Corporate Policies

Corporate Policies

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I. INTRODUCTION

BUSINESS CONDUCT POLICY

Firan Technology Group, its divisions and subsidiaries (hereinafter referred to as “FTG”) expect business dealings between employees and by employees with shareholders, customers, suppliers, retirees, community organizations and governmental and regulatory authorities to be conducted with the highest standards of ethics and integrity and in full compliance with applicable laws, statutes and regulations.

While the following summarizes the policies of FTG on major areas of business conduct, these guidelines are not meant to cover every eventuality. Consequently, employees with a question on the propriety of any action should discuss it with their Supervisor before proceeding. Directors with such questions should discuss them with the full Board before proceeding.

These guidelines have been unanimously approved by the Board of Directors of FTG and have the full support of Management.

II. COMMERCIAL INTEGRITY

FTG endorses the view that a viable free-enterprise system rests upon the fundamental proposition that free and open competition is the best way to assure a supply of goods and services at reasonable prices. To this end, employees shall refrain from any kind of understanding or agreement with others regarding prices, terms of sales, division of markets, and allocation of customers or any other practice which restrains competition or is otherwise prohibited.

III. MISREPRESENTATION OR FRAUD

Employees shall ensure that, at all times, in their role in the Corporation they comply with both the letter and spirit of all applicable government rules and regulations and that they represent the Corporation in an honest, respectable and professional manner. It is unethical for any Employee to engage in any form of misrepresentation and/or fraud which damages the Corporation and/or the reputation of the Employee and another Employee.

IV. COMPANY RECORDS

Employees shall ensure that all business records, accounts, invoices, vouchers, bills, payroll and other records reflecting FTG transactions are complete, accurate, reliable and supported by appropriate documents in auditable form. Employees are prohibited from entering into any transaction or arrangement which would intentionally or knowingly result in any of the above being false or misleading.

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V . CONFIDENTIALITY

Confidential and/or undisclosed information regarding FTG products, strategies, plans, forecasts, sales and earnings, financial condition, know how, design, processes and procedures, production plans, discoveries, cost and price data, possible acquisitions or divestitures as well as research and development are vitally important to FTG’s success and are to be held in strict confidence by employees.

The use of such information for the benefit of any employee or its disclosure to any unauthorized person violates FTG’s interest and is prohibited.

In cases where information or records are obtained under an agreement with a third party, such as software licenses or technology purchases, employees must ensure that the provisions of such agreements are strictly adhered to so that the employee(s) involved and/or FTG are not vulnerable to consequences in the event of unauthorized disclosure or use of such information or records.

VI. MISUSE OF FTG ASSETS, SERVICES OR TIME

FTG employees are prohibited from using FTG assets, services or time in a manner which may interfere or conflict with FTG business interests or reputation.

VII. CONFLICT OF INTEREST

Employees owe a duty of loyalty to FTG with the obligation to act in its best interest, to maintain in confidence all proprietary information and to refrain from placing themselves in a position that could tend to produce a conflict of interest between them and FTG. It is the duty of employees to act in good faith at all times and not to use their positions for private or personal gain beyond that provided by FTG.

Financial Interests:

A conflict of interest may exist when an employee (or member of his/her immediate family) who is able to influence business with FTG owns, directly or indirectly, a beneficial interest in a competitor, supplier, customer or contractor to FTG.

Outside Work:

A conflict of interest may exist when an employee (or member of his/her immediate family) directly or indirectly, acts as a director, officer, consultant or agent to an organization that is a competitor, supplier, customer or contractor to FTG.

Entertainment, Gifts, Favours and/or Gratuities:

A conflict of interest may exist when an employee (or member of his/her immediate family) accepts or provides any compensation, commissions, payments, fees, gifts, services, privileges, trips, entertainment, accommodation, favours or promises of future credit, goods, loans, advances or guarantees from or to any company, organization or individual doing business or seeking to do business with FTG that could be construed as attempting to secure preferential treatment.

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Entertainment, gifts, favours and/or gratuities are acceptable provided that they are of such a nominal value that they could not be reasonably perceived by anyone to affect the judgment of the recipient and that public disclosure would not be an embarrassment for FTG or the recipient.

Employees shall not give or offer anything to any government official, even if lawful, if the action could be construed as an attempt to influence a government decision in any matter affecting FTG.

