(For Directors and All Employees)
This Insider Trading Policy (the “Policy”) provides guidelines with respect to transactions in securities of TCF Financial Corporation (together with all of its subsidiaries, “TCF” or the “Company”) and the treatment of confidential information about TCF and the companies with which TCF does business. TCF’s Board of Directors has adopted this Policy to promote compliance with federal, state and foreign securities laws that prohibit certain persons who are aware of material, non-public information about TCF from: (i) trading in TCF Securities (as defined below); or (ii) providing material, non-public information to other persons, including relatives, friends and business acquaintances, who may trade on the basis of that information (i.e., “tipping”).
This Policy is intended to avoid even the appearance of improper conduct on the part of anyone employed by or associated with TCF. An investigation that does not ultimately result in prosecution or discipline can still tarnish one’s reputation and irreparably damage a career. It is your obligation to understand and comply with this Policy. If you have any questions regarding this Policy, please contact the Compliance Officer as set forth below under “How is the Policy Administered.”
II. APPLICABILITY AND SCOPE
A. Who does this Policy apply to?
This Policy applies to all directors, officers and other employees of TCF, regardless of title, position or duties. This Policy also applies to family members, other members of a person’s household and any entities controlled by a person covered by this Policy.
This Policy establishes additional prohibitions that apply to directors as well as to certain employees who may have access to sensitive information discussed below under “Additional Restrictions Applicable to Insiders.” Employees required to adhere to these additional prohibitions (“Insiders”) will be designated by the Compliance Officer and will be notified by TCF quarterly.
If you are in possession of material, non-public information when your employment with TCF ends, you may not trade in TCF securities until that information has become public or is no longer material.
B. What Transactions are Subject to this Policy?
This Policy applies to transactions in TCF’s securities, including TCF’s common stock, TCF’s trust preferred securities, warrants, options to purchase common stock and any other type of securities that TCF may issue, including but not limited to preferred stock, convertible debentures, as well as derivative securities that are not issued by TCF, such as exchange-traded put or call options or swaps relating to TCF securities (collectively referred to in this Policy as “TCF Securities”).
This Policy also applies to material, non-public information relating to counterparties, vendors or other companies learned in the course of performing your duties with TCF. As a result, transactions in the securities of such other companies are not permitted if you are aware of any material, non-public information about such company.
C. Who is Responsible?
Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about TCF and not to engage in transactions in TCF Securities while in possession of material, non-public information. 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, as discussed below, also comply with this Policy. In all cases, the responsibility for determining whether an individual is in possession of material, non-public information rests with that individual, and any action on the part of TCF, 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. Accordingly, you should consult with your own legal counsel. You could be subject to severe legal penalties and disciplinary action by TCF for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading “Consequences of Violations.”
Anyone looking at your transactions will be doing so with the benefit of hindsight. As a practical matter, you should carefully consider how enforcement authorities and others might view a particular transaction in hindsight before you engage in that transaction. If you have any questions regarding specific transactions or this Policy in general, please contact the Compliance Officer as well as your own legal counsel.
D. How is the Policy Administered?
The General Counsel of TCF (Joseph T. Green) shall serve as the Compliance Officer for the purposes of this Policy, and in his absence, the Chief Legal Counsel – Corporate and Securities (Kirk D. Johnson) or another employee designated by the Compliance Officer shall be responsible for administration of this Policy. All determinations and interpretations by the Compliance Officer or any designee shall be final and not subject to further review.
For any questions regarding this Policy, please contact Nick Smith at (952) 745-2724, or Kirk Johnson at (952) 745-2701.
III. THE POLICY
It is the policy of TCF that no director, officer or other employee of TCF (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material, non-public information relating to TCF may, directly or indirectly through family members or other persons or entities:
- Engage in transactions in TCF Securities, except as otherwise specified in this Policy under “Transactions under TCF Plans," “Transactions Not Involving a Purchase or Sale” and "Transactions under Rule 10b5-1 Plans";
- Recommend the purchase or sale of any TCF Securities;
- Disclose material, non-public information to persons within TCF whose jobs do not require them to have that information, or outside of TCF to other persons, including, but not limited to, family, friends, business associates, investors and expert consulting firms, unless any such disclosure is made in accordance with TCF’s policies regarding the protection or authorized external disclosure of information regarding TCF; or
- Assist anyone engaged in the above activities.
