Tucows Inc. (the “Company”) is committed to maintaining high standards of financial integrity, and the Audit Committee (the “Audit Committee”) of the Board of Directors of the Company takes very seriously all complaints and concerns regarding accounting, internal accounting controls, auditing and other legal matters. The Company strives to encourage open communication so that such concerns may be raised without fear of retaliation in any manner.
For these reasons, the Company must maintain a workplace environment where all employees of the Company and each of its direct and indirect subsidiaries can raise concerns free of any harassment, discrimination or retaliation if they reasonably believe that they are aware of: (1) questionable accounting, internal accounting controls or auditing matters, (2) the reporting of fraudulent financial information of or by the Company, (3) violations of securities laws or other laws, rules and regulations or (4) any activities or transactions that appear to violate the Company’s Code of Business Conduct and Ethics. Employees should report those concerns as soon as possible after discovery. The Company strives to encourage open communication so that such concerns may be raised without fear of retaliation in any manner.
Accordingly, the Audit Committee has established the following procedures for:
- The receipt, retention and treatment of complaints regarding accounting, internal accounting controls, or auditing matters; and
- The submission by the Company’s employees (confidentially and anonymously, if they wish, in the United States, Canada, and in any other jurisdiction to the fullest extent legally permitted in such other jurisdiction) of concerns regarding accounting or auditing matters they believe to be questionable or violations of the Company’s Code of Business Conduct and Ethics, U.S. federal securities laws or other state and federal laws.
The Audit Committee has established these procedures pursuant to Rule 10A-3(b)(3) under the Securities Exchange Act of 1934 (which implements Section 301 of the Sarbanes-Oxley Act of 2002). Any employee of the Company who submits a complaint related to the Company’s accounting, internal accounting controls, auditing and other legal matters (“Accounting Matter Complaint”) in good faith should have no fear of dismissal or retaliation of any kind.
Scope of Matters Covered by These Procedures
Employees must immediately report and submit complaints of accounting and auditing and other legal matters for which there is actual or suspected:
- Intentional error, fraud or gross negligence in the preparation, review or audit of any of the financial statements of the Company or any of its direct and indirect subsidiaries;
- Intentional error, fraud or gross negligence in the recording of transactions of the Company or any of its direct and indirect subsidiaries;
- Intentional noncompliance with the internal and reporting controls of the Company or any of its direct and indirect subsidiaries;
- Significant deficiencies in the internal and reporting controls of the Company or any of its direct and indirect subsidiaries;
- Violations of U.S. Securities and Exchange Commission (the “SEC”) rules and regulations that are related to accounting, internal accounting controls and auditing matters;
- Fraud against investors, securities fraud, mail or wire fraud, bank fraud or fraudulent statements to management, outside auditors, the SEC or members of the investing public; or
- Violations of the Company’s Insider Trading Policy, U.S. federal securities laws or the Company’s U.S. Foreign Corrupt Practices Act Policy.
Employees must also immediately report and submit complaints regarding potential violations of the Company’s Code of Business Conduct and Ethics or other applicable laws.
Receipt of Accounting Matter Complaints
Employees with Accounting Matter Complaints may report their complaints or concerns to: (i) their manager or higher levels of management; (ii) the Chief Legal Officer of the Company; or (iii) any member of the Audit Committee. Contact details for the Chief Legal Officer and the Chair of the Company’s Audit Committee can be found at the end of this policy.
Such complaints or concerns may be submitted anonymously by internal or regular mail or may be delivered confidentially, whether orally or in writing, such as through e-mails and letters. If a complaint is written and the employee seeks to remain anonymous, the employee should not submit such complaint via e-mail and should take care to submit a letter without a return address or other identifying mark. The Company cannot guarantee that oral complaints, whether by telephone or voice mail, can be made on an anonymous basis because the recipient of the complaint may recognize a complainant’s voice. All such complaints or concerns by employees and any complaints or concerns submitted by non-employees, such as shareholders, creditors, customers and suppliers, will be forwarded to the Chairman of the Audit Committee.
The report of any Accounting Matter Complaint should be factual rather than speculative or conclusory, and should contain as much specific information as possible to allow for proper assessment. A complaint describing an alleged violation or concern should be candid and set forth all of the information that the complainant knows regarding the allegation or concern. In addition, all complaints must contain sufficient corroborating information to support the commencement of an investigation. The Audit Committee may, in its reasonable discretion, determine not to commence an investigation if a complaint contains only unspecified or broad allegations of wrongdoing without appropriate informational support.
Treatment of Accounting Matter Complaints
Upon receipt of a complaint or concern, the Audit Committee will: (i) determine whether the complaint is a credible Accounting Matter Complaint; and (ii) when appropriate, acknowledge to the sender receipt of the complaint or concern.
Each credible complaint will be reviewed and investigated by the Compliance Officer and/or such other persons as the Audit Committee determines to be appropriate, under the Audit Committee’s direct review, direction and oversight.
The Audit Committee shall have the authority to retain outside legal or accounting expertise in any investigation as it deems necessary to conduct the investigation in accordance with its charter and this policy.
Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review. The identity of the complainant will be shared only with persons whose decisions are not implicated by the Accounting Matter Complaint.
All credible complaints will be investigated to a resolution. The Audit Committee will ensure that the Company’s management takes prompt and appropriate corrective action when and as warranted in the judgment of the Audit Committee, including, where appropriate, reporting any violation to the relevant regulatory authorities.
The Audit Committee will determine the appropriate report to be made to the Company’s external independent auditor.
Prohibition on Retaliation
The Company will not discharge, demote, suspend, threaten, harass or in any manner retaliate or discriminate against any employee based upon any lawful actions of such employee with respect to good faith reporting of Accounting Matter Complaints or otherwise as specified in Section 806 of the Sarbanes-Oxley Act of 2002.
Reporting and Retention of Complaints and Investigations
The Audit Committee will maintain a log of all complaints relating to Accounting Matter Complaints tracking their receipt, investigation and resolution. Copies of complaints and such log will be maintained in accordance with the Company’s document retention policy.
The Audit Committee will be responsible for the administration of this policy, including any updates which may be necessary or appropriate.
Compliance with the Policy
The Company will deliver a copy of this policy to all current employees promptly after the adoption of this policy and will deliver a copy of this policy to new employees on or prior to their start of employment. In addition, a link to the current version of this policy will be maintained on the Company’s website. All employees must follow the procedures outlined herein and cooperate with any investigation initiated pursuant to this policy. Adhering to this policy is a condition of employment. The Company must have the opportunity to investigate and remedy any alleged violations of this policy or employee concerns, and each employee must ensure that the Company has an opportunity to undertake such an investigation. This policy does not constitute a contract of employment or change the at-will status of any employee.
Non-accounting or non–auditing complaints shall be logged separately and will be forwarded to the appropriate person or department for investigation (e.g., Human Resources or Security), unless the Chief Legal Officer deems other treatment is necessary (e.g., such complaint involves a finance employee or executive officer).
Chief Legal Officer
Bret Fausett – (310) 985-1351, email@example.com, firstname.lastname@example.org or 96 Mowat Avenue, Toronto, ON M6K 3M1, Canada
Chair of the Audit Committee
Jeffery Schwartz – (416) 646-5472, email@example.com or 96 Mowat Avenue, Toronto, ON M6K 3M1, Canada