Carmanah Technologies Corporation (“Carmanah” or “Company”) has publicly traded securities and, therefore, must comply with certain legal and regulatory requirements regarding the public disclosure of information and the buying and selling shares or other securities of the Company. This Corporate Communications and Disclosure & Insider Trading Policy (the “Policy”) describes the responsibilities, principles and practices for Carmanah to be adhered to by all Company Personnel (as defined below). This Policy ensures that the Company complies with best practices in public disclosure of Information and the trading of its securities.
Application of Policy
This Policy applies to:
a. all directors, officers and employees of the Company or its subsidiaries;
b. any other person retained by or engaged in business of professional activity with or on behalf of the Company or any of its subsidiaries (such as a consultant, independent contractor or adviser);
c. any family member, spouse or other person living in the household or a dependent child of any of the individuals referred to in subsection (a) and (b) above; and
d. partnerships, trusts, corporations, RRSPs and similar entities over which any of the above-mentioned individuals exercise control or direction.
For the purposes of this Policy, the persons listed above are collectively referred to as “Company Personnel”. Paragraphs (c) and (d) should be carefully reviewed by Company Personnel as those paragraphs have the effect of making various family members or holding companies or trusts of the persons referred to in paragraphs (a) and (b) subject to the Policy.
This Policy applies to all Company disclosure, publications and documents, including any form of communication, such as a speech, roundtable discussion or an informal conversation on a convention center floor, by any Company Personnel made at any industry conference or similar event.
This Policy will be available on the Company’s website. Substantive changes will be communicated to all directors, officers and employees when they occur via the Company portal and by email. New directors, officers and employees will be provided with a copy of this Policy and educated about its importance.
Any questions with respect to the interpretation of this Policy should be referred to the Chief Executive Officer or Chairman of the Company.
Consequences of Non-Compliance
A violation of this Policy may carry severe consequences both for the Company and the Company Personnel involved. Compliance with this Policy is a condition of office or employment with the Company. A violation of this Policy may be grounds for discipline, up to and including immediate dismissal without notice.
The violation of this Policy may also violate certain securities laws. If it appears that a Company Personnel 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.
In this Policy, “Material Undisclosed Information” means:
a. 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 of Directors or by senior management who believe that confirmation of the decision by the Board of Directors is probable);
b. 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
c. 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.
Unless the Chief Executive Officer specifically advises otherwise, Company Personnel should assume that “Material Information” includes, among other things, information regarding the following topics:
- Financial results or projections
- Sales figures or projections.
- Earnings figures or projections.
- Significant merger, acquisition, take-over bid, joint venture or change in assets.
- Borrowing or lending of a significant amount of funds or any significant mortgaging or encumbering of Carmanah’s assets.
- Significant change in capital investment plans or corporate objectives.
- Change in control of Carmanah.
- Significant development regarding a customer or a supplier (e.g., winning or losing a significant contract).
- Change in officers or board members.
- Change in auditor or notification by the auditor that Carmanah may no longer rely on an auditor’s audit report.
- Significant lawsuit against Carmanah.
- Events regarding Carmanah’s securities (e.g., decision by Carmanah to buy back its own securities, default on a security, call of securities for redemption, stock split, dividend decision, change in the terms of a security, public or private sale of additional securities).
- any other event, fact or circumstance that is reasonably expected to have a significant effect on the market price or value of securities of the Company.
In determining whether certain information is material, a number of factors should be taken into account, including:
- the nature of the information;
- the volatility of Carmanah’s securities; and
- the prevailing market conditions.
In this Policy, “Corporate Communications” include any communication by or on behalf of Carmanah which is outside of the course of routine private business in a situation where the communication is intended to or has the potential to be disseminated to a wider audience. Corporate Communications covered by this Policy may or may not constitute Material Information, but Corporate Communications are those communications that have the potential to cause controversy or significant publicity that may affect Carmanah’s corporate identity.
Corporate Communications include documents filed with securities regulators, written statements made in Carmanah’s annual and quarterly reports, news releases, communications with and to shareholders, presentations by senior management, information contained on Carmanah’s Web site and other electronic communications, oral statements made in meetings and telephone conversations with analysts and shareholders, forward-looking information, interviews with the media, speeches, press conferences, conference calls, appointment notices for Carmanah or its affiliates and advertisements. Corporate Communications should only provide information concerning Carmanah and its business and will not normally include information about specific shareholders of Carmanah.
