Policy Regarding Insider Trading and Reporting

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:

• 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:

1. a director or officer of the Corporation;
2. a director or officer of a person or company that is itself an insider of the Corporation or subsidiary of the Corporation;
3. 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
4. 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:

1. 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
2. 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:

1. 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.
2. 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.
3. 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.
4. 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:

1. If one has knowledge of a material fact or material change related to the affairs of the Corporation’s stock or any public issuer’s stock 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.
2. If one has knowledge of a material fact or material change related to the affairs of the Corporation’s stock or any public issuer’s stock 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.
3. 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.
4. The practice of selling “short” securities of the Corporation at any time is not permitted.
5. 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.
6. 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.
7. 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."

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 VP Investor Relations and 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

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:

1. 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
2. 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
3. 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.