MONTREAL EXCHANGE CANADIAN EXCHANGE REGURETIONS　(03.04.87, 22.10.90, 23.01.92)　　 　1.0 The underlying principle of the Exchange's Policy on timely disclosure is that all persons investing in securities listed on the Exchange have equal access to information that may affect their investment decisions. 2.0 What is material information? 　2.l Material information is any information relating to the business and affairs of the company that results in or may reasonably be expected to result in a significant change in the value or market price of a company's listed securities. Material inf ormation consists of both material changes and material facts relating to the company's affairs. 　The company's management is in the best position to assess the materiality of a news announcement and the possible influence that such may impact on the value or market price of the company's securities. The Exchange, however, recognize that often such determination is not easily made with a great deal of certitude. Listed companies are invited to consult with Market Surveillance staff to discuss, on a confidential basis, the particularities of a situation, and whether or not disclosure should be made or when. 　Without limiting the generality of the foregoing definition of material information, the following events are generally considered to be material in nature and require immediate disclosure: 　l. a change in share ownership that may affect the control of the company; 　2. a change in the corporate structure such as merger, amalgamation, or reorganization; 3. a take@over bid or issuer bid; 　4. a major corporate acquisition, disposition or joint venture; 　5. a stock split, consolidation, stock dividend or other change in capital structure; 　6. the borrowing of a significant amount of funds; 　7. the public or private sale of additional securities; 　8. the development of a new product and/or a development affecting the company's resources, technology, products or markets: 　9. entering into or loss of a significant contract; 　10. quarterly financial results or firm evidence of a significant increase or decrease in near term earnings prospects; 　11. an important change in capital investment plans or corporate objectives; 　12. a significant change in management; 13. significant litigation; 　14. a major labor dispute or a dispute with a major contractor or supplier; 　15. an event of default under a financing or other agreement; 　16. a declaration or omission of dividends; 　17. a call of securities for redemption; 　18. an important discovery by a resource company or significant exploration results (positive or negative) by a resource exploration company; 　19. any other development relating to the business and affairs of the company that would reasonably be expected to significantly affect the market price or value of any of the company's securities or that would reasonably be expected to have a significant influence on an informed investor's investment decisions. 　2.2 Announcements of an intention to proceed with a transaction or activity should not be made unless the company has the ability to carry out the intent (although proceeding may be subject to contingencies) and a decision has been made to proceed wit h the transaction or activity by the board of directors of the company, or by senior management with the expectation of concurrence from the board of directors. 　Subsequently, updates should be announced at least every 30 days, unless the original announcement indicates that an update will be disclosed on another indicated date. In addition, prompt disclosure is required of any material change to the proposed transaction, or to the previously disclosed information. 2.3 Rumors or abnormal activity 　In addition to material information, trading in a company's securities can be affected by the exis@tence of rumors. When abnormal trading activity is attributed to the existence of rumors in the market for a company's listed securities, the company mu st immediately make clarifying statements public or deny the rumors. 　If unusual market activity is unexplained, the company should announce that to its knowledge there has been no material development in its business or operations not previously disclosed or any other reason to account for the unusual market activity. 　The management of the company may be contacted by the Market Surveillance staff of the Exchange to request information and discuss the irregular trading activity and, in certain cases, request that a clarifying press release be issued by the company. 　A trading halt may be imposed pending release and dissemination of that information. 　3.0 When and how should disclosure be made? The rule of timely disclosure 　3.1 Disclosure of material information concerning the business or affairs of a listed company should be made forthwith upon the information becoming known to management or, in the case of information previously known, forthwith upon it becoming appare nt that the information is material. 　3.2 Prior notice to the Exchange When an announcement covers material information, the Market Surveillance department must be advised of its content and supplied with a copy in advance of its release. It must also be advised of the proposed method of dissemination. A company official or representative, who is well informed about the details of the material information, should telephone the staff of the Market Surveillance Department, read the press release or send it by telecopier and discuss any necessary measures. If the news is deeme d to be material in nature and may affect the market price of the company's securities, it may be necessary to halt trading for dissemination of news if the information has to be issued during market hours. Two copies of the final press release must be fi led with the Market Surveillance Department. 　