1. Purpose of this Policy The purpose of this corporate disclosure policy (the "Policy") of Skintap Inc (the "Company") is to set out certain policies to ensure that: (a) the Company complies with its timely disclosure obligations as required under applicable exchange rules and securities laws; (b) the Company prevents the selective disclosure of material changes (as defined herein) to analysts, institutional investors, market professionals and others; (c) documents released by the Company or public oral statements made by a person with actual, implied or apparent authority to speak on behalf of the Company that relates to the business and affairs of the Company do not contain a misrepresentation (as defined herein); (d) all persons to whom this Policy applies understand their obligations to preserve the confidentiality of Undisclosed Material Information (as defined herein); and (e) all appropriate parties who have Undisclosed Material Information are prohibited from trading in securities of the Company on such Undisclosed Material Information and Tipping (as defined herein) under applicable laws, stock exchange rules and this Policy.
All persons to whom this Policy applies will exercise their powers and discharge their duties and will act honestly and in good faith with a view to the best interests of the Company.
2. Application of this Policy This Policy applies to the groups of persons set out in attached Schedule "A". Each section of this Policy that imposes restrictions and obligations will describe which groups of persons are subject to that section. References in this Policy to "any person to whom this Policy applies" or similar references are intended to include persons in all of the groups set out and agreed to.
3. Disclosure Committee
3.1 Structure of the Disclosure Committee. The Company has created a corporate disclosure committee (the "Disclosure Committee") which is responsible for implementing this Policy.
The Disclosure Committee will consist of the Chief Executive Officer, the Chief Financial Officer and such other persons as may be designated by the Chief Executive Officer and the Chief Financial Officer. The composition of the Disclosure Committee may change from time to time. The Disclosure Committee may adopt disclosure controls and procedures in addition to those set out in this Policy.
3.2 Responsibilities of the Disclosure Committee The Disclosure Committee will have the responsibility to: (a) evaluate the necessity of making public disclosures; (b) review and approve, before it is Generally Disclosed (as defined herein), each Document (as defined) to assess the quality of the disclosures made in the Document including, but not limited to, whether the Document is accurate and complete in all material respects; (c) review and approve the guidelines and procedures to be distributed to appropriate management and other Company personnel designed to gather the information required to be disclosed in Core Documents (as defined herein); (d) establish timelines for the preparation of Core Documents, which timelines will include sufficient time for review by the Disclosure Committee in advance of the applicable filing deadline; (e) make determinations about whether: i. a material change (as defined herein) has occurred; ii. selective disclosure has been or might be made; or iii. a misrepresentation has been made; (f) oversee the design and implementation of this Policy and the Company's "disclosure controls and procedures," which are defined as controls and procedures that are designed to ensure that information required to be disclosed by the Company in its Core Documents is recorded, processed, summarized and reported within the specified time periods; (g) periodically evaluate the effectiveness of the Company's disclosure controls and procedures, particularly prior to the filing of each Core Document; (h) in its discretion, conduct interim evaluations of the Company's disclosure controls and procedures in the event of significant changes in securities regulatory requirements, IFRS/Canadian GAAP, legal or other regulatory policies, or stock exchange requirements, or if it otherwise considers such evaluations appropriate; (i) educate the Directors, Officers, Employees and Contractors (each as defined herein) about the matters contemplated by this Policy; (j) monitor the effectiveness of, and compliance with, this Policy and report to the Corporate Governance & Nominating Committee of the board of directors of the Company (the "Board") on the operation of this Policy and the Disclosure Committee's assessment of the quality of the disclosures made in Documents, and recommend any necessary changes to this Policy; (k) annually review and reassess the adequacy of this Policy and, if necessary, recommend any changes to the Corporate Governance & Nominating Committee for approval such that it complies with changing requirements and best practices; and (l) accumulate information which may be required to be reported upon or disclosed and communicated to the executive officers of the Company to allow the Company to meet its disclosure obligations on a timely basis.
3.3 Consulting Outside Advisors The Disclosure Committee may consult with the Company's legal counsel and other appropriate expert advisors as it considers necessary in connection with this Policy.
4. Individuals who are Authorized to Speak on Behalf of the Company
4.1 Unless otherwise authorized by the Disclosure Committee, only the following individuals ("Spokespersons") are authorized to make public oral statements or initiate contacts with analysts, the media and investors. As well, only the Spokespersons are authorized to respond to analysts, the media and investors on behalf of the Company and only with respect to the areas noted opposite their names. The list may be changed by the Disclosure Committee from time to time.
