EADS Insider Trading Rules
Dear Colleagues,
The CEOs of EADS have recently approved an update of the EADS Insider Trading Rules to take into consideration recent changes in European regulations and to ensure EADS adherence to best-in-class corporate governance standards.
I would like to take this opportunity of having updated Insider Trading Rules to provide you with the context and background of these rules, their purpose and their application and to stress the importance of our strict compliance to the EADS Insider Trading Rules:
What are insider trading rules?
The Dutch Autoriteit Financiële Markten ("AFM"), as well as other stock exchange authorities (the French Autorité des marchés financiers ("AMF"), the German Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin"), and the Spanish Comisión Nacional del Mercado de Valores ("CNMV")), which regulate the markets on which EADS securities are listed, impose certain rules upon EADS and require it to enforce these rules internally.
The rules are imposed to ensure that the securities are traded based on their fair value. That fair value is in turn based, inter alia, on the transparency of the information available to all holders of securities. If some have inside information, their trading strategy will be biased and the market will suffer.
It is therefore imperative to avoid insider trading. This means that you must not buy or sell stock or other securities of any company while in possession of inside information about that company. You must also ensure that you do not disclose any inside information to any third party as this would enable that person to buy or sell stock or other securities of the company on the basis of the disclosed information.
What is inside information?
Inside information is any non-public information that a reasonable investor is likely to consider important in making a decision to buy or sell stock or other securities. This includes any confidential information, whether technical, commercial, financial or otherwise, which could affect the price of EADS securities or those of any other company with which a member of the EADS group does business such as customers or suppliers. For example, inside information could include confidential information about a pending merger or acquisition, the award or termination of a substantial contract, a major lawsuit, a significant technology breakthrough or failure, the gain or loss of a major customer or supplier or the occurrence of insolvency.
EADS Insider Trading Rules
EADS encourages its employees to hold EADS securities. The guiding principle is that employees should freely perform any EADS securities transactions provided that they act in accordance with any relevant legislation and with the EADS group's policy which is set out in the EADS Insider Trading Rules.
Management and other employees within the EADS group have regular access to or benefit from inside information relating to EADS or other companies. In order to comply with the rules and regulations stipulated by relevant authorities, such persons are prohibited from directly or indirectly conducting securities transactions except during specific periods. During such periods those persons are permitted to deal in securities only to the extent that the relevant director or employee does not have inside information. More generally, any employee is prohibited from conducting securities transactions if in possession of inside information. All directors and employees are also prohibited from providing third parties (including friends and family) with inside information. Any breach of these legal duties may lead to criminal and civil penalties being imposed upon the EADS director or employee or any third party to whom he has provided inside information. These penalties can include fines and/or imprisonment.
In addition, and in accordance with the EADS Insider Trading Rules, any trading by management and certain employees in EADS securities requires the EADS ITR Compliance Officer to be informed. If you think that you may be in one of the relevant categories because you have access to inside information, you should check the EADS Insider Trading Rules to verify if this requirement applies to you.
Please find below a brief summary for the four categories of persons, named “Assigned Persons Categories”, who must follow specific procedures to purchase or sell EADS shares. As you will see, certain persons are only allowed to trade in EADS shares within very limited periods (observation of “No Trading Periods”) and have specific obligations to inform the Insider Trading Rules Compliance Officer:
| Categories | Specific Procedure |
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Assigned Persons Category 1: • Members of the EADS Board and the Executive Committee and any person closely associated with these members (relatives who have shared the same household on the date of the transaction and legal persons, companies and institutions controlled by such a member). |
• May purchase or sell EADS shares only during the 21 days following official publication of the accounts and the company’s annual general meeting of shareholders. • May not conduct any transactions in securities relating to major suppliers or customers of the EADS group. • Specific notification duties toward the stock market authorities. • Should liaise with the EADS ITR compliance officer prior to any transaction. |
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Assigned Person Category 2: • EADS Group Corporate Vice Presidents and Senior Vice Presidents in EADS Corporate Headquarters and any person closely associated, • Members of the Airbus Shareholder Committee and Executive Committee. |
• May purchase or sell EADS shares only during the 21 days following official publication of the accounts and the company’s annual general meeting of shareholders. • Should liaise with the EADS ITR compliance officer prior to any transaction. |
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Assigned Persons Category 3: • Major shareholders of EADS. | • May trade throughout the year except during the 21 days preceding official publication of the accounts and the company’s annual general meeting of shareholders. |
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Assigned Persons Category 4: • Employees who are beneficiaries of securities pursuant to EADS' long term incentive plans (such as stock option plans and performance and restricted shares plans). | • May trade throughout the year except during the 21 days preceding official publication of the accounts and the company’s annual general meeting of shareholders. |
The above-mentioned restrictions also apply to securities issued and listed on a stock exchange by any other company, including customers and suppliers of the EADS group, should the EADS employee or director have inside information in connection with that company.
I would therefore invite you to carefully read the EADS Insider Trading Rules in order to familiarise yourselves with their content and the prohibitions which might apply to you. If you should have any questions, please do not hesitate to contact the EADS ITR Compliance Office by telephone on [+49 89 607 34200], by fax on [+49 89 607 34206] or by email on [hans-peter.ring@eads.net].
Yours faithfully,
Hans Peter Ring
EADS ITR Compliance Officer
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