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INSIDER TRADING POLICY …
Tags: applicability, board of directors, common stock, convertible debentures, households, informatio, information systems inc, insider trading, insiders, preferred stock, s board, stock options, stock warrants, stockgroup information systems, stockgroup information systems inc, subsidiaries, subsidiary, unauthorized disclosure,Pages: 9
Language: english
Created: Wed Jul 14 20:05:22 2004
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INSIDER TRADING POLICY
And Guidelines with Respect to
Certain Transactions in Company Securities.
This Policy provides guidelines to employees, officers, and directors of Stockgroup
Information Systems Inc. and its subsidiary(ies) (collectively, the "Company") with
respect to transactions in the Company's securities.
Applicability of Policy
This Policy applies to all transactions in the Company's securities, including common
stock, options for common stock and any other securities the Company may issue from
time to time, such as preferred stock, warrants and convertible debentures. It applies to
all officers of the Company, all members of the Company's Board of Directors, and all
employees of, and consultants and contractors to the Company and its subsidiaries who
receive or have access to Material Nonpublic Information (as defined below) regarding
the Company. This group of people, members of their immediate families, and members
of their households are sometimes referred to in this Policy as "Insiders." This Policy
also applies to any person who receives Material Nonpublic Information from any
Insider.
Any person who possesses Material Nonpublic Information regarding the Company is an
Insider for so long as the information is not publicly known. Any employee can be an
Insider from time to time, and would at these times be subject to this Policy.
Statement of Policy
General Policy
It is the policy of the Company to oppose the unauthorized disclosure of any nonpublic
information acquired in the work-place and the misuse of Material Nonpublic
Information in securities trading.
1. Trading on Material Nonpublic Information. No director, officer, or employee of, or
consultant or contractor to, the Company, and no member of the immediate family or
household of any such person, shall engage in any transaction involving a purchase
or sale of Company's securities, including any offer to purchase or offer to sell,
during any period commencing with the date that he or she possesses Material
Nonpublic Information concerning the Company, and ending at the close of business
on the second Trading Day following the date of public disclosure of that
information, or at such time as such nonpublic information is no longer material. As
used herein, the term "Trading Day" shall mean a day on which national stock
exchanges and the Over-the-Counter Bulletin Board service of the National
Association of Securities Dealers, Inc. or the TSX Venture Exchange are open for
trading.
2. Tipping. No Insider shall disclose ("tip") any Material Nonpublic Information to any
other person in the securities of the Company (including family members), nor shall
such Insider or related person make recommendations or express opinions on the
basis of Material Nonpublic Information as to trading in the Company's securities.
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3. Confidentiality of Nonpublic Information. Nonpublic information relating to the
Company is the property of the Company and the unauthorized disclosure of such
information is forbidden.
Potential Criminal and Civil Liability
and/or Disciplinary Action
1. Liability for Insider Trading. Insiders may be subject to penalties of up to $1 million
and up to ten years in jail for engaging in transactions in the Company's securities at
a time when they have knowledge of nonpublic information regarding the Company.
2. Liability for Tipping. Insiders may also be liable for improper transactions by any
person (commonly referred to as a "tippee") to whom they have disclosed nonpublic
information regarding the Company or to whom they have made recommendations or
expressed opinions on the basis of such information as to trading in the Company's
securities. The Securities and Exchange Commission (the "SEC") has imposed large
penalties even when the disclosing person did not profit from the trading. The SEC,
the Canadian Securities Commissions, the stock exchanges and the National
Association of Securities Dealers, Inc. use sophisticated electronic surveillance
techniques to uncover insider trading.
3. Possible Disciplinary Actions. Employees of the Company who violate this Policy
shall also be subject to disciplinary action by the Company, which may include
ineligibility for future participation in the Company's equity incentive plans or
termination of employment.
4. Company Liability. Although responsibility for compliance with this policy and
liability for non-compliance are primarily personal to the individuals involved,
violations may result in civil and criminal liability for the Company. Criminal
penalties for corporations have been assessed up to $2.5 million.
