EX-19 6 ex19.htm

 

Exhibit 19

 

Reed’s Inc.

 

Blackout Period Policy

 

Effective July 25, 2014

 

As an officer, employee or member of the Board of Directors of the Company, you are responsible for complying with federal and state securities laws and this Policy Statement. The consequences of failure to do so can be severe as outlined below.

 

Possible Consequences for Traders and Tippers

 

Company personnel who trade on inside information (or their “tippees” who trade after receiving information from them) are subject to severe penalties:

 

1. A civil penalty of up to three times the profit gained or loss avoided;

 

2. A criminal fine of up to $5,000,000 (no matter how small the profit); and

 

3. A jail term of up to twenty 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.

 

Reed’s Inc. Policy on Trading Blackout Periods

 

This Policy was unanimously adopted by the Board of Directors of Reed’s Inc. on July 25, 2014 which applies to all employees, consultants, directors, and officers of the Reed’s Inc.

 

Reed’s, Inc. (the “Company”) has adopted this Policy on Trading Blackout Periods to apply to each employee, consultant, director, and officer of the Company (“Insiders”) and to guide the Insiders with regard to their trading activity in stock of the Company and stock of the vendors and suppliers of the Company. The Company reserves the right to amend or rescind this Policy or any portion of it at any time and to adopt different policies and procedures at any time.

 

This Policy must be strictly followed. Your attention is also drawn to Reed’s Insider Trading Policy which should, where the context permits, be read and complied with in conjunction with this Policy.

 

Persons Covered. This Policy on Trading Blackout Period (this “Policy”) applies to all directors, officers, associates, employees, agents and consultants of Reed’s, Inc. (the “Company”). In this Policy, references to “you” include:

 

your family members who reside with you;

 

anyone else who lives in your household;

 

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);

 

any person to whom you have disclosed material, nonpublic information; and

 

any person acting on your behalf or on behalf of any individual listed above.

 

 

 

 

You are responsible for making sure that the purchase or sale of any security covered by this Policy by any such person complies with this Policy.

 

Securities Covered

 

Although it is most likely that the “material, nonpublic information” you possess will relate to the common stock of the Company, the Company may from time to time issue other securities that are publicly traded and, therefore, subject to this Policy. In addition, this Policy applies to purchases and sales of the securities of other entities, including customers or suppliers of the Company and entities with which the Company may be negotiating major transactions (such as an acquisition, investment or sale of assets). Information that is not material to the Company may nevertheless be material to those entities.

 

Statement of Policy

 

“BLACKOUT” PERIODS

 

A “blackout” period is a period during which you may not execute transactions in Company securities. Please bear in mind that even if a blackout period is not in effect, at no time may you trade in Company securities if you are aware of material, nonpublic information about the Company. For example, if the Company releases its quarterly financial results and you are aware of other material, nonpublic information not disclosed in the financial results, you may not trade in Company securities.

 

Quarterly Financial Results Blackout Periods

 

You may not buy or sell Company securities at any time from the last day of each fiscal quarter or fiscal year of the Company through to and including the one (1) full business day period following the public release of the financial results for such fiscal quarter or year (for example, by means of a press release, a publicly accessible conference call or a governmental filing).

 

For example, the second quarter of 2010 will end on June 30, 2010. If the Company issues its financial results for the second quarter of 2010 on August 15, 2010, you may not purchase or sell the Company’s common stock between June 30, 2010 and August 15, 2010. Employees, directors and others covered by the policy may buy stock after the financial results are accepted by the SEC. In accordance with this Policy, the Company will from time to time advise interested parties of the expected timing of its financial results.

 

Event-Specific Blackout Periods

 

The Company reserves the right to impose trading blackout periods from time to time when, in the judgment of the Company, a blackout period is warranted. A blackout period may be imposed for any reason, including the existence of nonpublic, material information about the Company, the anticipated issuance of interim financial results guidance or other material public announcements. The existence of an event-specific blackout period may not be announced, or may be announced only to those who are aware of the transaction or event giving rise to the blackout period. If you are made aware of the existence of an event-specific blackout period, you should not disclose the existence of such blackout period to any other person. Individuals that are subject to event-specific blackout periods will be contacted when these periods are instituted from time to time.

