| Insider
Trading Policy |
 |
Approved by the Churchill Board of Directors,
November 2, 2007
Introduction
The purpose of this Policy is to summarize
the insider trading restrictions to which
directors, officers and certain employees
are subject under applicable securities
laws, and to set forth a policy governing
investments in shares of The Churchill
Corporation (the “Corporation”)
and the reporting thereof which is consistent
with such laws.
This Policy is not intended to discourage
investment in the Corporation’s
shares. Rather, it is intended to highlight
the obligations and the restrictions
imposed on insiders by relevant securities
legislation.
Who is an Insider?
Insider trading rules are an aspect
of the securities regulatory system which
prohibit a person or company from trading
in the securities of an issuer where
that person or company is in a “special
relationship” with the issuer
and has knowledge of Material Information
(a “material fact” or “material
change”) which has not been generally
disclosed to persons investing in Canadian
public corporations.
Persons in a “special
relationship” include, but
are not limited to:
- insiders, including directors and
officers;
- employees of the Corporation;
- persons engaging in professional
or business activities for or on behalf
of the Corporation; and
- any person who learns of Material
Information from someone who is known
or ought to be known to be a person
in a special relationship with the
Corporation.
You should note that any person who
is associated with you, including any
member of your family, your spouse or
any person living with you, is also deemed
to be a person in a special relationship
with the Corporation, and is subject
to the same legal obligations and duties.
Securities laws specify that anyone in
a “special relationship” with
the Corporation, who informs any other
person, other than in the “necessary
course of business” of a material
fact or change, is found to be “tipping”.
This is prohibited activity and both
the person who provides the information
and the person who receives the information
could be liable under securities laws
if the person who receives the information
trades in the securities. Tipping is
prohibited so that everyone in the market
has equal access to, and opportunity
to act upon, material information. It
is important to keep in mind that the
prohibition against “tipping” is
broad and includes any unauthorized disclosure,
even if made by non-management employees.
Insiders are a more distinct sub-group
of those in a “special relationship”.
An insider is a person or company which
falls into any one of the following categories:
- a director or officer of the Corporation;
- a director or officer of a person
or company that is itself an insider
of the Corporation or subsidiary of
the Corporation;
- a person or company that beneficially
owns or that exercises control or direction
over, directly or indirectly, or a
combination of beneficial ownership
of and control or direction over, directly
or indirectly, securities of the Corporation
carrying more than 10% of the voting
rights attached to all issued securities
of the Corporation (excluding voting
securities held by the person or company
as an underwriter in the course of
a distribution); and
- the Corporation, if it has purchased,
redeemed or otherwise acquired any
of its securities for so long as it
holds any of its securities.
Under Alberta securities laws, insiders
are required to file a standard insider
report (the “Insider
Report”) with securities
regulators any time they acquire, dispose,
exercise or otherwise trade in shares,
debt securities, options, deferred share
units or restricted stock units of the
Corporation. Insiders must file an Insider
Report electronically through the “System
for Electronic Disclosure by Insiders” (“SEDI”)
within ten
(10) days after each trade.
It is each insider’s personal
responsibility to ensure that all requisite
Insider Reports are filed with the appropriate
securities commissions within the statutory
time limits. The Corporation has assigned
the Executive
Assistant to the President the
task of assisting each insider with their
filings. Insiders can deliver a copy
of the particulars of the trade to her,
and she will ensure it is filed with
the applicable securities commissions.
The Executive Assistant will maintain
a register of insider share positions
in the Corporation for the purposes of
monitoring compliance with this Policy. Note
that it is still the insider’s
responsibility to ensure that the filing
of Insider Reports is completed within
the regulatory deadlines.
Securities legislation prohibits any
person in a “special relationship” with
the Corporation from either:
- purchasing or selling the Corporation’s
shares with the knowledge of a material
fact or material change concerning
the Corporation that has not been generally
disclosed; or
- informing (or “tipping”),
other than when necessary in the course
of business, another person or corporation
of a material fact or material change
concerning the Corporation before the
material fact or material change has
been generally disclosed. A material
change or material fact is a change
that occurs in the business or affairs
of the Corporation or a fact which
would reasonably be expected to have
an effect on the market price or value
of any securities of a public issuer.
A material change is specifically defined
to include any decision by a board
of directors to implement a material
change, as well as any decision made
to implement such a change by senior
management, if Board approval is probable.
