CODE OF BUSINESS CONDUCT AND ETHICS
NAMASTE TECHNOLOGIES INC.
January 1, 2019
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NAMASTE TECHNOLOGIES INC.
CODE OF BUSINESS CONDUCT AND ETHICS
I. GENERAL
1. Purpose of the Code
The board of directors (the “Board”) of Namaste Technologies Inc. (the “Company”) has adopted this
Code of Business Conduct and Ethics (the “Code”), which is designed to provide guidance on the
conduct of the Company’s business in accordance with high ethical standards. As a public company,
the Company must not only conduct, but must also be seen to conduct, its business in accordance with
such high ethical standards. The Code constitutes written standards that are reasonably designed to
promote integrity, to deter wrongdoing and to address, at a minimum, the fundamental principles set out
below.
2. Application of the Code
The Code applies to all directors, officers and employees of the Company and its subsidiaries (who are
referred to collectively as “Company Personnel”) and operates in all countries in which the Company
and its subsidiaries conduct business. Company Personnel are required to be familiar with and adhere
to the Code. Suppliers and partners are also expected to adhere to the Code when dealing with the
Company.
3. Monitoring Compliance
The Board is ultimately responsible for monitoring compliance with the Code. The Board has delegated
this responsibility to the Corporate Governance and Nominating Committee.
4. Waivers from the Code
A waiver of the Code will be granted only in exceptional circumstances. Any waivers from the Code that
are granted for the benefit of the Company’s directors or executive officers will be granted by the Board
only. Any waiver of the Code for executive officers or directors must be disclosed pursuant to applicable
securities laws, which disclosure may require the filing of a current report or the inclusion of such
information in the Company’s next annual report.
II. FUNDAMENTAL PRINCIPLES
1. Conflicts of Interest
Company Personnel must act honestly and in good faith, with a view to the best interests of the
Company. Company Personnel must avoid situations involving a conflict or the potential for a conflict or
the appearance of a conflict between their personal interests and the interests of the Company.
The following are specific conflicts that may arise in the course of carrying out the Company’s business:
(a) Outside Business Interests
Company Personnel are free to take on employment and other activities outside of their
work responsibilities with the Company. However, in doing so, Company Personnel must
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ensure that any “outside” activities do not present a real or perceived conflict with the
interests of the Company or with their duties as Company Personnel.
(b) Public Statements
Before publicly expressing views on matters that relate to the Company, Company
Personnel should discuss the information with the Chief Executive Officer. Company
Personnel must not claim to speak on behalf of the Company without prior authorization.
Reference should be made to the Corporate Disclosure Policy.
(c) Outside Directorships
Company Personnel are free to take on directorships; however, Company Personnel
must be aware of any potential for conflicts with the interests of the Company.
(d) Financial Interests in Suppliers, Contractors or Competitors
Any proposed affiliation between Company Personnel and any entity that has a
relationship with the Company is subject to review by the Board.
(e) Obtaining a Personal Loan or Guarantee from the Company
Company Personnel who are directors or officers may not accept, whether directly or
indirectly, any loan or guarantee of obligations from the Company for personal benefit.
Company Personnel who are not directors or officers may receive loans from the
Company in certain circumstances, provided that those loans do not, or do not appear
to, create conflicts of interest or otherwise constitute improper benefits.
(f) Hiring Relatives of Current Company Personnel
The hiring of relatives of any Company Personnel is prohibited without the prior consent
of management.
(g) Giving and Receiving Gifts
Company Personnel are prohibited from soliciting or receiving any gift, loan, reward or
benefit from a supplier or customer in exchange for any decision, act or omission by any
Company Personnel in the course of carrying out their functions, with the exception that
directors and executive officers may occasionally give or receive small gifts as tokens of
appreciation, provided:
(i) it is not a cash gift;
(ii) it is consistent with customary business practices;
(iii) it is not excessive in value;
(iv) it does not violate any laws; and
(v) it does not violate any internal Company policy.
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Similarly, Company Personnel should not try to influence the decisions of a supplier or
customer by giving gifts.
(h) Director and Officer Conflicts of Interest
Each director or officer of the Company who has an interest in a material contract or
material transaction, whether made or proposed, with the Company will disclose the
nature and extent of that interest in the manner, at the time and in the circumstances
required by the Business Corporations Act (British Columbia) and any other applicable
laws. A director making that disclosure will, among other things:
(i) abstain from voting on any resolution to approve the contract or transaction if
prohibited from voting under the Business Corporations Act (British Columbia);
and
(ii) if abstaining from voting on the contract or transaction, excuse himself or herself
from all Board or Board committee deliberations in respect of the contract or
transaction.
