GULF ISLAND FABRICATION, INC.
Insider Trading Policy
This Insider Trading Policy (“Policy”) of Gulf Island Fabrication, Inc. (“GIFI”) and its subsidiaries and its affiliates (collectively, the “Company”) sets forth the general standards for the Company and for all officers, directors and employees with respect to engaging in transactions in GIFI’s securities and securities of other publicly traded companies. This Policy explains the prohibitions against “insider trading” based on federal securities laws and establishes GIFI’s policies and procedures to promote and monitor compliance with those laws.
Violations of insider trading laws can, and often do, result in criminal investigations, prosecutions, disgorgement of ill-gotten trading profits, fines and prison sentences. Accordingly, your compliance with this Policy is of the utmost importance for both you and GIFI.
This Policy describes the prohibition on insider trading applicable to all persons subject to the Policy, and also additional restrictions on individuals who have been classified as “insiders” of the GIFI (see Section 7 “Additional Restrictions Applicable to Insiders”). Insiders include members of GIFI’s Board of Directors and its executive officers, as well as certain GIFI officers and employees who have been informed in writing that they have been designated as “insiders” because they are likely to be in possession of material nonpublic information due to the nature of their work.
This Policy supersedes any previous version of the Policy.
1.1Persons Covered. As an officer, director or employee of the Company, this Policy applies to you. The same restrictions that apply to you also apply to members of your family who reside with you, anyone else who lives in your household, and any family members who do not live in your household but whose transactions in GIFI’s securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in GIFI’s securities (those persons are referred to as “related persons”). This Policy also applies to entities that you influence or control, including corporations, partnerships or trusts. In addition, the Company may determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information.
1.2Individual Responsibility. Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and not to engage in transactions in GIFI’s securities while in possession of material nonpublic information (see Section 5 “What is Material Nonpublic Information?”). You are responsible for complying with this Policy and ensuring that any of your related persons or any entities you control also comply with this Policy. In all cases, the responsibility for determining whether you possess material nonpublic information rests with you. While the Company provides policies, procedures and information on insider trading, no action on the part of the Company, or any employee, officer or director pursuant to this Policy, constitutes legal advice or insulates you from liability under applicable securities laws. You could be subject to severe legal penalties and disciplinary action by the Company for any conduct prohibited by this Policy or applicable securities laws (see Section 8 “Consequences of Non-Compliance”).
1.3Transactions Covered. Except as otherwise provided, this Policy applies to all transactions in GIFI’s securities, including common stock, options for common stock and any other securities GIFI may issue from time to time, including, but not limited to, preferred stock, warrants and convertible notes and debentures, as well as to derivative securities relating to GIFI’s stock, whether or not issued by GIFI, such as exchange-traded put or call options or swaps related to GIFI’s securities. Transactions subject to this Policy include purchases, sales and gifts of GIFI’s securities. This Policy also applies to transactions that occur after you cease to be an officer, director or employee of the Company for as long as you are in possession of material nonpublic information.
1.4Application to the Company. It is also the Company’s policy that it will not engage in transactions in GIFI securities in violation of applicable securities laws.
2.1Prohibition Against Trading On or Disclosing Material Nonpublic Information. No person subject to this Policy who is aware of material nonpublic information may directly or indirectly:
•Engage in transactions in GIFI’s securities, except as otherwise specified in this Policy (see Section 4 “Transactions Excluded from this Policy”);
•Recommend that others engage in transactions in any of GIFI’s securities;
•Disclose material nonpublic information to persons (a) within the Company whose jobs do not require them to have that information, or (b) outside of the Company, including family, friends, business associates, investors and consulting firms, unless any such disclosure is made in accordance with GIFI’s policies and procedures; or
•Assist anyone engaged in the above activities.
