EXHIBIT 14.1
NATURAL HEALTH TRENDS CORP.
WORLDWIDE CODE OF BUSINESS
CONDUCT
(EFFECTIVE JULY 1, 2004)
Dear Fellow Employees:
Natural Health Trends Corp. and Subsidiaries (the "Company") is committed
to conducting its business activities with honesty, integrity and fairness in
accordance with the highest ethical standards. Similarly, the Company depends on
you, its employees, to be committed to the highest standards of business ethics
and personal performance. In all your business transactions, it is our paramount
goal to gain and maintain the confidence of the public, our distributors,
suppliers, shareholders and others with whom we come in contact. As a Company
employee, you are obligated and expected to uphold this high ethical standard in
every business activity you conduct. Any actions that might raise questions
about our business ethics are unacceptable.
This Code of Business Conduct has been created to provide a written guide
for all of us to the principles and standards of conduct by which we at Natural
Health Trends Corp. conduct our business. We do not expect you to become a legal
expert as a result of reading this booklet. However, we do expect you to comply
with the Code, to be generally aware of certain laws and regulations and to
recognize sensitive issues. Most importantly, we expect you to ask questions and
seek advice. Remember: It is always better to ask questions first to avoid
problems later.
To help all of us comply with this Code of Business Conduct, we have
established Chris Sharng to be our Ethics Compliance Officer, who can be
contacted at 972-241-4080 or chrissharng@lexxusinternational.com. When we
involve him early, which we must always do, Mr. Sharng can help resolve
questions and guide actions.
This Code's purpose is guidance. Please read it carefully and keep it
continually in mind. If a situation arises, ever, whether it involves you
directly, indirectly, or even not at all, which raises a question in your mind
as to ethical or legal compliance; it is your obligation to communicate this to
your company. Speak with your supervisor or, better yet, directly to Mr. Sharng.
Thank you for your cooperation. Our mutual commitment to the principles of
ethical business conduct is an essential element to our success.
Sincerely,
Mark D. Woodburn,
President and Chief Executive Officer
TABLE OF CONTENTS
I. COMPLIANCE.................................................................................... 1
II. LEGAL MATTERS................................................................................. 1
A. COMPLIANCE WITH LAWS GENERALLY............................................................. 1
B. ANTITRUST AND COMPETITION LAWS............................................................. 1
C. SECURITIES TRADING AND NON-PUBLIC INFORMATION.............................................. 3
D. THE FOREIGN CORRUPT PRACTICES ACT.......................................................... 4
III. INFORMATION AND TECHNOLOGY MANAGEMENT......................................................... 4
A. PROTECTION OF PROPRIETARY INFORMATION...................................................... 4
B. ELECTRONIC COMMUNICATIONS POLICY........................................................... 5
IV. FINANCE AND ACCOUNTING........................................................................ 5
A. ACCURACY OF COMPANY RECORDS................................................................ 5
B. AUTHORIZATION SYSTEMS...................................................................... 5
C. SENIOR FINANCIAL OFFICERS.................................................................. 6
V. WHERE TO FIND MORE INFORMATION................................................................ 6
VI. HOW TO REPORT VIOLATIONS...................................................................... 6
VII. ACKNOWLEDGEMENT OF RECEIPT.................................................................... 6
I. COMPLIANCE
Compliance with this Code of Business Conduct is required of everyone who
acts on behalf of Natural Health Trends Corp. or one of its subsidiaries.
That includes directors, officers, employees and agents. Anyone who
violates our Code will be acting outside the scope of his or her
employment (or agency) and will be subject to disciplinary action, up to
and including termination of employment. Mr. Chris Sharng has been
designated by the Board of Directors to oversee compliance with our Code
and its policies and procedures. Any questions of applicability or
interpretation should be addressed to this person at 972-241-6525 or
chrissharng@lexxusinternational.com.
If at any time a Company employee has an ethical concern or becomes aware
of any conduct on the part of any Company employee that violates -- or may
violate -- our high ethical standards or any company policy, you should
report such concern or conduct to your supervisor or to Mr. Sharng, our
Ethics Compliance Officer. See the section entitled "How To Report
Violations" in Section VI on p. 6 of this Code of Business Conduct for
more detail.
Each employee will be asked to complete and submit an "Acknowledgment of
Receipt" that you have received and read a copy of the Code and agree to
comply with its requirements.