Trading with FTG:

A conflict of interest may exist when an employee (or member of his/her immediate family) enters into any transaction with FTG or any company, organization or person having or seeking business with FTG other than on normal trade terms and conditions.

Misappropriation of Business Opportunities:

A conflict of interest may exist when an employee (or member of his/her immediate family), without the knowledge and consent of FTG appropriates for their own use, or that of another person or organization, the benefit of any business venture, opportunity or potential about which he/she may have learned or may have developed during the course of his/her employment.

If a conflict of interest or a potential conflict of interest arises, employees having knowledge of the situation should immediately bring the matter to the attention of their Supervisor for resolution.

VIII. EMPLOYEE HEALTH AND SAFETY

Employees are expected to perform their duties with due consideration for their own safety as well as the safety of those around them and to report any situation of concern to their Supervisor.

IX. ENVIRONMENTAL RESPONSIBILITY

It is FTG’s objective to preserve and, if possible, enhance the environment in the communities where its various businesses operate through responsible and environmentally oriented operating practices. Employees are encouraged to participate in undertakings geared to improving the environment in both their workplaces and their community.

X. EQUAL EMPLOYMENT OPPORTUNITY

Employees and applicants will be treated equally according to their individual qualifications, abilities, experiences and other employment standards. FTG is committed to ensuring a work environment free from harassment because of race, national or ethnic origin, colour, religion, age, sex, marital status, family status, disability and conviction for which a pardon has been granted. The prohibition of harassment based on sex includes sexual harassment which is defined to mean conduct, comment, gesture or contact of a sexual nature that (a) is likely to cause offence or humiliation to any employee, or (b) might on reasonable grounds be perceived by that employee as placing a condition of a sexual nature on employment or on any opportunity for training or promotion.

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XI. POLITICAL CONTRIBUTIONS AND INVOLVEMENT

FTG will not interfere in the political activities of employees other than to encourage their involvement as citizens in accepting the responsibilities of good citizenship and doing everything they can to preserve and strengthen the system of government. Political involvement by employees is based on the understanding that it is undertaken solely on their own behalf and not as a representative of FTG.

Note: In this policy, the term “employees” includes members of the Board of Directors. **** *

I confirm to have read the Rules of Conduct set out above and understand their content and undertake to respect them.

__________________________

Name (please print)

__________________________

Signature

__________________________

Date

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This Policy applies to all directors, officers, employees and agents (“Employees”) of Firan Technology Group Corporation or its associated companies or subsidiaries (the “Corporation”) who have access to confidential information of the Corporation. Note that Capitalized terms have the meaning set forth in Schedule “A” unless they are otherwise defined.

Securities legislation is based on the premise that the public should have the opportunity to decide whether to buy or sell securities on the basis of information equally available to all. Employees of the Corporation sometimes, directly or indirectly, acquire knowledge of material information concerning the business affairs of the Corporation which has not yet been disclosed to the public. These individuals would have an unfair advantage if they were to trade securities of the Corporation with a less informed party who may have made a different investment decision had they been equally informed.

All Employees must familiarize themselves and at all times comply with the following measures:

  1. Access to undisclosed Material Information shall be limited to those who “need to know” such information.
  2. No person having knowledge of undisclosed Material Information relating to the Corporation shall:
    1. (a)  disclose the information to any person other than in the necessary course of
      business or with the express written consent of his or her supervising director, officer or manager; or
    2. (b)  buy or sell, or acquire an option to buy or sell, any security of the Corporation or of a third party involved in activity or negotiation with the Corporation;

    before the Material Information has been fully disclosed to the public by way of press release and at least one (1) clear day following the day on which the press release is made.

  3. The director, officer or employee involved in an activity or negotiation which could represent Material Information shall be responsible for initiating and maintaining adequate procedures and controls to restrict knowledge of the activity or negotiation such as:
    1. (a)  restricting participation and knowledge of the activity or negotiation to a minimum number of Employees; and
    2. (b)  notifying, in writing, all involved Employees of their confidentiality obligations; and
    3. (c)  ensuring that all correspondence relating to undisclosed Material Information is labeled “CONFIDENTIAL”.