Guidelines
1. Mandatory Black-out Period For Officers, Directors and Certain Employees,
Recommended For All Employees. The period beginning two weeks before the end
of each fiscal quarter and ending two Trading Days following the date of public
disclosure of the financial results for each fiscal quarter, is a particularly sensitive
period of time for transactions in the Company's stock from the perspective of
compliance with applicable securities laws. This sensitivity is due to the fact that
officers, directors and certain other employees will, during that period, often possess
Material Nonpublic Information about the expected financial results for the quarter.
Accordingly, to ensure compliance with this Policy and applicable federal and state
securities laws, all directors, officers and employees having access to the Company's
internal financial statements or other Material Nonpublic Information shall refrain
from conducting transactions involving the purchase or sale of the Company's
securities during the period beginning two weeks before the last day of the quarter
and ending two Trading Days following the date of public disclosure of the financial
results for each fiscal quarter (the "Black-out Period"). Trading by Insiders during
the last two weeks of each quarter are discouraged, but may be permissible with prior
approval of the Insider Trading Compliance Officer. Unless otherwise advised by the
Insider Trading Compliance Officer, the Black-out Period shall be the period
D/BIP/442158.1
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indicated above. The purpose behind the Black-out Period is to establish a diligent
effort to avoid any improper transaction.
From time to time, the Company may also recommend that directors, officers,
selected employees and others suspend trading because of developments known to
the Company and not yet disclosed to the public. In such event, such persons are
advised not to engage in any transaction involving the purchase or sale of the
Company securities during such period and should not disclose to others the fact of
such suspension of trading.
It should be noted, however, that even outside the Black-out Period, any person
possessing Material Nonpublic Information concerning the Company should not
engage in any transactions in the Company's securities until such information has
been known publicly for at least two Trading Days, whether or not the Company has
recommended a suspension of trading to that person. Assuming the absence of
Material Nonpublic Information, trading in the Company's securities outside of the
Black-out Period should not be considered a "safe harbor," and all directors, officers
and other persons should use good judgement at all times.
2. Pre-clearance of Trades. The Company has determined that all Reporting Insiders of
the Company should refrain from trading in the Company's securities without first
complying with the Company's "pre-clearance" process. Each officer and director
should contact the Company's Insider Trading Compliance Officer prior to
commencing any trade in the Company's securities. The Company may find it
necessary, from time to time, to require compliance with the pre-clearance process
from certain employee's, consultants and contractors other than and in addition to
officers and directors. Any employee with any questions regarding trading in the
Company's securities is encouraged to contact the Insider Trading Compliance
Officer.
3. Individual Responsibility. Every officer, director and employee has the individual
responsibility to comply with this Policy against insider trading, regardless of
whether the Insider trades even outside the Black-out Period.
An Insider may, from time to time, have to forego a proposed transaction in the
Company's securities even if he or she planned to make the transaction before
learning of the Material Nonpublic Information and even though the Insider believes
he or she may suffer an economic loss or forego anticipated profit by waiting.
Applicability of Policy to Inside Information
Regarding Other Companies
This Policy and the guidelines described herein also apply to Material Nonpublic
Information relating to other companies, including the Company's customers,
vendors or suppliers ("business partners"), when that information is obtained in the
course of employment with, or other services performed on behalf of, the Company.
Civil and criminal penalties, and termination of employment, may result from trading
on inside information regarding the Company's business partners. All employees
should treat Material Nonpublic Information about the Company's business partners
with the same care required with respect to information related directly to the
Company.
D/BIP/442158.1
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Definition of Material Nonpublic Information
It is not possible to define all categories of material information. However,
information should be regarded as material if there is a reasonable likelihood that it
would be considered important to a reasonable investor in making an investment
decision regarding the purchase or sale of the Company's securities.
While it may be difficult under this standard to determine whether particular
information is material, there are various categories of information that are
particularly sensitive and, as a general rule, should always be considered material.
Examples of such information may include:
· Financial results
· Projections of future earnings or losses
· Results of product development
· News of a pending or proposed merger or joint venture
· News of the disposition of a subsidiary
· Impending bankruptcy or financial liquidity problems
· Gain or loss of a substantial customer or supplier
· New product announcements of a significant nature
· Significant product defects or modifications
· Significant pricing changes
· Stock Splits or Consolidations
· New equity or debt offerings
· Acquisitions
· Significant litigation exposure due to actual or threatened litigation
· Major changes in senior management.
Either positive or negative information may be material.
Nonpublic information is information that has not been previously disclosed to the
general public and is otherwise not available to the general public.
