TELECONFERENCE ON CORPORATE GOVERNANCE Thursday, January 22, 2004

1. TELECONFERENCE ON CORPORATE GOVERNANCE Thursday, January 22, 2004

2. PAT FINNERTYPartner, Blakes CalgaryTel 403.260.9608 Fax 403.960.9700pcf@blakes.com AREAS OF PRACTICECorporate GovernanceMergers & AcquisitionsSecurities DAVID JACKSONPartner, Blakes TorontoTel 416.863.2636 Fax 416.863.2653david.jackson@blakes.com AREAS OF PRACTICEBusinessCorporate Governance Mergers & AcquisitionsSecurities PETER KALBFLEISCHPartner, Blakes VancouverTel 604.631.3377 Fax 604.631.3309peter.kalbfleisch@blakes.com AREAS OF PRACTICEBusinessChina PracticeCorporate Governance SecuritiesSports & Entertainment DENIS BOUDREAULTPartner, Blakes MontréalTel 514.982.4004 Fax 514.982.4099denis.boudreault@blakes.com AREAS OF PRACTICECorporate GovernanceFinancial ServicesMergers & AcquisitionsSecurities ALAN BELLPartner, Blakes TorontoTel 416.863.2662 Fax 416.863.2653alan.bell@blakes.com AREAS OF PRACTICEBusinessCorporate GovernanceMergers & Acquisitions Securities WELCOME AND INTRODUCTIONS ALISON JEFFREYChief Client Relations/Marketing OfficerBlakes TorontoTel 416.863.4152 Fax 416.863.2653E-mail: alison.jeffrey@blakes.com PAMELA HUGHESPartner, Blakes TorontoTel 416.863.2226 Fax 416.863.2653pamela.hughes@blakes.com AREAS OF PRACTICEBusiness Corporate GovernanceSecurities • E-mail questions to governance@blakes.com

3. DAVID JACKSONPartner, Blakes TorontoTel 416.863.2636 Fax 416.863.2653david.jackson@blakes.com AREAS OF PRACTICEBusinessCorporate Governance Mergers & AcquisitionsSecurities OVERVIEW OF NEW RULES • Multilateral Instrument 58-101 — Disclosure of Corporate Governance Practices • Multilateral Policy 58-201 — Effective Corporate Governance • Multilateral Instrument 52-110 — Audit Committees • Multilateral Instrument 52-109 — Certification of Disclosure • Released January 16, 2004

4. CADBURY REPORT • 1992 - UK Initiative that influenced Corporate Governance standards in Canada • DEY REPORT • 1994 - TSX commissioned report building on Cadbury recommendations • TSX REVIEW OF CORPORATE GOVERNANCE PRACTICES • 2003 - Revealed increased compliance with TSX Guidelines (82% vs. 69% in 2002) • SAUCIER REPORT • 2001 - Combined TSX, CICA & CDNX Initiative: suggested refinements to existing TSX Guidelines • CSA RULES & GUIDELINES • January 2004 - Intended to replace TSX Guidelines EVOLUTION OF CORPORATE GOVERNANCE STANDARDS IN CANADA

5. PETER KALBFLEISCHPartner, Blakes VancouverTel 604.631.3377 Fax 604.631.3309peter.kalbfleisch@blakes.com AREAS OF PRACTICEBusinessChina PracticeCorporate Governance SecuritiesSports & Entertainment HIGHLIGHTS OF THE NEW RULES Overview • New Corporate Governance Rules consist of: • Recommended Best Practices for Corporate Governance • Rule setting out Mandatory Disclosure Requirements • Open for Comment until April 15, 2004

6. HIGHLIGHTS OF THE NEW RULES Recommended Best Practices • Disclosure-based: disclosure must be made whether in compliance with certain recommended best practices, and if not, why not • Approach recognizes “one size does not fit all” • 18 recommended best practices vs. 14 under existing TSX Guidelines

7. HIGHLIGHTS OF THE NEW RULES New Developments • New standard of Director Independence - replaces “unrelated director” concept under TSX Guidelines • Enhanced provisions aimed at ensuring effective operation of Board independent from management • Recommendation that Board adopts a written Mandate, assuming responsibility for satisfying itself as to integrity of CEO and other senior officers, and including a clear division of responsibilities between the Board and management

8. HIGHLIGHTS OF THE NEW RULES New Developments (Cont’d) • Recommendation that Board adopts a written Code of Ethics applicable to Directors, Officers and Employees • Board responsible for monitoring compliance with Code • Any waiver of Code for benefit of Directors or Senior Officers to be granted only by Board or Board Committee • Recommendation that Nominating & Compensation Committees be appointed - enhanced provisions to ensure their independence, including recommendation that they be composed entirely of independent directors

9. HIGHLIGHTS OF THE NEW RULES New Developments(Cont’d) • Recommendation that a written Charter be adopted for Nominating & Compensation Committees covering purpose, responsibilities, member qualifications, member approvals and manner of reporting to the Board • Recommendation that the Board conduct regular assessments of Committees and individual Directors