This requirements is not for the purpose of certifying adequacy and accuracy of the release. However, the Exchange may comment on the contents of a news release in order to assist the company in ensuring that sufficient disclosure is being made to enable informed investors to formulate an opinion as to the impact that the news release may have on the value or market price of the company's securities. The responsibility for the adequacy and accuracy of the content of the news releases, however, rests entirely on the company, its management and directors. It should be noted that an investor may, under certain circumstances, have the right to recover damages from the company for losses sustained as a result of a materially false or misleading news release. 　3.3 What information should be included in a news release? 　News releases announcing material information should be factual and balanced, neither overemphasizing favourable news or underemphasizing unfavourable news. Unfavourable news must be disclosed just as promptly and completely as favourable news. I t is appreciated that it may be difficult to include in a news release all of the details that would be included in a prospectus or similar document. However, news releases should contain sufficient detail to enable media personnel and investors to appreciate the true substance and importance of the information so that investors may make informed investment decisions. The guiding principle should be to communicate clearly and accurately the nature of the information, without including unnecessar y details, exaggerated reports or editorial commentary designed to colour the investment community's perception of the announcement one way or another. The company should be prepared to supply further information when appropriate, and the Exchange reco mmends that the name and telephone number of a company official to contact be provided in the release. The releases must, of course, be dated and the time of release should be indicated. 　3.4 Delayed disclosure of material information 　In restricted circumstances, disclosure of material information concerning the business and affairs of a listed company may be temporarily delayed, where immediate release of the information would be unduly detrimental to the interest of the company. 　Examples of instances in which disclosure might be considered to be unduly detrimental to the company's interest are as follow: 　1. Release of the information would prejudice the ability of the company to pursue specific and limited objectives or to complete a transaction or series of transactions that are under way. For example, premature disclosure of the fact that a company intends to purchase a significant asset may increase the cost of making the acquisition. 　2. Disclosure of the information would provide competition with confidential corporate information that would be of significant benefit to them. Such information may be kept confidential if the company is of the opinion that the detriment to it result ing from disclosure would outweigh the detriment to the market is in not having access to the information. A decision to release a new product, or details on the features of a new product, may be withheld for competitive reasons. Such information should n ot be withheld if it is available to competitors from other sources. 　3. Disclosure of information concerning the status of ongoing negotiations would prejudice the successful completion of those negotiations. It is unnecessary to make a series of announcements concerning the status of negotiations with another party co ncerning a particular transaction. Disclosure should be made once "concrete information" is available, such as a final decision to proceed with the transaction or, at a later point in time, finalization of the terms of the transaction. 　It is the policy of the Exchange that the withholding of material information on the basis that disclosure would be unduly detrimental to the company's interest must be infrequent and can only be justified where the potential harm to the company or to investors caused by immediate disclosure may reasonably be considered to outweigh the undesirable consequences of delaying disclosure, keeping in mind at all times the considerations that have given rise to the Exchange's Disclosure Policy. While recogniz ing that there must be a trade@off between the legitimate interest of a company in maintaining secrecy and the right of the investing public to disclosure of corporate information, the Exchange discourages delaying disclosure for a lengthy period of time since it is unlikely that confidentiality can be maintained beyond the short term. 3.4.1 Maintaining confidentiality 　If disclosure of material information must be delayed, complete confidentiality must be maintained. In the event that such confidential information, or rumors respecting the same, is disclosed in any manner (other than in the necessary course of busine ss), the company is required to make an immediate announcement on the matter. The Exchange must be notified of the announcement in advance in the usual manner. During the period before material in@formation is disclosed, market activity in the company's s ecurities should be closely moni@tored. Any unusual market activity probably means that information on the matter is being disclosed and that certain persons are trading on the basis of that information. In such case, the Exchange should be advised immedi ately and a halt in trading will be imposed until the company has made disclosure on the matter. 　