APPENDIX A
TO NON-PROSECUTION AGREEMENT
(ATR-SF-2024-00312)
ENHANCED ANTITRUST COMPLIANCE PROGRAM
OF
TORCHLIGHT MINING CORP.
May 6, 2024
Reference: Non-Prosecution Agreement between the United States Department of Justice, Antitrust Division, and Torchlight Mining Corp. DOJ Reference No. ATR-SF-2024-00312
Prepared by:
Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104
and
Meridian Compliance Partners LLC 1100 Connecticut Avenue NW, Suite 730 Washington, DC 20036
This Appendix A is incorporated by reference into and forms an integral part of the Non-Prosecution Agreement executed on May 6, 2024, by Søren Dalmqvist, Chief Executive Officer, Torchlight Mining Corp., and Julia Stafford-Hayes, Deputy Assistant Attorney General, Antitrust Division, United States Department of Justice. This document shall be read in conjunction with the Non-Prosecution Agreement and all other appendices thereto. In the event of any conflict between this Appendix A and the body of the Non-Prosecution Agreement, the terms of the Non-Prosecution Agreement shall control.
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I. PURPOSE AND SCOPE
A. Purpose
This Enhanced Antitrust Compliance Program (the "Program" or "EACP") sets forth the minimum requirements for the antitrust compliance program that Torchlight Mining Corp. ("TMC" or the "Company"), a corporation organized under the Canada Business Corporations Act (CBCA Corporation No. 7841526-1), with its registered office at 200 Bay Street, Suite 3400, Toronto, ON M5J 2J2, Canada, and its principal U.S. operations conducted through its wholly owned subsidiary Torchlight Mining (U.S.) Inc. (Nevada Entity No. NV20160438721), at 8750 West Sahara Avenue, Suite 210, Reno, NV 89117, must implement and maintain for the duration of the Non-Prosecution Agreement dated May 6, 2024, between TMC and the United States Department of Justice, Antitrust Division (the "NPA"), and thereafter as described herein.
The Program is designed to ensure that TMC, its subsidiaries, affiliates, and business units worldwide establish and sustain robust internal controls, policies, procedures, training, monitoring, and enforcement mechanisms sufficient to prevent, detect, and remedy violations of applicable antitrust and competition laws. The Program reflects the commitments made by TMC in connection with the resolution of the investigation described in the NPA and is intended to provide meaningful, verifiable compliance safeguards that go substantially beyond minimum legal requirements.
The Program supersedes TMC's prior antitrust compliance policy, originally adopted in approximately 2014 (the "Prior Policy"). The parties acknowledge and agree that the Prior Policy was inadequate in several material respects. Specifically, the Prior Policy lacked annual training for covered personnel since at least 2018, when the last recorded company-wide antitrust training session was conducted. The Prior Policy contained no monitoring protocols or controls governing TMC personnel's interactions with competitors at trade-association meetings, conferences, or other industry events. The Prior Policy provided no internal or external audit mechanism for reviewing or evaluating competitor contacts, communications, or the overall effectiveness of the compliance program. These deficiencies contributed to an environment in which the conduct described in Appendix B to the NPA was able to occur and persist without detection by TMC's compliance function.
The Program is required pursuant to the NPA and must remain in effect for the full three-year term of the NPA, commencing on May 6, 2024, and continuing through May 6, 2027 (the "NPA Term"). TMC further acknowledges and agrees that, beyond the NPA Term, the Company shall maintain the Program, or an antitrust compliance program of at least equivalent rigor, as a matter of good corporate governance and in furtherance of its ongoing obligations under applicable antitrust and competition laws.
B. Scope of Application
The Program applies to all directors, officers, employees, agents, and contractors of TMC and all of its subsidiaries, affiliates, and business units worldwide, regardless of the individual's title, function, geographic location, or the nature of their engagement with the Company (collectively, and as further defined in Section I.C below, "Covered Personnel"). No individual associated with TMC in any capacity is exempt from the requirements of this Program.
While the Program applies company-wide, particular emphasis shall be placed on the U.S. Specialty Minerals Division ("USMD"), the operating division at the center of the conduct described in Appendix B to the NPA. The USMD generated approximately USD 687 million in revenue during TMC's fiscal year ended December 31, 2021, representing approximately twenty percent (20%) of TMC's consolidated revenue for that period. The USMD is headquartered at TMC's Reno, Nevada office and is responsible for the mining, processing, marketing, and sale of specialty mineral products within the United States and for certain export markets. Given the USMD's central role in the underlying conduct, enhanced compliance protocols, heightened training requirements, and additional monitoring measures shall apply to all USMD personnel, as set forth throughout this Program.
The Program's coverage extends to all activities relating to the sale, pricing, marketing, distribution, and supply of all products manufactured, processed, or sold by TMC and its subsidiaries and affiliates. However, the Program imposes specific enhanced protocols for the three product categories that were at issue in the investigation underlying the NPA: (i) high-purity feldspar; (ii) industrial talc; and (iii) rare-earth concentrates. These enhanced protocols are described in Sections IV, V, VI, and IX of this Program and are designed to address the particular competitive dynamics, customer relationships, and market structures associated with these products.
The geographic scope of the Program encompasses all jurisdictions in which TMC operates, including, without limitation, its fourteen (14) active mining operations across Canada, the United States, Brazil, and Australia, and its six (6) downstream chemical-processing and refining facilities. Given that the conduct described in the NPA primarily affected North American markets, particular focus shall be placed on TMC's operations in the United States and Canada, including all interactions with competitors, customers, and trade associations operating in these jurisdictions. However, the Company acknowledges that antitrust and competition law compliance is a global imperative, and the Program's requirements shall be adapted and applied to all jurisdictions in which TMC operates, taking into account the requirements of applicable local law.