The objectives of this Policy are:
- to ensure Carmanah has consistent standards and procedures for all of its Corporate Communications of both Material Information and non-material information;
- to ensure this Policy meets or exceeds the standards set by relevant regulators applicable to the Company,
- to ensure that Corporate Communications of Material Information to the investing public about Carmanah, whether positive or negative, are:
- full, fair, accurate, timely and understandable, and
- in compliance with applicable governmental laws, rules and regulations, and
- broadly disseminated in a non-selective manner in accordance with all applicable legal and regulatory requirements; and
- to provide the Company Personnel with guidelines regarding trading in securities of Carmanah.
The provisions of this Policy relating to public disclosure of Corporate Communications by Carmanah cover, among other things:
- documents filed with securities regulators;
- written statements made in Carmanah’s annual and quarterly reports, news releases, letters to shareholders and any other public disclosure documents;
- presentations by senior management of Carmanah;
- information contained on Carmanah’s website and other electronic communications;
- oral statements made in meetings and telephone conversations and other communications with analysts and investors; and
- interviews with the media, speeches, press conferences and conference calls.
- any written or oral comment or statement made to the media, investors, analysts and members of the public.
Corporate Communications and Disclosure Group
Carmanah has established a Corporate Communications and Disclosure Committee (the “Disclosure Committee “), which is responsible for overseeing Carmanah’s disclosure of Material Information. The members of the Disclosure Committee are.
- The Chief Executive Officer;
- The Chief Financial Officer
- The Manager, Financial Reporting; and
- The Manager of Compliance
The responsibilities of the Disclosure Committee are to:
- promote awareness of this Policy within Carmanah;
- oversee, review, enforce and update this Policy as approved by the Board of Directors, to ensure continuing compliance with changing legal and regulatory compliance;
- review disclosure (whether electronic, written or oral) of Material Information in advance of its public release;
- meet or communicate with other members outside of the Committee as required in order to meet the objectives of this Policy; and
- ensure timely and comprehensive disclosure of all Material Information.
Carmanah business units must keep the Disclosure Committee fully apprised of all potential material Carmanah developments by contacting the Chief Executive Officer who will make a preliminary assessment of whether the development constitutes Material Information. The Disclosure Committee members will involve other Company Personnel as required to permit the Disclosure Committee to evaluate and discuss those developments and determine the materiality of those developments and the appropriateness and timing of any public release of information relating to those developments.
If appropriate, the Chief Executive Officer may delegate the Corporate Communication of information on developments determined to be non-material to an Authorized Spokesperson (as defined below). If so delegated, decisions and approvals in respect of the Corporate Communication of non-material information may be made by the Authorized Spokesperson or other persons referred to in this Policy.
Principles of Public Disclosure of Material Information
All Material Information will be immediately publicly disclosed by Carmanah, except in the limited circumstances permitted by this Policy and by applicable law.
Carmanah will not selectively disclose any Material Information, including any report that operating or earnings results will be materially below or above publicly held expectations. Unfavorable information will be disclosed in the same manner as favorable Information.
Carmanah will provide full, fair, accurate, timely and understandable disclosure in its Corporate Communications, in compliance with applicable governmental laws, rules and regulations.
Material Information is Material Undisclosed Information if it has not been disseminated in a manner making it available to investors generally. Company Personnel should assume that any Material Information that has not been publicly disclosed pursuant to this Policy for at least two full days of trading of Carmanah’s securities is still Material Undisclosed Information. Any person who is uncertain as to whether particular information is “non-public” should contact a member of the Disclosure Committee.
Once the Chief Executive Officer has determined that a development constitutes Material Information, Carmanah will comply with the following principles of disclosure:
- Material Information will be publicly disclosed promptly by broadly disseminated news release to prevent selective, unauthorized disclosures prior to broad disclosure, except as set out below.
- If the Chief Executive Officer determines that public disclosure of Material Information would be premature (for example, if release of the information would prejudice negotiations in a major corporate transaction), the information will be kept confidential to the extent permitted by law, until the Chief Executive Officer determines that public disclosure is necessary or appropriate. In those circumstances, the Disclosure Committee will cause, if necessary, a confidential material change report to be filed with the applicable securities regulators, and will periodically (at least every 10 days) review its decision to keep the information confidential. During the period before such Material Information is publicly disclosed, trading in Carmanah’s shares should be under a Blackout (as defined below).
- Disclosure must be complete, without any omissions that might make the rest of the disclosure misleading, and unfavorable Material Information will be disclosed as promptly and completely as favorable Material Information.
