Canadian Tire Corporation, Limited Code of Business Conduct for Employees and Directors The Canadian Tire Way
Page 2 TABLE OF CONTENTS A. INTRODUCTION... 3 Who the Code Applies To... 4 B. PRINCIPLES OF BUSINESS CONDUCT... 5 C. COMPLIANCE WITH THE CODE OF CONDUCT... 6 Sources of Assistance... 6 Compliance with Laws... 6 Compliance with Canadian Tire Policies and Procedures... 7 Key Company Policies... 7 Commitment to the Code as a Condition of Employment... 7 Penalties for Breaching the Code... 8 Reporting and Responding to Breaches of the Code... 8 D. GOVERNANCE AND OVERSIGHT OF THE CODE OF BUSINESS CONDUCT.. 9 E. CONFLICT OF INTEREST... 10 Gifts and Loans... 11 Entertainment... 12 Attendance at Business Partner, Professional or Industry Association Functions... 13 Travel... 13 Attending Charitable Events... 14 Fundraising/Donations... 14 Political Gifts... 14 Products and Samples... 15 F. COMMUNICATING THE COMPANY S CODE OF BUSINESS CONDUCT... 15 G. DEALING WITH EXTERNAL PARTIES... 16 Respecting Competitors... 16 H. PRESERVATION AND USE OF CORPORATE PROPERTY... 17 I. BOOKS AND RECORDS... 17 J. ENVIRONMENT, HEALTH & SAFETY... 17 K. HUMAN RIGHTS AND HARRASSMENT... 18 L. CONFIDENTIALITY AND PRIVACY... 18 Insider Trading... 19 M. FORM FOR EMPLOYEE AND DIRECTOR COMMITMENT TO THE CANADIAN TIRE CODE OF BUSINESS CONDUCT FOR EMPLOYEES AND DIRECTORS... 21
Page 3 A. INTRODUCTION Integrity and trust are the foundations upon which any good business is built. In practice, a reputation for ethical business conduct is rewarded by the company s stakeholders and by the marketplace. In the absence of actual or perceived honest dealings, stakeholders punish corporations. Canadian Tire has a long-standing tradition of integrity and trust among employees, associate dealers, franchisees, agents, shareholders, customers, suppliers, authorities and the public at large. The Company has a strong reputation for the way in which it conducts its business and is held in high esteem for its commitment to corporate social responsibility. As one of Canada s most trusted companies, our actions must be above reproach to maintain the confidence of our stakeholders and to avoid eroding the strong reputation we have worked so diligently to build. Commitment to ethical business practices, a key part of operating with honesty, integrity and respect, is core to the values of Team Canadian Tire. To ensure a clear understanding and consistent level of commitment, this Code of Business Conduct and the Canadian Tire policies incorporated within are designed to appropriately direct the actions of all employees and those individuals who act on behalf of the Company. A Business Conduct Compliance Office is available to assist employees and others acting on behalf of the Company in interpreting the requirements of the Code. The Code of Business Conduct is the Company s overriding business conduct policy and incorporates the specific policies put in place by the Company to direct employees in critical areas of the business such as competition, employment practices, use of technology and privacy. This Code sets out the minimum standards of ethical business conduct that each of Canadian Tire s businesses must follow. Over time, it may be determined that changes are required to the Code to promote clarity or to meet regulatory or other requirements. Those changes and any unintended effects of the new policies will be reviewed and the Code will be updated as necessary. People are encouraged to provide feedback to the Vice-President, Human Resources, Canadian Tire Corporation or to the Business Conduct Compliance Office that would enhance the effectiveness and assist in the interpretation of this Code. A separate Code of Business Conduct has been developed for the Company s suppliers, which is available from each employee s manager and the Human Resources department. We need the commitment of the entire Canadian Tire team to demonstrate the highest standard of ethical behaviour.
