UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

 

 

Preliminary Proxy Statement

 

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a–6(e)(2))

 

Definitive Proxy Statement

 

 

Definitive Additional Materials

 

 

Soliciting Material Pursuant to §240.14a–12

 

 

 

UR-ENERGY INC.

(Name of Registrant as Specified In Its Charter)

____________________________________

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

  

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

 

Fee computed on table below per Exchange Act Rules 14a–6(i)(1) and 0–11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0–11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

(5)

Total fee paid:

 

 

 

 

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0–11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

(3)

Filing Party:

 

 

 

(4)

Date Filed: 

 

 

 

 

UR-ENERGY INC.

10758 West Centennial Road, Suite 200

Littleton, Colorado 80127

 

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 2, 2022

 

To the Shareholders of Ur-Energy Inc.:

 

The Annual and Special Meeting of Shareholders of Ur-Energy Inc. (the “Company”), will be held in person at the Hampton Inn & Suites, 7611 Shaffer Parkway, Littleton, Colorado 80127 on Thursday, June 2, 2022 at 1:00 p.m. Mountain Time to receive the audited consolidated financial statements of the Company for the year ended December 31, 2021, together with the report from the auditors thereon, and for the purpose of considering and voting upon proposals to:

 

 

1.

Elect seven (7) directors, each to serve until the next annual meeting of shareholders of the Company or until their successors are elected and appointed;

 

 

 

 

2.

Re-appoint PricewaterhouseCoopers LLP, Chartered Professional Accountants, as the independent auditors of the Company and to authorize the directors to fix the remuneration of the auditors;

 

 

 

 

3.

Approve, in an advisory (non-binding) vote, the compensation of the Company’s named executive officers (“say-on-pay”);

 

 

 

 

4.

Ratify, confirm, and approve the renewal Ur-Energy Inc. Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”) and approve and authorize for a period of three years all unallocated share units and shares issuable pursuant to the RSU&EI Plan; and

 

 

 

 

5.

Transact such other business as may lawfully come before the meeting or any adjournment(s) or postponement(s) thereof.

 

The Board of Directors recommends a vote “FOR” each of the director nominees and “FOR” Proposals 2, 3 and 4. The Board of Directors has fixed the close of business on April 8, 2022, as the record date for determination of the shareholders entitled to vote at the meeting and any adjournment(s) or postponement(s) thereof. This Notice of Annual and Special Meeting of Shareholders and related proxy materials are first being distributed or made available to shareholders beginning on or about April 21, 2022.

 

We cordially invite you to attend the Annual and Special Meeting of Shareholders either in person or to listen by toll-free access as described in the Management Proxy Circular. Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. Please refer to your proxy card and the Management Proxy Circular for more information on how to vote your shares at the Meeting and return your voting instructions as promptly as possible.

 

Important Notice Regarding Availability of Proxy Materials for the 2022 Annual and Special Meeting of Shareholders: The attached Management Proxy Circular, proxy card or voter information form, and the Company’s Annual Report to Shareholders (including financial statements) for the fiscal year ended December 31, 2021 are available at www.envisionreports.com/URGQ2022 or can be found at https://www.ur-energy.com.

 

Thank you for your support.

 

 

 

BY ORDER OF THE BOARD OF DIRECTORS,

 

 

 

 

 

 

 

/s/ Jeffrey T. Klenda, Chairman

 

 

 

MANAGEMENT PROXY CIRCULAR

TABLE OF CONTENTS

 

SOLICITATION OF PROXIES

 

 

1

 

APPOINTMENT OF PROXIES

 

 

2

 

VOTING INSTRUCTIONS

 

 

2

 

REVOCATION OF PROXIES

 

 

3

 

VOTING AND DISCRETION OF PROXIES

 

 

3

 

COMMON SHARES ENTITLED TO VOTE

 

 

4

 

VOTES REQUIRED

 

 

4

 

QUORUM

 

 

4

 

RIGHTS OF DISSENT

 

 

4

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

 

5

 

PARTICULARS OF MATTERS TO BE ACTED UPON

 

 

6

 

Proposal No. 1:

 Election of Directors

 

 

6

 

Proposal No. 2:

 Re-Appointment of PricewaterhouseCoopers LLP, Chartered Professional Accountants, as our Independent Auditors and Approval for the Directors to Fix the Remuneration of the Auditors

 

 

9

 

Proposal No. 3:

 Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers

 

 

10

 

Proposal No. 4:

 Approval of the Ur-Energy Inc. Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”)

 

 

11

 

MANAGEMENT

 

 

13

 

COMPENSATION PROGRAM

 

 

14

 

EXECUTIVE COMPENSATION

 

 

23

 

EQUITY INCENTIVE PLANS

 

 

24

 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

 

 

29

 

COMPENSATION OF DIRECTORS

 

 

32

 

REPORT OF THE AUDIT COMMITTEE

 

 

35

 

STATEMENT OF CORPORATE GOVERNANCE PRACTICES

 

 

36

 

INDEBTEDNESS OF DIRECTORS AND OFFICERS

 

 

47

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

 

47

 

HOUSEHOLDING

 

 

47

 

ACCOMPANYING FINANCIAL INFORMATION AND INCORPORATION BY REFERENCE

 

 

48

 

ANNUAL REPORT TO SHAREHOLDERS

 

 

48

 

SHAREHOLDER PROPOSALS

 

 

48

 

AVAILABILITY OF DOCUMENTS

 

 

48

 

OTHER MATTERS

 

 

48

 

APPROVAL

 

 

49

 

SCHEDULE A

 

 

A-1

 

 

i

 

UR-ENERGY INC.

10758 West Centennial Road, Suite 200

Littleton, Colorado 80127

 

 

MANAGEMENT PROXY CIRCULAR

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

JUNE 2, 2022

 

 

                                                                                                                                              

SOLICITATION OF PROXIES

 

This Management Proxy Circular (the “Circular”) is furnished in connection with the solicitation by the management of Ur-Energy Inc. (“we,” “us,” the “Company” or “Ur-Energy”) of proxies for use at the annual and special meeting of shareholders of the Company (the “Meeting”) to be held in person at the Hampton Inn & Suites, 7611 Shaffer Parkway, Littleton, Colorado 80127 on Thursday, June 2, 2022 commencing at 1:00 p.m. Mountain Time, and at any adjournment thereof, for the purposes set forth in the accompanying Notice of Meeting (the “Notice”). The solicitation will be primarily by mail, but proxies may also be solicited personally or by telephone by directors, officers, employees, or representatives of the Company. All costs of solicitation will be borne by the Company. This Circular and related proxy materials are first being distributed or made available to shareholders beginning on or about April 21, 2022. The information contained herein is given as at April 8, 2022, unless otherwise indicated.

 

We plan to hold our annual meeting in person on June 2, 2022. We remain mindful of the public health and travel concerns our shareholders may have and recommendations that public health and governmental officials may issue between the time of this Circular and our Meeting in light of the continuing COVID-19 situation. As a result, if the current public health conditions in Colorado deteriorate, we may impose additional procedures or limitations to assure the safety of Meeting attendees or we may decide to hold the Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We currently plan to address travel and general health concerns relating to the Meeting by having our out-of-town directors and other Meeting participants whose physical presence at the Meeting is not essential attend and participate in the Meeting via teleconference. 

 

In addition (i) shareholders and others who might otherwise attend in person may instead listen to the Meeting in real-time by calling toll-free 888-506-0062 (international: 973-528-0011) and use participant code 782613 and/or logging on to https://agm.issuerdirect.com/urg and (ii) shareholders who have questions they would like to pose at the Meeting may send those questions to our Corporate Secretary in advance of the Meeting at legaldept@Ur‑Energy.com. Please include your name and return email address when you convey your questions. We believe that these procedures will reduce risk and provide many of the benefits of a virtual-only meeting while minimizing associated costs of a virtual meeting.

 

As set forth below, if you are a registered shareholder and wish to vote the day of the Meeting or are a proxy appointee voting the day of the Meeting, you must do so in person. If COVID-19 related restrictions create changes to our current plan for an in-person meeting, we will disclose the updated plan on our website and by press release. We encourage you to check our website prior to the Meeting if you plan to attend in person.

 

All dollar amounts in this Circular are in U.S. dollars, except where indicated otherwise. On April 8, 2022, the exchange rate of Canadian currency in exchange for United States currency, as reported by the Bank of Canada, was US$1.00 = C$1.2589.

 

This Circular, the proxy card or voter information form, and the Company’s Annual Report to Shareholders (including financial statements) for the fiscal year ended December 31, 2021, are available at https://www.ur-energy.com.

 

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Table of Contents

 

APPOINTMENT OF PROXIES

 

The persons named in our form of proxy are Ur-Energy’s Chief Executive Officer, John W. Cash, and our Corporate Secretary, Penne A. Goplerud. Each shareholder has the right to appoint a person other than the persons named in the enclosed form of proxy, who need not be a shareholder of the Company, to represent such shareholder at the Meeting or any adjournment thereof. Such right may be exercised by inserting such person’s name in the blank space provided in the form of proxy and striking out the other names or by completing another proper form of proxy.

