REGULATION FD POLICY
Tecogen Inc (the "Company") is committed, consistent with legal and regulatory requirements, to providing timely, orderly, consistent and credible material information to its securityholders and potential investors. The Company has developed detailed guidelines and procedures for receiving requests for, and ultimately disclosing material information. Please refer to the full text of this Regulation FD Policy (the "Policy") for a complete description of these guidelines and procedures. This Policy regards communications with securityholders, analysts and others.
The Securities and Exchange Commission's ("SEC") Regulation FD (Fair Disclosure) ("Regulation FD") prohibits the selective disclosure of material nonpublic information to certain Enumerated Persons (as defined below). The regulation is intended to eliminate situations in which a company may disclose important nonpublic information to securities analysts or selected institutional investors, before disclosing the information to the general public.
Regulation FD requires that, whenever the Company (or a person acting on its behalf) intentionally discloses material nonpublic information to certain specified persons (including broker-dealers, analysts and securityholders), the Company must simultaneously disseminate the information to the public in a manner consistent with Regulation FD.
Examples of activities affected by this Policy include:
- Earnings releases and related conference calls.
- Speeches, interviews and conferences.
- Responding to market rumors.
- Reviewing analyst reports.
- Referring to or distributing analyst reports on the Company.
- Analyst and investor visits.
- Postings on the Company's websites.
- Social media communications, including through corporate blogs, employee blogs, chat boards, Twitter, Facebook, LinkedIn, YouTube and any other non-traditional means of communication.
If the Company learns that it (or certain persons acting on its behalf) has unintentionally disclosed material nonpublic information, the Company must promptly publicly disseminate the information no later than 24 hours after discovering the unintentional disclosure or at the opening of trading on the New York Stock Exchange, whichever is later.
The Company adopted this Policy to ensure that any persons acting on its behalf comply with Regulation FD. This Policy applies to every director and employee of the Company, and complements the Company's Insider Trading Policy. This Policy may be amended, terminated or reinstated at any time of the discretion of the Company's Chief Executive Officer.
The purpose of this Policy is to provide clear guidelines and procedures for receiving external requests for, and making disclosure of, material information in order to promote the Company's goal of providing accurate and timely communications on a broadly disseminated basis to ensure compliance with Regulation FD.
The Company's Chief Executive Officer shall have the authority to make materiality and distribution determinations covered by this Policy with respect to the information disclosed about the Company.
The Chief Executive Officer has the authority to interpret and enforce this Policy. All questions about this Policy should be directed to the Chief Executive Officer. Any suspected or known violations of this Policy should be reported immediately to the Chief Executive Officer. If a Company employee violates this Policy, he or she will be subject to disciplinary action up to and including immediate termination of employment.
The Chief Executive Officer must pre-approve any deviation from the policies and procedures outlined in this Policy.
Compliance with this Policy shall be overseen and documented by the Chief Executive Officer at the time of disclosure, including documentation of materiality and distribution determinations, with appropriate back-up documentation showing adherence to the established procedure or the basis for any deviation. The Chief Executive Officer shall document in advance the analysis of why information to be selectively disclosed is not material. The Chief Executive Officer shall establish a system to document and track what material information has and has not been made public and when such information was disclosed to the public.
The only persons authorized to speak on behalf of the Company to securities analysts, broker-dealers, securityholders and any other Enumerated Persons (as described below) are the Executive Officers of the Company and the head of the Investor Relations Department (each an "Authorized Spokesperson").
At various times, any one of the Authorized Spokespersons may designate others in writing to speak on behalf of the Company and/or respond to specific inquiries when necessary due to the unavailability of an Authorized Spokesperson or due to the specific nature of the request. While others may be designated in writing from time to time to speak on behalf of the Company, it is essential that the Chief Executive Officer and the Investor Relations Department have knowledge of the information being disseminated by those individuals to facilitate the Company's compliance with other applicable legal and regulatory requirements in its external communications.
To the extent practicable, Authorized Spokespersons must contact the Chief Executive Officer and the Investor Relations Department before having conversations with any Enumerated Persons in order to review as much of the substance of the intended communication as possible, including slides and other prepared materials.
Pre-written speeches, written statements, presentations and other external communications should, to the extent practicable or appropriate, be reviewed by the Chief Executive Officer and a member of the Investor Relations Department.
Enumerated Persons Subject to Regulation FD Disclosure Requirements
Regulation FD prohibits selective disclosure to certain specified persons, including:
- Broker-dealers and persons associated with them, including investment analysts.
- Investment advisers, certain institutional investment managers and their associated persons.
- Investment companies, hedge funds, and affiliated persons.
The persons noted above are collectively referred to as "Enumerated Persons".
Selective disclosure is also prohibited if made to any securityholder under circumstances in which it is reasonably foreseeable that the securityholder would purchase or sell the Company's securities on the basis of the information. In some cases disclosure of material nonpublic information to any group can result in a possible Regulation FD violation if the information is not widely disseminated.
Communications in the ordinary course of business with customers, suppliers or strategic partners, as well as communications with the press or news organizations, rating agencies, or the government, are not covered by the regulation.
Inquiries from analysts, securityholders and other Enumerated Persons in any department other than the Investor Relations Department and the offices of the Chief Executive Officer, Chief Financial Officer or Chief Executive Officer must be forwarded to Chief Executive Officer. Under no circumstances should any attempt be made to handle these inquiries without prior authorization from an Authorized Spokesperson.
