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Corporate Governance Practice

Statement of Corporate Governance Practices MDN Inc. (the "Company")

The Company seeks to attain high standards of corporate governance. The Board of Directors has carefully considered the Corporate Governance Guidelines set forth in National Policy 58-201. A description of the Company's corporate governance practices is set out below in response to the requirements of National Instrument 58-101 "Disclosure of Corporate Governance Practices" and in the form set forth in Form 58-101F1 "Corporate Governance Disclosure".

Form 58-101-F1 - Corporate Governance Disclosure
1. Board of Directors The Company’s Practices
a) Disclose the identity of directors who are independent. The Board of Directors is composed of six persons. Of those six persons, Serge Savard, Robert Getz, Paul Gobeil, Raymond Legault and Jacques Bonneau are independent. These directors are independent as none of them has a direct or indirect material relationship with the Company.
b) Disclose the identity of directors who are not independent, and describe the basis for that determination. Serge Bureau is not independent as he holds a position as executive officer of the Company.
c) Disclose whether or not a majority of directors are independent. If a majority of directors are not independent, describe what the board of directors (the board) does to facilitate its exercise of independent judgement in carrying out its responsibilities. A majority of the Company’s directors are independent.
d) If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer. Paul Gobeil is a director of National Bank of Canada, Diagnocure Inc., Metro Inc. and Yellow Pages Income Fund.
e) Disclose whether or not the independent directors hold regularly scheduled meetings at which nonindependent directors and members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held since the beginning of the issuer's most recently completed financial year. If the independent directors do not hold such meetings, describe what the board does to facilitate open and candid discussion among its independent directors. There have been regular meetings held by the independent directors at which non-independent members were not in attendance. The independent directors are encouraged to meet separately, from time to time, to discuss particular matters related to the Company.
f) Disclosure whether or not the chair of the board is an independent director. If the board has a chair or lead director who is an independent director, disclose the identity of the independent chair or lead director, and describe his or her role and responsibilities. If the board has neither a chair that is independent nor a lead director that is independent, describe what the board does to provide leadership for its independent directors. The Chairman of the Board, Serge Savard is an independent director. While the Board does not have in place formal structures and procedures to function independently of management, the independent directors meet separately, when needed, to discuss particular corporate matters.
g) Disclose the attendance record of each director for all board meetings held since the beginning of the issuer's most recently completed financial year. All directors attended all Board meetings, except for Paul Gobeil, who attended five of the six meetings held after his appointment and Jacques Bonneau, who attended seven of the eight meetings held.
2. Board Mandate The Company’s Practices
  Disclose the text of the board's written mandate. If the board does not have a written mandate, describe how the board delineates its role and responsibilities. The text of the board's written mandate reproduced in the Company’s Annual Information Form available on SEDAR at www.sedar.com
3. Position Descriptions The Company’s Practices
a) Disclose whether or not the board has developed written position descriptions for the chair and the chair of each board committee. If the board has not developed written position descriptions for the chair and/or the chair of each board committee, briefly describe how the board delineates the role and responsibilities of each such position. The Board has established a written position description for its Chairman and for the Chairman of each committee of the board.
b) Disclose whether or not the board and CEO have developed a written position description for the CEO. If the board and CEO have not developed such a position description, briefly describe how the board delineates the role and responsibilities of the CEO. The Board has established a written position description for its Chief Executive Officer.
4. Orientation and Continuing Education The Company’s Practices
a) Briefly describe what measures the board takes to orient new directors regarding Orientation and education of directors is an ongoing matter. As such, ongoing informal discussions between management and members of the Board is encouraged and formal presentations by management throughout the year in addition to visits to the Company's operations are organized.
i) the role of the board, its committees and its directors, and
ii) the nature and operation of the issuer’s business.
b) Briefly describe what measures, if any, the board takes to provide continuing education for its directors. If the board does not provide continuing education, describe how the board ensures that its directors maintain the skill and knowledge necessary to meet their obligations as directors. Orientation and education of directors is an ongoing matter. As such, ongoing informal discussions between management and members of the Board are encouraged and formal presentations by management throughout the year in addition visits to the Company's operations are organized.
5. Ethical Business Conduct The Company’s Practices
a) Disclose whether or not the board has adopted a written code for the directors, officers and employees. If the board has adopted a written code: The Company has not adopted a written code for its officers and employees.
i) disclose how a person or Company may obtain a copy of the code;
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ii) describe how the board monitors compliance with its code, or if the board does not monitor compliance, explain whether and how the board satisfies itself regarding compliance with its code; and
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iii) provide a cross-reference to any material change report filed since the beginning of the issuer's most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the code.
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b) Describe any steps the board takes to ensure directors exercise independent judgement in considering transactions and agreements in respect of which a director or executive officer has a material interest. Considering the size of the Company, the Board of Directors did not approve a written code of ethics for its officers and employees.

