Ann: GENERAL: KMD: KMD: Securities Trading Policy

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• Summary: GENERAL: KMD: KMD: Securities Trading Policy
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KMD
05/08/2013 10:05
GENERAL

REL: 1005 HRS Kathmandu Holdings Limited

GENERAL: KMD: KMD: Securities Trading Policy

Document No.:  KHR - Gov3
Policy Name: Securities Trading Policy
First Issue date:  1 March 2010
Revision No: 002/August 2013

KATHMANDU HOLDINGS LIMITED (the "Company")
ARBN 139 836 918

This Policy is in accordance with Kathmandu Corporate Governance Standards
and outlines ethical values and principles, which are essential to the
Company's continued success and reflects the direction and approach in the
conduct of our business activities.

1. Objective

1.1. The Company is committed to complying with all legal and statutory
requirements regarding trading by insiders. However, the Company considers
that Company Directors and Officers should generally be encouraged to hold
shares in the Company as it helps align the interests of officers and
shareholders.

1.2. This securities trading policy sets out the circumstances in which
Directors, senior executives and employees of the Company and its
subsidiaries may deal in Company securities with the objective that no
Director or employee will contravene the requirements of the Securities
Markets Act, the Corporations Act or the NZX or ASX Listing Rules.

1.3. The objective of this policy is to seek to ensure that:

1.3.1. Directors and employees adhere to high ethical and legal standards in
relation to their personal investment in Company securities; and

1.3.2. Personal investments of Directors and employees do not conflict with
the interests of the Company and other shareholders in relation to Company
securities

2. Purpose

2.1. This policy is designed to protect the reputation of the Company and to
seek to ensure that such reputation is maintained or perceived to be
maintained by persons external to the Company.

2.2. The policy is not designed to prohibit Directors and employees from
investing in Company securities but does recognise that there may be times
when Directors or employees cannot or should not invest in Company
securities. The policy provides guidance to Directors and employees as to the
times that Directors and employees may invest in the Company's securities.
The requirements of the policy also allow

the  Company  to  monitor  the personal  investment  activity in  the
Company's securities by Directors and employees.

3. Applicable Legal Requirements

3.1. A Director or employee possesses "inside information" in relation to the
Company where:

3.1.1. the person possesses information that is not generally available to
the public and, if the information were generally available, a reasonable
person would expect it to have a material effect on the price or value of
Company securities (or a decision whether or not to trade in them); and

3.1.2. the person knows, or ought reasonably to know, that the information is
not generally available and, if it were generally available, a reasonable
person would expect it to have a material effect on the price or value of
Company securities.

3.2. A reasonable person would be taken to expect information to have a
material effect on the price or value of Company securities if the
information would, or would be likely to, influence persons who commonly
invest in securities in deciding whether or not to deal in Company securities
in any way.

3.3. If a Director or employee possesses "inside information" in relation to
the Company, the person must not:

3.3.1. deal in Company securities in any way; or

3.3.2. procure another person to deal in Company securities in any way; or

3.3.3. directly or indirectly, communicate the information, or cause the
information to be communicated, to another person if the person knows, or
ought reasonably to know, that the other person would, or would be likely to,
deal in Company securities in any way or procure a third person to deal in
Company securities in any way.

3.4. For the purposes of paragraphs 2 and 3 above:

3.4.1. "Company securities" includes any shares in the Company, debentures
(including convertible notes) issued by the Company, units of shares in the
Company and options to acquire or subscribe for shares in the Company;

3.4.2. to "deal" in Company securities includes subscribing for, purchasing
or selling Company securities or entering into an agreement to do any of
those things, but does not in New Zealand include subscription for or the
issue of new securities.

3.5. A Director or employee who deals in Company securities while they
possess "inside information" will be liable to both civil and criminal
penalties.

