- Audit Committee Charter
- Code of Business Conduct and Ethics
- Disclosure Policy
- Insider Trading Policy
The following Audit Committee Charter was adopted by the Audit Committee of the Board of Directors and the Board of Directors of NICKEL NORTH EXPLORATION CORP. (the "Company"):
The primary function of the audit committee (the "Committee") is to assist the Company's Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company's systems of internal controls regarding finance and accounting and the Company's auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels. The Committee's primary duties and responsibilities are to:
- serve as an independent and objective party to monitor the Company's financial reporting and internal control system and review the Company's financial statements;
- review and appraise the performance of the Company's external auditors; and
- provide an open avenue of communication among the Company's auditors, financial and senior management and the Board of Directors.
The Committee shall be comprised of a minimum three directors as determined by the Board of Directors. If the Company ceases to be a "venture issuer" (as that term is defined in Multilateral Instrument 52-110), then all of the members of the Committee shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.
If the Company ceases to be a "venture issuer" (as that term is defined in Multilateral Instrument 52-110), then all members of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Company's Audit Committee Charter, the definition of "financially literate" is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements.
The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders' meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.
The Committee shall meet a least twice annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions.
Responsibilities and Duties
To fulfill its responsibilities and duties, the Committee shall:
- Documents/Reports Review
- review and update this Audit Committee Charter annually; and
- review the Company's financial statements, MD&A and any annual and interim earnings press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.
- External Auditors
- review annually, the performance of the external auditors who shall be ultimately accountable to the Company's Board of Directors and the Committee as representatives of the shareholders of the Company;
- obtain annually, a formal written statement of external auditors setting forth all relationships between the external auditors and the Company, consistent with Independence Standards Board Standard 1;
- review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors;
- take, or recommend that the Company's full Board of Directors take appropriate action to oversee the independence of the external auditors, including the resolution of disagreements between management and the external auditor regarding financial reporting;
- recommend to the Company's Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval;
- recommend to the Company's Board of Directors the compensation to be paid to the external auditors;
- at each meeting, consult with the external auditors, without the presence of management, about the quality of the Company's accounting principles, internal controls and the completeness and accuracy of the Company's financial statements;
- review and approve the Company's hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company;
- review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements; and
- review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company's external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if:
- the aggregate amount of all such non-audit services provided to the Company constitutes not more than five percent of the total amount of revenues paid by the Company to its external auditors during the fiscal year in which the non-audit services are provided,
- such services were not recognized by the Company at the time of the engagement to be non-audit services, and
- such services are promptly brought to the attention of the Committee by the Company and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee.
Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee.
- Financial Reporting Processes
- in consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external;
- consider the external auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting;
- consider and approve, if appropriate, changes to the Company's auditing and accounting principles and practices as suggested by the external auditors and management;
- review significant judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such judgments;
- following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information;
- review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements;
- review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented;
- review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters;
- review certification process;
- establish a procedure for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and
- establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
- review any related-party transactions;
- engage independent counsel and other advisors as it determines necessary to carry out its duties; and
- to set and pay compensation for any independent counsel and other advisors employed by the Committee.
The Company is committed to maintaining the highest standards of ethical conduct, promoting integrity, deterring wrongdoing and complying with applicable laws, rules and regulations. In furtherance of this commitment, the Board of Directors (the "Board") of the Company has adopted this Code of Business Conduct and Ethics (the "Code") for all directors, officers and employees of the Company and its subsidiaries (each, a "Company Individual"). The principles set forth in this Code describe how each of the Company Individuals should conduct themselves. All of the Company Individuals are expected to adhere to the principles of this Code.
The Code applies to all of the Company Individuals, and all of the Company Individuals are accountable for compliance with the Code. The Board, or a committee of the Board, is responsible for updating the Code and monitoring compliance with the Code. The requirements of this Code are in addition to, and not in substitution for, any applicable laws, rules, regulations, common law or other contractual provisions.
This Code does not address every expectation or condition regarding proper and ethical business conduct. Accordingly, this Code is intended to serve as a source of guiding principles for Company Individuals. Company Individuals are encouraged to discuss issues about particular circumstances that may be relevant to one or more of the provisions of this Code with the Chair of the Board, or other representative appointed by the Board (the "Board Code Representative"), who may consult with inside or outside legal counsel as appropriate.
The Board encourages the reporting of any behaviour by Company Individuals which violates the Code and the Board will not tolerate retaliation against any person who in good faith reports such violations to the Board or the Board Code Representative.
Reporting Violations of the Code
Company Individuals must promptly advise either a supervisor or the Board Code Representative if a Company Individual believes that he or she has observed a violation of the Code by any Company Individual, or by anyone purporting to be acting on the Company's behalf. Any such reports may be made anonymously. Confidentiality will be maintained, to the extent permitted by law. If a Company Individual is not comfortable reporting such behaviour to a supervisor or the Board Code Representative, the individual may report to the Company's external legal counsel.