 

VOTING INSTRUCTIONS

 

Registered Shareholders

 

There are two methods by which registered shareholders (“Registered Shareholders”), whose names are shown on the books or records of the Company as owning common shares no par value of the Company (“Common Shares”), can vote their Common Shares at the Meeting either in person at the Meeting or by proxy. Should a Registered Shareholder wish to vote in person at the Meeting, the Registered Shareholder should attend the Meeting where his or her vote will be taken and counted. Although we are making a toll-free number available to listen to the Meeting, if you wish to vote the day of the Meeting, you must do so in person. Should the Registered Shareholder not wish to attend the meeting or not wish to vote in person, his or her vote may be cast by proxy through one of the methods described below and the Common Shares represented by the proxy will be voted or withheld from voting, in accordance with the instructions as indicated in the form of proxy, on any ballot that may be called for, and if a choice was specified with respect to any matter to be acted upon, the shares will be voted accordingly.

 

A Registered Shareholder may vote by proxy by using one of the following methods: (i) the paper form of proxy to be returned by mail or delivery; (ii) by Internet; or (iii) by telephone. The methods of using each of these procedures are as follows:

 

Voting by Mail. A Registered Shareholder may vote by mail or delivery by completing, dating and signing the enclosed form of proxy and depositing it with Computershare Investor Services Inc. (the “Transfer Agent”) using the envelope provided or by mailing it to Computershare Investor Services Inc., Attention: Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1 or to the Corporate Secretary of the Company at 10758 West Centennial Road, Suite 200, Littleton, Colorado 80127 for receipt no later than 11:59 p.m. (ET) on Monday, May 30, 2022, or if the Meeting is adjourned, by no later than 1:00 p.m. Mountain Time on the last business day preceding the reconvened Meeting.

 

Voting by Internet. A Registered Shareholder may vote by Internet by accessing the following website: www.envisionreports.com/URGQ2022, and going to “vote now.” When you log on to the site you will be required to input a control number as instructed on the form of proxy. Please see additional information enclosed with the Circular on the form of proxy. Registered Shareholders may vote by Internet for receipt no later than 11:59 p.m. (ET) on Monday, May 30, 2022, or if the Meeting is adjourned, no later than 1:00 p.m. Mountain Time on the last business day preceding the reconvened Meeting.

 

Voting by Telephone. A Registered Shareholder may vote by telephone by calling the toll-free number 1‑866-732-8683 from a touch tone phone. When you telephone you will be required to input a control number as instructed on the form of proxy. Please see additional information enclosed with the Circular on the form of proxy. Registered Shareholders may vote by telephone for receipt no later than 11:59 p.m. (ET) on Monday, May 30, 2022, or if the Meeting is adjourned, no later than 1:00 p.m. Mountain Time on the last business day preceding the reconvened Meeting.

 

Voting by mail or the Internet are the only methods by which a Registered Shareholder may choose an appointee other than the management appointees named on the proxy and must be completed by the Registered Shareholder or by an attorney authorized in writing or, if the Registered Shareholder is a corporation or other legal entity, by an authorized officer or attorney.

 

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Non-Registered Shareholders (Beneficial Owners)

 

If you hold shares through a broker, bank or other nominee, you will receive material from that firm asking how you want to vote and instructing you of the procedures to follow in order for you to vote your shares. If the nominee does not receive voting instructions from you, it may vote only on proposals that are considered “routine” matters under applicable rules. Each of the proposals at the Meeting, other than Proposal No. 2, are “non-routine” matters and therefore an intermediary holding shares for a beneficial owner will not have the authority to vote on those matters in the absence of instructions from the beneficial owner. A nominee’s inability to vote on some proposals because it lacks discretionary authority to do so is commonly referred to as a “broker non‑vote.” Broker non-votes are not counted in the tabulation of votes cast on a particular proposal and therefore will not have an effect on the approval of that proposal.

 

Notice and Access

 

We distribute our proxy materials to shareholders via the Internet under the “Notice and Access” approach permitted by rules of the SEC. This approach conserves natural resources and reduces our distribution costs, while providing a timely and convenient method of accessing the materials and voting. On or before April 21, 2022, we mailed a Notice of Internet Availability of Proxy Materials to participating shareholders, containing instructions on how to access the proxy materials on the Internet to vote your shares over the Internet or by telephone. You will not receive a printed copy of the proxy materials unless you request them. If you would like to receive a printed copy of our proxy materials, including a printed proxy card on which you may submit your vote by mail, then you should follow the instructions for obtaining a printed copy of our proxy materials contained in the Notice of Internet Availability of Proxy Materials.

 

REVOCATION OF PROXIES

 

A shareholder who has given a proxy has the power to revoke it as to any matter on which a vote shall not already have been cast pursuant to the authority conferred by such proxy and may do so (i) by delivering another properly executed proxy bearing a later date and depositing it as aforesaid, including within the prescribed time limits noted above; (ii) by depositing an instrument in writing revoking the proxy executed by the shareholder or by the shareholder’s attorney authorized in writing (A) at our head office with the Corporate Secretary at 10758 West Centennial Road, Suite 200, Littleton, Colorado 80127 at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, at which the proxy is to be used, or (B) with the Chair of the Meeting, prior to its commencement, on the day of the Meeting, or at any adjournment thereof; (iii) by attending the Meeting in person and so requesting; or (iv) in any other manner permitted by law.

 

If you hold your shares through a broker, bank, or other nominee, you must follow their instructions to revoke your initial proxy vote or to otherwise vote at the Meeting.

 

VOTING AND DISCRETION OF PROXIES

 

On any ballot that may be called for, the shares represented by proxies in favor of the persons named by management of the Company will be voted in the manner identified in the proxy, in each case in accordance with the instructions of the shareholder. In the absence of any instructions on the proxy, it is the intention of the persons named by management in the accompanying form of proxy to vote

 

 

(1)

FOR the election of all of management’s nominees as directors;

 

 

 

 

(2)

FOR the re-appointment of PricewaterhouseCoopers LLP, Chartered Professional Accountants, as our independent auditors and the authorization of the directors to fix the remuneration of the auditors;

 

 

 

 

(3)

FOR the advisory resolution to approve, on an advisory (non-binding) basis, the compensation of our Named Executive Officers;

 

 

 

 

(4)

FOR the resolution to approve the renewal of our Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”) and to approve and authorize all unallocated share units and shares issuable pursuant to the RSU&EI Plan until the third anniversary of the adoption of the present resolution; and

 

 

 

 

(5)

In accordance with management’s recommendations with respect to amendments or variations of the matters set out in the Notice or any other matters which may properly come before the Meeting.

 

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Table of Contents

 

The form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations of the matters identified in the Notice or any other matters that may properly come before the Meeting. As at the date of this Circular, management of the Company knows of no such amendments, variations or other matters that may properly come before the Meeting other than the matters referred to in the Notice.

 

COMMON SHARES ENTITLED TO VOTE

 

As at April 8, 2022, the authorized capital of the Company consisted of an unlimited number of Common Shares, of which 218,622,828 Common Shares were issued and outstanding, and an unlimited number of Class A Preference Shares, issuable in series, of which none has been issued. A holder of record of Common Shares as at the close of business on April 8, 2022 (the “Record Date”) is entitled to one vote for each Common Share held by the shareholder. In accordance with the Canada Business Corporations Act, the Company will prepare a list of holders of Common Shares on the Record Date. Each holder of Common Shares named in the list at the close of business on the Record Date will be entitled to vote the Common Shares shown opposite his or her name on the list at the Meeting.

 

VOTES REQUIRED

 

The directors nominated for election pursuant to Proposal No. 1 will be elected by plurality vote, meaning that the seven nominees who receive the most votes, whether in person or by proxy, will be elected. Broker non‑votes will have no effect on the election of Directors. The Company has adopted a majority voting policy pursuant to which any director who fails to receive a majority of the votes cast will be required to tender their resignation. See “Statement of Corporate Governance – Majority Voting Policy.”

 

With respect to Proposal No. 2, the affirmative vote of a majority of the votes cast at the meeting (either in person or by proxy) will be required for approval.

 

With respect to Proposal No. 3, the affirmative vote of a majority of the Common Shares present at the meeting (either in person or by proxy) and entitled to vote on this matter will be required for approval. Broker non‑votes will have no effect on the vote on Proposal No. 3. Because your vote on this proposal is advisory, it will not be binding on the Board of Directors or the Company. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

 

With respect to Proposal No. 4, the affirmative vote of a majority of the votes cast at the meeting (either in person or by proxy) will be required for approval, however, rules of the Toronto Stock Exchange (“TSX”) provide that all eligible insiders in order to participate in the RSU&EI Plan may not vote on the resolution. Accordingly, the RSU&EI Plan resolution must be passed by a majority of votes cast at the meeting (either in person or by proxy), excluding 6,201,821 Common Shares held by certain insiders of the Company and their affiliates. Broker non‑votes will have no effect on the outcome of this proposal.

 

QUORUM

 

The presence, in person or by proxy, of two shareholders holding not less than 10% of the Common Shares entitled to vote as of the Record Date constitutes a quorum for the transaction of business at the Meeting. In the event there is not a quorum present to approve any proposals at the time of the Meeting, the Meeting shall be adjourned to a date no less than seven days later than the scheduled Meeting date in order to permit further solicitation of proxies. The scrutineer will treat Common Shares represented by a properly signed and returned proxy as present at the Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as casting a vote or abstaining.