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4. Employees shall observe the following precautions in addition to any specific precautions which may be imposed on them:

  1. (a)  refrain from discussing undisclosed Material Information while in the vicinity of uninformed persons or in such places where confidential information can be obtained by others;
  2. (b)  ensure that correspondence or other documents concerning undisclosed Material Information is not left in plain view and/or unattended;
  3. (c)  if activities, negotiations or other affairs of the Corporation have been assigned a code name, ensure that the code name is used on all correspondence and refrain from using specific corporate names whenever possible; and
  4. (d)  report any information leaks or suspected information leaks to the person responsible for the matter;
  5. (e)  refrain from selling short or trading in call or put options of the securities of the Corporation;
  6. (f)  refrain from frequent buying and selling of securities of the Corporation for the purpose of realizing the short-term profits and should acquire the securities only as long-term investments.

Strict compliance with this Policy is required. All persons subject to this Policy should be aware of the following potential consequences of non-compliance:

  1. Canadian securities laws provide that Employees or Tippees who trade on the basis of undisclosed Material Information may be subject to prosecution which may result in fines of up to $5,000,000 (or three times the profit made in the illegal trade) or to imprisonment for a term of up to five (5) years, or both. In addition to fines and imprisonment, violation may result in civil liability to shareholders affected.
  2. If Material Information is leaked or adequate disclosure not forthcoming, securities exchanges or regulatory authorities may require the untimely disclosure by the Corporation of information in order to deny or confirm rumors or to account for unusual trading activity. Securities exchanges or regulatory authorities may halt trading of the Corporation’s securities for an indeterminate period until satisfied that adequate public disclosure has been made.

In addition to the foregoing consequences, any Employee who fails to adhere to this Policy will be subject to disciplinary action by the Corporation which could result in termination of employment for cause.

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SCHEDULE “A” DEFINITIONS

The following definitions are used in this Policy:
“CFO” means the Chief Financial Officer of the Corporation.

“Employees” means all directors, officers, employees and agents of the Corporation or its associated companies or subsidiaries.

“Insiders” means all directors, senior officers and major shareholders of the Corporation and its affiliates and subsidiaries.

“Material Information” means any information relating to the business or affairs of the Corporation which, if released, would result in or would reasonably be expected to result in a significant change in the market price or value of the Corporation’s shares (or the securities of other companies with whom the Corporation may have an ownership position or be conducting confidential negotiations). Examples of information which may be Material Information includes, but is not limited to:

  1. (a)  changes in share ownership that may affect control of the Corporation;
  2. (b)  changes in corporate structure, such as amalgamations;
  3. (c)  take-over bids in respect of the Corporation’s securities or securities of a company with which the Corporation is related or is conducting any transactions with, or bids by the Corporation for its own securities;
  4. (d)  major acquisitions or dispositions;
  5. (e)  changes in capital structure of the Corporation, including dividend decisions;
  6. (f)  borrowingofasignificantamountoffunds;
  7. (g)  public or private sale of the Corporation’s securities;
  8. (h)  significant development affecting the Corporation’s resources, technologies, products or markets;
  9. (i)  entering into or loss of significant licenses or contracts;
  10. (j)  firm evidence of significant increases or decreases in near-term earnings prospects;
  11. (k)  changes in capital investment plans or corporate objectives;
  12. (l)  significant changes in management;
  13. (m)  significant litigation;
  14. (n)  major labor disputes and disputes with major contractors, suppliers or customers;

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  1. (o)  events of default under financing or other agreements; and
  2. (p)  any other developments relating to the business and affairs of the Corporation that would reasonably be expected to significantly affect the market price or value of the Corporation’s securities or that would reasonably be expected to have an influence on a reasonable investor’s investment decision.

“Restricted Persons” means all directors, officers, Insiders and those Employees and other persons who are aware of or have access to undisclosed Material Information.

“Tippees” means any persons who obtain or receive undisclosed Material Information from an Employee or Restricted Person or who subsequently receive such information, where such persons knew or ought reasonably to have known that the information originated from an Employee or Restricted Person.

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BLACKOUT POLICY

Restricted Persons should clear all trades through the CFO before placing a buy or sell order or otherwise committing to trade in the Corporation’s securities. Such trading may be prohibited from time to time as a result of there being undisclosed Material Information. Restricted Persons who request clearance to trade the Corporation’s securities may be advised by the CFO that trading in such securities is temporarily prohibited. No further explanation for the trading prohibition will be provided.

