1. Preliminary remarks 1.1. Shares in KTM Power Sports AG (“KTM PS”) may be traded on the Vienna Stock Exchange, as well as in a regulated market in the sense of § 1 para. 2 BörseG [Austrian Stock Exchange Act] inland. The regulations of the Austrian Financial Market Authority (FMA) concerning the basic principles for the passing on of information in companies as well as concerning organisational measures for preventing the misuse of insider information for issuers (Regulation on Compliance for Issuers 2007) (“ECV”) applies to KTM PS. § 12 ECV obliges KTM PS to issue internal compliance guidelines within its organisation.
1.2. KTM PS is the statutory consolidation parent company of the KTM Group. KTM PS solely exercises a holding function and has no employees. The operational activity, especially the development, production and marketing of sports car wheels as well as the development, production and marketing of so-called sports cars are taken care of solely by KTM-Sportmotorcycle AG (“KTM SMC”) and KTM-Sportcar GmbH (“KTM SC”). Further, KTM SMC performs services for KTM PS in the area of finance and accounts, controlling, investor relations as well as law and tax. The provision of these services for KTM PS involves at KTM SMC a legal person, who otherwise acts for the issuer, who regularly or on occasions has access to insider information. KTM SMC is thus defined as a person working in areas of confidentiality in the sense of § 3 line 4 second sentence ECV.
2. Addressees 2.1. These guidelines, which also make up an integral part of ECV, applies to all persons working in areas of confidentiality in the sense of § 3 line 4.
2.2. These guidelines also apply as KTM SMC’s regulations for all employees involved in the provision of services for KTM PS and for all power of attorney holders and area managers. The above-described persons have a duty to acknowledge these guidelines as regulations in writing and to declare in writing that they are aware of the sanctions linked to any misuse or improper dissemination of insider information.
2.3. The members of the board of directors and supervisory board of KTM SMC, the managing directors of KTM SC and the members of the works council at KTM SMC level have each committed themselves in writing to these guidelines.
2.4. Persons working in areas of confidentiality in the sense of § 3 line 4 second sentence ECV have – provided they are not otherwise bound to silence by law or rules of conduct – each committed themselves in writing to these guidelines.
3. Areas of confidentiality 3.1. KTM PS is due to its holding function solely an area of confidentiality. To this also belongs, in particular, the board of directors and supervisory board of KTM PS.
3.2. Likewise, in the sense of these guidelines, each company area of KTM SMC which provides services in the areas of finance and accounts, controlling, investor relations as well as law and tax for KTM PS is defined as an area of confidentiality.
3.3. Where required, further project-related areas of confidentiality in KTM PS itself or in KTM SMC must be set up by the compliance officer with the agreement with the board of directors of KTM PS or with the agreement with the board of directors of KTM SMC. The start, end and designation of the area of confidentiality and the activity pursued therein must be established in writing and brought to the attention of the compliance officer.
4. Handling insider information 4.1. Within an area of confidentiality, insider information may only be known by those persons who are involved with processing this information as part of their duties. The number of persons involved with insider information must be kept as low as possible.
4.2. All insider information which becomes known about for the first time in KTM PS or in KTM SMC and is recognised as such must be reported immediately to the board of directors of KTM PS and the compliance officer.
4.3. Written documentation and external data carriers, especially CD-ROMs and USB sticks which contain insider information, must be stored in such a manner that it is not accessible by those persons who are not involved in the processing of this insider information, written documentation or data carriers as part of their duties.
4.4. Electronically stored data including electronic mail which contains insider information is to be secured in such a manner that it is not accessible by those persons who are not involved in the processing of this insider information or data as part of their duties.
5. Passing on of insider information 5.1. Insider information must be treated as strictly confidential when dealing with other company areas, including internal business traffic.
5.2. Insider information may therefore only be passed on from one area of confidentiality to another company area if it is required for company purposes. Such passing on of information must be limited to when it is absolutely necessary.
5.3. As soon as insider information is passed on from an area of confidentiality, the compliance officer must be notified immediately. The latter must record the information content, the name of the reporting person, the date the notification was received and the date the information was passed on as well as the names of all persons who already have knowledge or will receive knowledge of the insider information. This obligation does not apply if the passing on of insider information is part of the existing institutionalised and predefined information flows. Institutionalised and predefined information flows must be documented in writing in KTM PS as well as in KTM SMC and brought to the attention of the compliance officer.
5.4. In accordance with § 48 d paras. 1 and 3 BörseG, insider information is subject to further secrecy up to its publication even after it has left an area of confidentiality. On leaving an area of confidentiality, the addressees of the insider information must therefore be advised that it concerns insider information which may not be misused in the sense of § 49 b BörseG.