 

RIGHTS OF DISSENT

 

Pursuant to the Canada Business Corporations Act, there are no rights of dissent in respect of the resolutions to be voted on by the shareholders at this Meeting. 

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

Security Ownership of Management

 

As of April 8, 2022, our Record Date, we had 218,622,828 Common Shares issued and outstanding, and 5,767,461 stock options which may be exercised currently or within the sixty (60) days following April 8, 2022.

 

 

Number of Common Shares of

Percentage of Issued and Outstanding Common Shares

Name of Holder

Ur-Energy

of Ur-Energy

Directors and Named Executive Officers (1)(2)

 

 

W. William Boberg (3)

1,369,295

*

John W. Cash

640,603

*

Rob Chang

545,048

*

James M. Franklin(4)

1,057,609

*

Penne A. Goplerud

764,642

*

Steven M. Hatten

557,780

*

Gary C. Huber

660,013

*

Jeffrey T. Klenda(5)

3,544,838

1.58%

Thomas H. Parker

678,827

*

Roger L. Smith

939,192

*

Kathy E. Walker

755,473

*

All Directors and executive officers, as a group (11 persons)

11,513,320

5.13%

 _______________

* Less than one percent

 

(1)

Address for each of our directors and executive officers: 10758 West Centennial Road, Suite 200, Littleton, Colorado 80127.

 

 

(2)

The beneficial ownership shown for all holders in this table represents Common Shares and all options which may be exercised currently or within sixty (60) days following April 8, 2022. For our Directors and executive officers, this represents the following: Boberg (942,762 Common Shares, 426,533 options); Cash (219,957 Common Shares, 420,646 options); Chang (38,515 Common Shares, 506,533 Options); Franklin (631,076 Common Shares, 426,533 options); Goplerud (261,033 Common Shares, 503,609 options); Hatten (216,420 Common Shares, 341,360 options); Huber (233,480 Common Shares, 426,533 options); Klenda (2,898,321 Common Shares, 646,517 options); Parker (252,294 Common Shares, 426,533 options); Smith (379,023 Common Shares, 560,169 options); and Walker (128,940 Common Shares, 626,533 options). As of the Record Date, April 8, 2022, the number of the Company’s Common Shares beneficially owned by all of the Directors and executive officers as a group and entitled to be voted at the meeting is 6,201,821.

 

 

(3)

Of the shares identified, Mr. Boberg holds 118,796 Common Shares jointly with his wife.

 

 

(4)

Of the shares identified, Dr. Franklin holds 50,000 Common Shares indirectly through his ownership in Franklin Geosciences Ltd.

 

 

(5)

Of the total number of Common Shares held by Mr. Klenda, he has pledged 1,706,640 Common Shares on a multi-purpose equity line of credit.

 

Security Ownership of Certain Beneficial Owners

 

As at April 8, 2022, no person owned of record, or was known to own beneficially, more than 5% of the outstanding voting shares of Common Shares.

 

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PARTICULARS OF MATTERS TO BE ACTED UPON

 

Proposal No. 1: Election of Directors

 

The articles of the Company provide that the Board of Directors of the Company (the “Board of Directors” or the “Board”) shall consist of a minimum of one and a maximum of ten directors, the number of which will be seven as elected at the Meeting. Election of directors will be conducted on an individual basis, and will include W. William Boberg, John W. Cash, Rob Chang, James M. Franklin, Gary C. Huber, Thomas H. Parker, and Kathy E. Walker. As discussed in the description of the Company’s Majority Voting Policy, below, each Director must receive a majority of the votes cast (in person or by proxy) as to his or her election or will be required to submit his or her resignation pursuant to the policy.

 

Nominees: Each of the seven persons named above is a nominee for election as a director at the Meeting for a term of one year or until his or her successor is elected and qualified. Unless authority is withheld, the proxies will be voted for the election of such nominees. Each of the nominees is currently serving as a director of the Company. Each of the nominees was elected to the Board of Directors at the last annual meeting of shareholders except for Mr. Cash, who was appointed as a Director of the Company March 1, 2022, when he was named Chief Executive Officer of Ur-Energy Inc. Management does not anticipate that any of the nominees for election as directors will be unable to serve as a director, but if that should occur for any reason prior to the Meeting, the persons named in the accompanying form of proxy reserve the right to vote for another nominee in their discretion or for the election of only the remaining nominees.

 

The Board of Directors has delegated to the Corporate Governance and Nominating Committee the responsibility for reviewing and recommending nominees for director. The Board determines which candidates to nominate or appoint, as appropriate, after considering the recommendation of the Corporate Governance and Nominating Committee.

 

Certain of our directors have historically and do currently serve on boards of directors of other companies. We view this to be beneficial to the Company, provided there is no conflict of interest, nor restrictions on time which are disadvantageous to our Board’s interests. Current service on the boards of other public companies is set forth, below, under “Service on Additional Boards.” The Company believes that service on other boards allows for broader experience and expertise which benefits the individual and the companies served, including Ur-Energy. None of our directors sits on more than three public company boards or, alternatively, is the CEO of a public company and sits on the board of more than two public companies besides the one for which he/she is the CEO (i.e., none of our directors is “overboarded”).

 

Qualifications: In evaluating a director candidate, the Corporate Governance and Nominating Committee considers the candidate’s independence, character, business experience, industry-specific experience including technical expertise, corporate governance skills and abilities, training and education, commitment to performing the duties of a director, and other skills, abilities, or attributes that fill specific needs of the Board or its committees. Each nominee brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas, including natural resources exploration and development, mining operations, executive management, board service, corporate governance, finance, financial markets, government, employment, and international business. These varied and substantial backgrounds, skills, and qualifications, as described in more detail below, and the contributions of each to the development and current operations of the Company as described below under the heading “Board Composition – Including Tenure, Diversity, and Outlook on Set Retirement Age,” led the Corporate Governance and Nominating Committee and the Board of Directors to the conclusion that each of the nominees should serve as a Director.

 

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Recommendation of Ur-Energy’s Board of Directors

 

The Board of Directors recommends that the shareholders vote FOR the election of all of the named nominees for director and, unless a shareholder gives instructions on the proxy card to the contrary, the proxies named thereon intend to so vote.

 

W. William (Bill) Boberg, 82, M.Sc., P. Geo

Director

 

Mr. Boberg has served as a director of the Company since January 2006. Mr. Boberg served as the Company’s President and Chief Executive Officer (2006 to 2011). Prior to that time, Mr. Boberg was the Company’s senior U.S. geologist and Vice President U.S. Operations (2004 to 2006). Before his initial involvement with the Company, he was a consulting geologist having over 40 years’ experience investigating, assessing, and developing a wide variety of mineral resources in diverse geologic environments in western North America, South America, and Africa. Mr. Boberg worked for Gulf Minerals, Hecla Mining, Anaconda, Continental Oil Minerals Department, Wold Nuclear, Kennecott, Western Mining, Canyon Resources and Africa Mineral Resource Specialists. Mr. Boberg has over 30 years of experience exploring for uranium in the continental U.S. He discovered the Moore Ranch Uranium Deposit and the Ruby Ranch Uranium Deposit as well as several smaller deposits in Wyoming’s Powder River Basin. He received his Bachelor’s Degree in Geology from Montana State University and his Master’s Degree in Geology from the University of Colorado. He is a registered Wyoming Professional Geologist and fellow of the Society of Economic Geologists. He is a member of the Society for Mining, Metallurgy & Exploration Inc., American Institute of Professional Geologists (for which he is a Certified Professional Geologist), the Denver Regional Exploration Society and the American Association of Petroleum Geologists. Mr. Boberg is also a director for Gold79 Mines Ltd. (formerly, Aura Resources Inc.) (since June 2008).

 

The Board of Directors has concluded that Mr. Boberg is well qualified and should serve as a director on the basis of his contributions to the Company since 2004 (since 2006 as a director and, from 2006 until 2011, as the President and CEO), as well as his more than 40 years of experience in mineral resources exploration and development.

 

John W. Cash, 49, M.Sc.

Director, Chief Executive Officer of Ur-Energy

 

Mr. Cash was named Ur-Energy’s Chief Executive Officer and appointed as a Director on March 1, 2022. Mr. Cash joined Ur-Energy in 2007 and was appointed as Vice President Regulatory Affairs in 2011. He has led the permitting and licensure of both the Lost Creek and Shirley Basin uranium mines, while managing the environmental, health and safety (“EHS”) and geology departments and contributing to the development and growth of the Company. During his tenure with Ur-Energy, Mr. Cash has gained a well-deserved reputation for developing impactful solutions for industry related to water management, EPA aquifer exemptions, technical design, and environmental matters. Mr. Cash has nearly 30 years of diverse experience in the uranium industry, from which he has acquired broad-reaching expertise in exploration, EHS including radiation safety, regulatory and legislative affairs, and uranium recovery operations, as well as extensive management experience. He is a respected industry leader and has served as a past president of the Uranium Producers of America.