C. Defined Terms
As used in this Program, the following terms shall have the meanings set forth below. These definitions shall apply throughout this Appendix A and, where context permits, shall be consistent with the definitions set forth in the NPA.
"Antitrust Laws" means Section 1 of the Sherman Antitrust Act of 1890, as amended (15 U.S.C. § 1), and related provisions of United States antitrust law, including Section 2 of the Sherman Act (15 U.S.C. § 2), Section 3 of the Clayton Act (15 U.S.C. § 14), and the Federal Trade Commission Act (15 U.S.C. § 41 et seq.); the Competition Act, R.S.C., 1985, c. C-34 (Canada); and all equivalent competition, antitrust, or fair-trade laws in any other jurisdiction in which TMC operates, including but not limited to the Brazilian Competition Law (Law No. 12,529/2011), the Australian Competition and Consumer Act 2010 (Cth), and the competition laws of the European Union (Articles 101 and 102 of the Treaty on the Functioning of the European Union), to the extent applicable to TMC's activities.
"Competitor" means any entity or individual engaged in the mining, processing, sale, distribution, or marketing of high-purity feldspar, industrial talc, rare-earth concentrates, or related specialty minerals in any market in which TMC operates or sells products, including but not limited to Ridgecrest Minerals Inc. (a Delaware corporation) and Pinnacle Earth Resources Ltd. (an Australian corporation). The term "Competitor" also includes any subsidiary, affiliate, agent, or representative of such an entity, and any joint venture or consortium in which such an entity holds a material interest.
"Covered Personnel" means all TMC directors, officers, employees, agents, contractors, and consultants, whether engaged on a full-time, part-time, temporary, or contingent basis, in any jurisdiction worldwide, and all directors, officers, employees, agents, contractors, and consultants of TMC's subsidiaries, affiliates, and business units.
"Trade Association" means any industry association, trade association, professional organization, standard-setting body, or similar group whose membership includes or may include one or more Competitors of TMC, including but not limited to the North American Specialty Minerals Council ("NASMC"), located at 2300 Wilson Boulevard, Suite 400, Arlington, VA 22201, USA, and any regional, national, or international organizations with similar functions or membership.
"Competitively Sensitive Information" means any information the disclosure of which to a Competitor could facilitate anticompetitive conduct, including but not limited to: current, historical, or future pricing (including price lists, discount structures, rebates, surcharges, and pricing methodologies); production volumes, capacity, or utilization rates; customer identities, customer lists, or customer-specific contract terms; bid information, bid strategies, or bid pricing; market-allocation strategies, territory assignments, or supply-allocation plans; cost structures, including raw-material costs, processing costs, and transportation costs; product-development plans or strategic plans; and any other commercial, financial, or operational information that, if shared with a Competitor, could facilitate price-fixing, bid-rigging, market allocation, output restriction, or any other violation of the Antitrust Laws.
"Independent Compliance Monitor" or "Monitor" means the independent compliance monitor appointed pursuant to Section VIII of this Program and Section 12 of the NPA, with authority and responsibilities as described herein.
"Chief Compliance Officer" or "CCO" means the independent Chief Compliance Officer appointed pursuant to Section III of this Program, with authority and responsibilities as described herein.
"NPA" means the Non-Prosecution Agreement between TMC and the United States Department of Justice, Antitrust Division, dated May 6, 2024, DOJ Reference No. ATR-SF-2024-00312.
"NPA Term" means the three-year period commencing on May 6, 2024, and ending on May 6, 2027, as set forth in the NPA.
"Monitor Term" means the two-year period commencing on May 6, 2024, and ending on May 6, 2026, during which the Independent Compliance Monitor shall serve.
"Board Compliance Committee" means the standing committee of the Board of Directors designated to oversee the Program, or, if the Board designates its Audit Committee for this purpose, the Audit Committee acting in that capacity, as described in Section II.A.
II. COMMITMENT OF SENIOR MANAGEMENT
A. Board-Level Oversight
The Board of Directors of TMC (the "Board") (current Chair: Margaret Caldwell) shall exercise active and informed oversight of the Program. To that end, the Board shall maintain a standing Compliance Committee or shall designate the Audit Committee of the Board (current Chair: Janet Moreau-Shaw) to serve as the Board-level body responsible for overseeing the implementation and ongoing effectiveness of the Program (in either case, the "Board Compliance Committee"). The Board's resolution establishing or designating the Board Compliance Committee shall be adopted within thirty (30) days of the NPA execution date and shall set forth the committee's charter, membership, meeting schedule, and authority.
The Board Compliance Committee shall receive quarterly written reports from the CCO on the status of the Program. These quarterly reports shall address, at a minimum, the following matters: (i) the current status of the Program's implementation, including any pending implementation milestones; (ii) training completion rates across all divisions and business units, with specific reporting on USMD completion rates; (iii) a summary of any reported potential violations of the EACP or Antitrust Laws received during the quarter through any reporting channel; (iv) the status and outcome of any compliance investigations conducted or pending during the quarter; and (v) the results of any compliance audits completed during the quarter.
In addition to the quarterly reports, the Board shall receive, at minimum, an annual comprehensive compliance report from the CCO. The annual report shall provide a thorough assessment of the overall effectiveness of the Program, a summary of the year's compliance activities, identification of areas of risk, and recommendations for enhancements or modifications to the Program. The annual report shall be presented to the full Board at a regularly scheduled Board meeting and shall be made available to the Independent Compliance Monitor during the Monitor Term.
The Board Compliance Committee shall meet at least quarterly to discuss the CCO's reports and shall have the authority to direct the CCO to undertake additional compliance activities, investigations, or corrective measures as the committee deems appropriate. Minutes of all Board Compliance Committee meetings at which the Program is discussed shall be maintained and made available to the Monitor upon request.
