review the management letter issued by the external auditors and management’s response. | |
| ● | Review fees paid for audit and consulting services, respectively. |
| 4. | Annually review and examine those matters which relate to a financial review of Selectis’ Investment Policies. | |
| 5. | Submit findings of importance, conclusions, recommendations, and items that require follow-up or action to the Board. | |
| 6. | Annually review and update the Audit Committee Charter, make recommendations to the Board to update this Charter, and submit these recommendations, if any, to the full Board for approval. | |
| 7. | Maintain minutes or the other records of meetings and activities of the Committee. |
| B. | Monitoring of Internal Controls |
The Committee is responsible for obtaining and understanding of Selectis’ key financial reporting risk areas and internal control structure. The Committee monitors the internal control process by reviewing information provided in the Business Conduct Questionnaire and Annual Certification reporting made by each Selectis employee, discussions with the chief financial and accounting officers and such other persons as the Committee deems appropriate, and discussions with and reports issued by external auditors.
| C. | Compliance with Laws, Regulations, and Ethics |
The Committee shall review reports and other information to gain reasonable assurance that Selectis is in compliance with pertinent laws and regulations, is conducting its affairs ethically, and is maintaining effective controls against conflict of interest and fraud.
Committee procedures shall include:
| 1. | Review Selectis’ policies relating to compliance with laws, regulations, ethics, and conflict of interest. | |
| 2. | Review significant cases of conflict of interest, misconduct, or fraud and the resolution of such cases. | |
| 3. | Review Selectis’ policies and processes for compliance with U.S. and foreign country business operation controls, laws and regulations. |
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| 4. | Review Selectis’ policies and processes for compliance with the Foreign Corrupt Practices Act and the USA Patriot Act. | |
| 5. | Review compliance reports received from regulators and consider legal and regulatory matters that may have a material impact on the financial statements. | |
| 6. | Review external auditor’s reports that relate to the monitoring of compliance with Selectis’ policies on business ethics. | |
| 7. | Review policies and procedures covering officers’ expense accounts and perquisites, including their use of corporate assets, and consider the results of any review of these areas by internal or external auditors. | |
| 8. | Review the disclosure included in Selectis’ periodic reports concerning whether at least one member of the Committee is an “audit committee financial expert” (as defined in Part III below) and, if no member of the Committee is an “audit committee financial expert”, why no such expert has been appointed to the Committee. |
| D. | Establishment of Complaint Procedure |
The Committee shall establish written procedures for the receipt, retention and treatment of complaints on accounting, internal accounting controls or auditing matters, as well as for the confidential, anonymous submissions by Company employees of concerns regarding questionable accounting or auditing matters.
| E. | Funding |
| 1. | The Committee shall engage such independent legal counsel and such accounting or other expert advisors as the Committee deems necessary to carry out its duties. | |
| 2. | The Committee shall receive appropriate funding, as determined by the Committee, from the Company for payment of (a) compensation to the Company’s independent external auditors (or other public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services for the Company), (b) compensation to the outside legal, accounting or other expert advisors employed by the Committee in the fulfillment of its duties and (c) ordinary administrative expenses of the Committee that are necessary or appropriate to carry out its duties. The Committee has sole authority to approve the fees and other retention terms of such legal, accounting and other expert advisors. |
II. OVERSIGHT OF EXTERNAL AUDIT FUNCTIONS
The Committee shall schedule meetings as necessary to receive and discuss reports from staff, other committees, and consultants. Particular emphasis will be given by the Committee to significant control deficiencies, and actions taken by management to correct them. The Committee may request through the Chief Financial Officer that the external auditors perform special studies, investigations, or other services in matters of interest or concern to the Committee. The Committee’s oversight of external audit coverage is covered under section I.A. above.
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III. COMMITTEE MEMBERSHIP
The Committee shall be composed of a number of Directors determined by the Board of Directors from time to time, each of whom shall satisfy the independence requirements imposed by any stock exchange or other marketplace on which the Company’s securities may be listed from time to time. All members of the Committee must be able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, and at least one member must have past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background which results in the member’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. In addition, the Committee will endeavor to have one member who will be deemed to be an “audit committee financial expert”, as that term is defined by the Commission. The Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by Selectis or an outside consultant. The Chairman and other members of the Committee shall be appointed by the Board.
Vacancies occurring in the Committee may be filled by appointment of the Chairman of the Board, after consultation with the Corporate Governance Committee, but no member of the Committee shall be removed except by vote of a majority of Directors present at any regular or special meeting of the Board.
The Secretary of the Committee shall be appointed by the majority vote of the Committee. The Secretary of the Committee shall prepare minutes of the meetings, maintain custody of copies of data furnished to and used by the Committee, and generally assist the Committee in connection with preparation of agendas, notices of meetings and otherwise.
IV. CONDUCT OF BUSINESS
All meetings require the presence of a majority of the members of the Committee to conduct business. Each Committee member shall have one vote. All actions or determinations by the Committee must be by majority vote of the members present. The Board shall have overall authority over all Committee actions.
V. COMPENSATION
The compensation of members of the Committee may be determined from time to time by resolution of the Board, after consultation with the Compensation Committee. Members of the Committee shall be reimbursed for all reasonable expenses incurred in attending such meetings.
VI. TIME AND PLACE OF MEETINGS
Committee meetings shall be held quarterly or more frequently as necessary at an agreed upon location. The Committee may ask members of management or others to attend the meeting and to provide pertinent information as necessary. As part of its job to foster open communication, the Audit Committee should meet at least annually with management, the director of the internal auditing department and the independent accountants separately to discuss any matters that the Audit Committee or each of these groups believe should be discussed privately. In addition, the Audit Committee or at least its Chairperson should meet with the independent accountants and management quarterly to review Selectis’ financial statements consistent with the Audit Committee’s duties and responsibilities set forth herein.
VII. PRESENTATION OF REPORTS TO THE BOARD OF DIRECTORS
The Committee shall make an annual presentation to the Board within three months after the receipt of the external auditor’s opinion on Selectis’ financial statement. The presentation shall provide an overview of the Committee’s activities, findings of importance, conclusions, recommendations, and items that require follow-up or action by the Board. Presentations may be made at more frequent intervals if deemed necessary by the Committee or as requested by the Board.
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Exhibit 10.2
SELECTIS HEALTH, INC.
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
As adopted by the Nominating and Governance Committee and Board of Directors
on July 25, 2022
I. PURPOSE
The primary purpose of the Nominating and Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of Selectis Health, Inc., (the “Company”) shall be to act on behalf of the Board in fulfilling the Board’s responsibilities to: (i) identify, review and evaluate candidates to serve as directors of the Company; (ii) recommend to the Board the persons to be nominated by the Board for election as directors at the annual meeting of shareholders; (iii) evaluate the composition, performance and other aspects of the Company’s Board committees; (iv) make other recommendations to the Board regarding affairs relating to the directors of the Company; (v) develop and review from time to time a plan of succession for key management; and (vi) administer and oversee all aspects of the Company’s corporate governance functions on behalf of the Board.
