Manitoba Telecom Services Inc.

1. INTRODUCTION
2. CORPORATE DISCLOSURE POLICY
3. COMPLIANCE
4. POLICY OBJECTIVES
5. DISCLOSURE POLICY COMMITTEE
6. MATERIALITY DEFINITIONS
7. FORMAL DISCLOSURE OF MATERIAL INFORMATION
8. APPROVAL BY COMMITTEE BEFORE PUBLIC DISCLOSURE
9. AUDIT COMMITTEE REVIEW OF CERTAIN DISCLOSURE
10. BOARD REVIEW AND APPROVAL OF CORE DOCUMENTS
11. ISSUANCE OF NEWS RELEASES
12. FORMAL DISCLOSURE OF A MATERIAL CHANGE
13. CONFIDENTIAL INFORMATION/MAINTINAING CONFIDENTIALITY
14. SELECTIVE DISCLOSURE
15. CORRECTING ERRORS
16. COMMUNICATING MATERIAL INFORMATION
17. EMPLOYEE TRADING GUIDELINES
18. INSIDER TRADING REPORTING
19. AUTHORIZED SPOKESPERSONS
20. CORPORATE DISCLOSURE AND ELECTRONIC COMMUNICATIONS
21. FORWARD-LOOKING INFORMATION
22. PROVIDING GUIDANCE
23. CONTACTS WITH ANALYSTS, INVESTORS AND THE MEDIA
24. DISCLOSURE RECORD
25. PUBLIC PRESENTATIONS AND SPEECHES
26. RUMOURS
27. PERSONAL RESPONSIBILITY
Appendix I - MANITOBA TELECOM SERVICES INC. - INSIDER TRADING POLICY

 

1. Introduction

As a publicly traded share capital corporation, Manitoba Telecom Services Inc. ("MTS" or the "Company") is obligated to comply with the disclosure requirements of The Corporations Act (Manitoba), the securities laws in Canada and the rules and regulations of the Toronto Stock Exchange ("TSX").

The disclosure requirements set forth in Canadian law and stock exchange rules are premised on all persons investing in securities of publicly traded companies having equal access to information that may affect their investment decisions. And more generally, that the integrity of the capital markets is based on full and fair disclosure of material information concerning public companies.

 

2. Corporate Disclosure Policy

MTS is committed to supporting the timely and accurate disclosure of material information in order to facilitate efficient capital market activities. It is the policy of MTS to disclose all material information in accordance with the requirements as set out in legislation and in the rules and regulations of the TSX.

MTS's Corporate Disclosure Policy and Practices (the "Policy") covers disclosures in corporate documents filed with the securities regulators, financial and non-financial disclosure, including management's discussion and analysis (MD&A), statements made in the Company's annual and quarterly reports, news releases, letters to shareholders, speeches and presentations by senior management and information contained on the Company's website and other electronic communications. It extends to public oral statements including those made in meetings and telephone conversations with analysts and investors, interviews with the media as well as news conferences and conference calls.

For purposes of this Policy a "corporate document" means any written communication, including a communication prepared and transmitted only in electronic form, disclosing information with respect to the business, operations, capital, financial performance or prospects of the Company and includes any communication:

1. that is required to be filed with the Ontario Securities Commission ("OSC");
2. that is filed with the OSC;
3. 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 quotation and trade reporting system; or
4. the content of which would reasonably be expected to affect the market price or value of the securities of the Company.

A "public oral statement" for the purposes of this Policy means an oral statement relating to the business or affairs of the Company that is made by or on behalf of the Company in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed.

For purposes of this Policy, "generally disclosed" means the public disclosure of information in a manner calculated to result in broad dissemination to the marketplace and the passage of a reasonable amount of time (generally at least 24 hours) to permit adequate dissemination in the market and to give investors a reasonable time to analyze the information.

 

3. Compliance

The MTS Guide for Business Conduct and Ethics (the "Guide") requires that MTS employees follow the Guide and all Company policies and procedures. Consistent with the Guide, all directors, officers and employees of MTS and its subsidiaries are bound by the disclosure, employee trading and confidentiality requirements set out in this Guide. Compliance with this Guide is mandatory.

Any director, officer or employee of the Company who violates this Guide may face disciplinary action, including termination of his or her employment for cause and without notice. Violation of this Guide may also constitute a breach of securities law, including laws against insider trading and tipping, and the Company may refer any such breach to the appropriate regulatory authorities. Accordingly, violation of this Guide could lead to fines, penalties, imprisonment and liability to investors and the Company for damages.

 

4. Policy Objectives

The objectives of this Policy are as follows:

• To ensure MTS complies with the disclosure obligations to which it is subject as a publicly traded company as established by Canadian securities legislation and the policies and regulations of the TSX.
• To ensure that information generally disclosed by MTS is timely and contains sufficient details to allow informed investment decision-making.
• To ensure that corporate documents and public oral statements are accurate and do not contain a misrepresentation.
• To ensure that disclosure of material information is made in a manner that ensures wide dissemination of the information and so that selective disclosure is avoided.
• To protect the confidentiality of competitively sensitive information within the context of the Company's disclosure obligations.
• To provide a framework for external communications that supports and fosters confidence in the quality and integrity of information released by MTS.
• To provide appropriate guidance for MTS staff in executing their duties in accordance with MTS's disclosure obligations.