4.2 If you are not a Spokesperson and are approached by the media, an analyst, investor or any other member of the public to comment on the business and affairs of the Company, you must refer all inquiries to the Chief Executive Officer and immediately notify the Chief Executive Officer that the approach was made.
4.3 The Chief Executive Officer or Chief Financial Officer may, from time to time, designate other Directors, Officers, Employees or Contractors, or any other person, to speak on behalf of the Company as back-ups or to respond to specific inquiries. Spokespersons shall be limited to providing information from previously disseminated publicly available information or as otherwise expressly authorized by the Chief Executive Officer or the Chief Financial Officer. If any questions cannot be answered in this manner by such personnel, the enquiry shall be referred to the Chief Executive Officer or the Chief Financial Officer.
5. Procedures Regarding the Preparation and Release of Documents
5.1 The procedures in this section apply to all Directors, Officers, Employees and Contractors.
5.2 A "Document" means any public written communication, including a communication prepared and transmitted in electronic form: (a) that is required to be filed with securities regulatory authorities on the SEDAR website; (b) that is not required to be filed with a securities regulatory authority or on the SEDAR website, but is so filed; (c) that is filed or required to be filed with a government or an agency of a government under applicable law or with any stock exchange or similar institution under its bylaws, rules or regulations; or (d) the content of
which would reasonably be expected to affect the market price or value of the securities of the Company.
5.3 A "misrepresentation" means: (a) an untrue statement of a material fact (as defined herein); or (b) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the circumstances in which it is made.
5.4 For the purpose of this Policy, the following documents are "Core Documents": (a) prospectuses; (b) take-over bid circulars; (c) issuer bid circulars; (d) directors' circulars; (e) rights offering circulars; (f) management's discussion and analysis ("MD&A"); (g) annual information forms; (h) information circulars; (i) annual financial statements; (j) interim financial statements; and (k) material change reports.
5.5 Prior to the time that any Document is to be released to the public, filed with a securities regulatory authority or filed on SEDAR, the following procedures must be observed: (a) the Document must be prepared in consultation with, and be reviewed by, personnel in all applicable internal departments of the Company, and input from external experts and advisors should be obtained as necessary; (b) any Core Document must be reviewed and approved by the Disclosure Committee; (c) any press release must be reviewed and approved by the Disclosure Committee; (d) in the event a report, statement or opinion of any expert is included or summarized in a Document, the written consent of the expert to the use of the report, statement or opinion or extract thereof and the specific form of disclosure will be obtained. In addition, the Disclosure Committee must be satisfied that: i. there are no reasonable grounds to believe that there is a misrepresentation in the part of the Document made on the authority of the expert; and ii. the part of the Document made on the authority of the expert fairly represents the expert report, statement or opinion; (e) in the case of interim financial statements, annual financial statements, interim and annual MD&A, and financial results and earnings guidance press releases, such documents must be reviewed and approved by the Audit Committee of the Board in accordance with the Audit Committee Charter following approval of the Disclosure Committee and prior to submission to the Board as a whole.
5.6 In the event that a Document contains any Forward-Looking Information (as defined below) this information must be specifically identified as such and include reasonable cautionary language.
5.7 "Forward-Looking Information" means all disclosure regarding possible events, conditions or results (including future-oriented financial information with respect to prospective results of operations, a prospective financial position or prospective changes in financial position that is based on assumptions about future economic conditions and courses of action) that is presented as either a forecast or a projection. An example would be the discussion of trends and prospects for the Company in its MD&A.
6. Procedures Regarding Public Oral Statements
6.1 The procedures in this section apply to all Directors, Officers, Employees, Contractors, Spokespersons and any other person with actual or implied authority to make a public oral statement (as defined below).
6.2 A "public oral statement" is any oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become Generally Disclosed. Examples include speeches, presentations, news conferences, interviews and discussions with analysts where the Company's business and affairs, prospects or financial condition is discussed. The following procedures should be observed in respect of any public oral statements made by or on behalf of the Company: (a) such public oral statements should be made only by the Spokespersons authorized by this Policy to make public oral statements on behalf of the Company; and (b) the Spokespersons must ensure that any public oral statements made on behalf of the Company do not contain any misrepresentation and comply with this Policy.