Page 4 Who the Code Applies To The Code of Business Conduct applies to the following: Members of the Board of Directors of Canadian Tire Corporation and any of the Company s subsidiary operations; Officers and other employees; and Independent contractors including contract employees and sales representatives engaged by and representing the Company. In this Code, reporting relationships are defined as follows: For the President and CEO and the Board of Directors, the Chairman of the Board; For the Chairman of the Board, the Chairman of the Governance Committee; and For all other team members, the person to whom you directly report or the designated individual or office within the Company that is responsible for directing your daily responsibilities. The business of Canadian Tire stores, certain Mark's Work Wearhouse stores, PartSource stores and Canadian Tire gas bars are operated by independent dealers, franchisees or agents who are responsible for adopting their own Code of Business Conduct. The Corporation expects these businesses to develop Codes that are consistent with the intent of this Code. It is to the Company s benefit that employees build strong and productive relationships with agents, dealers and franchisees as, together, they share responsibility for the overall success of Canadian Tire Corporation. Employees are, therefore, not bound by the normal rules set out in this Code with respect to gifts and entertainment when conducting Company business with dealers, agents and franchisees. However, employees are not permitted to accept money from a dealer, agent or franchisee or to demonstrate favouritism in exchange for gifts and entertainment. It is critical that employees exhibit fairness in the provision of business services to agents, dealers and franchisees. Upholding the standards of ethical conduct as outlined in the Code not only reflects a commitment to Canadian Tire but also demonstrates personal integrity and leadership. In a diverse business like Canadian Tire, no rule, code or policy can possibly guide all of the day-to-day decisions required of our team members. There may be legitimate business reasons which warrant flexible interpretation of certain Code guidelines. Accordingly, the Code allows Vice-Presidents and above to provide written authorization to an employee in rare and extenuating circumstances to pursue a course of action that may be prohibited by a strict interpretation of the Code. These circumstances are described in the sections of the Code that address Gifts and Loans, Entertainment and Products and Samples. Any written authorization provided to an
Page 5 employee to address unusual situations must be copied to the Business Conduct Compliance Office for monitoring purposes. Written authorizations will be reviewed by the Business Conduct Compliance Office on a regular basis to maintain the integrity of the Code and to provide input to future revisions of the Code. Except in those rare and extenuating circumstances where Vice-President and above approval is permitted, management and members of the Board of Directors must seek the written authorization of the Board of Directors for any waiver from the Code. Requests for Board authorization should be made to the Business Conduct Compliance Office which will present such requests to the Board. Canadian Tire expects that every one of its team members be guided by the values of the Company when conducting business on behalf of the Company. Everyone who represents the Company must carefully review the commitments in this Code and should not hesitate to seek assistance if they are unsure of the right course of action. As a team, directors and employees are expected to help one another in understanding and meeting the obligations outlined in the Code of Business Conduct. As directors and employees, we are only truly committed to our core values when we hold one another and ourselves accountable for our actions. B. PRINCIPLES OF BUSINESS CONDUCT As representatives of Canadian Tire, we will: comply with applicable laws, regulations, Company policies and procedures; respect the lives, rights, privacy and property of others; avoid conflicts of interest in decisions that we determine or influence; conduct our duties and business relationships in an honest, fair and responsible manner; sustain a culture in which ethical conduct is valued and recognized; maintain safe, healthy and secure work environments; use resources, material and energy as efficiently and responsibly as possible in the provision of our products and services; sustain responsible trading practices with all our suppliers to promote decent, legal and humane working conditions; foster a business environment that encourages open communication, and seeks out, listens and responds to the ideas and concerns of our stakeholders; provide timely, full and true disclosure of material information, both financial and non-financial, concerning the business and affairs of the Company to the public when and as required through authorized channels and/or spokespersons according to the Company s disclosure policy; and manage compliance with this Code of Business Conduct as any other critical business activity.