The policy of the Committee, in discharging these obligations, shall be to select well-qualified director nominees, and develop and review a set of corporate governance principles that enhance the overall management of the Company and provide a basis for governance that serves the best interests of the Company’s stockholders in building long-term value.
II. COMPOSITION
A. Number.
The Committee shall consist of shall consist of such number of directors as the Board shall from time to time determine.
B. Independence.
Each member of the Nominating and Governance Committee shall be free from any relationship that would interfere with the exercise of his or her independent judgment, as determined by the Board, in accordance with the applicable independence requirements imposed by any stock exchange or other marketplace on which the Company’s securities may be listed from time to time and the rules and regulations of the Securities and Exchange Commission (“SEC”), including any exceptions permitted by such requirements.
C. Chair.
Unless the Board elects a Chair of the Nominating and Governance Committee, the Committee shall elect a Chair by majority vote.
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D. Compensation.
The compensation of Nominating and Governance Committee members shall be as determined by the Board.
E. Selection and Removal.
Members of the Nominating and Governance Committee shall be appointed by the Board. The Board may remove members of the Nominating and Governance Committee from such Committee, with or without cause.
III. OPERATING PRINCIPLES AND PROCESSES
In fulfilling its functions and responsibilities, the Committee should give due consideration to the following operating principles:
| ● | Communication – Regular and meaningful contact with the Chairman of the Board, other committee chairpersons, members of senior management and independent professional advisors to the Board and its various committees, as applicable, is important shall be encouraged as a means of strengthening the Committee’s knowledge of relevant current and prospective corporate governance issues. | |
| ● | Committee Education/Orientation – Developing with management and participating in a process for systematic review of important corporate governance issues and trends in corporate governance practices that could potentially impact the Company shall be encouraged to enhance the effectiveness of the Committee. | |
| ● | Information Needs – The Committee members shall communicate to the Chief Executive Officer or his or her designees the Committee’s expectations, and the nature, timing, and extent of any specific information or other supporting materials requested by the Committee for its meetings and deliberations. | |
| ● | Meeting Agendas – Committee meeting agendas shall be the responsibility of the Committee chairperson with input from the Committee members and other members of the Board as well as, to the extent deemed appropriate by the chairperson, from members of senior management and outside advisors. |
IV. AUTHORITY AND RESPONSIBILITIES
The operation of the Committee will be subject to the provisions of the Bylaws of the Company and the Utah Business Corporations Act, each as in effect from time to time. The Committee shall oversee the Company’s nomination and corporate governance matters as established below and shall report the results of its activity to the Board. The Committee’s functions and procedures should remain flexible to address changing circumstances most effectively.
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A. Board and Committee Membership
1. Selection of Director Nominees. Except where the Company is legally required by contract or otherwise to provide third parties with the ability to nominate directors, the Nominating and Governance Committee shall be responsible for (i) identifying individuals qualified to become Board members and (ii) recommending to the Board the persons to be nominated by the Board for election as directors at the annual meeting of shareholders and the persons to be elected by the Board to fill any vacancies on the Board. In making such recommendations, the Committee shall consider candidates proposed by the shareholders in accordance with the Bylaws. The Committee shall review and evaluate information available to it regarding candidates proposed by shareholders and shall apply the same criteria, and shall follow substantially the same process in considering them, as it does in considering other candidates.
2. Criteria for Selecting Directors. The Board’s criteria for selecting directors are as set forth in the Company’s Corporate Governance Guidelines. The Nominating and Governance Committee shall use such criteria to guide its director selection process. The Committee shall be responsible for reviewing with the Board, on an annual basis, the requisite skills and criteria for new Board members as well as the composition of the Board as a whole.
3. Search Firms. The Nominating and Governance Committee shall have the sole authority to retain and terminate any search firm to be used to identify director nominees, including sole authority to approve the search firm’s fees and other retention terms. The Committee is empowered, without further action by the Board, to cause the Company to pay the compensation of any search firm engaged by the Committee.
4. Section of Committee Members. The Nominating and Governance Committee shall be responsible for recommending to the Board the directors to be appointed to each committee of the Board.
B. Corporate Governance
1. Corporate Governance Guidelines. The Nominating and Governance Committee shall develop and recommend to the Board a set of Corporate Governance Guidelines applicable to the Company. The Committee shall, from time to time as it deems appropriate, review and reassess the adequacy of such Corporate Governance Guidelines and recommend any proposed changes to the Board for approval.
C. Procedures and Administration
1. Meetings. The Nominating and Governance Committee shall meet as often as it deems necessary in order to perform its responsibilities. The Committee shall keep such records of its meetings, as it shall deem appropriate.
2. Subcommittee. The Nominating and Governance Committee may form and delegate authority to one or more subcommittee (including a subcommittee consisting of a single member), as it deems appropriate from time to time under the circumstances.
3. Reports to the Board. The Nominating and Governance Committee shall report regularly to the Board.
4. Charter. The Nominating and Governance Committee shall, from time to time as it deems appropriate, review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval.
5. Independent Advisors. The Nominating and Governance Committee shall have the authority to engage such independent legal and other advisors as it deems necessary or appropriate to carry out its responsibilities. Such independent advisors may be the regular advisors to the Company. The Committee is empowered, without further action by the Board, to cause the Company to pay the compensation of such advisors as established by the Committee.
6. Investigations. The Nominating and Governance Committee shall have the authority to conduct or authorize investigations into nay matters within the scope of its responsibilities as it shall deem appropriate, including the authority to request any officer, employee or advisor of the Company to meet with the Committee or any advisor engaged by the Committee.
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Exhibit 10.3
SELECTIS HEALTH, INC.
COMPENSATION COMMITTEE CHARTER
As adopted by the Compensation Committee and Board of Directors
on July 25, 2022
Purpose
The Compensation Committee (the “Committee”) exists to assist the Board of Directors in the discharge of its fiduciary responsibilities relating to the fair and competitive compensation of the executives and other key employees of the Company. The Committee has the ultimate responsibility for assuring that the senior executives of the Company are compensated in a manner consistent with the compensation philosophy and strategy of the Board of Directors and in compliance with the requirements of the regulatory bodies that oversee the Company. Generally, the Committee is charged with reviewing and approving the Company’s compensation philosophy and its executive compensation programs, plans and awards. The Committee also administers the Company’s short- and long-term incentive plans and other stock based plans and reviews and approves general employee pension benefit plans of the Company and other benefit plans on an as-needed basis.
Membership
The members of the Committee shall be appointed by the full Board of Directors upon the recommendation of the Corporate Governance Committee. Each director appointed to the committee must meet: (a) the independence requirements imposed by any stock exchange or other marketplace on which the Company’s securities may be listed from time to time and (b) any other legal requirements relevant to the proper administration of the Company’s compensation plans, including requirements under the federal securities laws and the Internal Revenue Code of 1986, as amended. In addition, unless approved by the Board of Directors, no director may serve on the Compensation Committee if he or she is, or during the past fiscal year has been, part of an interlocking directorate in which an executive officer of the Company serves on the compensation committee of another company that employs the director.