 

Prior to joining Ur-Energy, Mr. Cash worked for established uranium mining companies, including BHP, Rio Algom Mining, and Crow Butte Resources, a subsidiary of Cameco, in various roles in mineral exploration, as Operations Superintendent and EHS Manager. As Operations Superintendent, Mr. Cash managed all aspects of wellfield production and plant processing at the 800,000 lbs. U3O8 per year Crow Butte ISR facility. Mr. Cash is a Fellow of the inaugural World Nuclear Summer Institute. Mr. Cash received B.Sc. and M.Sc. degrees in Geology and Geophysics from the University of Missouri-Rolla.

 

The Board of Directors has concluded that Mr. Cash is well qualified and should serve as a director on the basis of his contributions to the Company since 2007, as an employee, executive officer and most recently as Chief Executive Officer and a member of the Board of Directors. Additionally, the Board of Directors believes that Mr. Cash’s lengthy tenure and diverse expertise in the uranium industry will benefit the Board.

 

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Rob Chang, 44, MBA

Director

 

Mr. Chang has 26 years of experience in the financial services industry and is a sought-after expert in uranium markets. An experienced senior executive, he currently sits on the boards of publicly traded mineral resource companies. He is the Co-Founder and Chief Executive Officer of Gryphon Digital Mining currently, while his past roles include serving as the Managing Director and Head of Metals & Mining at Cantor Fitzgerald where he provided research coverage in precious metals, base metals, lithium, and uranium. He is well familiar with the uranium mining industry and is considered a subject matter expert by several media outlets. He was recognized by Bloomberg as the “Best Precious Metals Analyst” in Q1 2016. Mr. Chang is frequently quoted by and a regular guest of several media outlets including Bloomberg, Reuters, CNBC, and the Wall Street Journal. Mr. Chang previously served as a Director of Research and Portfolio Manager at Middlefield Capital, a Canadian investment firm which managed $3 billion in assets. He was also on a five-person multi-strategy hedge fund team where he specialized in equity and derivative investments. Mr. Chang completed his MBA at the University of Toronto’s Rotman School of Management. Mr. Chang also serves as a director on the boards of Fission Uranium Corp. (since April 2018) and Shine Mineral Corp. (since November 2018).

 

The Board of Directors has concluded that Mr. Chang is well qualified and should serve as a director of the Company on the basis of his contributions to the Board since 2018, and his extensive knowledge of the financial markets and financial services industry, as well as his knowledge of the uranium mining industry.

 

James M. Franklin, 79, PhD, FRSC, P.Geo

Director & Chair of the HSE & Technical Committee

 

Dr. Franklin has over 50 years’ experience as a geologist. He is a Fellow of the Royal Society of Canada. Since 1998, he has been an Adjunct Professor at Queen’s University, since 2001, at Laurentian University and since 2006 at the University of Ottawa. He is a past President of the Geological Association of Canada and of the Society of Economic Geologists. He retired in 1998 as Chief Geoscientist of the Geological Survey of Canada, Earth Sciences Sector. Since that time, he has been a consulting geologist and is currently a director of Gold79 Mines Ltd. (formerly, Aura Resources Inc.) (since October 2003), and Nuinsco Resources Ltd. (since June 2018). Dr. Franklin’s lifetime achievements have been honored by several professional organizations: among his honors, Dr. Franklin has been awarded GAC’s Logan and Duncan R. Derry medals, CIM’s Selwyn Blaylock, A.O. Dufresne, Distinguished Lecturer and Julian Boldy Memorial awards and the Society of Economic Geologists Thayer Lindsley and Distinguished Lecturer awards. He has also received the R.A.F. Penrose Gold Medal from SEG for his many contributions to a broad cross section of geosciences. In 2017 he was made a Fellow of Lakehead University, honoring his contributions to education and economic development in northern Ontario. Dr. Franklin was inducted into the Canadian Mining Hall of Fame in 2019 for his many contributions to the mining industry.

 

The Board of Directors has concluded that Dr. Franklin is well qualified and should serve as a director on the basis of his contributions as a director to the Company since its inception and his more than 50 years of experience in geosciences and mineral resource work in industry, governmental service, and academia.

 

Gary C. Huber, 70, PhD, P.Geo

Director, Chair of Compensation Committee & Chair of Corporate Governance and Nominating Committee

 

Dr. Huber is a mining executive with over 40 years of natural resources experience. Previously, Dr. Huber served as a director for Ur‑Energy during 2007. Dr. Huber returned to serve as a director for Ur-Energy in 2015. In the interim, Dr. Huber served as President and CEO of Neutron Energy, Inc. (2007-2012), a privately held uranium company which was conducting project feasibility analyses as well as permitting of two uranium mines and a mill complex. Dr. Huber is the founder, in 2006, and managing member of Rangeland E&P, LLC, a private company established for oil and gas exploration. Dr. Huber served as an independent director of Gold Resource Corporation, a precious metal mining company. He was chairman of its audit committee and a member of the compensation committee. He also has served as an independent director of Capital Gold Corp., a gold mining company with operations in Mexico, and served on its audit and corporate governance committees. Dr. Huber was one of the founders of Canyon Resources Corporation in 1979, and served in various capacities there until 2006, including as director, chief financial officer, vice president of finance, treasurer, and secretary. He also served as the president and chief executive officer of CR Minerals Corporation, an industrial minerals subsidiary of Canyon Resources, from 1987 to 1998. Dr. Huber holds a PhD in geology from Colorado School of Mines and received a Bachelor of Science in geology from Fort Lewis College. He is a fellow of the Society of Economic Geologists, where he previously served as the chairman of its audit and investment committees; and a member of the Society for Mining, Metallurgy and Exploration, where he previously served as the chairman of the audit committee. Dr. Huber served as a director and treasurer of The Society of Independent Professional Earth Scientists, a not-for-profit professional group. He also has served as President of the Society of Independent Earth Scientists Foundation, which awards scholarships to undergraduate and graduate students majoring in the earth sciences fields. Dr. Huber formerly was a director of the Denver Gold Group, a not-for-profit industry association for publicly traded precious metal companies. Dr. Huber is a Utah registered Professional Geologist.

 

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The Board of Directors has concluded that Dr. Huber is well qualified and should serve as a director of the Company on the basis of his contributions to the Company as a director (in 2007, and since his return to the Board in 2015), and because of his extensive mining industry experience including in areas of natural resources development and mining operations, and executive management and finance, developed by serving as an executive officer and director of publicly-traded natural resource companies.

 

Thomas H. Parker, 79, M.Eng., P.E.

Lead Director, Chair of Audit Committee & Chair of Treasury & Investment Committee

 

Mr. Parker has worked extensively in senior management positions in the mining industry, having begun his career in the mining industry 57 years ago. Mr. Parker is a mining engineer graduate from South Dakota School of Mines, with a Master’s Degree in Mineral Engineering Management from Penn State. Mr. Parker was President and CEO, and a director of U.S. Silver Corporation until his retirement in 2012. Prior to that, Mr. Parker was President and CEO of Gold Crest Mines, Inc., before which he was the President and CEO of High Plains Uranium, Inc., a junior uranium mining company acquired by Energy Metals in 2007. Mr. Parker also served for 10 years as Executive Vice President of Anderson and Schwab, a management consulting firm. Prior to Anderson and Schwab, Mr. Parker held many executive management positions including with Costain Minerals Corporation, ARCO, Kerr McGee Coal Corporation and Conoco. He also has worked in the potash, limestone, talc, coal, and molybdenum industries and has extensive experience working in Niger, France, and Venezuela.

 

The Board of Directors has concluded that Mr. Parker is well qualified and should serve as a director on the basis of his contributions to the Company as a director since 2007 and, most recently, as our Lead Director since 2014, as well as his more than 55 years of experience in the mining industry and in executive management positions.

 

Kathy E. Walker, 63, MBA

Director

 

Ms. Walker is the founder and CEO of the eKentucky Advanced Manufacturing Institute, a high-tech workforce training center. She is also the CEO of Elm Street Resources Inc., an energy marketing company. Both companies are based in Painstville, Kentucky. She brings more than 35 years of experience in various energy, financial, and manufacturing related business endeavors to our Board. Ms. Walker holds an MBA from Xavier University. Prior to starting Elm Street Resources, she served as Secretary and Controller of Agip Coal, USA, a subsidiary of the Italian National Energy Agency ENI. Ms. Walker, former Chair of the Morehead State University Board of Regents, was a founder and board member of First Security Bank, Lexington, Kentucky and of Great Nations Bank, Norman, Oklahoma. She is a member of several regional economic development boards.

 

The Board of Directors has concluded that Ms. Walker is well qualified and should serve as a director of the Company on the basis of her contributions to the Company as a director since 2017, and because of her extensive energy-related business experience including in areas of sales and marketing, and executive management and finance expertise, developed by serving as an executive officer and director of various entities.

  

Proposal No. 2: Re-Appointment of PricewaterhouseCoopers LLP, Chartered Professional Accountants, as our Independent Auditors and Approval for the Board of Directors to Fix the Remuneration of the Auditors

 

Appointment of Auditor

 

The Audit Committee selected and has recommended the independent accounting firm of PricewaterhouseCoopers LLP with respect to the audit of our financial statements for the year ended December 31, 2022. At the Meeting, it is proposed to re-appoint PricewaterhouseCoopers LLP, Chartered Professional Accountants, as auditors of the Company, to serve until the next annual meeting of shareholders with their remuneration to be fixed by the Board of Directors.