Page 6 C. COMPLIANCE WITH THE CODE OF CONDUCT As employees, we are all individually responsible for knowing, understanding and acting in accordance with this Code of Business Conduct while performing our duties. We are also responsible for reporting any breaches of the Code that we have witnessed or believe to have occurred. The Company respects employees who take the initiative to report suspected breaches of the Code. Breaches of the Code or Company policies are very serious matters that will result in disciplinary action and may also result in civil or criminal prosecution. Sources of Assistance If you are faced with an ethical or legal question, the Company does not expect you to figure out the right thing to do on your own. A number of people are available throughout the Company to consult with, including your manager, the Human Resources and Legal departments and the Business Conduct Compliance Office. The Business Conduct Compliance Office supports employees and other stakeholders with questions regarding business conduct issues and the intent of the Code. The Business Conduct Compliance Office and the Hotline also offer channels to report anonymously or confidentially complaints or concerns regarding breaches of the Code of Business Conduct. Compliance with Laws We must be aware of and comply with all applicable laws that govern the areas of the Company s business in which our responsibility lies. The Company will assist employees in understanding laws that govern areas of the business considered of greatest risk, such as: employment standards securities trading disclosure competition standards privacy human rights and harassment environment, health and safety If you are in doubt as to the law or regulations governing your area of business, you should seek advice from your manager, Human Resources or the Legal department.
Page 7 Compliance with Canadian Tire Policies and Procedures The Company has adopted certain policies and procedures to protect employees and direct their actions in a responsible manner, to comply with specific legislation and protect our reputation as a responsible corporate citizen. It is the responsibility of every manager to ensure new employees are educated about the Company s policies including policies specific to their job responsibilities and business unit. Managers are also responsible for monitoring the actions of all their employees to ensure that policies and procedures are appropriately followed. It is the responsibility of the Governance Committee of the Board of Directors (and the Governance and Conduct Review Committee of Canadian Tire Bank) to ensure that new directors are educated on the Code in the context of their orientation to Canadian Tire. The Code of Business Conduct is the overriding business conduct policy for Canadian Tire and includes all of the Company s specific policies and procedures that govern business practices. Key policies, such as those referenced below, are accessible from an employee s manager or from the Human Resources Department. Key Company Policies Information Technology Acceptable Usage Corporate Disclosure Insider Trading Environment, Health and Safety Harassment Dignity and Respect Privacy Travel and Expense Donations Policy Commitment to the Code as a Condition of Employment By choosing to be a member of the Canadian Tire team, we agree to abide by the Code of Business Conduct as a condition of our employment. Each year, all employees of the Company will be asked to confirm that they: read the Company s Code of Business Conduct; complied with the Code in place since they last signed a commitment to the Code; and agree to comply with the Code as an ongoing condition of employment. An electronic or paper confirmation (see attached form) or a signed employment contract with Canadian Tire that incorporates the Code of Business Conduct must be completed by each employee upon hiring by the Company and, thereafter, annually.
Page 8 Penalties for Breaching the Code Each employee is expected to follow the Company s policies as well as any business unit or department s specific policies and procedures that complement the Code of Business Conduct. While honest mistakes made in the course of business may be tolerated, the Company will take appropriate disciplinary action against any employee who knowingly violates laws or regulations or demonstrates lapses in ethics or integrity as set out in this Code. Failure to follow the Code of Business Conduct will lead to disciplinary action up to and including dismissal or termination of any business relationship with the Company. Employees should also be aware that legal action may result from certain breaches of the Code. For example, disciplinary action will be taken if: the Company s policies and procedures are ignored or violated; violation of Company policy is counseled; a violation is deliberately not reported; information is withheld, or there is failure to cooperate during the course of an investigation of a suspected violation; an employee is penalized for reporting a suspected breach of the code; or an employee is found to have knowingly made a false and malicious report. Reporting and Responding to Breaches of the Code All employees are responsible for reporting promptly and fully any suspected breach of the Code of Business Conduct to their manager. Other reporting channels include the Human Resources Department and the Business Conduct Compliance Office or Hotline. Managers are responsible for reporting Code breaches to their Human Resources representative to determine the appropriate course of action. All reported incidents will be investigated in a discreet, fair and confidential manner with regard to all those involved. Where it has been proven that the Code has been breached, the Company will take decisive and appropriate action to uphold the integrity of the Company s business. No employee will be penalized for reporting any matter that they reasonably believe to be a breach of the Code of Business Conduct or for inquiring about suspected unethical behaviour. The Company will take disciplinary action where necessary to protect any employee who makes a report in good faith and subsequently faces retaliation. The Company will support the person reporting the breach in the workplace and beyond if the circumstances warrant extraordinary assistance. Employees must treat as confidential any information they report (including the fact the information has been reported) related to a suspected breach of the Code to protect all those involved during the course of an investigation from being the subject of general speculation.
