Again...This is all supposition on my part......BUT....I still don't buy that the Noront BOD had no other choice but to allow Wyloo to change the retention election threshold from 10% to a 20% just because the Venture Exchange had a 20% public shareholders policy. IMO...They could just as easily moved Noront to the CSE to avoid this, and allowed shareholders to ride along. The question here is who kept this theoretical CSE option from being exercised, or perhaps failed to mention that is was a potential way to avoid the 20% rule...One would have to ask...Was it the Noront BOD not fulfillig their duties, Wyloo who changed the rules in their favour, or the expensive legal and financial firms that knew but may have thought no one would notice....Gee...I really don't know ;)

Fundamental Duties of Directors

In Canada, corporate board members generally have three fundamental statutory duties:

• a duty to manage or supervise the management of the corporation;

• a duty of care; and

• a duty of loyalty (fiduciary duty).

Duty to Manage the Corporation

The duty to manage or supervise the management of the corporation is the director’s most fundamental duty. While day-to-day management tasks can be delegated to professional managers, the directors retain responsibility for the overall direction of the corporation (unless some or all of the board’s powers have been transferred to the corporation’s shareholders under a unanimous shareholders or equivalent agreement). In managing the corporation, directors have an obligation to inform themselves fully of all material information available on alternatives for the corporation and chart a course for the corporation that is in its best interests. In the context of a proposed change of control transaction, the duty to manage translates, generally speaking, into a duty to stay on top of the process, while still supervising the management of the ongoing business of the corporation. While a board may–and should–obtain the advice of financial advisors with respect to the merits of any proposed transaction, each board member must fully familiarize himself or herself with all reasonably accessible material information, while casting a critical eye on any advice received.

Duty of Care

Directors have a duty to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. While the Supreme Court of Canada indicated in Peoples Department Stores (Trustee of) v. Wise, [2004] 3 S.C.R. 461, (2004), 244 D.L.R. (4th) 564 (S.C.C.) that the standard is an objective one and that a director’s actions will not be judged with the perfect vision of hindsight, a cautious view is that Canadian courts are likely to impose a higher standard of care on directors who have specialized knowledge or are particularly sophisticated. Stikeman Elliott LLP M&A in Canada: Duties of the Target Board D3 Generally speaking, to satisfy the duty of care, directors must be in a position to demonstrate that their decision-making was properly informed and fully considered. As a practical matter, the courts are reluctant to substitute their own business judgment for that of directors who have acted honestly, prudently and in good faith. Canadian courts (like their U.S. counterparts) will, however, scrutinize the process by which the directors make their decisions and the apparent objectives of their actions. Both Canadian and American courts have tended to examine the degree of formality adopted by directors in deliberating over a potential transaction. Good corporate governance arrangements will therefore generally serve as “a shield that protects directors from allegations that they have breached their duty of care” (Peoples). In order to avoid potential liability for a breach of the duty of care, directors should:

• exercise reasonable diligence in gathering the necessary material information required to reach an informed decision;.....LIKE MOVING RETENTION % OF 10 TO 20 WITHOUT SEEKING TO SEE WHAT IS IN SHAREHOLDERS BEST INTERESTS....LIKE THE MOVING FROM THE VENTURE EXCHANGE TO THE CSE.

• acquaint themselves with the relevant facts and engage in an active, careful deliberation before making a final decision;

• read and understand material that is tabled prior to a meeting, including (where available) advance copies, drafts or summaries of key documents;

• ask probing questions and avoid undue haste;

• promptly register a dissent if a director concludes that the corporation is pursuing an improper course of action;

• seek the advice of credible financial advisors where appropriate, while taking care not to rely on such advice in an uncritical manner. As noted above, a higher standard of care may be expected of persons who, by nature of their professions, are well versed and sophisticated in corporate procedures; and

• take proactive steps to identify and respond to any actual or potential conflicts of interest when evaluating a potential change of control transaction. It is essential to document the board’s decision making process fully. Legal and financial advisors will be of assistance in this area.

Fiduciary Duty (Duty of Loyalty)

In managing the affairs of a corporation, directors have a fiduciary duty to act honestly and in good faith with a view to the best interests of the corporation. In carrying out his or her function, it is the director’s duty to pursue the corporation’s interest diligently and to the exclusion of any competing interest, including the director’s personal interest (to the extent that there is a conflict). This requires full disclosure of a director’s dealings with the corporation and the avoidance of all possible material conflicts of interest between the director and the corporation with respect to the transactions in which the corporation is involved. While the fiduciary duty of directors is owed to the corporation and not to any individual group of corporate stakeholders, the Supreme Court of Canada recognized in BCE v. 1976 Debentureholders, 2008 SCC 69, that, even when they are D4 M&A in Canada: Duties of the Target Board Stikeman Elliott LLP taken with a view to promoting the corporation’s interest, board decisions may incidentally benefit some corporate constituencies more than others. In BCE, the court stated that boards may take into account the “ancillary interests” of shareholders, employees, creditors and others as they deliberate about what is in the “best interests of the corporation”, and should be accorded deference under the business judgment rule where they choose to do so. While the Supreme Court’s view in BCE may appear difficult to reconcile with the view that the fiduciary duty is owed only to the corporation, it is largely understood to mean that in determining what is in the best interests of the corporation, the directors may be obliged to consider the impact of their decisions on other stakeholders given the reasonable expectations of such stakeholders. Regardless, the interests of the corporation are nevertheless paramount, as the duty is owed to the corporation, not to its stakeholders. Provided that the directors consider the interests of stakeholders and make a decision that is reasonable in light of conflicting interests, the court will not generally question whether the decision of the directors was perfect. It is only where directors do not satisfy the reasonable expectations of the shareholders that they will act in the best interests of the corporation and where the behaviour of the directors is oppressive, is unfairly prejudicial, or unfairly disregards relevant interests that stakeholders can legitimately claim that the directors breached their fiduciary duty.