The Company will not take or allow any reprisal against any Company Individual who, in good faith, reports a suspected violation of this Code. Any reprisal will in itself be a very serious breach of the Code and subject to disciplinary action.
Compliance with Laws, Rules and Regulations
The Company requires that all Company Individuals strictly comply with applicable laws, rules and regulations of Canada and other countries where the Company may conduct business. These include all provincial, federal and other laws, including securities and insider trading laws, and the Company's Insider Trading Policy. The obligation is on each Company Individual to ensure that applicable laws are known to him or her. The fact that in some countries certain standards of conduct are legally prohibited but are not enforced in practice, or their violation is not subject to public criticism or censure, will not excuse an illegal action by a Company Individual. Any case of non-compliance with an applicable law may subject a Company Individual to disciplinary action.
Conflicts of Interest
Company Individuals must base business decisions and personal actions on the best interests of the Company. Any situation that creates or appears to create a material conflict of interest must be avoided by a Company Individual. In addition to the conflicts of interest defined by applicable corporate law, a conflict of interest occurs when a Company Individual's private interest interferes in any way with the interests of the Company or may have an adverse effect on the Company Individual's motivation or the proper performance of their position with the Company. If a material conflict of interest arises, the Company Individual involved must disclose the conflict and take prompt action to remedy it in addition to taking any actions required by applicable corporate law. The following are examples of conflicts of interest:
- accepting outside employment with, or accepting personal payments from, any organization which does business with the Company or is a competitor of the Company;
- personally having, or having a close family member who has, a financial interest in a firm which does business with the Company;
- receiving personal loans or guarantees of obligations as a result of one's position as a Company Individual;
- engaging in conduct or entering into any transaction or agreement that competes with the Company's existing or prospective business or takes advantage of an opportunity which should be offered to the Company first;
- accepting or giving bribes, kickbacks or any other improper payments for services relating to the conduct of the business of the Company;
- accepting or giving gifts, favours, entertainment or services, other than such minor gifts, etc. as are the practice in the Company's industry; and
- having an interest in a transaction involving the Company.
If the Company determines that a Company Individual's employment or activity outside the Company interferes with performance or the ability to meet the requirements of the Company as they are modified from time to time, the director or employee may be asked to terminate the outside employment or activity. To protect the interests of both the Company Individual and the Company, any activity that involves potential or apparent conflict of interest may be undertaken only after disclosure to the Company by the Company Individual and review and approval by management or the Board, as applicable. Similarly, to the extent that a Company Individual is interested in accepting an appointment as a director of another company or entity whose business is competitive with, or likely to be competitive with, that of the Company, such appointment may be accepted only after disclosure to the Company by the Company Individual and review and approval by management or the Board, as applicable.
The requirements of this section of the Code are in addition to, and not in substitution for, any requirements imposed by applicable corporate law.
Except as may be approved by the Board or the Chair, Company Individuals are prohibited from:
- taking any opportunities that belong to the Company;
- taking any opportunities that are discovered through the use of Company corporate property or information, or as a result of being a Company Individual;
- using corporate property, information or position; or
- competing with the Company,
in any way that will benefit themselves personally, or benefit their family, or be to the benefit of persons or entities outside the Company, whether or not it has a material impact on the Company's financial performance.
It is the Company's policy that information regarding business affairs of the Company, other than information that has already been made available to the public, is confidential and should not be discussed with anyone outside the Company. If requested by the Company, Company Individuals must sign a written agreement confirming their obligations with respect to confidential information.
All Company Individuals must keep confidential information entrusted to them by the Company in their capacity as a Company Individual strictly confidential, except when the Company authorizes disclosure or when required by laws, regulations or legal proceedings. Company Individuals should avoid discussing confidential information in public areas such as airplanes, elevators and restaurants and on mobile phones, and should avoid inadvertent disclosure of confidential information through the use of laptop computers or other similar electronic devices in public places. Company Individuals should consult management or the Board Code Representative, as applicable, if they believe they have a legal obligation to disclose confidential information.
No Company Individual shall use confidential information for his or her own personal benefit or to benefit persons or entities outside the Company.
The Company's policies on maintaining confidentiality of Company information are further set forth in the Company's Disclosure Policy.
The Company seeks to outperform its competition fairly and honestly, seeking competitive advantages through superior performance, not through unethical or illegal business practices. All Company Individuals are expected to act at all times with the highest degree of integrity.
Information about competitors, customers and suppliers is a valuable asset in the competitive markets in which the Company operates. The Company will obtain this information legally. Theft of proprietary information, inducing disclosures by a competitor's past or present employees, or any actions that could create an appearance of an improper agreement in respect of competitors is prohibited. Any Company Individual who is authorized to retain a consultant to gather competitive information must take steps to ensure that the consultant adheres to these policies. When in doubt about the propriety of any information-gathering technique or about whether a competitor, supplier, or other external contact has provided confidential information, a Company Individual should contact a member of management or the Board Code Representative, as applicable.