Additionally, it is the policy of TCF that no director, officer or other employee of TCF (or any other person designated as subject to this Policy) who, in the course of working for TCF, learns of material, non-public information about a company with which TCF does business, including a customer or supplier of TCF, may trade in that company’s securities until the information becomes public or is no longer material.
The only exceptions to this Policy are specifically noted herein. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not excepted from this Policy. The securities laws do not recognize any mitigating circumstances, and even the appearance of an improper transaction must be avoided to preserve TCF’s reputation for adhering to the highest standards of conduct.
A. What is “Material”?
Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect TCF’s stock price, either positively or negatively, 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 is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:
- Projections of future earnings or losses, or other information regarding earnings;
- Changes in TCF’s prospects;
- Changes in TCF’s debt ratings;
- Changes to previously announced earnings guidance, or the decision to suspend earnings guidance;
- Significant regulatory developments;
- A significant cyber security event, data breach, or other large scale unauthorized release of customer information;
- A pending or proposed merger, acquisition or tender offer;
- A pending or proposed acquisition or disposition of a significant asset;
- A pending or proposed joint venture;
- A restructuring or reorganization;
- Significant transactions;
- A change in dividend policy, the declaration of a stock split or an offering of additional securities;
- Bank borrowings or other financing transactions out of the ordinary course;
- The establishment of a repurchase program for TCF Securities;
- A change in TCF’s pricing or cost structure;
- Major marketing changes;
- A change in management;
- A change in auditors or notification that the auditor’s reports may no longer be relied upon;
- Development of a significant new product, process or service;
- Pending or threatened significant litigation, or the resolution of such litigation;
- Severe liquidity problems;
- The gain or loss of a significant customer or supplier; or
- The imposition of a ban on trading in TCF Securities or the securities of another company.
The above list is not exhaustive. Many other types of information could be considered material, depending on the circumstances. If you are unsure whether certain information is “material,” you should contact the Compliance Officer for guidance.
B. What is “Non-public”?
Information that has not been disclosed to the public is generally considered to be non-public information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed broadly to the marketplace, such as through a press release or SEC filing, or placement on TCF’s website. By contrast, information would likely not be considered widely disseminated if it is available only to TCF employees.
Once information is widely disseminated, it is still necessary to afford the investing public sufficient time to absorb the information. As a general rule, information should not be considered fully absorbed by the marketplace until after the end of business on the day on which the information is released. Depending on the particular circumstances, TCF may determine that a longer or shorter period should apply to the release of specific material, non-public information.
V. SPECIFIC TRANSACTIONS
A. Transactions by Family Members and Others
This Policy applies to your family members who reside with you (including a spouse, children, children away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household and any family members who do not live in your household, but whose transactions in TCF 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 TCF Securities (collectively referred to as “Family Members”). You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in TCF Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were made by you. This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.
B. Transactions by Entities that You Influence or Control
This Policy applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were made by you.
C. Transactions under TCF Plans
This Policy does NOT apply in the case of the following transactions, except as specifically noted:
Stock Option Exercises. This Policy does not apply to the exercise of an employee stock option acquired pursuant to TCF’s plans. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.
Restricted Stock Awards. This Policy does not apply to the vesting of restricted stock, or the forfeiture of shares to pay for taxes incident to such vesting.
TCF 401K Plan (the “401K Plan”). This Policy does not apply to purchases of TCF Securities in the 401K Plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election. This Policy does apply, however, to certain elections you may make under the 401K Plan, including: (a) an election to increase the percentage of your periodic contributions that will be allocated to the TCF stock fund; (b) an election to make an intra-plan transfer of an existing account balance into or out of the TCF stock fund; and (c) any transaction that would result in the liquidation of some or all of your TCF stock fund balance.
Dividend Reinvestment Plan (“DRIP”). This Policy does not apply to purchases of TCF Securities under TCF’s DRIP resulting from your reinvestment of dividends paid on TCF Securities. This Policy does apply, however, to voluntary purchases of TCF Securities resulting from additional contributions you choose to make to the DRIP, and to your election to participate in the plan or increase your level of participation in the plan. This Policy also applies to transactions involving any TCF Securities purchased pursuant to the DRIP.