The determination as to each Committee member’s independence shall be disclosed in the Company’s proxy statement. The Committee shall consist of a number of independent directors determined from time to time by the Board of Directors. The business of the Committee may be transacted if a quorum of the Committee’s members is present. A quorum shall consist of at least one-third of the Committee’s membership, but no fewer than two persons. All action taken by the Committee shall be deemed approved on the vote of a majority of its members, however, the package of compensation for the Chairman, CEO and President that is submitted to the Board of Directors must be approved by the two-thirds vote of the standing members of the Committee. Membership on the Committee shall rotate at the full Board of Director’s discretion. Generally, the Board of Directors fills vacancies on the Committee and may remove a Committee member from the membership of the Committee at any time with or without cause.
Powers & Responsibilities
General Executive Compensation
The Committee shall have the power and responsibility to:
| 1. | Independently review the Company’s philosophy and strategy regarding executive compensation, and counsel with the CEO, as needed, regarding organization objectives, performance goals and the long-term interests of the Company’s shareholders; | |
| 2. | Annually review market and industry data to assess the Company’s competitive position with respect to the individual elements of total executive compensation to ensure the attraction, retention and appropriate reward of principal officers and other key employees; | |
| 3. | Annually approve the base salary amounts of, and all option grants, cash awards and stock awards to the SEC reporting officers (“SEC reporting officers” are those officers that file Forms 3 and 4 with the SEC under Section 16 of the Securities Exchange Act of 1934) of the Company; | |
| 4. | Periodically review and approve the Company’s stock ownership guidelines; | |
| 5. | Annually evaluate and approve the discretionary bonuses, benefits and perquisites offered to the Company’s CEO and other officers; | |
| 6. | Administer incentive compensation or option plans and stock-related plans (including specific provisions) in which the CEO and other senior executives and key employees may be participants and adopt or recommend amendments to such plans. In connection with administering such plans, the Committee has the authority to: |
| a) | approve option guidelines and general size of overall grants; | |
| b) | make grants; | |
| c) | interpret the plans; | |
| d) | determine rules and regulations relating to the plans; | |
| e) | modify or cancel existing grants and substitute new grants (with the consent of grantees); | |
| f) | designate employees eligible to participate in the long-term incentive plans; and | |
| g) | impose limitations, restrictions and conditions upon any award as the Committee deems appropriate and as permitted under the Plan; |
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| 7. | Assure that any payments under the long-term incentive plans are in conformance with any restrictions placed thereon by the Board of Directors and shareholders; | |
| 8. | Review recommendations made by the CEO for the compensation of the Company’s principal executives and other key employees; | |
| 9. | Retain and engage, with its sole authority and at its sole discretion, an independent compensation consultant or expert advisor to assist the Committee in the performance of its responsibilities. The Committee shall have the sole authority to approve the consultant’s fees and other terms of retention; | |
| 10. | Assure that total compensation paid to the Company’s SEC reporting officers and other key employees is appropriate and consistent with the Company’s compensation philosophy; | |
| 11. | Approve any SEC reporting officer’s employment agreement(s), severance agreement(s), change in control agreement(s) or provision(s) or separation agreement(s), or any amendments to the same; | |
| 12. | Approve any deferred compensation arrangement with the Company’s SEC reporting officers; | |
| 13. | Review with the CEO matters relating to management succession, including, but not limited to, compensation; | |
| 14. | Periodically review the competitiveness and appropriateness of compensation paid to executives of the Company’s controlled subsidiaries; | |
| 15. | Annually issue a report to the Company’s Board of Directors that advises the Board as to whether the Company’s executive compensation arrangements are appropriate, meet their stated purpose and effectively serve the interests of the Company and identify the specific factors and criteria that make each individual SEC reporting officer’s compensation reasonable or unreasonable; | |
| 16. | Annually issue a report on executive compensation in accordance with applicable rules and regulations of the Securities and Exchange Commission for inclusion in the Company’s proxy statement; | |
| 17. | Retain independent legal, financial or other advisors it deems necessary to fulfill its responsibilities, without obtaining approval of any officer of the Company in advance; and | |
| 18. | Delegate authority and responsibilities to subcommittees as it deems proper. |
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Chairman, CEO & President Compensation
In determining the Chairman’s, the CEO’s and the President’s total compensation, and in fulfilling its responsibilities hereunder, at a minimum, the Committee shall consider: (a) the Company’s performance during good and bad economic times and the relative shareholder returns during such periods, (b) the value of incentive awards to such persons at comparable companies, (c) the value of awards given to such persons in prior periods, (d) the proper balance between short term and long term incentives provided to such persons, and (e) the difference in compensation at various levels of the Company’s management.
Base Salary. Annually, the Committee shall have the power and responsibility to:
| 1. | Review market and industry data to assess the competitiveness of the Chairman’s, the CEO’s and the President’s base salary; and | |
| 2. | Approve in advance any salary increase or decrease for the Chairman, the CEO and the President and provide a written explanation to the Board of Directors for the approval of any such increase or decrease. |
Annual Incentives. Annually, the Committee shall have the power and responsibility to:
| 1. | Review and approve specific corporate goals and objectives that will be tied to the Chairman’s, the CEO’s and the President’s compensation incentives for the following year. These goals and objectives shall be submitted to the Board of Directors at the end of the current fiscal year and shall be discussed with the entire Board of Directors and the Chairman, the CEO or the President, as applicable; | |
| 2. | Evaluate the performance of the Chairman, the CEO or the President, as applicable, in meeting that year’s goals and objectives; and | |
| 3. | Approve any annual incentive awards given to the Chairman, the CEO or the President, as applicable, based upon this evaluation. |
Long-Term Incentive Compensation. Annually, the Committee shall have the power and responsibility to:
| 1. | Review and approve any long-term incentive awards granted to the Chairman, the CEO and the President; | |
| 2. | Consider the value of such award compared with those granted to other Chairmen, CEOs and Presidents, as applicable, in the industry and at comparable companies, as well as any other data it deems relevant; and | |
| 3. | Consider the common stock and number of stock options granted to the Chairman, the CEO and the President, as applicable, in prior years. |
During voting or deliberations regarding any of the compensation issues discussed above, the person whose compensation is the subject of deliberation may not be present.
