Attached files
Exhibit
99.6
HOME
SYSTEM GROUP
STATEMENT
OF POLICY ON
INSIDER
TRADING
Adopted
November 30, 2009
Introduction
It is the
policy of Home System Group and its subsidiaries (“Home System”) that all
employees comply fully with the insider trading securities laws and regulations
of the United States, of the several states, and of foreign jurisdictions,
wherever they apply.
All
personnel must maintain a basic familiarity with the principles and purposes of
these laws as they may be applied to Home System, and avoid any activity that
might violate these laws or give any appearance either of a
violation.
This
policy statement has been designed to prevent the violation of securities laws
and to ensure that you do not engage in any activity that violates the spirit of
the insider trading restrictions of those laws, is unfair to Home System’s
public stockholders, or creates an appearance of a violation.
Compliance
with this Statement of Policy is part of your job responsibility. Any failure to
comply with this policy will subject you to appropriate disciplinary action,
which may include suspension or termination.
This
Statement of Policy also applies to your spouse, any immediate family member
living in your household, any trust of which you or your spouse serves as
trustee or any entity in which you or a member of your immediate family has an
ownership interest. You are responsible for their compliance with this Statement
of Policy.
References
in this Statement of Policy to “Home System,” “the Company,” “our” or “we” refer
to Home System Group and all of its subsidiaries.
Insider
Trading
It is
generally illegal for any person, either personally or on behalf of others, to
trade in securities on the basis of material, nonpublic information. It is also
generally illegal to communicate (to “tip”) material, nonpublic information to
others who may trade in securities on the basis of that information. These
illegal activities are commonly referred to as “insider trading”. Penalties for
insider trading violations include civil fines of up to three times the profit
gained or loss avoided by the trading, criminal fines of up to $1 million, and
imprisonment for up to 10 years. There may also be liability to those damaged by
the trading. A company whose employee violates the insider trading prohibitions
may be liable for a civil of up to the greater of $1 million or three times the
profit gained or loss avoided as a result of the insider trading violation.
Additionally, a conviction for “securities fraud” or other violations of the
Sarbanes-Oxley Act of 2002 can result in severe fines and be punishable for
violators by terms of imprisonment of up to 20 years.
This
memorandum sets forth the Company’s policy against insider trading. All Company personnel must comply
with this policy.
General
Statement
You are
prohibited from trading, and tipping others to trade, when you know material,
nonpublic information.
What
information is material? All information that a reasonable investor would
consider important in deciding whether to buy, sell or hold securities is
considered material. Examples of some types of material information
are:
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financial
results for the quarter or the year
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financial
forecasts or information
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possible
mergers, acquisitions, joint ventures and other purchases and sales of
companies and investments in
companies
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obtaining
or losing important contracts
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information
about vendor relationships
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information
relating to major merchandising
initiatives
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information
and developments relating to branded
offerings
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information
relating to store site selection and store
development
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information
about geographic market expansion
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major
financing developments
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major
personnel changes
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major
litigation developments
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changes
in the Company’s auditors or a notification from its auditors that the
Company may no longer rely on the auditors’ audit
report
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major
events regarding the Company’s
securities
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changes
in dividends
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Information
that is likely to affect the price of securities is almost always
material.
What is
nonpublic information? Information is considered to be nonpublic unless it has been
effectively disclosed to the public. Examples of effective disclosure include
public filings with the Securities and Exchange Commission, Company press
releases, and Company meetings with members of the press and the public. The
information must not only be publicly disclosed, there must also be adequate
time for the market as a whole to digest the information. At least two full
business days of general availability may be required for information to be
considered public.
Prohibited
transactions. When you know material information about Home System that has not
been made public (i.e., nonpublic information), you are prohibited from three
activities:
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trading
in the Company’s securities
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having
others trade in the Company’s securities for
you
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disclosing
the information to anyone else who might then
trade.
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Neither you nor anyone acting on your
behalf nor anyone who learns the information from you can trade. This
prohibition continues whenever and for as long as you know the material,
nonpublic information.