 

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In light of ongoing travel concerns due to COVID-19 and in the interests of safety, we currently expect that our Audit Partner from PricewaterhouseCoopers LLP will participate in our Meeting by telephone.

 

Independent Accountant Fees and Services

 

PricewaterhouseCoopers LLP Chartered Professional Accountants, and its affiliates have been the auditors of Ur‑Energy since December 2004. The fees accrued for audit and audit-related services performed by PricewaterhouseCoopers LLP Chartered Professional Accountants, in relation to our financial years ended December 31, 2021 and 2020, paid and shown below in C$, were as follows:

 

 

December 31, 2021

December 31, 2020

Audit fees (1)

$176,600

$171,200

Audit related fees (2)

$57,245

$55,300

All other fees (3)

$66,105

$59,810

Total

$299,950

$286,310

____________ 

(1)

Audit fees consisted of audit services, reporting on internal control over annual financial reporting and review of such documents filed with the securities regulators.

(2)

Audit related fees were for services in connection with quarterly reviews of the consolidated financial statements and review of such documents filed with the securities regulators.

(3)

All other fees include fees related to financing activities, if any, and our shelf registration and at-market sales agreement. We have not incurred audit fees billed for tax compliance, tax advice, and tax planning services during either 2020 or 2021.

 

Audit Committee’s Pre-Approval Practice

 

All services reflected in the preceding table for 2021 and 2020 were pre-approved in accordance with the policy of the Audit Committee of the Board of Directors

 

It is proposed to approve an ordinary resolution to re-appoint the firm of PricewaterhouseCoopers LLP, Chartered Professional Accountants, as auditors of the Company to hold office until the close of the next annual meeting of shareholders or until PricewaterhouseCoopers LLP is removed from office or resigns, and to authorize the Board of Directors of the Company to fix the remuneration of PricewaterhouseCoopers LLP as auditors of the Company.

 

Recommendation of Ur-Energy’s Board of Directors

 

The Board of Directors recommends that the shareholders vote FOR the re-appointment of PricewaterhouseCoopers LLP, Chartered Professional Accountants, and to authorize the Board of Directors of the Company to fix the remuneration of PricewaterhouseCoopers LLP as auditors and, unless a shareholder gives instructions on the proxy card to the contrary, the proxies named thereon intend to so vote.

 

The approval of Proposal No. 2 requires the approval of a majority of the votes cast by shareholders (either in person or by proxy) at the Meeting.

 

Proposal No. 3: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers

 

Advisory Vote on Named Executive Officer Compensation

 

In accordance with SEC rules, our shareholders will be asked at the Meeting to cast a non-binding advisory vote on the compensation of our Named Executive Officers as disclosed in this Circular, including the disclosures under “Compensation Program” and “Executive Compensation” and the compensation tables and related narrative disclosure. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the policies and practices described in this Circular.

 

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We conducted a similar advisory vote in 2021 and approximately 80% of the votes cast at that meeting voted in favor of the compensation of our Named Executive Officers. For the past five years, our advisory “say on pay” vote has averaged approximately 90%. This vote is advisory, which means that its outcome is not binding on the Company, the Board of Directors, or the Compensation Committee of the Board of Directors.

 

We are continuing our practice of having an annual say-on-pay advisory vote, so the next advisory vote will occur at our annual meeting in 2023.

 

The Compensation Committee and the Board of Directors believe that our compensation policies and procedures are effective in achieving our goals. As described under “Compensation Program” our compensation program is designed to motivate executive officers and employees to achieve pre-determined objectives without taking excessive risks; provide competitive compensation and benefit programs to attract and retain highly qualified executives and employees; encourage an ownership mentality; and, fundamentally, to support the achievement of results. We believe that the Company’s compensation program, with its balance of (i) short-term incentives (including cash bonus awards and performance conditions for such awards), (ii) long-term incentives (including equity awards of stock options and restricted share units which vest over varied periods of two to three years), and (iii) share ownership guidelines for executive officers, reward sustained performance that is aligned with long-term shareholder interests. Shareholders are encouraged to read both “Compensation Program” and “Executive Compensation” sections below, as well as the compensation tables and related narrative disclosure. Shareholders will be asked to approve the following ordinary resolution (the “Advisory Vote on Named Executive Officer Compensation Resolution”) at the Meeting:

 

BE IT RESOLVED THAT the Company’s shareholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s Management Proxy Circular for this annual and special meeting of shareholders, including the “Compensation Program” and “Executive Compensation” sections and the compensation tables and related narrative disclosure.

 

Recommendation of Ur-Energy’s Board of Directors

 

The Board of Directors recommends that shareholders vote FOR approval of the Advisory Vote on Named Executive Officer Compensation Resolution.

 

The approval of the advisory vote on Proposal No. 3 requires the affirmative vote of a majority of the Common Shares present at the meeting (either in person or by proxy). Although the advisory vote is non-binding, the Board will review the results of the vote and will take the results of the vote into account in determinations concerning executive compensation.

  

Proposal No. 4:Approval of the Ur-Energy Inc. Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”)

 

At the Meeting, shareholders will be asked to consider and pass a resolution substantially in the form set out below, to approve, confirm and ratify the renewal of the Ur-Energy Inc. Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”), which was last approved by shareholders on May 2, 2019. Under the policies of the TSX, the RSU&EI Plan must be reconfirmed every three years by a majority of the Company’s directors and shareholders excluding the votes cast by, or in behalf of, the insiders of the Company who are eligible to participate in the RSU&EI Plan, and their affiliates. Therefore, a resolution will be placed before the shareholders to approve the renewal of the RSU&EI Plan and the unallocated share units and shares under the RSU&EI Plan. This approval will be effective for three years from the date of the Meeting. If approval is not obtained at the Meeting, RSUs and other units and shares under the RSU&EI Plan which have not been allocated and RSUs which are outstanding and are subsequently cancelled or terminated will not be available for a new grant of share units or shares under the RSU&EI Plan. Previously allocated RSUs will continue to be unaffected by the approval or disapproval of the resolution.

 

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The Board of Directors wishes to renew the RSU&EI Plan, which was previously ratified, confirmed and approved at meetings of shareholders of the Company in 2010, 2013, 2016 and 2019. The RSU&EI Plan continues to include directors and employees, including executive officers, of Ur‑Energy as possible eligible participants. The Board of Directors is of the view that it is in the best interests of the Company to renew the RSU&EI Plan as it contributes to our ability to maintain a strong compensation program, and specifically our bonus programs. Approval will allow the Board of Directors to grant the various share units and Common Shares permitted under the plan, and to utilize the RSU&EI Plan and the overall compensation program to support our ongoing efforts to attract and retain highly qualified directors and employees, including executive officers, in a highly competitive market. As part of our long-term incentive plan, the RSU&EI Plan encourages share ownership in the Company by directors and employees, including officers, and further motivates these individuals towards the overall success of the Company.

 

No modifications are proposed to be made to the RSU&EI Plan. There is no request to increase the percentage number of shares available for issuance under the RSU&EI Plan. Because the RSU&EI Plan participants and the amounts of any awards are determined in the absolute discretion of the Board of Directors, the benefits to be delivered under the amended RSU&EI Plan at this time are indeterminable at this time. 

 

At April 8, 2022, there are 11 employees and six non-executive directors who are eligible to participate in the plan. As at April 8, 2022, the closing price of our Common Shares on the NYSE American was $1.78 and on the TSX was C$2.23.

 

The RSU&EI Plan, as approved and ratified by the Board of Directors, is summarized in more detail under the heading “Stock Options and Amended and Restated Restricted Share Unit and Equity Incentive Plan,” below. A copy of the RSU&EI Plan is attached to this Circular as Schedule A. A shareholder may also obtain a copy of the plan from the Secretary of the Company upon request at 10758 West Centennial Road, Suite 200, Littleton, Colorado, 80127, telephone 720-981-4588 (ext. 250).

 

Ur-Energy Inc. Restricted Share Unit and Equity Incentive Plan Resolution

 

BE IT RESOLVED THAT:

 

 

1.

The renewal of the Ur-Energy Inc. Amended and Restated Restricted Share Unit and Equity Incentive Plan, as set forth fully in Schedule A to this Circular (the “RSU&EI Plan”), be and is hereby ratified, confirmed and approved; and

 

 

 

 

2.

All unallocated share units and shares issuable pursuant to the RSU&EI Plan be and hereby are approved and authorized until June 2, 2025; and

 

 

 

 

3.

Any director or officer of the Company be and each of them is hereby authorized, for and on behalf of the Company, to take such actions and to sign, execute and deliver all such documents that such director or officer may, in their discretion, determine to be necessary or useful in order to give full effect to the intent and purpose of this resolution.

   

Recommendation of Ur-Energy’s Board of Directors

 

After careful consideration, the Board of Directors has determined that the Amended and Restated Restricted Share Unit and Equity Incentive Plan continues to be in the best interests of the Company’s shareholders. The Board of Directors approved the Amended and Restated Restricted Share Unit and Equity Incentive Plan Resolution and recommends approval of the resolution by the Company’s shareholders.

