1. Flint Transfield Services Limited July 2009 Directors’ and Officers’ Liability presented by Aon Reed Stenhouse Inc. Directors’ & Officers’ Liability Insurance Catherine Richmond, LLB, CRM Senior Vice President Aon Canada Catherine.Richmond@aon.ca May 2014

2. D&O Litigation Trends

3. Canadian Securities Filings by Sector 2013 Source: NERA Economic Consulting

4. US Filings against Canadian Companies 2013 Source: NERA Economic Consulting Source: Trends in Canadian Securities Class Actions: 2013 Update, NERA Economic Consulting

5. Overview of D&O Insurance Program Broad Form A-Side DIC* Coverage  Drops down to primary if underlying insurance:  wrongfully refuses to indemnify  is financially unable to indemnify  is rescinded  is subject to bankruptcy/financial impairment  Is non-rescindable for any reason *DIC = Difference In Conditions DEDUCTIBLE BROAD FORM (DIC)* EXCESS A-SIDE COVERAGE A-SIDE COVERAGE EXECUTIVES’ PERSONAL ASSETS PROTECTION B-SIDE COVERAGE CORPORATE BALANCE SHEET PROTECTION C-SIDE COVERAGE CORPORATE ENTITY PROTECTION (securities claims only) Annual, Aggregate Limit NO DEDUCTIBLE

6. D&O Liability: Hot Topics 1.Purchasing decision changing – Directors and Officers engaged 2.Program structure –Who should be insured? –Adequacy of Limits –Side A—Difference in Conditions (“DIC”) 3.International Placements 4.M&A 5.Choice of Insurer 6.Indemnification 7.Northstar Decision – Environmental Remediation 6

7. Northstar Aerospace Case (Baker v. The Ministry of The Environment – Ontario)

8. Northstar: Background 1981 – 2009 : Parts manufacturing facility operated in Cambridge, ON 2004: Pollution remediation starts 2012: Northstar Aerospace goes bankrupt 2012: MOE takes over remediation efforts and files regulatory action against 12 former D&O’s 2013: D&O’s settle with MOE for $4.75 million 8

9. Northstar and D&O Insurance Pollution Matters: –D&O meant to cover defense costs and financial loss –Will not cover clean-up costs, property damage –Excess to other insurance policies (EIL, GL) –Coverage Issues: ›Remove pollution exclusion ›Side A Difference in Conditions ›Aon is working on wording to address remediation liability to provide express protection to directors and officers

10. Northstar and EIL Insurance Environmental Impairment Liability (EIL) –Covers pollution conditions that commence after inception date –Site-specific –Covers remediation expenses and bodily injury/property damage –Coverage Issues ›Survives bankruptcy of the insured? ›Directors and officers named? ›Challenges insuring known problems ›Specialized wordings

11. Thank You 11