Securities laws and stock exchange rules contain strict prohibitions regarding the use and disclosure of non-public information when such information may have a significant impact on the market value of the shares or other securities of Domtar Corporation (“Domtar”). Such information is commonly referred to as “material information.”
STATEMENT OF POLICY
Domtar is committed to providing timely, factual, accurate and transparent information about Domtar, in accordance with applicable legal and regulatory requirements.
It is also Domtar policy to not make disclosures of material nonpublic information on a selective basis. This Policy is especially important in order to comply with Regulation FD (Fair Disclosure), a rule under the US federal securities laws that prohibits companies from disclosing material nonpublic information to market professionals or, in most instances, to shareholders without also disclosing the information to the general public. Under Regulation FD, market professionals include analysts, institutional investors, investment advisers, institutional investment managers and investment companies. In this Policy, we refer to these market professionals and to shareholders of Domtar that are reasonably likely to trade on material nonpublic information collectively as the “Investment Community.”
The oversight of the Policy is governed by Domtar’s Compliance Program. The President and Chief Executive Officer, the Senior Vice President and Chief Financial Officer, and the Senior Vice President and Chief Legal and Administrative Officer (together referred to as the “Senior Disclosure Team”) are responsible for management’s oversight of Domtar’s disclosure practices
PRINCIPLES OF DISCLOSURE OF MATERIAL INFORMATION
1. There is always information about Domtar that is not generally known to the public. This information is considered material information if it would be likely, or would reasonably be expected, to result in a significant change in the market price of Domtar’s securities or would reasonably be expected to have a significant influence on a reasonable investor’s investment decisions. Assuming that it is not publicly known, examples of material nonpublic information could include:
2. Where determined appropriate by the Senior Disclosure Team, Domtar will issue a news release upon material developments. Domtar will also follow Form 8-K rules for disclosure of events, when applicable. Whenever Domtar discloses any material nonpublic information to the Investment Community, such material information will simultaneously be disclosed to the general public, for instance through distribution to major wire services, publicly-accessible conference calls or publicly-available simulcasts.
3. Disclosure must include any information the omission of which would make the rest of the disclosure misleading.
4. Unfavorable material information must be disclosed with the same prominence as favorable information.
5. There shall be no selective disclosure. Nonpublic material information must not be disclosed to selected individuals (for example, in a “one-on-one” meeting with an analyst or telephone conversation with an investor). The Senior Vice President, and Chief Legal and Administrative Officer shall be notified immediately of any possible disclosure of nonpublic material information to a member of the Investment Community, or to any other person not bound by a confidentiality obligation, for further evaluation. If, after review, the information is ascertained to be nonpublic material information, then such information must be promptly broadly disclosed via news release, or through some other method of disclosure that is reasonably designed to provide broad, non-exclusionary distribution of the information to the general public.
6. Disclosure must be corrected immediately if Domtar subsequently learns that earlier disclosure by the company contained a material error at the time it was made and the original disclosure continues to be material to the Investment Community.
Domtar designates a limited number of spokespersons (the “Designated Spokespersons”) responsible for the communication of material information to the Investment Community, regulatory authorities or the media. The President and Chief Executive Officer, the Senior Vice-President and Chief Financial Officer, the Vice-President, Corporate Services and Sustainability, and the Head of Investor Relations are Domtar’s Designated Spokespersons. They, in turn, may designate other Domtar managers to serve from time-to-time as spokespersons to communicate material information about the Corporation as they deem appropriate.
Employees who are not authorized Designated Spokespersons must not respond under any circumstances to inquiries seeking material information from the Investment Community, regulatory authorities or the media unless specifically designated as indicated above. All such inquiries shall be referred to the Vice-President, Corporate Services and Sustainability, the Head of Investor Relations or to a member of the Senior Disclosure Team.
Note that Domtar managers will, in the normal course of their duties, represent the Corporation with government regulators and the media. If, in the judgment of the Domtar manager, such communications become or may become material (e.g., the information being communicated may have a significant impact on the market price of Domtar’s securities), the manager should refer the issue to a Designated Spokesperson.
The Disclosure Policy applies with equal force to communications through social media. Employees using social media to discuss Domtar matters must also follow Domtar Social Media Participation Policy, and are prohibited from disclosing any confidential or proprietary non-public information on social media.
Any employee privy to confidential information, whether material or not, is prohibited from communicating such information to anyone else, unless it is necessary to do so in the normal course of business. Efforts shall be made to limit access to such confidential information to only those who need to know the information, and recipients will be advised that the information is to be kept confidential.
Outside parties privy to undisclosed material information concerning Domtar will be told that they must not divulge such information to anyone else other than in the necessary course of business, and that they may not trade in Domtar’s securities until the information is publicly disclosed. The person making the disclosure is obligated to confirm the outside parties’ commitment to non-disclosure, generally in the form of a written confidentiality agreement.
In order to prevent the misuse or inadvertent disclosure of material information, the procedures set forth below should be observed at all times:
1. Documents and files containing confidential information should be kept in a safe place to which access is restricted to individuals who “need to know” that information in the normal course of business and code names should be used if necessary.
2. Confidential matters should not be discussed in places where the discussion may be overheard, such as elevators, hallways, restaurants, airplanes or taxis. Confidential documents should not be read or displayed in public places and should not be discarded where others can retrieve them.
3. When discussing confidential matters on wireless telephones or other wireless devices, participants should be appropriately discrete.
4. Transmission of documents by electronic means should be made only where it is reasonable to believe that the transmission can be made and received under secure conditions.
5. No unnecessary copies are to be made and removed from meeting rooms.
6. All unused copies must be properly discarded by shredding them instead of putting them in the recycling or refuse bins.