 

The TSX rules provide that all eligible insiders in order to participate in the RSU&EI Plan may not vote on the approval of the renewal of the RSU&EI Plan. Accordingly, the RSU&EI Plan Resolution must be passed by a majority of votes cast by shareholders present in person or represented by proxy at the Meeting, excluding 6,201,821 Common Shares held by certain insiders of the Company and their affiliates.

 

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MANAGEMENT

 

Identification of Executive Officers

 

John W. Cash, 49, M.Sc.

Chief Executive Officer, Director

 

Mr. Cash was named Ur-Energy’s Chief Executive Officer and appointed as a Director on March 1, 2022. Mr. Cash joined Ur-Energy in 2007 and was appointed as Vice President Regulatory Affairs in 2011. He has led the permitting and licensure of both the Lost Creek and Shirley Basin uranium mines, while managing the environmental, health and safety (“EHS”) and geology departments and contributing to the development and growth of the Company. During his tenure with Ur-Energy, Mr. Cash has gained a well-deserved reputation for developing impactful solutions for industry related to water management, EPA aquifer exemptions, technical design, and environmental matters. Mr. Cash has nearly 30 years of diverse experience in the uranium industry, from which he has acquired broad-reaching expertise in exploration, EHS including radiation safety, regulatory and legislative affairs, and uranium recovery operations, as well as extensive management experience. He is a respected industry leader and has served as a past president of the Uranium Producers of America.

 

Prior to joining Ur-Energy, Mr. Cash worked for established uranium mining companies, including BHP, Rio Algom Mining, and Crow Butte Resources, a subsidiary of Cameco, in various roles in mineral exploration, as Operations Superintendent and EHS Manager. As Operations Superintendent, Mr. Cash managed all aspects of wellfield production and plant processing at the 800,000 lbs. U3O8 per year Crow Butte ISR facility. Mr. Cash is a Fellow of the inaugural World Nuclear Summer Institute. Mr. Cash received B.Sc. and M.Sc. degrees in Geology and Geophysics from the University of Missouri-Rolla.

 

Jeffrey T. Klenda, 65, B.A.

President and current Chairman (retiring June 2022)

 

Mr. Klenda graduated from the University of Colorado in 1980 and began his career as a stockbroker specializing in venture capital offerings. Prior to founding Ur-Energy in 2004, he worked as a Certified Financial Planner and was a member of the International Board of Standards and Practices. In 1986, he started Klenda Financial Services, an independent financial services company providing investment advisory services to high-end individuals and corporate clients as well as providing venture capital to corporations seeking entry to the U.S. securities markets. In the same year, Mr. Klenda formed Independent Brokers of America, Inc., a national marketing organization. He also served as President of Security First Financial, a company he founded to provide consultation to individuals and corporations seeking investment management and early-stage funding. Over the last 35 years, Mr. Klenda has acted as an officer and/or director for numerous publicly traded companies, having taken his first company public at 28 years of age. Mr. Klenda has served as the Chairman of the Board of Directors of the Company since 2006. He served as Executive Director from January 2006 to May 2015. Thereafter, he served as Acting Chief Executive Officer until being named President and Chief Executive Officer by our Board of Directors in December 2016.

  

Roger L. Smith, 64, CPA, MBA, CGMA

Chief Financial Officer and Chief Administrative Officer

 

Mr. Smith has 35 years of mining and manufacturing experience including finance, accounting, IT, ERP and systems implementations, mergers, acquisitions, audit, tax, and public and private reporting in international environments. Mr. Smith served as Ur-Energy’s Chief Financial Officer and Vice President Finance, IT and Administration until May 2011, when he assumed the title and responsibilities of Chief Administrative Officer as well as Chief Financial Officer. Mr. Smith joined Ur-Energy in May 2007, after having served as Vice President, Finance for Luzenac America, Inc., a subsidiary of Rio Tinto PLC and Director of Financial Planning and Analysis for Rio Tinto Minerals, a division of Rio Tinto PLC, from September 2000 to May 2007. Mr. Smith has also held such positions as Vice President Finance, Corporate Controller, Accounting Manager, and Internal Auditor with companies such as Vista Gold Corporation, Westmont Gold Inc., and Homestake Mining Corporation. He has a Master of Business Administration and Bachelor of Arts in Accounting from Western State Colorado University, Gunnison, Colorado.

 

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Steven M. Hatten, 58, B.Sc.

Vice President Operations

 

Mr. Hatten has served as Ur-Energy’s Vice President Operations since 2011. Prior to that, Mr. Hatten was Ur-Energy’s Engineering Manager from 2007 to 2010 and Director of Engineering and Operations 2010 to 2011. He has over 25 years of experience with a strong background in in situ recovery uranium design and operations. He previously worked as a Project Engineer for Power Resources, Inc., Manager, Wellfield Operations for Rio Algom Mining Corp., and Operations Manager at Cameco’s Smith Ranch – Highland Facility. Mr. Hatten has a Bachelor of Science in Petroleum Engineering from Texas Tech University.

 

Penne A. Goplerud, 60, JD

General Counsel & Corporate Secretary

 

Ms. Goplerud has nearly 30 years of diverse legal experience in general corporate matters, natural resources transactions and complex litigation. She was named General Counsel and Corporate Secretary of the Company in 2011, having joined Ur‑Energy as its Associate General Counsel in 2007. While in private practice, she represented clients in complex litigation, arbitration and mediation involving mining, oil and gas, commercial and corporate disputes, securities, and environmental law. She also counseled business clients and represented clients in the negotiation of business transactions. Prior to joining Ur-Energy, much of Ms. Goplerud’s practice focused on natural resources work in the U.S. and abroad. Ms. Goplerud obtained her JD from the University of Iowa College of Law.

 

COMPENSATION PROGRAM

 

We are a “smaller reporting company” as defined by SEC regulations. As a result, we are not required to include a comprehensive Compensation Discussion and Analysis in this Circular. We are providing, voluntarily, certain of the information that would typically be contained in a Compensation Discussion and Analysis section in an effort to provide our shareholders with additional information regarding our executive compensation policies, practices, and plans, and in order to provide context for your consideration of our advisory ‘say on pay’ proposal.

 

Compensation Program

 

We believe that the caliber and commitment of our executive officers are critical to our continued success and performance, and the overall commitment of all of our employees. The Compensation Committee reviews and makes recommendations to the Board with respect to the overall approach to compensation for all of our employees, and specifically with respect to our executive officers, including the Chief Executive Officer, and the remuneration of directors.

 

Pursuant to our obligations of disclosure as a smaller reporting company, our named executive officers (“Named Executive Officers” or “NEOs”) for 2021 were:

 

 

·

Jeffrey T. Klenda, Chairman, President and CEO

 

 

 

 

·

Roger L. Smith, Chief Financial Officer and Chief Administrative Officer

 

 

 

 

·

Penne A. Goplerud, General Counsel and Corporate Secretary

 

We maintain a compensation program in which both performance and compensation are routinely evaluated. Further, we maintain a program in which (a) pay for performance is supported by a significant percentage of executive pay being at risk (50% of CEO compensation; 45% of other executive officers); (b) motivating executive officers to create shareholder value by using total shareholder return as a part of the Company’s “Total Company” objectives; (c) performance by all employees on personal objectives and corporate objectives is evaluated, with executive officers’ short-term incentive bonus awards being more closely aligned to performance on corporate objectives (60%) based upon the greater opportunity, and responsibility, to shape corporate performance (hourly and non-managerial staff bonuses are more heavily weighted to their personal objectives) with generally 80% of an executive’s long-term incentive is based upon stock options; (d) certain defined thresholds must be reached as a minimum level of performance, typically 50% of the target (or, a score of 2 on our 1-4 scale), before eligibility for payout on any objective and, by contrast, short-term incentive bonuses are effectively capped, as the maximum level of performance for each objective is typically set at 150% of the target (or, a score of 4 on our 1-4 scale); (e) reasonable salaries and overall compensation packages are based upon regularly updated compensation surveys and ongoing review of peer comparators’ practices; (f) compliance with executive share ownership guidelines is routinely monitored; (g) we have no multi-year contracts with executive employees, and our employment agreements with executive officers protect specialized and proprietary information, and contacts with personnel obtained while employed with the Company; (h) we do not permit repricing of stock options; (i) executives are not permitted to hedge their beneficially-held Company’s shares; and (j) we have adopted a clawback policy, all as discussed further below.

 

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Our compensation program is designed to effectively link compensation to performance as demonstrated by the completion by our executive officers of corporate and personal objectives that are designed to drive creation of shareholder value. The Compensation Committee believes that it is important to maintain a defined connection between the achievement of these objectives and compensation payout. The Committee has thoughtfully reviewed the metrics and priorities most appropriately used to establish and maintain that connection. In doing so, the following has been considered:

 

 

·

the selection of corporate and personal objectives that are measurable and tied to shareholder value creation, which is fundamental to our success as a company;

 

 

 

 

·

executive officers should be evaluated and paid based on performance and achievement of both corporate and personal objectives; and

 

 

 

 

·

executive officers should have a clear understanding of how their performance and the achievement of pre-determined objectives may influence their compensation.