2. Protection and Proper Use of Corporate Assets and Opportunities
(a) Use of Company Assets
All Company Personnel must handle the physical and intellectual assets of the Company
with integrity and with due regard to the interests of all of the Company’s stakeholders.
Such assets should be used only for legitimate business purposes. Any suspected
incident of fraud or theft should be reported for investigation immediately. Unauthorized
use or distribution of the intellectual assets of the Company is prohibited and could also
be illegal and result in civil or criminal penalties.
(b) Corporate Property and Opportunities
Company Personnel cannot appropriate a corporate opportunity or corporate property,
arising out of their relationship with the Company, for their own personal benefit.
(c) Corporate Transactions
Company Personnel must have authorization to enter into business transactions on
behalf of the Company.
(d) Accounting
All corporate transactions must be accounted for in the Company’s books. Records must
not be manipulated or destroyed for the purpose of impeding or obstructing any
investigation undertaken by the Company or a governmental body.
(e) Audits
No action will be taken to fraudulently influence or mislead anyone engaged in the
performance of an audit of the Company’s financial statements.
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(f) Corporate Disclosure Policy
All Company Personnel are required to comply with the Corporate Disclosure Policy.
(g) Use of Email and Internet
Email and Internet systems are provided primarily for business use. Personal use of
these resources should be kept to a minimum. As email may not be entirely secure,
Company Personnel must exercise caution and etiquette when sending email
correspondence.
3. Confidentiality of Corporate Information
(a) Meaning of Confidential Information
Confidential information is any information relating to the Company that is not known to
the general public and includes, without limitation, business research, market plans,
strategic objectives, unpublished financial information, customer, supplier and personnel
lists and all intellectual property, including trade secrets, software, trademarks,
copyrights and patents.
(b) Release of Confidential Information
Confidential information may not be given or released without proper authority and
appropriate protection to anyone not employed by the Company. Company Personnel
are prohibited from discussing, disclosing or using any confidential information for their
own personal purposes without prior consent of an executive officer. In addition,
confidential information should only be disclosed to other Company Personnel on a
“need to know” basis.
Notwithstanding the foregoing, nothing contained in the Code shall limit the ability of
Company Personnel, including any consultants, to file a charge or complaint with a
governmental agency in the United States and communicate with any such agency or
otherwise participate in any investigation or proceeding that may be conducted by any
such agency, including by providing documents or other information in connection
therewith, without notice to the Company.
(c) Insider Trading
Company Personnel are prohibited from trading or encouraging others to trade in the
securities of the Company when in possession of material non-public information.
Company Personnel are prohibited by Canadian and United States securities laws from
insider trading and tipping.
(d) Personal Information
Personal information, as it relates to Company Personnel, including medical and benefits
information, is only to be released to non-Company individuals after receiving prior
permission from the affected Company Personnel, except if the information will be used
to verify employment or to satisfy legitimate legal requirements.
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4. Fair Dealing
(a) Competitor’s Information
Company Personnel will not undertake any activities that could reasonably be expected
to result in an unreasonable restraint of trade, unfair trade practice or any other
anticompetitive behaviour in violation of any law. However, in the normal course of
business, it is not unusual for Company Personnel to acquire information about other
organizations. In doing so, Company Personnel must not use illegal means to acquire a
competitor’s trade secrets or other confidential information.
(b) Competition Laws
Company Personnel are expected to be sensitive to situations in which competition law
issues may exist and to comply with all competition laws that apply in all countries in
which the Company and its subsidiaries carry on business. When participating in joint
ventures and industry associations involving competitors, Company Personnel must limit
communication to that reasonably required for the legitimate business purposes of the
arrangement.
(c) Harassment
The Company undertakes to deal fairly with all Company Personnel, customers and
suppliers. There is a “no tolerance” policy in place for any form of discrimination or
harassment against any individual, including Company Personnel, customers and
suppliers, with respect to race, religion, age, gender, marital and family status, sexual
orientation, ethnic or national origin or disability or any other grounds enumerated in
applicable human rights legislation.
