Insider Trading Policy
Insider Trading Policy
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:
(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
(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:
(a) restricting participation and knowledge of the activity or negotiation to a minimum number of Employees; and
(b) notifying, in writing, all involved Employees of their confidentiality obligations; and
(c) ensuring that all correspondence relating to undisclosed Material Information is labeled “CONFIDENTIAL”.
4. Employees shall observe the following precautions in addition to any specific
precautions which may be imposed on them:
(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;
(b) ensure that correspondence or other documents concerning undisclosed Material Information is not left in plain view and/or unattended;
(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
(d) report any information leaks or suspected information leaks to the person responsible for the matter;
(e) refrain from selling short or trading in call or put options of the securities of the Corporation;
(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.
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:
(a) changes in share ownership that may affect control of the Corporation;
(b) changes in corporate structure, such as amalgamations;
(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;
(d) major acquisitions or dispositions;
(e) changes in capital structure of the Corporation, including dividend decisions;
(f) borrowing of a significant amount of funds;
(g) public or private sale of the Corporation’s securities;
(h) significant development affecting the Corporation’s resources, technologies, products or markets;
(i) entering into or loss of significant licenses or contracts;
(j) firm evidence of significant increases or decreases in near-term earnings prospects;
(k) changes in capital investment plans or corporate objectives;
(l) significant changes in management;
(m) significant litigation;
(n) major labor disputes and disputes with major contractors, suppliers or customers;
(o) events of default under financing or other agreements; and
(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.
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.
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.