At any time when material information is being withheld from the public, the company has a duty to take precautions to keep such information completely confidential. 　3.5 Information disseminated in another form other than a press release 　Initial disclosure of material information should always be accomplished by the issuance of a news release. Listed companies that distribute brochures, pamphlets, etc., which contain material information that has been previously disclosed should ensure that the content of these documents conforms to the disclosure principles established in the policy. 　The company should therefore ensure that these documents do not contain material information that has not already been disclosed through a press release. 3.6 Press Conferences 　A company that wishes to disclose material information during a press conference should ensure that the principle of all investors having equal access to this material information is respected. 　To do so, the company should issue a press release on a network for the distribution of press releases at the beginning of the press conference. 3.7 Financial results 　The annual and quarterly financial statements published by listed companies must be in compliance with the requirements set out in the securities legislations of Quebec which provides that they must be drawn up in accordance with generally accepted acc ounting principles as established by the Canadian Institute of Chartered Accountants. 　Financial result disclosed by press release should therefore include the following: 　* revenues; * income before discontinued operations and extraordinary items; * net income for the period; * earnings per share before discontinued operations and extraordinary items; * earnings per share for the period. 　It is preferable to present these figures in tabular form. In the case of quarterly results, releases should include information about the period elapsed from the end of the latest fiscal year to the end of the quarter in question, as well as figures f or the comparative period of the previous year. Releases concerning annual results should also include comparative figures for the previous fiscal year. In addition, the discontinued operations and extraordinary items should be explained. 3.8 How to issue a press release 　After notifying the Exchange, a news release must be transmitted to the media by the quickest possible method, and by one which provides the widest dissemination possible. To ensure that the entire financial community is aware of the news at the same t ime, a wire service (or combination of services) must be used which provides national and simultaneous coverage. 　The Exchange accepts the use of any news services that meet the following criteria: 　* dissemination of the full text of the release to the national financial press and to daily newspapers that provide regular coverage of financial news; * dissemination to all Exchange members; and * dissemination to all relevant regulatory bodies. 　Companies are also expected to use the Dow Jones News Service which provides wide dissemination (in English only) at no charge to the issuer. However, companies should be aware that this service does not carry all releases and may substantially edit t he releases they do carry. News services guaranteeing transmission of the full text of the release are required to be used. 　Dissemination of news is essential to ensure that all investors trade on equal information. The onus is on the listed company to ensure appropriate dissemination of news releases, and any failure to properly disseminate news shall be deemed to be a bre ach of the Timely Disclosure regulations of the Exchange and shall be grounds for suspension or delisting of the company. In particular, the Exchange will not consider relieving a company from its obligation to disseminate news properly because of cost fa ctors. 4.0 Trading halts 4.1 When is trading halted? 　The Exchange's objective and its role is to provide a continuous auction market in listed securities. The guiding principle is therefore to reduce the frequency and length of trading halts as much as possible. 　Trading may be halted in the securities of a listed company upon the occurrence of a material change during normal trading hours, which requires immediate public disclosure. The determination that trading should be halted is made by the Exchange. 　It is neither the intention or practice of the Market Surveillance Department to halt trading for all news releases from listed companies. A news release is discussed by Market Surveillance and the listed company prior to its release and determinations are made as to whether a trading halt is justified based upon the impact which the particular announcement is expected to have on the market for the company's securities. 　A halt in trading does not reflect upon the reputation of management of a company or upon the quality of its securities. Indeed, trading halts for material information announcements are usually made at the request of the listed company involved. The Ex change normally attempts to contact a company before imposing a halt in trading. 　4.2 A trading halt should only requested when an announcement is imminent 　It is not appropriate for a listed company to request a trading halt in a security if a material announcement is not going to be made forthwith. 　