- Carmanah will not make selective disclosures of Material Information. Previously undisclosed Material Information will not be disclosed to selected individuals (for example, as a result of telephone calls or inquiries from an analyst or a shareholder). If previously Material Undisclosed Information is inadvertently disclosed to an analyst or any other person not bound by an express confidentiality obligation follows the procedures set out below under “Inadvertent Disclosure”.
- Disclosure should be corrected as soon as reasonably practicable if Carmanah subsequently learns that an earlier disclosure by Carmanah contained a material error at the time it was given.
- The Authorized Spokespersons will monitor the media following the release of Material Information and, in the event of perceived inaccuracies in reporting, will consult with the Chief Executive Officer to determine if and what corrective steps will be taken.
“Forward-Looking Information” is information about prospective results of operations, financial position or changes in financial position, based on assumptions about future conditions and courses of action or any other disclosure other than statements of fact or regarding historical information.
If Carmanah elects to disclose Forwarding-Looking Information in continuous disclosure documents, speeches, conference calls, or otherwise, it will observe the following guidelines:
- The Forward-Looking Information, if determined to be material, will be broadly disseminated by news release or other appropriate means, in accordance with this Policy.
- The Forward-Looking Information will be clearly identified as forward-looking.
- Carmanah will identify material factors and assumptions used in the preparation of the Forward-Looking Information.
- The Forward-Looking Information will be accompanied by a statement that identifies, in specific terms, risks and uncertainties that may cause the actual results to differ materially from those set out in the Forward-Looking Information, including a sensitivity analysis to indicate the extent to which different business conditions from the underlying assumptions may affect the actual outcome.
- The Forward-Looking Information will be accompanied by a statement that disclaims any intention or obligation of Carmanah to update or revise the Forward-Looking Information, whether as a result of new information, future events or otherwise, except as required by applicable law. Notwithstanding this disclaimer, should subsequent events prove past statements about current events to be materially different or to have materially changed, the Disclosure Committee will consider whether this constitutes Material Information requiring public disclosure. Even if public disclosure is not required, Carmanah may still choose to issue a news release explaining the reasons for the difference and updating its guidance on the anticipated impact on revenue and earnings (or other key metrics).
If Carmanah has issued a forecast or projection in connection with an offering document, Carmanah will update that forecast or projection periodically, as required by National Instrument 51-102.
Carmanah will try to ensure, through its regular public dissemination of quantitative and qualitative information that analysts’ estimates are in line with Carmanah’s expectations. However, Carmanah will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with analysts’ models and earnings estimates.
A quarterly public communication quiet period will begin on the third trading day prior to the end of each financial quarter and will terminate two full business days after the issuance of a news release disclosing quarterly results. During this period, Carmanah will not normally communicate with the investment community, investors or the media on matters potentially impacting earnings outlooks.
The purpose of the quiet period is to avoid the potential for, or perception of, selective disclosure. During this period, Carmanah will only communicate with the investment community, investors or the media to respond to unsolicited inquiries concerning factual matters about already publicly disclosed information, unless otherwise determined by the Chief Executive Officer.
Maintaining Confidentiality & Tipping
Company Personnel are prohibited from communicating Material Information, including Material Undisclosed Information, to any person outside the Company, unless: (i) disclosure is in the necessary course of the Company’s business provided that the person receiving such information first enters into a confidentiality agreement in favour of the Company (which should contain, among other things, an acknowledgement by the recipient of the requirements of applicable securities laws relating to such recipient trading securities with knowledge of a material fact or material change in respect of the Company that has not been generally disclosed and to such recipient information another person or company such a material fact or material change) and the disclosure is made pursuant to the proper performance by such Company Personnel of his or her duties on behalf of the Company; (ii) disclosure is compelled by judicial process; or (iii) disclosure is expressly authorized by notification from the Disclosure Committee. Subject to the above, Material Information, including Material Undisclosed Information, is to be kept strictly confidential by all Company Personnel until after it has been generally disclosed. Discussing Material Information, including Material Undisclosed Information, within the hearing of, or leaving it exposed to, any person who has no need to know is to be avoided at all times. Company Personnel with knowledge of Material Information shall not encourage any other person or company to trade in the securities of the Company, regardless of whether the Material Information is specifically communicated to such person or company. If any Company Personnel has any doubt with respect to whether any information is Material Information or whether disclosure of Material Information is in the necessary course of business, the individual is required to contact the Disclosure Committee.