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General Employee Pension and Employee Welfare Benefit Plans
The Board of Directors has delegated to the Committee the standing authority to discharge the ultimate fiduciary responsibilities and plan administrator responsibilities under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that may reside with the Board of Directors for employment benefit plans, as defined in Section 3(3) of ERISA, sponsored by the Company or any domestic subsidiary of the Company. The Committee shall render appropriate reports to the Board and the Board has delegated to the Committee the standing authority to make certain amendments (as limited below) to the Company’s employee benefit plans as defined by Section 3(3) of ERISA, whether or not covered by ERISA and related trust agreements and to further delegate its authority to appropriate officers of the Company. With respect to these delegations, the Committee shall have the power and responsibility to:
| 1. | Monitor the employee benefit plans sponsored by the Company with respect to external competitiveness, internal equity and legal compliance; | |
| 2. | Recommend the creation of any additional pension, profit-sharing or tax qualified employee benefit plan or program; | |
| 3. | Develop and implement long-term strategic asset allocation policies that accomplish the investment objectives adopted by the Committee for the Company’s domestic defined benefit retirement plans; | |
| 4. | Establish investment policies and guidelines for all funded defined benefit and defined contribution plans, and welfare benefit plans; | |
| 5. | Select and terminate investment managers, consultants, and trustees; | |
| 6. | Maintain fiduciary control over all employee benefit plan assets, delegating such fiduciary control to the extent deemed necessary or desirable by the Committee to investment managers and institutional trustees and custodians as is consistent with ERISA; | |
| 7. | Approve actuarial funding assumptions regarding expected return on investments; | |
| 8. | Shall report to the full Board with respect to any authority exercised by it or any delegate, including a summary of each amendment and its financial impact, at the next Board meeting; | |
| 9. | To the extent deemed necessary or desirable by the Committee, shall retain independent professional advisors to assist the Committee with its duties under any employee benefit plan, and shall ensure that such advisor performs its duties under an employee benefit plan independently and in the best interest of plan participants and their beneficiaries; and | |
| 10. | Shall otherwise ensure that the employee benefit plans are maintained, operated, and administered in compliance with ERISA, the Internal Revenue Code and all other applicable laws. |
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Director Compensation
The Committee shall have the power and responsibility to:
| 1. | Annually review the directors’ compensation and recommend any changes to the full Board of Directors. In considering an independent director’s compensation the Committee shall consider whether fees and emoluments exceed what is customary. The Committee should also consider the effect that any form of indirect compensation may have on a director’s independence (i.e. substantial charitable contributions to an organization in which a director is affiliated); and | |
| 2. | Approve annual retainer and meeting fees for the Board of Directors and its committees and fix the terms and awards of compensation to members of the Board. |
Procedures
Meetings:
| 1. | Any action required to be taken at a meeting of the Committee will be deemed the action of the Committee if all of the Committee members executed, either before or after the action is taken, a written consent and the consent is filed with the Company’s Secretary. | |
| 2. | The Chairman will report from time to time to the Board of Directors on Committee actions and on the fulfillment of the Committee’s responsibilities under its Charter. | |
| 3. | The Committee will meet a minimum of once each quarter and at such other times as may be requested by its Chairman. |
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Exhibit 10.4
SELECTIS HEALTH, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
Adopted as of July 25, 2022
Introduction
This Code of Business Conduct and Ethics (the “Code”) applies to Selectis Health, Inc. (“Selectis” or the “Company”). This Code covers a wide range of business practices and procedures. The Code should also be provided to and followed by the Company’s agents and representatives, including, without limitation, consultants.
Although this Code does not cover every issue that may arise, it does set out basic principles to guide all directors, officers, employees, agents, representatives, consultants and contractors (referred to herein collectively as “Personnel”) of the Company. The Company expects all Personnel at all levels to observe ethical standards, to conduct themselves accordingly, and to avoid even the appearance of improper behavior.
All Personnel should be aware that:
| ● | This Code cannot anticipate every possible situation or cover every topic in detail. If a situation is unclear, stop and ask for guidance before taking action. | |
| ● | When you have questions about the application of this Code to you and your role in the Company, seek assistance from your supervisor or the Company’s legal counsel. | |
| ● | From time to time, the Company may establish training programs to address specific areas of risk. Reading this Code is not a substitute for undertaking such training and complying with specific policies and procedures. | |
| ● | This Code does not necessarily take into account all local legal requirements. Where more restrictive local laws or requirements exist, such laws and requirements take precedence, and you must comply with such laws or requirements. If you have any questions about any conflicts of interest between local legal requirements and the standards of this Code, ask for guidance from the Company’s legal counsel before taking any action. | |
| ● | This Code is not intended to create, nor does it create, any contractual rights related to employment. |
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| ● | Those who violate the standards in this Code are subject to disciplinary action up to and including termination of employment. | |
| ● | If you are aware of a situation that you believe may violate or lead to a violation of this Code, follow the guidelines set forth herein, including, without limitation, Articles IX and X of this Code. | |
| ● | Company policy prohibits any Personnel from retaliating or taking adverse action against anyone for raising or helping to resolve a concern regarding the standards set forth in this Code. |
On an annual basis, Selectis will require its Personnel to certify their commitment to the spirit and letter of this Code.
For purposes of Section 406 of the Sarbanes Oxley Act of 2002 and the rules promulgated thereunder, Articles I-III and VIII-XIII of this Code shall be the Company’s code of ethics for Senior Financial Officers(1).
| I | Compliance with Laws, Rules and Regulations |
The Company is subject to numerous local, state and federal laws, rules and regulations (collectively, “Legal Requirements”). Obeying Legal Requirements, both in letter and in spirit, is the foundation on which the Company’s ethical standards are built. Any violation of a Legal Requirement may jeopardize the Company’s integrity.
All Personnel must respect and comply with all applicable Legal Requirements and to refrain from all illegal, dishonest or unethical conduct. Although Legal Requirements may sometimes be ambiguous or difficult to interpret, the Company expects all Personnel to comply with both the letter of the law and to make a good faith effort to comply with the spirit of the law. Illegal activities and illegal conduct are prohibited whether or not they are specifically set forth in this Code. If you have any questions about the existence, applicability or interpretation of any Legal Requirement, you are expected to consult with your supervisor or the Company’s legal counsel.
With respect to political affairs, Legal Requirements governing political activities and contributions are complex and diverse. Personnel may not undertake such activities on behalf of the Company or on Company time without the prior approval of the Company’s legal counsel. The Company also strictly prohibits making illegal payments to government officials of both foreign and domestic jurisdictions.
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| II | Material Nonpublic Information |
The Company is committed to fair and efficient trading markets for publicly traded securities. Any illegal insider trading is unethical, is prohibited as a matter of Company policy and will be dealt with decisively.
| A. | Insider Trading |
If any Personnel is in possession of Material Nonpublic Information (as defined below) relating to the Company, neither such Personnel nor any Related Person (as defined below) may buy or sell securities of the Company (the “Company Securities”) or engage in any other action to take advantage of, or pass on to or “tip” others, such information. Even a casual remark to a friend or family member may find its way to a broker and eventually to the entire financial community, thereby requiring the Company to make a premature or unplanned public announcement of such information. This policy also applies to Material Nonpublic Information relating to any other company with publicly traded securities, including, without limitation, the Company’s customers or suppliers, obtained in the course of employment by or association with the Company.