When a listed company (or its advisors) requests a trading halt for an announcement, the company must provide assurance to the Exchange that an announcement is imminent. The nature of this announcement and the current status of events shall be disclos ed to the Exchange, in order that Exchange staff can assess the need for and appropriate duration of a trading halt. 　4.3 How long will a trading halt be maintained? 　The Exchange determines the amount of time necessary for dissemination in any particular case, which determination is dependent upon the significance and complexity of the announcement. When a halt in trading is deemed necessary, trading is normally i nterrupted for a period of less than two (2) hours. 　In the normal course of business, the announcement should be made immediately after the halt is imposed and trading will resume approximately one (1) hour following the dissemination of the announcement. 　A trading halt in a security shall not normally extend for a period longer than 24 hours from the time the halt was imposed. This is a maximum time period intended to address usual situations. The only exception to the 24 hours time limit is where the Exchange determines that resumption of trading would have a significant negative impact on the integrity of the market. 　4.4 What happens if the announcement is not immediately forthcoming? 　If trading is halted but an announcement is not immediately forthcoming as expected, the Exchange will establish a reopening time, which shall not be later than 24 hours after the time that the halt was imposed (excluding non@business days). If the com pany fails to make an announcement, the Exchange will issue a notice stating that trading was halted for dissemination of news or for clarification of abnormal trading activity, that an announcement is not immediately forthcoming and that trading will th erefore resume at a specific time. 　When the Exchange advises a company in applying the provisions of this section that it will announce the reinstatement of trading, the company should reconsider, in light of its responsibilities to make timely disclosure of all material information , whether it should issue a statement prior to the reinstatement becoming effective to clarify why it had requested a trading halt (if this is the case) and why, in any case, it is not able to make an announcement prior to the reinstatement to tradin g. 4.5 Coordination with other Exchanges 　The Market Surveillance Department coordinates halts and reinstatements of trading with other Exchanges on which the company's securities are traded. However, the company is responsible for advising all Exchanges on which its securities are listed of any disclosure which it proposes to make. 4.6 Stock watch 　Management should not hesitate to contact the Market Surveillance staff of the Exchange, on a confidential basis, when the company is in the process of negotiating a material change which it cannot disclose immediately. The Exchange will closely m onitor all trading in the company's securities during the period of such negotiations. 　Unusual fluctuations in market price or volume may indicate the possibility of a leak of information, and the Market Surveillance staff will immediately advise the company under such circumstances. A discussion between the Market Surveillance staff and the company's representative will be necessary in order to determine possible measures which may be taken. Public disclosure with respect to the negotiations may become necessary. 5.0 Insider trading 　Many listed company have developed their own internal policy for the purpose of limiting the possibility of illegal use of confidential information. The Exchange strongly recommends that every listed company adopt such a policy. Suggestions as to what should be contained in such a policy are provided hereunder: 　- The policy should explain the provisions of the applicable securities and corporate legislation with respect to the use of confidential information and the consequences for those using the information and those who pass on the information. 　- The policy should explain the obligations applicable to insiders with respect to reporting their positions and transactions and should include copies of the applicable forms. 　- The policy should establish specific restrictions with respect to trading by insiders of the company (the issuer, its subsidiaries, holders of 10% or more of the voting shares of the company or shares to which are attached unlimited rights to a share of the profits and in the assets in case of winding@up [other than securities that were the object of a firm underwriting and are in the course of distribution] and senior executives of such holders) and by special relationship persons (audito rs, lawyers, financial advisors, printers, etc.) during a specified number of days before and after the release of financial results, dividends and other important information. 　- The policy should prohibit trading by directors during a specified number of days surrounding Board of Director's meetings. 　- The policy should be well distributed within the company and to special relationship persons and should be explained in detail. 　- The policy should be periodically updated and explained throughout the company and to special relationship persons. 　- During material negotiations of the company, knowledge of the negotiations should be kept to a very select group of people, and, each time, these people should be reminded of the restrictions on the use of confidential information. 　