RAM ENERGY RESOURCES, INC.
Corporate Disclosure Policy
OVERVIEW
This corporate disclosure policy for RAM Energy Resources, Inc. (“RAM”) is designed to
ensure compliance with Securities and Exchange Commission (the “SEC”) guidelines as
stipulated in Regulation FD (“Reg FD”).
In summary, Reg FD prohibits RAM, or any person acting on its behalf, from intentionally
disclosing material nonpublic information to specified types of securities market professionals
and security holders unless RAM publicly discloses the information simultaneously. In addition,
if RAM, or any person acting on its behalf, non-intentionally discloses material nonpublic
information to persons covered by the regulation, RAM must publicly disclose the information
promptly.
With certain exceptions, Reg FD covers material communications between RAM’s officers,
directors, its Investor Relations Officer (“IRO”) and other authorized spokespersons and
analysts, professional investors and holders of RAM’s securities who could reasonably be
expected to trade on that information (collectively, the “Investment Community”).
CORPORATE DISCLOSURE POLICY SUMMARY
When RAM has material, nonpublic information to discuss in a selective forum, it must first
disclose that information publicly through a news release, a Form 8-K filing or simultaneously
through a fully accessible, non-exclusionary telephonic or Web-cast means. If there is an
inadvertent disclosure of material, nonpublic information in a selective forum, and once RAM is
aware that such a disclosure has occurred, RAM must issue a news release or file an 8-K within
24 hours or before the opening of the next trading day on the NASDAQ Stock Market,
whichever is later.
RAM is committed to providing timely, orderly, consistent and credible dissemination of
information, consistent with legal and regulatory requirements, to enable orderly behavior in the
market. It is imperative that this continues to be accomplished evenly and at all times.
This disclosure policy confirms in writing the existing policy for RAM. Its goal is to develop
and maintain realistic investor expectations by making all required disclosures on a broadly
disseminated basis.
CORPORATE DISCLOSURE POLICY COMMITTEE
RAM has in place a Corporate Disclosure Policy Committee (the “Committee”), with its
members including the Chief Financial Officer, Vice President – Corporate Development, Chief
Executive Officer, and key members of its internal communications function.
THE COMMITTEE IS CHARGED WITH MAINTAINING A WRITTEN DISCLOSURE
POLICY ENCOMPASSING RAM’S PRACTICES. IN ADDITION, THE COMMITTEE IS
RESPONSIBLE FOR MONITORING DISCLOSURE ACTIVITIES AND ENSURING
COMPLIANCE WITH RAM’S STATED POLICY.
The Committee should review all speeches, written statements, presentations to the investment
community and other external communications prior to their use and should consider the
inclusion of legal disclaimers and other cautionary language, where appropriate. The Committee
should also be informed of regulatory or litigation responses in an effort to ensure that such
disclosures are accurate and complete. The Committee must react quickly to developments and
make recommendations to the Chief Executive Officer as appropriate. The Committee will meet
as conditions dictate and will also systematically review RAM’s prior disclosures, SEC filings
and other public information to determine whether any updating or correcting is appropriate.
AUTHORIZED SPOKESPERSONS
The Chief Executive Officer, the Chief Financial Officer and the Vice President – Corporate
Development are designated as RAM’s spokespersons for all situations. While only these three
spokespersons are authorized to disclose information about RAM to the Investment Community,
Reg FD applies to disclosures of material nonpublic information by any of the following:
•
•
•
•
directors;
executive officers;
IRO; and
any other officer or employee who regularly interacts with securities market
professionals or investors as part of his or her job responsibilities.
Accordingly, individuals who occupy these positions and who are not spokespersons should refer
any inquiries from the Investment Community about RAM to a spokesperson.
RAM’s spokespersons shall continue to be integrally involved in scheduling and developing
presentations for all meetings and other communications with the Investment Community,
arranging appropriate interviews with RAM management and responding to all inquiries from
the public for additional information. After public dissemination, all disclosures will be
monitored by RAM spokespersons and the Committee to ensure accurate reporting. Further, and
after consultation with the Committee, RAM spokespersons are authorized to take corrective
measures, if necessary.
RAM employees should be notified of who are the designated spokespersons and informed that
non-designated employees are prohibited from talking with the Investment Community, unless
authorized to do so under special circumstances. Likewise, RAM employees shall not post any
nonpublic information regarding RAM on Internet chat boards or similar sites.
If a question arises as to whether information is material or nonpublic, or whether an officer or
employee is authorized to disclose information, officers and employees should contact the Chief
Executive Officer or other members of the Committee prior to disclosure of the information. If
2
Corporate Disclosure Policy
the disclosure has already occurred, such disclosure should be reported to the Committee as soon
as possible following the disclosure.