Page 9 D. GOVERNANCE AND OVERSIGHT OF THE CODE OF BUSINESS CONDUCT The Board of Directors of Canadian Tire holds ultimate oversight for the ethical culture of the Company. It is the Board s responsibility to ensure that it is setting an example by complying with the Code and by gaining reasonable assurance that management: is setting an example by complying with the Code at all times; is sustaining a work environment that encourages ethical behaviour and open communication so that concerns may be raised and addressed without fear of reprisal; is holding employees to account for their commitment to the Code; and is decisively responding to breaches of the Code. The Social Responsibility and Risk Governance Committee of the Board of Directors has been given the responsibility for annually reviewing the content of the Code of Business Conduct for Employees and Directors (and the Supplier Code of Business Conduct) and making any recommendations for amendments to the Board. In fulfilling its mandate, the Social Responsibility and Risk Governance Committee will consult regularly with the Audit Committee and with the Governance and Conduct Review Committee of the Canadian Tire Bank to ensure that the Code of Business Conduct is sufficiently addressing the oversight and regulatory requirements of Audit Committees. Each officer of the Company is accountable for ensuring that this Code and the Company s Supplier Code of Business Conduct are implemented in their business unit or functional area and that all breaches are reported in a manner consistent with the requirements of the Code. The Business Conduct Compliance Office is responsible for maintaining records of all reported breaches and managing the investigation process. Management will provide, at least, quarterly reports to the Audit and Social Responsibility and Risk Governance Committees on reported breaches and their disposition having a material, financial or significant reputation impact on the Company as well as Code violation trends. The Chairman of the Audit Committee and the Chairman of the Social Responsibility and Risk Governance Committee will subsequently report to the Board of Directors any significant matters that they determine warrant the Board s attention.
Page 10 E. CONFLICT OF INTEREST As employees, we owe exclusive business loyalty to the Company as a whole. We must not ignore Company procedures or use our position for the benefit of our own personal interests or those of our family, friends, colleagues or those seeking to do business with the Company. Acting in this manner may not only impact the Company but may also profoundly harm our position of trust with our colleagues. A conflict of interest arises when an employee has a personal or financial interest in a proposed Company action, even if the action is in the best interests of the Company. Any employee, who participates in a decision where they have a personal and/or financial interest, must declare the conflict of interest in writing to their supervisor at a Vice-President level or above and remove himself or herself from the decision-making process. The conflict of interest provisions in the Ontario Business Corporations Act that direct specific action(s) where conflicts of interest arise govern members of the Board of Directors and Officers of the Company. Conflicts of interest are serious matters and it is not always clear if a particular situation will give rise to a conflict. The Company expects employees, when in doubt, to seek the guidance they need to make the right decision. When considering the right course of action, common sense and good judgment should guide our actions; consider these questions: Am I following Company policies and procedures? Am I favouring a vendor, business partner, associate dealer, agent or franchisee for less than appropriate business reasons; Will I gain personally from my actions? (While it is normal to consider the impact of our actions on our compensation or potential for advancement, our ultimate course of action must be in the best interests of the Company.) Will my actions result in a financial or other advantage for me, for my relatives or my friends? Would I feel uncomfortable discussing this situation with my manager or fellow colleagues? Would I make a different decision if a friend or relative were not involved? Would I be embarrassed if my decision was reported by the media and seen by my family, friends or colleagues?
