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1. Statement of Purpose
In this Joint Code of Business Conduct and Ethics (the "Code"), the term "Precision" refers collectively to Precision Drilling Trust (the "Trust"), Precision Drilling Corporation (the "Corporation") and all entities in which the Trust has a direct or indirect equity interest of 50% or more.
Every trustee, director, officer and employee of Precision (each, a "Precision Person") has the responsibility to obey the law and act ethically. To that end, this Code is a guide intended to sensitize such individuals to significant legal and ethical issues that arise frequently and to identify mechanisms available to report illegal or unethical conduct. This Code affirms the commitment of Precision to uphold ethical standards and specifies the basic principles of acceptable conduct for a Precision Person. There may be occasions where you are confronted by circumstances not covered by policy or procedure and where you must make a judgment as to the appropriate course of action. In such cases you should contact your supervisor, a member of the human resources department or a member of senior management for guidance on proper conduct.
This Code has been adopted by the Board of Trustees of the Trust and the Board of Directors of the Corporation and extends to every Precision Person, including full-time, part-time and temporary employees and contractors of Precision.
Each Precision Person will be provided with a copy of this Code and will be required to comply as a term of office or employment and certify compliance on an annual basis. Conduct that violates this Code may also violate federal, provincial or state law and can subject both Precision and a Precision Person to prosecution and legal sanctions. Further, a Precision Person who violates this Code may face disciplinary action up to and including termination of their employment with Precision for just cause without notice or payment in lieu of notice.
In carrying out their duties, each Precision Person is expected to act honestly and in good faith with a view to the best interests of Precision and its stakeholders, particularly the unitholders of the Trust. To this end, Precision has committed to maintain a high standard of corporate governance that incorporates the principles of good conduct and ethical behavior. Accordingly, the following principles for business conduct and ethical behavior have been adopted.
2. Compliance with Laws,Rules and Regulations
Each Precision Person will conduct the business of Precision in compliance with laws, rules, regulations and other legal requirements applicable wherever Precision is carrying on business.
No Precision Person shall directly or indirectly give, offer or agree to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official in contravention of the Canadian Corruption of Foreign Public Officials Act or similar U.S. legislation.
This law can be complicated and result in serious and adverse enforcement proceedings against Precision if violated. If you are in doubt about whether a particular practice may violate such law, you should contact your supervisor, a member of the human resources department or a member of senior management for guidance on proper conduct.
Each Precision Person shall adhere to Precision's Insider Trading Policy with respect to buying or selling units of the Trust.
3. Conflicts of Interest
Each Precision Person shall conduct their business affairs in a manner that ensures their private or personal interests do not conflict with the interests of Precision, including conflicts relating to personal, financial or other gain. It is not always easy to determine whether a conflict of interest exists, so any potential conflict of interest must be reported immediately to your supervisor, a member of the Audit Services Department or a member of senior management. See Schedule "A" of this Code for examples of potential conflicts of interest.
4. Fair Dealing
Ethical behavior requires the observance of reasonable commercial standards of fair dealing. Each Precision Person should endeavor to deal fairly with Precision's customers, suppliers, competitors, employees and stakeholders. No Precision Person will take unfair advantage of anyone through illegal conduct or act in a manner that is dishonest or outside reasonable commercial standards of fair dealing.
5. Confidentiality
Each Precision Person shall maintain the confidentiality of information entrusted to them except in circumstances where disclosure is authorized or legally mandated. Confidential information shall not be used for personal gain. Confidential information includes all non-public information that may be of use to competitors or harmful to Precision or its customers or a Precision Person if disclosed. It includes information deemed to be proprietary to Precision, whether patented or not. It also includes information that suppliers and customers have entrusted to Precision. A Precision Person who leaves Precision has an ongoing obligation to keep such information confidential. Each Precision Person shall adhere to Precision's Disclosure Policy.
6. Protection and Proper Use of Precision's Assets
Each Precision Person shall ensure that Precision's assets are protected and properly and efficiently used for legitimate business purposes. Any suspected incidents of abuse, fraud or theft should be immediately reported to that person's supervisor or as detailed in paragraph 11 of this Code.