II. LEGAL MATTERS
A. COMPLIANCE WITH LAWS GENERALLY
Natural Health Trends Corp., each of its subsidiaries and its
directors, officers, employees and agents will abide by the letter
and the spirit of all applicable laws and regulations, and will act
in such a manner that the full disclosure of all facts related to
any activity will always reflect favorably upon the Company.
The international business operations of Natural Health Trends Corp.
may encounter laws, local customs and social standards that differ
widely from U.S. practice. It is Company policy to abide by the
national and local laws of the countries in which we operate, unless
prohibited by U.S. law. When local customs and business or social
practices vary from the standards contained in this Code of Business
Conduct, it is permissible to conform to local customs and practices
when necessary for the proper conduct of Natural Health Trends Corp.
business provided that it does not violate U.S. law, such as the
Foreign Corrupt Practices Act (discussed below) and when approved by
the Ethics Compliance Officer.
B. ANTITRUST AND COMPETITION LAWS
Antitrust laws in the United States are designed to preserve and
foster fair and honest competition within the free enterprise
system. To accomplish this goal, the language of these laws is
deliberately broad, prohibiting such activities as "unfair
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methods of competition" and agreements "in restraint of trade." Such
language gives enforcement agencies the right to examine many
different business activities to judge their effect on competition.
Natural Health Trends Corp. requires all employees to comply with
the U.S. antitrust laws. The failure to do so can result in severe
penalties for both the individuals involved and Natural Health
Trends Corp.
Outside of the United States, many countries and the European Union
have competition laws that are similar to the U.S. antitrust laws.
Natural Health Trends Corp. also requires strict compliance with
these laws.
There are two areas in which antitrust or competition violations
most frequently occur -- relations with competitors and relations
with customers and suppliers.
1. Relations with Competitors
The greatest danger for violations of the
antitrust/competition laws rests in contacts with competitors.
It is illegal to have an understanding with a competitor,
expressed or implied, written or oral that improperly
restricts competition or interferes with the ability of the
free market system to function properly.
A formal agreement with a competitor is not needed to prove a
violation of the antitrust laws. A general discussion followed
by common action often is enough to show that an agreement
exists. In an investigation, every communication, written or
oral, is subject to extreme scrutiny.
Communications with competitors should be avoided unless they
concern a true customer-supplier relationship, other
legitimate business ventures or permitted trade association
activities. You must not engage in any communications with
competitors that could result, or even appear to result, in
price-fixing, allocation of customers or markets, boycotts, or
production limits.
The antitrust laws do recognize, however, your need to be
aware of market conditions, and you may discuss these with
customers, suppliers, retailers, wholesalers and brokers, if
they are not your competitors.
2. Relations with Customers and Suppliers
Generally speaking, a company has an unrestricted right to
choose its customers and suppliers. However, a company may not
improperly restrict a distributor's freedom to establish its
own prices or terms of resale. With respect to suppliers, we
must avoid any agreement that sets the minimum price of resale
by Natural Health Trends Corp. You should also avoid
discussions with customers or distributors regarding Natural
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Health Trends Corp.'s supplying other customers or
distributors or the prices charged to them.
If you have any questions about a specific business activity,
consult with the Mr. Chris Sharng. Remember that we want you
to ask questions.
C. SECURITIES TRADING AND NON-PUBLIC INFORMATION
In the normal course of business, you may have access to information that
would affect the value of the stock, options or other securities of
Natural Health Trends Corp. or another company. Until this information is
publicly disclosed, it is considered material non-public information and
must be kept confidential. Acting on this information for personal gain or
disclosing it to anyone else before it has been released to the public
violates federal law and Natural Health Trends Corp. policy.
Information is material if it would influence a reasonable person's
decision to buy, sell or hold a company's stock, options or other
securities. It includes not only information about earnings and possible
dividend changes, but also such things as stock splits, new stock or bond
offerings, significant acquisitions or divestitures, and major changes in
management, corporate structure or policy. You may not trade while
possessing this information, or disclose it to anyone else, including
relatives, friends, co-workers or stockbrokers, until the information has
been released publicly and the public has had time to react to the
information.
Trading while in possession of material non-public information creates an
unfair advantage over investors who do not have access to this
information. Federal securities laws are designed to protect the investing
public by prohibiting anyone with access to material non-public
information from exploiting this advantage. Penalties for violations are
severe and include criminal fines and imprisonment, payment to damaged
investors of any profits made from trading on the information, and payment
of civil penalties of up to three times the amount of profits made or
losses avoided. In addition, Natural Health Trends Corp. may be penalized
for violations by its employees.