Although
it is most likely that any material, nonpublic information you might learn would
be about the Company, these Company prohibitions apply to trading in the
securities of any company about
which you have material, nonpublic information that you obtained through or in
connection with your employment.
Unauthorized
Disclosure
As
discussed above, disclosing material, nonpublic information to others can lead
to significant legal difficulties. If you acquire any nonpublic information
about the Company or any other company while performing duties for the Company,
you must keep that information confidential. You must not disclose that
information to any person or entity outside of the Company, except as required
for a legitimate business purpose of the Company. In order to safeguard the
Company’s confidential information, and to minimize the possibility that you
will violate the law, the following policies have been adopted:
• All
confidential information relating to the Company or any other company should be
handled on a “need to know” basis. Such information should not be discussed with
any person who does not need to know such information to conduct the Company’s
business. Confidential information should never be discussed with friends or
relatives.
• Confidential
information should not be posted in Internet chat rooms, discussed in hallways,
elevators, or other public places (such as airplanes or restaurants) where
conversations may be overheard, and inadvertent disclosure should not be made
through speaker phone discussions that can be overheard.
• To
prevent access by unauthorized persons, confidential documents should be stored
appropriately when not being used, and other appropriate precautions should be
taken. These may include using sealed envelopes, marking documents
“Confidential”, shredding documents and using secret access codes and other
appropriate computer security measures.
• If
you have any doubt about whether you possess material nonpublic information
regarding the Company or any other company, you should treat it as
such.
• If
you become aware of a leak-deliberate or otherwise – of nonpublic information
relating to the Company or any other company, please report the leak immediately
to the Company’s Counsel, Mark E. Crone, Esq. of The Crone Law Group at (415)
955-8900. A “leak” is any unauthorized disclosure of nonpublic information to
person or entity outside of the Company
• All
inquires involving the Company from persons outside the Company, including the
news media, arbitrageurs, financial analysts and the general public must be
referred without comment to the President, the Chief Financial Officer, of the
Company’s Counsel.
Prior
Notice of Any Transaction by Covered Persons
All
Covered Persons (as defined below) are required to (i) provide the Company
written notice of any proposed transaction in Home System securities and (ii)
receive written clearance from the General Counsel prior to entering into that
proposed transaction.
Certain
persons routinely possess material nonpublic information. These persons include
the Company’s executive officers, members of the Legal, Finance or Executive
Departments, as well as Home System’s Board of Directors and any other
individual who may from time to time be designated as a Covered Person by the
President or Chief Financial Officer of the Company. A current list of these
employees and members of the Board of Directors is set forth on Schedule B
hereto (the “Cover Persons”). Additionally, any person who, after the enactment
of this policy, is named to any of the positions listed on Schedule B shall be a
“Covered Person” for the purposes of this Statement of Policy.
To
provide assistance in preventing inadvertent violations and avoiding even the
appearance of an improper transaction (which could result, for example, where a
Covered Person engages in a transaction while unaware of a pending major
development), the procedure set forth below must be followed by all Covered
Persons:
• Any
Covered Person who wants to enter into a transaction in Home System securities
(purchase, sale or other disposition for value) must provide written notice of
his or her intent to enter into the transaction at least 48 hours prior to
lacing an order or before other wise becoming bound to complete the transaction.
The form of that notice is attached as Schedule A hereto and must be delivered
by e-mail to the Company’s Counsel, Mark E. Crone, Esq. of The Crone Law Group
at (415) 955-8900 at mcrone@cronelaw.com.
• Once
the appropriate notice has been delivered, all transactions must be pre-cleared
by the Company’s Counsel (or, in his absence, the President
Officer).
• If
the transaction is allowed, the Covered Person will receive written clearance to
enter into the transaction from the Company’s Counsel, which may be in the form
of an email. This clearance will only be made following compliance with
pre-clearance notice procedures set forth above. Any clearance should not be
regarded as investment advice or as a guarantee that no liability will
arise.