B. CEO and General Counsel Annual Certifications
The Chief Executive Officer of TMC (currently Søren Dalmqvist) and the General Counsel of TMC (currently Priya Anand) shall each execute an annual written certification attesting to the following:
(i) that TMC has implemented and maintained the EACP during the preceding fiscal year in accordance with the requirements set forth herein and in the NPA;
(ii) that the certifying officer is not aware of any material violations of the Antitrust Laws by any Covered Personnel that have not been reported to the CCO, the Board Compliance Committee, the Independent Compliance Monitor (during the Monitor Term), and (where required) the DOJ Antitrust Division; and
(iii) that the certifying officer has reviewed the CCO's annual compliance report for the preceding fiscal year and has discussed the findings and recommendations contained therein with the CCO.
Each annual certification shall be executed within ninety (90) days of the end of each fiscal year during the NPA Term. For the avoidance of doubt, the first such certifications shall be due on or before March 31, 2025 (covering the period from NPA execution through December 31, 2024), and certifications shall continue to be required for each subsequent fiscal year through the fiscal year ending December 31, 2026 (with certifications due on or before March 31, 2027). Executed certifications shall be provided promptly to the DOJ Antitrust Division and, during the Monitor Term, to the Independent Compliance Monitor.
The template for the annual certifications shall be maintained by TMC and shall be based on the template prepared by Calderwood & Harkness LLP dated May 10, 2024 (the "Certification Template"). The Certification Template may be modified from time to time by the CCO in consultation with outside counsel, provided that any substantive modifications during the NPA Term shall be submitted to the DOJ Antitrust Division for review.
The annual certification requirement is intended to ensure that TMC's most senior leadership remains personally engaged with the compliance program and is not merely a formality. Each certifying officer shall conduct a good-faith inquiry sufficient to support the certifications made, including review of the CCO's annual compliance report, discussion with the CCO regarding any compliance concerns or issues, and such additional inquiry as the certifying officer deems appropriate.
C. Tone from the Top
TMC's senior leadership shall demonstrate, through both words and actions, an unequivocal commitment to compliance with the Antitrust Laws and to the requirements of this Program.
Within thirty (30) days of the execution of the NPA (i.e., by June 5, 2024), the CEO shall issue a written communication to all Covered Personnel worldwide reaffirming TMC's commitment to full compliance with the Antitrust Laws. This communication shall summarize the key elements of the EACP, including the Company's enhanced training requirements, Competitor-contact protocols, Trade Association policies, and reporting obligations. The communication shall emphasize TMC's zero-tolerance policy for antitrust violations and shall make clear that any Covered Personnel who engages in, facilitates, or conceals anticompetitive conduct will face serious consequences, up to and including termination of employment and referral for individual criminal prosecution. The communication shall be distributed in English, French, and Portuguese to ensure accessibility across TMC's global operations.
The CEO and the General Counsel shall participate personally in the annual antitrust compliance training sessions described in Section IV of this Program. At each such training session, the CEO and/or the General Counsel shall make introductory statements emphasizing the critical importance of antitrust compliance to TMC's business, reputation, and legal standing. These introductory statements shall be substantive and shall convey genuine commitment, not perfunctory participation.
Senior management of TMC, including the Chief Financial Officer (currently Richard Fong), the heads of all operating divisions, and the heads of all corporate functions with responsibility for commercial, sales, pricing, or marketing activities, shall communicate the compliance message consistently and visibly through their respective organizations. Division heads shall be responsible for ensuring that their personnel understand and comply with the requirements of the EACP and shall be held accountable for compliance failures within their organizations. The CCO shall work with senior management to develop and implement a communications plan to ensure that the compliance message is reinforced regularly, not only during annual training sessions but also through periodic reminders, newsletters, intranet postings, and management communications throughout the year.
III. APPOINTMENT OF INDEPENDENT CHIEF COMPLIANCE OFFICER
A. Qualifications and Independence
Within sixty (60) days of the NPA execution date (i.e., by July 5, 2024), TMC shall appoint a Chief Compliance Officer with direct and primary responsibility for the management, administration, and enforcement of the Program. The appointment of the CCO shall be a critical priority for TMC's leadership and shall be completed within the specified timeframe without exception.
The CCO must possess relevant professional experience in antitrust compliance, regulatory enforcement, corporate compliance, or a closely related field. Preferred qualifications include, without limitation, a law degree or equivalent professional qualification, prior experience in antitrust law or competition law enforcement, prior service as a compliance officer or in a senior compliance role, and familiarity with the mining and specialty minerals industry. The individual selected as CCO must have the professional stature, independence, and judgment necessary to carry out the responsibilities described herein.
The CCO must not have been involved in, or have had direct or indirect supervisory responsibility for, the conduct described in Appendix B to the NPA. The CCO must not have served in any capacity within the U.S. Specialty Minerals Division during the relevant period of the conduct under investigation. These requirements are intended to ensure the independence and credibility of the CCO and to avoid any actual or perceived conflict of interest.
The CCO shall report directly to the General Counsel on day-to-day administrative and operational matters. On all matters relating to the Program, the CCO shall have a direct and unrestricted reporting line to the Board Compliance Committee. This dual-reporting structure is intended to ensure that the CCO has appropriate access to both operational resources and Board-level oversight. The CCO shall have the right to request meetings with the Board Compliance Committee at any time and shall not be required to obtain approval from the General Counsel or any other member of management before communicating with the Board Compliance Committee on compliance matters.
To protect the independence of the CCO, TMC shall not terminate the CCO's employment, materially reduce the CCO's compensation, or materially diminish the CCO's authority or responsibilities without the prior approval of the Board. During the Monitor Term, any proposed termination, material reduction in compensation, or material diminishment of the CCO's authority or responsibilities shall also require prior written notice to the Independent Compliance Monitor. The CCO shall not be subject to retaliation or adverse action for the good-faith performance of their compliance responsibilities.