In addition, Canadian securities laws require a person who is an Insider of the Corporation to disclose, through an insider report, any direct or indirect beneficial ownership of or control or direction over securities and changes thereto.

Every Insider is personally responsible for filing insider reports. Insiders should contact the CFO for assistance to prepare and file insider reports. Insiders who file their own insider reports are asked to provide copies of all reports to the CFO.

Trading Blackouts are periods of time during which Restricted Persons are not allowed to trade, or cause others (i.e. family, friends, business associates, etc.) to trade the Corporation’s securities or other companies’ securities whose price may be affected by a pending announcement of the Corporation.

Trading Blackouts are used to prevent certain persons from trading in securities of the Corporation during periods when the price of those securities may be affected by a pending corporate announcement.

The Corporation will have scheduled and unscheduled announcements of Material Information. Scheduled announcements are public announcements of quarterly financial statements and year- end financial statements.

A trading blackout will be in effect from the time the end of each fiscal quarter or fiscal year until at least one (1) clear day following the day of disclosure to the public of such information by press release.

In the case of a pending transaction, the particular circumstances will determine the period during which trading is prohibited. In some cases it may be appropriate to stop trades as soon as discussions about a transaction begin. In other cases, a Trading Blackout may commence immediately upon conclusion of a transaction.

For scheduled and unscheduled announcements, the CFO will notify Restricted Persons that a Trading Blackout is in effect and the period of the Blackout.

The Corporation issues a yearly Black-Out Calendar for normal black-out periods. In the event that previously granted options or PSU’s are about to expire during a normal black-out period or if there is a material event which extends a scheduled black-out period, they will be extended for 2 weeks after the black-out period expires.

Trading with knowledge of undisclosed Material Information is a breach of securities laws. Failure to observe this Policy may result in penal sanctions, civil liability and/or disciplinary action, including termination of employment.

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FIRAN TECHNOLOGY GROUP CORPORATION
WHISTLEBLOWER POLICY

I. INTRODUCTION:

Firan Technology Group Corporation (“FTG” or the Corporation) is committed to the highest standards of openness, honesty and accountability. In line with that commitment, we expect employees and others that we deal with who have serious concerns about any aspect of the Corporation’s activities and operations to come forward and voice those concerns.

Employees are often the first to realize that there may be something seriously wrong within the Corporation. However, they may decide not to express their concerns because they feel that speaking up would be disloyal to their colleagues or to the Corporation. They may also fear recrimination, harassment or victimization. In these circumstances, they may feel it would be easier to ignore the concern rather than report what may be just a suspicion of wrong-doing.

This policy document makes it clear that employees can report wrong-doings or suspected wrong-doings without fear of victimization, subsequent discrimination or disadvantage. This Whistle Blowing Policy is intended to encourage and enable employees to raise serious concerns within the Corporation rather than overlooking a problem or seeking a resolution of the problem outside of the Corporation.

This policy applies to all employees, as well as contract or temporary personnel working for the Corporation. It is also intended to provide a method for other stakeholders (suppliers, customers, shareholders etc.) to voice their concerns regarding the Corporation’s business conduct.

The Policy is also intended as a clear statement that if any wrong-doing by the Corporation or any of its employees or by any of its contractors or suppliers is identified and reported to the Corporation, it will be dealt with promptly and thoroughly investigated and remedied. The Corporation will further examine and implement the means of ensuring that such wrong-doing can be prevented in future.

A whistleblowing or reporting mechanism invites all employees and other stakeholders to act responsibly to uphold the reputation of their organization and maintain public confidence. Encouraging a culture of openness within the organization will also help this process. This Policy aims to ensure that serious concerns are properly raised and addressed within the Corporation.