A “Related Person” includes a person’s spouse, minor children or anyone else living in the household; partnerships in which such person is a general partner; trusts of which he or she is a trustee; and estates of which he or she is an executor.
“Material Nonpublic Information” is material information which would affect a reasonable investor’s decision on whether or not to invest in a company’s securities. The materiality of a fact depends upon the totality of the circumstances relating to such fact. A fact is considered “material” if there is a substantial likelihood that a reasonable investor would consider such fact important in making a decision to buy, sell or hold a security or where the fact is likely to have a significant effect on the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company’s business or to any type of security, debt or equity. Examples of possible Material Nonpublic Information include, but are not limited to:
| ● | Plans to issue or repurchase securities | |
| ● | Annual, quarterly or monthly financial results, a change in earnings or projections, or unexpected or unusual gains or losses in major operations | |
| ● | Changes in key management personnel | |
| ● | Mergers, acquisitions, joint ventures, divestitures or tender offers | |
| ● | New products, services or developments | |
| ● | Major litigation | |
| ● | Gain or loss of a significant customer or supplier | |
| ● | Important regulatory approvals | |
| ● | Any other undisclosed information that could affect the price of the security |
When material information has been publicly disclosed, each director and executive officer must continue to refrain from buying or selling the securities in question until two full trading days after the information has been publicly released to allow the markets time to absorb the information. Directors and executive officers must report transactions in Company Securities to the Securities and Exchange Commission (“SEC”) within two days of the transaction.
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| B. | Blackout Periods |
Pursuant to SEC rules, the Company’s directors and executive officers are prohibited from trading in the Company’s equity securities during any period of three or more consecutive days during which at least 50% of the participants or beneficiaries in an “individual account” retirement plan of the Company or its subsidiaries are unable to purchase, sell or otherwise acquire or transfer an interest in the equity of the Company held in such plan due to a temporary suspension by the Company or a fiduciary (“Blackout Period”). “Individual account” plans include, without limitation, defined contribution plans such as a broad-based qualified 401(k) plans and profit sharing plans, stock bonus plans and certain nonqualified deferred compensation arrangements. There are limited exceptions to this rule, and directors and executive officers should consult with the Company’s legal counsel or designee prior to attempting a securities transaction during a Blackout Period. Under Regulation BTR adopted by the SEC, the Company is required to notify directors and executive officers of blackouts that might affect them. The Company also has a general Blackout Period beginning 15 days before the end of a reporting period (quarter or year end) and ending two full trading days after the Company’s financial results have been reported to the public via either a press release and/or the filing of its quarterly or annual reports with the SEC.
| C. | Corporate Communications |
Only designated spokespersons may engage in discussions with persons outside the Company regarding previously undisclosed Material Nonpublic Information of the Company. For coordination and consistency, all investor and all media inquiries and interview requests must be managed by the Company’s Chief Executive Officer, Chief Financial Officer or designated Investor Relations and Media Relations personnel. Instances of unintentional disclosure should be immediately reported to the Company’s legal counsel in order for the Company to publicly disclose this information on a timely basis.
The Company expects you to consult with the Company’s Chief Executive Officer or Chief Financial Officer if you have any questions or uncertainties about insider trading or any matters relating to Material Nonpublic Information, Blackout Periods or corporate communications.
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| III | Conflicts of Interest |
Conflicts of interest can arise in virtually every area of the Company’s operations. A conflict of interest occurs when an individual’s private interest interferes or conflicts in any way (or it even appears to interfere or conflict with) the interests of the Company. Conflicts of interest, should, to the extent possible, be avoided, and are prohibited as a matter of Company policy, unless full disclosure has been made by the individual and, as deemed necessary and approved by the Board of Directors.
Service to the Company should never be subordinated to personal gain and advantage. In particular, Personnel must ensure that they never use or attempt to use their position at the Company to obtain any improper personal benefit for themselves, their families or for any other person.
It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, supplier or customer. No member of our Personnel may work for or receive payments for services from any competitor, customer, distributor or supplier of the Company without the express written approval of the Chief Executive Officer. The best policy is to avoid a direct or indirect business connection with the Company’s competitors, suppliers, or customers except on behalf of the Company.
No member of our Personnel should use his or her position with the Company, or confidential or non-public information acquired in connection with such person’s relationship with the Company, in a manner that may create a conflict, or the appearance of conflict, between the interests of the Company and such individual’s personal interests.
No member of our Personnel, nor any member of such Personnel’s family or company in which he or she is an officer, director, partner or beneficial owner of more than 2% of the outstanding securities, may have an interest in a transaction in which the Company is also a party (other than as a consumer of normal services provided by a Company business) without disclosing such interest to the Board of Directors of the Company and having the transaction approved by the Board of Directors.
No member of our Personnel, nor any member of such Personnel’s family or company in which he or she is an officer, director, partner or beneficial owner of more than 2% of the outstanding securities, may be affiliated with any buyer, purchasing agent or provider of goods and services without written authorization from the Company.
No member of our Personnel may serve as a director or officer of a publicly traded company unless approved by the Chief Executive Officer or his designee. Personnel may not disclose their employment or any affiliation with the Company in the endorsement of any product not affiliated with the Company unless approved by the Chief Executive Officer or his designee.
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Employees must make sure that the skills they learn and use in their employment with the Company are not used in such a way that could hurt the business of the Company. Employees must inform their supervisor of any outside employment, including, without limitation, the name of the employer and the expected work hours. Although the Company recognizes and respects an individual’s right to be employed by another entity or to engage in activities outside of his or her employment, such employment or activities must not reflect poorly on the Company or conflict with one’s responsibilities to the Company, including, without limitation, impairing one’s work efficiency, interfering with one’ ability to act conscientiously in the best interest of the Company, or requiring the use of Company property or confidential procedures, plans or techniques.
The Company reserves the right to determine, in its sole discretion, when an employee’s employment and activities reflect poorly on the Company or represent a conflict with an employee’s responsibilities to the Company.
Situations that may lead to conflicts of interest include:
| ● | Holding a financial interest in a company where one could personally affect the Company’s business with that company | |
| ● | Taking a part-time job where one may be tempted to spend time on that job during one’s normal Company working hours or to use Company property or job information | |
| ● | Receiving gifts of greater than nominal value from suppliers, customers or competitors while one is in a position to influence Company decisions that might affect or appear to affect the outside concern | |
| ● | Receiving personal discounts or other benefits from suppliers, service providers, or customers not available to the general public or similarly situated Company Personnel. | |
| ● | Accepting an offer to purchase ‘friends and family stock” in a company issuing shares through an initial public offering (“IPO”) if one interfaces with that company in his or her business activities with the Company. | |
| ● | Directing business of the Company to a supplier that is owned or managed by one’s relative or close friend. | |
| ● | Misusing Company resources, one’s position or influence to promote or assist an outside business or not-for-profit activity. | |
| ● | Preferential hiring of, direct supervision of, or making a promotion decision about one’s spouse, relative or close personal friend. | |
| ● | A romantic or other personal relationship that may create a conflict of interest with one’s Company responsibilities or compromise Company interests. | |
| ● | Seeking or accepting, directly or indirectly, any personal loan or services from any individual or business concern doing or seeking to do business with the Company except from financial institutions or service providers offering like loans or services to third parties under similar terms in the ordinary course of their respective businesses. | |
| ● | Doing business on behalf of the Company with a close relative unless such business has been expressly authorized in writing by a supervisor after such relationship has been appropriately disclosed. |
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The requirement of freedom from conflicts of interests that applies to all Personnel extends also to situations involving their close relatives. This normally includes spouses, parents, children and brothers and sisters.