5.5. The passing on of insider information to non-company persons is only permitted, if it is necessary for company purposes, if the passing on is limited to the extent absolutely necessary and if the non-company person – provided he/she is not bound to secrecy by law or code of conduct – is bound within the framework of an agreement to treat the insider information as confidential and not misuse it in the sense of § 48 b BörseG (“Non-Disclosure Agreement”). In the case of passing on, § 48 b BörseG must be observed at all times.
5.6. Areas of confidentiality must be separated from other company areas via suitable organisation-based measures to prevent the misuse or passing on of insider information.
The following technical measures serve to aid this:
- Storage of written documentation and external data carriers in locked filing cabinets
- (Automatic) securing of computers via passwords
- Securing of files containing insider information via passwords
- Change of password at least every 6 months
- Copy protection on storage media
- Activation of a locking function on IT systems which contain programs and data with insider information when leaving the workplace so that access to the program or data is no longer possible
- Prevention of conversations about insider information
- Use of code names for confidential projects
- Marking of written documentation containing insider information with a non-removable mark “CONFIDENTIAL / INSIDER”
- Encryption programs for e-mails
- Prevention of the removal of documents containing insider information from the offices
of KTM PS and KTM SMC
5.7. In the case of doubt when handling insider information or the classification of information as such, the compliance officer must be informed and the latter’s decision received before the information may be used or passed on.
6. Frozen periods and trading bans 6.1. The length of the frozen period, during which persons from areas of confidentiality may not give orders concerning shares in KTM PS or derived financial instruments, is set at three weeks before the planned publication of the (interim) quarterly figures and 6 weeks before the planned publication of the (interim) yearly figures. These frozen periods also apply to such orders which are founded by persons from areas of confidentiality in the name of and/or on the account of a third party, or by third parties in the name of and/or on the account of persons from areas of confidentiality or legal persons, establishments or partnerships acting as trusts, which are directly or indirectly controlled by a person from an area of confidentiality, in favour of such a person or which fulfil to a large degree the financial interests of such a person.
6.2. The compliance officer can, with the agreement of the board of directors of KTM PS, set further frozen periods whereby these frozen periods can also limit the trading ban in accordance with § 8 para. 1 ECV to a limited circle of people from areas of confidentiality or to individual areas of confidentiality. The start date and – provided one has already been set – the specific duration of a frozen period is to be notified to the relevant persons from the areas of confidentiality in a demonstrably suitable manner.
6.3. The compliance officer can grant exceptions to the trading ban during a frozen period under the provisions set out in § 8 para. 4 ECV. The compliance officer must document all applications which concern intended dealings in the financial instruments of the issuer during frozen periods in accordance with § 8 para. 5 ECV.
7. Submission of Directors Dealings reports 7.1. Reports pursuant to § 48d para. 4 BörseG by persons from areas of confidentiality must also be submitted to the compliance officer. The latter must record the content and date of the report.
8. Insider record 8.1. The compliance officer must keep a record with content pursuant to § 11 para. 2 ECV, keep it up to date regularly and at the request of the FMA submit it to the latter immediately. This insider record must also record those persons who have been appointed to an area of confidentiality in terms of 3.2. on an organisational or functional basis.
8.2. The insider record must be kept for at least 5 years from the date of its issue or where applicable from the date of its last revision.
9. The compliance officer 9.1 The board of directors of KTM PS has appointed a compliance officer whose duties and tasks are derived from § 13 ECV. The compliance officer’s function is directly and solely responsible to the board of directors of KTM PS and is not subject in this function to any instructions from other persons working for KTM PS. In terms of his/her function as compliance officer, he/she is also free from following instruction within the framework of his/her existing employment relation with KTM SMC.
9.2 The annual activity report pursuant to § 13 para. 4 line 3 ECV must be presented to the supervisory board by the compliance officer within 5 months from the end of the business year and submitted to the FMA via suitable means.
10. Sanctions 10.1. Violations of these guidelines may lead to consequences under civil or employment law. Consequences under employment law may extend from a simple instruction or warning to dismissal in the case of repeated or particularly major breaches.
10.2. KTM PS and KTM SMC reserve the right to assert explicitly claims for damages in the event that these guidelines are violated.
11. Declaration of duty 11.1. All persons from areas of confidentiality confirm their knowledge of and commit themselves to complying with these guidelines through submission of a pre-printed declaration (Enclosure ./2) to the compliance officer appointed according to these guidelines.