Examples of when communicating Material Information may be necessary, subject in all cases to prior approval of the Disclosure Committee, include the following:
- Vendors, suppliers or strategic partners on issues such as research and development, sales and marketing and supply contracts.
- Lenders, legal counsel, auditors, financial advisors and underwriters.
- Counterparties to negotiations.
- Labour unions when necessary for performance of required work or negotiations with labour unions.
- Government agencies and non-governmental regulators.
- Credit rating agencies (provided that the information is disclosed for the purpose of assisting the agency to formulate a credit rating and the credit rating is or will be publicly available).
Communicating Material Information outside of these guidelines to family members, friends or other third parties constitutes “tipping” and can result in serious consequences for Carmanah as well as the persons communicating or receiving the information if the persons receiving the information subsequently trade in securities of Carmanah.
In order to prevent the misuse or inadvertent disclosure of Material Information, the following procedures should be observed at all times:
- Documents and files containing Material Information should be kept in a safe place to which access is restricted to individuals on a need-to-know basis.
- Code names should be used, where appropriate.
- Confidential matters should not be discussed in places where the discussion may be overheard, such as elevators, hallways, restaurants, airplanes or taxis.
- Confidential documents should not be read or displayed in public places and should not be discarded where others can retrieve them.
- Employees must ensure that they maintain the confidentiality of information in their possession outside of the office as well as inside the office.
- Transmission of confidential documents by electronic means, such as by fax or directly from one computer to another, should be made only where it is reasonable to believe that the transmission can be made and received under secure conditions.
- Unnecessary copying of confidential documents should be avoided and documents containing Material 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.
- Access to confidential electronic data should be restricted through the use of passwords.
Corporation Communications and Authorized Spokesperson
The following are the spokespersons authorized (“Authorized Spokespersons”) by the Corporation to communicate on behalf of Carmanah with the investment community, investors, regulators and the media:
- the Chief Executive Officer, or failing him,
- the Chief Financial Officer, or failing him,
- the Chairman, or failing him,
- persons specifically authorized by the Chairman, Chief Executive Officer or Chief Financial Officer.
No other persons are authorized to communicate on behalf of Carmanah, unless specifically authorized in this Policy or by the Chairman, Chief Executive Officer or Chief Financial Officer.
Corporate Disclosure of Material Information
In order to ensure compliance with legal and regulatory requirements, the Chief Executive Officer, or failing him, the Chairman, has the sole authority in respect of the Corporate Communication of Material Undisclosed Information or any other Material Information that has not been publicly disclosed.
Unless otherwise permitted by this Policy no Material Information may be disclosed to the media, regulators, investors, analysts or to the public without the pre-approval of the Chief Executive Officer, or failing him, the Chairman. Unless otherwise permitted by this Policy, the Corporate Communication of Material Information can only be made by an Authorized Spokesperson.
Shareholders, the Investment Community and the Media
Directors, officers or employees who are not Authorized Spokespersons must not respond to inquiries from the investment community, the media or others, unless specifically asked to do so by an Authorized Spokesperson. These inquiries must be referred to the Authorized Spokespersons.
The Chief Financial Officer will co-ordinate all meetings and interviews with and presentations to (including electronic or telephonic ones) shareholders, the investment community, and the media. The Authorized Spokespersons will approve the messages and materials for these events. If Material Information is to be disclosed, it will be released in accordance with this Policy immediately before the meeting.
Governments and Regulators
To the extent that communication or disclosure is required to senior levels of federal, provincial, territorial and international government or regulatory authorities, such communications or disclosure must be approved by the Chief Executive Officer. The Chief Executive Officer is responsible for the coordination and approval of Carmanah’s corporate positions on government policy. The Chief Executive Officer may delegate to other directors or officers the authority to communicate with lower levels of government, such as the Deputy Ministers, Assistant Deputy Ministers and other relevant levels of government, such as municipal governments.
In general, Carmanah does not independently comment in public on government policy, but expresses its support, where appropriate, for positions taken through various industry organizations.
In the event of emergencies, the Chief Executive Officer or, failing him, the Chairman will make an initial media response responding to the incident and the Authorized Spokespersons may co-ordinate all subsequent media responses related to the emergency. The primary Authorized Spokesperson for the media in emergencies will be the Chief Executive Officer or, failing him, the Chairman. Many emergencies will result in developments which constitute Material Information and will be dealt with as such in accordance with this Policy.