Trading
Blackout Period for Covered Persons
Covered
Persons are prohibited from engaging in transactions involving Home System
securities during certain Blackout Periods
In
addition to the prohibition of trading on nonpublic information at any time and
to providing the written notice required above, Covered Persons cannot engage in
any transactions in Home System securities during any Blackout Period. The
following are Blackout Periods for this Statement of Policy:
• The
period beginning on 12:01am of the fifteenth day before the end of any calendar
quarter and ending 48 hours after the Company’s earnings release has been made
to the public for that quarter.
• The
period of 48 hours following the publication of any material press release or
the filing of any SEC report by the Company.
• A
pension fund blackout period. A pension fund blackout period exists whenever 50%
or more of the plan participants are unable to conduct transactions in their
accounts for more than three consecutive days. These blackout periods typically
occur when there is a change in a retirement plan’s trustee, record keeper, or
investment manager.
This
prohibition does not apply to the exercise of stock options for cash granted
under the Company’s existing stock plans. However, the use of any form of
“cashless exercise” of option or disposing of any securities acquired through
the exercise of options is prohibited during a Blackout Period.
10b5-1
Plans
Under SEC
Rule 10b5-1, certain transactions which would otherwise be prohibited can take
place if made pursuant to a pre-arranged trading plan that meets certain
criteria.(1) Generally, the trading plan must establish in advance the
date, price, and amount of securities that are to be purchased or sold or
establishes. Any such plan must be approved by the Company’s Counsel and may not
be entered into when you have material nonpublic information or during a
Blackout Period.
(1) Under
the rule, if you enter into a binding contract, an instruction, or a written
plan that specifies the amount, price and date on which securities are to be
purchased or sold and these arrangements are established at a time when you do
not possess material nonpublic information, you may have a defense to insider
trading liability if the transactions under the trading plan occur at a time you
subsequently receive material nonpublic information.
Post-Trade
Reporting for covered Person
Covered
Persons must report all transactions in Company securities by the end of the day
on which the transaction occurs.
All
Covered Persons are required to report to the Company’s Counsel any transaction
in the Company’s securities by the Covered Person, his or her spouse or any
immediate family member or person sharing the Covered Person’s household not
later than the end of the day on which the transaction occurs. Each report you
make to the Company’s Counsel must be in writing and include the date of the
transaction, quantity, price and broker through which the transaction was
effected.
Section
16(b) Liability and Reporting
Short-Swing
Liability
The
“short-swing profit” provisions of Section 16(b) of the Securities Exchange Act
of 1934 require a director or officer of the Company or beneficial owner of more
than 10% of any class of the Company’s equity securities listed or registered
under that Act to pay over to the Company any profit realized by such person
from any purchase and sale, or sale and purchase, of any Company equity security
(whether or not listed or registered) within any period of less than six
months.
Section 16(b) requires no showing of
wrongdoing on the part of the director, officer or 10% shareholder. It is an
arbitrary statute. If the purchase and sale, or sale and purchase, occur within
a six-month period, and a profit results, the person is absolutely liable to the
Company, and any shareholder can sue on the Company’s behalf to recover the
profit.
The
restrictions apply to certain officers and to all directors and more than 10%
shareholders. The officers subject to the restrictions are an issuer’s
president, principal financial officer, principal accounting officer (or, if
there is no such accounting officer, the controller) any vice-president of the
issuer in chare of a principal business unit, division or function (such as
sales, administration or finance), any other officer who performs a
policy-making function, and any other person who performs such policy making
functions for Home System. Officers of Home System subsidiaries are covered if
they perform policy making functions for Home System.
A
comprehensive analysis of fact situations giving rise to possible Section 16(b)
liability literally requires a book. Perhaps the best general advice that can be
given is this: neither you, any member of your family, nor any corporation,
trust, partnership or other entity which you or your family control or in which
you have a significant interest should engage in any transaction in Company
securities which takes place within six months of any other transaction in
Company securities by you or any such person, without first checking the Section
16(b) implications with the Company’s Counsel or your own counsel.
Reporting
Obligations
Directors,
officers and more than 10% shareholders of the Company have significant
reporting obligations under the securities laws, including section 16. Under
Section 16(a), directors, officers and 10% shareholders are required to report
an initial statement of beneficial ownership on Form 3 and 10% shareholders are
required to report an initial statement of beneficial ownership on Form 3 and
changes in beneficial ownership on Form 4 and may be required to file an annual
statement of beneficial ownership on Form 5 (for reporting transactions during
the year not required on From 4).