Even where Company approval is not required for any outside activities, one should excuse his or herself from any decision or matter involving the Company to avoid the appearance of impropriety. The Chief Executive Officer of the Company has the ultimate authority and responsibility to determine what remedial steps should be taken in situations involving an actual or potential conflict of interest except in cases where he or she is involved (in which case the Company’s Board of Directors has such authority).
The Company expects all Personnel to report any potential conflict situation to an immediate supervisor, to the Company’s legal counsel, or in accordance with the procedures set forth in Articles IX and X of this Code. The Company has the right to take whatever action is necessary to resolve the issue using corrective action it deems appropriate up to and including, without limitation, discharge.
| IV. | Corporate Opportunities |
All Personnel owe a duty to the Company to advance the Company’s legitimate interests when the opportunity to do so arises. Directors, officers and other employees are prohibited from taking for themselves personally, opportunities which are discovered through the use of Company property, information or position without the prior consent of the Board of Directors. All Personnel are also prohibited from directly or indirectly buying, or otherwise acquiring rights to any property or materials, when such employee knows, or has reason to believe, that the Company may be interested in pursuing such an opportunity and the information is not public. No director, officer or employee may use Company property, information or position for improper personal gain and no Personnel may compete with the Company directly or indirectly. See also Article VI regarding the protection and proper use of the Company’s assets.
| V. | Fair Dealing |
The Company seeks to outperform its competition fairly and honestly. Stealing or otherwise misusing proprietary information, possessing trade secret information that was obtained without the owner’s consent or inducing improper disclosures of proprietary information by past or present personnel of other companies is prohibited. All Personnel should endeavor to respect the rights of, and deal fairly and ethically with, the Company’s customers, service providers, suppliers, competitors and employees. Personnel shall not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. In addition, all Personnel have an obligation under Legal Requirements relating to the antitrust laws to avoid certain conduct designed to lessen or restrict competition or to harm competitors. Such conduct includes certain discussions, exchanges of information or agreements with competitors relating to current and future pricing, production and marketing or allocation of customers and market. The Company expects all Personnel to consult the Company’s legal counsel regarding any questions or uncertainties regarding antitrust compliance.
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The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered, given, provided or accepted by any Personnel or family members of Personnel unless it: (1) is not a cash gift; (2) is consistent with customary business practices; (3) is not excessive in value; (4) cannot be construed as a bribe or payoff; and (5) does not violate any Legal Requirement. Please discuss with your supervisor or the Company’s legal counsel any gifts or proposed gifts which you are not certain are appropriate.
The Company’s policy is to abide by rules and practices of federal, state and local legislative and executive agencies regulating receipt of gifts, meals and entertainment from Company representatives. Personnel shall not entertain or be entertained on behalf of the Company by a person or firm at locations which violate any Legal Requirement. No illegal activities are to occur during Company-sanctioned entertainment activities, nor should there by any actions which would support a claim against the Company for unlawful discrimination or harassment.
| VI. | Protection and Proper Use of Company Assets |
All Personnel should endeavor to protect the Company’s assets and ensure their efficient use. Company property should not be misused. Company property may not be sold, loaned or given away regardless of condition, without proper authorization. Theft, carelessness and waste have a direct impact on the financial well-being and stability of the Company. Company assets may only be used for legitimate purposes that advance the Company’s interests. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business, though reasonable incidental personal use may be permitted. However, since excessive personal use can be costly and impact profitability, Personnel are expected to use good judgment.
You are personally responsible and accountable for proper expenditure of Company funds, including, without limitation, money spent for travel expenses or customer entertainment. You are responsible for proper use of property over which you have control, including both Company property and funds, as well as any property that customers or others have entrusted to your custody.
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The obligation of all Personnel to protect the Company’s assets includes the Company’s proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information, customer lists, supplier lists and any unpublished financial data and reports. Unauthorized distribution of this information violates Company policy. It may also be illegal and result in civil or criminal penalties. The Company expects all Personnel to consult a supervisor or the Company’s legal counsel if it is unclear whether the use of any Company asset in a given situation is inappropriate.
| VII. | Confidentiality |
In carrying out the Company’s business, Personnel may have access to confidential or proprietary information about the Company, its customers, suppliers or joint venture partners. Confidential information includes all non-public information that may be of use to competitors, or harmful to the Company or its customers, if improperly disclosed. It also includes information that suppliers and customers have entrusted to the Company. No Personnel shall take advantage of or disclose to anyone any Company information which they know or have reason to believe is confidential or proprietary unless such disclosure is authorized by the Company’s legal counsel or required Legal Requirements. This obligation to preserve confidential or proprietary information continues even after a person is no longer employed by, or affiliated with, the Company.
| VIII. | Integrity of Information and Record-Keeping |
The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For example, many employees regularly use business expense accounts, which must be documented and recorded accurately. Personnel should not knowingly supply false information on any of the Company’s business records, including, without limitation, employment information, time sheets or maintenance reports. Any knowledge of false or misleading information on the Company records should be reported to a supervisor. If you are unsure whether a certain expense is legitimate, ask the Chief Financial Officer.
The Company requires that all the information in its public communications, including, without limitation, its SEC filings, should be full, fair, accurate, timely and understandable. All Personnel who are involved in the Company’s disclosure process, including without limitation, Senior Financial Officers, are responsible for acting in furtherance of this policy. In particular, these individuals are required to maintain familiarity with the disclosure requirements applicable to the Company and are prohibited from knowingly misrepresenting, omitting or causing others to misrepresent or omit, material facts about the Company to others, whether within or outside the Company, including, without limitation, the Company’s independent auditors in connection with their audit of the Company’s financial statements, the preparation of any required reports whether by independent or internal accountants or any other work which involves or relates to the filing of a document with the SEC. In addition, all Personnel with supervisory roles in the Company’s disclosure process have an obligation to discharge their responsibilities diligently.
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All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable Legal Requirements and to the Company’s internal controls policies and procedures.
All Personnel are prohibited from directly or indirectly falsifying or causing to be false or misleading any financial or accounting book, record or account. Everyone associated with the Company is expressly prohibited from directly or indirectly manipulating an audit and from destroying or tampering with any record, document or tangible object with the intent to obstruct a pending or contemplated audit, review or federal or state investigation. The commission of, or participation in, one of these prohibited activities or other illegal conduct will subject Personnel to federal or state penalties, as well as punishment of up to and including termination of employment.