B. Responsibilities
The CCO shall have overall management and administration responsibility for the EACP. The CCO's responsibilities shall include, without limitation, the following:
(i) Design, development, delivery, and oversight of all antitrust compliance training programs, including annual training for Covered Personnel, new-hire training, and specialized training for USMD personnel, as described in Section IV;
(ii) Drafting, maintenance, review, and updating of all written compliance policies required by the Program, including the Antitrust Compliance Policy, the Competitor-Contact Policy, the Trade Association Interaction Policy, and the Electronic Communications Policy, as described in Section X;
(iii) Administration of the Competitor-contact pre-approval process described in Section V, including review and approval of pre-approval requests and maintenance of the Competitor-contact log;
(iv) Administration of the Trade Association interaction protocols described in Section VI, including pre-attendance briefings, review of post-event reports, and maintenance of Trade Association membership and personnel records;
(v) Administration of the compliance hotline and online reporting portal, receipt and evaluation of compliance reports, and coordination and conduct of internal investigations into reported potential violations, as described in Section VII;
(vi) Coordination with outside counsel (currently Calderwood & Harkness LLP) and the compliance consultant (currently Meridian Compliance Partners LLC) on all matters relating to the Program;
(vii) Coordination with the Independent Compliance Monitor during the Monitor Term, including facilitation of Monitor access, provision of documents and information, and review and implementation of Monitor recommendations;
(viii) Preparation and delivery of quarterly and annual compliance reports to the Board Compliance Committee and the General Counsel, as described in Section II.A;
(ix) Recommendation of disciplinary action for violations of the EACP or Antitrust Laws, and authority to escalate matters directly to the Board without management interference or pre-clearance; and
(x) Maintenance of comprehensive records of all compliance activities, investigations, training sessions, certifications, audit results, and other materials relating to the Program.
The CCO shall have unrestricted authority to access all relevant TMC documents, records, data, personnel, and systems, in any business unit, division, or geographic location, as necessary to perform their compliance functions. No member of management shall obstruct, delay, or interfere with the CCO's access to information or personnel.
C. Resources
TMC shall provide the CCO with adequate staff, budget, and resources to fulfill the CCO's responsibilities under this Program. The adequacy of the CCO's resources shall be assessed at least annually by the Board Compliance Committee, with input from the CCO and, during the Monitor Term, from the Independent Compliance Monitor. The CCO's budget shall be sufficient to fund, at a minimum, the compliance training program, the compliance hotline and reporting portal, internal compliance audits, and such outside counsel and consultant engagements as are necessary to maintain the Program.
The CCO shall have the authority to engage outside counsel or consultants as needed to assist with the performance of the CCO's responsibilities, subject to budgetary approval by the General Counsel or the Board Compliance Committee. Such engagements may include, without limitation, the retention of outside antitrust counsel to assist with training, the engagement of forensic data analysts to assist with communications reviews, and the retention of compliance consultants to assist with auditing or risk-assessment activities.
IV. MANDATORY ANTITRUST COMPLIANCE TRAINING
A. Annual Training Requirement
All Covered Personnel who serve in commercial, sales, pricing, marketing, business development, and executive roles shall complete mandatory annual antitrust compliance training. For the avoidance of doubt, the term "executive roles" includes all individuals at the level of Vice President and above, all division heads, and all members of the Company's executive committee or leadership team, regardless of whether their primary responsibilities are commercial in nature.
Training shall be conducted at minimum once per calendar year. The first training cycle under this Program must be completed within one hundred twenty (120) days of the NPA execution date (i.e., by September 3, 2024). Subsequent annual training cycles shall be completed by December 31 of each calendar year during the NPA Term.
Training for the U.S. Specialty Minerals Division personnel shall be conducted separately from training for other TMC business units and divisions. USMD training shall include enhanced, scenario-based modules specifically tailored to the risks identified in the investigation underlying the NPA. These enhanced modules shall address, in detail, the specific mechanisms by which the anticompetitive conduct occurred, including pricing coordination, bid-rigging, and customer allocation in the markets for high-purity feldspar, industrial talc, and rare-earth concentrates. USMD training shall be of sufficient duration and depth to address the heightened compliance risks associated with this division's operations.
B. Training Content
All antitrust compliance training sessions shall cover, at a minimum, the following topics:
(i) An overview of the applicable Antitrust Laws, including Section 1 of the Sherman Act (15 U.S.C. § 1), the distinction between per se violations and rule-of-reason analysis, the Competition Act (Canada), and relevant foreign competition laws applicable to TMC's operations;
(ii) Detailed instruction on specific prohibited conduct, including price-fixing (both horizontal and vertical), bid-rigging (including complementary bidding, bid suppression, and bid rotation), market allocation (including geographic allocation and customer allocation), output restrictions, and group boycotts;
(iii) Real-world scenarios drawn, in anonymized form, from the conduct underlying the NPA, designed to illustrate the practical risks that TMC personnel may encounter. These scenarios shall include, without limitation: the risks of exchanging Competitively Sensitive Information through encrypted messaging platforms, such as the VaultChat application identified in the investigation; the risks of side conversations, informal meetings, and social interactions at Trade Association events, such as the NASMC quarterly conferences at which certain of the conduct at issue occurred; and the risks of informal communications, including phone calls, text messages, and in-person meetings, with Competitor personnel outside of formal business settings;
(iv) TMC's obligations and protocols regarding Trade Association interactions, as set forth in Section VI of this Program, including the requirement for pre-attendance briefings, the prohibition on discussions of Competitively Sensitive Information, and the post-event reporting requirement;
(v) TMC's Competitor-contact protocols, as set forth in Section V of this Program, including the general prohibition on the exchange of Competitively Sensitive Information, the pre-approval process for planned Competitor contacts, the prohibition on unauthorized communication channels, and the post-contact reporting requirement;
(vi) Reporting obligations and whistleblower protections, as set forth in Section VII of this Program, including the availability and operation of the compliance hotline and online reporting portal, the right to report anonymously, and TMC's anti-retaliation policy;
(vii) The consequences of violations, including individual criminal liability (which under Section 1 of the Sherman Act may include imprisonment for up to ten (10) years and fines of up to USD 1,000,000 per individual per violation), corporate penalties (which may include fines of up to USD 100,000,000 or twice the gross gain or loss from the offense), civil treble-damages liability, and internal disciplinary measures up to and including immediate termination of employment, forfeiture of bonuses and deferred compensation, and referral for individual criminal prosecution.