 

5. Disclosure Policy Committee

The requirement for a publicly traded company to disclose information publicly hinges on whether or not the relevant information constitutes material information. MTS has established a Disclosure Policy Committee (the "Committee") to administer this Policy, to determine whether particular information is material, to determine whether a material change has occurred which requires an immediate news release, and to ensure the appropriate disclosure of such information. This Committee is comprised of the CEO, the Chief Financial Officer, the Chief Legal Officer and the Vice-President Investor Relations. The Committee will access external legal counsel as required in the discharge of its duties.

Specific roles and responsibilities of the Committee include:

1. Ensuring compliance with the Policy.
2. Identifying violations of the Policy and implementing remedial and disciplinary action as required.
3. Monitoring the disclosure requirements contained in law and stock exchange requirements, developing amendments to the Policy arising from changes to the relevant laws and regulations and recommending approval of such amendments to the Board of Directors.
4. Establishing and maintaining appropriate disclosure controls and procedures in addition to those controls relating to financial reporting.
5. Reviewing and approving, before they are generally disclosed, all written, electronic and oral statements (including all news releases, corporate documents and public oral statements) that may contain material undisclosed information.
6. Making determinations about whether:
   1. any information is material information;
   2. a material change has occurred;
   3. selective disclosure has been or may have been made; or
   4. a misrepresentation has been or may have been made.
7. Reporting quarterly to the Audit Committee of the Board of Directors on compliance with the Policy.
8. Ensuring that Company spokespersons receive adequate training.
9. Ensuring appropriate internal communication of the Policy.

It is not expected that the Committee will have formal meetings or prepare minutes of meetings. Many decisions made by the Committee will be made by those members of the Committee who are then available on a real time basis as a result of informal meetings and consultations. It is understood that where consultation with at least one other member of the Committee is not reasonably possible on a timely basis, any member of the Committee may make decisions under this Policy, subject to subsequent reports to and consultations with the other members of the Committee with respect to those decisions. Members of the Committee making any material decision under this Policy should maintain a written note or record of that decision.

 

6. Materiality Definitions

Any assessment concerning materiality will be evaluated within the context of the following definitions:

1. "Material Information" - Any information relating to the business and affairs of the company that if disclosed would result in or would reasonably be expected to result in a significant change in the market price or value of any of the Company's securities.
2. "Material Change" - A change in the business, operations or capital of the Corporation that would reasonably be expected to have a significant effect on the market price or value of any of its securities.

The definition of Material Information is broader than the definition of a Material Change. Therefore, information that gives rise to a Material Change will always constitute Material Information. However, Material Information does not necessarily constitute a Material Change which requires immediate public disclosure.

The Canadian Securities Administrators have identified examples of developments that may constitute Material Information, which are described in Attachment A of Appendix I.

The materiality of information is affected by factors such as the Company's existing disclosure record, the volatility and liquidity of the Company's securities and prevailing market conditions. If there is doubt about whether any particular confidential corporate information is Material Information, directors, officers and employees should treat the information as if it was confidential Material Information.

The Committee will monitor the market's reaction to the release of corporate information to assist it in making future judgments about the kinds of information that are likely to be Material Information.

 

7. Formal Disclosure of Material Information

The responsible senior officers of the Company and its subsidiaries shall inform the CFO or any other member of the Committee of the Company on a timely basis of the full particulars of any transaction, development or information that is or could reasonably be considered to be Material Information with respect to the Company so as to enable the members of the Committee to determine whether timely disclosure is required and otherwise to perform its duties under this Policy.

If there is any doubt whether any particular corporate information is material, a member of the Committee should be contacted.

 

8. Approval by Committee Before Public Disclosure

All news releases, corporate documents and public oral statements disclosing potentially Material Information in circumstances in which it is reasonable to conclude that such information will become generally disclosed must be reviewed and approved by the Committee before they are issued or made. In approving the disclosure, the Committee will apply the following principles:

1. It should be reasonably satisfied that the news release, corporate document or public oral statement does not contain a misrepresentation and is not, in a material respect, misleading or untrue.
2. If any part of a news release, corporate document or public oral statement includes, summarizes or quotes from a report, statement or opinion made by an expert retained by or on behalf of the Company, the Committee should obtain the written consent of the expert to the use of the report, statement or opinion.
3. If any part of a news release, corporate document or public oral statement contains forward-looking information, the Committee will comply with section 21 of this Policy.
4. The Committee should also consider whether approval of the Board of Directors is necessary or desirable prior to the issuance of a news release, the release of a non-core document or the making of a public oral statement. For the purposes of this Policy, a "non-core document" means a corporate document other than a core document as defined in section 10 of this Policy. The Committee must not, however, delay the issuance of a news release which the Committee considers to be required by applicable law or this Policy, for the purpose of obtaining board approval.

