Insider Trading and Equity
Insider Trading
Insider trading is the illegal practice of trading public company stock while in possession of material nonpublic information. The purpose of making insider trading illegal is to maintain a level playing field between outside investors and inside investors, to promote fairness in the market and to protect shareholder interests.
Insider Trading Policy
Material Non-Public information
MNPI is information that has not been disseminated to the public that would be considered relevant to a reasonable investor who is considering buying, selling or holding Upstart stock. It is generally information that will have a significant impact on the business, for better or worse, if it is released to the public without forethought. You cannot trade Upstart equity when you are in possession of MNPI - even during an Open Trading Window. You should always consider whether you are in possession of MNPI before placing trades.
MNPI Examples
The following examples are illustrative and not exhaustive. If you believe that you are in possession of MNPI or you are not sure, please reach out to legal-corp@upstart.com for guidance.
Financial Information
Knowledge of a significant financial error or omission: Do you know of any recently disclosed financial disclosures or earnings materials that contain errors or omissions that could require a restatement or retraction?
- Includes financials results, key metrics, financial condition, earnings pre-announcements, guidance, projections or forecasts.
Access to financial reporting and accounting systems: Do you have access to Upstart’s financial reporting or accounting platforms or otherwise have access to the Company’s financial information and:
- Are aware of an impending restatement of financial results, or material impairments, write-offs or restructurings? or
- Prepare, review or can access Upstart’s financial statements or accounting reports during the last month of the financial quarter?
- Does not include any financial information or company performance data obtained during the first two months of the current financial quarter.
Knowledge of a change to Upstart’s independent auditors (Deloitte): Do you have knowledge that Upstart plans to change its independent auditor (Deloitte) or notification that the Company may no longer rely on an audit report?
Knowledge of business plans or budgets that will significantly cause us to fall outside of projections or forecasts: Do you know of a major business plan or budget that will make Upstart significantly miss or exceed its last earnings forecasts?
Knowledge of an impending bankruptcy or financial liquidity problems.
Business Information
Knowledge of significant developments involving business relationships: Are you aware of any major changes to Upstart’s relationships with its bank partners, institutional investors or other business partners that could significantly impact Upstart’s financial position or current or future plans?
- Includes execution, modification or termination of the agreements.
Major Events
Knowledge of significant legal or regulatory developments that are not publicly disclosed: Are you aware of any new, or changes to, major litigation or regulatory action that occurred after Upstart filed its most recent 10-Q or 10-K that hasn’t been publicly announced yet?
- Includes positive or negative changes, actual or threatened litigation, government inquiries or investigations;
Knowledge of major events involving the Company’s securities that has not been publicly announced:
- Includes calls of securities for redemption, adoption of stock repurchase programs, option repricings, stock splits, changes in dividend policies, public or private securities offerings, modification to the rights of security holders or notice of delisting;
Knowledge of significant corporate events: Are you aware of any M&A deals, large investments or spin-offs that haven't been made public?
- Includes pending or proposed merger, joint venture or tender offer, a significant investment, the acquisition or disposition of a significant business or asset or a change in control of the Company.
Knowledge of unannounced major personnel changes: Are you aware of any unannounced changes in the executive team?
Knowledge of unannounced data breaches or other cybersecurity events: Are you aware of any major cybersecurity or data breach that hasn’t been publicly announced?
Pre-Clearance
Employees who are routinely in possession of MNPI will be required to receive pre-clearance from Legal prior to trading Upstart stock. These are generally Upstart’s executive officers, and those other officers at and above the Senior Vice President level or otherwise designated by the Chief Legal Officer. Upstart Legal determines which Upstarters will require pre-clearance on a quarterly basis and contacts these individuals to discuss this designation and required steps.
10b5-1 Plans
A 10b5-1 Plan is a written trading plan that allows insiders who are likely to have MNPI to trade their Upstart equity. Upstart leadership has done a lot of work to maintain our culture of open communication while limiting access to MNPI during open windows. As a result, the vast majority of Upstarters will not need a 10b5-1 plan. 10b5-1 Plans are typically only put in place by direct reports to the CEO and a small group of other leaders. If you are a candidate for a 10b5-1 plan, Legal has already contacted you.
Blackout Period Exceptions
The following are certain limited exceptions to the quarterly and special blackout period restrictions and pre-clearance requirements imposed by the Company:
- Exercise stock options in cash and hold until the next open trading window;
- Receipt and vesting of stock options, restricted stock units, restricted stock or other equity compensation awards and hold until the next open trading window;
- Purchases pursuant to an employee stock purchase plan that you hold until the next open trading window;
- Certain net share withholding with respect to equity awards where shares are withheld by the Company in order to satisfy tax withholding requirements;
- Certain sales to cover transactions where shares are sold on your behalf upon vesting of equity awards and sold in order to satisfy tax withholding requirements; and
- Automatic purchases of the Company’s stock in the 401(k) plan resulting from periodic contributions to the plan based on your payroll contribution election.
For more information about exceptions to the blackout period restrictions, please review Upstart’s Insider Trading Policy
You can find more information about our open trading window, ESPP program and stock administration here.