This Code of Business Conduct and Ethics (this “Code”) contains the policies and guidance that relate to the legal and ethical standards of conduct of employees, officers, directors and agents (including employees, officers, directors, and agents of Quintana Minerals Corporation and Western Pocahontas Properties Limited Partnership that perform services for Natural Resource Partners L.P., together, “Representatives”) of GP Natural Resource Partners LLC (together with its controlled subsidiaries (specifically including but not limited to Natural Resource Partners L.P.) and affiliated entities, the “Company”). This Code applies to all full-time and part-time Representatives and to any temporary, contract or seasonal workers and sets forth the Company’s expectations regarding the conduct of the Company’s Representatives while acting on the Company’s behalf and also provides guidelines regarding administration of the Code. The Company strives to apply high ethical, moral and legal principles in every aspect of business conduct.
The Company requires that all laws applicable to it or the conduct of its business, regardless of where located, be observed. If a law conflicts with a policy in this Code, the law must be followed; however, if a local custom or policy conflicts with this Code, this Code must be followed. If in doubt about how to deal with conflicts among this Code and local laws, custom or practice, the General Counsel of the Company should be contacted for guidance. This Code and all laws and regulations applicable to the Company must be strictly followed. Adherence to the Code and all other policies and procedures adopted by the Company is a condition of employment. The exercise of personal discretion or judgment in this area is not acceptable. Each Representative has the personal responsibility to adhere to these standards and apply them in good faith and with reasonable business judgment. Any Representative who does not adhere to these standards is acting outside the scope of employment or agency.
Along with legal compliance, all Representatives should observe high standards of business and personal ethics when performing assigned duties. This requires using honesty and integrity when dealing with other Company Representatives, the public, the business community, unitholders, customers, suppliers and governmental and regulatory authorities.
The Company considers its reputation for fairness and integrity one of its most valuable assets. The Company seeks stable and profitable business relationships, based on fairness and integrity with its Representatives, customers, business associates, suppliers and all others whose activities are associated with it. Representatives are expected to use good judgment in all dealings with individuals, business associates, suppliers or firms who seek to become a supplier of goods or services to the Company. To that end, Representatives must conduct their business affairs in a manner to ensure the Company's unquestionable integrity.
Waivers of the Code of Business Conduct and Ethics
Any waiver of this Code for executive officers or directors may be made only by the Board of Directors and will be promptly disclosed as required by law and stock exchange regulation.
Compliance with Laws, Rules and Regulations
Obeying the law both in letter and in spirit is the foundation upon which the Company’s ethical standards are built. Although Representatives of the Company are not expected to know every law that is applicable to the Company, it is important that Representatives know enough to ask questions and seek advice from supervisors, managers, lawyers or other appropriate personnel if they have any doubt regarding the legality of an action taken, or not taken, on behalf of the Company. For this reason, the Company will periodically organize information and training sessions to promote compliance with laws, rules and regulations and all invited Representatives are expected to attend these information and training sessions.
Purchasing or selling, whether directly or indirectly, securities of the Company while in possession of material non-public information is both unethical and illegal. Representatives are also prohibited by law from disclosing material non-public information to others who might use such information to directly or indirectly place trades in the Company’s securities. Representatives shall also not recommend the purchase or sale of the Company’s securities. All Representatives shall comply with the Company’s Policy on Insider Trading. Designated Representatives shall comply with the Company’s Policy Regarding Special Trading Procedures.
Pursuant to Section 16 of the Rules and Regulations of the Securities Exchange Act of 1934, most purchases or sales of securities of the Company by directors, executive officers, and 10% unitholders must be disclosed within two business days of the transaction. Representatives who are subject to these reporting requirements must comply with the Company’s Policy Regarding Special Trading Procedures.
Both the federal government and various states have enacted Antitrust laws to help preserve the free enterprise system by promoting healthy competition. These laws prohibit anti-competitive agreements among competitors and other unfair trade practices that reduce competition or unreasonably restrain trade. The Company will comply in all respects with both the letter and spirit of the antitrust laws.