Page 11 To prevent a conflict of interest, all employees and directors must avoid involvement in outside interests or activities that would prevent full and competent performance or interfere with duties and obligations to Canadian Tire. As general rules, employees and directors: Must not engage in any business activity directly or indirectly -- in competition with the business of the Company. Must disclose to the Company, in writing, any interest they have in an organization that supplies products, services, materials, equipment or property to the Company, including shares in publicly traded companies where more than 5% of the equity is held. The Code of Business Conduct does not necessarily forbid employees from having such an interest, but employees are duty bound to disclose their involvement to their manager and the Company s Legal department. May not use Company equipment, time, materials and facilities in paid or unpaid work for other organizations or personally, unless specifically authorized by the employee s manager. Gifts and Loans The acceptance of gifts or loans can often give rise to conflicts of interest. Accepting or offering gifts or loans can compromise or appear to compromise our ability to make fair and objective business decisions. Employees and directors must never put themselves in a situation where their conduct would create - or appear to create - a conflict with the interests of Canadian Tire. Employees and directors must never use their position to obtain personal gain nor become obligated to persons with whom the Company does business. Team members must not accept gifts or loans from business partners or potential business partners, except for unsolicited souvenirs of a nominal value (under $100). All other gifts must be promptly and politely refused or returned with a note explaining the Company s Code of Business Conduct. Accepting items that have greater than a nominal value such as gift certificates, tickets, services, discounts or loans is not acceptable. Accepting money is not permissible in any situation. Offering or accepting gifts in excess of $100 will only be considered in rare circumstances. Employees who believe there is a legitimate business reason to offer or accept a gift in excess of $100 must seek written permission at a Vice-President level or above before taking any action.
Page 12 Entertainment Building appropriate relationships with business partners is an integral part of doing business and offering or accepting reasonable hospitality may be appropriate in certain cases. As a general guideline, business entertainment in the form of meals is acceptable as long as it is modest and infrequent. Other acceptable situations include: A customer appreciation lunch where a supplier invites many different customers to attend, not just Canadian Tire employees; and Annual lunches or dinners that serve to recognize the efforts of business partners. Employees should consult their manager when in doubt about the appropriateness of a specific situation. Sporting or cultural events do not always present an environment that advances the Company s business interests. Golfing or attending hockey games, for example, are largely for entertainment value and to build a personal rather than a business relationship. It is critical that the Company maintains a competitive and level playing field on costs and services with its suppliers. As employees, we cannot allow a personal relationship built through the acceptance of entertainment to create or be perceived to create a bias in our selection of suppliers or additional costs to the Company or its customers. It is not necessary to accept entertainment in order to develop an appropriate business relationship with a supplier that is consistent with our values of honesty, integrity and respect. Employees are not permitted to accept invitations or tickets to sporting or cultural events offered by suppliers of products and services except in very limited circumstances. Employees who believe there is a legitimate business reason to attend a supplier-paid sporting or cultural event must seek written permission at a Vice-President level or above before taking any action. Occasionally, it may be to the benefit of the Company to entertain a supplier at Company cost if the venue or event is appropriate to facilitate the business relationship. In such cases, employees must seek written permission at a Vice-President level or above before extending an invitation to a supplier. It is not the intent of the Company to interfere with personal relationships that exist between an employee and a supplier. Employees can, of course, entertain or be entertained by vendors or business partners who are personal friends, on employees' and their personal friends own time and at employees' and their personal friends own cost.
Page 13 Attendance at Business Partner, Professional or Industry Association Functions Many of our business partners as well as professional or industry associations offer conferences and functions to facilitate learning. Often such conferences benefit the Company by enhancing our employees understanding of the service offered or by enhancing supplier understanding of the Company s business, thereby improving the delivery of products and services. Employees may participate in business partner, industry or professional association functions with manager approval. The Company will pay for attendance at such events. Employees may keep prizes won at such events. Employees may accept entertainment organized for participants to meet and foster dialogue with other attendees of a conference or function. It is normal business practice for business partners or associations to invite subject matter experts to speak at conferences. Canadian Tire is well regarded for the quality and knowledge of its team members and speaking to suppliers groups or business partners particularly can enhance their understanding of our organization. While it is often normal business practice for the company making the invitation to cover travel and associated expenses, Canadian Tire will pay these costs when speaking at a supplier s or business partner s conference that will advance our Company s business goals. Speaker fees should be politely declined or referred to a charitable organization, preferably the Canadian Tire Foundation for Families. Employees