RE: Director resingnation A director should seriously consider resigning in the following situations:
• in the case of a material contravention of the law or violation of the corporation’s by-laws, its shareholders agreement or the corporation’s undertakings, if the contravention is not rectified promptly;
• in the case of bankruptcy or insolvency, if the director is unable to obtain adequate protection from the trustee, the corporation’s creditors or other third parties;
• if the corporation or the Board does not allow him to perform his duties, despite his repeated requests;
• in certain cases, if he disagrees with the corporation’s major practices or orientations, and if he has advised the Board of his disagreement and the importance that he attaches to such disagreement;
• in the case of persisting and irreconcilable conflicts of interest or conflicting loyalties;
• in the case of a provision that stipulates resignation (e.g., pursuant to a statute, corporate by-law, unanimous shareholders agreement);
• if he is unable to devote the time and efforts required to perform his duties, or if he is not prepared to do so;
• if he received a negative performance evaluation or was asked to resign.
• In many instances, the expression of dissent does not suffice.
• Each case is unique and must be assessed by the director with the assistance of his colleagues and external counsel, if required.
• A director is entitled to resign during his term of office, but he should not do so without a serious reason and at an inopportune moment, if he does not want to risk being held liable for the damages that may be caused by his resignation.
• The obligation of loyalty to the corporation applies, to a certain extent, to the manner of resigning.