This Trading Policy outlines the legal obligations of “Insiders,” as defined, including obligations and restrictions with regard to trading in the securities of BluMetric Environmental Inc. (“BluMetric” or the “Corporation”).
Insider trading is strictly regulated by the applicable corporate laws, stock exchange rules and applicable securities regulatory authorities in Canada.
An “Insider,” as defined under applicable law, includes every director and officer of a reporting issuer (i.e., the Corporation), and for the purposes of these restrictions immediate family members of such persons living in the same household, every director and officer of a company that is itself an insider or subsidiary of a reporting issuer and any person or company who beneficially owns, directly or indirectly, voting securities of a reporting issuer or who exercises control or direction over voting securities of a reporting issuer or a combination of both carrying more than 10% of the voting rights attached to all voting securities of that reporting issuer and director or officer of any such company.
“Material Information” means any information relating to the activities, business, affairs, operations and properties of the Corporation that results in, or would reasonably be expected to result in a significant change in the market price or value of the Corporation’s securities or that would reasonably be expected to have a significant influence on any reasonable investor’s investment decisions.
Insiders have strict controls on their ability to trade shares of the Corporation. Such trading restrictions may even continue for a reasonable period of time after an individual ceases to be an officer, director or employee because of his/her continued possession of insider information.
There may also be times when other individuals employed by the Corporation or its affiliates will be deemed by the Board to be Insiders for a period of time (i.e., because of close involvement in a transaction, or access to confidential information not yet publicly disseminated). Those individuals will be advised of their status at that time by the Corporation.
In addition, some jurisdictions, such as Ontario, Canada, prohibit any person or company in a “special relationship” with a listed company from trading on the basis of undisclosed Material Information on the affairs of that company. Those considered to be in a “special relationship” with a listed company include those that are insiders, affiliates or associates of the listed company, a person or company proposing to make a take over bid of the listed company and a person or company proposing to become a party to a reorganization, amalgamation, merger or similar business relationship with the listed company. A person or company in a “special relationship” also includes those involved, or which were involved, in the provision of business or professional services for the listed company, including employees.
Tipping and Consequences
BluMetric personnel are prohibited from disclosing undisclosed Material Information to, or “tipping”, another party or recommending that another party trade in BluMetric securities or another public company’s securities while BluMetric personnel have knowledge of undisclosed Material Information. Tipping is a violation of law, even if the person disclosing the information does not personally make a trade or otherwise benefit from disclosing the information.
The consequences of insider trading and tipping can be severe. BluMetric personnel who contravene securities laws or regulations not only expose themselves to criminal, penal and administrative actions by the relevant authorities, which could lead to substantial fines and imprisonment, but BluMetric personnel who violate this Trading Policy may also be subject to disciplinary actions.
Individuals are encouraged to discuss any questions or concerns they might have about Insider trading activities and restrictions with the Chief Executive Officer or Chief Financial Officer of the Corporation.
Trading Restrictions and Blackout Periods
It is illegal to purchase or sell securities of any public company with knowledge of material non-public information affecting that company that has not been publicly disclosed. Except in the necessary course of business, it is also illegal for anyone to inform any other person of material non-public information.
Insiders, employees, officers, directors, consultants, immediate family members of such persons and those in a “special relationship” (as such term is defined in applicable law ad described above) with such persons, who have knowledge of material non-public information about the Corporation are prohibited at all times from trading in the Corporation’s securities until the information has been fully disclosed and a reasonable period of time has passed for the information to be widely disseminated.
Trading blackout periods will apply to all directors, officers and employees for a period of time when financial statements are being prepared but results have not yet been publicly disclosed. Quarterly financial statements are due 60 days after the close of a quarter; year-end annual financial statements are due 120 days after the close of the year. The blackout on trading relating to dissemination of financial statements will generally commence 30 days prior to the reporting deadline, unless otherwise specifically identified by management of the Corporation. Each of these quarterly blackouts on trading will continue until two full business days after the public release of the financial statements by the Board, unless you are specifically notified of an earlier lift of the trading blackout. These and other trading restrictions are applicable to the members of your immediate family.
Special trading blackout periods may be prescribed from time to time as a result of special circumstances relating to the Corporation pursuant to which Insiders of the Corporation would be precluded from trading in securities of the Corporation.
During blackout periods, Insiders shall not sell, directly or indirectly, securities of the Corporation including the exercise of an option or other equity incentive. An Insider shall not, directly or indirectly, sell a call or buy a put (or any other derivative security) in respect of a security of the Corporation.
To protect the reputation of the Corporation and avoid the appearance of impropriety, all officers and directors at all times, and any other employees who are deemed by the Board to be Insiders during specific periods, are encouraged whenever possible to pre-clear all proposed trades in the Corporation’s securities (including the exercise of stock options) with the Chief Financial Officer.
Filing Insider Report
“Reporting Insider” means those certain BluMetric personnel who are directors or executive officers designated by the Corporation as a reporting insider within the meaning of National Instrument 55-104 – Insider Reporting Requirements and Exemptions. This is typically the Chief Executive Officer, the Chief Financial Officer, other Executives, members of the Board of Directors and significant shareholders.
Under applicable Canadian securities legislation, a person or corporation who becomes a Reporting Insider of the Corporation must file an insider report within ten (10) days of the date of becoming a Reporting Insider on the System for Electronic Disclosure by Insiders (SEDI).
In addition, a Reporting Insider whose direct or indirect beneficial ownership of or control or direction over the Corporation’s securities changes, must file an insider report of the change within five (5) days of the date of the change. The Corporation may assist any Reporting Insiders in completing and filing insider reports, but the ultimate responsibility for complying with the insider filing requirements rests with the individual trading in the Corporation’s securities.