Representatives should not participate in any discussion or activity that would serve to undermine the competitive nature of the industry or to artificially establish product prices independent of the market. Activities of trade associations and other joint enterprises with competitors can raise antitrust issues. Representatives must review with the General Counsel of the Company any proposed discussions or activities involving a competitor that may result in the disclosure or exchange of pricing or other sensitive or proprietary information before engaging in those discussions or activities.
Representatives shall maintain the confidentiality of information entrusted to them by the Company or its customers, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information that if disclosed might be of use to competitors, or harmful to the Company or its customers. Confidential information also includes all non-public information that is learned about the Company’s suppliers, customers, competitors and potential acquisition targets that is not in the public domain. The obligation to preserve confidential information shall continue even after employment or agency with the Company ends. Any documents, papers, records, or other tangible items that contain trade secrets or proprietary information are the property of the Company.
Conflicts of Interest
A conflict of interest occurs when an individual’s private interest (whether such interest is personal, social, financial or political) interferes in any way with the interests of the Company as a whole. Even the appearance of a conflict can damage a Representative’s reputation and that of the Company. This situation can arise when a Representative takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest also arise when a Representative or a member of his or her family or household, receives improper personal benefits as a result of his or her position in the Company.
It is almost always a conflict of interest for a Representative to work simultaneously for a competitor, customer or supplier. No Representative is permitted to work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with the Company’s customers, suppliers or competitors, except on the Company’s behalf. Representatives are expected to avoid activities that might interfere with the proper and efficient discharge of their duties or which might be inconsistent with their obligations of loyalty to the Company.
Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board of Directors and as provided in the Omnibus Agreement, the Restricted Business Contribution Agreement, and pursuant to Section 7.9 of the Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P. Any Representative who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel or consult the procedures described in the Compliance Procedures Section of this Code.
Except under guidelines approved by the Board of Directors and as provided in the Omnibus Agreement, the Restricted Business Contribution Agreement and pursuant to Section 7.9 of the Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., employees are prohibited from (a) taking for themselves personally opportunities that are discovered through the use of Company property, information, or position; (b) using Company property, information, or position for personal gain; and (c) competing with the Company. Representatives of the Company owe a duty to the Company to advance its legitimate interest when the opportunity to do so arises.
Representatives should endeavor to deal fairly with the Company’s customers, suppliers, competitors and employees. No Representative should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.Representatives should never pay or receive kickbacks for obtaining business for or from the Company.
The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers or suppliers. However, paying or receiving money, gifts, services, loans or other favors that may influence business decisions or compromise independent judgment is prohibited. No gift or entertainment should ever be offered, given, provided or accepted by any Representative, family member of a Representative unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations. Supervisors, managers or the General Counsel of the Company can advise on the appropriateness of any gifts or proposed gifts.
In addition, it is not unusual within our industry to organize or be invited to attend social and sporting events that may involve significant travel expense. Infrequent participation in these activities may be acceptable so long as participation does not compromise the exercise of independent business judgment by any party participating and is approved in advance by your supervisor or manager.
If a Representative is requested to make or accept a gift or payment that is prohibited or may appear to be prohibited under this Code, the Representative should consult the procedures described in the Compliance Procedures Section of this Code, or disclose and submit the request and all the surrounding circumstances immediately to the appropriate supervisor or manager. If the appropriateness of any such request is uncertain, the General Counsel of the Company should be consulted for guidance.
Protection and Proper Use of Company Assets
All Representatives should protect the Company’s assets (which include Company funds, property and time) and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. All Company assets should be used for legitimate business purposes. Company assets and equipment should only be used for Company business, although incidental personal use of assets may be permitted in some circumstances.
Company funds include both cash and its equivalents, such as currency, checks, postage, charge cards, bills, vouchers and reimbursement claims. Representatives should insure that all claims, vouchers, bills and invoices are accurate and proper.
Company property is used to conduct Company business. Representatives are expected to behave responsibly and exercise good judgment when using Company property. Occasional personal use of office supplies and office equipment may be permissible where such use is of limited duration and frequency and does not consume a significant amount of resources. Any personal use of Company property on premises other than Company premises must be approved in advance by the Representative’s supervisor or manager. A Representative should consult with an immediate supervisor or manager if there is any question about the reasonableness of Representative’s intended use of Company assets.