Certain Exceptions
For the purposes of this Policy, the Company considers that exercise of stock options
for cash under the Company's stock options plans (but not the sale of any such
shares) is exempt from this Policy, since the other party to the transaction is the
Company itself and the price does not vary with the market but is fixed by the terms
of the option agreement or the plan.
Additional Information Directors and Officers
The Company must comply with the reporting obligations and limitations on short-
swing transactions set forth in Section 16 of the Securities Exchange Act of 1934, as
amended. The practical effect of these provisions is that officers and directors who
purchase and sell the Company's securities within a six-month period must disgorge
all profits to the Company whether or not they had knowledge of any Material
Nonpublic Information. Under these provisions, and so long as certain other criteria
are met, the receipt of an option under the Company's option plans, not the exercise
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of that option, is deemed a purchase under Section 16; however, the sale of any such
shares is a sale under Section 16. Moreover, no officer or director may ever make a
short sale or the Company's stock. The Company has provided, or will provide,
separate memoranda and other appropriate materials to its officers and directors
regarding compliance with Section 16 and its related rules.
Inquiries
Please direct your questions as to any of the matters discussed in this Policy to the
Company's Insider Trading Compliance Officer.
D/BIP/442158.1
STOCKGROUP INFORMATION SYSTEMS INC.
500 750 West Pender Street
Vancouver, British Columbia, V6C 2T7
Telephone: 1-800-650-1211
Facsimile: (604) 331-1194
___, 2003
Dear Officer, Director or Employee:
Enclosed is a memorandum from _______________, Stockgroup Information Systems Inc.'s
newly appointed Insider Trading Compliance Officer, a copy of the Company's Insider Trading
Policy, and, for officers and directors, a summary of the Ownership Reporting and Short-Swing
Trading Rules under section 16 of the Securities Exchange Act of 1934. As described in the
Insider Trading Policy, violations of the insider trading laws can result in significant civil and
criminal liability. Accordingly, please take the time right now to read the materials provided, and
then sign and return the attached copy of this letter.
Very truly yours,
David Gillard, CGA
Chief Financial Officer
Certification
The undersigned hereby certifies that he or she has read, understands and agrees to comply with
the Company's Insider Trading Policy and, if applicable, the summary of the Ownership
Reporting and Short-Swing Trading Rules under section 16 of the Securities Exchange Act of
1934, copies of which were distributed with this letter.
Date:___________________ Signed:
Name:
(Please Print)
D/BIP/442158.1
Memorandum
To: All Employees and Consultants of Stockgroup Information Systems Inc. (the
"Company")
From: __________________, Insider Trading Compliance Officer
Date: _____________, 2003
Re: Prohibition Against Insider Trading, and Confidentiality Obligations
By consent resolutions dated as of _______________, 2003, the Board approved the adoption of
a formal Insider Trading Compliance Policy.
This memorandum is to emphasize the Company's policy against " Insider Trading" and the
importance of maintaining the confidentiality of sensitive Company information.
It is against Company policy and against the law for any employee or any other person associated
with the Company or its employees, to trade in our common stock while possessing inside
information about the Company. A violation of the laws against insider trading can lead to
criminal prosecution resulting in prison terms of up to 10 years, and monetary penalties of
U.S.$1,000,000 or more. A violation of the Company's policy may also result in termination of
employment.
Many employees have access to inside information about the Company at one time or another.
Insider information is information that is not available to the public but which an investor might
consider important in deciding whether to buy or sell the Company's stock. Inside information
could include, as examples, anticipated quarterly or annual results of operations, progress or lack
of it in milestone achievement, new product introductions, discussions of a potential acquisition,
or price increases or decreases.
In the event you possess inside information, you should not trade in our stock until Company has
publicly announced the information by press release or similar means, and the information has
been available to the public for two full business days.
Please do not disclose inside information to anyone outside the Company. It is important to
maintain the confidentiality of sensitive information to protect the Company's secrets and
information that could benefit our competitors. It is also prudent from the perspective of your
potential personal liability you could be criminally and civilly liable for helping insider trading
if you disclose inside information to another person and that person trades in the Company's
stock on the basis of your information (also called "tipping").
