PURPOSE The purpose of this insider trading policy statement ( ) is two-fold: (i) to establish guidelines so that all Insiders (as defined below) of the Company comply with all applicable laws prohibiting trading in the Company s securities by persons having knowledge of Inside Information (as defined below) and (ii) to ensure that the Company itself fulfills its responsibility to comply with those laws. DEFINITIONS Company Walter Energy, Inc. and its subsidiaries. Company Personnel all employees and directors of the Company. Controlled Entities any trust, corporation or other entity controlled by Company Personnel or a Family Member of Company Personnel. Family Members any person (i) whose securities transactions are directed by such Company Personnel or (ii) who permanently resides in Company Personnel s household (whether or not related to such Company Personnel). Insiders Company Personnel and their Family Members and Controlled Entities. Inside Information While the definition of what constitutes Inside Information is necessarily dependent on the facts of each case, in general, Inside Information means information that has not been disclosed to the public and is material. Material Information is generally considered material if a reasonable investor would consider it important in deciding whether to buy, sell, or hold a security or if the information would significantly affect the market price of a security. The information may concern the Company, another company or the Company s industry and may be positive or negative. Material information does not need to relate to the Company s business, and information about the contents of a forthcoming publication in the press that is expected to affect the market price of the Company s securities could also be material. Examples of material information may include, but are not limited to: 1 monthly, quarterly or annual financial results of the Company; estimates and guidance on earnings and changes in previously released earnings results, estimates or guidance; 1 Additional examples of what may constitute material information may be found at U.S. Securities and Exchange Commission Release Nos. 33-7881; 34-43154; available at http://www.sec.gov/rules/final/33-7881.htm and Canadian Securities Administrators National 51-201 Disclosure Standards Section 4.3: Examples of Potentially Material Information; available at http://www.osc.gov.on.ca/en/securitieslaw_pol_20020712_51-201.jsp. Page 1
significant changes in the level of revenues, income or expenses; Company strategy or developments affecting the Company s technology, products or markets; negotiation, execution, or termination of significant contracts; significant changes in exposure to loss, production or reserves; significant changes in investment results; stock splits, dividend, redemption or repurchase information; major financings; significant personnel changes; significant acquisitions or dispositions of assets; significant litigation; merger negotiations, restructurings or a change in control of the Company; material changes in accounting policies; or significant developments involving proceedings with state or federal regulatory authorities. Information that something is likely to happen or even just that it may happen can be material. Company Personnel should err on the side of caution. Company Personnel should also keep in mind that certain applicable securities rules and regulations provide that the mere fact that a person is aware of the Inside Information is a bar to trading, even if such person s reasons for trading were not based on the information. Non-Public Information Non-public information is information that has not been publicly disclosed. Information is publicly disclosed if it has been widely disseminated, such as filed with the U.S. Securities and Exchange Commission or the Canadian securities regulatory authorities, published in a press release or in the newspapers and/or carried by a national television news service, and the public has had sufficient time to process and absorb it. As a general rule, it would be appropriate to refrain from trading for at least two full trading days after the initial release of material information to the public. Permanent Restricted Persons all members of Walter s Board of Directors, all of its executive officers and each such person s Family Members and Controlled Entities. Page 2
Securities Exchange Act U.S. Securities Exchange Act of 1934, as amended. Security or Securities The term security or securities includes stock (common and preferred), stock options, warrants, bonds, notes, debentures, convertible instruments, put or call options (i.e., exchange-traded options) or other similar instruments. Significant Subsidiaries as defined under the Securities Exchange Act generally means a subsidiary in which (i) the Company s investments in and advances to the subsidiary exceed 10% percent of the Company s total consolidated assets, (ii) the Company s share of the subsidiary s assets exceeds 10% percent of the Company s total consolidated assets; or (iii) the Company s equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle of the subsidiary exceeds 10% percent of the Company s consolidated income. Trade or trading means any purchase, sale or other acquisition, transfer or disposition of securities, including market option exercises, gifts or other contributions, exercises of stock options granted under the Company s stock plans, sales of stock acquired upon the exercise of options and trades made under an employee benefit plan, such as a 401(k) plan. Walter Walter Energy, Inc. SCOPE This applies to all Insiders of the Company. The Company may also determine on a case by case basis to subject to this other persons who have access to Inside Information. Company Personnel who, or whose Family Members and Controlled Entities, trade in the Company s securities while in the possession of Inside Information or Company Personnel who, or whose Family Members and Controlled Entities, provide Inside Information to others will be subject to appropriate disciplinary action, which may