 

The objectives of our compensation program are to support the achievement of results; motivate executive officers to achieve pre-determined objectives without taking excessive risks; provide competitive compensation and benefit programs to attract and retain highly qualified executives; and encourage an ownership mentality, which is further augmented through share ownership guidelines for all executive officers.

 

Our compensation program continues to follow the same progression throughout the year:

 

 

·

 

Setting Objectives: Establishment of department and corporate objectives, followed by personal objectives being approved, in conjunction with the approved budget, our key performance objectives and additional guidance from management set the stage for our year ahead.

 

 

 

 

·

 

LTIP Awards to Incentivize: As a part of setting objectives, and “looking ahead,” the Compensation Committee recommends, and the Board considers and approves the annual grant of stock options and RSUs and other share units or commons shares available to grant under the RSU&EI Plan to those eligible for consideration. See also “Equity Incentive Plans,” below.

 

 

 

 

·

 

Performance Review: Annually, in the first quarter, we review our performance during the past year, initially with a determination of performance on corporate objectives (reviewed by the Compensation Committee and our Board). Performance of all staff is reviewed; executive officers are evaluated by the Chief Executive Officer and the Compensation Committee; and the Chief Executive Officer is evaluated by the Compensation Committee and the Board of Directors. Based upon these performance assessments, bonuses are determined and awarded, in the discretion of the Compensation Committee and Board. See further discussion under “Short Term Incentive Plan” below.

 

 

 

 

·

 

COLA and Salary Reviews: Cost-of-living adjustments to salaries are typically considered mid-year when best data are available. Contemporaneously, a salary survey is completed, with staff salaries adjusted to the findings of the survey, as necessary, and/or for merit increases.

 

 

 

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Compensation Structure

 

Our compensation program consists of base salary, short- and long-term incentives, and other perquisites. The components of total direct compensation relate to performance as follows:

 

Fixed Compensation

 

Variable Compensation

 

 

 

 

 

Current Incentive

 

Short-term Incentives

 

Long-term Incentives

 

 

 

 

 

Based on skills,

experience and market rates

 

Tied to Past

Annual Performance

 

Tied to Future Long-term Share Price Performance

 

 

 

 

 

Base Salary

 

Cash Bonus

 

Stock Options

 

Restricted Share Units

 

Employment Agreements with Named Executive Officers

 

We have employment agreements with each of our executive officers. The agreements contain standard employment provisions, as well as salary, entitlement to a cash bonus to be determined in the discretion of the Board, and statements of eligibility for Company benefits (e.g., health and wellness benefits, paid time off, 401(k) plan), and equity compensation plans (stock option and RSU plans). The agreements also provide for post-termination obligations of the executives (one-year non-solicitation provisions applicable to all executive officers; and one-year non-competition provisions in the agreements of Messrs. Hatten and Cash). Post-termination obligations of the Company with respect to the NEOs, including in an event of change of control, are discussed and summarized below under the heading “Potential Payments Upon Termination or Change of Control.” The Compensation Committee reviews the employment agreements of and compensation program for the executive officers on a periodic basis.

 

Objectives to be Met Through “Pay Mix”

 

The compensation program is designed to provide motivation and incentives to our executive officers and employees with a view toward enhancing shareholder value and successfully implementing our corporate objectives. The compensation program accomplishes this by rewarding performance that is designed to create shareholder value. The portion of variable, at-risk, performance-based compensation is commensurate to an executive officer’s or employee’s position and increases as their respective level of responsibility increases. Further, the mix and structure of compensation is designed to strike an appropriate balance to achieve pre-determined objectives without motivating excessive risk taking.

 

Our share price may be heavily influenced by changes in uranium and other commodity prices, which are outside of our control. As a result, the compensation program is designed to focus on areas where the executive officers and employees have the most influence. To achieve this, a combination of operational, financial and share price criteria are utilized when selecting corporate and personal objectives and establishing an appropriate combination of pay.

 

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The compensation structure and “pay mix” in place for 2021 for our CEO and other executive officers was as follows:

 

The characteristics of the compensation program’s mix of pay, as they relate to the executive officers, include:

 

 

·

a significant portion of executive pay is at-risk;

 

 

 

 

·

executive officers have a higher percentage of at-risk compensation relative to other employees, because they have the greatest ability to influence corporate performance;

 

 

 

 

·

60% of an executive’s short-term incentive is based on corporate performance; and

 

 

 

 

·

80% of an executive’s long-term incentive is composed of stock options, which are highly leveraged to our share price performance.

 

The incentive compensation actually received by the executive officers varies based upon individual performance and the achievement of corporate and personal objectives and is ultimately subject to the discretion of the Compensation Committee and the Board.

 

Components of Compensation

 

Base Salary

Base salary is the fixed portion of cash compensation earned by and paid to our executive officers and employees. We seek to identify levels of base salary or wage which will aid in attracting and retaining quality employees. Base salaries for all employees are reviewed annually by management. The Compensation Committee reviews the base salary for each executive officer routinely or upon a promotion or other change in job responsibility, based on the individual’s level of responsibility, the importance of the position and the individual’s contribution to our overall performance. The Compensation Committee also assesses the base salaries of the executive officers relative to a group of peer companies with similar scope and operations to ensure that base salaries are positioned competitively with executive officers in similar roles at peer companies. Our overall objective remains to provide a competitive base salary designed to recruit and retain qualified, high-performing executives, while responsibly administering our budget and achieving our corporate objectives.

 

Short-Term Incentive Plan

Total cash compensation includes base salary and any variable (at risk) short-term cash incentive compensation. Bonus awards under our short-term incentive plan (“STIP”) are typically calculated using a formula that is based upon performance in relation to corporate objectives, set by the Chief Executive Officer and executive management and approved by the Board, and in relation to personal objectives, also overseen by the CEO and Board. The STIP program is designed to recognize and reward both corporate and individual performance results. Weighting of corporate and personal objectives as related to the STIP program provides greater personal responsibility of each executive officer for not only the corporate objectives, but also his or her personal objectives which are tied to that year’s corporate and departmental objectives. This portion of our compensation program was also developed through consideration of peer group practices and other standards.

 

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We continue to use corporate objectives to broadly measure our total corporate performance in consideration of our STIPs, as well as for other purposes. Health, safety, and environmental performance objectives are embedded repeatedly throughout our process. As well, we continue to ask each employee to focus on personal safety objectives. We continue to evaluate, broadly, Total Company, Lost Creek, Pathfinder Mines and Corporate Services objectives.

 

Each performance objective is measured on three performance levels (Threshold, Target and Maximum). Threshold, Target and Maximum performance-level values are based on quantifiable measures, when possible, where typically the Threshold value is 80% of Target and the Maximum value is 120% of Target. When quantifiable measures are not possible, or more than one measure is used, we use a four-point scale to measure results. The target level of performance is set at an aggressive level that represents a ‘reasonable stretch.’ For example, when using our four-point scale to measure results, a score of 3 (Fully Successful) is used as the Target. Achieving the Target would result in a 100% payout of the objective. The Threshold level of performance is the minimum performance that must be met before being eligible for any payout. The Threshold performance level is typically set at 80% of Target, or a score of 2 (Partially, but not Fully, Successful Performance) on the four-point scale. There is no payout if the Threshold is not met. Achieving the Threshold would result in a 50% payout. Maximum level of performance is typically set at 120% of Target, or a score of 4 (Superior Performance). Achieving or exceeding the Maximum would result in a 150% payout.

 

The following table shows the target levels and weightings used to establish STIP awards for 2021 for our Executive Officers, including our CEO:

 

STIP Targets and Weights

POSITION

STIP Target (% of Base Salary)

Corporate Objectives Weight

Personal Objectives Weight

Chairman, President and CEO: Jeffrey T. Klenda

40%

60%

40%

Other Executive Officers

(CFO, Corporate Secretary, Vice President Operations and Vice President Regulatory Affairs)

30%

60%

40%

 

Actual STIP awards are based on performance for the year and are typically paid in the following year after our year-end results are evaluated. We calculate the STIP awards as follows:

 

  

Long-Term Equity Incentives

The long-term incentive plan (“LTIP”) includes our Option Plan and the RSU&EI Plan (or, with the Option Plan, the “Plans”). The Plans together form a long-term incentive plan for employees including executive officers and, in the case of the Option Plan, our consultants. Eligibility for participation and awards under the Plans are determined by the Compensation Committee, considering the recommendations of the Chief Executive Officer (and, for the Chief Executive Officer, the recommendations of the Compensation Committee to the Board). The purposes of the Plans are to provide eligible participants with the opportunity to own Common Shares of the Company, enhance Ur-Energy’s ability to attract, retain and motivate key personnel, and align each participant’s interests with those of the Company’s shareholders. Awards made under the Plans are based upon a pre-established formula tied to base salary and the compensation structure. The LTIP target for our CEO is 60% of his base salary; the LTIP target for our other executive officers is 50% of his or her base salary. A more detailed discussion of the Plans can be found below under “Stock Options and Amended and Restated Restricted Share Unit and Equity Incentive Plan.”