Although the nature of their duties means that some employees have greater
access to non-public information than others do, the rules apply to anyone
who has direct or indirect access to material non-public information. This
includes everyone from officers and directors to secretaries who may type
confidential memoranda or technical personnel who may work on new
projects.
The following guidelines are intended to help you comply with the rules
regarding non-public information:
i) Material non-public information should be shared only with
Natural Health Trends Corp. employees whose jobs require them
to have the information.
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ii) Do not disclose sensitive or non-public information to anyone
outside Natural Health Trends Corp. Natural Health Trends
Corp. has standard procedures for the release of information
to the public.
iii) You should not buy or sell stock, options or other securities
of Natural Health Trends Corp. or another company, or direct
someone else to buy or sell these for you, when you possess
material information about Natural Health Trends Corp. or such
other company that has not been made public. After it has been
made public, you cannot act on the information until the
public has had time to react to the information.
PLEASE REFER TO NHTC'S BLACKOUT PERIOD POLICY FOR REGULAR
BLACKOUT PERIODS, SPECIAL BLACKOUT PERIODS AND REPORTING
OBLIGATIONS. ALSO PLEASE REFER TO NHTC'S INSIDER TRADING
POLICY FOR ADDITIONAL INFORMATION.
iv) You should not trade in another company's stock, options or
other securities if you believe Natural Health Trends Corp.'s
plans or activities will affect such stock's value.
D. THE FOREIGN CORRUPT PRACTICES ACT
It is a Federal offense under the Foreign Corrupt Practices Act
("FCPA") to offer, pay, promise, or authorize the payment of
anything of value to any foreign government official, political
party, or candidate for political office, for the purpose of
influencing an act or decision to obtain, retain or direct business
or securing any improper advantage. "Anything of value" includes
money, debt forgiveness, gifts, entertainment and other goods or
services of value. The FCPA applies to U.S. individuals, companies
and businesses, including their controlled international
subsidiaries. Therefore, foreign agents who represent Natural Health
Trends Corp. must comply with the terms of the FCPA. Any director,
officer, employee or agent of Natural Health Trends Corp., or any
stockholder acting on behalf of Natural Health Trends Corp., who is
convicted of violating the FCPA is subject to substantial fines
and/or imprisonment. In addition, Natural Health Trends Corp. may
also be subject to substantial fines.
Any employee or other agent of Natural Health Trends Corp. who
thinks a transaction may be illegal under the FCPA must report this
to the Mr. Chris Sharng. All appropriate persons, including the
reporting individual, will be informed as to how the issue is
resolved. If the review procedure results in a favorable decision,
the transaction may proceed.
III. INFORMATION AND TECHNOLOGY MANAGEMENT
A. PROTECTION OF PROPRIETARY INFORMATION
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All Natural Health Trends Corp. employees must respect the
proprietary information and trade secrets of our distributors and
suppliers. New employees are not to divulge the proprietary
information of their former employers. Natural Health Trends Corp.
employees should not disclose any proprietary information of
distributors or suppliers unless the release or disclosure is
properly authorized by the individual or firm owning the
information.
B. ELECTRONIC COMMUNICATIONS POLICY
All company-provided equipment, software and communication systems,
including without limitation voice mail, e-mail, Internet, file
folders and personal computer systems, are the property of Natural
Health Trends Corp. and as such are provided to employees for
business purposes only. The review, transmission, retrieval or
storage of offensive, obscene or other inappropriate material via
Natural Health Trends Corp. computing and communications systems,
including the Internet and electronic mail, is strictly prohibited.
The use of Company e-mail to send offensive or inappropriate
statements, make solicitations, or divulge confidential information
is also prohibited.
All communications made via Natural Health Trends Corp. property are
considered records and property of the Company. Natural Health
Trends Corp. reserves the right, in compliance with applicable laws,
to monitor, access, copy, modify, disclose or delete the contents of
messages sent or received over its systems, including Internet
points of contact.