7. Corporate Opportunities
Each Precision Person owes a duty to advance Precision's legitimate interests whenever an opportunity arises and is prohibited from:
- taking personal advantage of opportunities discovered through the use of Precision's assets, property, information or their position that would be contrary to Precision's interests;
- using or deploying Precision's assets, property, or information or their position for personal gain; and
- competing with Precision.
Each Precision Person shall protect Precision's assets. Precision's managers are specifically responsible for establishing and maintaining appropriate internal controls to safeguard Precision's assets against loss from unauthorized or improper use or disposition.
8. Reporting Integrity
No false, artificial or misleading entries in the books, records and documents of Precision shall be knowingly made for any reason and no Precision Person shall engage in any arrangement that results in such prohibited acts. All periodic reports filed by Precision shall be in accordance with Precision's Disclosure Policy, and will include full, fair, accurate, timely and understandable disclosure.
9. Encouraging the Reporting of Any Illegal or Unethical Behavior
Each Precision Person is encouraged to promote ethical behavior in things they do and to ensure a healthy, ethical workplace. Violations of laws, rules, regulations or this Code are to be reported on the basis set forth in paragraph 11 of this Code.
Officers and management of Precision shall not retaliate against any Precision Person who reports in good faith on any matter which is in contravention of this Code. Precision's trustees and directors will not knowingly allow any retaliation by officers or management in respect of reports made in good faith by any Precision Person.
10. Waivers
Any Precision Person whose conduct or actions have failed to meet or whose conduct or actions may not meet the principles and standards set out in this Code must immediately report such failure to either the Chair of the Audit Committee or through the Whistleblower Hotline. If the reporting contains a request for a waiver of such conduct, that request shall be filed with the Chair of the Audit Committee for review and recommendation by that committee. The Audit Committee shall examine the circumstances related to the failure and the requested waiver and make an appropriate recommendation to the Board of Trustees of the Trust or the Board of Directors of the Corporation, as the case may be. Precision will promptly disclose waivers of this Code as required by applicable law or the rules of any stock exchange on which the units of the Trust are listed for trading.
11. How to Raise a Concern
If a Precision Person becomes aware of a breach or possible breach of applicable laws, rules or regulations or of this Code, they are expected to report such breach.
In the case of an employee, the report should be made to the employee's immediate supervisor, if appropriate. If the reporting person is of the view that it would be more appropriate under the circumstances to take the breach or possible breach of this Code or other laws, rules or regulations to higher levels, due to either the nature of the breach or, if earlier reports through normal channels have not been acted upon, then that person may directly contact the Audit Committee through the anonymous confidential phone line - ConfidenceLine™ to report suspected illegal or improper activities within Precision. A Precision Person need not identify themselves.
To access the ConfidenceLine™ and have messages delivered directly to the Audit Committee, a Precision Person can use any of the following methods:
- You can speak to a ConfidenceLine™ agent by calling 1-800-661-9675, they are available 365 days per year, 24 hours a day to take your information and report, or
- You can go on-line directly to www.precisiondrilling-eweb.com, or go to Precision Drilling's home page and click on the ConfidenceLine™ link. The secure web application will ask you general questions about your ConfidenceLine™.
I hereby acknowledge that I have read, understood and will comply with the above Joint Code of Business Conduct and Ethics
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SCHEDULE "A"
CLARIFICATION OF THE JOINT CODE OF BUSINESS CONDUCT AND ETHICS
Examples of Possible Conflicts
Conflict of Interest
A conflict situation can arise when a Precision Person takes actions or has interests that may make it difficult to perform their work effectively. Conflicts of interest also arise when a Precision Person, or family members of a Precision Person, receive improper personal benefits as a result of the Precision Person's position with Precision. Loans to, or guarantees of obligations of, such persons are likely to pose conflicts of interest, as are transactions of any kind between Precision and any other organization in which a Precision Person or members of their families have an interest.
Financial Interest
Neither a Precision Person nor their families (including spouses, children or spouse equivalents residing together) shall own, control or direct a material financial interest in a supplier, contractor or competitor of Precision or in any business enterprise, which does or seeks to do business with Precision.