Domtar is constantly scrutinized by the media and is subject to analyses and interpretations that may or may not be accurate. Domtar wishes to maintain excellent relations with the media, provide them with all relevant information and help them circulate as accurate a picture of Domtar as possible. The information given to the media must be unequivocally in the proper context and not liable to be confusing or misinterpreted.
Following is a list of guidelines concerning Domtar’s relations with the media:
1. Communications, whether oral or written, with the media relative to Domtar must be approved by a Designated Spokesperson prior to disclosure, to the extent such communications would be likely, or would reasonably be expected, to result in a significant change in the market price or value of Domtar’s securities or would reasonably be expected to have a significant influence on a reasonable investor’s investment decisions. In such cases, prior authorization also must be obtained from the Senior Vice President, and Chief Legal and Administrative Officer
2. The release of any strategic figures such as asset values, location operating losses, cost of raw materials, etc. is prohibited. Some figures given in the wrong context could draw the attention of the competition or lead to questions from the financial community in general. Comments should be limited to data already published in such publications as annual reports, quarterly or interim financial reports and annual information distributed to shareholders. This data is public and available to everyone.
3. Most corporate services, operating groups and regional facilities have set up communication programs to inform employees on relevant business and operational issues. Such programs are necessary if employees are to feel associated with Domtar’s overall situation and react as a team to the challenges that arise. However, care must be exercised with respect to nonpublic or confidential information because there is always a possibility that this information could find its way outside of Domtar, leading to unintended consequences.
Conference calls will be held for quarterly earnings and major corporate developments after publication of a news release. A Designated Spokesperson will provide a cautionary statement with respect to forward-looking information and direct participants to publicly available documents containing such statement.
It is Domtar’s policy not to comment, affirmatively or negatively, on rumors. Where a response is necessary, Domtar’s Designated Spokespersons will respond consistently to rumors, saying, “It is our policy not to comment on market rumors or speculation.” Should a stock exchange request that Domtar make a definitive statement in response to a market rumour that is causing significant volatility in the stock, the Senior Disclosure Team will consider the matter and decide whether to make a policy exception. In situations where it may be appropriate to respond to rumors, the Senior Disclosure Team will make a determination to this effect.
CONTACTS WITH THE INVESTMENT COMMUNITY AND THE MEDIA
Disclosure in individual or group meetings may not constitute adequate disclosure of information that is considered material nonpublic information. If Domtar intends to announce material information at an Investment Community meeting or a press conference or conference call, the announcement must be preceded by a news release and the means of communication must be accessible to the public.
Domtar recognizes that meetings with the Investment Community are an important element of Domtar’s investor relations program. Domtar will meet with the Investment Community on an individual or small group basis as needed and will initiate contacts or respond to Investment Community calls in a timely, consistent and accurate fashion in accordance with this Disclosure Policy.
Domtar will provide only non-material information through individual and group meetings or calls with the Investment Community, in addition to regular publicly disclosed information, recognizing that an analyst or investor may construct this information into a mosaic that could result in material information. Domtar will not attempt to alter the materiality of information by breaking it down into smaller, non-material components, since an analyst or investor may be able to construct a material mosaic of such disassembled information.
The act of reaffirming guidance (e.g., the Corporation’s prediction of financial results) may constitute the release of material nonpublic information if such reaffirmation does not occur within a short period after its original issuance. As a result, guidance shall not be reaffirmed more than two weeks after its original issuance unless such reaffirmation complies with Regulation FD.
REVIEWING ANALYST DRAFT REPORTS AND MODELS
It is Domtar’s policy generally not to review analysts’ draft research reports or models. However, on occasion Domtar may review a report or model for the purpose of pointing out errors of fact, based on publicly disclosed information. It is Domtar’s policy, when an analyst inquires with respect to his estimates, to question an analyst’s assumptions if the estimate is a significant outlier among the range of estimates and/or Domtar’s published earnings guidance. Domtar will limit its comments in responding to such inquiries to non-material information. Domtar will not confirm, or attempt to influence, an analyst’s opinions or conclusions and will not express comfort with the analyst’s model and earnings estimates.
In order to avoid appearing to “endorse” an analyst’s report or model, Domtar will provide its comments orally or will attach a disclaimer to written comments to indicate the report was reviewed only for factual accuracy.
DISTRIBUTING ANALYST REPORTS
Analyst reports are proprietary products of the analyst’s firm. Re-circulating a report of an analyst may be viewed as an endorsement of the report by Domtar. For these reasons, Domtar will not provide analyst reports through any means to persons outside of Domtar, nor will it post such information on its website. Domtar may provide such reports to its Board of Directors or to its employees or advisors for information purposes.
In order to avoid the potential for selective disclosure or even the perception or appearance of selective disclosure, Domtar will observe a quarterly quiet period, during which Domtar will not initiate or participate in any meetings, telephone conversations or emails or other correspondence with the Investment Community and no earnings guidance will be provided to anyone, other than responding to unsolicited inquiries concerning immaterial factual matters. The quiet period commences on the first day of the month following the end of a quarter and ends with the issuance of a news release disclosing quarterly results.
Any new material document that is added to the Domtar websites should be referred for review to the Senior Vice-President and Chief Legal and Administrative Officer, to the Vice-President, Corporate Services and Sustainability, and/or to the Head of Investor Relations, as the case may be, before being posted on the website or made public.
COMMUNICATION AND ENFORCEMENT
The Disclosure Policy extends to all employees of Domtar and all its subsidiaries, its Directors, advisors and other representatives.
Any questions regarding this policy should be addressed to the Senior Vice-President, and Chief Legal and Administrative Officer.
The Law and Secretariat Department is responsible for ensuring compliance with the legal disclosure requirements. If you are aware of any violations of the Disclosure Policy, you should promptly contact the Law and Secretariat Department.
Last amended October 2017