Planned conversations must include at least one Authorized Spokesperson and should, if practicable, include a second person. It should be determined in advance whether it is intended that any material nonpublic information be disclosed. If so, the material nonpublic information should be disclosed prior to or simultaneously with the planned conversation by the issuance of a press release or the filing or "furnishing" of a report on a Form 8-K or both.
Any time an Authorized Spokesperson determines to disclose or discuss nonpublic Company information with anyone who is or might be an Enumerated Person, the Authorized Spokesperson should consult with the Chief Executive Officer to determine whether the information is material. Information is material if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell, or hold a security or where the fact is likely to have a significant effect on the market price of the security. Both positive and negative information may be material.
Possible material information or events include, but are not limited to:
- Earnings information and quarterly results.
- Guidance/statements on earnings estimates.
- Fund performance.
- Mergers, acquisitions, tender offers, joint ventures, or changes in assets.
- New products, contracts with suppliers, or developments regarding customers or suppliers (such as the acquisition or loss of a contract).
- New investments or financings or developments regarding investments or financings.
- Changes in auditors or auditor notification that the issuer may no longer rely on an audit report.
- Events regarding the Company's securities (such as defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights of securityholders, public or private sales of additional securities or information related to any additional funding).
- Bankruptcies or receiverships.
- Regulatory approvals or changes in regulations and any analysis of how they affect the Company.
The SEC has explicitly cautioned:
If the determination is made that the information to be disclosed is material, the information must be disclosed through a press release or current report on Form 8-K or both before or at the same time that the information is disclosed to the Enumerated Person. The public disclosure may either disclose the material information or, if it is issued prior to disclosure to the Enumerated Person, may disclose that a conference call and/or webcast will be held to disclose the information. The public must be given adequate advance notice of any conference call and/or webcast and the means of accessing it.
Adequate advance public notice must be given of any quarterly earnings conference calls and/or webcasts. Notice shall include a press release issued to all major news wires and a posting on the Company's website with information including the date, time, telephone number and webcast URL for the earnings call. The press release must also state the period, if any for which a replay of the webcast will be available. Also, a copy of the release must be provided to the New York Stock Exchange prior to issuance.
A quarterly earnings conference call and/or webcast must be open to analysts, media representatives and the general public. The Company will make certain that the date of the conference call and the oral forward-looking statement safe harbor legend is recited at the beginning of the call or webcast and included in the recording so that the date of the information discussed in the call or webcast is unmistakable to listeners of the archived material. This practice reinforces the historical nature of the information discussed in the call or webcast.
The Company and its employees cannot give earnings guidance in any form (including "soft" or indirect guidance) in nonpublic settings. To the extent practicable, analysts will be requested to provide a written agenda or questions in advance to avoid inadvertent disclosures or to allow the preparation and simultaneous public release of information the Company is willing to disclose. Any statements regarding earnings expectations will be limited to press releases and publicly available earnings calls.
Analyst Meetings/Investment Banker Conferences/Roadshows
This Policy will apply to communications between Authorized Spokespersons and Enumerated Persons at analyst meetings, investment banker conferences and roadshows (other than roadshows undertaken in connection with certain public offerings of the Company's securities). Accordingly, prior to the meeting, conference or roadshow, the Company will disclose either through a press release (accompanied by a current report on Form 8-K), an open conference call or a webcast, or any combination of these methods, any material information that is not already public and which may be discussed or presented at the meeting, conference or the roadshow.
If it is determined that material nonpublic information may have been disclosed unintentionally during the meeting, conference or roadshow, the Chief Executive Officer and the Chief Financial Officer should be notified immediately. If the Chief Executive Officer and the Chief Financial Officer determine that an inadvertent disclosure of material nonpublic information has occurred, a press release (accompanied by a current report on Form 8-K) will be issued disclosing the information no later than either 24 hours after discovery of the unintentional disclosure or prior to the commencement of the next day's trading on the NYSE, if later.
Press Release Policy
Press releases should be reviewed and prepared in accordance with the Company's standard procedures.
If a forward-looking statement has been made and there is clear meaning to that statement, an employee shall report to the Chief Executive Officer facts or events which might cause that meaning to change.
If a meeting or conference call is held after the issuance of a press release the purpose of which is to give analysts or major securityholders an opportunity to seek more information or ask questions concerning the information disclosed in a press release, the meeting or call shall be preceded by a press release as soon as the meeting or call is planned, which shall announce such meeting or call and provide information including the date, time, telephone number and webcast URL for the meeting or call. The meeting or call shall be open to analysts, media representatives and the general public.
If a director, member of management or employee of the Company learns of information that causes him or her to believe that a disclosure may have been misleading or inaccurate when made or may no longer be true, such person should report that information to the Chief Executive Officer.
Rumors and M&A: No Comment Policy
The Company will not comment on potential M&A and market rumors in the normal course of business. When it is learned that rumors about the Company are circulating or the Company is questioned about uncertain M&A activity, Authorized Spokespersons should state only that it is Company policy to not comment on rumors or uncertain M&A. If the source of the rumor is found to be internal, the Chief Executive Officer should be consulted to determine the appropriate response.
The trading activity of Company stock will be generally monitored by management for unusual trading activity. In addition, Investor Relations will monitor the financial and news media for stories about the Company. Unusual trading volume or price swings may indicate the inadvertent disclosure of material information that may need to be remedied by a press release.
Violation of this Policy
Violations of Regulation FD are subject to SEC enforcement actions, which may include an administrative action seeking a cease-and-desist order, a civil action against the Company or an individual seeking an injunction and/or civil monetary penalties. Any violation of this policy by a director or employee shall be brought to the attention of the Chief Executive Officer and may constitute grounds for disciplinary action.