It makes no difference whether or not you relied upon or used material nonpublic information in deciding to transact; if you are aware of material nonpublic information about GIFI, the prohibition applies. You should avoid even the appearance of an improper transaction to preserve GIFI’s and your own reputation and to avoid investigations of your and GIFI’s conduct. In addition, no person subject to this Policy who, in the course of working for the Company learns of material nonpublic information about a company with which the Company does business (as described below), may trade in such company’s securities, including common stock, options for common stock and any other securities that such company may issue from time to time, including, but not limited to, preferred stock, warrants and convertible notes and debentures, as well as to derivative securities relating to such company’s stock, until the information becomes public or is no longer material. Such companies include current or prospective customers or suppliers of the Company, companies with which the Company may be negotiating a significant agreement, arrangement or other understanding and companies that may be a party to potential corporate transactions, such as an acquisition, investment or sale.
2.2No Exceptions. Transactions that may seem necessary or justifiable to you for independent reasons (such as the need to raise money for an emergency expenditure), or transactions related to a small number of GIFI securities, are NOT exceptions to this Policy. The securities laws do not recognize any mitigating circumstances. Further, even the appearance of an improper transaction must be avoided to preserve the Company’s and your reputation for adhering to the highest standards of conduct.
3.Additional Limitations and Prohibited Transactions
3.1Short Sales, Hedging and Other Derivative Transactions. Short sales of GIFI’s securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve the Company’s performance. For these reasons, short sales of GIFI’s securities are prohibited for persons subject to this Policy.
Transactions in publicly traded options are generally short-term in nature and may give the public the perception that persons subject to this Policy are not focused on the long-term performance of the Company. Hedging transactions are often complex, may be perceived negatively by the public and can present unique insider trading risks. Accordingly, persons subject to this Policy are prohibited from engaging in hedging or derivative transactions.
3.2Pledging. Persons subject to this Policy may not pledge GIFI’s securities as collateral for a loan (including a margin loan) or for any other purpose.
3.3Standing and Limit Orders. Standing and limit orders, except under Rule 10b5-1 plans, create heightened risks for insider trading violations. There is no control over timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when the customer is in possession of material nonpublic information or otherwise prohibited from trading. GIFI therefore discourages persons subject to this Policy from placing standing or limit orders on GIFI’s securities other than for short durations. For additional restrictions on insiders (including pre-clearance procedures), see Section 7 “Additional Restrictions Applicable to Insiders”.
3.4Transactions in Connection with a Company Stock Repurchase Program. Any person subject to this Policy who is aware that GIFI is adopting a share repurchase program, increasing the amount of shares subject to the program, or making other modifications to the program, whether or not such event is material, may not engage in transactions in GIFI’s securities within four business days before or after such program or modification is implemented or (if it is to be announced) announced, whichever is later.
4.Transactions Excluded from this Policy
This Policy does not apply to the following transactions, except as specifically noted:
4.1Restricted Stock Unit Awards. This Policy does not apply to the vesting of restricted stock units, or the exercise of a tax withholding right pursuant to which you elect to have GIFI withhold shares of stock to satisfy tax withholding obligations upon the vesting of any restricted stock unit. However, this Policy does apply to any sale of common stock received by you as a result of the vesting, including to satisfy tax liabilities.
4.2Stock Option Exercises. This Policy does not apply to the exercise of an employee or director stock option if the exercise price is paid in cash or to an award recipient’s use of shares delivered or withheld from the exercise to cover the cost of the option exercise or the satisfaction of tax withholding obligations. However, this Policy does apply to any sale of the underlying stock or to a cashless option exercise through a broker (which entails the sale of a portion of the underlying stock on the market to cover the costs of exercise or the resulting taxes), or any other market sale for the purpose of generating cash to pay the exercise price.
4.3Transactions with GIFI. Any other purchase of GIFI’s securities from GIFI or sale of GIFI’s securities to GIFI are not subject to this Policy.
4.4Transactions Pursuant to Rule 10b5-1 Plans. Transactions involving GIFI’s securities pursuant to an effective Rule 10b5-1 plan pre-cleared by GIFI as described below may be made notwithstanding this Policy. (See Section 6 “Rule 10b5-1 Plans” and Section 7.4 “Rule 10b5-1 Plans and Similar Plans Adopted by Insiders” for more information.)