5. Policy to Prevent the Corruption of Public Officials
Both Canada and the United States have laws making it illegal to corrupt officials of foreign governments
or to engage in certain related acts. In Canada, the law is entitled Corruption of Foreign Public Officials
Act and in the United States the law is entitled Foreign Corrupt Practices Act
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Company. For this reason, you should assume that any action of any company and joint
venture in which the Company has a significant interest, including the actions of the
employees and agents of such other company and joint venture, will be attributable to
the Company.
(b) Prohibition.
The laws and this policy prohibit offering or providing money or anything of value for the
personal benefit of any “Public Official.” For purposes of this policy, Public Official means
(i) any government official or any official of a public international organization (such as
the International Monetary Fund, regional development banks or other multilateral
organizations) or (ii) any political party or its officials or any political candidate for the
purpose of: influencing that official in the exercise of his or her duties (or non-exercise of
those duties); having any such person influence government activity; or otherwise
securing an improper advantage for the purpose of aiding the Company in obtaining,
retaining or directing business. The laws and this policy may be violated if the Company
knows, or if it should have been obvious to the Company, that the payments were made
for an illegal purpose.
The laws and this policy also apply to indirect payments, i.e., where the Company offers
or provides money or anything of value to any person with the knowledge that the person
will make a payment to a Public Official for such a prohibited purpose.
The laws and this policy also prohibit the possession of property or proceeds from
property known to have been obtained as a result of the bribery of a Public Official or to
“launder” (i.e., deal with intent to conceal) property or proceeds from property obtained
as a result of the bribery of a Public Official.
Government-owned corporations and other instrumentalities are generally treated as if
they are governments, and their employees, officers and directors are treated as
government officials.
(c) Facilitating Payments.
“Facilitating payments” are payments made to expedite routine governmental action that
does not involve obtaining, retaining or directing business. Example include payments to
(i) secure processing of papers such as visas, work orders and permits, (ii) induce
customs officials to process legally transmitted goods, (iii) obtain police protection, (iv)
obtain installation and maintenance of utility connections, and (v) induce minor
government functionaries (government employees without discretionary authority over a
project or transaction) to complete their jobs in the manner required and where the
situation does not involve the securing of business. Effective in 2013, the law of Canada
prohibits facilitating payments to foreign Public Officials. For this reason, the policy of the
Company is that no facilitating payments may be made to any Public Official, foreign or
domestic.
(d) Exceptions to Prohibitions.
There are three exceptions to the laws and this policy:
? It is an affirmative defence if it can be shown that the payment was legal under
the written laws and regulations of the country. As an example, in some foreign
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countries, the Company may be required by law to hire as an agent a national of
that country who also is connected to the government of that country in some way
or other.
? It also is an affirmative defence if it can be shown that the payment was a
reimbursement of travel, lodging and other reasonable and bona fide expenses
directly related to the business promotion, demonstration or explanation of the
Company’s business, or the execution or performance of a contract with the
government. As an example, payment of the travel expenses of a government
official to visit one of our distribution centres, as a part of an effort to promote the
Company in that country, would fit into this category.
? Unconditional gifts having nominal value, when made openly and as a social
amenity, or as a token of esteem, regard or gratitude in accordance with local
custom, generally will not be regarded as a bribe.
(e) Company Policy.
The Company’s policy is firm and unconditional. Under no circumstances will the
Company ever pay a bribe to a Public Official. If you are ever solicited for such a bribe,
or if you become aware of any instance where any Company employee, officer, director,
agent or representative of the Company or its subsidiaries or its joint ventures proposes
to offer such a bribe or is otherwise involved in such illegal activity, you are to report the
matter to your immediate superior, or directly to the CEO or CFO of the Company. Any
employee, officer, director, agent or representative who participates in any scheme to
pay such an illegal bribe will be terminated immediately.
With respect to payments that fall within the exceptions noted above:
? No payment that would otherwise be an illegal bribe may be made on the basis
that it is legal under the written laws and regulations of the foreign country without
the prior written approval of the CEO.
? No payment that would otherwise be an illegal bribe may be made on the basis
that it is a reimbursement of travel, lodging or other reasonable and bona fide
expenses directly related to the business promotion, demonstration or
explanation of the Company’s business or the execution or performance of a
contract with the government without the prior written approval of the CEO.
? With respect to unconditional gifts of nominal value made openly and as a social
amenity, or as a token of esteem, regard or gratitude in accordance with local
custom, the CEO will establish a monetary limit on the value of any such gift. Any
gifts with a value in excess of that limit must be approved in advance by the CEO.
