Insider Trading Policy
1. General Rule.
Any person who possesses material non-public information concerning NovAtel must not buy or sell, and must not advise others to buy or sell, NovAtel Shares until full disclosure of such information has been made to the public. You may, however, exercise your stock options but you cannot sell the Shares resulting from the exercise i.e. you would have to pay for the Shares and hold them until full disclosure of the material non-public information has been made to the public.
2. Definition of Insiders
An insider is any person who possesses non-public material information about NovAtel ("Insider"). This policy also applies to the immediate family (defined as direct family members living in the same household) of such Insider and to any corporation, partnership or other entity affiliated with or controlled by such Insider. A person can be an Insider for a limited period of time with respect to certain undisclosed information which s/he knows, even though s/he may not be an Insider with respect to other information. For example, an assistant who learns that earnings are significantly above or below expectations may be an Insider with respect to that information until the news has been fully disclosed to the public.
3. Applicability of Policy
This policy applies to all trades in NovAtel Shares, including, but not limited to, purchases or sales of NovAtel Shares and the exercise of employee stock options and subsequent sale of Shares.
4. Tipping
In addition, Insiders may be liable for improper transactions by "tippees", i.e. persons to whom they have disclosed material non-public information regarding the Company (including to family members). If you have material non-public information, you should not disclose this information to anyone outside of the Company. Also, you should not disclose this information, in writing or casually, to any other NovAtel employee unless that employee has a need to know the information in order to perform his or her job.
5. Definition of Material Information
It is not possible to define all categories of material information. Information should be regarded as material if there is a likelihood that it would be considered important by a shareholder or investor in making voting decisions or a decision to buy or sell NovAtel shares. While it may be difficult under this standard to determine whether certain information is material, there are various categories of information that would ordinarily be regarded as material, such as:
- financial information, especially quarterly and year-end earnings, and significant changes in financial performance;
- Company forecasts or strategic plans;
- significant changes in sales, margins or expenses;
- major new contracts, orders, suppliers, customers or finance sources or the loss thereof; significant changes or developments in products or product lines, research or technologies;
- planned stock splits, equity or debt offerings, changes in Company dividend policy; potential mergers or acquisitions;
- significant changes in senior management; and
- actual or threatened litigation, or the resolution of such litigation.
As a general rule, if the information makes you think of buying or selling NovAtel shares, it probably would have the same effect on others and would therefore constitute material information.
6. Definition of "Non-public" Information
Information is "non-public" if it has not been fully disclosed to the public via a press release issued through major newswire services, national news services and financial news services followed by publication in the print media. Full disclosure also means the securities markets have had the opportunity to digest the news. For the purposes of this policy, information will be considered public, i.e. no longer "non-public", after the close of the second full trading day following the Company’s widespread public release of the information.
7. Blackout Periods
Directors, officers or employees, including entities affiliated with or controlled by such persons, may not trade in Company Shares during blackout periods. You may, however, exercise your stock options but you cannot sell the Shares resulting from the exercise i.e. you would have to pay for the Shares and hold them until the blackout period is no longer in effect.
The Company may announce blackout periods from time to time especially when year-end or quarterly financial results are to be released. Once implemented, a blackout period would remain in effect until the underlying material non-public information has been fully disclosed to the public (see paragraph 6). Directors, officers and employees may confirm if a blackout is in effect by checking with the Chief Financial Officer ("CFO") or the Legal Assistant.
8. Trading During Non-Blackout Periods
Prior to trading in Shares of NovAtel you are required to contact the Legal Assistant to:
- sign a Certification (Appendix "A") confirming that you have no material non-public information; and, if appropriate,
- complete and sign an Exercise of Stock Option Form (Appendix "B") if trading involves the exercise of stock options.
9. Options, Puts, Calls and Like Instruments.
Employees should never buy or sell or otherwise trade options, puts, calls or similar types of instruments exercisable into NovAtel shares or take short positions in NovAtel shares. This policy does not pertain to Company issued options, which cannot be traded.
10. Almost No Exceptions to the Policy.
There are almost no exceptions to the prohibition against insider trading. It does not matter that you decided to buy or sell NovAtel Shares before learning the material non-public information, or that delaying the transaction would result in economic loss to you. There are no limits on the size of transaction that will trigger insider trading liability. Relatively small trades have resulted in SEC investigations and lawsuits. Violations of insider trading or tipping rules in the U.S. and Canada may require you to disgorge the profit made or the loss avoided, pay the loss suffered by the person who purchased securities from or sold securities to the insider tippee, pay civil penalties up to three times the profit made or loss avoided, pay a criminal penalty of up to $1 million, and/or serve a jail term. The Company may also be required to pay major civil or criminal penalties.
Rule 10b5-1(c) of the Securities Exchange Act of 1934 provides an affirmative defense against insider trading liability under federal securities laws for a transaction done pursuant to "blind trusts" (generally, trusts or other arrangements in which investment control has been completely delegated to a third party, such as an institutional or professional trustee) or pursuant to a written plan, or a binding contract or instruction, entered into in good faith at a time when the insider was not aware of material nonpublic information, even though the transaction in question may occur at a time when the person is aware of material nonpublic information. The Company may, in appropriate circumstances, permit transactions pursuant to a blind trust or a pre-arranged trading program that complies with Rule 10b5-1 to take place during periods in which the individual entering into the transaction may have material nonpublic information or during black-out periods.
If you wish to enter into a blind trust arrangement or a pre-arranged trading program, you must notify the CFO. The CFO will review proposed arrangements to determine whether they will or may result in transactions taking place during periods in which you may be in possession of material non-public information. The Company reserves the right to bar any transactions in Company stock, even those pursuant to arrangements previously approved, if the Company determines that such a bar is in the best interests of the Company.
12. Application of Policy After Employment Terminates
If your employment terminates at a time when you have or think you may have material non-public information about the Company or its business partners, the prohibition on trading on such information continues until such information is absorbed by the market following public announcement of it by the Company or another authorized party, or until such time as the information is no longer material. If you have questions as to whether you possess material non-public information after you have left the employ of the Company, you should direct questions to the CFO at (403) 295-4550.
13. Potential Criminal and Civil Liability and/or Disciplinary Action
The penalties for "insider trading" include civil fines of up to three times the profit gained or loss avoided, and criminal fines of up to $1,000,000 and up to ten years in jail for each violation. You can also be liable for improper transactions by any person to whom you have disclosed nonpublic information or made recommendations on the basis of such information as to trading in the Company’s securities ("tippee liability"). The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the National Association of Securities Dealers (NASD) use sophisticated electronic surveillance techniques to uncover insider trading. 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 for cause.