All Company Individuals must treat the Company's customers, suppliers, competitors, creditors, directors, officers and employees fairly and with respect. No Company Individual may take unfair advantage of anyone dealing or involved with the Company through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice.
Respect for Company Individuals
All Company Individuals have the right to pursue their careers at the Company free from harassment and free from discrimination based on any ground prohibited by law, including race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age.
The Company prohibits workplace harassment and discrimination. Company Individuals are encouraged and expected to report workplace harassment, discrimination or other inappropriate conduct as soon as it occurs.
Health and Safety
The Company is committed to making the work environment safe, secure and healthy for its employees and others. The Company complies with all applicable laws and regulations relating to safety and health in the workplace. All Company Individuals are expected to promote a positive working environment for all. Company Individuals are expected to consult and comply with all Company rules regarding workplace conduct and safety and should immediately report any unsafe or hazardous conditions or materials, injuries and accidents connected with the Company's business, and any activity that compromises Company security, to management or the Board Code Representative. Company Individuals must not work under the influence of any substances that would impair the safety of others. All acts of workplace violence are prohibited.
Protection And Proper Use Of Company Assets
All Company Individuals must perform their duties in a manner that protects the Company's assets and resources and ensures their efficient use. The Company's assets include the time that Company Individuals spend at work and their work product, as well as the Company's equipment, vehicles, supplies, computers and software, trading and bank accounts, company information and intellectual property. The Company's assets must be protected from loss, damage, theft, misuse and waste and they may only be used for legitimate Company business purposes and not for personal benefit or gain.
Examples of prohibited personal use of the Company's assets include:
- removal of Company property for personal use;
- unauthorized use of Company vehicles or residences, if any;
- use of company-paid contractors, if any, to perform work at a Company Individual's home; and
- unauthorized copying of software, tapes, books and other legally protected work owned by the Company.
All Company Individuals must comply with security procedures in place to protect the Company's assets from time to time.
Company Individuals should exercise prudence in incurring and approving business expenses, work to minimize such expenses, and ensure that such expenses are reasonable and serve the Company's business interests.
Accuracy of Business Records
Honest and accurate recording and reporting of information is extremely important. Investors rely on the Company to provide accurate information about it and its affiliates and to make responsible business decisions based on reliable records. All books, records and accounts must accurately reflect transactions and events, and all financial records must conform both to generally accepted accounting principles and to the Company's internal control systems. Undisclosed or unrecorded funds or assets are not allowed. No entry may be made that intentionally hides or disguises the true nature of any transaction.
The Audit Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters. Company Individuals who have concerns or complaints regarding such matters must promptly submit those concerns or complaints to the chair of the Audit Committee or the Company's legal counsel.
Waivers and Amendments
Only the Board may waive application of, or amend any provision of, this Code. A request for such a waiver should be submitted in writing to the Board for its consideration. The Board may modify or repeal the provisions of the Code or adopt a new Code at any time it deems appropriate, with or without notice.
No Rights or Obligations Created
This Code is a statement of the fundamental principles and key policies and procedures that govern the conduct of the Company's business. It is not intended to, and does not, in any way constitute an assurance of continued employment or create any rights in any Company Individual or other person or entity.
This Code is intended as a component of the flexible governance framework within which the Board, assisted by its committees, directs the affairs of the Company. It is for the sole and exclusive benefit of the Company and may not be used or relied upon by any other party. While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company's charter documents, it is not intended to establish any legally binding obligations on the Company or limit or diminish any rights or remedies of the Company.
Scope and Purpose
The Company is committed to providing timely, factual and accurate disclosure of material information about the Company. The objectives of this Disclosure Policy (this "Policy") are to:
- ensure that material information about the Company is disclosed in a timely, consistent and appropriate manner;
- protect and prevent the improper use or disclosure of material information or confidential information about the Company; and
- ensure that communications are broadly disseminated in accordance with all applicable legal and regulatory requirements.
This Policy covers all directors, officers, employees and consultants of the Company and its subsidiaries, including those authorized to speak on its behalf. It covers all disclosure by the Company to stakeholders, shareholders, the investment community, the media, industry counterparts, business partners, governments and the public, including:
- disclosures in documents filed with securities regulatory authorities;
- written statements made in annual and quarterly reports, news releases and letters to shareholders;
- speeches and presentations by senior management or other persons speaking on behalf of the Company;
- information contained on the Company's website and other electronic communications; and
- oral statements made in meetings and telephone conversations with analysts and investors and in discussions with the media, including interviews, press conferences and conference calls.
Everyone who invests in the Company's securities should have equal access to information that may affect their investment decisions. Insiders of the Company and others who have received or have access to undisclosed material information about the Company should not purchase or sell the Company's securities or inform others of the undisclosed material information unless it is necessary in the ordinary course of business.
This Policy has been prepared by the Company's Board of Directors (the "Board"). Any waivers of, or amendments to, this Policy must be reviewed and approved by the Board.
What is Material Information?
Information relating to the Company is material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the Company's shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information about the Company that is available to investors.