The adoption of such policy will reduce the chances of the use of confidential information which could be of significant embarrassment for a public company. Also, such a policy, when well prepared and well disseminated, can give a significant measure o f protection to the company and its principal officers and directors as they can clearly demonstrate that, at all times, all reasonable efforts were made by the company to avoid the use of confidential information. 5.1 Use of confidential information 　In summary, the Securities Act of Quebec prohibits the use of privileged information by an insider of a company who is in possession of such confidential information or by any other person who obtained confidential information from an insider or any ot her individual having access to such information. The Act also prohibits the passing on of confidential information by such persons except in the course of business (articles 187 to 191). The Act provides that a person found guilty of such an offence is l iable, in addition to costs, to a maximum fine of 　1,000,000 or four times the profits eventually realized, whichever of the two figures is higher, and the minimum amount is equal to the double of the profit without being lower than 　5,000 and to imprison ment for one month to two years (article 204). 6.0 Relationship with the specialist 　The securities of each company listed on the Montreal Exchange are assigned by the Exchange to a specialist who is responsible pursuant to the Rules of the Exchange, to provide a fair and orderly market in the shares to which he is assigned. 　The specialist will wish to obtain all of the important information with respect to the operations of the company on whose securities he is providing a market. The Exchange suggests that the company's specialist be included in the mailing list for info rmation which the company distributes to its shareholders. Management may communicate with the specialist; however, we stress that the company must not provide the specialist with any confidential information relating to corporate matters. The specialist should not receive any important information pertaining to the company before such information has been publicly disclosed. 　The communication between the company and the specialist does not relieve the company from its disclosure or filing obligations, under the Exchange's Rules, to the Market Surveillance Department or the Listed Companies Regulation Department. 　7.0 Declaration of dividends or other distributions to shareholders 7.1 When to inform the Exchange? 　Immediately following each declaration by the Board of Directors of the payment (or omission) of dividends. Such notice is given to the Exchange by telephone or telecopier, at least 7 business days prior to the record date for the dividend. A written c onfirmation of the dividend declaration must be transmitted to the Exchange within 24 hours following the telephone call. 7.2 Why 7 business days? 　The settlement of trades occurring on the Exchange requires 5 business days for registration on the transfer books. Therefore, an investor who acquires a security on Tuesday the 4th, will become a registered shareholder in the books of the transfer age nt on Tuesday the 11th. 　If, in this example, the record date for a particular dividend has been established as Tuesday the 11th, the security will therefore begin trading on the Exchange on an "ex@dividend・basis as of Wednesday the 5th (if there is no intervening legal holid ay). This implies that the aforementioned investor who purchased on Tuesday the 4th will be entitled to receive the dividend. Purchasers of said security, beginning Wednesday the 5th, will not be entitled to receive the dividend declared by the company an d the market will reflect this fact by reducing the price of the security accordingly. It is for this reason that the Exchange requires that notice be given at least 7 business days prior to the record date. 　7.3 What happens if the Exchange is not notified within the prescribed period? 　Trading will continue on a "cum-dividend" basis on the date the company should have indicated to be "ex-dividend" and purchasers will be entitled to any declared dividend. However, given the delay required for delivery purposes, a purchaser as of Wedne sday the 5th, will not be registered on the transfer books on the record date. The seller will therefore receive the dividend even if he has in fact sold the dividend with the shares. Consequently, the purchaser will have to claim the dividend from the se lling party. 　As the seller sold his shares without knowing that he was selling dividend, he may feel that he has not been treated fairly and may wish to keep the dividend. If the buying and selling parties cannot arrive at an agreements with respect to the dividend , the Exchange will refer all claims to the company since the disagreements were caused by the companies failure to provide adequate notice as required by the Rules of the Exchange. 8.0 Conclusion 　The Market Surveillance staff and the Executive staff of the Exchange is at the disposal of listed companies to discuss particular issues relating to Timely Disclosure. 　Listed companies are required to comply with the provisions of this Policy Statement which is designed to further the goal of providing an open and fair market place which merits the trust and confidence of the investing public. 　Listed companies are also reminded that the Securities Act of Quebec contains provisions relating to timely disclosure and that various corporate legislation also have provisions on this subject.