(f) Accounting Requirements.
The Company and its affiliated companies and joint ventures must:
? Keep financial records which, in reasonable detail, accurately and fairly reflect
transactions; and
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? Maintain a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management
authorization, (ii) transactions are properly recorded as needed to permit
preparation of financial statements and to maintain accountability for assets, (iii)
all assets are recorded on the books of the Company and access to assets is only
permitted in accordance with management authorization, and (iv) periodic
auditing is done at reasonable intervals and action is taken to resolve
discrepancies.
As an example, the accounting provisions require that the Company properly record all
payments and prohibit their characterization in some other form. The accounting
provisions also prohibit the Company from maintaining off-record cash “slush” funds or
cash that may be accessed without senior management authorization.
6. Compliance with Laws, Rules and Regulations
(a) Company Policies
All Company Personnel must comply with all Company policies.
(b) Compliance with Laws
All Company Personnel, in discharging their duties, must comply with all the laws and
regulations of the countries in which the Company and its subsidiaries carry on business.
(c) Knowledge of Laws
All Company Personnel are charged with the responsibility for acquiring sufficient
knowledge of the laws involved in each area relating to their particular duties.
(d) Dealings with Public Officials
Company Personnel are prohibited from making payments or giving gifts to a public
official in any country in which the Company and its subsidiaries operate, in order to
obtain a business advantage.
7. Reporting of Any Illegal or Unethical Behaviour
(a) Compliance and Reporting
Company Personnel are each responsible for being aware of, understanding and
complying with the Code when making business decisions. Company Personnel must
promptly report any problems or concerns and any actual or potential violation of the
Code. To do otherwise will be viewed as condoning a violation of the Code.
(b) No Reprisal
There will be no reprisal or other action taken against any Company Personnel who, in
good faith, bring forward concerns about actual or potential violations of laws or the Code.
Anyone engaging in any form of retaliatory conduct will be subject to disciplinary action,
which may include termination.
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(c) Process
Company Personnel should first raise a complaint or concern with his or her supervisor.
If that is not possible for some reason or if this does not resolve the matter, Company
Personnel must take the matter up the chain of management within the Company.
Ultimately, unresolved complaints and concerns should be referred to the Chief
Executive Officer who will treat all disclosures in confidence and will involve only those
individuals who need to be involved in order to conduct an investigation. If a complaint
regarding accounting, internal accounting controls or auditing matters or a concern
regarding questionable accounting or auditing matters is not effectively addressed after
being raised internally, then that complaint or concern should be referred to the Chair of
the Audit Committee. Company Personnel are expected to cooperate in any internal
investigation of misconduct.
(d) Public Complaints
Company Personnel who receive complaints from a member of the public, including
complaints regarding accounting, internal accounting controls or auditing matters, should
advise the complainant to raise those complaints with the Chief Executive Officer.
(e) Accounting Complaints
Company Personnel or members of the public wishing to refer a complaint regarding
accounting, internal accounting controls or auditing matters or a concern regarding
questionable accounting or auditing matters to the Chair of the Audit Committee on a
confidential and anonymous basis may do so in writing. The complaint or concern should
be specified in detail in a letter, which should be delivered to the chairman of the Board
in a sealed envelope marked “Confidential—For the Chair of the Audit Committee”. The
Chairman of the Board will forward the sealed envelope to the Chair of the Audit
Committee.
8. Consequences of Violating the Code
Failure to comply with the Code will be considered by the Company to be a very serious matter.
Depending on the nature and severity of the violation, disciplinary action may be taken by the Company,
up to and including termination. In addition, the Company may make claims for reimbursement of losses
or damages and/or the Company may refer the matter to the authorities. Anyone who fails to report a
violation upon discovery or otherwise condones the violation of the Code may also be subject to
disciplinary action.
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APPENDIX 1
BOARD DELEGATON POLICY
MATTERS REQUIRING BOARD APPROVAL (NON-DELEGATION POLICY)
This Policy identifies items that must be approved by the Board or a committee of the Board and are not
delegated to management without Board approval. A general overriding consideration is that the
directors are required under law to manage, or supervise the management of, the business and affairs
of the Company. Accordingly, even if an action might fall outside these guidelines, management should
consider whether the matter, nevertheless, should be referred to the Board for consideration.
