The Board of Directors of Johnson Outdoors Inc. (the “Company”) has adopted this Insider Trading Policy applicable to all of the Company’s and its designated subsidiaries’ employees, officers, directors and consultants with respect to transactions in the Company’s securities, as well as the securities of publicly traded companies with whom the Company has a business relationship, including customers and suppliers.

 

This Policy is designed to prevent insider trading or allegations of insider trading, and to protect the Company’s reputation for integrity and ethical conduct. It is your obligation to understand and comply with this Policy. Should you have any questions about this Policy, please contact the Company’s General Counsel.

 

 

This Policy applies to all transactions in the Company’s securities, including common stock, options for common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s securities, whether or not issued by the Company, such as exchange-traded options. This policy applies to all officers, directors, employees and consultants of the Company and its subsidiaries, who receive or have access to Material Nonpublic Information (as defined below) regarding the Company. This group of people, members of their immediate families, and members of their households are sometimes referred to in this policy as “Insiders.” This policy also applies to any person who receives Material Nonpublic Information from any Insider.

 

Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as the information is not publicly known.

The Company’s Chief Financial Officer and General Counsel  shall serve as the Compliance Officers for the purposes of this Policy, and in their absence, another employee designated by the Board of Directors shall be responsible for the administration of this Policy.  All determinations and interpretations relating to this Policy by the Compliance Officer shall be final and not subject to further review.

 

1.          Trading on Material Nonpublic Information.  No Insider shall engage in any transaction involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell, during any period in which he or she possesses Material Nonpublic Information concerning the Company. Moreover, no Insider may purchase or sell any security of any other company, whether or not issued by the Company, while in possession of Material Nonpublic Information about that company that was obtained in the course of his or her involvement with the Company or its subsidiaries.

 

2.         Short Sales.  No Insider shall engage in a short sale of the Company’s securities.  A “Short Sale” is a sale of securities not owned by the seller or, if owned, not delivered against such sale within 20 days thereafter (a “Short Against the Box”). Transactions in certain put and call options for the Company’s securities may in some instances constitute a short sale.

3.          Tipping.  No Insider who knows of Material Nonpublic Information about the Company and its subsidiaries shall disclose (“tip”) Material Nonpublic Information to any other person inside the Company whose job or role does not require them to have that information or to any person outside the Company (including family members or friends) concerning the Company or its subsidiaries, nor shall such Insider or related person make recommendations or express opinions as to trading in the Company’s securities on the basis of Material Nonpublic Information, in either case without the Company’s authorization.

 

4.          Hedging Transactions.  Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an Insider to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock.  These transactions allow the Insider to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the Insider may no longer have the same objectives as the Company’s other stockholders. Therefore, these types of transactions are prohibited by this Policy.

 

5.         Margin Accounts.  Securities held in a margin account may be sold without your consent by a broker if you fail to meet a margin call.  Because a margin sale may occur at any time when an Insider is aware of Material Nonpublic Information or otherwise are not permitted to trade in the Company’s securities, all Insiders are prohibited from holding the Company’s securities in a margin account. However, the Company may, on a case-by-case basis, grant an exception to this prohibition and permit an Insider to hold Company Securities in a margin account or otherwise pledge Company securities as collateral for a loan.  Any such exception must be approved in advance by the Compliance Officer.  The Compliance Officer may consider any factors he or she deems relevant in deciding whether to approve a margin account or pledge, including the financial capacity of the Insider to satisfy any obligation without resort to the pledged shares and whether the obligations pursuant to the margin account or pledge are full recourse to the Insider.  If the Insider is subject to the Addendum to this Policy, any such margin account or pledge may not be established during any Quarterly Blackout Period or Event-Specific Blackout as provided in the Addendum.

 

6.          No Exception for Hardship. The existence of a personal financial emergency does not excuse any Insider from compliance with this Policy.

7.       Confidentiality of Nonpublic Information.  Material Nonpublic Information relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden. In the event any officer, director, employee or consultant of the Company receives any inquiry from outside the Company, such as a stock analyst, for information (particularly financial results and/or projections), the inquiry should be referred to the Company’s Chief Financial Officer, who is responsible for coordinating and overseeing the release of such information to the investing public, analysts and others in compliance with applicable laws and regulations.