It is not possible to define all categories of material information but there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Although not intended to be a comprehensive list, the following are examples of information that could be material, depending on scale and magnitude:
- quarterly or annual operational results or projections;
- mergers, acquisitions, joint ventures or divestitures;
- management changes or changes in control of the Company;
- public or private sales of the Company's securities;
- new discoveries or developments regarding projects or the Company's business;
- changes in auditors and agreements/disagreements with auditors;
- litigation pending or threatened;
- labour disputes or disputes with major contractors or suppliers; and
- stock splits or changes in capital or corporate structure.
Role of Disclosure Committee
Representatives of the Company (the "Disclosure Committee"), as may be designated by the Board and the Chief Executive Officer from time to time, will be responsible for the implementation of this Policy.
The Disclosure Committee is responsible for assisting the Company's management in (i) determining whether information is material information; (ii) ensuring the timely disclosure of such material information in accordance with applicable securities laws; and (iii) overseeing the disclosure controls, procedures and practices of the Company.
It is important that the Disclosure Committee be informed about events and developments that may be material. Company personnel who become aware of information that may constitute material information should promptly contact the Chief Executive Officer or the Company's legal counsel, who will liaise with members of the Disclosure Committee. The Disclosure Committee will give consideration to the nature of the information itself, the volatility of the Company's securities and prevailing market conditions. In general, if there is any doubt about whether particular information is material, the Disclosure Committee will err on the side of materiality and release the information publicly.
The Disclosure Committee may consult with the Company's legal counsel and other appropriate expert advisors as it considers necessary in connection with this Policy.
In the absence of a Disclosure Committee, the Chief Executive Officer shall be responsible for ensuring the Company's disclosure policy is adhered to.[CR1]
The Company shall comply with all applicable laws and regulations regarding the timely disclosure of material information and changes. Once a decision is made that information is material, applicable securities laws and stock exchange rules require prompt disclosure, and broad dissemination to the public in a manner that is both accurate and complete. Unfavourable news must be disclosed as promptly and completely as favourable news. The principal method of publicly disclosing material information will be by news release, using a news wire service that provides simultaneous distribution to widespread news services, financial media, and relevant stock exchanges and regulatory bodies. The Company will comply with the rules of the TSX Venture Exchange, or other stock exchange on which the Company's securities are then listed, regarding the timing of release of news releases, and any requirement to obtain pre-clearance of news releases. The Company will file material change reports when required in accordance with applicable securities laws and regulations.
In certain circumstances, the Disclosure Committee may determine certain material information may be withheld from the public for legitimate business purposes (for example if release of the information would prejudice negotiations in a corporate transaction), in which case the information will be kept confidential until the Disclosure Committee determines it is appropriate to publicly disclose that information.
In the event that the Company has information relating to a "material change" that:
- if publicly disclosed would, in the reasonable opinion of the Company, be unduly detrimental to the interests of the Company; or
- consists of a decision to implement a change made by senior management of the Company who believe that confirmation of the decision by the Board is probable, and the senior management have no reason to believe that persons with knowledge of the material change have made use of that knowledge in purchasing or selling securities of the Company,
the Company will immediately cause a confidential material change report to be filed with applicable securities regulators that includes reasons why the Company does not believe the information should be publicly disclosed at that time. This confidential material change report must be re-filed with the applicable securities regulators every 10 days thereafter. In such circumstances, the information can never be kept confidential permanently. It can only remain confidential until the occurrence of the earlier of: (i) the rationale for keeping the information confidential ceasing; or (ii) notification by a securities regulator that the information has been kept confidential for too long a duration and must be publically disclosed.
Procedures Regarding the Preparation and Release of Documents
Prior to the time that any document is to be released to the public, filed with a securities regulatory authority or filed on SEDAR, the following procedures must be observed:
- the document must be prepared in consultation with, and be reviewed by, personnel in all applicable internal departments of the Company, and input from external experts and advisors should be obtained if necessary;
- any core document (as is set out in applicable securities laws, rules and regulations), other than a material change report, must be reviewed and approved by the Disclosure Committee;
- any press release or any material change report must be reviewed and approved by the Chief Executive Officer and at least one member of the Disclosure Committee;
- in the event a report, statement or opinion of any expert is included or summarized in a document, the written consent of the expert to the use of the report, statement or opinion or extract thereof and the specific form of disclosure shall be obtained. In addition, the Disclosure Committee must be satisfied that: A. there are no reasonable grounds to believe that there is a misrepresentation in the part of the document made on the authority of the expert, and
B. part of the document fairly represents the expert report, statement or opinion;
- core documents, other than material change reports, must be provided to the Company's directors sufficiently in advance of the time they are to be filed or released to allow the directors to review and comment on such documents; and
- in the case of interim financial statements, annual financial statements and interim and annual management discussion and analysis (the "MD&A"), such documents must be reviewed and approved by the Company's Audit Committee in accordance with the Audit Committee Charter following approval of the Disclosure Committee and prior to submission to the Board as a whole.