 

9. Audit Committee Review of Certain Disclosure

In addition to approval by the Committee, the following disclosure documents will generally be submitted to the Audit Committee of the Board of Directors prior to public release by the Company:

• News releases containing earnings guidance;
• Quarterly earnings releases, interim and annual financial statements and MD&A; and
• News releases containing financial information based on or derived from the Company's financial statements.

 

10. Board Review and Approval of Core Documents

A "core document" means a prospectus, a take-over bid circular, an issuer bid circular, a directors' circular, a rights offering circular, MD&A, an annual information form, an information circular and annual and interim financial statements.

Each core document proposed to be released by the Company must be submitted to the appropriate committee of the Board of Directors for their consideration and recommendation for approval to the Board and must be accompanied by a certificate signed by the Chief Executive Officer and the Chief Financial Officer of the Company, in their capacities as officers of the Company, certifying that:

1. the Committee has reviewed the core document and approved its issuance;
2. after reasonable inquiry, the Committee is satisfied that the core document does not contain a misrepresentation and is not, in any material respect, misleading or untrue and that the Committee is satisfied that it has conducted, or caused to be conducted, a reasonable investigation to satisfy itself as to such matters; and
3. if any part of a core document includes, summarizes or quotes from a report, statement or opinion to the Company made by an expert, the Committee has obtained the written consent of the expert to the use of the report, statement or opinion and the committee is satisfied that:
   1. there are no reasonable grounds to believe that there is a misrepresentation in the part of the core document made on the authority of the expert; and
   2. the part of the core document made on the authority of the expert fairly represents the report, statement or opinion made by the expert;
4. if any part of a core document is based upon third party disclosure, the Committee is reasonably satisfied that:
   1. the third party disclosure was not corrected in another document filed by the third party with the OSC or other securities regulatory authority in Canada or a stock exchange before the issuance of the core document by the Company;
   2. the core document contains a reference identifying the document containing the third party disclosure; and
   3. there are no reasonable grounds to believe that the relevant portion of the core document contains a misrepresentation.

 

11. Issuance of News Releases

A news release must be issued immediately if the Committee determines that a Material Change or selective disclosure of Material Information has occurred. The news release must be factual and balanced, and contain sufficient detail to enable investors to understand the nature and substance of the information.

If the Committee is of the opinion that the issuance of a news release announcing Material Information would be unduly detrimental to the Company's interests (for example, if the release of the information would prejudice negotiations with respect to a corporate transaction) the Committee may authorize and approve the filing of a confidential Material Change report in accordance with section 13 of this Policy.

All news releases disclosing information that is potentially Material Information must be approved prior to release by the Committee.

Once necessary authorizations have been received, the news release will be issued by Corporate Communications or Investor Relations through a full text news service that provides rapid and broad dissemination. The news release will also be distributed to the relevant securities regulators. Where Material Information is released during the trading hours of the stock exchange on which the Company's shares are listed, MTS must notify the market surveillance section of the stock exchange prior to issuing the news release. Exchange staff will determine whether a temporary halt in the trading of MTS shares is necessary to allow for dissemination of the information into the market. News releases will be simultaneously posted on the MTS website. A copy of every news release which contains previously undisclosed Material Information should be promptly circulated to the Board of Directors.

Information contained in a news release that is issued through the news services will not be considered to be generally disclosed until the news release appears on such services and a reasonable period has elapsed in order for the news release to be adequately disseminated and to give investors a reasonable time to analyze the information (generally at least 24 hours). The reasonable period necessary for effective dissemination may vary depending on factors such as the complexity of the information and how broadly the Company is followed by analysts. Everyone to whom this Policy applies must treat the information as undisclosed Material Information until this period has elapsed.

 

12. Formal Disclosure of a Material Change

Where a Material Change has occurred, in addition to the procedures described above, MTS must file a Material Change report with the appropriate securities regulators within 10 days of the date on which the Material Change occurs. The completion and filing of this report is performed by the Corporate Secretary's office.

 

13. Confidential Information/Maintaining Confidentiality

In circumstances where disclosure of Material Information would be unduly detrimental to MTS, that information may be kept confidential for a limited period of time.

The Committee will determine, in accordance with applicable law, whether or not confidentiality can be maintained and whether a confidential Material Change report should be filed.

If the Committee determines that the Material Information may be maintained on a confidential basis, the Company and its employees must take precautions to ensure the information remains confidential, including taking steps to:

• Ensure that those individuals who are aware of the information know that it is confidential and that it must be kept confidential;
• Ensure that there is no selective disclosure (as defined below) of confidential Material Information to third parties; and
• Ensure that no one with knowledge of the Material Information trades in the securities or related financial instruments of the Company, and securities and related financial instruments of any other issuer that is affected by the Material Information, until such time as the information has been generally disclosed.