C. Training Methodology
Antitrust compliance training shall be conducted through in-person or live-virtual training sessions led by qualified antitrust counsel or compliance professionals with substantive expertise in antitrust law and competition enforcement. Pre-recorded training modules may be used as supplements to, but shall not serve as the sole format for, the required annual training. The use of exclusively pre-recorded or self-directed online training, without a live interactive component, does not satisfy the requirements of this Program.
All training sessions shall include meaningful interactive components designed to engage participants and reinforce key concepts. Interactive components shall include, at a minimum, case-study discussions drawn from real-world antitrust enforcement actions, question-and-answer sessions with the trainer, and hypothetical exercises requiring participants to identify and respond to compliance risk scenarios. Training sessions shall be designed to encourage open discussion and to create an environment in which participants feel comfortable raising questions and concerns.
Training materials shall be reviewed and updated at least annually by the CCO, in consultation with outside antitrust counsel (currently Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, CA 94104) and the compliance consultant (currently Meridian Compliance Partners LLC, 1100 Connecticut Avenue NW, Suite 730, Washington, DC 20036). Updates shall reflect any changes in applicable law, regulatory guidance, enforcement trends, or internal compliance experience, including lessons learned from any compliance investigations or audits conducted during the preceding year. Updated training materials shall be reviewed by the Independent Compliance Monitor during the Monitor Term.
D. New Hire Training
All new hires who will serve in commercial, sales, pricing, marketing, business development, or executive roles must complete antitrust compliance training within thirty (30) days of their start date. New-hire training shall cover the same substantive topics as the annual training program and shall include the same interactive components. New hires who join TMC within ninety (90) days prior to the next scheduled annual training session may satisfy this requirement by attending the annual training session, provided that they also receive a preliminary compliance briefing from the CCO or designated compliance counsel within thirty (30) days of their start date.
Contractors and agents who will have access to Competitively Sensitive Information in the course of their engagement with TMC must complete abbreviated antitrust compliance training prior to commencing work. The abbreviated training shall cover, at a minimum, the definition of Competitively Sensitive Information, the prohibition on sharing such information with Competitors, the Competitor-contact protocols, and the obligation to report potential violations. The CCO shall be responsible for identifying contractors and agents subject to this requirement and for ensuring that the required training is delivered and documented.
E. Training Records
The CCO shall maintain comprehensive records of all training sessions conducted under this Program. Training records shall include, for each session: the date, time, and location (or virtual platform) of the session; the name and qualifications of the trainer; a copy of the training materials used; a list of all attendees, including each attendee's name, title, division, and location; and a signed or electronic certification from each attendee confirming completion of the training.
Training completion rates shall be calculated by the CCO on a quarterly basis and reported to the Board Compliance Committee as part of the quarterly compliance reports described in Section II.A. Training completion rates shall also be reported annually to the Independent Compliance Monitor (during the Monitor Term) and to the DOJ Antitrust Division as part of the annual compliance reporting. Any division or business unit with a training completion rate below ninety-five percent (95%) for any quarter shall be flagged for immediate corrective action, and the CCO shall report the deficiency and the corrective measures taken to the Board Compliance Committee.
V. COMPETITOR-CONTACT PROTOCOLS
A. General Prohibition
No Covered Personnel shall communicate or exchange Competitively Sensitive Information with any Competitor, directly or indirectly, without prior written authorization from the CCO or the General Counsel. This prohibition applies to all forms of communication, whether oral, written, or electronic, and whether conducted in person, by telephone, by email, by text message, through messaging applications, through intermediaries, or by any other means.
For purposes of this prohibition, Competitively Sensitive Information includes, without limitation:
(a) Current or future pricing, including price lists, discount structures, rebate programs, surcharges, pricing formulas, and pricing methodologies;
(b) Production volumes, production capacity, capacity-utilization rates, inventory levels, and planned changes to production;
(c) Customer identities, customer lists, customer-specific contract terms, and customer-specific pricing or discount arrangements;
(d) Bid information, including bid prices, bid strategies, decisions to bid or not to bid, and the terms of bids submitted or to be submitted;
(e) Market-allocation or territory-assignment strategies, including any plans, discussions, or understandings regarding the division of markets, customers, or geographic territories among Competitors; and
(f) Cost structures, including raw-material costs, processing costs, transportation costs, and labor costs, to the extent such information could be used to infer pricing strategies or competitive positioning.
The prohibition applies regardless of whether the communication is initiated by TMC personnel or by Competitor personnel. If a Competitor initiates a communication in which Competitively Sensitive Information is or may be discussed, TMC personnel must immediately terminate the communication, decline to participate, and report the incident as described in Section V.D below.
B. Pre-Approval Process
Any planned communication with a Competitor regarding a legitimate business purpose — such as joint-venture discussions, supply-agreement negotiations, industry standard-setting activities, or other lawful commercial transactions — must be pre-approved in writing by the CCO or the General Counsel prior to the communication taking place.