may accept small tokens of appreciation (under $100) for speaking at industry seminars and conferences. In all cases, employees should seek the approval of their manager before accepting invitations to speak at functions. Travel The acceptance of travel for business purposes, particularly the use of corporate jets, furnished by a supplier is often perceived as excessive and may appear to present conflicts of interest. It is always the preference of the Company to pay the travel costs of employees when on Company business. In certain cases, employees are asked to travel to unfamiliar locations. When traveling, ground transportation services offered by a supplier may be accepted if such services prove time and cost efficient or protect the health and safety of employees. Employees may also accept use of a corporate jet from an existing supplier only when it is absolutely necessary to visit multiple supplier facilities in a specified time period and where the use of commercial airlines would prove to be an inefficient use of Company time. In all cases involving the use of a supplier s corporate aircraft, employees must seek the approval of their manager. The Company has adopted a Travel and Expense Policy to direct employees in the selection of travel and in submitting expenses for reimbursement. A copy of the policy
Page 14 can be obtained from your manager or the Human Resources department. Employees should consult the policy prior to making travel arrangements. Attending Charitable Events Canadian Tire has a strong reputation for community involvement and social investments. Attendance at charitable events can enhance the Company s reputation. The Company encourages employees to volunteer their time in support of charitable causes in the community. Employees may accept unsolicited invitations from the Company's suppliers or business partners to attend charitable events. Employees should consider, in accepting an invitation to a charitable event, if they are obligating the Company to a donation that would otherwise be precluded by the Company policy on donations. Purchasing tickets for fundraising events with Company funds outside of the Canadian Tire Foundation for Families should be vetted through the Vice-President, Corporate Affairs who is responsible for the Company s Corporate Donations Policy or through the executive responsible for a business unit s donations. Employees should note that the Company s donations policy gives preference to direct contributions over the purchase of tickets or tables for fundraising events to ensure maximum impact for each granted dollar. Fundraising/Donations Canadian Tire employees are actively involved in enriching our communities through a variety of charitable endeavours, including the Canadian Tire Foundation for Families. Employees are encouraged to make use of vendor and business contacts to solicit support for the Foundation for Families and its fundraising events, as well as charities supported by the Foundation. Employees must seek the approval of the person in the company who is responsible for the vendor or business relationship prior to making a request for charitable support. Given our own Code of Business Conduct, employees must be sensitive to the donation policies and codes of conduct of our suppliers and business partners when requesting sponsorships or donations in support of the Canadian Tire Foundation for Families. The Company expects employees to respect the decisions of our vendors and business partners regarding charitable support and not allow such decisions to influence normal business dealings. Political Gifts Canadian Tire strongly believes in maintaining productive relationships with government at all levels and actively participates in the development of public policy where such policies or regulations have impact on our business. The Company does not believe,
Page 15 however, that our business goals are well served by the granting of gifts to a political party. Often, such gifts can be perceived as improperly influencing government. Canadian Tire s policy on political giving is clear: no political gifts are made at any political level to any party, riding association or individual. Attendance at a political function by an employee as a representative of the Company is acceptable in very limited situations, where the Company s presence is warranted and justified based on the relationship. Any employee invited to represent the Company at a political event, or who is asked to facilitate a corporate donation, should seek the advice of the Corporate Affairs department who holds responsibility for government relations. The Company encourages employees to participate in the democratic process; the Code of Business Conduct is in no way designed to interfere with the purely personal political interests of employees. Products and Samples Employees must not directly or indirectly offer or give gifts other than token novelty items or payments to any person, organization, or group doing business or seeking to do business with the Company. However, product samples may be offered to customers or potential customers for evaluation. It is not acceptable to keep for personal use, any sample products or services that are provided to the Company for testing, evaluation or promotional purposes. Some employees may be asked, by the Company s Quality Engineering department in Canadian Tire Retail or similar departments in other retail divisions to take home certain products for use, thus helping the Company to determine the value of a product from a customer s point of view. In such cases, the most senior person responsible for the quality engineering, in any division, must maintain a record of employee research volunteers and the products in their care. Please note that the above provision does not extend to items given by the Company to its employees for the purposes of promoting our brands (e.g. t-shirts, jackets, etc.). Employees who believe there is a legitimate business reason to retain a product or sample for personal use must seek written permission at a Vice-President level or above before taking any action. F. COMMUNICATING THE COMPANY S CODE OF BUSINESS CONDUCT The Company s Code of Business Conduct will be posted on the Canadian Tire website for access by any member of the public and filed with regulatory agencies where required.