Company time means the time Representatives are assigned to work or are traveling on Company business. This also means that when Representatives are assigned to work, Representatives will not allow outside interests to interfere with Representative’s job responsibilities. All Representatives who are required to report their work hours must do so truthfully and accurately.
All Company books, records, accounts, funds and assets must be maintained to reflect fairly and accurately the underlying transactions and disposition of Company business in reasonable detail. No accounting entries will be recorded that intentionally conceal, disguise or misrepresent the true nature of any transaction involving the Company. The Company will maintain a system of internal accounting controls sufficient to reinforce compliance with this Code and provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements and to maintain accountability of assets.
In this respect, the following guidelines must be followed:
- No undisclosed, unrecorded, or "off book" funds or assets should be established for any purpose;
- No false or fictitious invoices should be paid or created;
- No false or artificial entries should be made or misleading reports issued; and
- Assets and liabilities of the Company shall be recognized and reported on the Company’s financial statements in accordance with the Company's standard practices and GAAP.
If a Representative believes that the Company's books and records are not being maintained in accordance with these requirements, the Representative should report the matter directly to their supervisor, manager or the General Counsel of the Company.
Company Information Systems
Every Representative must do everything possible to protect and maintain the security of the Company’s communications networks. Each Representative must adhere to all policies governing the security of computer passwords and pass codes. Downloading or installing software from unsecured sources can subject the Company’s computer systems to threats from computer viruses. The knowing introduction of any viruses into the network via the Internet or through the use of dial-in access or diskettes obtained from non-virus, protected areas is expressly prohibited.
Representatives will use only computer software according to applicable government laws and licensing requirements. Representatives will not make unauthorized copies of legally protected software. When downloading material from the Internet, be aware of and respect all copyright and licensing agreements. Although Representatives may download or print material prepared by the U.S. Government or materials that have been dedicated to the public, each Representative should consult with the General Counsel of the Company before downloading or printing any material protected by copyright.
Representatives should use Company information systems, including e-mail and the Internet, primarily for business purposes. Because e-mail and voice mail are business communication tools, all such messages should be businesslike and professional in tone and content. Be aware that every outgoing communication contains a Company signature and can be read by millions of people, including the Company’s customers, business associates and competitors.
Use of Company e-mail and the Internet to download, transmit or receive sexually explicit or otherwise offensive material is prohibited. All documents, including electronic communications and other contents on Company-owned computer are the Company's property, and as such are reviewed from time to time. If the Company or its systems personnel discovers possible evidence of illegal activity or activity that violates Company policies, the Company may take appropriate disciplinary action, up to and including discharge and/or disclosure of evidence to law enforcement officials or other third parties. Also be aware that in response to a lawful subpoena or other request for documents the Company may be required to hand over the computer and any information on it.
All Representatives, regardless of position, shall do their best to work together to meet the following objectives:
- Respect each employee, worker and representative of customers, suppliers and contractors as an individual, showing courtesy and consideration and fostering personal dignity. Members of the management team shall use good judgment and exercise appropriate use of their influence and authority in their interactions with employees, customers, business associates, suppliers, contractors and partners of the Company;
- Make a commitment to and demonstrate equal treatment of all employees, workers, customers, business associates, suppliers and contractors of the Company without regard to race, color, gender, religion, age, national origin, citizenship status, military service or reserve or veteran status, sexual orientation or disability;
- Provide a workplace free of harassment of any kind, including on the basis of race, color, gender, religion, age, national origin, citizenship status, military service or reserve or veteran status, sexual orientation or disability;
- Representatives who are members of management should keep employees generally informed of the policies, plans and progress of the Company through regular communications;
- Provide and maintain a safe, healthy and orderly workplace; and
- Assure uniformly fair compensation and benefit practices that will attract, reward and retain quality employees.
The Company values the diversity of its Representatives and is committed to providing an equal opportunity in all aspects of employment to all Representatives without regard to race, sex, national origin or religion. Representatives should use reasonable efforts to seek business partners for the Company that do not discriminate in hiring or in their employment practices, and who make decisions about hiring, salary, benefits, training opportunities, work assignments, advancement, discipline, termination and retirement solely on the basis of a person’s ability to do the job.