Material information will be disclosed in a news release. Should material information inadvertently be made in a selective form, the Company will promptly issue a news release in order to fully publicly disclose that information.
All news releases should be accurate and complete and should contain enough detail to enable the media and investors to understand the substance and importance of the change being disclosed. All news releases from the Company (except for news releases that relate to financial information) shall be disseminated and pre-approved by the Disclosure Committee, or as it may otherwise designate from time to time. News releases regarding the Company's financial statements, MD&A and other material financial information shall be approved by the Audit Committee and/or the Board.
If the TSX Venture Exchange is open for trading at the time of a proposed announcement, prior notice of a news release announcing material information should be provided to market surveillance if the matter is material. If a news release announcing material information is issued outside of trading hours, market surveillance must be notified before the market opens.
News releases must be posted on the Company's website as soon as practicable after dissemination over the news wire.
The Chair, the Chief Executive Officer, members of the Disclosure Committee and any investor relations personnel are the authorized spokespersons (each, a "Spokesperson") for the Company. These Spokespersons may, from time to time, designate others to speak on behalf of the Company as back-ups or to respond to specific inquiries from the investment community or the media.
Communication with the Investment Community and the Media
Employees, officers, directors and consultants who are not authorized Spokespersons must not communicate information, material or otherwise, relating to the Company to any securities regulator, the investment community or the media unless specifically asked to do so by an authorized Spokesperson. All such inquiries must be referred to an authorized Spokesperson.
The Company may be requested to review draft analysts' reports from time to time. Only authorized spokespersons will comment on analysts' reports, and such comments will be limited to identifying publicly disclosed factual information that could affect the analyst's model and to pointing out inaccuracies or omissions with reference to publicly available information.
External Speeches and Presentations
Invitations to give external speeches or other presentations relating to the Company's business or operations at conferences or other public venues at which stakeholders, industry counterparts, business partners, government representatives, media or the public may be present, or which are expected to become available to any of the above, must be pre-approved by an authorized Spokesperson before acceptance, and the content of any such speeches or presentations must be reviewed and approved by an authorized Spokesperson or his or her designee. Any such speeches or other presentations that may contain material information that has not previously been publicly disclosed by the Company must be referred to the Disclosure Committee for prior review and comment.
Response to Market Rumours
Generally, the Company's policy is to neither confirm nor deny market rumours or speculation when asked to comment, unless required by applicable regulatory authorities. The Company's authorized Spokespersons will respond by stating that it is the Company's policy not to comment on rumours. However, when authorized by the Disclosure Committee or an appropriate subset thereof, authorized Spokespersons may make exceptions, and clarify or confirm certain rumours, in accordance with applicable securities regulations, that are deemed harmful to the Company's interests if not rebutted or that have had, or are likely to have, a substantial effect on the Company's securities.
The Company may from time to time provide certain forward-looking information in news releases, orally and in other disclosure materials to enable shareholders and the investment community to better evaluate the Company and its prospects. Any such information will be clearly identified as forward looking and will be accompanied by appropriate cautionary language identifying: (i) such forward-looking information, (ii) the material factors that could cause actual results to differ materially from expected results, and (iii) the material factors or assumptions that were applied or used in the forward-looking information. All new public disclosures of material forward-looking information must be approved by one or more of the following: the Chief Executive Officer or the Disclosure Committee.
Disclosure of information on the Company's website does not in and of itself constitute adequate public disclosure of such information. Only material information that has already been disclosed to the public in accordance with this Policy will be posted on the Company's website.
All publicly disclosed material information about the Company, and presentations to analysts and conferences, will be made available through the Company's website for a reasonable period of time. All documents filed by the Company on SEDAR will be concurrently posted to the Company's website. The Company's website will be kept up-to-date with the Company's latest disclosures.
The Company's website will contain an email link to an investor relations contact for the Company to facilitate communication with investors and will include a notice that advises the reader that the information was accurate at the time of posting, but may be superseded by subsequent disclosures. Inaccurate information will be promptly removed from the Company's website and a correction must be posted and information contained on the website must be removed or updated when it is no longer current. All links from the Company's website must be approved by the Disclosure Committee and all links must include a notice that advises the reader that he or she is leaving the Company's website and that the Company is not responsible for the contents of the other website.
Electronic Communications and Chat Rooms
Only public information or information which could otherwise be disclosed in accordance with this Policy shall be utilized in responding to electronic inquiries.
In order to ensure that no material undisclosed information is inadvertently disclosed, directors, officers and employees of the Company are prohibited from participating in Internet chat rooms, newsgroup discussions or other social media forums on matters pertaining to the Company. Directors, officers and employees of the Company are also strongly discouraged from participating in Internet discussions on matters related to the Company's competitors or the industry generally.
Directors, officers, employees and consultants are prohibited from participating in discussions of the Company's corporate matters in chat rooms, bulletin boards, newsgroups, blogs, or other social networking sites. Directors, officers, employees and consultants shall immediately report to a representative of the Disclosure Committee any such discussions pertaining to the Company which they find on the Internet. Specific individuals may from time to time be authorized by the Disclosure Committee to communicate with the public on various social media platforms, in accordance with the Company's policies and guidelines, but no material non-public information may be disclosed.
