RIM Executive Adopts Automatic Securities Disposition Plan
Waterloo, ON - Research In Motion Limited (“RIM” or the “Company”) (Nasdaq: RIMM; TSX: RIM) announced that David Yach, RIM’s Chief Technology Officer, Software, has adopted a new automatic securities disposition plan (“ASDP”) in accordance with the Securities and Exchange Commission’s Rule 10b5-1 (“Rule 10b5-1”), applicable Canadian provincial securities legislation, including the guidance under Ontario Securities Commission’s Staff Notice 55-701 (the “Canadian Legislation”), and RIM’s Insider Trading Policy. Mr. Yach's new ASDP will replace the ASDP that Mr. Yach entered into in 2009, which is expiring in April 2011.
Rule 10b5-1 and the Canadian Legislation permit insiders to adopt written ASDPs (generally referred to in the United States as “Rule 10b5-1 Plans”) to sell, donate or otherwise transfer shares in the future (including upon exercise of stock options) according to the ASDP on an automatic basis regardless of any subsequent material non-public information they receive. Once an ASDP is established, the insider is not permitted to exercise any further discretion or influence over how dispositions will occur under the ASDP. RIM recognizes that insiders may have reasons unrelated to their assessment of a company or its prospects in determining to effect transactions in that company’s common shares under an ASDP. These reasons might include, for example, charitable donations, tax and estate planning, retirement planning, the purchase of a home, the payment of university tuition for a child, the establishment of a trust, the balancing of assets and diversification of investments in an orderly manner, or other personal reasons. RIM also recognizes that many of its officers and employees have a substantial portion of their personal net worth represented by securities of the Company.
In addition to meeting the basic requirements of Rule 10b5-1 and Canadian Legislation, RIM has in place additional measures that are designed to conform with “best practices” relating to ASDPs. Those measures include the following: (i) ASDPs may only be adopted during a trading window; (ii) a waiting period of three months will generally be required between the adoption of the ASDP and the first disposition under the ASDP; (iii) an ASDP should generally have a duration of 12-24 months; (iv) the ASDP must contain meaningful restrictions on the ability of the insider to modify or terminate the ASDP; and (v) the ASDP should generally provide for regular sales of smaller amounts (relative to an insider’s holdings) over a period of time rather than large sales during a short period of time after adoption of the ASDP. In addition, RIM’s Insider Trading Policy requires all ASDPs to be pre-cleared by the Compensation, Nomination & Governance Committee (the “Committee”) of RIM’s Board of Directors, which is comprised of independent directors. The Committee will also consider such other “best practices” as they exist at the time an insider adopts an ASDP and may impose such additional requirements, or grant such exceptions, as it determines are necessary or appropriate.
The objective of Mr. Yach’s new ASDP is to facilitate the sale of 120,000 RIM shares by Mr. Yach over a two-year period. The RIM shares to be sold were issued to Mr. Yach upon the exercise of stock options in 2008. Sales under Mr. Yach’s ASDP will not commence until after the expiry of a three-month waiting period following the adoption of the ASDP and will be subject to a limit order price.
Dispositions by Mr. Yach under his ASDP will be reported in accordance with applicable Canadian securities laws (RIM’s insiders are exempt from filing insider reports under U.S. securities laws). Each such filing will bear a notation to advise readers that the dispositions relate to an ASDP.
Other insiders of the Company may from time to time adopt ASDPs during trading windows. RIM will issue a press release to announce the adoption of any other ASDPs by its directors or executive officers.
Rule 10b5-1 and the Canadian Legislation permit insiders to adopt written ASDPs (generally referred to in the United States as “Rule 10b5-1 Plans”) to sell, donate or otherwise transfer shares in the future (including upon exercise of stock options) according to the ASDP on an automatic basis regardless of any subsequent material non-public information they receive. Once an ASDP is established, the insider is not permitted to exercise any further discretion or influence over how dispositions will occur under the ASDP. RIM recognizes that insiders may have reasons unrelated to their assessment of a company or its prospects in determining to effect transactions in that company’s common shares under an ASDP. These reasons might include, for example, charitable donations, tax and estate planning, retirement planning, the purchase of a home, the payment of university tuition for a child, the establishment of a trust, the balancing of assets and diversification of investments in an orderly manner, or other personal reasons. RIM also recognizes that many of its officers and employees have a substantial portion of their personal net worth represented by securities of the Company.
In addition to meeting the basic requirements of Rule 10b5-1 and Canadian Legislation, RIM has in place additional measures that are designed to conform with “best practices” relating to ASDPs. Those measures include the following: (i) ASDPs may only be adopted during a trading window; (ii) a waiting period of three months will generally be required between the adoption of the ASDP and the first disposition under the ASDP; (iii) an ASDP should generally have a duration of 12-24 months; (iv) the ASDP must contain meaningful restrictions on the ability of the insider to modify or terminate the ASDP; and (v) the ASDP should generally provide for regular sales of smaller amounts (relative to an insider’s holdings) over a period of time rather than large sales during a short period of time after adoption of the ASDP. In addition, RIM’s Insider Trading Policy requires all ASDPs to be pre-cleared by the Compensation, Nomination & Governance Committee (the “Committee”) of RIM’s Board of Directors, which is comprised of independent directors. The Committee will also consider such other “best practices” as they exist at the time an insider adopts an ASDP and may impose such additional requirements, or grant such exceptions, as it determines are necessary or appropriate.
The objective of Mr. Yach’s new ASDP is to facilitate the sale of 120,000 RIM shares by Mr. Yach over a two-year period. The RIM shares to be sold were issued to Mr. Yach upon the exercise of stock options in 2008. Sales under Mr. Yach’s ASDP will not commence until after the expiry of a three-month waiting period following the adoption of the ASDP and will be subject to a limit order price.
Dispositions by Mr. Yach under his ASDP will be reported in accordance with applicable Canadian securities laws (RIM’s insiders are exempt from filing insider reports under U.S. securities laws). Each such filing will bear a notation to advise readers that the dispositions relate to an ASDP.
Other insiders of the Company may from time to time adopt ASDPs during trading windows. RIM will issue a press release to announce the adoption of any other ASDPs by its directors or executive officers.
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