II. BACKGROUND:

  1. What is whistleblowing?
    Employees are usually the first to know when something is going seriously wrong. A culture of turning a “blind eye” to such problems means that the alarm is not sounded and those in charge do not get the chance to take action before real damage is done. Whistleblowing can therefore be described as giving information about potentially illegal and/or underhanded practices i.e. wrong-doing.
  2. What is wrong-doing?
    Wrong-doing involves any unlawful, illegal or otherwise improper behaviour and can include:

    • An unlawful act whether civil or criminal;
    • Breach of FTG’s Code of Business Conduct and Ethics;
    • Breach of or failure to implement or comply with any approved FTG policy;
    • Knowingly breaching federal or provincial laws or regulations;
    • Unprofessional conduct or conduct that is below recognized, established standards of practice;
    • Questionable accounting or auditing practices;
    • Dangerous practice likely to cause physical harm / damage to any person/property;
    • Failure to rectify or take reasonable steps to report a matter likely to give rise to a significant and avoidable cost or loss to the Corporation;
    • Abuse of power or authority for any unauthorized or ulterior purpose;
    • Unfair discrimination in the course of employment or provision of services.This list is not definitive, but is intended to give an indication of the kind of conduct which might be considered as “wrong-doing”.
  3. Who is protected?
    This Policy is set in the context of the regulatory provisions of the Canadian Securities Association (CSA) Multilateral Instrument 52-110 – Audit Committees. Any employee who makes a disclosure or raises a concern under this Policy will be protected if the employee:

    • Discloses the information in good faith;
    • Believes it to be substantially true;
    • Does not act maliciously or make knowingly false allegations; and
    • Does not seek a personal or financial gain.
  4. Who should you contact?
    • Anyone with a complaint or concern about the Corporation should try to contact their supervisor or manager responsible for the group which provides the relevant service. This depends however, on the seriousness and sensitivity of the issues involved and who is suspected of malpractice.
    • As an alternative, they could contact (i) James Crichton, Vice President, CFO and Secretary at (416) 299-4000, ext. 264; (ii) Human Relations contact in your division or (iii) Edward Hanna, Chairman of the Board of Directors at (252) 515-2602.
  5. How the Corporation will respond?
    The Corporation will respond positively to your concerns. Where appropriate, the matters raised may:

    • be investigated by management, the Board of Directors, or through the disciplinary process;
    • be referred to the police;
    • be referred to the external auditor or external legal counsel;
    • form the subject of an independent inquiry.In order to protect individuals and those accused of misdeeds or possible malpractice, initial enquiries will be made to decide whether an investigation is appropriate and, if so, what form it should take. Some concerns may be resolved by agreed action without the need for investigation. If urgent action is required, this will be taken before any investigation is conducted.Within ten working days of a concern being raised, the responsible officer will write to you:
    • acknowledging that the concern has been received;
    • indicating how he/she proposes to deal with the matter;
    • giving an estimate of how long it will take to provide a response;
    • telling you whether any initial enquiries have been made; and
    • telling you whether further investigations will take place if not, why not.The amount of contact between the officers considering the issues and you will depend on the nature of the matters raised, the potential difficulties involved and the clarity of the information provided. If necessary, the Corporation will seek further information from you. The Corporation will take steps to minimize any difficulties which you may experience as a result of raising a concern. For instance, if you are required to give evidence in criminal or disciplinary proceedings, the Corporation will arrange for you to receive advice about the procedure.The Corporation accepts that you need to be assured that the matter has been properly addressed. Thus, subject to legal constraints, we will inform you of the outcomes of any
      investigation
  6. Time Frames
    Concerns will be investigated as quickly as possible. It should be borne in mind that it may be necessary to refer a matter to an external agency and this may result in an extension of the investigative process. It should also be borne in mind that the seriousness and complexity of any complaint may have an impact on the time taken to investigate a matter. A designated person will indicate at the outset the anticipated time frame for investigating the complaint.
  7. Prevention of recriminations, victimization or harassment
    The Corporation will not tolerate an attempt on the part of anyone to apply any sanction or detriment to any person who has reported to the Corporation a serious and genuine concern that they may have about an apparent wrong-doing.
  8. Confidentiality and Anonymity
    The Corporation will respect the confidentiality of any whistleblowing complaint received by the Corporation where the complainant requests that confidentiality. However, it must be appreciated that it will be easier to follow up and to verify complaints if the complainant is prepared to give his or her name.
  9. False and Malicious Allegations
    The Corporation is proud of its reputation with the highest standards of honesty. It will therefore ensure that substantial and adequate resources are put into investigating any complaint which it receives. However, the Corporation will regard the making of any deliberately false or malicious allegations by any employee of the Corporation as a serious disciplinary offence which may result in disciplinary action, up to and including dismissal for cause.