The following is a list of items that officers must refer to the Board, or an appropriate committee thereof,
for consideration. Under these guidelines, the “Threshold Amount” is equal to $2,000,000 and an “Out
of Budget Transaction” is a transaction that exceeds the Threshold Amount and that is not otherwise
already part of the Company’s approved operating budget.
1. The approval of annual corporate budgets.
2. The approval of all financial information and other disclosure documents that are required by
law to be approved by the Board before they are released to the public.
3. Allotment of any securities. This includes shares, options, warrants or other convertible or debt
securities, and the payment of a commission to any person as consideration for purchasing
securities of the Company or providing purchasers for any such securities. Securities may be
issued by executive officers where previously allotted by the Board (e.g. exercise of previously
allotted options and warrants).
4. Entering into transactions of a fundamental nature such as amalgamations, mergers and
material acquisitions or dispositions.
5. Agreeing to redeem, purchase or otherwise acquire any of the Company’s shares.
6. Entering into any agreement or commitment to acquire or dispose of assets that are material to
the Company including, but not limited to, those that are an Out of Budget Transaction.
7. Entering into, or making a material modification of, any agreement or commitment to become
liable for any indebtedness, including the granting of a guarantee or similar standby obligation,
if (a) the amount of such indebtedness is an Out of Budget Transaction or (b) any assets of the
Company are made subject to a security interest in an Out of Budget Transaction.
8. Committing to making any capital expenditure which is an Out of Budget Transaction.
9. Entering into any contract, agreement or commitment out of the ordinary course of business if
such agreement involves a commitment of financial resources which exceeds the Threshold
Amount.
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10. Adoption of hedging policies.
11. Approval of insurance policy limits.
12. Entering into any agreement with an officer, director or 10% shareholder of the Company or
any parent or subsidiary of the Company outside of the ordinary course of business.
13. Terminating, suspending or significantly modifying any material business activity or business
strategy of the Company.
14. Undertaking a new business activity that requires an allocation of resources that exceed the
Threshold Amount.
15. Making any material change to a business or strategic plan that has been approved by the
Board.
16. Initiating or settling any legal proceeding involving a payment that may exceed the Threshold
Amount.
17. Employing or terminating the Company’s independent auditor.
18. Hiring or terminating the employment, or determining the compensation, of any person who is
an executive officer of the Company.
19. Offering any material employment or consulting terms to any individual or entity which are not
customary for the Company. This determination is to be made by reference to terms of
employment or consultancy that have generally been offered to other employees or
consultants in similar positions or with similar status.
20. The approval of a request by the CEO or the CFO of the Company to serve on the board of
another entity, other than not-for-profit entities or family businesses that in no material way
compete with the Company or do any material business with the Company.
21. Any other matter specified by the Board as requiring its prior approval.
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APPENDIX 2
RELATED PARTY INVESTMENT PROTOCOL
I. PURPOSE
The purpose of this Protocol is to establish a procedure to manage investments by the Company in
circumstances involving a Related Party.
II. PROCESS AND ADMINISTRATION
(a) If management identifies a potential investment in a Related Party, the matter will be
presented to the Lead Director.
(b) The Lead Director will consult with members of management who are independent of the
transaction (“Independent Management Personnel”) and the independent directors and
will establish a Special Committee of independent directors to review the potential
investment. The Special Committee will appoint a chairman of the Special Committee.
(c) The Special Committee may perform due diligence with respect to the potential
investment, and may use the services of Independent Management Personnel and/or
outside advisors. The Special Committee is empowered, without further action by the
Board, to cause the Company to pay appropriate compensation to outside advisors
engaged by the Committee.
(d) If the Special Committee determines that it is appropriate to proceed to negotiate the
terms of an investment, the Special Committee will establish parameters for Independent
Management Personnel and outside advisors in negotiating arms’ length terms of any
transaction. A good indicator of arms’ length terms is whether the proposed terms are
comparable to those applicable to an unrelated party transaction.
(e) Any negotiated investment terms will be presented to the directors who do not have an
interest in the transaction for their approval or disapproval.
(f) The Lead Director and the members of the Special Committee will be compensated for
their services in connection with the investment in amounts determined by the directors
who do not have an interest in the transaction. They also will be reimbursed for expenses
reasonably incurred in connection with their services. The Special Committee is
empowered, without further action by the Board, to cause the Company to pay such
compensation and expense reimbursement.
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