Insider Trading Policy FEBRUARY 2014
Table of Contents 1. Introduction... 2 2. Insider Trading Restrictions... 2 a) Insider Trading Restrictions... 2 b) Material Information... 3 c) Persons in Special Relationship... 3 d) Prohibition against Insider Trading and Speculating... 4 e) Non-Monetization Policy... 4 f) Black-out Windows and Additional Trading Restrictions for all Vice- Presidents, Officers and Board of Directors... 4 3. SEDI Reporting Requirements... 5 ATTACHMENT A... 6 ATTACHMENT B... 8 INSIDER TRADING POLICY PAGE 1 FEBRUARY 2014
1. Introduction Manitoba Telecom Services Inc. (the Company ) is a publicly traded company and a reporting issuer under securities legislation. The Company is required by law to disclose Material Information to the public on a timely basis. The Company also has an obligation to ensure that its Directors, Officers and Employees comply with the insider trading and tipping requirements set out in securities legislation and Criminal Code (Canada). These rules are designed to protect the integrity of the securities markets by ensuring that all investors have equal access to information that may affect their investment decisions. The Toronto Stock Exchange recommends that every listed company should have a firm rule prohibiting those who have access to Material Information from trading in the company s securities before the information has been generally disclosed to the public and a reasonable period of time for dissemination of the information has passed. This policy is intended to outline the restrictions on trading in securities of the Company by insiders and other Employees of the Company or its subsidiaries, and the insider reporting requirements applicable to certain insiders of the Company. It is the personal responsibility of each Director, Officer and Employee to ensure that, when they trade or propose to trade in the Company s securities or of companies with which the Company has business dealings, they comply with all applicable insider trading restrictions including those referred to in this policy. The provisions of this policy are qualified by the specific provisions of applicable law, which shall always apply regardless of this policy. For greater certainty and without limiting individuals responsibilities under this policy, any breach of insider trading or tipping laws shall be deemed to be a breach of this policy. 2. Insider Trading Restrictions a) Insider Trading Restrictions Insider trading is strictly regulated by Canadian securities law, which provides for both fines and imprisonment in the event of violations of the prescribed restrictions on trading in the securities of a reporting issuer. For this purpose, securities include any of the Company s shares, phantom shares, debt instruments, puts, calls, options or other rights to purchase or sell securities of the Company, and a security the market price of which varies materially with the market price of the securities of the Company (collectively Securities ). Securities legislation sets out two main prohibitions in relation to Material Information of a reporting issuer: INSIDER TRADING POLICY PAGE 2 FEBRUARY 2014
(i) (ii) A person in a special relationship with a reporting issuer may not purchase or sell securities of the issuer when in possession of Material Information related to the issuer that has not been generally disclosed to the public. Failure to comply with the foregoing is known as insider trading. A person in a special relationship with a reporting issuer may not inform another person or corporate entity, other than in the necessary course of business (as described in ATTACHMENT B), of Material Information related to the issuer before that information has been generally disclosed to the public. Failure to comply with the foregoing is known as tipping. b) Material Information Material Information is a term defined under applicable law. At a very general level, it means any information that, if disclosed, would significantly affect, or would reasonably be expected to have a significant effect on, the market price or value of any of an issuer s securities. That includes any such information related to the business, operations or capital of the Company, and also includes tentative decisions that have been made but whose subsequent approval is probable. Information may also be material if it would reasonably be expected to have a significant influence on an informed investor s investment decisions. The most common Material Information consists of quarterly and annual financial results. The Canadian Securities Administrators, in a national policy instrument adopted in July 2002, have identified an expanded, non-exhaustive list of examples of the types of events or information that may be material. These examples are specified in ATTACHMENT A. c) Persons in Special Relationship A person in a special relationship with a reporting issuer includes all Directors, Officers, Employees and insiders of the issuer and its subsidiaries (including their spouses, family members and others that live in their households), and anyone who is informed of Material Information of the issuer that has not been generally disclosed. Securities legislation defines insider as meaning all Directors and senior Officers of a reporting issuer or of any of its subsidiaries, and any holder of more than 10% of the voting rights of the issuer and the Directors and Senior Officers of any such holder. A Senior Officer is defined as the chair and any vice-chair, the president, any vice-president, the secretary, the treasurer, the general manager, and any other individual who performs functions for the issuer similar to those normally performed by an individual occupying any of the above offices, INSIDER TRADING POLICY PAGE 3 FEBRUARY 2014