Insider trading laws also apply to any inside information you may have regarding other
companies, including information about our vendors and customers that you might obtain in the
course of employment. In the event you hold inside information regarding another company, you
should not trade in securities of that company until that company has publicly disclosed the
information for two full days.
In addition, officers, directors, and certain employees with regular access to particularly sensitive
information, please pre-clear all trades with me. Attached is Company's policy on "Insider
Trading".
D/BIP/442158.1
Memorandum
(to be delivered annually to employees)
To: All Employees and Consultants of Stockgroup Information Systems Inc.
(the "Company")
From: __________________, Insider Trading Compliance Officer
Date: __________________
Re: Prohibition Against Insider Trading, and Confidentiality Obligations
This memorandum is intended to remind all of the Company's personnel of the Company's policy
against "insider trading" and to remind personnel of the importance of maintaining the
confidentiality of sensitive Company information.
It is against Company policy and against the law for any employee, or any other person associated
with the Company or its employees, to trade in common stock or any securities of the Company
while possessing inside information about the Company. A violation of the laws against insider
trading can lead to criminal prosecution resulting in prison terms of up to 10 years, and monetary
penalties of $1,000,000 or more. A violation of the Company's policy can also result in
termination of employment.
Many employees have access to inside information about the Company at one time or another.
Insider information is information that is not available to the public but which an investor might
consider important in deciding whether to buy or sell the Company's stock. Inside information
could include, as examples, anticipated quarterly or annual results of operations, total product
shipments, major new product introductions, discussions of a potential acquisition, or price
increases or decreases.
In the event you possess inside information, you should not trade in securities of the Company
until the Company has publicly announced the information by press release or similar means, and
the information has been available to the public for two full business days.
You should also be careful not to disclose inside information to anyone outside the Company, or to
anyone within the Company without a need to know. It is important to maintain the
confidentiality of sensitive information in order to protect the Company's trade secrets and other
information that could benefit our competitors. It is also prudent from the perspective of your
potential personal liability--you could be criminally and civilly liable for aiding and abetting
insider trading if you disclose inside information to another person and that person trades in the
Company's stock on the basis of your information.
Insider trading laws also apply to any inside information you may have regarding other companies,
including information about our vendors and customers that you might obtain in the course
employment. In the event you hold inside information regarding another company, you should not
trade in securities of that company until that company has publicly disclosed the information for
two full days.
In addition to the foregoing restrictions, officers, directors, and certain employees with regular
access to particularly sensitive information (as advised by the Company) must preclear all trades in
Company securities with the Company's Insider Trading Compliance Officer and are subject to
certain other restrictions.
The Company has adopted a detailed policy with respect to these matters. You may obtain a copy
from the Company's Insider Trading Compliance Officer.
D/BIP/442158.1
STOCKGROUP INFORMATION SYSTEMS INC.
Insider Trading Compliance Program Pre-clearance Checklist
Individual Proposing to Trade: ________________________________________
Compliance Officer: ________________________________________________
Proposed Trade: __________________________________________________
Date: ___________________________________________________________
Black-out Period. Confirm that the trade will not be made during the Company's Black-out
Period.
Section 16 Compliance. Confirm, if the individual is an officer or director subject to Section
16, that the proposed trade will not give rise to any potential liability under Section 16 as a
result of matched past (or intended future) transactions. With respect to Rule 16b-3 plans,
ensure that a stock option has been held for at least 6 months from the date of grant prior to
sale of the shares. Also, ensure that a Form 4 has been or will be completed and will be
timely filed.
Prohibited Trades. Confirm that the proposed transaction is not a "short sale, "put", "call" or
other prohibited or strongly discouraged transaction.
Rule 144 Compliance. Confirm that:
Current public information requirement has been met;
Shares are not restricted or, if restricted, the one year holding period has been
met;
Volume limitations are not exceeded (confirm the individual is not part of an
aggregated group);
The manner of sale requirements have been met; and
The Notice of Form 144 has been completed and filed.
Rule 10b-5 Concerns. Confirm that (i) the individual has been reminded that trading is
prohibited when in possession of any material information regarding the Company that has
not been adequately disclosed to the public, and (ii) the Insider Trading Compliance Officer
has discussed with the insider any information known to the individual which might be
considered material, so that the individual has made an informed judgement as to the
presence of inside information.
____________________________
Signature of Insider Trading
Compliance Officer
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