During such period, no document may be released and no public oral statement may be made that, due to the undisclosed Material Change, contains a misrepresentation.

When a confidential Material Change report is filed, the Committee should promptly advise the Board of Directors of that fact.

For the purposes of this Policy a "related financial instrument" means:

1. an instrument, agreement or security where the value, market price or payment obligations are derived from, referenced to or based on the value, market price or payment obligations of a security of the Company or of another reporting issuer; and
2. any other instrument, agreement or understanding that affects, directly or indirectly:
   1. a person's economic interest in a security of the Company or of another reporting issuer; or
   2. economic exposure to the Company, or another reporting issuer.

 

14. Selective Disclosure

Selective disclosure occurs when undisclosed Material Information is communicated to particular persons such as analysts, institutional investors, investment dealers or other third parties and is not generally disclosed so that all investors have access to the information.

No selective disclosure of undisclosed Material Information is permitted.

There is an exception to this prohibition, however, where information is disclosed to a person in the necessary course of business (see section 16).

To protect against selective disclosure, the following procedures should be followed where it is reasonable and practical to do so:

1. Company spokespersons who are participating in shareholder meetings, news conferences, analysts' conferences, private meetings with analysts, industry conferences and on-line conferences, and in other circumstances where an oral or written statement may become generally disclosed, should script their comments and prepare answers to anticipated questions in advance of the meeting or conference.
2. The scripts should be reviewed by the Committee (or by at least one member of the Committee other than the spokesperson).

If undisclosed Material Information is inadvertently disclosed, the Company must take immediate steps to ensure that the Material Information is generally disclosed through the normal process described in section 11 and must immediately report the circumstances to the Board of Directors.

Where selective disclosure has occurred, the Committee should consider whether it is practical to contact the parties to whom the Material Information was disclosed and inform them:

1. That the relevant information is undisclosed Material Information; and
2. That they have a legal obligation until the information is generally disclosed not to disclose the information to others or to trade in securities of the Company or related financial instruments (as defined in section 13), or the securities or related financial instruments of any other issuer that is affected by the Material Information,

 

15. Correcting Errors

If the Committee concludes that a news release, corporate document or a public oral statement issued or made contains a misrepresentation or is in any material respect misleading or untrue, or that there has been a failure by the Company to make timely disclosure of a Material Change, the Committee must take immediate steps to generally disclose correcting information or the Material Change and immediately advise the Board of Directors of the Company.

The Committee should keep the Board of Directors informed of all significant corporate developments and Material Information that has been generally disclosed.

 

16. Communicating Material Information

Because it is often difficult to determine whether confidential corporate information is Material Information, directors, officers and employees of the Company should treat all confidential information as if it was Material Information and communicate that information only on a "need to know" basis (including communications among employees of the Company).

It is an offence under securities laws for a director, officer or employee of the Company to communicate non-public Material Information to anyone other than in the necessary course of business.

Attachment B lists circumstances where securities regulators believe disclosure may be in the necessary course of business. If in doubt, you should consult with a member of the Committee to determine whether disclosure in a particular circumstance would be in the necessary course of business.

It is also illegal for anyone who receives non-public Material Information about the Company (also called "tippee") to trade in securities of the Company with the knowledge of that information. Anyone who communicates Material Information to a third party (other than in the necessary course of business) is liable for damages if the "tippee" trades in securities of the Company with knowledge of that information.

If undisclosed Material Information is disclosed in the necessary course of business to third parties, the recipient should be advised that the information is Material Information that has not been generally disclosed. When undisclosed Material Information is disclosed to a third party in the necessary course of business, there may be circumstances in which it would be prudent for the Company to obtain a written agreement from the third party that it will not divulge the Material Information to anyone (other than to directors, officers or other employees of the third party who need to know the information for the purposes for which the undisclosed Material Information was communicated to them) without written authorization from the Company and that the third party understands the restrictions under applicable law not to purchase or sell securities of the Company or related financial instruments, or securities or related financial instruments of any other entity to which the information relates, until the transaction, development or event has been generally disclosed or has been abandoned.

Where any undisclosed Material Information communicated in the necessary course of business becomes publicly known on a selective basis, where there are rumours in the market with respect to such information or where there are reasonable grounds to believe that persons are purchasing or selling securities of the Company or related financial instruments with knowledge of such information, the Material Information must be promptly generally disclosed by news release.

 

17. Employee Trading Guidelines

It is illegal under securities laws for anyone who is in possession of non-public Material Information to trade in securities of the Company until the information has been generally disclosed and a reasonable period of time has passed for the information to be disseminated.

Any employee who is contemplating trading MTS securities or related financial instruments, and is uncertain as to whether or not they are in possession of non-public Material Information, should contact the office of the Corporate Secretary.

 

18. Insider Trading Reporting

The Securities Act (Manitoba) and similar legislation in the other Canadian provinces require that individuals defined as "insiders" of a company (primarily directors and officers of the company and its subsidiaries) must publicly report their trading in the securities of that company.