General Guidelines
The Corporation adopts as general guidelines
the basic guidelines set out in “Insider
Trading in Canada: Recommendations and
Guidelines of Boardroom Practice”,
published by the Institute of Corporate
Directors in Canada which states the
following:
- Do Not Trade -
an Insider should not purchase or sell
securities of the Corporation where
the Insider possesses knowledge of
a “material fact” or a “material
change” which is not disclosed
to the public.
- Do Not Advise -
Information about a material change
which an Insider has by reason of their
position within the Corporation should
not be communicated to anyone, including
co-workers and consultants, except
on a need-to-know basis and only for
the purpose of allowing such persons
to carry on their duties to the Corporation.
No advice with respect to trading in
securities should be given by an Insider
with knowledge of material undisclosed
information.
- Encourage
Timely Disclosure - Prompt
public disclosure of material undisclosed
information should be made by the
Corporation unless there are good
and valid business reasons for not
doing so.
- Do Not Speculate -
an Insider should not speculate in
securities where knowledge of material
undisclosed information exists or may
exist. This prohibition applies to
any persons who are deemed to have
a “special relationship” with
the Corporation. While the penalties
for a breach of this prohibition vary
among jurisdictions, a breach may render
you personally liable to prosecution
and, upon conviction, to a fine not
exceeding one million dollars or two
years in jail, or both. Further, you
may be subject to civil actions at
the instance of certain security holders,
the companies whose securities were
traded, various securities commissions,
or any of these.
Trading Policy
In light of the foregoing, all directors,
officers and employees of the Corporation
will be subject to the following policy
relating to investments in the Corporation’s
securities and securities of other public
issuers:
- If one has knowledge of a material
fact or material change related to
the affairs of the Corporation or any
public issuer involved in a transaction
with the Corporation which is not generally
known, no purchase or sale may be made
until the information has been generally
disclosed to the public and the blackout
periods set forth below have expired.
- If one has knowledge of a material
fact or material change related to
the affairs of the Corporation or any
public issuer involved in a transaction
with the Corporation which is not generally
known, no recommendation or encouragement
to another person or company to purchase
or sell may be made until the information
has been generally disclosed to the
public and the blackout periods set
forth below have expired.
- Knowledge of a material fact or material
change must not be conveyed to any
other person other than in the necessary
course of business until the information
has been generally disclosed to the
public and the blackout periods set
forth below have expired.
- The practice of selling “short” securities
of the Corporation at any time is not
permitted.
- The practice of buying or selling
a “call” or “put” or
any other derivative security in respect
of any securities of the Corporation
is not permitted.
- Trading is prohibited in the event
that the Corporation has provided notice
of a pending material fact or material
change until the information has been
generally disclosed to the public and
the blackout periods set forth below
have expired.
For purposes of this Policy, a “public
issuer” includes any issuer, whether
a corporation or otherwise, whose securities
are traded in a public market, whether
on a stock exchange or “over the
counter”.
The above prohibition and the insider
reporting obligation provided below applies
equally to the trading or exercising
of options of the public issuer.
Blackout Periods
In order to ensure uniform compliance
with securities legislation, the Corporation
has made the following provision for
blackout periods during which restricted
persons, directors, officers and employees
who are routinely in possession of undisclosed
material information, are prohibited
from trading in the Corporation’s
securities:
- For each quarter, the blackout period will
commence with the closing of the
General Leger, and will continue
for two
business days following the press
release, disseminating the
information to the shareholders and
the general public;
- Quarterly blackouts may be instituted
earlier or remain in place longer,
at the discretion of the Corporation’s
management;
- The blackout period for any unscheduled
event will begin as soon as management
notifies Insiders of a blackout, and
continues until the end of the second
business day following the release
of a press release announcing the event,
or until further notice by management;
Notwithstanding the above, it is the
responsibility of the individual to be
informed of the activities or circumstances
that would preclude that individual from
trading in the securities of the Corporation.
Directors, officers and all other insiders
of the Corporation must provide prior
notice to the Chairman of the Board,
or in his absence, the Chief Financial
Officer of the Corporation (the “Responsible
Officers”) when they wish to trade
in any of the securities of the Corporation.
In response to such notice, a Responsible
Officer will advise the insider whether
or not a blackout period is currently
in effect. In addition, if an insider
is unsure whether or not you may trade
in a given circumstance, you should contact
a Responsible Officer to determine if
the particular information is or is not
material.