10. HIGHLIGHTS OF THE NEW RULES Disclosure Requirements • Corporate Governance Practices must be disclosed in AIF in accordance with requirements of Form 58-101F1 • AIF disclosure must also be cross-referenced (but not reproduced) in the issuer’s Management Proxy Circular • Venture Issuers - disclosure must be made in the Management Proxy Circular, unless not required to be sent to shareholders, in which case it is to be included in AIF or annual MD&A

11. HIGHLIGHTS OF THE NEW RULES Disclosure Requirements (Cont’d) • Filing of Code of Ethics and Amendments to Code • if a Code is adopted, must be filed no later than deadline for filing of annual financial statements • amendments to Code must be filed within 30 days after Board approval • Press Release required where Board grants waiver of Code of Ethics in favour of an Officer or Director • Press Release must include: • Nature of Waiver • Name of Beneficiary of Waiver • Basis for Granting Waiver • Date of Waiver

12. ALAN BELLPartner, Blakes TorontoTel 416.863.2662 Fax 416.863.2653alan.bell@blakes.com AREAS OF PRACTICEBusinessCorporate GovernanceMergers & Acquisitions Securities DIRECTOR INDEPENDENCE • New Rules adopt a two-fold definition of “Independence”: • broad factually-based test, and • specifically identified situations in which a Director will not be independent • Director is independent if he or she has no direct or indirect material relationship with the issuer • A “material relationship” is one that could, in the view of the issuer’s Board, reasonably interfere with the exercise of a Director’s independent judgment • Independence is not a static concept and should be reviewed periodically to ensure changed circumstances do not undermine previously valid conclusions -- Oracle case in the U.S. is illustrative of this

13. Auditor Relationship Cross Compensation Committee Link Compensation of >$75,000 per annum Employment or Retainer DIRECTOR INDEPENDENCE • Lookback period for determining existence of relationships: 3 years (but no further than March 30, 2004) • There are also prescribed situations in which a Director will be considered to have a material relationship with an issuer: “Material Relationship” • Includes Relationships with Director’s “Immediate Family Members” • Spouse • Parent • Child • Sibling • Mother/Father-in-law • Son/Daughter-in-law • Anyone who shares the same home (other than an employee)

14. DIRECTOR INDEPENDENCE • Additional Audit Committee Independence Issues • Not Independent if: • Director receives fees from issuer, other than remuneration received for acting in capacity as Board or Committee member • Director is an “affiliated entity” of the issuer or any of its subsidiaries • Director (a) controls the issuer or a subsidiary, or (b) is a director and employee of the issuer or an executive officer, general partner or managing member of an issuer • “Safe harbour” provided that ownership of 10% or less of the voting securities of the issuer, provided further an individual is not an executive officer, will not give rise to “affiliated entity” status

15. AUDIT COMMITTEE RULE Implementation • Expected implementation date: March 30, 2004 • Will not apply to an issuer until earlier of: • first annual meeting held after June 1, 2004 and • July 1, 2005 • Significant changes to June 2003 draft rule

16. AUDIT COMMITTEE RULE Important Changes to Draft Rule • Requirement to disclose whether an "audit committee financial expert" is serving on the audit committee replaced with rule requiring issuers to describe financial education and experience of each committee member relevant to discharge of the committee's responsibilities • Pre-approval of non-audit services of performed by the auditor -- adoption of relevant policies and procedures

17. AUDIT COMMITTEE RULE Important Changes to Draft Rule(Cont’d) • Controlled companies -- exemption from the "affiliated entity" portion of the definition of independence provided certain conditions are met and the audit committee member: 1. is otherwise independent 2. is not an executive officer or similar of an affiliated entity of the issuer which is publicly traded 3. is not an immediate family member of an executive officer or similar of an affiliated entity of the issuer which is publicly traded 4. does not act as Chair of the audit committee • The final rule exempts reporting issuers that are "SEC foreign issuers" from compliance with the rule

18. PAT FINNERTYPartner, Blakes CalgaryTel 403.260.9608 Fax 403.960.9700pcf@blakes.com AREAS OF PRACTICECorporate GovernanceMergers & AcquisitionsSecurities REVIEW OF BEST PRACTICES— BEYOND THE RULES • State-of-the-art Governance Practices companies may wish to consider in some cases exceed the minimum standards recommended by the New Rules • Determination of Independence • Best practices would require each Director or nominee to identify all relationships he or she has with the issuer, and the independent Board members to consider whether any such relationship compromises the individual’s independence • Best practices would also include disclosure of all relationships considered by the Board and the basis on which the Board reached its conclusion on independence • Audit Committee Rule standard on director independence constitutes best practice

19. REVIEW OF BEST PRACTICES— BEYOND THE RULES • Independent Board • Best practice is for substantially all directors to be independent • Independent Chair • A critical best practice and a key factor in permitting a Board to provide independent leadership to the issuer • Independent Committee • Best practice is for all Board committees to be fully independent and to include an independent committee assigned specific responsibility for supervising the corporate governance of the issuer