Please consult the Company’s legal counsel if one has any questions or concerns in this area.
| IX. | Reporting Violations or Concerns |
All Personnel should be alerted and sensitive to situations that might result in violations of any Legal Requirements or the standards of conduct set forth in this Code. If one believes his or her own conduct or that of any other Personnel may have violated any Legal Requirement or this Code, one has an obligation to promptly report the matter to the Company either orally or in writing. Directors and officers should promptly report any such conduct to the Company’s legal counsel. Complaints relating to the Company’s accounting, internal accounting controls or auditing matters will be referred to the Audit Committee of the Board of Directors. Unless otherwise specifically indicated in this Code, Personnel shall report perceived wrongdoings or unethical behavior promptly as follows:
| ● | By contacting the Company’s legal counsel or the Chief Executive Officer | |
| ● | In the case of concerns regarding questionable accounting or auditing matters, employees should also feel free to contact the Chair of the Audit Committee of the Board of Directors. |
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Any employee who in good faith reports such incidents as described above, or who cooperates in any Company or governmental investigation in connection with any of the above, will be protected to the extent required by applicable law from threats of retaliation, discharge or other types of discrimination, including, but not limited to, compensation or terms and conditions of employment, that are directly related to the disclosure of such reports. In addition, employees may not be adversely affected because of a refusal to carry out a directive which, in fact, constitutes corporate fraud or is a violation of this Code or any Legal Requirement. All Company supervisors should familiarize themselves with this Code and the Company’s related policies and procedures to ensure that (i) no adverse affects or other impermissible action is taken with respect to such employees and (ii) any good faith reports are handled in accordance with the Company’s policies and procedures.
| X. | Compliance Procedures |
Everyone associated with the Company must work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know if a violation has occurred. Since every situation that will arise cannot be anticipated, it is important to have a way to approach a new question or problem. These are some steps to keep in mind:
| ● | Make sure you have all the facts. In order to reach the right solutions, you and the Company must be as fully informed as possible. | |
| ● | Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with and alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is. | |
| ● | Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem. | |
| ● | Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question and will appreciate being brought into the decision-making process. Remember that it is your supervisor’s responsibility to help solve problems. | |
| ● | Seek help from Company resources. In the rare case where it may not be appropriate to discuss any issue with your supervisor or where you do not feel comfortable approaching your supervisor with your question, discuss it locally with the Company’s legal counsel. | |
| ● | You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind against employees for good faith reports of ethical violations. | |
| ● | Always ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act. |
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| XI. | Non-Compliance |
Failure to obey rules and regulations violates this Code and may expose you and the Company to criminal or civil prosecution. Any violation of this Code may result in corrective action, including, without limitation, oral or written reprimand, suspension, modified duties, job title and compensation and benefits, termination and potential civil litigation against you. The Company may also seek civil remedies from you and even refer misconduct to law enforcement agencies that might even result in a criminal prosecution. Furthermore, the Company reserves the right to enforce this Code in its sole discretion, on a case-by-case basis, according to the facts and circumstances of each individual instance in which this Code is violated. No form of disciplinary action enacted by the Company in response to any specific violation of this Code will bind the Company to choose the same form of disciplinary action in reaction to future violations.
| XII. | Waiver |
From time to time, circumstances may warrant a material departure from, or a waiver of, a provision of this Code. Any such waiver of this Code for directors or executive officers may be made only by the Board of Directors or a committee thereof. In case a waiver of any of Sections I-III or VIII-XII of this Code is granted to a director or an executive officer, a notice of such waiver briefly describing the nature of the waiver, the name of the person to whom the waiver was granted, the reason for the waiver, and the date of the waiver, shall be promptly disclosed in a Current Report on Form 8-K within four days of the waiver. Notices shall be retained in the Company’s files as required by law.
For the purposes of this Code, the term “waiver” shall include an “implicit waiver,” which shall mean the Company’s failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to an executive officer of the Company.
| XIII. | Amendments and Modifications of this Code |
There shall be no other amendment or modification of this Code except by a vote of the Board of Directors or a designated committee that will ascertain whether amendment or modification is appropriate. In the case of any amendment or modification of this Code that applies to a Senior Financial Officer, other than a technical, administrative or other non-substantive amendment, a notice of such amendment or modification briefly describing the nature of the amendment or modification will be promptly disclosed on a Form 8-K or on the Company’s website as required by applicable Legal Requirements or NYSE American Rules.
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| XIV. | Conclusion |
This Code is an attempt to point everyone related to the Company in the right direction, but no document can achieve the level of principled compliance that the Company is seeking. Each individual is responsible for maintaining his or her awareness of these issues and complying with the Code’s principles to the best of his or her abilities. Before taking any action, one should always ask oneself:
| ● | Does it feel right? | |
| ● | Is this action ethical in every way? | |
| ● | Is this action in compliance with the law? | |
| ● | Could my action create an appearance of impropriety? | |
| ● | Am I trying to fool anyone, including myself, about the propriety of this action? |
If an action would elicit the wrong answer to any of these questions, do not take it. The Company expects you to act in good faith. If you act in bad faith or fail to report illegal or unethical behavior, then you will be subject to disciplinary procedures. The Company hopes that you agree that it is always best to be honest, forthright and loyal.
| I have read and agree to comply with the above policy, | ||
| Signature | Date | |
| Printed Name |
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Exhibit 10.5
SELECTIS HEALTH, INC.
DOCUMENT RETENTION POLICY
The corporate records of Selectis Health, Inc., a Delaware corporation (hereafter the “Company”) are important assets. Corporate records include essentially all records you produce as an employee, whether paper or electronic. A record may be as obvious as a memorandum, an e-mail, a contract or a case study, or something not as obvious, such as a computerized desk calendar, an appointment book or an expense record.
The law requires the Company to maintain certain types of corporate records, usually for a specified period of time. Failure to retain those records for those minimum periods could subject you and the Company to penalties and fines, cause the loss of rights, obstruct justice, spoil potential evidence in a lawsuit, place the Company in contempt of court, or seriously disadvantage the company in litigation.
The Company expects all employees to fully comply with any published records retention or destruction policies and schedule, provided that all employees should note the following general exceptions to any stated destruction schedule: If you believe, or the Company informs you, that Company records are relevant to litigation, or potential litigation (i.e., a dispute that could result in litigation), then you must preserve those records until the Chairman of the Board determines the records are no longer needed. That exception supersedes any previously or subsequently established destruction schedule for those records. If you believe that exception may apply, or have any question regarding the possible applicability of that exception, please contact the Chairman of the Board.