Speaking Engagements in General
Speaking engagements and presentations by employees of Carmanah on any matter which pertains to Carmanah and which may affect Carmanah’s corporate identity or its relations with the public, industry or government must be approved in advance by the Chief Executive Officer or other Authorized Spokesperson. The approval for the content of the speech or presentation should be obtained at least one week prior to presentation.
The principal method of publicly disclosing Material Information by Carmanah will be by news release. No news release disclosing Material Information may be issued by Carmanah unless it has been approved in advance by the Chief Executive Officer and Chief Financial Officer after sign-off by the leaders of the business unit responsible for releasing the Material Information. The Disclosure Committee will, if considered appropriate or desirable in the discretion of the Disclosure Committee, consult with the Board of Directors in respect of the dissemination of Material Information and notify the Board of Directors of the dissemination of Material Information.
Conference calls will be held by the Chief Executive Officer and Chief Financial Officer to report on quarterly earnings and major corporate developments so that the information will be accessible simultaneously to all interested parties, including access by telephone, webcast or online. Conference calls will be preceded by a news release containing all Material Information.
If a stock exchange upon which securities of Carmanah are listed is open for trading at the time of the issuance of a news release announcing Material Information, prior notice of the news release must be provided to the market surveillance department of the stock exchange to enable a trading halt, if deemed necessary by the stock exchange. If a news release announcing Material Information is issued outside of trading hours, the market surveillance department of the stock exchange must be notified before the market reopens.
Annual and interim financial results will be publicly disclosed by news release as soon as possible following approval of the financial statements by Carmanah’s Board of Directors in the case of annual financial results and the Audit Committee of the Board of Directors in the case of quarterly financial results.
Material Information will be publicly disclosed immediately by news release through a major news wire service, on Carmanah’s website and by mail, fax or e-mail to lists of interested parties which have requested such information. News releases will be transmitted to SEDAR, all stock exchange members on exchanges where Carmanah’s securities trade, relevant regulatory bodies, major business wires, national financial media, and the local media in areas where Carmanah has its headquarters and operations. Carmanah’s Corporate Communications Committee will manage the distribution of such information.
The News Releases section of Carmanah’s Web site will include a notice that advises the reader that the information was accurate at the time of posting, but may be superceded by subsequent publicly disclosed information.
Carmanah will grant public access to conference calls, teleconference calls and simultaneous webcasts it organizes for analysts and securityholders. The news release announcing an upcoming conference call will include:
- the date and time of the conference call;
- a general description of what is to be discussed;
- the means of accessing the conference call; and
- when a replay of the conference call will be available on Carmanah’s website.
Conference calls will normally be preceded by a meeting of Carmanah participants to review responses to anticipated questions and to identify information that may require public disclosure prior to the conference call. At the beginning of the call, a Carmanah spokesperson will provide appropriate cautionary language with respect to any Forward-Looking Information and direct participants to publicly available documents containing the assumptions and sensitivities and a discussion of the risks and uncertainties.
A tape recording of the conference call or an archived audio webcast on the Internet will be made following the call and maintained on the Web site for a minimum of 30 days, for anyone interested in listening to a replay. Any non-material supplemental information provided to participants will also be posted to Carmanah’s Web site for others to view.
The Chief Executive Officer and the Chief Financial Officer will hold a debriefing immediately after the conference call and, if the debriefing uncovers selective disclosure of previously undisclosed Material Information, Carmanah will immediately disclose that Material Information in accordance with this Policy.
Analysts and Investor Meetings
Carmanah recognizes that meetings with analysts and institutional investors are an important element of Carmanah’s investor relations program. Carmanah will meet with analysts and investors on an individual or small group basis, as needed, and will initiate contact with, or respond to, analysts and investors in a timely, consistent and accurate fashion in accordance with this Policy.
Carmanah will provide only factual non-material information at individual and group meetings, in addition to publicly disclosed information, recognizing that an analyst or institutional investor maybe capable of constructing this information into a mosaic that could constitute Material Information. Carmanah will not alter the materiality of information by breaking down the information into smaller, non-material components. Carmanah will maintain all presentation material on its website and will provide the same detailed, non-material information to individual investors or reporters that it has provided to analysts and institutional investors.
Carmanah Authorized Spokespersons will normally keep notes of telephone conversations with analysts and investors and, where practicable, more than one Carmanah representative will be present at all individual and group meetings.
Where practical, detailed records or transcripts should be made of any conference call, industry conference presentation or meeting with an analyst. These should be reviewed after the event to determine whether any inadvertent selective disclosure has occurred.