To obtain pre-approval, the requesting Covered Personnel shall submit a written pre-approval request to the CCO (or, in the CCO's absence, to the General Counsel) that includes the following information:
(a) The legitimate business purpose of the planned communication;
(b) The identity of the Competitor(s) and the specific individuals expected to participate in the communication;
(c) The specific topics to be discussed during the communication;
(d) A written confirmation that no Competitively Sensitive Information will be exchanged during the communication; and
(e) The anticipated date, time, and format (in-person, telephone, video conference) of the communication.
The CCO shall review each pre-approval request and shall approve or deny the request in writing, with such conditions or limitations as the CCO deems appropriate to minimize antitrust risk. The CCO may require that a compliance representative attend the communication, that the communication be limited to specific topics, or that a post-communication report be submitted. The CCO shall maintain a centralized log of all pre-approved Competitor contacts, including the information submitted in the pre-approval request, the CCO's approval or denial, any conditions imposed, and any post-communication reports received.
C. Prohibited Communication Channels
Covered Personnel are strictly prohibited from using non-company-approved encrypted messaging applications, ephemeral messaging platforms, or any other communication tools that are not subject to TMC's document-retention and monitoring policies for any business-related communications with Competitors or any third parties. This prohibition specifically includes, but is not limited to, the VaultChat application and any similar applications that provide end-to-end encryption, auto-deletion of messages, or other features designed to prevent the retention or review of communications.
All business-related communications must be conducted through TMC-approved channels, which currently include TMC company email (hosted on Ashgrove Software), TMC company-issued mobile phones, and TMC-approved messaging platforms (currently Northgate Data Systems). TMC-approved communication channels are subject to the Company's document-retention policies and are accessible for compliance monitoring purposes. The CCO, in consultation with TMC's information-technology department and the General Counsel, shall maintain a current list of approved communication channels and shall update this list as necessary to reflect changes in available technology.
Any Covered Personnel found to have used a non-approved communication channel for business-related communications shall be subject to disciplinary action, as described in Section VII.D, regardless of the content of the communication.
D. Post-Contact Reporting
Any unplanned or inadvertent contact with a Competitor in which Competitively Sensitive Information is discussed, solicited, or communicated — whether by the TMC employee or by the Competitor's representative — must be reported to the CCO within twenty-four (24) hours of the contact. The report shall include a description of the circumstances of the contact, the identity of the Competitor personnel involved, the topics discussed, the nature of any Competitively Sensitive Information exchanged, and the actions taken by the TMC employee in response (e.g., terminating the conversation, declining to participate).
The CCO shall promptly investigate all post-contact reports and shall document the investigation and its findings. Where the investigation reveals a potential violation of the EACP or the Antitrust Laws, the CCO shall follow the investigation and escalation procedures described in Section VII.C.
VI. TRADE ASSOCIATION INTERACTION POLICIES
A. Membership and Participation Approval
TMC's membership in any Trade Association must be approved in advance by the CCO and the General Counsel. For existing Trade Association memberships as of the NPA execution date, the CCO shall conduct a review of each membership within ninety (90) days of the CCO's appointment and shall confirm or recommend discontinuation of each membership based on an assessment of the antitrust risks and legitimate business benefits associated with the membership.
All TMC personnel designated to attend Trade Association meetings, conferences, symposia, working groups, or other events — including, without limitation, the NASMC quarterly conferences — must receive a pre-attendance antitrust compliance briefing from the CCO or designated compliance counsel prior to each event. The pre-attendance briefing shall review the key requirements of Section VI of this Program, remind attendees of the types of discussions and interactions that are prohibited, and provide attendees with practical guidance on how to respond if Competitively Sensitive Information is raised during a Trade Association event.
The CCO shall maintain a current and comprehensive list of all Trade Associations in which TMC holds membership and all TMC personnel authorized to participate in Trade Association activities. This list shall be updated as memberships are added or discontinued and as personnel authorizations change, and shall be made available to the Independent Compliance Monitor upon request.
B. Conduct at Trade Association Events
TMC personnel attending Trade Association events shall comply with the following requirements at all times:
(i) TMC personnel shall not participate in any discussions, whether formal or informal, regarding pricing, customers, bids, production volumes, capacity, market allocation, territory assignment, or any other Competitively Sensitive Information with representatives of Competitors. This prohibition applies to discussions occurring during formal meeting sessions, panel discussions, working-group meetings, and all informal settings, including meals, receptions, social events, and hallway conversations.
(ii) If TMC personnel find themselves present at any meeting, session, or informal gathering at which Competitively Sensitive Information is being discussed by Competitor representatives or others, the TMC personnel must leave the meeting, session, or gathering immediately, must ensure that their departure is noted in any official minutes or attendance records, and must report the incident to the CCO within twenty-four (24) hours.
(iii) TMC personnel shall not attend any side meetings, dinners, receptions, social events, or other gatherings with Competitor personnel at or in connection with Trade Association events unless the gathering is on the official event agenda, its purpose is documented and consistent with legitimate Trade Association business, and the CCO or designated compliance counsel has approved attendance in advance.
(iv) Under no circumstances shall TMC personnel have private one-on-one meetings with Competitor personnel on the margins of, or in connection with, Trade Association events without prior written approval from the CCO. Any such approved meeting shall be limited to the specific legitimate business purpose for which approval was granted.