The Company will not tolerate harassment of any nature on the basis of sex, race, color, religion, national origin, age or disability. All such harassment, whether it occurs in the workplace or at outside work-sponsored activities, is strictly prohibited. Jokes, slurs, threats, coercion or intimidation based upon sex, race, color, national origin, age or disability are prohibited.
Freedom of Association
The Company recognizes and respects the right of Representatives to exercise their lawful rights of free association, including joining or not joining any association. The Company expects its business partners to also adhere to these principles.
The Company will not condone any type of harassment, abuse or punishment, whether corporal, mental or physical, of a Representative by another Representative or any partner, customer, business associate or supplier of the Company.
The Company is committed to providing a safe and secure workplace. Any violence, threat of violence, intimidation, harassment or other such directed toward or against any Representative or other individual in the workplace is strictly prohibited and will not be tolerated by the Company.
The Company prohibits the possession of firearms or any other weapons while on Company premises or when engaged in Company business. Exceptions may be made to this policy when written authorization is obtained from management for hunting purposes.
In keeping with this commitment, the Company may conduct a full background investigation on each Representative prior to actual employment. Representatives and other persons on Company premises may be subject, in certain approved circumstances, to inspection of their personal property (including, but not limited to, briefcases, desks, parcels, baggage and lockers), computers and automobiles.
It is imperative that each Representative while working be able to think clearly and act intelligently and rationally. Being under the influence of drugs and alcohol, or improperly using medication, results in poor job performance and can compromise the safety and well-being of the individual Representative and fellow Representatives.
Representatives will not use, sell, purchase or possess any illegal drug while on Company premises or conducting Company business, nor will Representatives abuse alcohol or legal or doctor-prescribed drugs. Representatives shall obey and abide by all federal, state and local laws regulating the use of alcohol while operating or riding in a motor vehicle.
Governmental Affairs and Political Contributions
The Company’s official policy concerning all governmental, political, and public matters in which the Company has an interest will be decided and announced by, or at least with prior approval from, the Board of Directors. No alteration of or deviation from such official policy will be made without the prior approval of the Board of Directors.
Under no circumstances shall any activity be authorized or undertaken by a Representative that violates the provisions of the Foreign Corrupt Practices Act, federal and state election laws, bribery, or other applicable domestic or foreign laws. Generally, the U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.
In addition, the U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel. The promise, offer or delivery to an official or employee of the U.S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy, but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules. To determine whether a gift or gratuity to be made on behalf of the Company complies with applicable laws or this Code, Representatives should seek guidance from the General Counsel of the Company.
To establish restrictions with regard to corporate participation in the political system as imposed by law, the following guidelines will be followed:
- No funds, assets, or services of the Company will be used for political contributions, directly or indirectly, unless allowed by applicable foreign and U.S. law and approved in advance by the Board of Directors.
- Company contributions to support or oppose public referenda or similar ballot issues are only permitted, with advance approval of the Board of Directors.
- Representatives, if eligible under applicable foreign and U.S. law, may make political contributions through legally established Company sponsored and approved political support funds. Any such personal contribution is not a deductible expense for federal or other applicable income tax purposes and is not eligible for reimbursement by the Company as a business expense. Political action committees are permitted under applicable law.
Of special concern to some Representatives is purchasing food and refreshments for federal and state public officials during the course of a normal business luncheon, dinner or other meeting. As a general rule, regulations permit U.S. government officials to accept food and refreshments of nominal value on infrequent occasions in the ordinary course of a luncheon, dinner or other meeting, or on an inspection tour where a Representative is properly in attendance.
The Company encourages political activity and participation in electoral politics by Representatives where appropriate. However, such activity must occur strictly in an individual and private capacity and not on behalf of the Company. Representatives may not conduct personal political activity on Company time or use Company property or equipment for this purpose. Furthermore, no Representative may ever force, direct or in any way urge another employee to make a political contribution.
Representatives can contribute to a political action committee but any contribution must be voluntary. Participation or nonparticipation will have no effect on a Representative's employment, promotion or compensation. Things that can be considered political contributions include: purchasing tickets to political events, furnishing Company goods or services, loan of Company personnel during working hours or payment for advertisements and other campaign expenses. Such political contributions will not be reimbursed by the Company and should never be submitted on an expense report.