together with each of the five highest paid Employees of the issuer, including any of the individuals specified above. These individuals, therefore, are all insiders, and are subject to the insider trading restrictions described in this section 2 and to the insider reporting requirements described in section 3 below. d) Prohibition against Insider Trading and Speculating Every Employee, Officer and Director of the Company and its subsidiaries must refrain from: (i) (ii) (iii) Insider trading and tipping; purchasing or selling Securities frequently so as to appear to be speculating; and the short selling of, or trading in, puts or calls in respect of Securities. e) Non-Monetization Policy Every Employee, Officer and Director of the Company and its subsidiaries must refrain from the indirect trading of Securities including, but not limited to, the short sale of, trading in puts, calls or options or other rights or obligations to buy or sell Securities. f) Black-out Windows and Additional Trading Restrictions for all Vice-Presidents, Officers and Board of Directors In order to avoid even the appearance of possible insider trading, the following additional trading restrictions apply to all members of the Company s Board of Directors, as well as the Company s Officers and Vice-Presidents: (i) (ii) Such individuals are all prohibited from trading in securities of the Company during a period commencing on the first date following the end of a financial quarter, and ending on the date of public disclosure by the Company of this Material Information (the Black Out Window ). This Black-Out Window shall apply regardless of whether such individuals received advance notice of the commencement of the Black-Out Window; and Prior to any trades, such individuals shall obtain the prior consent of the Chief Executive Officer or the Chief Corporate and Strategy Officer & Corporate Secretary (provided further that members of the Executive Committee shall obtain the prior consent of the Chief Executive Officer). The insider trading restrictions generally described in this policy also apply to restrict trading by Directors, Officers and Employees of the Company in securities of an issuer with which the Company has a significant business INSIDER TRADING POLICY PAGE 4 FEBRUARY 2014
relationship or with which it is proposing to enter into a transaction or business combination. The Company may from time to time impose additional black-out periods on some or all of the Directors, Officers or Employees of the Company and its subsidiaries. Despite the above, a Director, Officer or Employee of the Company may purchase or sell Securities during a black-out period with the prior written consent of the Chief Executive Officer. The Chief Executive Officer will grant permission to purchase or sell during a black-out period only in exceptional circumstances. Exceptional circumstances may include the sale of Securities in the case of financial hardship or where the timing of the sale is important for tax planning purposes or where options may be expiring. In no event will any person be permitted to trade with a third party when such person has knowledge of any material undisclosed information. In addition, the trade of securities that have been pre-approved by the Chief Executive Officer or the Board of Directors (e.g., the decision to invest a bonus into shares of the company, an irrevocable and pre-determined decision to convert share units into shares, etc.) may not be subject to this Policy. 3. SEDI Reporting Requirements Certain insiders are subject to obligations to report their trades of Securities on SEDI. Any insiders seeking clarification of their obligations are to consult with the Chief Corporate and Strategy Officer & Corporate Secretary. The insiders themselves are legally responsible for ensuring that they are in compliance with SEDI reporting requirements. To assist such insiders in complying with SEDI requirements, the office of the Chief Corporate and Strategy Officer & Corporate Secretary, through the Law Department, will when requested to do so, arrange to file the required insider reports with the securities regulatory authorities on behalf of the insider. Such insiders are responsible for ensuring the accuracy of any such reports. INSIDER TRADING POLICY PAGE 5 FEBRUARY 2014
ATTACHMENT A Changes in corporate structure Examples of Information That May Be Material (Reproduced from National Instrument 51-201) changes in share ownership that may affect control of the company major reorganizations, amalgamations, or mergers take-over bids, issuer bids, or insider bids Changes in capital structure the public or private sale of additional securities planned repurchases or redemptions of securities planned splits of common shares or offerings of warrants or rights to buy shares any share consolidation, share exchange, or stock dividend changes in a company s dividend payments or policies the possible initiation of a proxy fight material modifications to the rights of security holders Changes in financial results a significant increase or decrease in near-term earnings prospects unexpected changes in the financial results for any period shifts in financial circumstances, such as cash flow reductions, major asset write-offs or write-downs changes in the value or composition of the company s assets any material change in the company s accounting policies Changes in business and operations any development that affects the company s resources, technology, products or markets a significant change in capital investment plans or corporate objectives major labour disputes or disputes with major contractors or suppliers significant new contracts, products, patents, or services or significant losses of contracts or business significant discoveries by resource companies changes to the Board of Directors or executive management, including the departure of the company s CEO, CFO, COO or president (or persons in equivalent positions) INSIDER TRADING POLICY PAGE 6 FEBRUARY 2014
the commencement of, or developments in, material legal proceedings or regulatory matters waivers of corporate ethics and conduct rules for Officers, Directors, and other key Employees any notice that reliance on a prior audit is no longer permissible de-listing of the company s securities or their movement from one quotation system or exchange to another Acquisitions and dispositions significant acquisitions or dispositions of assets, property or joint venture interests acquisitions of other companies, including a take-over bid for, or merger with, another company Changes in credit arrangements the borrowing or lending of a significant amount of money any mortgaging or encumbering of the company s assets defaults under debt obligations, agreements to restructure debt, or planned enforcement procedures by a bank or any other creditors changes in rating agency decisions significant new credit arrangements INSIDER TRADING POLICY PAGE 7 FEBRUARY 2014
ATTACHMENT B Examples of Disclosures That May Be Necessary In The Course Of Business (Reproduced from National Policy 51-201) The necessary course of business exception to the tipping prohibition would generally cover communications that are reasonably necessary in the course of business with: vendors, suppliers, or strategic partners on issues such as research and development, sales and marketing, and supply contracts Employees, Officers and board members lenders, legal counsel, auditors, underwriters, and financial and other professional advisors to the Company parties to negotiations labour unions and industry associations 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 agency s ratings generally are or will be publicly available) * * * INSIDER TRADING POLICY PAGE 8 FEBRUARY 2014