June Edition 2023

77 The company’s board of directors, in accordance with its fiduciary duties under state corporation law, considers share buybacks to be one of several valuable ways our company can deploy capital. The first way is to reinvest in existing businesses, from employee training and customer support to repaying lenders. An alternative is to acquire new businesses. After considering these deployments, next is either to repurchase shares if they can be acquired cheaply or, if not, pay a dividend. We may undertake share buybacks when we lack better ways to deploy capital and our shares are priced below value. Since 2023, we also take into account the excise taxes imposed on share buybacks and other administrative costs. In addition, to assure that selling shareholders are not disadvantaged by selling at a discount, we comply with all of our disclosure obligations designed to enable shareholders to make a reasonable estimate of share value in deciding whether to sell. We believe that our share buyback policy is in the best interests of our corporation and its shareholders and is also consistent with the interests of our other stakeholders. With respect to shares withheld to satisfy tax withholding upon exercise or vesting of equity awards, the adopting release acknowledges that at least one commenter sought clarification regarding whether the requirement to disclose share repurchases extends to shares withheld to cover tax withholding obligations. The SEC declined to provide such clarification, noting only that “terms, times, and transactions used for, and applicable to, the current Item 703 disclosure requirements should be applied to the final amendments.” In this regard, it is worthwhile to reexamine existing compliance and disclosure interpretations (e.g., 149.01) and consider whether the company’s routine withholding of shares upon the exercise or vesting of equity awards must be included in the new quarterly disclosure tables. The Amendments prescribe many specific disclosure requirements. However, when preparing these disclosures companies should also consider whether any additional information in connection with their buyback disclosures is material. As noted by the SEC in the adopting release, “[t]o the extent further material information is necessary to make such disclosures not misleading, the issuer will be required to provide that information under existing Rule 12b-20.” For Canadian issuers that file SEC reports using the Multijurisdictional Disclosure System (“MJDS”), the SEC clarified in footnote 219 to the adopting release for the Amendments that it is “not imposing the amended