Any director, officer, employee or consultant privy to confidential information (regardless of whether such information is also material information) is prohibited from disclosing such information to anyone other than authorized Company personnel or authorized Company representatives who have a legitimate need to know such information in connection with their duties and who have been advised of the confidential nature of such information. No one in possession of confidential information should disclose that information to any outside party, except to the extent it is necessary to do so in the course of business.
The Disclosure Committee may approve limited exceptions to this prohibition where disclosure is made to the Company's auditors, legal counsel, underwriters or other professional advisors in the necessary course of the Company's business.
In order to prevent the misuse or inadvertent disclosure of confidential information, the procedures set forth below should be observed at all times:
- documents containing confidential information should be kept in a safe place with access restricted to individuals who "need to know" that information in the necessary course of business;
- confidential matters should not be discussed in places where, or in a manner that, the discussion may be overheard;
- confidential documents should not be read in public places or discarded where others can retrieve them;
- directors, officers and employees must ensure they maintain the confidentiality of information in their possession outside of the office as well as inside the office;
- transmission of documents by electronic means should be made only where it is reasonable to believe that transmission can be made and received securely;
- unnecessary copying of confidential documents should be avoided and documents containing confidential information should be promptly removed from conference rooms and work areas after meetings have concluded. Extra copies of confidential documents should be shredded or otherwise destroyed; and
- passwords should be used to protect access to confidential electronic data.
If it is determined that previously undisclosed material information has inadvertently been disclosed, the Company shall immediately disclose the information in a news release in order to achieve broad public dissemination of the information.
It is the responsibility of all directors, officers, employees and consultants of the Company to comply with this Policy. Adherence to and respect for the rules and procedures outlined in this Policy is fundamental to the reputation and continued success of the Company.
Any employee who violates this Policy may face disciplinary action up to and including termination of his or her employment with the Company without notice. Violation of this Policy may also violate certain securities laws.
This Insider Trading Policy (the "Policy") applies to the following persons, who are collectively referred to as "Company Personnel" in this Policy:
- all directors, officers and employees of the Company or its subsidiaries;
- any other person retained by or engaged in the provision of services with or on behalf of the Company or any of its subsidiaries (such as a consultant, contract or temporary agency employee, independent contractor or adviser); and
- any associates or partnerships, trusts, corporations, RRSPs and similar entities over which any of the above-mentioned individuals exercise control or direction.
Company Personnel may, at any time, purchase securities and exercise options of the Company as long as those purchases or exercises are not decisions based on inside information. Applicable securities laws in Canada prohibit the purchase or sale of securities on the basis of material non-public information about the Company, or the disclosure of material non-public information to others who might trade on the basis of that information. These laws impose severe sanctions on individuals who violate them. The Company has adopted this Policy in order to prevent improper trading in the securities of the Company.
Company Personnel will from time to time become aware of Company business developments or plans or other information that may affect the value of the Company's securities before these developments, plans or information are made public. Trading securities of the Company while in possession of such information before it is generally disclosed (known as "insider trading"), or disclosing such information to third parties before it is generally disclosed (known as "tipping"), is against the law and may expose Company Personnel to criminal prosecution or civil lawsuits. Such action will also result in a lack of confidence in the market for the Company's securities, harming both the Company and its shareholders.
The Board will designate one or more individuals from time to time as "Insider Trading Policy Administrators" for the purpose of administering this Policy. At the date hereof, the designated Insider Trading Policy Administrators are the Chief Executive Officer and the Chief Financial Officer.
This Policy has been reviewed and approved by the Board and may be reviewed and updated periodically by the Board. Any amendments or waivers to this Policy will be subject to the prior approval of the Board.
The Company has adopted this Policy to:
- prevent inadvertent violations of the insider trading laws;
- avoid even the appearance of impropriety on the part of Company Personnel; and
- protect the reputation of the Company and the Company Personnel.
The procedures and restrictions set forth in this Policy are only a general framework to assist Company Personnel in ensuring that any purchase or sale of Company securities occurs without actual or perceived violation of applicable securities laws. Company Personnel have the ultimate responsibility for complying with applicable securities laws and should obtain such additional guidance, including independent legal advice, as may be appropriate for their own circumstances.
Trades that are Subject to this Policy
Under this Policy, all references to trading in securities of the Company include any sale or purchase of securities of the Company, including the exercise of stock options granted under the Company's stock option plan and the acquisition of shares or any other securities pursuant to any Company benefit plan or arrangement and any derivatives-based or other transaction or arrangement.
For the purposes of this Policy, the term "security" includes:
a put, call, option or other right or obligation to purchase or sell securities of the Company;
a security, the value or market price of which is derived from, referenced to or based on the value, market price or payment obligations of a security of the Company; and
any agreement, arrangement or understanding of any nature or kind, the effect of which is to alter, directly or indirectly, a Company Personnel's economic interest in a security of the Company or economic exposure to the Company.