6.3 Where a public oral statement contains Forward-Looking Information, the Spokesperson must, prior to making such a public oral statement make a cautionary statement indicating that the public oral statement contains Forward-Looking Information.
7. Timely Disclosure of Material Information
7.1 "Material Information" consists of both "material facts" and "material changes". A "material fact" means a fact that significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of the securities of the Company. A "material change" means a change in the business, operations or capital of the Company that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the Company and includes a decision to implement such a change if such a decision is made by the Board or by senior management of the Company who believe that confirmation of the decision by the Board is probable.
7.2 Any person to whom this Policy applies who becomes aware of information that has the possibility of being Material Information must immediately disclose that information to the Chief Executive Officer or the Chief Financial Officer.
7.3 Upon the occurrence of any change that may constitute a material change in respect of the Company, the Disclosure Committee, in consultation with such other advisors as it may consider necessary, will: (a) consider whether the event constitutes a material change; (b) if it does constitute a material change, prepare a press release and a material change report describing the material change as required under applicable securities laws; (c) determine whether a reasonable basis exists for filing the material change report on a confidential basis; and (d) issue the news release and make the applicable filings.
8. Conference Calls
8.1 Conference calls may be held for quarterly earnings and major corporate developments, accessible simultaneously to all interested parties, some as participants by telephone, and others in a listen only mode by telephone or via a webcast over the internet. At the beginning of the call, a Spokesperson will provide appropriate cautionary language regarding any ForwardLooking Information and direct participants to publicly available documents containing the assumptions, sensitivities and a full discussion of the risks and uncertainties applicable to the news.
8.2 The Company will provide advance notice of the conference call and webcast by issuing a news release announcing the date, time and topic and providing information and how interested parties may access the call and webcast. These details will be provided on the Company's website. In addition, the Company may send invitations to analysts, institutional investors, the media and others. Any non-material supplemental information provided to participants will also be posted to the website for others to view.
8.3 The Disclosure Committee will hold a debriefing meeting immediately following the conference call and if such debriefing uncovers a selective disclosure of previously undisclosed Material Information, the Company will immediately disclose such information broadly by a news release.
9. Internet Chat Rooms and Bulletin Boards
9.1 Directors, Officers, Employees and Contractors must not discuss or post any information relating to the Company or any of its subsidiaries or trading in securities of the Company in Internet chat rooms, newsgroups or bulletin boards.
9.2 Directors, Officers, Employees and Contractors must advise the Chief Financial Officer if they are aware of any discussion of information regarding the Company in a chat room, newsgroup or bulletin board.
10. Rumours The Company will not comment, affirmatively or negatively, on rumours. This also applies to rumours on the Internet. Spokespersons will respond consistently to those rumours, saying "It is our policy not to comment on market rumours or speculation." If the relevant stock exchange or a securities regulatory authority requests that the Company make a statement in response to a market rumour, the Disclosure Committee will consider the matter and make a recommendation to the Chief Executive Officer as to the nature and context of any response.
11.1 The Vice President, Investor Relations of the Company is responsible for creating and maintaining the Company's website. The Company's website must be maintained in accordance with this Policy.
11.2 The Disclosure Committee will review or designate appropriate management personnel to review the disclosure on the Company's website periodically to ensure that it remains accurate and consistent with this Policy.
12. Confidentiality of Undisclosed Material Information
12.1 "Undisclosed Material Information" of the Company is Material Information about the Company that has not been "Generally Disclosed", that is, disseminated to the public by way of a press release together with the passage of a reasonable amount of time (24 hours, unless otherwise advised that the period is longer or shorter, depending on the circumstances) for the public to analyze the information.
12.2 Any person to whom this Policy applies and who has knowledge of Undisclosed Material Information must treat the Material Information as confidential until the Material Information has been Generally Disclosed.
12.3 Undisclosed Material Information will not be disclosed to anyone except in the necessary course of business. If Undisclosed Material Information has been disclosed in the necessary course of business, anyone so informed must clearly understand that it is to be kept confidential, and, in appropriate circumstances, execute a confidentiality agreement. Schedule "C" attached lists circumstances where securities regulators believe disclosure may be in the necessary course of business. When in doubt if this Policy applies, consult with the Chief Financial Officer to determine whether disclosure in a particular circumstance is in the necessary course of business. For greater certainty, disclosure to analysts, institutional investors, other market professionals and members of the press and other media will not be considered to be in the necessary course of business. "Tipping", which refers to the disclosure of Undisclosed Material Information to third parties outside the necessary course of business, is prohibited.