8.         Blackout and Pre-Clearance Procedures. To help prevent inadvertent violations of the federal securities laws and to avoid even the appearance of trading on the basis of inside information, the Company’s Board of directors has adopted an Addendum to this Policy that applies to Company directors, executive officers subject to Section 16 of the Securities Exchange Act of 1934 (“executive officers”), and certain designated employees and consultants of the Company and its subsidiaries who have access to Material Nonpublic Information about the Company.  The Company will notify you if you are subject to the Addendum.

 

The Addendum generally prohibits persons covered by it from trading in the Company’s securities during quarterly blackout periods and during certain event-specific and fact-specific blackouts.  The quarterly blackout periods coincide with the consolidation and distribution of the financial results for the second month of each fiscal quarter. These financial results will be accompanied by a notification from the Chief Financial Officer announcing the immediate closing of the trading window, which will reopen at the beginning of the second trading day following the release of the Company’s earnings for that quarter, barring any other fact-specific or event-specific blackout. Persons covered by the Addendum also must pre-clear all transactions in the Company’s securities.

 

1.         Liability for Insider Trading. Pursuant to federal and state securities laws, potential penalties for trading on or communicating Material Nonpublic Information can be severe, both for individuals involved in such unlawful conduct and their employers and supervisors, and may include jail terms, criminal fines, civil penalties and civil enforcement injunctions.  Given the severity of the potential penalties, compliance with this Policy is absolutely mandatory.  A person who violates insider trading laws by engaging in transactions in the Company’s securities when he or she has Material Nonpublic Information can be sentenced to a substantial jail term and required to pay a criminal penalty of several times the amount of profits gained or losses avoided.  The U.S. Securities and Exchange Commission (“SEC”) can also seek substantial civil penalties from any person who, at the time of an insider trading violation, “directly or indirectly controlled the person who committed such violation,” which would apply to the Company and/or management and supervisory personnel. Even for violations that result in a small or no profit, the SEC can seek penalties from a company and/or its management and supervisory personnel as control persons.

2.         Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed Material Nonpublic Information regarding the Company or to whom they have made recommendations or expressed opinions as to trading in the Company’s securities on the basis of such information.  Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority use sophisticated electronic surveillance techniques to uncover insider trading.

3.         Possible Disciplinary Actions. The Company may also impose sanctions for failure to comply with this Policy, including dismissal for cause, whether or not your failure to comply with this Policy results in a violation of law.

 

4.         Individual Responsibility.  Every officer, director, employee and consultant has the individual responsibility to comply with this Policy against insider trading and to maintain the confidentiality of information about the Company and to not engage in transactions in Company securities while in possession of Material Nonpublic Information. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.   Each individual is responsible for making sure that he or she complies with this Policy, and that any family member, household member or entity whose transactions are subject to this Policy also complies with this Policy. In all cases, the responsibility for determining whether an individual is in possession of Material Nonpublic Information rests with that individual, and any action on the part of the Company, the Compliance Officer or any other employee or director pursuant to this Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws.

 

This policy and the guidelines described herein also apply to material nonpublic information relating to other companies, including the Company’s distributors, vendors or suppliers (“Business Partners”), when that information is obtained in the course of employment with, or during the rendering of services by or on behalf of, the Company or its subsidiaries. Civil and criminal penalties, and termination of employment, may result from trading on or entering into any transaction related to inside information regarding the Company’s Business Partners.  All officers, directors, employees and consultants should treat Material Nonpublic Information about the Company’s Business Partners with the same care required with respect to information related directly to the Company.

 

Information should be regarded as (1) material if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company’s securities or the securities of the Company’s Business Partners and (2) nonpublic if the information has not been previously disclosed to the general public and is otherwise not available to the general public such as in a press release or an SEC filing (such information is referred to as “Material Nonpublic Information”).

Any information that could be expected to affect the Company’s stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities with the benefit of hindsight.  While it may be difficult under this standard to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:

•

Stock splits

 

Either positive or negative information may be material.

