Statement of Company Policy – Trading in the Company’s Securities
TO: All Employees, Officers and Directors of Seanergy Maritime Holdings Corp.
(the "Company") and its Affiliates
FROM: Dale Ploughman, Chief Executive Officer
RE: Statement of Company Policy - Securities Trading By Company
and Affiliate Personnel
The Need for a Policy Statement
The purchase or sale of securities while aware of material nonpublic information, or the
disclosure of material nonpublic information to others who then trade in the Company's
securities, is prohibited by the federal securities laws. Insider trading violations are
pursued vigorously by the United States government and are punished severely. While
the regulatory authorities concentrate their efforts on the individuals who trade, or who
tip inside information to others who trade, the federal securities laws also impose
potential liability on companies and other "controlling persons" if they fail to take
reasonable steps to prevent insider trading by company personnel.
The Company's Board of Directors has adopted this Policy Statement both to satisfy the
Company's obligation to prevent insider trading and to help Company personnel avoid
the severe consequences associated with violations of the insider trading laws. The
Policy Statement also is intended to prevent even the appearance of improper conduct on
the part of anyone employed by or associated with the Company.
The Consequences
The consequences of an insider trading violation can be severe:
Traders and Tippers. Company personnel (or their tippees) who trade on inside
information are subject to the following penalties:
- - A civil penalty of up to three times the profit gained or loss avoided;
- - A criminal fine of up to $1,000,000 (no matter how small the profit); and
- - A jail term of up to 10 years.
An employee who tips information to a person who then trades is subject to the same
penalties as the tippee, even if the employee did not trade and did not profit from the
tippee's trading.
Control Persons. The Company and its supervisory personnel, if they fail to take
appropriate steps to prevent illegal insider trading, are subject to the following penalties:
- - A civil penalty of up to $1,000,000 or, if greater, three times the profit gained or
loss avoided as a result of the employee's violation; and
- - A criminal penalty of up to $2,500,000.
Company-Imposed Sanctions. An employee's failure to comply with the Company's
insider trading policy may subject the employee to Company-imposed sanctions,
including dismissal for cause, whether or not the employee's failure to comply results in a
violation of law. Needless to say, a violation of law, or even an SEC investigation that
does not result in prosecution, can tarnish one's reputation and irreparably damage a
career.
Statement of Policy
It is the policy of the Company that no director, officer or other employee of the
Company or any of the Company’s affiliates (a “Covered Person”) who is aware of
material nonpublic information relating to the Company may, directly or through family
members or other persons or entities, (a) buy or sell securities of the Company (other than
pursuant to a pre-approved trading plan that complies with SEC Rule 10b5-1), or engage
in any other action to take personal advantage of that information, or (b) pass that
information on to others outside the Company, including family and friends. In addition,
it is the policy of the Company that no Covered Person who, in the course of working for
or on behalf of the Company, learns of material nonpublic information about a company
with which the Company does business, including a customer or supplier of the
Company, may trade in that company's securities until the information becomes public or
is no longer material.
Transactions that may be necessary or justifiable for independent reasons (such as the
need to raise money for an emergency expenditure) are not exempt from the policy. The
securities laws do not recognize such mitigating circumstances, and, in any event, even
the appearance of an improper transaction must be avoided to preserve the Company’s
reputation for adhering to the highest standards of conduct.
Disclosure of Information to Others. The Company has established procedures for
releasing material information about the Company in a manner that is designed to achieve
broad public dissemination of the information immediately upon its release. You may
not, therefore, disclose information to anyone outside the Company, including family
members and friends, other than in accordance with those procedures. You also may not
discuss the Company or its business in an internet "chat room" or similar internet-based
forum.
Material Information. Material information is any information that a reasonable
investor would consider important in making a decision to buy, hold, or sell securities.
Any information that could be expected to affect the Company's stock price, whether it is
positive or negative, should be considered material. Some examples of information that
ordinarily would be regarded as material are:
- - Projections of future earnings or losses, or other earnings guidance;
- - Earnings that are inconsistent with the consensus expectations of the investment
community;
- - A pending or proposed merger, acquisition or tender offer;
Page 3 of 4 of Insider Trading Policy Statement
- - A pending or proposed acquisition or disposition of a significant asset or vessel;
- - A change in dividend policy, the declaration of a stock split, or an offering of
additional securities;
- - A change in management;
- - Development of a significant new product or process;
- - Impending bankruptcy or the existence of severe liquidity problems;
- - The gain or loss of a significant charterer.