MTS has established an Insider Trading Reporting Policy (Appendix I) to facilitate these reporting requirements. That Insider Trading Reporting Policy should be read in conjunction with this Policy.

 

19. Authorized Spokespersons

The Executive Committee is committed to keeping the Company's spokespersons fully apprised of corporate developments in order to ensure the ongoing achievement of the objectives of the Policy.

To ensure that key financial, operating and strategic information that is released is consistent, is of the highest integrity, and complies with regulatory disclosure requirements, the following individuals are authorized as Regular Authorized Spokespersons for MTS:

1. the CEO, MTS, or delegate,
2. the Chief Financial Officer, MTS, or delegate,
3. the Senior Vice-President Corporate Relations & Communications, MTS, or delegate,
4. the Vice-President Investor Relations, MTS, or delegate.

In addition, the President Enterprise Solutions division, the President MTS Business Unit, the Executive Vice-President Government and Regulatory Affairs, or other individuals as may be designated by the CEO of MTS, are Authorized Spokespersons of their respective companies.

Members of the Board of Directors are not authorized to speak on behalf of the Company. Situations in which a director is required to speak publicly on behalf of the Board of Directors are highly unusual and infrequent. Should such a situation arise, the Chairman of the Board of Directors or delegate is authorized to speak (or respond) on behalf of the Board of Directors.

As a general practice, no other employee is authorized to speak (or respond) on behalf of MTS. However, under certain circumstances arrangements may be made for individuals other than those designated above to speak to a member of either the investment community or media. These individuals must however receive authorization to make statements on behalf of MTS. Such authorizations will be coordinated either through the Investor Relations department if the discussion is with the investment community, or through the Corporate Communications department, if the discussion/interview is with the media.

Should an employee receive an inquiry regarding MTS from a third party, the inquiring party must be referred to the appropriate contact as identified below:

1. Contacts with securities regulators - Communications and reporting to the provincial securities regulators with respect to disclosure issues (material change reports, insider trading reports, etc.) is to be conducted by the Corporate Secretary's office.
2. Contacts with the stock exchanges - Communications with the TSX respecting disclosure of Material Information is to be conducted by the Investor Relations department.
3. Contacts with investors - Securities analysts, professional investors and other members of the investment community wanting to discuss financial, operating and industry matters should be referred to the Investor Relations department.
4. Contacts with individual shareholders - Individuals who have questions regarding share certificates, share transfers or dividends should be referred to MTS's transfer agent Computershare Investor Services Inc.
5. Contacts with the media - All inquires from news media should be referred to the Corporate Communications department.

 

20. Corporate Disclosure and Electronic Communications

Communication through websites, e-mail and other channels available on the Internet must comply with this Policy and the related Canadian securities legislation and stock exchange requirements.

Disclosure on the Company's website alone does not constitute adequate disclosure of information that is considered material non-public information. Any disclosures of Material Information on MTS's website will be preceded by a news release. In accordance with this policy, any Material Information respecting MTS that is being contemplated for posting on the Internet must first be reviewed and approved by the Vice-President Investor Relations. Any amendments to, or deletion of, existing Material Information on MTS's website, e-mail addresses or other Internet channels also must be approved by the Vice-President Investor Relations.

All continuous disclosure documents will be posted following public release in the Investors section of the Company's Web site. The Investors section of the website shall include a notice that advises the reader that the information posted was accurate at the time of posting, but may be superseded by subsequent information, events or disclosures and that the Company disclaims any obligation to update or revise such information. All data posted to the website, including text and audiovisual material, shall show the date that such material was posted.

Links from the Company website to a third party website must be approved by the Vice-President Investor Relations. Any such links will include a notice that advises the reader that he or she is leaving the Company's website and that the Company is not responsible for the contents of the other site.

The Vice-President Investor Relations shall also be responsible for responses to electronic inquiries from investors. Only public information or information which could otherwise be disclosed in accordance with this disclosure policy shall be utilized in responding to electronic inquiries.

 

21. Forward Looking Information

If the Company elects to disclose forward-looking information in corporate documents, speeches, conference calls, etc., the following guidelines will be observed:

1. There must be a reasonable basis for all forwarding-looking information.
2. The Committee must approve the disclosure of the forward-looking information.
3. The forward-looking information, if material, will be generally disclosed via news release.
4. The information will be identified as forward-looking.
5. The information will be accompanied by a cautionary statement proximate to the forward-looking information that (i) identifies the material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information, and (ii) contains a statement of the material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.
6. The information will be accompanied by a statement that disclaims the Company's intention or obligation to update or revise the forward-looking information, whether as a result of new information, future events or otherwise. Notwithstanding this disclaimer, should subsequent events prove past statements about current trends to be materially off target, the Company will consider issuing a news release explaining the reasons for the difference.

If the forward-looking information is contained in a public oral statement, the person making the public oral statement (or another person on his or her behalf) must:

1. Make a cautionary statement that his or her comments include forward-looking information;
2. State that actual results could differ materially from a conclusion, forecast or projection in the forward-looking information;
3. State that certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection reflected in the forward-looking information; and
4. Identify a readily-available corporate document (or portion of a readily-available corporate document) where additional information can be found about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information.