 

 

 

 

Definition of Material Information and Non-public Information

 

Material Information

 

This policy makes reference to “material information.” In this policy, “material information” is any information relating to the business and affairs of the Company if it is likely that a reasonable investor would consider such information to be important in making a decision to buy, sell or hold a Covered Security or where the information results in, or would reasonably be expected to result in, a significant change in the market price or value of any of the Covered Securities. Material information can be positive or negative and can relate to virtually any aspect of the Company’s business or to any type of security, debt or equity.

 

Examples of material information include (but are not limited to) facts concerning:

 

a) a significant acquisition, disposition or merger, a new issue of securities or significant change in capital structure,

 

b) a significant change in financing arrangements of the Company,

 

c) a significant change in expected financial results in the near future (such as in the next fiscal quarter),

 

d) significant operational events or incidents,

 

e) changes in ownership that may affect control of the Company,

 

f) significant changes in management or the Board of Directors of the Company,

 

g) changes in the nature the Company’s business and major litigation developments, and/or

 

h) any substantial change in industry circumstances or competitive conditions that could significantly affect the Company’s financial results or prospects for growth.

 

Moreover, material information does not have to be related to the Company’s business. For example, the contents of a forthcoming newspaper column or investment newsletter that is expected to affect the market price of the Company’s securities can be material.

 

Non-public Information

 

Material information is “non-public” if it has not been generally disclosed. Information is considered to have been generally disclosed if:

 

(i) the information has been disseminated in a manner calculated to effectively reach the marketplace,

 

(ii) public investors have been given a reasonable amount of time to analyze the information.

 

For the purposes of this policy, information will be considered public; i.e. no longer non-public, after information has been generally disclosed by means of a broadly disseminated press release and the trading has closed on the first full trading day following such press release.

 

If you are unsure whether the information that you possess is material or non-public, the President & Chief Executive Officer, the Chief Financial Officer, Corporate Secretary or Legal Counsel of the Company should be consulted before trading in any securities of the Company.

 

 

 

 

Hardship Exceptions

 

If you have an unexpected and urgent need to sell Company securities in order to generate cash you may, in appropriate circumstances, be permitted to sell Company securities during a financial results blackout period. Hardship exceptions may be granted only by the Company’s Chief Executive Officer and must be requested at least two (2) business days in advance of the proposed transaction.

 

Stock Option Exercises

 

You may exercise stock options for cash. However, you may not sell the underlying shares of stock and you may not engage in a cashless exercise of a stock option through a broker (because this entails selling a portion of the underlying stock to cover the costs of exercise) while you possess material, nonpublic information.

 

Section 16 Reporting

 

Directors and officers of the Company must file periodic reports regarding their ownership of the Company securities pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to disgorgement of “short-swing” profits pursuant to Section 16(b) of the Exchange Act. Violations of or failure to comply with these requirements can result in SEC enforcement action. Directors and officers must clear all transactions in Company securities in advance with the Company’s Chief Executive Officer prior to executing such transactions. The Company will notify employees or officers if they are subject to Section 16.

 

Post Employment Transactions

 

This Policy continues to apply to your transactions in Company securities even after you have ended your employment with or services to the Company and/or its subsidiaries and affiliated companies. If you are aware of material, nonpublic information when your employment or service relationship terminates, you may not trade in Company securities until that information has been publicly released.

 

 

 

 

ACKNOWLEDGMENT

 

I have received a copy of the Reed’s Inc. Policy on Trading Blackout Periods. I have read and understand the Policy. I will comply with the policies and procedures set forth in the Policy. I understand and agree that, if I am an employee or consultant of Reed’s Inc., my failure to comply in all respects with Reed’s Inc.’s policies, including the Policy on Insider Trading, is a legitimate basis for termination for cause of my employment or engagement with Reed’s Inc., to which my employment or engagement now relates or may in the future relate.

 

I have been notified that I am a member of the Insider Group, and I have carefully read and understand the additional restrictions that I am subject to pursuant to the Company’s Policy on Insider Trading.

 

Date: _________

 

Signed: ________________________________

 

Name: _________________________________

 

(Please Print)

 

Please return this page once executed to:

 

Reed’s Inc. Attn: HR Manager
13000 South Spring Street
Los Angeles, CA 90061