4. Examples of "inside information"

4.1. Examples of information which may be considered to be "inside
information" include the details relating to the items listed below (this is
not an exhaustive list):

4.1.1. sales figures;

4.1.2. profit forecasts;

4.1.3. unpublished announcements;

4.1.4. proposed changes in capital structure, including share issues, rights
issues and the redemption of securities;

4.1.5. borrowings;

4.1.6. impending mergers, acquisitions, reconstructions, takeovers, etc;

4.1.7. significant litigation;

4.1.8. significant  changes  in  operations  or  proposed  changes  in the
general character or nature of the business of the Company or its
subsidiaries;

4.1.9. new distributorships, products and technology;

4.1.10. liquidity and cashflow information;

4.1.11. major or material purchases or sales of assets;

4.1.12. management restructuring or board changes;

4.1.13. new significant contracts or customers; and

4.1.14. a  new entity proposing  to  buy,  or  a  shareholder  proposing
to  sell,  a substantial number of shares in the Company.

5. Application of the Policy

5.1. The policy applies to all Directors, all "Key Management Personnel" (as
defined by AASB 124), all employees who from time to time possess information
that could be considered inside information, or who are nominated as such by
the board ("Senior Executives") and other employees, and to their respective
associates (including a company or trust controlled by the Director or
employee, a spouse, dependent children, a close relative, a person acting in
concert with the Director or employee, etc).

6. Policy

6.1. General Principles - Directors and employees of the Company and its
subsidiaries should note the following general principles regarding their
personal trading of Company securities:

6.1.1. avoid and be seen to avoid, actual or potential conflict between their
personal interest and their duty to the Company and its shareholders;

6.1.2. not to derive personal advantage from information which is not
generally available and which has been obtained by reason of, or in the
course of, their directorship or employment;

6.1.3. seek prior approval to trade from a designated officer with a view to
ensuring the Company's and shareholder's interests are not compromised;

6.1.4. ensure any personal trading is on a scale that reflects your
individual financial ability to fund and maintain an appropriately sized
portfolio;

6.1.5. ensure any personal trading does not adversely impact on your ability
to perform normal duties;

6.1.6. not utilise broker credit - relevant exchange settlement terms must
apply on all occasions and all transactions must be settled according to
industry standards. Such prohibition does not extend to normal documented
margin lending or loan facilities offered to the general public by brokers,
banks or other lending institutions;

6.1.7. Directors and employees who have access to price sensitive information
or "inside information" should not conduct personal trading in Company
securities.

6.2. Short term trading - Notwithstanding the following, Directors and
employees of the Company and its subsidiaries should never engage in short
term trading of any Company securities. In general, the purchase of
securities with a view to resale within a 12 month period and the sale of
securities with a view to repurchase within a 12 month period would be
considered to be transactions of a "short term" nature. However, the sale of
shares immediately after they have been acquired through the conversion of a
security (eg. exercise of an option) will not be regarded as short term
trading.

6.3. Trading windows - Subject to the below, the designated time (in terms of
avoiding suggestions of insider trading) for any Director or employee to deal
in Company securities is during the:

6.3.1. 4 week period immediately after the release by the Company of its half
yearly results announcement to NZX and ASX;

6.3.2. 8 week period immediately after the release by the Company of its
yearly results announcement to NZX and ASX; or

6.3.3. 4 week period immediately after the release of a disclosure document
offering equity securities in the Company,

6.4. PROVIDED that the person is NOT in possession of any inside information
relating to those securities.

6.5. Trading Embargo - In addition, a "closed season" operates in respect of
which Directors and employees must refrain from dealing in Company securities
during:

(1) any major promotional event (being currently the Kathmandu Christmas,
Easter and Winter sales) which the Company Secretary advises are captured by
this clause, and

(2) the 2 month period prior to release of the interim and full year results
announcements.

All participants in the Long Term Incentive Plan are automatically regarded
as being subject to this "closed season" restriction.

6.6. Directors, Key Management Personnel and Senior Executives - A Director,
Key Management Personnel or Senior Executive may not deal in Company
securities without the prior consent of the Chairman of the Board and the
Chairman may not deal in Company securities without the prior consent of the
Chairman on the Audit and Risk Committee before commencing the transaction. A
Director or Senior Executive must also provide the Chairman of the Board with
subsequent confirmation of the trading that has occurred.