- a common, preferred or other share of the Company;
For the purposes of this Policy, "Inside Information" means:
- a change in the business, operations or capital of the Company that would reasonably be expected to have a significant effect on the market price or value of the securities of the Company (which includes any decision to implement such a change by the Board or by senior management who believe that confirmation of the decision by the Board is probable);
- a fact that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of the securities of the Company; or
- any information which is not generally available to the public that a reasonable investor would be likely to consider important in deciding whether to buy, hold or sell securities of the Company,
in each case, which has not been generally disclosed. Examples of information that may constitute Inside Information include, but are not limited to, the following:
- proposed changes in capital structure including stock splits and stock dividends;
- proposed or pending financings;
- material increases or decreases in the amount of outstanding securities or indebtedness;
- proposed changes in corporate structure including amalgamations and reorganizations;
- proposed acquisitions of other companies including take-over bids or mergers;
- material acquisitions or dispositions of assets;
- material changes or developments in products or contracts which would materially affect earnings upwards or downwards;
- material changes in the business of the Company;
- changes in senior management or control of the Company;
- bankruptcy or receivership;
- changes in the Company's auditors;
- the financial condition and results of operations of the Company;
- changes in revenues or earnings upwards or downwards of more than recent average size;
- material legal proceedings;
- defaults in material obligations;
- the results of the submission of matters to a vote of securityholders;
- transactions with directors, officers or principal securityholders; and
- the granting of options or payment of other compensation to directors or officers
A number of the scenarios described above include the concept of materiality. Under Canadian securities laws, material information is information that could, or could reasonably be expected to, have a significant effect on the price of the Company's shares on the stock market or that would reasonably be expected to have a significant influence on a reasonable investor's investment decisions. Material non-public information can include positive or negative information about the Company. It is the responsibility of any Company Personnel contemplating a trade in securities of the Company to determine prior to such trade whether he or she is aware of any information that constitutes Inside Information. If in doubt, the individual should consult with an Insider Trading Policy Administrator.
Prohibition Against Trading on Inside Information
Company Personnel must not purchase, sell or otherwise trade securities of the Company with the knowledge of Inside Information until:
- twenty-four (24) hours after the disclosure to the public of the Inside Information, whether by way of press release or a filing made with securities regulatory authorities; or
- the Inside Information ceases to be material (e.g. a potential transaction that was the subject of the information is abandoned, and either Company Personnel are so advised by the Insider Trading Policy Administrators or such abandonment has been generally disclosed).
In addition, Company Personnel must not make any trades in securities of the Company during black-out periods, as described under the heading "Restrictions on Trading of Company Securities".
Prohibition Against Speculating, Short-Selling, Puts and Calls
Certain types of trades in securities of the Company by Company Personnel can raise particular concerns about potential breaches of applicable securities law or concerns that the interests of the persons making the trade are not aligned with those of the Company. Company Personnel are therefore prohibited at any time from, directly or indirectly, undertaking any of the following activities:
- speculating in securities of the Company, which may include buying with the intention of quickly reselling such securities, or selling securities of the Company with the intention of quickly buying such securities (other than in connection with the acquisition and sale of shares issued under the Company's stock option plan or any other Company benefit plan or arrangement);
- short selling a security of the Company or any other arrangement that results in a gain only if the value of the Company's securities declines in the future;
- selling a "call option" giving the holder an option to purchase securities of the Company; and
- buying a "put option" giving the holder an option to sell securities of the Company.
Restrictions on Trading of Company Securities
(i) Black-out Periods
Company Personnel who participate in the preparation of the Company's financial statements or who are privy to material financial information relating to the Company are prohibited from purchasing or selling securities of the Company during the period beginning on the date which is ten (10) business days prior to the release of financial results for a fiscal quarter or a fiscal year end and ending on twenty-four (24) hours after financial results for a fiscal quarter or fiscal year end have been disclosed.
Black-out periods may also be prescribed from time to time by the Insider Trading Policy Administrators as a result of special circumstances relating to the Company when Company Personnel are precluded from trading in its securities. All parties with knowledge of such special circumstances should also be covered by the black-out. These parties may include external advisers such as legal counsel, investment bankers, investor relations consultants and other professional advisers, and counter-parties in negotiations of material potential transactions.
The prohibition on purchases and sales of Company securities during black-out periods does not apply to purchases or sales made pursuant to a legal obligation entered into prior to the black-out period and prior to the acquisition of knowledge of material non-public information. Notwithstanding this exception, the Company reserves the right to bar any transactions in Company securities, even those pursuant to such agreements, if the Chief Executive Officer or the Board of Directors of the Company, in consultation with legal counsel, determines that such a bar is in the best interests of the Company.
Company Personnel subject to a black-out period who wish to trade Company securities may apply to an Insider Trading Policy Administrator for approval to trade securities of the Company during the black-out period. Any such request should describe the nature of and reasons for the proposed trade. The Insider Trading Policy Administrator will consider such requests and inform the requisitioning individual whether or not the proposed trade may be made. The requisitioning individual may not make any such trade until he or she has received the specific approval from an Insider Trading Policy Administrator.