Other Similar Transactions. Any other purchase of TCF Securities from TCF or sales of TCF Securities to TCF are not subject to this Policy.
D. Transactions Not Involving a Purchase or Sale
Bona fide gifts of securities are not transactions subject to this Policy. Further, transactions in mutual funds that are invested in TCF Securities are not transactions subject to this Policy.
E. Transactions under Rule 10b5-1 Plans
Rule 10b5-1 under the Exchange Act provides a safe harbor from insider trading liability to insiders of companies that enter into Rule 10b5-1 plans with their broker. Under these plans, the broker buys or sells company securities for the insider based on certain pre-established criteria, including price, timing and the number of shares. Doing so provides the insider with an affirmative defense against insider trading liability. Employees of TCF may enter into a Rule 10b5-1 plan for transactions in TCF Securities provided the plan meets the requirements of Rule 10b5-1 and this Policy. If the plan meets the requirements of Rule 10b5-1 and this Policy, TCF Securities may be purchased or sold under the plan without regard to the insider trading restrictions described in this Policy.
TCF requires a Rule 10b5-1 plan to meet the following requirements:
1. Pre-Approval. The Rule 10b5-1 plan must meet the requirements of Rule 10b5-1 and be pre-approved in writing by the Compliance Officer prior to the adoption of the Rule 10b5-1 plan.
2. Material Non-Public Information and Blackout Periods. The Rule 10b5-1 plan must be submitted to the Compliance Officer for approval outside of a Blackout Period (as defined below) and when the insider is not in possession of material non-public information. Additionally, the Rule 10b5-1 plan must be entered into outside of a Blackout Period and when the insider is not in possession of material non-public information.
3. Term and Termination. The Rule 10b5-1 plan must have a term of at least six months and no more than two years. Once adopted, the Rule 10b5-1 plan may only be terminated early upon written approval of the Compliance Officer, and generally, unless approved by the Compliance Officer, must take place during an open trading period and in the absence of material non-public information. No one may enter into a new Rule 10b5-1 plan within three months of terminating a Rule 10b5-1 plan prior to its normal expiration date.
4. Trading Restrictions. No trades may occur under the Rule 10b5-1 plan for 30 days after it is adopted. Additionally, anyone with a Rule 10b5-1 plan may not trade TCF Securities outside of the Rule 10b5-1 plan.
5. Modifications Prohibited. Once adopted, the Rule 10b5-1 plan may not be modified or amended.
6. Multiple Plans Prohibited. No one may have more than one Rule 10b5-1 plan in effect at a time.
A transaction under a director or Section 16 officer’s Rule 10b5-1 plan must still be reported to the SEC on a Form 4 within two days of the transaction.
F. Special and Prohibited Transactions
TCF has determined that there is heightened legal risk and the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It is therefore TCF’s policy that any persons covered by this Policy may only engage in the following transactions in accordance with the terms below and then only subject to the other terms of this Policy, including the prohibition on transactions when in the possession of material non-public information:
Short Sales. Short sales of TCF 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 TCF’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve TCF’s performance. For these reasons, short sales of TCF Securities are prohibited.
Publicly-Traded Options. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer or other employee is trading based on material, non-public information and focus a director’s, officer’s or other employee’s attention on short-term performance at the expense of TCF’s long-term business objectives. Accordingly, transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy, except transactions in TARP Warrants due to their long-term focus.
Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such hedging transactions may permit a person to continue to own TCF Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the person may no longer have the same objectives as TCF’s other shareholders. Accordingly, this Policy prohibits you from engaging in hedging transactions.
Pledged Securities. Securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a foreclosure sale may occur at a time when the pledgor is aware of material, non-public information or otherwise is not permitted to trade in TCF Securities, directors, officers or other employees are strongly discouraged from pledging TCF Securities as collateral for a loan. Any person wishing to enter into such an arrangement must first submit the proposed transaction for approval by the Compliance Officer. Any request for pre-clearance of such a transaction must be submitted to the Compliance Officer at least seven (7) days prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction.
Standing and Limit Orders. Standing and limit orders create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material, non-public information. TCF therefore prohibits placing standing or limit orders on TCF Securities without prior approval by the Compliance Officer. Any request for pre-clearance of such a transaction must be submitted to the Compliance Officer at least two (2) days prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction.