 

22. Providing Guidance

Authorized Spokespersons are permitted to meet with and discuss financial matters with analysts and other market participants but care must be taken to ensure that no Material Information that has not been previously disclosed, including information in the form of guidance on financial performance relative to street expectations, is communicated. If any Material Information is inadvertently communicated on a selective basis, an immediate news release containing such information will be issued. It is the Company's general policy that:

1. at least two representatives of the Company participate in meetings and discussions of the nature referred to above; and
2. that such persons debrief with a member of the Committee following such meetings and discussions in order to assess whether any material non-public information may have inadvertently been disclosed.

 

23. Contacts with Analysts, Investors and the Media

Where MTS intends to disclose Material Information at an analyst or shareholder meeting or a news conference or conference call, that disclosure will be preceded by a news release.

The Company recognizes that analysts are important conduits for disseminating corporate information to the investing public and that analysts play a key role in interpreting and clarify existing public data and in providing investors with background information and details that cannot practically be put in public documents.

The Company recognizes that meetings with significant investors are an important element of the Company's investor relations program. The Company will meet with analysts and investors on an individual or small group basis as needed and will initiate contacts or respond to analyst and investor calls in a timely, consistent and accurate basis in accordance with this disclosure policy. All analysts will receive fair treatment regardless of their recommendation on the Company's securities.

The Company will, upon request, and on a reasonable basis, provide the same sort of non-Material Information to individual investors or reporters that it has provided to analysts and institutional investors.

1. Quiet Periods

   With the exception of the disclosure of Material Information in accordance with this policy, the Company will observe quiet periods prior to the release of quarterly earnings results and when Material Changes are pending. During these periods, the Company will not initiate any meetings or telephone contacts with analysts and investors. The quarterly quiet period generally commences on or about the first day of the month following the end of a quarter and ends with the issuance of a news release disclosing the results for that quarter.

   For greater certainty, during a quiet period, the Company may respond to unsolicited inquiries about information that is not Material Information or that has previously been generally disclosed.

2. Reviewing Analyst Draft Reports and Models

   The Company will, upon request, review analysts' draft research reports or models for the purpose of pointing out errors in fact based on publicly disclosed information. It is the Company's policy, when an analyst inquires with respect to estimates, to question an analyst's assumptions if the estimate is significantly out of line with the range of other analysts' estimates and/or the Company's published guidance. The Company will limit its comments in responding to such inquiries to the correction of factual errors.

   In order to avoid appearing to "endorse" an analyst's report or model, the Company will attach a disclaimer to written comments to indicate the report was reviewed only for factual accuracy, or in the case of oral comments, will orally state that the report was reviewed only for factual accuracy.

3. Distributing Analyst Reports

   In order to avoid appearing to "endorse" an analyst's report, any re-distribution of such reports by the Company will be at the discretion of the Committee.

4. Conference Calls

   MTS periodically holds conference calls to discuss quarterly results and major corporate developments. The calls are accessible simultaneously to all interested parties, some as participants by telephone and others in a listen-only mode by telephone or by webcast. In each case, the conference call will be preceded by a news release containing all relevant Material Information. At the beginning of the call, a Company spokesperson will provide appropriate cautionary language with respect to any forward-looking information in accordance with section 21 of this policy.

The Company will provide advance notice of the conference call and webcast by issuing a news release announcing the date and time and providing information on how interested parties may access the call and webcast. In addition, the Company may send invitations to analysts, institutional investors, the media and others invited to participate. Any non-material supplemental information provided to participants will also be posted on the Company's website. A tape recording of the conference call will be made available following the call for 10 days, for anyone interested in listening to a replay. An archived audio web cast of the conference call will be made available on the Company's website on the Internet for a minimum of 90 days.

The Committee will hold a debriefing session following each such conference call. If it is determined that selective disclosure of previously undisclosed Material Information occurred during the course of the call, the Company will immediately disclose such information broadly via news release.

 

24. Disclosure Record

The Vice-President Investor Relations will maintain a permanent file containing all public information about the Company, including continuous disclosure documents, news releases, analysts' reports, transcripts or tape recordings of conference calls and newspaper articles.

 

25. Public Presentations and Speeches

Public presentations and speeches made by employees of MTS which contain references to MTS's corporate policies or financial and operating performance should be submitted to the Vice-President Investor Relations for approval prior to delivery.

 

26. Rumours

As a general rule, MTS does not respond to rumours. However, the TSX may require MTS to issue a clarifying statement where market trading activity of MTS shares is being unduly influenced by rumours. MTS is committed to working with all securities regulators to ensure the continuing efficient functioning of the market and uninterrupted trading of MTS shares. The Committee will promptly address all requests for clarifying statements respecting rumours.