(ii) Use of Discretionary Accounts
Company Personnel who have a discretionary account with a broker must advise their broker in writing that there are to be no purchases or sales of the Company's securities by such discretionary account without first discussing it with such person in order to ensure compliance with this Policy and insider trading laws.
(iii) Exercising Options
Options may not be exercised during a trading black-out period or if the option holder is in possession of any material non-public information concerning the Company or its subsidiaries.
(iv) Unacceptable Trading
Company Personnel are prohibited from engaging in abusive, manipulative or deceptive trading practices. Without limiting the restrictions imposed by applicable securities laws and other requirements of the TSX Venture Exchange (the "Exchange"), activities that could reasonably be expected to create or result in a misleading appearance of trading activity in, or an artificial price for securities listed on the Exchange include:
- executing any transaction in a security, through the facilities of the Exchange, if the transaction does not involve a change in beneficial ownership;
- effecting, alone or with others, a transaction or series of transactions in a security for the purpose of inducing others to purchase or sell the same security or a related security;
- entering one or more orders for the purchase or sale of a security that could reasonably be expected to create an artificial appearance of investor participation in the market;
- purchasing or making offers to purchase a security at successively higher prices, or selling or making offers to sell a security at successively lower prices, if the transactions or offers create a misleading appearance of trading or an artificial market price for the security;
- effecting, alone or with others, one or a series of transactions through the facilities of the Exchange where the purpose of the transaction is to defer payment for the security traded;
- entering an order to purchase or sell a security, except for a security sold short in accordance with applicable securities laws and policies and rules of the Exchange, without the ability and the bona fide intention to make the payments necessary and/or deliver the security necessary to properly settle the transaction; and
- engaging, alone or with others, in any transaction, practice or scheme that unduly interferes with the normal forces of demand for, or supply of, a security or that artificially restricts the public float of a security in a way that could reasonably be expected to result in an artificial price for the security.
Prohibition Against Tipping
Company Personnel are prohibited from communicating Inside Information to any person outside the Company, whether or not a black-out period is in effect, unless:
- disclosure is in the necessary course of the Company's business;
- disclosure is compelled by judicial process; or
- disclosure is expressly authorized by the Insider Trading Policy Administrators.
Subject to the above, Inside Information is to be kept strictly confidential by all Company Personnel until after it has been generally disclosed. Discussing Inside Information within the hearing of, or leaving it exposed to, any person who has no need to know it, is to be avoided at all times. Company Personnel with knowledge of Inside Information will not encourage any other person or company to trade in the securities of the Company, regardless of whether the Inside Information is specifically communicated to such person or company.
If any Company Personnel has any doubt with respect to whether any information is Inside Information or whether disclosure of Inside Information is in the necessary course of business, the individual should contact an Insider Trading Policy Administrator.
Securities of Other Companies
In the course of the Company's business, Company Personnel may obtain information about another publicly traded company that has not been generally disclosed. Securities laws generally prohibit such Company Personnel from trading in securities of that other company while in possession of such information or communicating such information to another person. The restrictions set out in this Policy apply to all Company Personnel with respect to both trading in the securities of another company while in possession of such information, and communicating such information.
Under Canadian securities laws, directors and "senior officers" (as defined in applicable securities laws) of the Company and its subsidiaries, as well as beneficial holders of more than 10% of the Company's voting securities, are called "Insiders". Insiders are required to file reports with Canadian provincial securities regulators through the System for Electronic Disclosure by Insiders ("SEDI") of any direct or indirect beneficial ownership of, or control or direction over, securities of the Company and of any change in such ownership, control or direction. Such reports are required within five (5) days of becoming an Insider and thereafter within five (5) days after any change to previously filed information.
It is the responsibility of each Insider (and not the Company) to comply with these reporting requirements. The Company will assist any Insider in the preparation and filing of insider reports upon request.
Some officers of the Company or its subsidiaries may be eligible to be exempted by applicable securities law from the requirements to file insider reports.
A person that is uncertain as to whether he or she is an Insider or whether he or she may be eligible to be exempted from these requirements should contact an Insider Trading Policy Administrator. Insiders who are exempted from these requirements remain subject to all of the other provisions of applicable securities laws and this Policy.
All Company Personnel will be provided with a copy of this Policy. It is a condition of their appointment, employment or engagement that each of these persons at all times abide by the standards, requirements and procedures set out in this Policy unless a written authorization to proceed otherwise is received from an Insider Trading Policy Administrator. Any such person who violates this Policy may face disciplinary action up to and including termination of his or her employment or appointment with or engagement by the Company without notice. The violation of this Policy may also violate certain securities laws. If it appears that a director, officer, employee or consultant may have violated such securities laws, the Company may refer the matter to the appropriate regulatory authorities, which could lead to penalties, fines or imprisonment.