Independence of Directors Under Canadian Securities Law

Canadian securities regulators have amended Multilateral Instrument 52-110, Audit Committees, which contains the tests for determining whether directors are independent. The definition of independence in MI52-110 applies not only for determining eligibility to serve on the issuer’s audit committee, but also for assessing whether directors are independent for the purposes of the new corporate governance disclosure rule that requires issuers to publicly identify which board members are and are not independent and to disclose whether or not the board is composed of a majority of independent directors and whether or not certain board committees are composed entirely of independent directors.

Generally, the amendments correct some technical glitches and further harmonize the definition of independence with the definition in the New York Stock Exchange’s corporate governance listing standards. The amendments, discussed below, will be effective on June 30, 2005.