 

27. Personal Responsibility

It is the responsibility of all directors, officers and employees of MTS and its subsidiaries who have access to Material Information that has not been generally disclosed, whether they are insiders or not, to ensure that they are at all times fully aware of, and in full compliance with, the law governing corporate disclosure and the requirements of MTS's Policy as described above.

The Committee will take reasonable steps to ensure that all directors, officers and employees of the Company are aware of the terms of this Policy and of any material changes to it.

 

APPENDIX I   MANITOBA TELECOM SERVICES INC.   INSIDER TRADING POLICY  

1. INTRODUCTION

   Manitoba Telecom Services Inc. ("MTS"), as a publicly traded company and a reporting issuer under securities legislation, is required by law to disclose Material Information to the public on a timely basis. MTS also has an obligation to ensure that its directors, officers and employees comply with the insider trading requirements set out in securities legislation, which prohibit insiders and other persons who have access to undisclosed Material Information of a reporting issuer from trading in securities of the issuer. These rules are designed to protect the integrity of the securities markets by ensuring that all investors have equal access to information that may affect their investment decisions.

   The Toronto Stock Exchange recommends that every listed company should have a firm rule prohibiting those who have access to Material Information from trading in the company's securities before the information has been generally disclosed to the public and a reasonable period of time for dissemination of the information has passed.

   This policy is intended to outline the restrictions on trading in securities of MTS by insiders and other employees of MTS or its subsidiaries, and the insider reporting requirements applicable to insiders of MTS.

   It is the personal responsibility of each director, officer and employee to ensure that, when they trade or propose to trade in securities of MTS or of companies with which MTS has business dealings, they comply with all applicable insider trading restrictions including those referred to in this policy. The provisions of this policy are qualified by the specific provisions of applicable law.

2. INSIDER TRADING RESTRICTIONS
   1. Insider Trading Restrictions

      Insider trading is strictly regulated by Canadian securities law, which provides for both fines and imprisonment in the event of violations of the prescribed restrictions on trading in the securities of a reporting issuer. For this purpose, securities include shares, phantom shares, debt instruments, puts, calls, options or other rights to purchase or sell securities and a security the market price of which varies materially with the market price of the securities of the reporting issuer.

      Securities legislation sets out two main prohibitions in relation to Material Information of a reporting issuer:

      1. A person in a special relationship with a reporting issuer may not purchase or sell securities of the issuer when in possession of Material Information related to the issuer that has not been generally disclosed to the public. Failure to comply with the foregoing is known as "insider trading".
      2. A person in a special relationship with a reporting issuer may not inform another person or corporate entity, other than in the necessary course of business, of Material Information related to the issuer before that information has been generally disclosed to the public. Failure to comply with the foregoing is known as tipping.
   2. Material Information

      For this purpose, "Material Information" means any information that, if disclosed, would significantly affect, or would reasonably be expected to have a significant effect on, the market price or value of any of an issuer's securities. That includes any such information related to the business, operations or capital of MTS. Information may also be material if it would reasonably be expected to have a significant influence on an informed investor's investment decisions. The most common Material Information consists of quarterly and annual financial results.

      The Canadian Securities Administrators, in a national policy instrument adopted in July 2002, have identified an expanded, non-exhaustive list of examples of the types of events or information that may be material. These examples are specified in Attachment A.

   3. Persons in Special Relationship

      A "person in a special relationship" with a reporting issuer includes all directors, officers, employees and insiders of the issuer and its subsidiaries (including their spouses, family members and others that live in their households), and anyone who is informed of Material Information of the issuer that has not been generally disclosed.

      Securities legislation defines "insider" as meaning all directors and senior officers of a reporting issuer or of any of its subsidiaries, and any holder of more than 10% of the voting rights of the issuer and the directors and senior officers of any such holder. A "senior officer" is defined as the chair and any vice-chair, the president, any vice-president, the secretary, the treasurer, the general manager, and any other individual who performs functions for the issuer similar to those normally performed by an individual occupying any of the above offices, together with each of the five highest paid employees of the issuer, including any of the individuals specified above. These individuals, therefore, are all insiders, and are subject to the insider trading restrictions described in this section 2 and to the insider reporting requirements described in section 3 below.

   4. MTS Trading Restrictions

      In order to avoid even the appearance of possible insider trading, MTS has established the following additional trading restrictions:

      1. Insiders of MTS and its subsidiaries, and any other employees of MTS who are given notice that they are subject to black out are prohibited from trading in securities of MTS during a period of ten (10) business days prior to, and two (2) business days following, the date of public disclosure by MTS of this Material Information. Advance notice will be given by the Company to all persons who are subject to this trading restriction of the commencement of a restricted trading period.
      2. Insiders of MTS and its subsidiaries, as well as employees of MTS and its subsidiaries, must refrain from purchasing or selling shares of MTS frequently so as to appear to be speculating in securities of MTS.
      3. Insiders of MTS and its subsidiaries, as well as employees of MTS and its subsidiaries, must not engage in short selling of, or trading in, puts or calls in respect of securities of MTS.