include dismissal. No exceptions will be made to this, even where the transaction may have been very small or the trading party may have planned to make the transaction before learning of the Inside Information. All Company Personnel are responsible for making sure that he or she and his or her Family Members and Controlled Entities comply with this. In all cases, the responsibility for determining whether an individual or entity is in possession of Inside Information rests with that individual and the individuals who control such entity. Neither this nor any action by the Company, the or any other employee or director of the Company taken pursuant to this or otherwise shall in any way constitute legal advice, result in the Company or any employee or director of the Company being responsible for any such individual s acts and omissions, or otherwise insulate any such individual from liability under applicable securities Page 3
laws. You could be subject to severe legal penalties and disciplinary action by the Company for any conduct prohibited by this or applicable securities laws. Punishment for insider trading violations can be severe, and those who buy or sell the Company s securities while in the possession of Inside Information or fail to prevent insider trading by those under their control can be held personally liable for damages totaling up to three times the profits made. Insider trading may also expose the liable party to criminal penalties, including imprisonment. POLICY STATEMENT 1. U.S. federal and state securities laws, and similar laws in other jurisdictions where the Company conducts business ( applicable securities laws ), prohibit certain persons, deemed to be insiders, from trading in a company s securities when those persons are in possession of Inside Information. For purposes of those laws, insiders generally are persons who possess, or are deemed to possess, or have access, or are deemed to have access, to Inside Information. 2. No Insider may buy or sell the Company s securities at any time when the Insider has Inside Information concerning the Company. No Insider may buy or sell securities of another company at any time when the Insider has Inside Information about that company when that information was obtained as a result of the Insider s employment or relationship to the Company. 3. All Insiders are prohibited from trading in financial instruments or engaging in hedging transactions that are designed to hedge or offset the risks of price fluctuations in the value of Walter Energy common stock (including but not limited to collars or forward sale contracts, puts, calls or other exchange traded options, or short sales). 4. No Insider may disclose ( tip ) Inside Information to any other person (including relatives, friends and business associates) for any reason, or assist a third party s trading activities or make buy or sell recommendations to a third party based upon Inside Information. Insiders who reveal Inside Information to a third party may be liable as tippers and may face civil or criminal penalties. In addition, Insiders should take care before trading on the recommendation of others to ensure that the recommendation is not the result of an illegal tip. 5. Because of access to Inside Information on a regular basis, all (i) (ii) (iii) (iv) directors and officers of Walter; Walter senior accounting, finance, legal and investor relations personnel; Presidents and controllers at any of Walter s Significant Subsidiaries; persons referred to in Section 6; and Page 4
(v) Family Members and Controlled Entities of any of the persons identified in clauses (i) through (iv) (such persons and entities identified in clauses (i) though (v), ( Designated Personnel ) are hereby prohibited from effecting transactions in the Company s securities (excluding exercising an option, but including selling the option or the underlying stock) during Blackout Periods. Unless otherwise specified by the Company in a written notice to Company Personnel, Blackout Periods shall be the period commencing on and including the tenth calendar day of the last month of each fiscal quarter and expiring on and including the second trading day after the day on which the Company announces its quarterly or annual earnings. Even if a Blackout Period is not in effect (a Window Period ), the Company may impose additional or different Blackout Periods as it deems necessary. If any Designated Personnel comes into possession of Inside Information, such Designated Personnel may not effect a transaction in the Company s securities until at least two trading days after the public disclosure of such Inside Information, even if during a Window Period. 6. In order to facilitate compliance with certain securities regulations, Permanent Restricted Persons must always obtain the advance approval of the (in accordance with Section 7) before effecting transactions in the Company s securities (including any exercise of an option or warrant (whether cashless or otherwise) to acquire Company securities, or contributions to trusts, gifts, loans or pledges of Company securities), whether the transaction is for the individual s own account, one over which he or she exercises control or one in which he or she has a beneficial interest. 7. From time to time, the Company may notify persons other than Permanent Restricted Persons that they will be subject (indefinitely or for any limited period of time specified by the Company) to the pre-clearance requirements set forth in Section 7 ( Other Restricted Persons ). 8. Permanent Restricted Persons and Other Restricted Persons should request pre-clearance from the in advance of the proposed transaction (at least two business days in advance in the case of using shares as collateral for a permitted loan). The information set forth on Exhibit B must be conveyed to the as set forth therein. Approval for transactions and pledges of the Company s securities will generally be granted only during a Window Period (described in Section 4 above), and the transaction may only be performed during such period in which the approval was granted and in any event within three business days from the date of approval. Permanent Restricted Persons must comply with these pre-clearance requirements for six months after the termination of their status as a Permanent Restricted Person. 9. Other Company employees, other than Designated Personnel, may, from time to time, come into possession of Inside Information. Such temporary insiders may not effect a transaction in the Company s securities from the time they obtain the Inside Information until two trading days after the public disclosure of such Inside Information. Page 5