The Company is committed to conducting its business in compliance with all applicable environmental laws and regulations in a manner that has the highest regard for the environment and safety and well-being of Representatives and the general public. Therefore, the Company expects all Representatives to do their utmost to abide by the letter and spirit of these laws and regulations.
Reporting any Illegal or Unethical Behavior
The Company proactively promotes ethical behavior. Representatives are encouraged and obligated to report violations of laws, rules, regulations, or this Code to appropriate personnel. To encourage Representatives to report such violations, the Company will not allow retaliation for reports of misconduct made in good faith by Representatives. Representatives are expected to cooperate in internal investigations of misconduct.
A Representative should speak up if such Representative believes that any of Representative’s coworkers risk violating any laws, regulations or Company policies, or if Representative is placed in an uncomfortable situation, Representative is expected to raise any concern with Representative’s supervisor or manager. Alternatively, Representative may raise concerns with other local management personnel or may contact the Company's General Counsel. Legal questions, and any questions relating to interpretation or application of the Code or policies, should be directed to the General Counsel of the Company.
All information provided will be maintained in the strictest confidence; however the Company may be required by law to reveal the Representative’s identity or it may be impossible to keep the Representative’s identity confidential.
Any violation of any law, regulation or Company policy can result in disciplinary action or termination. In addition, a Representative may face disciplinary action, including termination, if such Representative:
- Fails to report a violation of law, regulation or Company policy.
- Fails to cooperate in a Company investigation of possible violations.
- Retaliates against another employee for reporting a concern or violation.
- Fails to effectively monitor the actions of subordinates.
Representatives must work together to ensure prompt and consistent action against violations of this Code. However, one may encounter a situation in which it is difficult to determine how to proceed, while also complying with this Code. Since not every situation that will arise can be anticipated, it is important to have a way to approach a new question or problem. When considering these situations, Representatives should:
- Make sure to have all the facts. In order to reach the right solutions, all relevant information must be known.
- Ask what he or she specifically is being asked to do and whether it seems unethical or improper. This will enable Representatives to focus on the specific question, and the alternatives he or she has. If something seems unethical or improper, it probably is.
- Understand that person’s individual responsibility and role. In most situations, there is shared responsibility. Are other colleagues informed? It may help to get others involved and discuss the problem.
- Discuss the problem with a supervisor or manager. This is the basic guidance for all situations. In many cases, supervisors or managers will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Representatives should remember that it is the responsibility of supervisors and managers to help solve problems and ensure that the Company complies with this Code.
- Seek help from Company resources. In the rare case where it may not be appropriate to discuss an issue with a supervisor or manager, or where a supervisor or manager is not available to answer a question, Representatives should discuss it locally with the CEO or the President. If that also is not appropriate or if a satisfactory resolution is not obtained; call the Company’s General Counsel or send concerns to: email@example.com.
- Report ethical violations in confidence and without fear of retaliation. If the situation so requires, a Representative’s anonymity will be protected. The Company does not permit retaliation of any kind against Representatives for good faith reports of ethical violations.
- Always ask first, act later: When unsure of what to do in any situation, Representatives should seek guidance and ask questions before the action in question is taken.
Media and Shareholder Inquiries
Any Representative, other than the Chief Executive Officer, the President, the Chief Financial Officer, Vice President and General Counsel or the Vice President Investor Relations receiving calls from the press, investment analysts, stockbrokers, shareholders or others looking for information about the Company or one of the Company's shareholders, customers, suppliers or other persons with whom the Company has contractual relationships or is negotiating a transaction, should politely decline to comment or to answer, and instead direct the call to the Company's Vice-President of Investor Relations, at (713) 751-7555.
Insider Trading Policy
GP NATURAL RESOURCE PARTNERS LLC POLICY ON INSIDER TRADING
THIS POLICY WAS ADOPTED BY THE BOARD OF DIRECTORS OF GP NATURAL RESOURCE PARTNERS LLC ON JANUARY 21, 2003.