      The insider trading restrictions described in this policy, also apply to restrict trading by directors, officers and employees of MTS in securities of an issuer with which MTS has a business relationship or with which it is proposing to enter into a transaction or business combination.

      MTS may from time to time impose additional black-out periods on some or all of the directors, officers or employees of MTS and its subsidiaries. Despite the above, a director, officer or employee of the Company may purchase or sell securities during a black-out period with the prior written consent of the Chief Legal Officer. The Chief Legal Officer will grant permission to purchase or sell during a black-out period only in exceptional circumstances. Exceptional circumstances may include the sale of securities in the case of financial hardship or where the timing of the sale is important for tax planning purposes or where options may be expiring. In no event will any person be permitted to trade with a third party when such person has knowledge of any material undisclosed information.

3. INSIDER REPORTING REQUIREMENTS
   1. General Reporting Requirements

      Pursuant to Canadian securities legislation, insiders, as defined in section 2 above, are required to file insider trading reports, in a prescribed manner, with the securities regulatory authorities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia and Newfoundland.

   2. Initial Insider Report

      An insider must file an initial insider report within ten (10) days from the day on which the person became an insider of a reporting issuer. This report must indicate the position held by the insider with the issuer, and must disclose any direct or indirect beneficial ownership of, or control or direction over, securities of the issuer. If the insider does not own or exercise control or direction over securities of the issuer, the insider is not required to file an initial insider report until such time as the insider first acquires securities or control or direction over securities.

   3. Subsequent Insider Reports

      All changes in the beneficial ownership of or control or direction over securities by an insider, including the purchase or sale of securities, must be reported by filing an insider report within ten (10) days from the day on which the change took place. This insider report must state both the change in holdings and the resulting ownership or control position.

   4. Filing by MTS

      The insiders of MTS are responsible for ensuring that they are in compliance with the insider reporting requirements set out in securities law as described above. Insiders, therefore, are responsible for preparing and filing the required insider reports in the prescribed manner within the statutory filing period. To assist MTS's insiders in complying with these requirements, the office of the Corporate Secretary, through the Law Department, will when requested to do so, arrange to file the required insider reports with the securities regulatory authorities on behalf of the insider.

 

ATTACHMENT A   EXAMPLES OF INFORMATION THAT MAY BE MATERIAL   (Reproduced from National Instrument 51-201)  

Changes in corporate structure

• changes in share ownership that may affect control of the company
• major reorganizations, amalgamations, or mergers
• take-over bids, issuer bids, or insider bids

Changes in capital structure

• the public or private sale of additional securities
• planned repurchases or redemptions of securities
• planned splits of common shares or offerings of warrants or rights to buy shares
• any share consolidation, share exchange, or stock dividend
• changes in a company's dividend payments or policies
• the possible initiation of a proxy fight
• material modifications to the rights of security holders

Changes in financial results

• a significant increase or decrease in near-term earnings prospects
• unexpected changes in the financial results for any period
• shifts in financial circumstances, such as cash flow reductions, major asset write-offs or write-downs
• changes in the value or composition of the company's assets
• any material change in the company's accounting policies

Changes in business and operations

• any development that affects the company's resources, technology, products or markets
• a significant change in capital investment plans or corporate objectives
• major labour disputes or disputes with major contractors or suppliers
• significant new contracts, products, patents, or services or significant losses of contracts or business
• significant discoveries by resource companies
• changes to the Board of Directors or executive management, including the departure of the company's CEO, CFO, COO or president (or persons in equivalent positions)
• the commencement of, or developments in, material legal proceedings or regulatory matters
• waivers of corporate ethics and conduct rules for officers, directors, and other key employees
• any notice that reliance on a prior audit is no longer permissible
• de-listing of the company's securities or their movement from one quotation system or exchange to another

Acquisitions and dispositions

• significant acquisitions or dispositions of assets, property or joint venture interests
• acquisitions of other companies, including a take-over bid for, or merger with, another company

Changes in credit arrangements

• the borrowing or lending of a significant amount of money
• any mortgaging or encumbering of the company's assets
• defaults under debt obligations, agreements to restructure debt, or planned enforcement procedures by a bank or any other creditors
• changes in rating agency decisions
• significant new credit arrangements

ATTACHMENT B   EXAMPLES OF DISCLOSURES THAT MAY BE NECESSARY IN THE COURSE OF BUSINESS   (Reproduced from National Policy 51-201)  

The necessary course of business exception to the tipping prohibition would generally cover communications that are reasonably necessary in the course of business with:

• vendors, suppliers, or strategic partners on issues such as research and development, sales and marketing, and supply contracts
• employees, officers and board members
• lenders, legal counsel, auditors, underwriters, and financial and other professional advisors to the Company
• parties to negotiations
• labour unions and industry associations
• government agencies and non-governmental regulators
• credit rating agencies (provided that the information is disclosed for the purpose of assisting the agency to formulate a credit rating and the agency's ratings generally are or will be publicly available)
• in connection with a private placement
• communications with controlling shareholders, in certain circumstances