If a Company Personnel becomes aware that there may have been an inadvertent disclosure of Material Undisclosed Information relating to Carmanah, that person should immediately contact the Chief Executive Officer. The Chief Executive Officer shall, to the extent permitted by law, endeavor to obtain from the recipient(s) of the information an express written or oral agreement to keep this information confidential and refrain from trading in the Company’s securities until such time as the Material Undisclosed Information is publicly disseminated. To the extent necessary to comply with applicable law, a plan or the development and implementation of a plan to make prompt public disclosure of the Material Information should be made by news release or other appropriate means. This plan will normally include contacting the relevant stock exchange and requesting that trading be halted pending public disclosure of the Material Undisclosed Information.
Subject to compliance with applicable laws and stock exchange policies, Carmanah will not normally comment, affirmatively or negatively, on rumors. This Policy also applies to rumors on the Internet.
The Authorized Spokespersons will respond consistently to rumors, by stating, “It is our Policy not to comment on market rumors or speculation.”
Should a stock exchange request that Carmanah make a definitive statement in response to a market rumour relating to Carmanah, the Disclosure Committee will respond to the stock exchange.
Analyst Research Reports
Carmanah will review research reports by analysts for internal use only and will not normally comment on those reports to any persons outside of Carmanah, except for the purpose of pointing out factual errors based on already publicly disclosed information.
Carmanah will not post research reports by analysts on its website or include links to any investment firm’s or analyst’s websites or publications.
Carmanah will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with the analyst’s model or earnings estimates.
In order to avoid appearing to endorse an analyst’s research report or model, Carmanah will provide its comments orally or will attach a disclaimer to written comments to indicate that the analyst’s report or model was reviewed only for factual accuracy based on publicly disclosed information.
Carmanah may post on its Web site a complete list, regardless of the recommendation, of all of the investment firms and analysts who are known to Carmanah to provide research coverage on Carmanah. If provided, the list will not include links to the investment firm’s or analyst’s Web sites or publications.
Carmanah will maintain on its website public information about Carmanah and all news releases disseminated by Carmanah. Carmanah will also maintain or provide website links or access instructions to the following documents:
- Annual Reports for the preceding five fiscal years.
- Annual Information Forms for the preceding five fiscal years.
- Management Information Circulars for the preceding five fiscal years.
- Management’s Discussion & Analysis for the preceding five fiscal years.
- Quarterly reports for the current and the immediately preceding fiscal year.
- News releases for the current and the immediately preceding fiscal year.
- Material change reports for the current and the immediately preceding fiscal year.
The Chief Financial Officer will ensure these documents are maintained for the required period.
The Chief Financial Officer is responsible for approving and monitoring all information placed on the “Investor Information” section of the website to ensure that it is accurate, complete, up-to-date and in compliance with legal and regulatory requirements.
Any link from the Carmanah website to a third party website must be approved in advance by the Chief Financial Officer. Any link must include a notice that advises the reader that he or she is leaving Carmanah’s website and that Carmanah is not responsible for the contents of the third party website.
Investor information material will be contained within a separate section of Carmanah’s website and shall include a notice that advises the reader that the information posted was accurate at the time of posting, but may be superceded by subsequent disclosures. All data posted to Carmanah’s website, including text and audiovisual material, will show the date that the material was posted. The Chief Financial Officer will maintain a log indicating the date that Material Information is posted and removed from the Investor Information section of the Carmanah Web site.
Disclosure on Carmanah’s website alone does not constitute adequate dissemination of non-public Material Information. Any disclosure of non-public Material Information on Carmanah’s website will be preceded by the issuance of a news release or dissemination by other appropriate means.
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 non-public Material Information is inadvertently disclosed, directors, officers and employees of Carmanah are prohibited from participating in Internet chat rooms or newsgroup discussions on matters pertaining to Carmanah’s activities or its securities. Any Company Personnel who becomes aware of a discussion pertaining to Carmanah on the Internet should advise the Chief Executive Officer as soon as possible.
Insider Share Trading
Responsibilities and Rules
Company Personnel who have knowledge of Material Undisclosed Information are personally responsible for complying with securities regulations when purchasing, selling or otherwise trading Carmanah securities. 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 material undisclosed information. If in doubt, the individual should consult with the Chief Executive Officer or Chief Financial Officer.
In addition to compliance with securities laws, Company Personnel are subject to the following rules pursuant to this Policy.
No Insider Trading:
Any Company Personnel who has knowledge of Material Undisclosed Information may not purchase, sell or otherwise trade in securities of the Company or disclose, provide or make use of such information to achieve any other benefit either for himself or herself or for another person. Trading securities of the Company with knowledge of Material Undisclosed Information constitutes “insider trading” and is prohibited pursuant to this Policy and under securities laws.
