HNZ GROUP INC. INSIDER TRADING POLICY
This Policy provides guidelines for directors, officers, employees and consultants of HNZ Group Inc. and its subsidiaries (the “Corporation”) with respect to transactions in shares or other securities of the Corporation. APPLICATION OF POLICY This Policy applies to all transactions in the Corporation’s securities, including common shares, variable voting shares, options for common shares or variable voting shares, securities exchangeable for common shares or variable voting shares, convertible debentures and any other securities that the Corporation may issue from time to time, as well as derivative securities relating to its common shares or variable voting shares, whether or not issued by the Corporation, such as exchange traded options. This Policy applies to all directors, officers, employees and consultants of the Corporation who receive or have access to Material Non-Public Information (as defined below). This group of people, members of their immediate families, and members of their households are sometimes referred to in this Policy as “insiders”. This Policy also applies to any person who receives Material Non-Public Information from any insider. Any person who possesses Material Non-Public Information with respect to the Corporation is an insider for so long as the information has not been publicly disclosed. Any employee of the Corporation can be an insider from time to time, and would at those times be subject to this Policy. GENERAL POLICY The Corporation prohibits the unauthorized disclosure of any Non-Public Information (as defined below) relating to the Corporation, and also any securities trading activities by people in possession of Material Non-Public Information. SPECIFIC POLICIES (a)
Trading on Material Non-Public Information No directors, officers, employees and consultants of the Corporation or any member of their immediate family or household shall directly or indirectly engage in any transaction involving a purchase or sale of the Corporation’s securities, during any period commencing with the date that he or she possesses Material Non-Public Information with respect to the Corporation and ending at the close of business on the second trading day following public disclosure of that information. For the purposes of this Policy, “trading day” means a day on which the Toronto Stock Exchange or any other stock exchange on which the securities of the Corporation are listed is open for trading.
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-2(b)
Tipping No insider shall disclose (“tip”) Material Non-Public Information to any other person (including family members) where such information may be used by such person to his or her benefit by trading in the securities of issuers to which such information relates (including the Corporation), nor shall such insider or related person make recommendations or express opinions on the basis of Material Non-Public Information as to trading in securities of the Corporation or other issuers. Insiders may, from time to time, be required to selectively disclose Material Non-Public Information to persons in the “necessary course of business” of the Corporation. Any such disclosure shall conform to the disclosure standards in National Policy 51-201 – Disclosure Standards or any successor rule or policy.
(c)
Confidentiality of Non-Public Information Disclosure of Non-Public Information relating to the Corporation is prohibited.
POTENTIAL CRIMINAL AND CIVIL LIABILITY AND / OR DISCIPLINARY ACTION (a)
Liability for Insider Trading Insiders may be subject to penalties of up to the greater of (a) $5 million and (b) triple any profit made or loss avoided, as well as imprisonment, for engaging in transactions in the Corporation’s securities at a time when they have knowledge of Material Non-Public Information about the Fund.
(b)
Liability for Tipping Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed Material Non-Public Information on the Corporation or to whom they have made recommendations or expressed opinions on the basis of such information. Securities regulators have imposed large penalties even when the disclosing person did not profit from the trading. Securities regulators and stock exchanges use sophisticated programs to detect insider trading.
(c)
Possible Disciplinary Actions Employees who violate this Policy will be subject to disciplinary action by the Corporation, which may include termination of employment.