C. Post-Event Reporting
Within five (5) business days of attending any Trade Association event, each TMC attendee shall submit a written post-event report to the CCO. The post-event report shall include, at a minimum:
(a) The name and date of the Trade Association event;
(b) A list of all meetings, sessions, working groups, and other activities attended by the TMC employee;
(c) A summary of the topics discussed in each meeting or session;
(d) The identities of any Competitor personnel encountered during the event, including the context of the encounter (e.g., formal meeting, informal conversation);
(e) A description of any concerns regarding potential antitrust issues, including any instances in which Competitively Sensitive Information was raised or in which the TMC employee felt uncomfortable with the direction of a discussion; and
(f) A confirmation that the TMC employee complied with all requirements of this Section VI.
The CCO shall review all post-event reports promptly upon receipt and shall investigate any concerns raised. Post-event reports shall be maintained by the CCO as part of the compliance records described in Section XI.
VII. REPORTING, WHISTLEBLOWER PROTECTIONS, AND INVESTIGATIONS
A. Reporting Channels
TMC shall establish and maintain a confidential compliance hotline and an online reporting portal accessible to all Covered Personnel worldwide for reporting known or suspected violations of the EACP, the Antitrust Laws, or any other TMC compliance policy. The compliance hotline shall be operational twenty-four (24) hours per day, seven (7) days per week, and shall be available in the primary languages of TMC's operations (English, French, and Portuguese). The online reporting portal shall be accessible from any internet-connected device and shall provide a secure mechanism for submitting reports.
Reports may be made anonymously through the compliance hotline or the online reporting portal, where permitted by applicable local law. TMC shall not attempt to identify anonymous reporters except as necessary to investigate the substance of the report.
In addition to the compliance hotline and reporting portal, reports of known or suspected violations may be made directly to the CCO, the General Counsel, or any member of the Board Compliance Committee. TMC shall publicize the availability of all reporting channels through annual training, intranet postings, posters in common areas at TMC facilities, and periodic communications from senior management.
B. Anti-Retaliation Protections
TMC shall adopt and enforce a written anti-retaliation policy ensuring that no Covered Personnel who in good faith reports a known or suspected violation of the EACP, the Antitrust Laws, or any other TMC compliance policy shall be subject to retaliation, demotion, termination, suspension, harassment, discrimination, or any other adverse employment action as a consequence of making such a report. The anti-retaliation policy shall apply regardless of whether the report is ultimately substantiated, provided the report was made in good faith.
The anti-retaliation policy shall be communicated to all Covered Personnel during annual antitrust compliance training sessions, shall be included in the written Antitrust Compliance Policy distributed to all Covered Personnel, and shall be prominently displayed on TMC's intranet. Any Covered Personnel who believes they have been subjected to retaliation for making a good-faith compliance report may report the retaliation through any of the reporting channels described in Section VII.A, and all such reports of retaliation shall be investigated with the same rigor and attention as reports of underlying compliance violations.
Any Covered Personnel found to have engaged in retaliation against a good-faith reporter shall be subject to disciplinary action, up to and including termination of employment.
C. Investigation Procedures
All reports of potential violations of the EACP or the Antitrust Laws shall be investigated promptly and thoroughly by the CCO, with the assistance of outside counsel, forensic consultants, or other resources as appropriate to the nature and severity of the reported conduct. The CCO shall acknowledge receipt of each report within five (5) business days (or as soon as practicable in the case of anonymous reports) and shall commence an investigation within ten (10) business days of receiving a report.
Investigations shall be conducted in a manner that protects the confidentiality of the reporter and the integrity of the investigative process, consistent with applicable law. The CCO shall document each investigation, including the nature of the report, the steps taken to investigate, the evidence reviewed, the individuals interviewed, the findings, and the conclusions reached.
Where an investigation reveals a potential violation that is substantiated by the evidence, the CCO shall report the findings to the General Counsel, the Board Compliance Committee, and, during the NPA Term, the Independent Compliance Monitor. Where required by TMC's cooperation obligations under the NPA, substantiated violations of the Antitrust Laws shall be reported promptly to the DOJ Antitrust Division through TMC's outside counsel.
The CCO shall maintain a log of all reports received, investigations conducted, and outcomes, and shall include a summary of this information in the quarterly and annual reports to the Board Compliance Committee.
D. Disciplinary Measures
TMC shall impose appropriate disciplinary measures for violations of the EACP or the Antitrust Laws. Disciplinary measures may include, without limitation, written reprimand, mandatory additional training, temporary or permanent reassignment, suspension, demotion, reduction in compensation, forfeiture of bonuses or deferred compensation, termination of employment, and referral for individual criminal prosecution.
The severity of disciplinary measures shall be proportionate to the nature, severity, and circumstances of the violation, taking into account factors such as whether the violation was intentional or inadvertent, whether the violator self-reported the conduct, and whether the violator has a prior history of compliance violations. However, TMC shall apply disciplinary measures consistently regardless of the seniority, tenure, or position of the individual who committed the violation. No individual shall be exempt from discipline by virtue of their rank or their importance to TMC's business operations.
Records of all disciplinary actions taken in connection with antitrust compliance matters shall be maintained by the CCO and shall be included in the CCO's reports to the Board Compliance Committee and the Independent Compliance Monitor.
VIII. INDEPENDENT COMPLIANCE MONITOR
A. Appointment
Pursuant to Section 12 of the NPA, TMC shall retain an Independent Compliance Monitor for a period of two (2) years from the NPA execution date (i.e., from May 6, 2024, through May 6, 2026) (the "Monitor Term"). The Monitor shall be an entity or individual with demonstrated expertise in antitrust compliance, corporate governance, and regulatory matters, and shall be independent of TMC and its directors, officers, and employees.
The Monitor shall be selected and appointed in accordance with the process set forth in the NPA and must be approved by the DOJ Antitrust Division. Meridian Compliance Partners LLC (Engagement Lead: Claudia Ferraro; 1100 Connecticut Avenue NW, Suite 730, Washington, DC 20036) has been pre-approved by the DOJ Antitrust Division to serve as the Monitor for the Monitor Term.