However, all the directors, officers and employees of the Company are expected to act and to hold their office within the best interests of the Company. The Company expects that all directors shall act in compliance of all laws an regulations applicable to their office as director of the Company.
c) Describe any other steps the board takes to encourage and promote a culture of ethical business conduct. Furthermore, the Company is committed to promote the highest standard of ethic and integrity in the pursuance of all of its activities. Full attendance to Board and committee meetings is expected.
6. Nomination of Directors The Company’s Practices
a) Describe the process by which the board identifies new candidates for board nomination. Discussions between members of the Human Resources, Corporate Governance and Nomination Committee, the Board and management to determine the nomination of new candidates for Board nomination.
b) Disclose whether or not the board has a nominating committee composed entirely of independent directors. If the board does not have a nominating committee composed entirely of independent directors, describe what steps the board takes to encourage an objective nomination process. The Company's Human Resources, Corporate Governance and Nomination Committee seeks out qualified candidates for nomination as directors. The Human Resources, Corporate Governance and Nomination Committee is made up solely of independent directors.

Proposed nominations are subject to review and approval from the Board.
c) If the board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee. The Human Resources, Corporate Governance and Nomination Committee has the mandate to (i) consider and assess all issues that may affect the Company in the area nomination generally; (ii) recommend actions or measures to the Board to be taken in connection with this area. The Committee is responsible for recommending to the Board new candidates for directors and to assist the Board in the assessment of the performance of senior officers, of the Board and its committees and of individual directors.
7. Compensation The Company’s Practices
a) Describe the process by which the board determines the compensation for the issuer's directors and officers. The Company's Human Resources, Corporate Governance and Nomination Committee annually reviews the directors' remuneration to ensure that it reflects market realities and that it is commensurate with the duties performed by the directors.

The Human Resources, Corporate Governance and Nomination Committee is responsible for reviewing senior management remuneration amounts and methods. The Committee Chairman reports the recommendations of the Committee to the Board.
b) Disclose whether or not the board has a compensation committee composed entirely of independent directors. If the board does not have a compensation committee composed entirely of independent directors, describe what steps the board takes to ensure an objective process for determining such compensation. The Human Resources, Corporate Governance and Nomination Committee is made up solely of independent directors.
c) If the board has a compensation committee, describe the responsibilities, powers and operation of the compensation committee. The Human Resources, Corporate Governance and Nomination Committee is responsible for examining the remuneration of the senior management of the Company. It is also responsible for studying the candidacy of the Company's Executive Officers. It reports to the Company's Board of Directors on the aggregate of this remuneration, whether payable in cash, in the form of plans or otherwise. The Human Resources, Corporate Governance and Nomination Committee meets when required during the year.

This committee is currently comprised of three independent directors of the Company.
d) If a compensation consultant or advisor has, at any time since the beginning of the issuer's most recently completed financial year, been retained to assist in determining compensation for any of the issuer's directors and officers, disclose the identity of the consultant or advisor and briefly summarize the mandate for which they have been retained. If the consultant or advisor has been retained to perform any other work for the issuer, state that fact and briefly describe the nature of the work. During the last financial year, the Company did not retain the services of a compensation consultant.
8. Other Board Committees The Company’s Practices
  If the board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function. The Board also created a Health, Safety and Environmental Committee.
  The Health, Safety and Environment Committee includes three independent directors (Serge Savard, Raymond Legault and Jacques Bonneau).

In all jurisdictions, in addition to complying with legislative requirements, the Company's Health, Safety and Environment Committee diligently applies technically proven and economically feasible measures and environmental, health and safety risk management practices to advance protection of the environment throughout exploration, mining, processing, manufacturing and decommissioning activities.
9. Assessments The Company’s Practices
  Disclose whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the board satisfies itself that the board, its committees, and its individual directors are performing effectively. Yes, the directors, the Board and its committees are assessed once a year by reviewing the attendance and performance.