Quarterly Blackout Period:
No Company Personnel shall purchase, sell, or otherwise trade in securities of the Company:
a. during the period commencing on the 3rd trading day prior to the end of each of the Company’s first, and second and third fiscal quarters and ending after two full business days have elapsed following the date on which a press release has been issued in respect of the Company’s interim financial statements; and
b. during the period commencing on the 3rd trading day prior to the Company’s fiscal year end and ending after two full business days have elapsed following the date on which a press release has been issued in respect of the Company’s annual financial statements;
The trading restrictions described above (each a “Black-Out Period”) also apply to the exercise of stock options granted under the Company’s incentive awards plan and any other securities that may be acquired pursuant to any Company benefit plan or arrangement.
Blackout Commencement Date*
Blackout Expiry Date
Q1 – (Jan. 1 – Mar. 31)
2 Days after release
Q2 – (Apr. 1 – June 30)
2 Days after release
Q3 – (July 1 – Sept. 30)
2 Days after release
Q4 – (Oct. 1 – Dec. 31)
2 Days after release
* Dates to be on the next earlier business day, if such date falls on a weekend or statutory holiday in Ontario in any given year.
Additional Blackout Periods:
In the event of pending Material Undisclosed Information, the Company’s Chairman or its Chief Executive Officer may notify specific Company Personnel of additional Black-Out Periods during which they are prohibited from purchasing, selling or otherwise trading the Company’s securities.
If at any time, any Company Personnel is approved for a grant of more than 25,000 stock options, such Company Personnel is prohibited from trading Carmanah shares during the 14 day period between approval and grant date of the stock options.
Prohibition on Speculating, Short Sales and Derivatives:
Certain types of trades in securities of the Company by Company Personnel can raise particular concerns about potential breaches of applicable securities law or 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:
a. 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 incentive awards plan or any other Company benefit plan or arrangement);
b. 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;
c. selling a “call option” giving the holder an option to purchase securities of the Company; and
d. buying a “put option” giving the holder an option to sell securities of the Company.
Insider Trader Reporting Requirements:
Responsibility for accurate, clear and timely insider report filings with the appropriate regulatory authority (currently “System for Electronic Disclosure by Insiders” or “SEDI”) rests with any Company Personnel who are “reporting insiders” pursuant to applicable securities laws and not with the Company.
Reporting of Trades by Directors and Senior Officers
To provide assistance in preventing inadvertent violations of this Policy and avoiding even the appearance of an improper transaction, Company Personnel must not at any time, directly or indirectly, trade in the Company’s securities unless such Company Personnel provides prior notice to the Chief Executive Officer of such trade (trades by the Chief Executive Officer shall require prior notice to the Chairman).
Unless otherwise specified by the Chief Executive Officer, notification for a transaction is only valid for five business days after such notification is given. If the trade is not completed within that five business day period, notification for the transaction must be given again. If the Chief Executive Officer (or Chairman, in the case of trades by the Chief Executive Officer) advises, following notice of a trade, that such trade is not permitted, the fact of such denial must be kept confidential by the Company Personnel. The notification must specify the amount and nature of the proposed trade(s), and the applicant must attest that he or she is not in possession of any Material Undisclosed Information concerning the Company. If the applicant becomes possessed of Material Undisclosed Information concerning the Company before the proposed trade is completed, the trade must not take place. Likewise, the Chief Executive Officer may in his or her discretion revoke any clearance given.
Automatic Share Purchase and Disposition Plans
The Board may approve the adoption by the Company, and the Disclosure Committee may approve the adoption by Company Personnel of automatic share disposition plans (“ASDPs”) and automatic share purchase plans (“ASPPs”). An ASDP may enable Company Personnel to arrange for the exercise of stock options and the automatic sale or donation of securities of Carmanah (including common shares underlying stock options) in accordance with pre-arranged instructions notwithstanding that the Company Personnel is then aware of or in possession of Material Undisclosed Information or a Blackout has been imposed. Similarly, an ASPP may enable Company Personnel to arrange for purchases of Carmanah’s securities in accordance with pre-arranged instructions notwithstanding that the Company Personnel is then aware of or in possession of material, non-public information or a trading blackout has been imposed. In each case, the Company or the Company Personnel, as applicable must clear in advance with the Disclosure Committee (or the Board in the case of an ASDP or ASPP to be established by a member of the Disclosure Committee) the adoption of the ASDP or ASPP, and the ASDP or ASPP must comply with applicable Canadian securities laws, including National Instrument 55-104 Insider Reporting Requirements and Exemptions (“NI 55-104”).