Any individual who is subject to a blackout
period should not disclose to any third
party that such blackout period is in
effect, unless approved by the Responsible
Officers.
News Releases
If an insider knows that the Corporation
is about to make a news release on material
information at any time, the Insider
should not trade from the time of such
knowledge of pending release until after
two (2) business days have elapsed from
the date of the issue of the release.
Dissemination of the
Policy
Directors, officers and managers of
the Corporation are to bring this Insider
Trading Policy to the attention of insiders
of the Corporation and any subsidiary
or affiliated corporations who have or
may have access to annual or interim
reports or earnings of the Corporation
prior to their public disclosure or to
information with regards to any material
developments, changes, or occurrences
in the affairs of the Corporation prior
to their public disclosure. Insiders
of the Corporation should annually certify
they have received and reviewed the most
current Insider Trading Policy.
Standing Sell or Purchase
Orders and Trading on Margin
Insiders are cautioned as to the use
of standing sell orders or standing purchase
orders. If these are left with a broker
they may create an inadvertent conflict
with these guidelines, as a transaction
could be executed during blackout periods.
A similar caution applies to margin trading
whereby the broker may inadvertently
buy or sell during blackout periods in
order to satisfy a margin call.
Purchases under the
Employee Share Purchase Plan
The Churchill Employee Share Purchase
Plan is considered an “automatic
securities purchase plan” for the
purposes of applicable securities regulations
and accordingly, any acquisition under
the Plan (other than under a “lump
sum provision” of the Plan) must
be reported on a yearly basis for each
calendar year, such filing to be completed
within 90 days of the end of the calendar
year.
In addition, any “specified dispositions” of
shares under the Plan also can be reported
on an annual basis within 90 days of
the end of the calendar year. A specified
disposition includes a disposition incidental
to the operation of the Plan and not
involving a discrete investment decision
by the insider or a disposition made
to satisfy a tax withholding obligation
arising from a distribution of securities
under the Plan. Any
other dispositions require the filing
of an insider report within ten (10)
days of the sale.
If you require assistance in respect
of reporting of acquisitions and dispositions
under the Plan, please contact the Corporate
Secretary.
Notices Prohibiting
Trading
The Corporation may, from time to time,
circulate a notice prohibiting insiders
from trading. In the case of pending
transactions (other than the release
or quarterly or annual financial statements)
the circumstances of each case will be
considered in determining when to prohibit
trading. In some cases, prohibition may
be appropriate as soon as discussions
about the transaction begin. Securities
legislation dictates that trading must
be prohibited once the negotiations have
progressed to a point where it reasonably
could be expected that the market price
of the Corporation’s securities
would materially change if the status
of the transaction were publicly disclosed.
Non-Compliance
Under the Securities
Act (Alberta), if a person or company
in a special relationship with the Corporation:
- has purchased or sold a security
with knowledge of a material fact or
material change with respect to the
Corporation that has not generally
been disclosed; or
- informs another person of a material
fact or material change with respect
to the Corporation before the material
fact or material change has been generally
disclosed; or
- recommends or encourages another
person or company to purchase or sell
a security or enter into a transaction
involving a security;
then that person or company is liable
to a fine which shall not be less than
the profit made by the person or company,
and not more than the greater of $5,000,000
or an amount equal to three times the
profit made or loss avoided by the person
or company by reason of the contravention.
If it is not possible to determine the
profit made or loss avoided, then that
person or company is liable to a fine
of not more than $5,000,000 or to imprisonment
for five years, or to both.
Summary
In implementing this Insider Trading
Policy, the Corporation wishes to eliminate
any transaction by an insider which would
not be in full compliance with the law
or which, by implication, might suggest
that such rules may have not been strictly
followed. This Insider Trading Policy
is established to ensure that insiders
are following the basic guidelines:
- No one may trade in the securities
of a corporation when in possession
of material undisclosed information.
- No one in possession of material
undisclosed information may communicate
such information to others unless such
information needs to be disclosed in
the course of business and there is
no ground to believe that it would
be used or further disclosed contrary
to the law.
- It is the responsibility of all insiders
to ensure that they are at all times
fully aware of the law and with the
guidelines set out in this policy,
and that they are in full compliance
with same.
|