Material Nonpublic Information
Information about RAM is considered material if there is a substantial likelihood that a
reasonable investor would:
• consider the information important in making an investment decision; or
• view the information as significantly altering the total mix of information in the
marketplace about RAM.
Under these standards, RAM information that may be material includes information regarding
(but is not limited to):
• earnings, RAM performance or division performance;
• mergers, acquisitions, tender offers, joint ventures, or significant changes in assets;
• new products or discoveries, or significant developments regarding customers or
suppliers;
• changes in control or management of RAM;
• changes in RAM’s auditors or a notification from its auditors that RAM may no longer
rely on the auditors’ audit report; and
• major events relating to RAM’s securities or RAM’s operations.
Information about RAM is considered nonpublic if it has not been distributed in a manner that
makes it available to investors generally. Discussing previously disclosed historical information
about RAM or facts that are generally known would not be considered a prohibited selective
disclosure. However, commenting on or updating previously disclosed historical information
could provide material nonpublic information and, as a result, may in certain circumstances
constitute a disclosure of material nonpublic information.
Routine Procedure for All Corporate Communications
RAM’s routine procedure for all corporate communications consists of drafting a press release,
circulating it for review to the members of the Committee, the Chief Executive Officer and other
officers as appropriate, and disseminating the release through a national wire service and other
distribution channels so as to effect broad dissemination to the public. Prior to the issuance of
the release, the spokespersons, in consultation with the Committee, should determine whether to
file a Form 8-K with the SEC and whether to post the press release on RAM’s Web site.
The Investor Relations Department will maintain a file of all written statements, releases or
filings made by RAM that contain material information about RAM. The file should include
SEC filings, press releases, RAM statements, stockholder communications, analyst reports, and
newspaper and magazine articles.
3
Corporate Disclosure Policy
EARNINGS GUIDANCE
RAM will issue earnings guidance, as deemed appropriate, in quarterly news releases, and within
forty-eight hours following such releases, RAM may hold a conference call through telephonic
or Web-cast means that are fully accessible and non-exclusionary. Guidance may be in the form
of projections based on factors that drive RAM’s business or projected earnings for the period(s)
addressed. RAM will make no commitment to update the information, but as a matter of
principle, will issue a news release if projections change materially.
Guidance should only be based on:
• information RAM has publicly issued;
• non-material information, whether in the public domain or not; and/or
• industry related information.
RAM may consider publishing an “outlook” section in its earnings release that forecasts
expectations with respect to those factors that drive RAM’s financial results. As the quarter
progresses, an expression of comfort with projections may be viewed as material and would
require a press release. It is essential that any forward-looking information be accompanied by
“safe harbor” language containing risk factors specifically related to the forecasts or projections
and not simply boilerplate language.
Reviewing or commenting on analysts’ earnings models or draft reports is limited to:
• correcting errors of historical fact; provided that, such corrections will only be made
in writing, explicitly stating that RAM has corrected only historical factual errors, but
does not approve, adopt or endorse the model or report;
• pointing out information that is in the public domain; and/or
• providing information RAM believes is clearly non-material.
If RAM chooses to forecast as a means of providing earnings guidance, management should
consider:
• its ability to provide such information early in the quarter;
• the risks in doing so; and
• the risk factors that need to be communicated in a readily available written document
such as a news release or SEC filing related to its projections.
CONFERENCE CALLS
When RAM conducts conference calls, they should be done in a fully accessible, nonexclusionary basis through telephonic or Web-cast means, providing investors and the media
with adequate notice of the call. The SEC has not specified what constitutes “adequate notice”
since circumstances may require a call on short notice. As a general practice, RAM typically
issues a conference call notice one to two weeks in advance of the call, which is well within a
reasonable time frame for meeting full disclosure purposes.
4
Corporate Disclosure Policy
RAM’s conference calls are preceded with a news release containing any new material
information that will be discussed on the call. In addition to a news release and fully accessible,
non-exclusionary call, RAM uses an 8-K filing where appropriate. Should RAM intend to
provide earnings guidance during the call, the information should be made available in a written
document containing the relevant safe harbor risk factors. RAM may then use that document as a
future basis of reference when analysts ask for guidance. A recorded copy of any conference call
will be made available to the public on RAM’s Web site for five business days following the
conference call.