This policy should be read carefully by all directors, officers and consultants of GP Natural Resource Partners LLC (the “Company”), by such employees of Quintana Minerals Corporation, Western Pocahontas Properties Limited Partnership and their affiliates that provide services to the Company or Natural Resource Partners L.P. (“NRP”), as well as by other individuals to whom this policy is delivered. All are encouraged to ask questions and seek any follow-up information that they may require about this Policy. Any questions should be directed to the persons listed below.
Vice President and General Counsel
GP Natural Resource Partners LLC
601 Jefferson, Suite 3600
Houston, TX 77002
In the absence of the Vice President and General Counsel:
Vice President – Investor Relations
GP Natural Resource Partners LLC
601 Jefferson Street, Suite 3600
Houston, TX 77002
The Company has adopted this policy on Insider Trading to apply to each consultant, director and officer of the Company, to such employees of Quintana Minerals Corporation, Western Pocahontas Properties Limited Partnership and their affiliates that provide services to the Company or NRP, as well as to other individuals to whom this policy is delivered (collectively, the “Insiders”). The Company reserves the right to amend or rescind this policy or any portion of it at any time and to adopt different policies and procedures at any time. This policy must be strictly followed.
It is generally illegal for any person, either personally or on behalf of others, to trade in securities on the basis of “Inside Information.” Inside Information is generally defined as any non-public information about an entity that may be considered material to an investor in making a decision regarding the purchase, holding or sale of securities of that entity. For purposes of this policy, Inside Information includes all material, non-public information about NRP, the Company, or any other entity, learned as a result of the Insider's relationship with the Company or NRP. Information is "non-public" until it is widely disseminated to the public (generally through a news release by the Partnership to one or more national wire services). Information is "material" if there is a substantial likelihood that an investor would reasonably consider it important in arriving at a decision to buy, sell or hold securities. It is also generally illegal to communicate (or “tip”) material, nonpublic information to others who may trade in securities on the basis of that information. These illegal activities are commonly referred to as “insider trading.”
Recent amendments of the federal securities laws have dramatically increased the severity of the penalties for illegal trading or tipping and have greatly enhanced the enforcement powers of the Securities and Exchange Commission and the Department of Justice to prosecute such crimes. Potential penalties for insider trading violations include administrative sanctions, damage awards to private plaintiffs, civil fines equal to the greater of $1,000,000 or three times the profits resulting from illegal trading or tipping, as well as criminal fines of up to $1,000,000 and a maximum of ten years in jail.
The Company’s policy prohibits all Insiders who, by virtue of their relationship with the Company or NRP, have access to Inside Information about the Company, its affiliates (including NRP), or any other publicly traded entity, from (i) buying or selling securities of NRP or such other entity while in possession of such information or (ii) passing on such information, directly or indirectly, to others (“tipping”).
Scope of The Policy
Persons Covered by This Policy. This policy shall be strictly adhered to by all Insiders and all members of their immediate families and personal households. All Insiders are responsible for the compliance with this policy by members of their immediate families and personal households.
Transactions Covered by This Policy. This policy applies to all transactions in the securities of NRP and other publicly traded entities, with the exception of the acquisition of securities under Company-sponsored plans such as the Long-Term Incentive Plan. The trading restrictions of this policy do apply, however, to all sales of securities acquired under such plans.
Purpose of the Policy
This policy is implemented (1) to make all Insiders aware of what constitutes Inside Information and the severe consequences that may result from the illegal trading on or tipping of such information, and (2) to protect the Company and its affiliates against legal liability and to preserve the reputation of the Company and its Insiders for integrity and ethical conduct by setting forth procedures to prevent the illegal use of Inside Information.
1. Tipping is Prohibited. All Inside Information is to be held in the strictest confidence and not disclosed to anyone outside the Company, unless and until the information has been properly disseminated to the public. Unauthorized disclosure of any Inside Information learned as a result of an Insider’s relationship to the Company or NRP is strictly prohibited. Inside Information is often inadvertently disclosed or overheard in casual, social conversations. Care must be taken to avoid such inadvertent disclosures. This prohibition against tipping includes Inside Information about a company, other than the Company or NRP, learned by an Insider as a result of his relationship with the Company or NRP.