10. Knowledge of Inside Information should be limited to Company Personnel who need to know such information in order to perform their jobs, and any Company Personnel who has received Inside Information must not disclose such information to anyone outside of the Company. When Inside Information is provided to a Company Personnel, he or she should be informed by the person providing such information that it is Inside Information and that he or she is restricted from trading in the Company s securities until two trading days after the public disclosure of such information. Company Personnel should refrain from discussing Inside Information in the presence of other Company Personnel who do not need to know such Inside Information and in any public area, such as elevators, hallways, airplanes and airports. If the Company becomes aware that Inside Information has been leaked widely within the Company, the Company may prohibit all trading by employees in the Company s securities for so long as it deems necessary. 11. In order to avoid selective disclosure of Inside Information to unauthorized third parties, Company Personnel should refer any requests for financial information or financial projections or forecasts to the Company s Chief Financial Officer. This includes requests by analysts or others to corroborate their financial projections for the Company. Other inquiries from the investing community or the press should be referred to Authorized Spokespersons of the Company as designated in the Company s Public Disclosure and Media Inquiries policy. 12. Any Insider who has concerns about whether he or she is in possession of information which falls within the definition of Inside Information should contact the Company s before trading in the Company s securities. This is aimed to ensure that Insiders unaware of a particular piece of information do not give the appearance of improperly trading in the Company s securities and to minimize the risk of civil and criminal liability under applicable securities laws. OTHER SECURITIES MATTERS Officers and directors will be liable for short-swing profits from purchases and sales of such securities under Section 16(b) of the Securities Exchange Act, excluding exercising an option, but including selling the option or the underlying stock. Section 16(b) of the Exchange Act provides that any such person who makes both a purchase and sale or a sale and purchase of a company s securities within a period of six months must pay to the company the excess of the sale price over the purchase price. If Company Personnel hold restricted securities, i.e., securities that cannot be resold by that Company Personnel unless registered under the Securities Act of 1933, sold pursuant to Rule 144, or disposed of pursuant to another exemption from the registration requirements of the Securities Act, he or she should consult with the prior to effecting purchases or sales of the Company s securities. CERTIFICATION All Company Personnel subject to this must certify their understanding of, and intent to comply with, this by completing the Certification form appended hereto as Exhibit A. Page 6
QUESTIONS AND CONTACT Questions about the scope or application of this should be directed to the Company s at generalcounsel@walterenergy.com. VIOLATIONS OF THE POLICY If you are aware of any violations or possible violations of this or applicable securities trading laws, rules or regulations, please report it through the special ethics hotline as follows: Toll free: (877) 899-0756 (UK residents will be subject to usual charge rates) Fax: (770) 409-5008 E-mail: hotline@walterenergy.com Web: https://www.reportlineweb.com/walterenergy Page 7
Exhibit A CERTIFICATION I certify that: 1. I have read and understand the Company s (the ). I understand that the is available to answer any questions I have about the. 2. I have complied with this since the latest of (a) the date of my last certification and (b) the first date on which I became an employee or director of the Company. 3. I will continue to comply with the for as long as I am subject to the. Date Employee Signature Printed Name Employing Company
Exhibit B INFORMATION REGARDING WALTER ENERGY, INC. SECURITIES TO BE TRADED (Information previously provided and unchanged need not be completed; new information can be provided to the orally or via email; will complete the form.) Type of Security to be Traded [check all applicable boxes] Common stock Preferred stock Restricted stock Stock Option Other type of security (please describe) Number of securities to be sold Proposed Date of Transaction Type of Transaction Stock option exercise Exercise Price $ /share Exercise Price paid as follows: Broker s cashless exchange cash pledge other Withholding tax paid as follows: Broker s cashless exchange cash other Purchase Sale Gift Broker Contact Information Company Name Contact Name Telephone Fax Account Number Social Security or other Tax Identification Number Status (check all applicable boxes) Executive Officer Board Member Other (position, title and/or association with the Company)
Filing Information (check all applicable boxes and complete blanks) Date of filing of last Form 3 or 4 Is a Form 144 Necessary? Date of filing of last Form 144 By completing this form or providing the information to the orally or via email, I hereby confirm that I am not currently in possession of any Inside Information (as defined in the Walter Energy, Inc. ) and that the information I have provided is true and correct. Page 10