ONE-ON-ONE DISCUSSIONS
One-on-one discussions, whether by phone or in person are permitted. However, it is imperative
that RAM executive officers, directors, spokespersons and other RAM personnel authorized to
engage in such discussions be very careful to avoid disclosing material, nonpublic information
during the discussions. Should a disclosure happen inadvertently, RAM is obligated to promptly
issue a news release or provide the information in some other form of full disclosure.
In advance of any scheduled one-on-one discussions, the spokespersons should request an
agenda and/or a list of questions. The IRO should be present or on the phone with any RAM
official engaged in a one-on-one discussion with analysts or investors. RAM’s IRO must at all
times be fully apprised of RAM’s disclosure record. The IRO should interrupt the RAM official
and advise him or her not to respond to certain questions that would provide material, nonpublic
information. RAM’s IRO may continue to engage in one-on-one discussions with investors and
analysts without other RAM officials present, as long as he is fully knowledgeable of RAM’s
disclosure record, along with all of RAM’s material developments, whether public or not.
One-on-one meetings should continue and are an important venue for discussing information
restricted to:
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
long term strategy;
history and mission;
goals;
management philosophy;
strength and depth of management;
competitive advantages and disadvantages;
previously disclosed material and non-material information; and
industry trends and issues.
INVESTOR AND BROKER SPONSORED CONFERENCES
RAM’s participation at these events can be particularly useful and should be continued as
deemed appropriate. RAM should request a live Web-cast of any presentation and
accompanying Q&A session as a condition of participation, unless otherwise not possible. If
Web-casting services are provided, it is RAM’s responsibility to take the initiative to inform
interested investors and the media via a news release and a posting on RAM’s Web site
identifying the event date, time of the Web-cast and how to access it. Breakout sessions at these
5
Corporate Disclosure Policy
conferences should be conducted in the same manner as one-on-one discussions with the
appropriate precautions taken to ensure that statements made by RAM officials comply with this
policy and Reg FD. Prior to attending any analyst or investor conferences, a spokesperson will
consult with the Committee to determine whether any material nonpublic information is likely to
be disclosed during the conference. Any material nonpublic information that RAM intends to
disclose will be released prior to or simultaneous with the occurrence of the conference, in
consultation with the Committee.
HEADQUARTERS VISITS
Analysts and investors who make visits to RAM’s headquarters may be exposed to employees
who are not covered by Reg FD. The IRO must control these visits to ensure that the analysts or
investors gain insight into RAM’s business and operations while avoiding opportunities to gain
material, nonpublic information in the process.
Responding to Rumors and Questions; Commenting on Information
Spokespersons should err on the side of caution and decline to comment on statements and
respond to questions if it appears that doing so may involve a discussion of material nonpublic
information.
It shall continue to be the policy of RAM to respond consistently to questions about rumors in
the following manner, “It is our position not to comment about rumors or speculation.” Separate
stock exchange RAM or inter-dealer quotation RAM guidelines may require us to make a more
definitive statement when it is clear that RAM is the source for the rumors, or has some
knowledge respecting the rumors, which are causing movement in the share price. This
determination shall be the decision of RAM outside counsel in conjunction with the Chief
Executive Officer or Chief Financial Officer.
RAM will not assist in the preparation of, nor will it comment on, analyst projections regarding
RAM, except that previously disclosed historical information may be provided as described
above. Spokespersons may point out mistakes regarding previously disclosed historical
information about RAM that are part of a draft or proposed analyst financial report or projection.
When they make those corrections, Spokespersons will do so in writing, stating that RAM has
corrected only historical factual errors, but does not approve, adopt or endorse the report or
projection.
ADDITIONAL OVERALL GUIDELINES
1. The Board of Directors should continue to be kept aware of all material developments and
significant information disseminated to the public. Further, Board members and other
insiders will be apprised of material developments which RAM is not ready to announce
publicly in order to avoid premature or selective disclosure or inadvertent insider trading.
2. RAM maintains a formal quiet period beginning when RAM’s results become reasonably
apparent and ending when the quarterly results are released. During the quiet period, RAM
will not comment on earnings or provide any additional earnings guidance.
6
Corporate Disclosure Policy
3. The IRO should pre-brief RAM officials prior to analyst or investor meetings. Should a
RAM official conduct a one-on-one without the IRO present, a debriefing with the IRO
should be conducted promptly to ensure that no inadvertent disclosure of material nonpublic
information occurred.
4. RAM should utilize its external Web site to continue the current practice of using technology
to deliver, via fax or e-mail, press releases, conference call notices, SEC filings, etc. to
analysts and investors.
5. RAM should utilize its internal Web site as a vehicle for communicating RAM’s corporate
disclosure policy to employees.
7
Corporate Disclosure Policy