2. Inquiries by Stock Analysts, Investors and the Media. Unless expressly authorized by the Chief Executive Officer, the only persons authorized to communicate with stock analysts, NRP investors or potential investors and members of the media are the Company’s Chief Executive Officer, President, Chief Financial Officer, Vice President – Investor Relations, and General Counsel. All inquiries from stock analysts, NRP investors or potential investors and members of the media, and any inquiry regarding rumors, price movement or activity in the common units of NRP, should immediately be referred to one of the persons designated above.
3. Restrictions on Trading in Securities and Other Entities. If an Insider obtains Inside Information concerning another entity as a result of his relationship with the Company or NRP, such Insider may not trade in the securities of such other entity until at least the third business day after such entity has made a formal public disclosure of such information. (An example of information of this nature would be knowledge of an imminent acquisition of coal properties by such other entity).
Prohibition on Short Sales, Puts, Calls, and Options
All Insiders and members of their immediate families and personal households are prohibited from making any short sales of NRP’s securities. Also, no such person may buy or sell puts, calls or options in respect of the NRP’s securities at any time without receiving approval from the Company’s Vice President and General Counsel.
Short sales are sales of securities that the seller does not own at the time of the sale or, if owned, that will not be delivered within 20 days of the sale. One usually sells short when one thinks the market is going to decline substantially or the stock will otherwise drop in value. If the stock falls in price as expected, the person selling short can then buy the stock at a lower price for delivery at the earlier sale price (this is called “covering the short”) and pocket the difference in price as profit. In addition to the fact that it is illegal for directors and officers to sell their company’s securities short, the Company believes that it is inappropriate for its Insiders to bet against the securities of NRP or any of its affiliates in this way. Puts, calls and options for NRP units (other than options granted pursuant to employee benefit plans) also afford the opportunity to profit from a market view that is adverse to NRP and its affiliates, and they carry a high risk of inadvertent securities law violations. All such transactions are prohibited without receiving the approval of the Company’s Vice President and General Counsel.
The Company may impose sanctions for failure to comply with the provisions of this policy. Such sanctions may include suspension without pay and dismissal without cause.
Special Trading Procedures
Policy Regarding Special Trading Procedures
THIS POLICY WAS ADOPTED BY THE BOARD OF DIRECTORS OF GP NATURAL RESOURCE PARTNERS LLC ON JANUARY 21, 2003.
This policy applies to all directors and officers of GP Natural Resource Partners LLC (the “Company”), as well as other individuals to whom this policy is delivered. Certain provisions of this policy apply only to directors and to officers of the Company who are subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended (the “Pre-Clearance Group”). The policy should be read carefully, and any questions should be directed to the persons listed below.
Vice President - General Counsel
GP Natural Resource Partners LLC
601 Jefferson Street, Suite 3600
Houston, TX 77002
In the absence of the Vice President - General Counsel:
Vice President – Investor Relations
GP Natural Resource Partners LLC
601 Jefferson Street, Suite 3600
Houston, TX 77002
The Company has adopted a Policy on Insider Trading that applies to each director, officer and consultant of the Company and to such employees of Quintana Minerals Corporation, Western Pocahontas Properties Limited Partnership and their affiliates that provide services to Natural Resource Partners L.P. (“NRP”) or the Company (collectively, the “Insiders”). A copy of that Policy on Insider Trading has been distributed or made available to all Insiders and is incorporated herein by reference. This Policy Regarding Special Trading Procedures describes additional special trading restrictions that apply to all directors, officers and, with respect to the blackout period provisions, other individuals to whom this policy is delivered. All directors, officers and designated persons must comply strictly with this policy as well as comply with the Company’s Policy on Insider Trading.
There are times when the Company may be aware of a material, non-public development concerning the Company or one of its affiliates, including NRP. If you trade in securities of NRP before the development is either disclosed to the public or resolved, you may expose yourself and the Company to a charge of insider trading that could be costly and difficult to defend. This can occur even though you may not know of the development or its details. In addition, the Company and NRP could receive negative publicity if you trade during such development.
