Disclaimer

Appropriate corporate governance has long been a priority for Canadian Hydro. Over the last several years, Canadian Hydro has taken steps to comply with its understanding of best practices of corporate governance, including:

• Proper financial disclosure, with a clean balance sheet and no "sidecar" issues such as sale and leaseback transactions or partnership arrangements;

• 85% of the directors are fully "independent" ;

• Audit and compensation committees are composed entirely of independent directors;

• Roles of Chairman and CEO are split;

• Board meets quarterly;

• CEO does not sit on any other publicly traded company's boards;

• CEO is required to own stock;

• The company does not make loans to directors or employees;

• All directors are elected annually;

• All issued and outstanding shares comprise one class, with no non or multi-voting shares; and

• Stock options constitute a maximum of 8.5% of the issued and outstanding shares, with no insider holding options for more than 5% of the issued and outstanding shares. In practice, no insider holds options on more than 1% of issued and outstanding shares.  This has a relatively modest dilutive effect on shareholders.