The Corporate Governance Committee (the "Committee") is a standing committee appointed by the Board. The Committee is responsible for overseeing and assessing the functioning of the Board and the committees of the Board and for the development, recommendation to the Board, implementation and assessment of effective corporate governance principles. The Committee's responsibilities also include identifying candidates for director and recommending that the Board select qualified director candidates for election at the next annual meeting of shareholders ("Annual Meeting").
Procedures, Powers And Duties
In addition to the procedures and powers set out in the resolution of the Board establishing this Committee, the Committee shall have the following procedures, powers and duties:
(a) Composition - Each member of the Committee shall be both an "unrelated" director and "independent" director (as such terms are defined from time to time under the requirements or guidelines for compensation committee or corporate governance committee service under applicable securities laws and the rules of any stock exchange on which the Company's securities are listed for trading).
(b) Separate Executive Meetings - The Committee shall meet at least twice every year, and more often as warranted, with the Chief Executive Officer and the Corporate Secretary to discuss any matters that the Committee or either of these individuals believes should be discussed privately. However, the Committee shall also meet periodically without management present.
(c) Professional Assistance - The Committee may retain special legal, accounting, financial or other consultants to advise the Committee at the Company's expense including sole authority to retain and terminate any search firm to be used to identify director candidates and to approve any such firm's fees and other retention terms.
(d) Reporting to the Board - The Committee will report through the Committee Chair to the Board following meetings of the Committee on matters considered by the Committee.
Board Composition and Director Nominations
2. The Committee shall identify and recommend to the Board qualified director nominees for election at the Annual Meeting.
3. The Committee shall:
(a) review from time to time the size of the Board;
(b) develop and review periodically standards to be applied in making determinations as to the presence or absence of material relationships between a director and the Company;
(c) review annually the competencies, skills and personal qualities required of directors in order to add value to the Company, in light of:
(i) the opportunities and risks facing the Company and the Company's proposed strategy;
(ii) the need to ensure that a majority of the Board is comprised of individuals, each of whom is an "unrelated" director and an "independent" director (as such terms are defined from time to time under the requirements or guidelines for board service under applicable securities laws and the rules of any stock exchange on which the Company's securities are listed for trading); and
(iii) the Company's corporate governance guidelines and Board policies with respect to director tenure, retirement and succession and the number of boards on which directors may sit.
(d) review periodically the competencies, skills and personal qualities of each existing director, and the contributions made by the director to the effective operation of the Board and review any significant change in the primary occupation of the director; and
(e) in light of (a), (b) and (c) above, make recommendations for changes to the composition of the Board.
4. The Committee shall recruit and consider candidates for director, including any candidates recommended by shareholders, having regard for the background, employment and qualifications of possible candidates. The Committee shall:
(a) consider whether the candidate's competencies, skills and personal qualities are aligned with the Company's needs and any criteria for selecting new directors established by the Board; and
(b) ensure the candidate understands the demands and expectations of a director of the Company.
Director Compensation and Protection
5. The Committee shall recommend to the Board the terms upon which directors shall be compensated. The Committee shall recommend terms for the compensation of directors, the Chair of the Board and those acting as committee chairs that adequately reflect the responsibilities they are assuming.
6. The Committee shall receive a report from management with respect to the directors and officers insurance policy of the Company and make recommendations for its renewal or amendment or the replacement of the insurer.
7. The Committee is responsible for reviewing at least annually the Company's approach to governance issues and shall make recommendations to the Board respecting revisions to the Company's corporate governance guidelines. The Committee shall make recommendations to the Board respecting the number of boards on which directors may sit and Board policies with respect to director tenure, retirement and succession.
8. The Committee shall approve, in appropriate circumstances, the engagement of an outside advisor by an individual director at the expense of the Company.
9. The Committee shall review any changes recommended by management regarding the Company's Corporate Disclosure Policy, and revise as necessary the policy with respect to insider trading in the Company's securities. The Company's insider trading policy shall impose mandatory black-out periods during which directors and senior management of the Company are prohibited from trading in securities of the Company.
10. The Committee shall periodically review management's systems and practices for ensuring that all directors and all officers of the Company who are required to do so file insider reports in connection with any trade of securities of the Company or any derivative transaction which results in the effective disposition of the individual's economic interest in a security of the Company within the shortest period of time in which such reports are required to be filed.
Director Orientation and Continuing Education
11. The Committee shall oversee an orientation program to familiarise new directors with the Company's business and operations, including the Company's reporting structure, strategic plans, significant financial, accounting and risk issues and compliance programs and policies, management and the external auditors. The Committee shall oversee ongoing education for all directors.
12. The Committee shall annually review and make recommendations to the Board for changes to the Mandate for the Board and the position description for the Chair of the Board.
13. The Committee shall conduct annual surveys of directors with respect to their views on the effectiveness of the Board, the Chair of the Board, each committee of the Board and its Chair and the contribution of individual directors.
14. The Committee shall evaluate the performance of the Chair of the Board, having regard for the position description for the Board Chair and the Board Chair's attendance at Board and Board committee meetings and overall contribution.
15. The Committee shall also annually assess the effectiveness of the Board as a whole and each committee of the Board, including this Committee, and make recommendations to the Board.
Operations of the Board
16. The Committee shall assess the needs of the Board and make recommendations with respect to rules and guidelines governing and regulating the affairs of the Board, including:
(a) the frequency and location of Board and committee meetings;
(b) procedures for establishing meeting agendas and the conduct of meetings; and
(c) the availability, relevance and timeliness of discussion papers, reports and other information required by the Board.
17. At the first meeting of the Board following each Annual Meeting, the Chair of the Committee shall recommend to the Board the allocation of directors to each of the Board committees. Thereafter, when a vacancy occurs at any time in the membership of any Board committee, the Committee shall recommend a particular director to the Board to fill such vacancy.
18. The Committee shall review from time to time, and at least annually, the charters of the committees of the Board and make recommendations regarding the charters to the Board and recommend, in consultation with the Chair of the Board, timely changes in the role, size, composition and structure of Board committees.
19. The Committee shall monitor and assess the relationship between the Board and management, defining the limits to management's responsibilities and making such recommendations as it may deem necessary with a view to ensuring that the Board is able to function independently of management.
Reporting and Disclosure Requirements
20. The Committee shall annually prepare, review and approve the corporate governance report to be made in either the annual report to shareholders or the proxy circular prepared in connection with the Annual Meeting. The corporate governance report shall describe the corporate governance practices of the Company with reference to the reporting requirements of the Toronto Stock Exchange and disclose the number of Board and committee meetings held during the preceding calendar year and attendance of individual directors at all meetings.
21. The Committee shall undertake on behalf of the Board such other corporate governance initiatives as may be necessary or desirable to enable the Board to provide effective corporate governance for the Company and contribute to the success of the Company and enhance shareholder value.
The Committee shall review and reassess the adequacy of this Charter at least annually and otherwise as it deems appropriate and recommend changes to the Board. Each year the Committee shall review its performance with reference to this Charter.
The Committee shall ensure that this Charter is disclosed on the Company's website and that this Charter or a summary of it which has been approved by the Committee is disclosed in accordance with all applicable securities laws or regulatory requirements in the annual proxy circular or annual report of the Company.
Dated December 2003