Before an ASDP or ASPP that is proposed to be adopted will be cleared under this Policy, the Company Personnel must provide a draft of the ASDP or ASPP to the Disclosure Committee together with a schedule of planned exercises of options, sales, donations or purchases, and the Company Personnel must certify that (i) he or she is not then in possession of material, non-public information, and (ii) he or she is entering into the ASDP or ASPP in good faith and not as part of a plan or scheme to evade the prohibitions of applicable Canadian securities laws.
In determining whether to clear the adoption of an ASDP or ASPP, the Disclosure Committee, shall consider whether the ASDP or ASPP complies with the following guidelines:
- Timing for Adopting an ASDP or ASPP – An ASDP or ASPP may not be adopted during a trading blackout period. An ASDP or ASPP may only be adopted at a time when the Company Personnel is not in possession of material, non-public information.
- Cooling-Off Period – A “cooling-off” period of not less than 60 days will generally be required between the adoption of the ASDP or ASPP and the first disposition or acquisition under the ASDP or ASPP.
- Duration – An ASDP or ASPP should have a limited duration (e.g., 12-24 months).
- Modification and Termination – The ASDP or ASPP must contain meaningful restrictions on the ability of the insider to modify or terminate the ASDP or ASPP. Following the adoption of the ASDP or ASPP, the Company Personnel may not modify or terminate the ASDP or ASPP unless: (i) an explanation of the reasons for such modification or termination is provided to the Disclosure Committee, and pre-clearance of such modification or termination is obtained from the Disclosure Committee; (ii) in connection with such pre-clearance, the Company Personnel certifies that (a) he or she is not then in possession of material, non-public information, and (b) he or she is modifying or terminating the ASDP or ASPP in good faith and not as part of a plan or scheme to evade the prohibitions of applicable Canadian securities laws; and (iii) if the if ASDP or ASPP was established by an “insider” that is required to file insider reports in accordance with applicable Canadian securities laws, such person notifies the public via a SEDI filing (or other filing agreed to by the Disclosure Committee) of the modification or termination and includes in such filing a representation that such insider is not in possession of any material, non-public information. No such modification or termination may occur during a trading blackout period. In addition, the ASDP or ASPP should include a delay period (e.g., 30-45 days) for any instructions to modify or terminate an ASDP or ASPP.
- Simplicity – The Company Personnel should avoid complex sales formulae that may be hard to apply, misinterpreted or that may require the broker under the ASDP or ASPP to seek guidance from the Company Personnel.
- Disclosure – Carmanah will generally disclose by press release the adoption of an ASDP by a director or officer.
- Manner of Trades – The ASDP or ASPP should generally provide for regular sales or purchases of smaller amounts (relative to a Company Personnel’s holdings) over a period of time rather than large sales or purchases during a short period of time after adoption of the ASDP or ASPP.
- Broker – A Company Personnel should use a broker that is familiar with ASDPs and/or ASPPs, as applicable. The broker responsible for the ASDP or ASPP should not have an established relationship with the Company Personnel to prevent allegations of influence.
The Board may also consider such other “best practices” as they exist at such time with respect to ASDPs and ASPPs, and may impose such additional requirements, or grant such exceptions, as it determines are necessary or appropriate.
In pre-clearing the adoption, modification or termination of an ASDP or ASPP, none of the Company or the Board shall be responsible for determining whether such ASDP or ASPP is in compliance with the provisions of applicable securities laws, including NI 55-104. Compliance with applicable securities laws is the responsibility of the Company Personnel, who should consult with his or her own legal advisors before adopting an ASDP or ASPP.
Company Personnel are prohibited from depositing securities of the Company into any margin account other than deposits of securities into a margin account that may be created pursuant to an ASDP or ASPP that is established in compliance with requirements under applicable securities laws and the requirements of this Policy set out below.
Any violation of this Policy should be promptly reported to the Chief Executive Officer and / or Chief Financial officer or in extreme exceptional cases regarding financial disclosure, to the Chair of the Audit Committee.
Any person who has any questions about this policy statement or about specific transactions may contact the Chief Executive Officer. Remember, however, that the ultimate responsibility for adhering to the policy statement and avoiding improper transactions rests with you. In this regard, it is imperative that you use your best judgement