From time to time the Company establishes retention or destruction policies or schedules for specific categories of records in order to ensure legal compliance, and also to accomplish other objectives, such as preserving intellectual property and cost management. Several categories of documents that bear special consideration are identified below. While minimum retention periods are suggested, the retention of the documents identified below and of documents not included in the identified categories should be determined primarily by the application of the general guidelines affecting document retention identified above, as well as any other pertinent factors.
(a) Tax Records. Tax records include, but may not be limited to, documents concerning payroll, expenses, proof of deductions, business costs, accounting procedures, and other documents concerning the Company’s revenues. Tax records should be retained for at least six years from the date of filing the applicable return.
(b) Employment Records/Personnel Records. State and federal statutes require the Company to keep certain recruitment, employment and personnel information. The Company should also keep personnel files that reflect performance reviews and any complaints brought against the Company or individual employees under applicable state and federal statutes. The Company should also keep all final memoranda and correspondence reflecting performance reviews and actions taken by or against personnel in the employee’s personnel file. Employment and personnel records should be retained for six years.
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(c) Board and Board Committee Materials. Meeting minutes should be retained in perpetuity in the Company’s minute book. A clean copy of all Board and Board Committee materials should be kept for no less than three years by the Company.
(d) Press Releases/Public Filings. The Company should retain permanent copies of all press releases and publicly filed documents under the theory that the Company should have its own copy to test the accuracy of any document a member of the public can theoretically produce against the Company.
(e) Legal Files. Legal counsel should be consulted to determine the retention period of particular documents, but legal documents should generally be maintained for a period of ten years.
(f) Marketing and Sales Documents. The Company should keep final copies of marketing and sales documents for the same period of time it keeps other corporate files, generally three years.
An exception to the three-year policy may be sales invoices, contracts, leases, licenses and other legal documentation. These documents should be kept for at least three years beyond the life of the agreement.
(g) Development/Intellectual Property and Trade Secrets. Development documents are often subject to intellectual property protection in their final form (e.g., patents and copyrights). The documents detailing the development process are often also of value to the Company and are protected as a trade secret where the Company:
| (i) | derives independent economic value from the secrecy of the information; and | ||
| (ii) | the Company has taken affirmative steps to keep the information confidential. |
The Company should keep all documents designated as containing trade secret information for at least the life of the trade secret.
(h) Contracts. Final, execution copies of all contracts entered into by the Company should be retained. The Company should retain copies of the final contracts for at least three years beyond the life of the agreement, and longer in the case of publicly filed contracts.
(i) Electronic Mail. E-mail that needs to be saved should be either:
| (i) | printed in hard copy and kept in the appropriate file; or | ||
| (ii) | downloaded to a computer file and kept electronically or on desk as a separate file. |
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The retention period depends upon the subject matter of the e-mail, as covered elsewhere in this policy.
Failure to comply with this Document Retention Policy may result in punitive action against the employee, including suspension or termination. Questions about this policy should be referred to the Chairman of the Board, who is in charge of administering, enforcing and updating this policy.
| READ, UNDERSTOOD AND AGREED: | |
| Employee’s Signature | |
| Date |
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Exhibit 10.6
SELECTIS HEALTH, INC.
Whistleblower Policy
Procedures for the Submission of Complaints or Concerns regarding Financial Statement or other Disclosures, Accounting, Internal Accounting or Disclosure Controls, Auditing Matters or violations of the Selectis Health, Inc. Code of Business Conduct and Ethics.
Section 301 of the Sarbanes-Oxley Act requires the Audit Committee of the Board of Directors of Selectis Health, Inc. (the “Company”) to establish procedures for: (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the submission by employees of the Company and others, on a confidential and anonymous basis, of good faith concerns regarding questionable accounting or auditing matters.
In accordance with Section 301, the Audit Committee has adopted the following procedures:
1. The Company shall promptly forward to the Audit Committee any complaints that it has received regarding financial statement disclosures, accounting, internal accounting or disclosure controls or auditing matters, disclosure violations or violations of its Code of Business Conduct and Ethics.
2. Any employee of the Company may submit, on a confidential, anonymous basis if the employee so desires, any good faith concerns regarding financial statement or other disclosure, accounting, internal accounting or disclosure controls, auditing matters or violations of the Company’s Code of Business Conduct and Ethics. All such concerns shall be set forth in writing and forwarded in a sealed envelope to the Chairman of the Audit Committee in an envelope labeled with a legend such as: “To be opened by the Audit Committee only. Being submitted pursuant to the “whistleblower policy” adopted by the Audit Committee.” If an employee would like to discuss any matter with the Audit Committee, the employee should indicate this in the submission and include a telephone number at which he or she might be contacted if the Audit Committee deems it appropriate.
3. Following the receipt of any complaint submitted hereunder, the Audit Committee will investigate each such matter so reported and take corrective and disciplinary actions, if appropriate, which may include, alone or in combination, a warning or letter of reprimand, demotion, loss of merit increase, loss of bonus or stock options, suspension without pay or termination of employment.
4. The Audit Committee may enlist committee members, Board members, employees of the Company and/or outside legal, accounting or other advisors, as appropriate, to conduct any investigation of complaints regarding financial statement disclosures, disclosure concerns or violations, accounting, internal accounting controls, auditing matters or violations of the Company’s Code of Business Conduct and Ethics. In conducting any investigation, the Audit Committee shall use reasonable efforts to protect the confidentiality and anonymity of the complainant.
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5. The Company does not permit retaliation of any kind against employees for complaints submitted hereunder that are made in good faith. Additionally, no employee shall be adversely affected because the employee refuses to carry out a directive which, in fact, constitutes corporate fraud, or is a violation of state or federal law or of the Company’s Code of Business Conduct and Ethics.
6. The Audit Committee shall retain as a part of the records of the Audit Committee any such complaints or concerns for a period of no less than seven (7) years.
7. Problems or concerns related to financial statement or other disclosures, accounting, internal or disclosure controls, auditing matters or questions, disclosure violations or violations of the Company’s Code of Business Conduct and Ethics, which an employee wishes to discuss or report on a non-confidential or non-anonymous basis, should be reported immediately to the Company’s Lead Director using the contact information specified below, or if the employee is uncomfortable reporting to such person, to the Company’s outside legal counsel using the contact information specified below.
8. The Lead Director or outside counsel, as the case may be, shall keep a written record of all such reports or inquiries and make monthly reports of the same to the Chairman of the Audit Committee in any month in which an inquiry or complaint is received. If the contact is in the nature of an alleged violation of the Company’s Code of Conduct and Ethics or an impropriety with regard to the Company’s financial statements or other disclosures, accounting, internal or disclosure controls, or auditing matters, the allegation shall immediately be relayed by the Lead Director, or the Company’s outside legal counsel, to the Chairman of the Audit Committee, who shall immediately notify the complainant that the complaint has been received and begin the procedures outlined above.
| Contact Information | ||
| Audit Committee Chairman | David Furstenberg | |
| dfurstenberg@comcast.net | ||
| Outside Legal Counsel | Clifford L. Neuman, P.C. | |
| clneuman@neuman.com |
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