VI. ADDITIONAL RESTRICTIONS APPLICABLE TO INSIDERS
TCF has established additional procedures in order to assist in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material, non-public information and to avoid the appearance of any impropriety. These additional procedures described below are applicable only to directors and those individuals designated by the Compliance Officer as Insiders, except the “Pre-Clearance Procedures” set forth below apply to all transactions described above under the captions "Margin Accounts and Pledged Securities” and “Standing and Limit Orders.”
Pre-Clearance Procedures. Directors and those persons designated by the Compliance Officer as Insiders, as well as the Family Members and Controlled Entities of such persons, may not engage in any transaction in TCF Securities without first obtaining pre-clearance of the transaction from the Compliance Officer. A written request for pre-clearance should be submitted to the Compliance Officer at least two (2) business days in advance of the proposed transaction, or such longer period set forth elsewhere in this Policy.
There are two forms, one for Section 16 officers and directors required to make Form 4 filings with the SEC (Form 4 Filers) and a separate form for all other employees (Non-Form 4 Filers). These forms are available on the Intranet. Click on the “Workplace” tab, then under Documents by Area, click on “Legal” and under Document Types, click on “Forms.” Directors may request a copy of the form by contacting Nick Smith by phone at (952) 745-2724 or by email at Nsmith4@tcfbank.com, or by contacting Kirk Johnson by phone at (952) 745-2701 or by email at email@example.com.
The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance, and may determine not to permit the transaction. If a person seeks pre-clearance and is denied permission to engage in the transaction, then he or she should refrain from initiating such transaction in TCF Securities, and should not inform any other person of the restriction.
When a request for pre-clearance is made, the requesting person should carefully consider whether he or she may be aware of any material, non-public information about TCF, and should describe fully those circumstances to the Compliance Officer on the form. They should also consider consulting their own legal counsel.
If your pre-clearance request is granted, you have seven (7) calendar days or until the next Blackout Period (defined below), whichever occurs first, to make your trade, provided that during that period you do not become aware of material non-public information about TCF. Transactions not made during the time limit will be subject to pre-clearance again.
Quarterly Trading Restrictions. Directors and those persons designated by the Compliance Officer as Insiders, as well as their Family Members or Controlled Entities, may not conduct any transactions involving TCF Securities (other than as specified by this Policy) during a “Blackout Period” beginning seven (7) business days prior to the end of each quarter (or year) and ending the day after TCF publicly releases earnings results for that quarter (or year).
Event-Specific Trading Restriction Periods. From time to time, an event may occur that is material to TCF and is known by only a few directors, officers or other employees. So long as the event remains material and non-public, the persons designated by the Compliance Officer may not trade TCF Securities. In addition, TCF’s financial results may be sufficiently material in a particular quarter (or year) that, in the judgment of the Compliance Officer, designated persons should refrain from trading in TCF Securities even sooner than the typical Blackout Period described above. In that situation, the Compliance Officer may notify these persons that they should not trade in TCF Securities, without disclosing the reason for the restriction. The existence of an event-specific trading restriction period or extension of a Blackout Period will not be announced to all TCF employees, and should not be communicated to any other person. Even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while aware of material, non-public information. Exceptions will not be granted during an event-specific trading restriction period.
Exceptions. The quarterly trading restrictions and event-driven trading restrictions do not apply to transactions under an approved Rule 10b5-1 Plan and to those transactions to which this Policy does not apply, as described above under “Transactions under TCF Plans” and “Transactions Not Involving a Purchase or Sale.”
VII. CONSEQUENCES OF VIOLATIONS
The purchase or sale of securities while aware of material, non-public information, or the disclosure of material, non-public information to others, who then trade in TCF Securities, is prohibited by certain federal and state laws. Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities. Punishment for insider trading violations is severe, and could include significant fines and imprisonment. Such penalties may include:
- Disgorgement of any profit gained or loss avoided, even if the individual planned to make the transaction in question before learning of the material, non-public information;
- A civil penalty of up to three times the profit gained or loss avoided (in addition to disgorgement);
- A criminal fine of up to $5 million; and
- A jail term of up to 20 years.
In addition, an individual’s failure to comply with this Policy may subject the individual to TCF-imposed sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of the law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career.
Revised: November 7, 2018