5.What is Material Nonpublic Information?
Information is “material” if there is a substantial likelihood that a reasonable investor would consider the information important in deciding whether to purchase, sell or hold a security, or if there is a substantial likelihood that the information would be viewed by a reasonable investor as significantly altering the total mix of publicly available information about the Company. Any information that could reasonably be expected to affect the market price of a security is likely to be considered material. This determination is made based on the facts and circumstances of each particular situation and is often evaluated by enforcement personnel with the benefit of hindsight. Material information can be positive or negative and can relate to any aspect of the Company’s business or to any type of GIFI’s securities, whether debt, equity or a hybrid. Information that could be considered material includes, but is not limited to, information regarding:
•Revenues, expenses, operational results or earnings, including anticipated results or projections;
•Proposed or pending mergers, acquisitions, joint ventures or tender offers;
•Proposed or pending acquisitions or dispositions of a significant asset;
•Significant borrowings or financing transactions out of the ordinary course;
•Award or loss of a significant contract;
•A major change in strategy or corporate objectives;
•Changes in dividend policy, the declaration of a stock split or an offering of additional securities;
•Establishing a new stock repurchase program or changes with respect to such a program;
•Changes in GIFI executive officers or board members;
•Developments regarding threatened, new or pending significant litigation or government investigations, or the resolution of such litigation or investigations;
•A significant disruption in the Company’s operations;
•Change in auditors or notification that the auditor’s reports may no longer be relied upon;
•A loss, or potential loss, of significant property or assets;
•Imposition of a black-out period with respect to transactions in GIFI securities or the extension or termination of such black-out period; and
•A significant cyber security incident.
The above list is not exclusive and many other types of information may be considered material, depending on the circumstances. The probability of whether an event will or will not occur, along with the magnitude of the potential event, affects the determination of whether it is material. If you have any questions concerning the materiality of particular information, you should consult with the Chief Financial Officer.
“Nonpublic” information is information that is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors, including through the issuance of a press release or a filing with the Securities and Exchange Commission (“SEC”). In addition, even after a public announcement of material information, a reasonable period of time must elapse in order for the market to absorb and react to the information. Generally, 48 hours have elapsed (and no less than one full trading day) after the public release of material information via the issuance of a press release, a webcast conference call or an SEC filing should elapse before you transact in GIFI’s securities. If you have any questions concerning whether information is considered public, you should consult with the Chief Financial Officer.
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provides an affirmative defense from insider trading liability to a person who enters into a trading plan for transactions in GIFI’s securities that meets the conditions specified in Rule 10b5-1. A Rule 10b5-1 plan must, among other things, be entered into at a time when the person is not aware of material nonpublic information, and there is a specified cooling off period before trades under the plan can begin. It is your responsibility to ensure that your trading plan, and trades made pursuant to such plan, meet all the conditions of Rule 10b5-1. A standing or limit order does not, by itself, qualify as a Rule 10b5-1 plan. For additional information on Rule 10b5-1 plans, including the required pre-clearance procedures, contact the Chief Financial Officer. Rule 10b5-1 plans or similar plans adopted by insiders are subject to additional requirements. (See Section 7.4 “Rule 10b5-1 Plans and Similar Plans Adopted by Insiders.”)
7.Additional Restrictions Applicable to Insiders
In addition to the provisions above that apply to all persons subject to this Policy, insiders and their related persons are subject to additional restrictions on trading. The provisions below will govern to the extent that any such requirement is more restrictive than the requirements set forth above.
7.1Pre-Clearance Procedures. All insiders must pre-clear any transaction in GIFI securities with the Chief Financial Officer. All pre-cleared transactions must be effected within five business days following the date of receipt of pre-clearance, after which the pre-clearance automatically expires. However, under no circumstance may you effect a transaction while in possession of material nonpublic information, even if pre-cleared. GIFI’s approval of any particular transaction under this pre-clearance procedure does not necessarily insulate you from liability under the securities laws.
