About Tundra

As governance practices continue to evolve, Tundra periodically reviews, evaluates and enhances its governance program.

Statement of Corporate Governance Practices

Mandate of the Board

The mandate of the Board is to supervise the management of the business and affairs of the Corporation. While management is responsible for the development of a long-term corporate strategy, the Board's role is to:

• Ensure that a strategic planning process is in place;
• Review and approve the strategic plan(s) and statements of objectives of the Corporation; and
• Monitor management's success in implementing the Corporation's strategic plan(s) and corporate objectives.

The Board also discharges its supervisory role by reviewing and approving the Corporation's quarterly and annual financial statements and the annual budget.

The Board looks to management to be responsible for the day-to-day operations of the Corporation and the efficient management of the enterprise within the strategic framework approved by the Board. The Board as a whole is kept apprised of and informed about the business of the Corporation on a regular basis through reports and presentations at regular meetings of the Board. From time to time, corporate officers, financial and other experts are invited to participate in Board meetings to describe matters within their respective areas of expertise. The Board expects management to report on a frequent and timely basis on short-term results and long-term goals. The Board receives input from management through the President and Chief Executive Officer and the Chief Financial Officer, as well as other members of management.

The Board reviews and approves the general parameters for the financial capitalization of the Corporation, major acquisitions and dispositions, if any, and other significant matters affecting the Corporation and which are outside of its ordinary course of business. The Board is also responsible for ensuring that management is alert to identifying and managing the principal risks of the Corporation's business and for ensuring that appropriate systems are implemented to manage those risks.

In accordance with its legal responsibilities, the Board takes responsibility for appointing those members of senior management who become officers of the Corporation. The Chief Executive Officer of the Corporation makes recommendations to the Board respecting the appointment of individuals to various senior management positions.

Committees of the Board

The Board has established two Committees: the Audit Committee and the Human Resources, Governance and Nominating Committee. The Board also establishes, from time to time, ad hoc committees to deal with specific issues.

Audit Committee

The Audit Committee is composed of three directors: Mr. Terry Nickerson (Chair), Mr. Cesar Cesaratto and Dr. Adam Chowaniec. Each of these Directors is independent under the National Instruments as well as Multilateral Instrument No. 52-110 Audit Committees. In addition to reviewing the annual and quarterly financial statements of the Corporation prior to Board approval, the Audit Committee oversees the operation of the Corporation's accounting systems and internal controls. The Audit Committee has direct communication channels with the Corporation's external auditors to discuss and review specific issues as appropriate.

Human Resources, Governance and Nominating Committee

The Human Resources, Governance and Nominating Committee is composed of four directors: Mr. Chuck Thompson (chair), Mr. Cesar Cesaratto and Mr. Fred Shlapak. Each of these directors, except Mr. Shlapak, is independent under the Disclosure Rules.

The Committee has a significant mandate, which includes:

• Ensuring that the Chief Executive Officer and other Executive Officers are fairly and adequately compensated;
• Ensuring that human resources training and development, succession planning and performance evaluation procedures are established and operating efficiently;
• Ensuring that the Corporation's stock option plan is properly administered;
• Monitoring the effectiveness of the relationship between management and the Board, the effectiveness of Board operations, the operations of Board Committees and that of individual directors, making recommendations to improve each of the above, and monitoring the implementation of those recommendations;
• Overseeing corporate governance matters and monitoring and assessing the Corporation's ongoing compliance with the rules and policies of the Canadian Securities Administrators and guidelines of the Toronto Stock Exchange; and
•  Proposing new nominees to the Board.

Board Nominations

The Human Resources, Governance and Nominating Committee is responsible for proposing new nominees to the Board and for assessing directors on an on-going basis. The Committee (which is composed entirely of independent directors) has adopted a process for identifying new director candidates that involves:

• An annual review of the competencies, skills and personal qualities required of directors in order to add value to the Corporation, in light of:

• the opportunities and risks facing the Corporation and the Corporation's proposed strategy;
• 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 Corporation's securities are listed for trading); and
• the Company's corporate governance guidelines and Board policies with respect to director tenure, retirement and succession and the number of boards on which a director may sit; and

• A periodic review of the competencies, skills and personal qualities of each incumbent director, and the contributions made by the director to the effective operation of the Board, as well as a review of any significant change in the primary occupation of the director.

After considering the annual and periodic reviews described above, the Committee makes recommendations to the Board for changes to the composition of the Board. The Committee recruits and considers candidates for director, including any candidates recommended by shareholders, having regard for the background, employment and qualifications of possible candidates. The Committee considers whether the candidate's competencies, skills and personal qualities are aligned with the Corporation's needs. The Committee also considers any criteria for selecting new directors established by the Board and ensures that the candidate understands the demands and expectations of a director of the Corporation.

The Board as a whole reviews the Committee's nomination recommendations and confirms the nominations of suitable candidates. The Chief Executive Officer actively participates in the recruitment of potential director nominees. 

Board Assessment

The Board, its committees and individual directors are assessed on an annual basis as to their effectiveness and their individual contribution to the Corporation. The intent of the Board in adopting an assessment process is to improve the Corporation's governance practices, to identify and remove obstacles to better Board and individual director performance, and to highlight for the Board, those practices that work well. The assessment process involves each individual Director independently completing a Board evaluation questionnaire, focusing on overall Board effectiveness, as well as Director self-assessment. The results of these assessments are then presented to the Board, discussed by the Board in some detail, and used by the Board to set overall Board objectives and actions in upcoming periods.

Individual directors can engage outside advisors with the authorization of the Board.

Board Orientation

In accordance with the Disclosure Rules, the Corporation provides orientation to new members of the Board. New Board members meet with the senior managers of the Corporation to obtain information regarding the nature and operation of the Corporation's business. In particular, new Board members are provided with details of the controls that exist within the business of the Corporation. New Board members also meet with the Chairperson of the Board regarding the Board's role, its committees and its directors.

Code of Ethics and Business Conduct

The Board has adopted a written Code of Ethics and Business Conduct (the "Code") that applies to all directors, executive officers and employees of the Corporation. The Board monitors compliance with the Code through the Human Resources, Governance and Nominating Committee. The Committee receives regular reports from the Vice President, Human Resources and other members of senior management regarding compliance with the Code. A copy of the Code may be found here or on SEDAR at http://www.sedar.com/.

Shareholder Communication

The Corporation communicates at least quarterly with its shareholders. At the Corporation's annual meeting of shareholders, a full opportunity is afforded for shareholders to ask questions about the Corporation's activities. The Investor Relations and Finance Departments of the Corporation respond to all shareholder communications and operate an active program of meetings with analysts and institutional investors.

The Board or the Audit Committee reviews and approves all material investor communications, including press releases and annual and quarterly financial information.

Employee Communication

The Corporation has a program of employee communication. This program includes employee meetings ("All-staff meetings") on a regular basis, usually conducted by the President and Chief Executive Officer and other members of senior management of the Corporation. In addition, employees are regularly invited to speak about issues of interest to other employees. Presentations made at All-staff meetings are posted on the Corporation's intranet for those employees who are unable to attend.

All employees receive an electronic report on a regular basis respecting the Corporation's marketing and marketing communications activities. Employees are also provided with information through department meetings, an intranet website and through regular email and verbal communications from members of senior management.
Shareholder Proposals

A person entitled to vote at the next annual meeting of shareholders of the Corporation, who desires to raise a matter at such meeting, must submit a proposal (as contemplated in section 137 of the CBCA) outlining the matter to the Corporation by April 30, 2007.