TRADING RESTRICTIONS AND BLACKOUT PERIODS (a)
Blackout Periods for Directors, Officers and Employees The periods (i) beginning ten trading days after the end of the financial year end and ending two trading days following the date of public disclosure of the year end results (ii) beginning five trading days after the end of each quarter (other than the fourth quarter) and ending two trading days following the date of public disclosure of the financial results for that quarter and (iii) if a declaration of dividends is not announced concurrently with the release of quarterly results, beginning on the fifth day prior to the date of public disclosure of a declaration of dividends and ending two trading days following the date of public disclosure
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-3of such declaration (each a “Blackout Period”) is particularly sensitive, as directors and officers and certain employees will often possess Material Non-Public Information about the expected financial results for the quarter or the amount of the proposed dividends. Accordingly, to ensure compliance with this policy and applicable securities laws, all directors, officers and employees having access to internal financial statements or other Material Non-Public Information shall refrain from undertaking transactions involving the purchase or sale of the Corporation’s securities during Blackout Periods. Notwithstanding the foregoing, directors, officers and employees having access to internal financial statements or other Material Non-Public Information may apply to the President and Chief Executive Officer for approval to trade the Corporation’s securities during Blackout Periods. From time to time, the Corporation may also recommend that directors, officers, selected employees and consultants and others suspend trading activities because of the existence of Material Non-Public Information. In such event, those people are advised not to engage in any purchase or sale of the Corporation’s securities, and should not disclose to others the facts giving rise to or the imposition of such suspension of trading. Even outside Blackout Periods, any person possessing Material Non-Public Information with respect to the Corporation should not engage in any transactions in the Corporation’s securities until such information has been known publicly for at least two trading days. All directors, officers, employees and other persons are expected to use their judgment in interpreting this policy, and to err on the side of caution at all times. (b)
Pre-Clearance of Trades The President and Chief Executive Officer shall approve and monitor the trading activities of each director, officer and employee with regular access to Material Non-Public Information. Before initiating any trade in the Corporation’s securities, each director, officer and employee with regular access to Material Non-Public Information should contact the President and Chief Executive Officer.
(c)
Short-Swing Trades The Corporation recommends that, other than in the course of exercising an option, insiders do not buy and sell its securities within the same six month period.
(d)
Short Sales Insiders are not permitted to sell “short” or purchase a “call option” on any of the Corporation’s securities or purchase a “put option” where they do not own the underlying security.
(e)
Equity Monetization Transactions References to “securities” in subsection (a) above also include secondary market derivativebased transactions that involve, directly or indirectly, securities of the Corporation. Insiders of the Corporation are as a result also prohibited from engaging at any time in secondary market derivative-based transactions that involve, directly or indirectly, securities
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-4of the Corporation if they would be prohibited at such time from trading in securities of the Corporation. APPLICABILITY OF POLICY TO NON-PUBLIC INFORMATION REGARDING OTHER COMPANIES This Policy and the guidelines described herein also apply to Material Non-Public Information relating to other companies, including joint venture partners, customers, vendors and suppliers of the Corporation as well as potential merger or acquisition candidates (the “Business Partners”), when that information is obtained in the course of employment with, or providing services on behalf of, the Corporation. For the purposes of this Policy, information about Business Partners should be treated in the same way as information related directly to the Corporation. DEFINITION OF MATERIAL NON-PUBLIC INFORMATION It is not possible to define all categories of Material Non-Public Information. However, information should be regarded as Material Non-Public Information if it is Non-Public Information, and if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Corporation’s securities. Examples of such information could include: •
Changes in equity ownership that may affect control of the Corporation.
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Changes in corporate structure, such as reorganizations, mergers, amalgamations, etc.
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Take-over bids or issuer bids.
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Major corporate acquisitions or dispositions.
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Changes in capital structure.
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Borrowing or lending of a significant amount of funds.
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Public or private sale of additional securities.
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Development of new products and developments affecting the Corporation’s assets, technology, products or market.
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Entering into or loss of significant contracts, or other developments involving major customers or major suppliers.
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Firm evidence of significant increases or decreases in near-term earnings prospects.
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Significant changes in capital investment plans or corporate objectives.
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Significant changes in management.
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Significant litigation.
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Major labour disputes or disputes with major contractors or suppliers.
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Events of default under financing or other agreements.
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Events regarding securities (e.g. a call for redemptions, dividends, stock splits, etc.)
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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 any of the Corporation’s securities or that would reasonably be expected to have a significant influence on a reasonable investor's investment decisions.
Either positive or negative information may be material. Non-Public Information is information (which may constitute a fact or a change) that has not been previously disclosed to the general public and is otherwise not available to the general public. CERTAIN EXEMPTIONS The Corporation considers that the purchase of shares under any employee compensation plan, such as a long-term incentive plan, (but not the sale of any such shares) is exempt from this Policy, since the other party to the transaction is the Corporation itself and the price does not vary with the market but is fixed by the terms of the plan.
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