 

Additionally, the fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be “public” the information must have been disseminated in a manner designed to reach investors generally, and the investors must be given the opportunity to absorb the information.  Even after public disclosure of information about the Company, you must wait until the open of business on the second trading day after the information was publicly disclosed before you can treat the information as public.

Non-public information may include:

If you are not sure whether information is considered material and/or public, you should either consult with the Company’s General Counsel or assume that the information is material and non-public and treat it as confidential.

 

This Policy continues to apply to transactions by an Insider in the Company’s securities even after the Insider’s employment or services to the Company or one of its subsidiaries have terminated until any Material Nonpublic Information concerning the Company that the Insider possesses as of the date of termination has become public. Post-Insider transactions are not subject to the Addendum.

 

 

 

The Company’s insider trading policy does not apply to the exercise of an employee stock option granted by the Company, the exercise of stock appreciation rights under the Company’s stock incentive plan, the grant of restricted stock or restricted stock units  or other equity awards under the Company’s stock incentive plan (but not the sale of any shares issued upon such exercise or grant) or to the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares subject to such an option to satisfy tax withholding requirements. Nor does it apply to your surrender to the Company of previously owned shares to pay the option exercise price. The policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option or following the vesting of restricted stock, or any other market sale. In other words, while the exercise of an employee stock option is not subject to the policy, any sale of the shares acquired upon exercise (other than to the Company) is subject to the policy.

 

 

For purposes of this Policy, the Company considers that bona fide gifts of the securities of the Company are exempt from this Policy, unless the Insider making the gift has reason to believe that the recipient intends to sell the Company Securities while the Insider is aware of Material Nonpublic Information.

 

The Company’s insider trading policy does not apply to purchases of Company stock in the Company employee stock purchase plan resulting from your periodic withholding of compensation under the plan’s election forms for the purpose of purchasing Company stock.  Instead, your purchase of Company stock under the plan is subject to the terms and conditions of the plan in effect at the time of such purchase.

 

 

Your compliance with this Policy is extremely important to you and the Company. If you have any questions about this Policy or its application please address them to the CFO or General Counsel.  Do not try to resolve uncertainties on your own, as the rules relating to insider trading are complex and there can be severe consequences for any violation of the rules.

This Insider Trading Policy is dated March 1, 2023 and supersedes any previous policy of the Company concerning insider trading.

 

ADDENDUM TO INSIDER TRADING POLICY –

PRE-CLEARANCE AND BLACKOUT PROCEDURES

 

This is an Addendum to the Insider Trading Policy of Johnson Outdoors Inc. (the “Company”).  You should carefully review the Insider Trading Policy along with this Addendum for important terms and definitions that relate to this Addendum, including the definition of Material Nonpublic Information.  This Addendum is in addition to and supplements the Insider Trading Policy.

 

To help prevent inadvertent violations of the federal securities laws and to avoid even the appearance of trading on inside information, the Company’s Board of Directors has adopted this Addendum.  This Addendum applies to directors, executive officers subject to Section 16 of the Securities Exchange Act of 1934 (“executive officers”) and certain designated employees of the Company or its subsidiaries (collectively, “Covered Persons”).  The names of the Covered Persons subject to this Addendum are listed on the attached Schedule 1. The Company may amend Schedule 1 from time to time as necessary to reflect any changes it deems appropriate, such as the appointment, resignation or change in status of any individual.

This Addendum also includes additional procedures designed to address the two- business day Form 4 filing requirement under Section 16.

 

 

1.          Quarterly Blackout Periods for Covered Persons.  The period commencing with the consolidation and distribution of the financial results for the second month of each fiscal quarter and ending at the beginning of the second trading day following the date of public disclosure of the financial results for that quarter is a particularly sensitive period of time for transactions in the Company’s stock from the perspective of compliance with applicable securities laws.  This sensitivity is due to the fact that the Covered Persons will, during that period, often possess Material Nonpublic Information about the expected financial results for the quarter during that period. Accordingly, this period of time is referred to as a “Quarterly Blackout Period.” All Covered Persons are prohibited from trading or engaging in any transaction that involves the purchase or sale of the Company’s securities during the Quarterly Blackout Period.