1. Provisions Applicable To Pre-Clearance Group (Section 16 Reporting Persons)
A. Pre-Clearance. All members of the Pre-Clearance Group and members of their immediate families and personal households may enter into transactions involving common units of NRP only after pre-clearing their intent to trade with the Vice President - General Counsel. Clearance by the Vice President - General Counsel will not relieve the director or officer of the obligation to otherwise comply with the Company’s policy or the securities law relating to insider trading.
If you intend to engage in a trade, you must receive from the Vice President – General Counsel a signed Trading Authorization Request, a form of which is attached as Exhibit A to this policy. The Vice President – General Counsel may refuse to permit any transaction if he determines that the transaction could give rise to a charge of insider trading.
After you receive permission to engage in a transaction, you must complete your transaction within five business days (unless otherwise indicated on the Trading Authorization Request) or make a new request for clearance.
The exercise of an employee option to purchase units of NRP for cash is not subject to these pre-clearance procedures. Nevertheless, the units so acquired may not be sold until after authorization from the Vice President – General Counsel has been received, and after all other requirements of this policy have been satisfied.
B. Post-Trading Reporting. All members of the Pre-Clearance Group are required to report to the Vice President – General Counsel any transaction in NRP’s securities undertaken by them or members of their immediate families and personal household not later than the end of the business day on which the transaction occurs. Each report you make to the Vice President – General Counsel should include the date of the transaction, quantity, price, and broker-dealer through which the transaction was effected. This reporting requirement may be satisfied by sending (or having your broker send) duplicate confirmations of trades to the Vice President – General Counsel if the Vice President – General Counsel receives that information by the required date.
2. Blackout Periods
No person subject to this policy may trade in NRP’s securities during the 10-day period prior to a quarterly or annual earnings release, or the two-day period following a quarterly or annual earnings release. The Company may extend a blackout period at any time if at the time the Company believes trading by Insiders would be inappropriate because of developments at the Company that are or could become material.
If you are advised that the Company is in a blackout period, you may not buy or sell NRP’s securities under any circumstances until you are advised that the blackout has been lifted and your transaction is specifically approved. In addition, you may not inform anyone else within or outside the Company that a blackout period has been imposed (other than the Vice President – General Counsel or that officer’s representative, or except as authorized by the Vice President – General Counsel).
3. Communicating Potential Material Information
If you become aware of information about the Company, NRP or any of their affiliates that is or may become material, you should promptly communicate that information to the Chief Executive Officer, President, Chief Financial Officer, Vice President - General Counsel and the Vice President – Investor Relations of the Company. This communication is very important to allow the Company to determine whether, how and when the information should be reported to the public. It is also critical to permit the Vice President - General Counsel to determine whether to permit transactions in securities of NRP. Except for this communication, you should keep the information confidential and share it only with the Company’s accountants and legal counsel who have a need to know as directed by any of the above officers. If you have any doubt about whether information may be material, you should err in favor of prompt communication to the Chief Executive Officer, President, Chief Financial Officer, Vice President - General Counsel and the Vice President – Investor Relations.
4. Reporting Violations
If you know or have reason to believe that any compliance procedures contained in this Policy have been or are about to be violated in any way, you should promptly bring the actual or potential violation to the attention of the Vice President - General Counsel.
This document states a policy of GP Natural Resource Partners LLC and is not intended to be regarded as the rendering of legal advice.
TRADING AUTHORIZATION REQUEST
NATURAL RESOURCE PARTNERS L.P.
Section I: To be completed by the officer or director
Number of units to be purchased or sold: __________________
Type of Transaction: Unit Purchase_____ Sale______
I certify that I am not in possession of material, nonpublic information about Natural Resource Partners or any of its subsidiaries.
Section II: Approval
I approve________ disapprove________ the above transaction.
Vice President - General Counsel:____________________________ Date:__________________
Note: This procedure must be repeated if the transaction is not completed within five business days beginning with the approval date in Section II.
If the Vice President - General Counsel or members of his immediate family and personal household wish to enter into transactions involving common units of NRP, the Vice President - General Counsel must pre-clear that intent to trade with the Company’s Chief Executive Officer or Chief Financial Officer.
In the absence of the Vice President - General Counsel, Trading Authorization Requests may be submitted to the Vice President – Investor Relations.