Rule
16a-3(e) requires that officers and directors file copies of Form3, 4 and 5 with
the SEC. Copies of each form must also be filed with the Company’s corporate
secretary and NASDAQ at the same time that the form is forwarded to the SEC for
filing.
The
deadlines for filing these reports are extremely short – as little as two
business days in the case of a Form 4 report.
The
Company is required in its annual proxy statement and Form 10-K to report (i)
officers and directors who have failed to comply timely with the filing
requirements of Section 16 during the past year, (ii) the number of times each
person was delinquent and (iii) any known failure by such person to file a
required form.
Persons
who own 5% or more of the Company’s equity securities are required to file a
Schedule 13D or Schedule 13G with respect to such holdings. This reporting
obligation is separate and in addition to the reporting obligations imposed by
Section 16.
Compliance
with the requirements of the federal securities laws, including the foregoing
reporting obligations, is the personal obligation of each individual. The
Company, however, will, as an accommodation, and if requested, assists you in
the preparation of the Forms 3, 4 and 5 and Schedules 13D and 13G. You must
timely notify the Company of any covered transaction in order to avail yourself
of the Company’s assistance.
Short-Term
or Speculative Transactions
Short-term
or speculative transactions involving Home System securities carry a greater
degree of risk of liability for insider trading violations and also have an
appearance of impropriety. For these reasons, they should be avoided. They
include the following:
Buying or
Selling Puts or Calls on Home System Securities. This includes options trading
on any stock exchange or futures exchange.
Short
Sales of Home System Securities. This involves selling securities you do not own
in the expectation that the price of the securities will fall as part of an
arbitrage transaction. Short selling of Home System securities by officers and
directors may also be illegal under certain circumstances.
Trading
Home System Securities on a Short-Term Basis. This involves buying and selling
securities in the open market on a short-term basis (i.e. within six months).
Please note that the SEC’s short-wing profit rules already penalize officers and
directors who purchase and sell, or sell and purchase, any Company stock within
a six month period.
Questions
About This Policy
Compliance
by all employees with this policy is of the utmost importance to you and to the
Company. If you have any questions about the application of this policy to any
particular case, please contact the Company’s Counsel, Mark E. Crone, Esq. of
The Crone Law Group at (415) 955-8900 immediately.
Your
failure to observe this policy could lead to significant legal problems, as well
as having other serious consequences, including termination of your
employment.
CERTIFICATION
I certify
that I have read and carefully reviewed this Statement of Policy on Insider
Trading. I understand that my failure to observe this policy could result in
serious consequences to me and to the Company and is a basis for the termination
of my employment relationship with the Company and could result in other
sanctions being placed against me.
By ：____________________________________
Name
：__________________________________
Title
：___________________________________
Date
：___________________________________
SCHEDULE
A
NOTICE
OF TRANSACTION(S) IN HOME SYSTEM GROUP
SECURITIES
FOR COVERED PERSONS3
Name of
Covered Person：________________________________________
Title：_______________________________________________
Type of
proposed transaction (check box that applies):
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purchase
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other
acquisition (describe)
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sale
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other
disposition (describe)
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other
form of transaction (describe)
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Expected
Date of Transaction (date order to be entered)
Type of
Security (check box that applies):
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Common
stock
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Other
(describe)
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If a
disposition, date securities were acquired: _________________
If a
disposition, describe how securities were acquired (e.g. open market, employee
stock purchase plan, option exercise, etc):
I hereby
certify that the information contained in this Certificate is true and
correct.
______________________________________________________
3 A
sufficiently detailed email sent to an individual authorized to pre-clear
transactions that requests clearance also suffices for purposes of the Insider
Trading Policy in lieu of providing a copy of this Notice of
Transaction(s).
By ：________________________________________
Name
：______________________________________
Date
：_______________________________________
SCHEDULE
B
COVERED
PERONS
As of
_________________________, _____
Name Position
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Each
person is also a reporting person under Section
16.
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