EXHIBIT 14
MERITAGE HOSPITALITY GROUP INC.
CODE OF ETHICS FOR PRINCIPAL FINANCIAL EMPLOYEES
Meritage Hospitality Group Inc. ("MERITAGE" or the "COMPANY") is
committed to conduct Meritage's business in accordance with the highest ethical
standards. This Code sets forth the principles by which the Company's principal
executive officer, principal financial officer, principal accounting officer or
controller, and any other officers or employees of Meritage (or its affiliates)
that perform similar functions (the "PRINCIPAL FINANCIAL EMPLOYEES") are
expected to adhere in meeting these standards. The Code embodies rules regarding
individual and peer responsibilities, as well as responsibilities to Meritage,
its investors and the public.
CONFLICTS OF INTEREST
Meritage's Principal Financial Employees have an obligation to promote
the best interests of the Company at all times. They should avoid any action
which may involve a conflict of interest with the Company. The Principal
Financial Employees should not have any undisclosed, unapproved financial or
other business relationships with any suppliers, customers or competitors of a
magnitude or nature that could impair the independence of any judgment they may
need to make on behalf of Meritage. Conflicts of interest would also arise if a
Principal Financial Employee, or a member of his or her family, receives
improper payments or other personal benefits as a result of his or her position
with Meritage.
Principal Financial Employees must also avoid apparent conflicts of
interest which may occur where a reasonable observer might assume there is a
conflict of interest and, therefore, a loss of objectivity in their dealings on
behalf of Meritage.
Where conflicts of interest arise, Principal Financial Employees must
provide full disclosure of the circumstances and stand back from any related
decision making process. Principal Financial Employees shall provide full
disclosure of any perceived or apparent conflicts of interest to Meritage's
Audit Committee Chairman.
CORPORATE OPPORTUNITIES
Principal Financial Employees shall not (i) take for themselves any
business opportunities that are discovered through the use of Meritage property,
information or efforts, or as a result of their position with Meritage, (ii) use
Meritage property, information or position for personal gain, or (iii) compete
with Meritage. All Principal Financial Employees owe a duty to Meritage to
advance its legitimate business interests when the opportunity to do so arises.
CONFIDENTIALITY
Principal Financial Employees shall maintain the confidentiality of all
information entrusted to them in their position with Meritage, except when
disclosure is authorized or legally mandated. They should recognize that such
information is the property of Meritage and only the Company may authorize its
publication or use by others. Confidential information includes, but is not
limited to, all non-public information that might be used by Meritage's
competitors, or information that may be harmful to Meritage's business if
disclosed. Principal Financial Employees shall inform their subordinates, as
appropriate, regarding the confidentiality of information acquired in the course
of their work, and monitor these subordinates, as needed, to ensure that
confidentiality is maintained.
PROTECTION AND PROPER USE OF MERITAGE ASSETS
Principal Financial Employees must safeguard Meritage property, whether
it is a piece of equipment, an electronic file, real estate or confidential
information. Principal Financial Employees should ensure that all Meritage
property is used in an efficient manner and for legitimate business purposes.
Theft, carelessness and waste that impacts Meritage's profitability should be
promptly reported and appropriately addressed.
COMPLIANCE WITH LAWS
Principal Financial Employees must respect and follow, and cause
Meritage to comply with, all governmental laws, rules and regulations applicable
to Meritage's business. In addition, the Principal Financial Employees shall
comply with Meritage's Stock Trading Policy.
FULL DISCLOSURE
Meritage has an obligation to comply with all reporting requirements
under the Securities Exchange Act of 1934 and all requirements of any market or
exchange on which Meritage's securities are traded. In accordance with
Meritage's disclosure obligations, financial communications and reports will be
delivered in a manner that facilitates the highest degree of clarity of content
and meaning so that readers and users will be able to determine their
significance and consequence quickly and accurately. The Principal Financial
Employees shall ensure that Meritage's financial officers communicate to
Meritage's executive management, Meritage's Audit Committee, and the independent
auditors engaged to conduct an audit of Meritage's consolidated financial
statements, all relevant information and their professional judgments or
opinions. The Principal Financial Employees shall encourage open communication
and full disclosure of financial information by all relevant employees.
Furthermore, any Principal Financial Employees in possession of
material information must not disclose such information before its public
disclosure, and must take steps to ensure that Meritage complies with its timely
disclosure obligations.
All Principal Financial Employees shall ensure that all relevant
employees understand Meritage's open communication and full disclosure standards
and processes. Further, all Principal Financial Employees shall ensure that all
employees are aware of the Employee Complaint Policy regarding accounting
matters which permits employees to submit good faith complaints regarding any
questionable accounting, internal controls and auditing matters.
COMPLIANCE WITH CODE OF ETHICS
If any Meritage employee has knowledge of, or is suspicious of, any
noncompliance with any section of this Code, or is concerned whether
circumstances could lead to a violation of this Code, the employee should
discuss the situation with his/her immediate supervisor. If such employee feels
uncomfortable or otherwise believes it is inappropriate to discuss the matter
with his/her immediate supervisor, then the employee may discuss the matter
directly with the Audit Committee Chairman or submit an anonymous message to the
Audit Committee Chairman by following the procedures set forth in the Employee
Complaint Policy. If Principal Financial Employees have knowledge or are
suspicious of any noncompliance with any section of this Code, or are concerned
whether circumstances could lead to a violation of this Code, they should
discuss the situation with the Audit Committee Chairman. Meritage will not
permit any retaliation against a Principal Financial Employee or other employee
who acts in good faith in reporting any such violation or suspected violation.
2
Any waiver of this Code for Principal Financial Employees may be made
only by the Audit Committee and will be promptly disclosed as required by law.
ACCOUNTABILITY FOR ADHERENCE TO THE CODE
Principal Financial Employees are responsible for abiding by this Code.
This includes individual responsibility for failure to exercise proper
supervision and detect and report any violation. Principal Financial Employees
who violate this Code are subject to disciplinary action, up to and including
discharge or termination from their position.
IMPORTANT
THIS CODE OF ETHICS AND THE POLICIES DESCRIBED HEREIN DO NOT CONSTITUTE
AN EMPLOYMENT CONTRACT, NOR DOES IT CREATE ANY CONTRACTUAL RIGHTS. IN ADDITION,
THIS CODE OF ETHICS DOES NOT LIMIT THE OBLIGATIONS OF ANY PRINCIPAL FINANCIAL
EMPLOYEE UNDER ANY EXISTING NON-COMPETE, NON-DISCLOSURE OR OTHER RELATED
AGREEMENTS TO WHICH SUCH EMPLOYEE IS BOUND.
As a Principal Financial Employee, I have read and agreed to abide by this Code
of Ethics for Principal Financial Employees:
_____________________________________ ________________________
Name: Date
Title
Adopted by the Board of Directors on December 16, 2003
3