12.4 In order to prevent the misuse of inadvertent disclosure of Undisclosed Material Information, the procedures set forth below should be observed at all times:
- Documents and files containing confidential information should be kept in a safe place to which access is restricted to individuals who "need to know" that information in the necessary course of business and code names should be used if necessary;
- Confidential matters should not be discussed in places where the discussion may be overheard;
- •Transmission of documents containing Undisclosed Material Information by electronic means will be made only where it is reasonable to believe that the transmission can be made and received under secure conditions; and unnecessary copying of documents containing Undisclosed Material Information must be avoided and extra copies of documents must be removed from meeting rooms and work areas at the conclusion of the meeting and must be destroyed if no longer required.
13. Quiet Period
13.1 Each period (1) beginning on the first day following the end of each fiscal quarter and each fiscal year, and (2) ending on the date on which preliminary production and operating results for the preceding fiscal quarter or fiscal year are Generally Disclosed by way of a press release, will be a "Quiet Period". During a Quiet Period, Spokespersons must not provide any Forward-Looking Information relating to the business and affairs of the Company or any of its subsidiaries, including information relating to expected revenues, net income or profit, earnings per share, expenditure levels and other information commonly referred to as earnings guidance ("Earnings Guidance") or comments with respect to the financial results for the current fiscal quarter or current fiscal year.
13.2 Notwithstanding these restrictions, the Company may Generally Disclose ForwardLooking Information during the Quiet Period when the Forward-Looking Information constitutes Undisclosed Material Information. During a Quiet Period, Spokespersons may respond to unsolicited inquiries about information either that is not Material Information or that has been Generally Disclosed.
14. Avoiding Selective Disclosure
14.1 When participating in shareholder meetings, news conferences, analysts' conferences and private meetings with analysts or institutional investors, Spokespersons must only disclose information that either (1) is not Material Information or (2) is Material Information but has previously been Generally Disclosed. Any selective disclosure of Undisclosed Material Information, including Earnings Guidance, is not permitted.
14.2 If Undisclosed Material Information is inadvertently disclosed, the Disclosure Committee will take immediate steps to ensure that the information is Generally Disclosed and the Company will contact the parties to whom the Material Information was disclosed and inform them: (a) that the information is Undisclosed Material Information, and (b) of their legal obligations with respect to the Material Information.
15. Analyst Reports and Financial Models
15.1 Upon request, the Company may review analysts' draft research reports and financial models. When reviewing such documents, comments of Directors, Officers, Employees and Contractors must be limited to identifying and or pointing out inaccuracies of factual information that has been Generally Disclosed. No comfort or guidance will be expressed on the analysts' earnings models or earnings estimates and no attempt will be made to influence an analyst's opinion or conclusion.
15.2 In order to avoid appearing to "endorse" an analyst's report or model, the Company will provide its comments orally or will attach a disclaimer to written comments to indicate the report was reviewed only for factual accuracy.
15.3 Analyst reports are proprietary products from the analyst's firm and re-circulating a report may be viewed as an endorsement by the Company of the report. As such, the Company will not directly distribute analyst's research reports to any person outside the Company or to its employees but, if requested, will advise which analysts follow the Company, accompanied by an appropriate disclaimer that the view expressed in any reports, including all forward-looking information, are the views of the analysts and not of the Company. Analysts' reports will not be posted on or linked from the Company's website.
16. Trading of Securities of the Company
16.1 No Person in a Special Relationship (as defined herein) with the Company will purchase or sell or otherwise monetize securities of the Company while in possession of Undisclosed Material Information.
16.2 All Directors, Officers, Employees and Contractors
The Company will maintain a five (5) year record of public information about the Company including continuous disclosure documents and news releases.
17. Commitment This Policy will be circulated or made available to all Company personnel on an annual basis and whenever changes are made. New Company personnel will be provided with a copy of this Policy and will be advised of its importance. This Policy should be read in conjunction with the rules in the Company's Business Conduct & Ethics Policy. Any person to whom this Policy applies and who violates this Policy may face disciplinary action up to and including termination of his or her employment with the Company without notice. The violation of this Policy may also violate certain securities laws. If it appears that any Company personnel may have violated such securities laws, the Company may refer the matter to the appropriate regulatory authorities, which could lead to penalties, fines or imprisonment. All Directors, Officers, Employees and Contractors specified by the Board, shall provide a certification of compliance with this Policy.