6.7. Prudence will dictate that dealings should generally be limited to the
recommended times referred to above and that the Chairman will generally
refuse consent to deal in Company securities outside these recommended times
unless exceptional circumstances exist (as outlined below). In any event, the
Director or Senior Executive should not deal in Company securities at any
time if the Director or Senior Executive is in possession of any inside
information relating to those securities.

6.8. Employees other than Senior Executives and Key Management Personnel -
Employees of the Company other than Senior Executives and Key Management
Personnel may deal in Company securities at any time if the employee notifies
the Company Secretary before commencing the transaction and after the
transaction has occurred, providing confirmation of the trading. Employees
are strongly advised to limit dealing in Company securities to the
recommended timing referred to above. In any event, the employees should not
deal in Company securities at any time if the employee is in possession of
any inside information relating to those securities.

6.9. Exercise of options, participation in employee share option plans etc -
Subject to the insider trading provisions of the Securities Markets Act and
the Corporations Act, Directors and employees may at any time:

6.9.1. acquire the Company's ordinary shares by conversion of securities
giving a right of conversion to ordinary shares;

6.9.2. acquire Company securities under a bonus issue made to all holders of
securities of the same class;

6.9.3. acquire Company securities under a dividend reinvestment, or top-up
plan that is available to all holders of securities of the same class;

6.9.4. acquire, or agree to acquire, options under a Company share option
plan; and

6.9.5. exercise options acquired under a Company share option plan (but may
not sell all or part of the shares received upon exercise of the options
other than in accordance with these procedures).

6.10. Exceptional Circumstances - Senior Executives, the Company Secretary
and Directors who are not in possession of material non-public information
may be given prior written approval to sell or otherwise dispose of
securities during a Closed Season only where there are exceptional
circumstances. Exceptional circumstances may include:

6.10.1. severe financial hardship being a pressing financial commitment that
cannot be satisfied otherwise than by selling the securities; or,

6.10.2. if there is a court order or court enforceable undertaking to
transfer or sell the securities or there is some other overriding legal or
regulatory requirement to do so.

6.11. Senior Executives, the Company Secretary and Directors who are not in
possession of material non-public information may in the Independent
Directors' absolute discretion be given written approval to deal in Company
securities during a Closed Season for a period of 2 weeks immediately after
the release of any announcement by the Company that informs the market of the
Company's sales and profit results for the period immediately prior to the
date of that announcement.

6.12. When requesting written approval to buy, sell or otherwise dispose of
the Company's securities during a Closed Season, the person making this
request must submit an application in writing (which can be by email) to the
Independent Directors generally through the Company Secretary, (or in the
case of a request the Chairman, to the Chairman of Audit and Risk Committee),
including the reasons for requesting approval and confirming that they are
not in possession of material non- public information.

6.13. If approval is granted, it must be in writing (which can be by email)
and must specify a time period to which the approval applies.

7. NZX and ASX Notification
7.1. A Director must notify the NZX and the ASX within 5 trading days after
any change in the Director's relevant interest in securities of the Company
or a related body corporate of the Company.

7.2. A Director must notify the Company Secretary in writing of the requisite
information for the Company Secretary to make the necessary notifications to
ASIC, the NZX and the ASX as required by the Securities Markets Act, the
Corporations Act and the NZX and ASX Listing Rules.

8. Questions?
If you have any questions regarding this policy you should contact:

Mark Todd
Company Secretary
Email: [email protected]
Phone: +64 3 373 6115

Alyson Rooney
Assistant Company Secretary
Email:[email protected]
Phone: +64 3 373 6082

Approved:
Peter Halkett
Chief Executive Officer

Date: 05 August 2013
End CA:00239291 For:KMD    Type:GENERAL    Time:2013-08-05 10:05:03