It is illegal for anyone with knowledge of material information affecting a public issuer (including ARC) that has not been publicly disclosed to purchase or sell securities of that issuer. It is also illegal for anyone to inform any other person of material non-public information except in the necessary course of business and where approved by the Disclosure Committee. There are serious sanctions for these matters, including substantial fines and potential jail sentences of up to 10 years for insider trading and up to 5 years for "tipping". Therefore, directors, officers and employees with knowledge of confidential or material information about ARC or other public issuers are prohibited from trading securities of ARC or any such other public issuer until the information has been fully disclosed and a reasonable period has passed for the information to be widely disseminated.
Quarterly trading blackout periods will apply to all directors, officers and employees in a position to know of financial and operating results, during periods when financial statements are being prepared but results have not yet been publicly disclosed. Quarterly trading blackouts will commence 5 business days following the end of a financial quarter and end after the first business day following the issuance of a news release disclosing quarterly financial results.
Blackout periods will not apply to the participation of directors, officers and employees in ARC's automatic dividend reinvestment plan (the "DRIP") but will apply to entering into, or terminating participation in, the DRIP during any blackout period or any contribution of cash to the DRIP during any blackout period.
Blackout periods may also be prescribed from time to time by the Disclosure Committee as a result of special circumstances relating to ARC when directors, officers and employees would be precluded from trading in its securities. All parties with knowledge of such special circumstances should be covered by the blackout. The fact that a trading blackout has been imposed should not be discussed with other parties. These parties may include external advisors such as legal counsel, investment bankers, and other professional advisors, and counter-parties in negotiations of material potential transactions. For confidentiality purposes the Disclosure Committee may determine that the reasons for the blackout are not to be given. In extraordinary circumstances, the Disclosure Committee may grant a waiver of the blackout period to a director, officer or employee.
Directors, officers and all other insiders of ARC must provide prior notice to the Senior Vice President, Business Development and Capital Markets and the Senior Vice President and Chief Financial Officer of ARC (the "Responsible Officers") when they wish to trade in any of the securities of ARC. In response to such notice, a Responsible Officer will advise the insider whether or not a blackout period is currently in effect and if such insider is free to trade in any of the securities of ARC.
In addition, in connection with a take-over bid, issuer bid or business combination or a prospectus offering, private placement, amalgamation, arrangement, capital reorganization or similar transaction, neither ARC nor any director or officer or other insider of ARC shall bid for or purchase a "restricted security" for their own account or for an account over which they exercise control or direction or attempt to induce or cause any person or company to purchase a restricted security. A restricted security for this purpose is the securities offered pursuant to the prospectus or private placement offer or offered by ARC pursuant to any securities exchange take-over bid, any security of ARC subject to an issuer bid or a security of ARC issuable pursuant to a business combination. These restrictions shall apply:
- in the case of a private placement or public offering commencing on the date that is two trading days prior to the date that the offering price of the offered securities is determined and ending on the date that the selling process in respect of the offering ends and all stabilizations relating to the offered security are terminated;
- in the case of a take-over bid or issuer bid, commencing on the date of dissemination of the take-over bid or issuer bid circular and ending on the termination of the period during which the securities may be deposited under the bid;
- in the case of another type of business combination, commencing on the date that the information circular for such transaction is disseminated and ending on the date of approval of the transaction by securityholders.
A member of the Disclosure Committee should be consulted if there is any question as to when these restrictions shall have ceased to apply in any particular circumstance. Legal counsel shall be consulted prior to any discussions, written or otherwise, with any stakeholder.