Page 16 To ensure a thorough understanding of the requirements of the Code of Business Conduct, the Human Resources department will develop training covering all aspects related to the Code which will include examples of common business situations that may pose ethical dilemmas for employees. All employees will be required to complete the training. It is the responsibility of every manager to assist employees in understanding their obligations under the Code of Business Conduct and to monitor their ongoing compliance. Employees are responsible for communicating sections of the Company s Code of Business Conduct which are relevant to suppliers, business to business associates and other business partners. G. DEALING WITH EXTERNAL PARTIES In dealings with parties outside Canadian Tire, including domestic or foreign public officials, suppliers and customers, employees are expected to behave in a manner that enhances the reputation and integrity of the Company and the individual with whom they are dealing. Employees are expected to behave in a manner consistent with the Company s values, which includes treating people with honesty, integrity and respect. It is never acceptable for any employee to pay or accept any bribe, kickback or other unlawful payment or benefit to secure any concession, contract or other favourable treatment. Employees who engage either merchandise or non-merchandise suppliers (e.g. services) are responsible for ensuring that suppliers review, sign and commit to comply with the Company s Supplier Code of Business Conduct which is available from your manager or from the Corporate Affairs department. All employees must promptly report all offers of kickbacks and bribes or other breaches of this Code to their manager, Human Resources and the Legal department. Respecting Competitors We have a responsibility to portray our competitors fairly and accurately; doing otherwise would be unethical and may subject the Company to charges of anticompetitive behaviour. Employees must be careful about commenting, publicly or otherwise, on topics like a competitor s financial situation, business practices, pricing practices, management or ownership. The best source of information about a competitor comes from the competitor and all inquiries should be referred back to that source. We have every right to gather information about the market in which we operate, which includes our competitors, their products and services, advertising and pricing; however, we must always obtain such information through legal and ethical means.
Page 17 H. PRESERVATION AND USE OF CORPORATE PROPERTY Preserving and safeguarding the Company s property is the responsibility of all employees. Inventory, equipment, materials, supplies and services (including Internet access), that are purchased with Company funds are the property of the Company and must be used in the interest of the Company and must be protected from theft, misuse or damage. Employees are required to follow the Information Technology Acceptable Usage Policy of their individual business unit. I. BOOKS AND RECORDS The financial books and records of the Company must be maintained in accordance with Canadian generally accepted accounting principles unless agreed otherwise after discussion with the Chief Financial Officer and the Audit Committee of the Board of Directors. In all cases, records must reflect accurately, fairly and in a timely manner, the transactions of the Company. Non-cash transactions and every exchange of goods and services for money require proper authorization and are to be executed in accordance with the policies and procedures adopted by the Company. To ensure and maintain accountability for the Company s assets and to ensure the preparation of accurate financial statements, all transactions must be properly reported in accordance with Company policies and procedures. Non-financial records must also be maintained in accordance with Company policies and procedures and with standard business practice. When in doubt as to the proper course to follow, consult with the Chief Financial Officer. The books and records of the Company must not be destroyed unless authorized by the Legal department. J. ENVIRONMENT, HEALTH & SAFETY The Company is committed to the protection of the environment and the health and safety of its employees, customers and the communities in which it does business. Employees are required to follow the Company s Environment, Health and Safety Policy and any additional policies respecting environment, health and safety issued by their business unit. The Environment Health and Safety Policy can be obtained from your manager or from the Environment, Health and Safety department.