IV. FINANCE AND ACCOUNTING
A. ACCURACY OF COMPANY RECORDS
Natural Health Trends Corp. business transactions worldwide must be
properly authorized and be completely and accurately recorded on the
Company's books and records in accordance with generally accepted
accounting practice and established Natural Health Trends Corp.
financial policies and procedures. Budget proposals and economic
evaluations must fairly represent all information relevant to the
decision being requested or recommended. No false, artificial or
misleading entries in the books and records of Natural Health Trends
Corp., domestic or foreign, shall be made for any reason and no
employee shall engage in any arrangement that results in such
prohibited acts. The retention or proper disposal of Company records
shall be in accordance with established Natural Health Trends Corp.
financial policies and applicable statutory and legal requirements.
B. AUTHORIZATION SYSTEMS
Natural Health Trends Corp. has established a financial approval
system in keeping with approved quarterly budgets that defines and
limits the authority of employees to commit or obligate the Company
with respect to any agreement or transaction that has financial
consequences. The Finance Department maintains
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and monitors compliance with the system. You are required to
understand your financial approval authority and to ensure that you
do not exceed your authority.
C. SENIOR FINANCIAL OFFICERS
The honesty, integrity and sound judgment of the senior financial
officer and the chief executive officer of Natural Health Trends
Corp. (the "Senior Financial Officers") is fundamental to the
reputation and success of the Company. Although all employees,
officers, and directors are required to adhere to the Company's Code
of Business Conduct, the professional and ethical conduct of the
Senior Financial Officers is essential to the proper function and
success of the Company. Therefore, the Senior Financial Officers, in
addition to complying with all of the other provisions of this Code
of Business Conduct, must also comply with the Company's Code of
Ethics for Senior Financial Officers.
V. WHERE TO FIND MORE INFORMATION
The Natural Health Trends Corp. Code of Business Conduct is a summarized
version of many policies and laws and does not cover all situations. Any
questions of applicability or interpretation should be addressed to your
local General Manager or Mr. Chris Sharng at 972-241-6525 or
chrissharng@lexxusinternational.com.
VI. HOW TO REPORT VIOLATIONS
It is each employee's personal responsibility to bring violations or
suspected violations of the Company's Code of Business Conduct to the
attention of their local General Manager or to Chris Sharng, Ethics
Compliance Officer. To report conduct you suspect to be unethical or in
violation of any Code of Business Conduct policy or the law, talk to your
supervisor or Chris Sharng. If you wish to disclose such information
anonymously, you are free to do so. To report an ethical violation
anonymously, we suggest that you leave a voice-mail message or send a
sealed, confidential envelope containing a written or typed concern to:
Ethics Compliance Officer, 12901 Hutton Drive, Dallas, Texas 75234. You
should feel free to make the report to your local General Manager. If for
any reason those persons are not available or you would feel more
comfortable making the report to someone else, then feel free to contact
Chris Sharng.
The Company encourages its employees to report or question any conduct
that may violate the company's ethical standards. Therefore, no employee
will suffer any retribution in connection with any good faith reporting,
and your identity will not be disclosed without your permission.
VII. ACKNOWLEDGEMENT OF RECEIPT
The following page contains the Acknowledgement of Receipt form that you
should read, sign and return to the attention of Ethics Compliance Officer
at 12901 Hutton Drive, Dallas, Texas 75234.
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NATURAL HEALTH TRENDS CORP. ("NHTC") AND SUBSIDIARIES
ACKNOWLEDGEMENT OF RECEIPT
OF WORLDWIDE CODE OF BUSINESS CONDUCT
By signing below, I acknowledge and understand that as an employee
of NHTC or one of its subsidiaries, it is my responsibility to read the
Worldwide Code of Business Conduct (the "Code") and familiarize myself
with the information contained in it. I understand that the Code will be
periodically updated and revisions and amendments will be made available
to all employees via e-mail. A current version of the Worldwide Code of
Business Conduct will be available in the Human Resources Department in
Dallas at all times. I understand that it is my responsibility to comply
with the policies contained in the Code and any revisions to it and that I
should consult my local General Manager or the Ethic Compliance Officer
concerning any questions I may have about the Code.
I further understand that the Code supersedes any previously issued
policies or procedures. I understand that the policies and procedures
described in the Code are subject to change at the sole discretion of NHTC
at any time.
______________________________________ ________________________
Employee's Signature Date
______________________________________
Employee's Printed Name
PLEASE REMOVE THIS PAGE, SIGN IT AND RETURN IT TO:
ETHICS COMPLIANCE OFFICER
NATURAL HEALTH TRENDS CORP.
12901 HUTTON DRIVE
DALLAS, TEXAS, USA 75234
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