20. REVIEW OF BEST PRACTICES— BEYOND THE RULES • Committee Reports • This best practice would require each Board committee to provide an annual written report to shareholders as to committee activities and achievements over the past year and its agenda for the upcoming year • Although as yet infrequently implemented, this practice would require committees to better consider how they implement their responsibilities and enhance accountability to shareholders • Board Self-Evaluation • Best practice in this area would include retaining an outside consultant who assists in setting up and administering a peer evaluation process aimed at obtaining critical analysis from directors

21. REVIEW OF BEST PRACTICES— BEYOND THE RULES • Board Self-Evaluation(cont’d) • Results of the process are reported to the Board in order to identify areas where Board practices can be improved • Controlling Shareholders • The New Rules do not provide guidance in cases where a company has a controlling shareholder, unlike the TSX Guidelines • Best practices would require the Board to consider any relationship arising from shareholding in its determination of whether a given Director is independent

22. PAMELA HUGHESPartner, Blakes TorontoTel 416.863.2226 Fax 416.863.2653pamela.hughes@blakes.com AREAS OF PRACTICEBusiness Corporate GovernanceSecurities CANADA/U.S. COMPARISON • The New Rules reflect clearly the influence of developments in the U.S., including the NYSE rules on Corporate Governance • A key distinction, however, is that the New Rules maintain the existing guidelines and disclosure approach, rather than the U.S. approach of mandating compliance

23. CANADA/U.S. COMPARISON • Implications for Inter-listed Canadian companies • NYSE Foreign Private Issuer Exemption • Controls and limits on Management: New Rules vs SOX/NYSE Rules • Division of Chair & CEO Roles/lead Director Independence • Individual Director Assessments – higher standard under New CSA Rules • Disclosure Requirements – continuous disclosure document (AIF) vs. Web site or other means

24. DENIS BOUDREAULTPartner, Blakes MontréalTel 514.982.4004 Fax 514.982.4099denis.boudreault@blakes.com AREAS OF PRACTICECorporate GovernanceFinancial ServicesMergers & AcquisitionsSecurities INSTITUTIONAL INVESTORS’ PERSPECTIVE • CCGC, Caisse des Dépôts, CPP, OMERS and Teachers proxy voting guidelines and corporate governance recommendations have influenced issuer practice • New Rules exceed best practices recommended by Institutional Investors in some cases, but in other cases do not go as far

25. INSTITUTIONAL INVESTORS’ PERSPECTIVE Comparison of Recommended Best Practices

26. INSTITUTIONAL INVESTORS’ PERSPECTIVE Conclusion • There are a number of Corporate Governance Practices often cited by Institutional Investors as “Best Practices” that are not covered by the New Rules • Issuers will need to take into account market implications of compliance with Institutional Investors’ recommendations

27. WRAP-UP — 4 KEY POINTS 1.Canadian Regulators continue to believe that the preferred approach to Corporate Governance is the guidelines and disclosure approach, rather than mandating rules as in the United States. 2. Assuming the New Rules are approved in the form published for comment, Canadian issuers will need to carefully consider how to handle adopting a Code of Business Conduct and Ethics.

28. WRAP-UP — 4 KEY POINTS 3.The determination of whether a Board member is independent or not will become a more technical exercise, requiring a more detailed analysis. 4.Best practices in Canada will continue to be influenced by more than just Canadian regulators — Institutional Investors and U.S. developments will continue to have significant influence on the evolution of Corporate Governance practices in Canada.

29. CUE UP YOUR QUESTIONS governance@blakes.com

30. SPEAKERS’ BIOS ALISON JEFFREYChief Client Relations/Marketing OfficerBlakes TorontoTel 416.863.4152 Fax 416.863.2653E-mail: alison.jeffrey@blakes.com PAT FINNERTYPartner, Blakes CalgaryTel 403.260.9608 Fax 403.960.9700pcf@blakes.com AREAS OF PRACTICECorporate GovernanceMergers & AcquisitionsSecurities DAVID JACKSONPartner, Blakes TorontoTel 416.863.2636 Fax 416.863.2653david.jackson@blakes.com AREAS OF PRACTICEBusinessCorporate Governance Mergers & AcquisitionsSecurities PAMELA HUGHESPartner, Blakes TorontoTel 416.863.2226 Fax 416.863.2653pamela.hughes@blakes.com AREAS OF PRACTICEBusiness Corporate GovernanceSecurities PETER KALBFLEISCHPartner, Blakes VancouverTel 604.631.3377 Fax 604.631.3309peter.kalbfleisch@blakes.com AREAS OF PRACTICEBusinessChina PracticeCorporate Governance SecuritiesSports & Entertainment DENIS BOUDREAULTPartner, Blakes MontréalTel 514.982.4004 Fax 514.982.4099denis.boudreault@blakes.com AREAS OF PRACTICECorporate GovernanceFinancial ServicesMergers & AcquisitionsSecurities ALAN BELLPartner, Blakes TorontoTel 416.863.2662 Fax 416.863.2653alan.bell@blakes.com AREAS OF PRACTICEBusinessCorporate GovernanceMergers & Acquisitions Securities • E-mail questions to governance@blakes.com

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32. TELECONFERENCE ON CORPORATE GOVERNANCE Thursday, January 22, 2004