B. Monitor Authority and Access
The Monitor shall have full and unrestricted access to TMC's books, records, documents, data, personnel, facilities, and systems as necessary to assess TMC's implementation of and compliance with the EACP. This access shall include, without limitation, the right to review TMC's financial records, commercial contracts, electronic communications, training records, compliance investigation files, Competitor-contact logs, Trade Association post-event reports, and all other documents and materials related to the Program.
TMC shall cooperate fully and promptly with the Monitor and shall instruct all Covered Personnel to cooperate fully with any requests from the Monitor for information, documents, or interviews. Failure by any Covered Personnel to cooperate with the Monitor shall constitute a violation of this Program and may result in disciplinary action.
The Monitor may conduct unannounced site visits to any TMC facility, office, or mine site at any time during the Monitor Term. The Monitor may conduct interviews of any TMC personnel, including senior management, division heads, commercial and sales personnel, and any other individuals the Monitor deems relevant to the assessment of TMC's compliance. The Monitor may review TMC's electronic communications, including email, messaging, and other communications conducted through TMC-approved channels, as part of the Monitor's assessment of compliance with the Competitor-contact protocols and other elements of the Program.
TMC shall designate a senior point of contact (the CCO, unless otherwise agreed) to serve as the primary liaison between TMC and the Monitor and to facilitate the Monitor's access and activities.
C. Monitor Reporting
The Monitor shall submit written reports to both the DOJ Antitrust Division and the TMC Board Compliance Committee at minimum semi-annually during the Monitor Term. Accordingly, the Monitor shall produce a total of four (4) reports during the Monitor Term, at intervals of approximately six (6) months, with the first report due on or about November 6, 2024, and the final report due on or about May 6, 2026.
Each Monitor report shall assess TMC's compliance with the requirements of the EACP, identify any deficiencies or areas of concern, evaluate the effectiveness of the Program's controls and procedures, and recommend corrective actions where appropriate. The Monitor's reports shall be based on the Monitor's independent assessment and shall reflect the Monitor's professional judgment.
TMC shall implement the Monitor's recommendations within sixty (60) days of receipt of the relevant report, unless TMC objects in writing to the DOJ Antitrust Division within fifteen (15) days of receipt of the recommendation. In the event of an objection, TMC shall set forth the specific basis for its objection and any proposed alternative measures. The DOJ Antitrust Division shall have the final determination as to whether TMC must implement the recommendation as made, implement an alternative measure, or is excused from the recommendation.
D. Monitor Fees and Expenses
TMC shall bear all reasonable fees and expenses of the Monitor incurred during the Monitor Term. Fees and expenses incurred by Meridian Compliance Partners LLC through the NPA execution date total approximately USD 1,100,000, reflecting the firm's involvement in the compliance review, program design, and NPA negotiation process. Ongoing fees during the two-year Monitor Term shall be incurred separately and shall be borne solely by TMC. The Monitor's fee arrangement shall be set forth in a separate engagement letter between TMC and the Monitor, subject to review by the DOJ Antitrust Division for reasonableness.
TMC shall not use the cost of the monitorship as a basis for reducing the resources allocated to the CCO or the Program. The Monitor's fees and expenses are an obligation separate from and in addition to the resources required to maintain the Program.
IX. COMPLIANCE AUDITS
A. Annual Internal Compliance Audit
The CCO, with the assistance of outside counsel, compliance consultants, or internal audit personnel as necessary, shall conduct an annual internal audit of TMC's compliance with the EACP (the "Annual Compliance Audit"). The first Annual Compliance Audit shall be completed within twelve (12) months of the NPA execution date (i.e., by May 6, 2025), and subsequent audits shall be completed annually thereafter during the NPA Term.
The Annual Compliance Audit shall include, at a minimum, the following components:
(a) Review of training records and completion rates, including an assessment of whether all required personnel completed training within the required timeframes;
(b) Review of Competitor-contact logs and pre-approval requests, including an assessment of whether the pre-approval process is being followed consistently and whether any unauthorized Competitor contacts occurred;
(c) Review of Trade Association post-event reports, including an assessment of whether all required reports were submitted and whether any concerns were identified and appropriately addressed;
(d) Review of compliance hotline and reporting-portal activity, including the number and nature of reports received, the timeliness and thoroughness of investigations, and the outcomes of investigations;
(e) Assessment of the effectiveness of written compliance policies and procedures, including whether policies are current, accessible, and understood by Covered Personnel; and
(f) Evaluation of the overall effectiveness of the Program in preventing, detecting, and addressing potential antitrust violations.
B. Scope of Audit
The Annual Compliance Audit shall cover all TMC business units, divisions, and geographic locations. However, consistent with the enhanced compliance requirements applicable to the USMD, the Annual Compliance Audit shall include enhanced scrutiny of the U.S. Specialty Minerals Division and any other business units or divisions involved in the sale, marketing, or distribution of high-purity feldspar, industrial talc, and rare-earth concentrates.
The Annual Compliance Audit shall include a review of electronic communications conducted through TMC-approved channels (including company email and approved messaging platforms) for compliance with the Competitor-contact protocols set forth in Section V. The scope of the electronic-communications review shall be determined by the CCO in consultation with outside counsel and, during the Monitor Term, with the Monitor, and shall be designed to identify potential unauthorized communications with Competitors or the use of non-approved communication channels.
C. Audit Reports
The results of each Annual Compliance Audit shall be documented in a written audit report. The audit report shall be presented to the CCO, the General Counsel, and the Board Compliance Committee. During the NPA Term, the audit report shall also be provided to the Independent Compliance Monitor. The audit report shall identify any deficiencies or weaknesses in the Program and shall include specific recommendations for corrective action.