Page 18 K. HUMAN RIGHTS AND HARRASSMENT Canadian Tire s working environment recognizes the rights, dignity and worth of every individual and provides for equal rights and opportunities based solely on performance and ability. The Company will not discriminate in its hiring practices or any other term or condition of work (other than legitimate occupational requirements allowed by law) on the basis of race, ancestry, place of origin, colour, ethnic origin, citizenship, religion, faith, sex, sexual orientation, age, marital status, same-sex partnership status, family status or disability. The Company expects all employees to promote a work environment of mutual respect and understanding of all individuals. All practices and programs must be administered in a responsible and equitable manner in full compliance with human rights legislation. Canadian Tire s Team Values and the principles outlined earlier in this Code of Business Conduct must guide the Company s conduct in an atmosphere of timely and open communication, mutual respect and responsibility, personal well-being, and a responsibility to its community and environment. Employees are responsible for ensuring that their own conduct supports these principles. Employees have the right to a harassment-free workplace. The Company will not tolerate any act of harassment against any of our team members. Any comment, form of harassment (either physical or psychological), act or omission that violates or appears to violate human rights should be brought to the immediate attention of the employee s manager or Human Resources. As employees, we are all required to follow policies respecting human rights and harassment. For further information, employees should speak to their manager or the Human Resources department. L. CONFIDENTIALITY AND PRIVACY The Company has adopted a policy to protect the privacy and security of personal information obtained in the normal course of business. Employees are required to follow the Privacy Policy and specific provisions put in place by their business unit. Many documents and other communications contain sensitive and proprietary information critical to the Company s business operations. Information entrusted to employees by a third party may also be proprietary or confidential and must be handled according to the instructions of the owner. Examples of proprietary information include: marketing and business strategies; bids and proposals; legal proceedings;
Page 19 Board of Director books, materials or presentations; records of our suppliers and business partners; human resources information; internal audit reports; corporate security matters; training material; and computer programs and software. Employees must protect as confidential all trade secrets and proprietary information and must not, without the written approval of the Legal department, use such information for their own benefit or purposes. Employees must not disclose confidential or proprietary information to others, during or after employment, except as required in the discharge of their duties with the Company and as required by law. In cases where it is necessary to disclose confidential information to an outside party for the purpose of conducting Company business, employees should consult with the Legal department to ensure confidentiality agreements are obtained before the disclosure of any information. Employees who are asked by suppliers to sign non-disclosure or confidentiality agreements must inform their manager and consult the Company s Legal department for review before signing. Any apparent misuse of proprietary information must be reported to Human Resources and the Legal department immediately. Employees must also report any instances of persons seeking their assistance in obtaining proprietary or confidential Company information without the proper authorizations. Insider Trading Securities legislation imposes restrictions regarding the purchase and sale of shares and other securities or the sharing of information (called tipping ) not yet known to the public and which could affect the market price of the securities of any company. The Company s Insider Trading Policy has been adopted to prevent breaches of the law by our employees and to impose certain black-out periods where shares and other securities of the Company may not be traded to avoid a perception that inside knowledge has prompted the trading of such securities. Officers of the Company and certain other individuals who work closely with financial and other material information are subject to additional provisions that include obtaining written approval by the Legal department of any proposed trade. If any employee is in doubt as to the requirements of the Insider Trading Policy, they should consult their manager or the Legal department. As a general rule, no employee may: Buy or sell securities of Canadian Tire, or any other public company, with knowledge of undisclosed material information obtained in the course of employment; or
Page 20 Tip others concerning undisclosed or material information. We must be especially careful not to inadvertently disclose confidential information to spouses, family members, friends, business partners or others. It is illegal for employees or members of their immediate family to buy, trade or sell shares or other securities on the basis of undisclosed material information. It is also illegal to pass undisclosed information on to others who may buy or sell securities. The Company will not tolerate breaches of its Insider Trading Policy and employees should be aware that criminal prosecution might also result. Examples of material information include: annual and quarterly financial results; new products and services or the research and development of such products and services; business plans, strategies or negotiations; sales results; and confidential information of third parties.
Page 21 M. FORM FOR EMPLOYEE AND DIRECTOR COMMITMENT TO THE CANADIAN TIRE CODE OF BUSINESS CONDUCT FOR EMPLOYEES AND DIRECTORS I acknowledge that I have received a copy of the Code of Business Conduct for Employees and Directors effective April 1, 2005, that I have read and understood it, that I am responsible for compliance with the Code and that I have complied with the Code in place since my last acknowledged commitment. I also declare that I have reported all breaches of the Code known to me in the past year. I acknowledge that this Code may change from time to time, and I agree to review and comply with subsequent versions of the Company s Code of Business Conduct for Employees and Directors as a condition of ongoing employment with the Company. If I have any concerns as to the application or interpretation of the Code of Business Conduct for Employees and Directors, I will discuss my concerns with the person to whom I report and, if required, will seek the advice of the Legal and/or Human Resources department. Employee/Director Signature Employee/Director Printed Name Date