Outside Business Activities
A Precision Person shall not engage in any outside business or activity that is detrimental to Precision. Each Precision Person is expected to spend their full time and attention performing their jobs during normal business hours or as contracted.
Outside Directorships
A Precision Person shall not, other than as permitted in the Declaration of Trust, serve as a trustee, director, officer, partner, consultant or any other role in any unaffiliated profit-making organization if that entity competes with or provides goods or services to Precision, without Precision's prior consent.
Gifts and Entertainment
A Precision Person must be prudent in offering or accepting gifts (including tickets to sporting, recreational or other events) to or from a person or entity with which Precision does or seeks to do business. The value of gifts should be nominal, both with respect to frequency and amount. Gifts that are repetitive (no matter how small) may be perceived as an attempt to create an obligation to the giver and are therefore inappropriate. Likewise, business entertainment should be moderately scaled and intended only to facilitate business goals. If, for example, tickets to a sporting or cultural event are offered, then the person offering the tickets should plan to attend the event as well. Use good judgment. "Everyone else does it" is not sufficient justification. If you are having difficulty determining whether a specific gift or entertainment item lies within the bounds of acceptable business practice, ask yourself these guiding questions:
- Is it legal?
- Is it clearly business related?
- Is it moderate, reasonable and in good taste?
- Would public disclosure embarrass Precision?
- Is there any pressure to reciprocate or grant special favors?
Strict rules apply when we do business with governmental agencies and officials, whether in Canada, the United States or in other countries. Due to the sensitive nature of these relationships, talk with your supervisor before offering or making any gifts or hospitality to governmental employees whether in Canada, the United States or in other countries.
Customer and Supplier Relations
All customers, suppliers and independent contractors purchasing or furnishing goods and services must be dealt with fairly. Decisions to hire a subcontractor or source materials from a particular vendor must be made on the basis of objective criteria such as quality, reliability, technical excellence, price, delivery, service and maintenance of adequate sources of supply.
Government and Community Relations
Precision's financial support to political organizations requires the express approval of the Executive Chair or Chief Executive Officer of the Corporation. A Precision Person engaging in personal political activities must do so in their own right and not on behalf of Precision. Corporate donations to charities made on behalf of Precision shall be within budgets approved by the appropriate business unit head.
Personal Relationships
Each Precision Person shall avoid any arrangement or circumstance, including personal relationships that may compromise their ability to act in the best interest of the Precision. A Precision Person, excluding contractors, shall not supervise directly or be in a position to influence the career of someone with whom he or she is engaged in a personal relationship.
Additional Obligations with Respect to Precision's Assets
Use of Precision's Resources
Precision's resources include company time, materials, supplies, equipment, information, electronic mail and computer systems. These resources are generally only to be used for Precision-specific purposes.
In protecting Precision's resources, Precision reserves the right to periodically monitor access to and the content of Precision's computer systems and networks. A Precision Person should not assume they have any right to privacy of electronic data residing on Precision's computer resources.
Use of Internet and Email
Precision's computer networks and information resources include electronic mail and messaging systems, internal Intranet and the public Internet. Precision's computer resources and networks are provided for company-related business purposes. Excessive personal use is inappropriate. Use of Precision's computer resources to view, retrieve or send sexually related or pornographic messages or material; violent or hate-related messages or material; bigoted, racist or other offensive messages or other messages or material related to illegal activities is strictly prohibited. Each Precision Person shall adhere to the Information Systems Policies and Procedures.
Use of Precision's Name
A Precision Person must not use their employment status to obtain personal gain from those doing or seeking to do business with Precision. Employees may not use Precision's name or purchasing power to obtain personal discounts or rebates unless the discounts are made available to each Precision Person.
Patents and Inventions
Inventions, discoveries and copyright material, made or developed by employees in the course of, and relating to, their employment with Precision are the property of Precision unless a written release is obtained or covered by contract.
Proprietary Information
Employees are reminded they are not to use proprietary information which is detrimental to Precision's interests.
As at July 26, 2006 |
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