"20-20" Hindsight. Remember, anyone scrutinizing your transactions will be doing so
after the fact, with the benefit of hindsight. As a practical matter, before engaging in any
transaction, you should carefully consider how enforcement authorities and others might
view the transaction in hindsight.
When Information is "Public" If you are aware of material nonpublic information, you
may not trade until the information has been disclosed broadly to the marketplace (such
as by press release or an SEC filing) and the investing public has had time to absorb the
information fully. To avoid the appearance of impropriety, as a general rule, information
should not be considered fully absorbed by the marketplace until the third trading day
after the information is released. If, for example, the Company were to make an
announcement on a Monday, you should not trade in the Company's securities until
Thursday. If an announcement were made on a Friday, Wednesday generally would be
the first eligible trading day.
Transactions by Family Members. The insider trading policy also applies to your family
members who reside with you, anyone else who lives in your household, and any family
members who do not live in your household but whose transactions in securities are
directed by you or are subject to your influence or control (such as parents or children
who consult with you before they trade in securities). You are responsible for the
transactions of these other persons and therefore should make them aware of the need to
confer with you before they trade in the Company's securities.
Transactions under Future Company Plans
Stock Option Exercises. The Company's insider trading policy does not apply to the
exercise of an employee stock option. The policy does apply, however, to any sale of
stock as part of a broker-assisted cashless exercise of an option, or any other market sale
for the purpose of generating the cash needed to pay the exercise price of an option.
Trading Windows and Blackout Periods
Trading Windows. A Covered Person may trade in Company securities only during
the period beginning at the opening of trading on the third full trading day following
the Company's widespread public release of quarterly or year-end operating results,
and ending at the close of trading on the 30th day following the end of the next
quarter (or, if such 30th day is not a trading day, on the next trading day), as long as
the Covered Person is not in possession of material nonpublic information or subject
to any special trade blackout.
No Trading During Trading Windows While in the Possession of Material Nonpublic
Information. No Covered Person possessing material nonpublic information concerning
the Company may trade in Company securities even during applicable trading windows.
Persons possessing such information may trade during a trading window only after the
opening of trading on the third full trading day following the Company's widespread
public release of the information.
No Trading During Blackout Periods. No Covered Person may trade in Company
securities outside of the applicable trading windows or during any special blackout
periods that the Company’s CEO may designate. In addition, no Covered Person may
disclose to any outside third party that a special blackout period has been designated.
Pre-Clearance by CEO. All transactions by a Covered Person must be cleared in
advance by the Company’s CEO.
Exception for Transfers Pursuant to Rule 10b5-1
Blackout periods shall not prohibit transfers of Company securities made pursuant to a
written contract, letter of instruction or plan that (a) complies with the requirements of
SEC Rule 10b5-1 (a "Rule 10b5-1 Plan"), (b) has been approved by the Company’s CEO
in advance of the first trade thereunder and (c) with respect to which the Company's CEO
has received certification from such Covered Person that (i) such Covered Person was not
in possession of material nonpublic information about the Company at the time the Rule
10b5-1 Plan was adopted and that all trades made under the Rule 10b5-1 Plan will
comply with Rule 10b5-1 Plan and applicable securities laws and (ii) the Rule 10b5-1
Plan complies with the requirements of Rule 10b5-1. No such approval by the CEO shall
be considered the CEO's or the Company's determination that the Rule 10b5-1 Plan
satisfies the requirements of Rule 10b5-1. It shall be the sole responsibility of the person
establishing the Rule 10b5-1 Plan to ensure that such plan complies with the
requirements of Rule 10b5-1.
Miscellaneous
Post-Termination Transactions. This Policy Statement will continue to apply to your
transactions in Company securities even after you have terminated your employment with
or position as a director of the Company or its affiliates. If you are in possession of
material nonpublic information when your employment or directorship terminates, you
may not trade in Company securities until that information has become public or is no
longer material.
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