 

2.         Event-Specific Blackout Periods. In addition to the Quarterly Blackout Periods, from time to time, Material Nonpublic Information regarding the Company may be pending.  While such information is pending, the Company may impose a special Event- Specific Blackout Period during which the same prohibitions on trading the Company’s securities shall apply.  The Company will notify those persons who are subject to any Event- Specific Blackout Period. All officers, directors, employees, consultants and contractors of the Company and its subsidiaries are urged to remember that even if they are not subject to a Quarterly or Event-Specific Blackout Period, they are still prohibited from the unauthorized disclosure of any Material Nonpublic Information and the misuse of Material Nonpublic Information in securities trading.

 

3.          Exception for Approved 10b5-1 Plans.  Rule 10b5-1 under the Securities Exchange Act of 1934 provides an affirmative defense from insider trading liability under the federal securities laws for trading plans (referred to as 10b5-1 plans) that meet certain requirements. In general, a 10b5-1 plan must be entered into outside of a Blackout Period and at a time in which you do not have Material Nonpublic Information about the Company. In order to have a valid 10b5-1 plan, you must:

(i)          enter into a binding contract to purchase or sell the security;

 

(ii)         instruction another person to purchase or sell the security for your account; or

 

(iii)        adopt a written plan for trading securities.

 

Furthermore, the contract, plan or instructions must:

 

(i)          specify the amount of securities to be traded, the price at which they will be sold and the date of the transaction;

(ii)          include a formula for determining the amount, price and date; or

 

(iii)        not permit the trader any influence over how, when or whether to effect a trade and no such influence may in fact be exercised.

 

If you enter into a 10b5-1 plan which is in writing and approved in advance by the Company’s Chief Financial Officer and its General Counsel, then you may trade in the Company’s securities pursuant to such 10b5-1 plan during a Blackout Period and while otherwise in possession of Material Nonpublic Information. See Addendum to Insider Trading Policy – Rule 10b5-1 Trading Plans.

The Company’s approval of a Covered Person’s Rule 10b5-1 plan does not constitute any advice or assurance to the Covered Person that the plan complies with Rule 10b5-1 or will result in an effective affirmative defense under the rule and such approval shall no way reduce or eliminate any Covered Person’s obligations under Section 16 of the Exchange Act, including such person’s disclosure and short-swing trading liabilities thereunder.  If any questions arise, such person should consult with his or her own counsel in implementing a Rule 10b5-1 plan.

 

The Company has determined that all Covered Persons must refrain from trading in the Company’s securities or engaging in any transaction related to the Company’s securities, even outside of a Blackout Period, without first complying with the Company’s preclearance process.  This preclearance requirement applies to stock option exercises, bona fide gifts and other transactions otherwise excepted from the Insider Trading Policy. Each such person must contact the Company’s Chief Financial Officer and its General Counsel prior to commencing any trade in or transaction related to the Company’s securities, including entering into a 10b5-1 plan.  The Company’s Chief Financial Officer and its General Counsel will consult as necessary with senior management of the Company before clearing any proposed trade.

 

 

Directors and executive officers of the Company must also comply with the reporting obligations and limitations on short-swing transactions set forth in Section 16 of the Securities Exchange Act of 1934. The practical effect of these provisions is that directors and executive officers who purchase and sell the Company’s securities within a six-month period must disgorge all profits to the Company whether or not they had knowledge of any Material Nonpublic Information. Under these provisions, and so long as certain other criteria are met, neither the receipt of restricted stock, restricted stock units, an option, a stock appreciation right or any other equity award under the Company’s stock incentive plans, nor the exercise of that option, stock appreciation right or other equity award is deemed a purchase under Section 16; however, the sale of any such shares is a sale under Section 16. Section 16 prohibits executive officers and directors from ever making a short sale of the Company’s stock. A short sale is a sale of securities not owned by the seller or, if owned, not delivered (a “short sale against the box”). Transactions in put and call options for the Company’s securities may in some instances constitute a short sale or may otherwise result in liability for short swing profits. All such transactions are prohibited by the Company’s Insider Trading Policy.

This Addendum to the Insider Trading Policy is dated March 1, 2023.

1. The Plan must be entered into in good faith and not as part of a scheme to avoid the prohibitions of federal securities laws and the Insider must act in good faith with respect to his or her Plan.