7.2Window Period Requirement. GIFI requires that insiders trade in GIFI’s securities only during the period beginning after 48 hours have elapsed (and no less than one full trading day) after the time of the filing of GIFI’s quarterly and annual reports on Forms 10-Q and 10-K, respectively, with the SEC and ending at 5:00 p.m. central time on the 20th business day following the date on which the window opens (“window period”). GIFI will periodically issue detailed guidance and procedures to insiders subject to the window period for trading in GIFI’s securities. Trading during a window period minimizes the potential violation of insider trading laws because material financial information has just been released to the public. It should be noted that even during the window period, any person possessing material nonpublic information may not engage in any transactions in GIFI’s securities until the information is no longer nonpublic or is no longer material, as discussed in Section 5. From time to time, insiders may also be advised that no trading, except pursuant to a Rule 10b5-1 plan previously approved by GIFI, will be permitted until further notice (generally known as a “black-out period”). Any person made aware of a black-out period should not disclose the existence of the black-out period to anyone else.
7.3Section 16 and Rule 144 Restrictions and Reporting. The federal securities laws, including Section 16 of the Securities Exchange Act of 1934, as amended (“Section 16”), and Rule 144 under the Securities Act of 1933, as amended, impose additional trading restrictions and reporting obligations on executive officers, directors and holders of more than 10% of any class of equity security of GIFI. GIFI will notify you if you are subject to these additional restrictions and reporting requirements.
7.4Rule 10b5-1 Plans and Similar Plans Adopted by Insiders. All Rule 10b5-1 plans, or plans similar to Rule 10b5-1 plans, and any modifications to such plans, adopted by an insider must be adopted during a window period and cleared in advance by the Chief Financial Officer. Transactions executed pursuant to a pre-cleared Rule 10b5-1 plan do not require further approval and are not subject to the Company’s window period or black-out period, as Rule 10b5-1 provides an affirmative defense from insider trading liability under the federal securities laws for transactions made pursuant to the plan and in accordance with Rule 10b5-1. Any termination of such a plan must be reported promptly to the Chief Financial Officer.
The Company is required to disclose in its quarterly and annual reports on Forms 10-Q and 10-K, respectively, filed with the SEC whether during its last fiscal quarter any director or officer subject to Section 16 adopted (which includes certain modifications) or terminated a Rule 10b5-1 plan or similar plan, and is also required to disclose specified information about the plan. Therefore, it is important that you promptly report to the Chief Financial Officer such adoptions, modifications and terminations as noted above. For additional information, contact the Chief Financial Officer.
8.Consequences of Non-Compliance
Federal and state securities laws prohibit the purchase or sale of securities while aware of material nonpublic information as well as the disclosure of material nonpublic information to others who then trade in a company’s securities (sometimes called “tipping”). Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities as well as the laws of foreign jurisdictions. Punishment for insider trading violations is severe and may include significant fines and imprisonment.
Failure to comply with this Policy may also subject you to Company-imposed sanctions, including disciplinary action up to and including termination of employment, whether or not the failure to comply with this Policy results in a violation of law. A violation of law, or even questionable conduct leading to federal investigation that does not result in prosecution, can tarnish an individual’s reputation and irreparably damage a career.
Violations of insider trading laws can, and often do, result in criminal investigations, prosecutions, disgorgement of ill-gotten trading profits, fines and prison sentences. Accordingly, your compliance with this Policy is of the utmost importance for both you and the Company.
9.Asking Questions and Reporting Concerns
It is your obligation to understand and comply with this Policy. If you are concerned that a policy has been violated, or have any questions about this Policy, you should discuss it with the Chief Financial Officer.
The Company will not tolerate retaliation against any employee who reasonably and in good faith raises a question or concern about the Company’s business practices, this Policy, or compliance with applicable laws or regulations.
This Insider Trading Policy was adopted by the Board of Directors effective October 31, 2024, and supersedes any previous policy of GIFI concerning insider trading.