 

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Perquisites Including Benefits

We provide employees, including our executive officers, with perquisites including personal benefits that we believe are reasonable and consistent with the overall compensation program to better enable us to attract and retain quality employees. We periodically review the types and levels of perquisites provided to the employees and executive officers to ensure competitiveness and value. Executive officers participate on the same terms as other employees in our healthcare and other benefit programs including a 401(k) Plan, medical, prescription drug, dental, vision, short- and long-term disability, life and supplemental life insurances; employee assistance program; and health and dependent care flexible spending accounts.

 

Compensation Risk Assessment

The charter for our Compensation Committee requires the Committee to review and consider the implications of the risks associated with our compensation policies and practices to avoid encouraging inappropriate risk taking by executive officers. The Compensation Committee has undertaken reviews of this type in conjunction with periodic reviews of the compensation program, including most recently in December 2021. The Committee has implemented and maintained multiple practices to ensure that there are not incentives to take inappropriate or excessive risks, including: combining fixed and variable compensation, granting appropriate levels of equity compensation, and mandating equity ownership requirements for executive officers and directors which are routinely reviewed. Based upon the Compensation Committee’s review, we do not believe that the Company’s executive or non-executive compensation structure is reasonably likely to have a material adverse effect on the Company.

 

2021 Review of Compensation Program and Establishment of Peer Group

 

The Compensation Committee from time to time undertakes a comprehensive review of our compensation program which includes competitive market data, pay grades, share ownership guidelines and short- and long-term incentives. Establishment of our peer group(s) is among the first steps in any such review. Our 2021 peer group, as with others before it, was used as a foundation from which we can compare our performance to peer companies and is also used for comparison when we evaluate our directors’ and officers’ total compensation. If the selected peer group has insufficient depth of data for a particular executive’s compensation, we extend our review to companies outside the peer group which have similar executive positions. Generally, the Compensation Committee reviews and/or updates our peer group annually and then recommends the comparator group, with any changes or additions, to the Board for its approval.

 

The peer group approved by the Board for 2021 included five uranium producers and explorers and 11 other mining companies (e.g., gold, silver) with similar revenues, total assets and market capitalization, with a focus on U.S. or North American based companies. Our review continues to reflect a lack of similarly situated uranium explorers and producers and therefore reaches out into other sectors of the mining industry to operating companies. Generally, our ranking is in the middle of the peer group in terms of revenues, total assets and market capital. Our 2021 peer group, as approved by the Board of Directors, is as follows:

 

ALEXCO Resource Corp.

Americas Gold and Silver Corporation

Argonaut Gold Inc.

Denison Mines Corp.

Endeavour Silver Corp.

Energy Fuels Inc.

Fission Uranium Corp.

Gold Resource Corporation

Golden Star Resources Ltd.

Great Panther Mining Limited

Largo Resources Ltd.

NexGen Energy Ltd.

Seabridge Gold Inc.

Silvercorp Metals Inc.

Uranium Energy Corp.

Westwater Resources, Inc.

 

 

 

As a result of our compensation program review and establishment of the peer group, no changes to the structure of the Company’s compensation program were determined to be appropriate. Further review of the total compensation of the non-executive directors is discussed below at “Compensation of Directors.”

 

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2021 Performance Highlights

 

During 2021 our corporate objectives remained focused on safe, compliant reduced operations at Lost Creek, while addressing the continuing challenges in the uranium recovery and fuel-cycle industries to be best prepared to ramp up production operations when market conditions warrant. Continuing to maintain our broader focus for objectives and having the ability to refine and adjust them in light of evolving conditions assisted greatly in the overall preparations toward ramp up through various financing activities, planning and maintenance at Lost Creek, additional training of staff and, in Q4, decisions to return to construction and development activities in Lost Creek’s Mine Unit 2 (MU2). In its review of corporate performance for 2021, our Board made the assessment that the Company’s performance, and the performance of each executive, generally met or exceeded the various performance objectives, effectively assessing performance of our executives to be between a “3” and a “4” in our compensation program. We are pleased to share highlights of our 2021 corporate performance below.

 

Growing international recognition of nuclear power’s role in achieving net-zero carbon emissions goals greatly renewed interest in the nuclear- and uranium-related equity markets throughout 2021. Additionally, this interest in all things nuclear prompted significant investment in physical uranium by financial funds, uranium ETFs, and uranium developers and producers. The Sprott Physical Uranium Trust (“SPUT”) began purchases of uranium mid-year and established the means in the equity markets to raise more than $3 billion for uranium purchases. At present, SPUT holds more than 52 million pounds U3O8. These events moved spot pricing more than 68 percent from the beginning of 2021 to mid-September. While the market retreated somewhat through 2021 Q4, active interest in the nuclear sector has been sustained into 2022. Nuclear energy industries have also been affected by the geopolitical events and outlook including the invasion of Ukraine by Russia. Recent spot pricing has stayed in the upper $50s and above $60/lbs; term pricing is also increasing, although it continues to lag behind spot pricing increases.

 

We, too, were the beneficiary of this interest and investment in the sector in 2021. We raised $55.2 million during the year through an underwritten public offering in Q1, proceeds from expiring warrants, and strategic use of our At Market facility. The Company ended the year with cash and cash equivalents balance of $46.2 million. As a result, we have preserved our ready-to-sell inventory at the conversion facility (~284,000lbs U3O8) for sales at improved market pricing in the future. We stand well-funded and with great operational strength and leverage to ramp up at Lost Creek and construct Shirley Basin when “go” decisions are made.

 

Decisions were made to further enhance our operational readiness with initiation of a development and construction program in MU2 at Lost Creek. In Q4, we began drilling and construction activities, including hiring staff, to construct the next header house (HH2-4) and for the further development of the mine unit through delineation drilling for the next four header houses. HH2-4 will soon be production ready and, together, these development activities will substantially shorten the time for the return to full production operations when ramp up occurs.

 

Lost Creek operated throughout 2021 with zero lost-time accidents, zero spills or environmental incidents, and zero regulatory violations arising from our operations. As in years past, we are pleased to report that Lost Creek received consistently strong inspection reports. We continue to operate in an environmentally sound fashion, notwithstanding reduced staffing, and will continue to remain stewards of the environment with our oversight of operations at Lost Creek and all of our mineral properties. We continue to strengthen our robust safety culture at Lost Creek and throughout the Company. In addition to the Lost Creek zero lost-time accidents, we remained free from lost-time accidents throughout the Company. There has been no material impact on operations because of quarantine or isolation of staff due to COVID-19. We have remained vigilant in monitoring ongoing changes to public health guidance and look to safeguard our staff and operations during the pandemic.

 

On project-specific regulatory efforts, we enjoyed numerous successes with receipt of all remaining major authorizations to construct and operate at our Shirley Basin project being received in 2021 Q2. The BLM granted its approval in 2020 Q2; we had also received other state permits and authorizations for the project throughout 2020-2021. Shirley Basin stands construction ready.

 

The Shirley Basin approvals were received only weeks after we received the amendment to the Lost Creek license to include recovery of the uranium resource in the LC East Project (HJ and KM horizons) immediately adjacent to the Lost Creek Project and to add recovery from additional mine units at Lost Creek. This license amendment approved access to six planned mine units in addition to the already licensed three mine units at Lost Creek. The approval also increased the license limit for annual plant production to 2.2 million pounds U3O8 which includes wellfield production of up to 1.2 million pounds U3O8 and toll processing up to one million pounds U3O8. The Wyoming Department of Environmental Quality, Land Quality Division, continues its review of the application for amendment to the Lost Creek permit to mine which will add the HJ and KM Horizon mine units at LC East and HJ mine units at Lost Creek. We anticipate that this final review of the Lost Creek expansion will be complete in 2022. Additionally, we submitted our request for extension of our Lost Creek source material license; it is currently in timely review by URP.

 

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In December 2021, we closed on the purchase of our new Casper, Wyoming operations headquarters. The facility will serve our current and future Wyoming operations and mineral exploration and development projects. The three-acre site includes a fully furnished 14,000 sq. ft. office building, and sufficient land to build a construction shop and warehouse facility, which will also house our shared services chemistry laboratory. In 2022 Q1, we selected a contractor, and anticipate construction of the new facility will be complete in 2022. Building, wiring and automating header houses in Casper, as well as other construction activities, will provide numerous safety, environmental and financial advantages to our operations. Due to the remote location of Lost Creek, our staff have been provided rideshare arrangements by the Company to minimize the number of required commuter vehicles. We anticipate that the new facility will remove several of those vehicles from the routine daily commute when Lost Creek is in full production operations, and that the facility will similarly benefit the Shirley Basin Project when it is constructed and operating. Fewer miles traveled by our staff and fewer vehicles on the road equates to a significantly lower risk of accident or injury, a smaller carbon footprint for Lost Creek, and considerably lower vehicle and labor costs.

 

In 2022, we stand ready to quickly ramp-up and supply a domestically produced, clean energy solution to our customers and America’s communities.

 

2022 Compensation Program and Company Outlook

 

We currently anticipate that the structure of the Company’s compensation program will remain largely the same in 2022 for employees and executive officers. The continuing market environment is such that we are maintaining a reduced production level, while further optimizing our operational readiness through fieldwork to advance certain aspects of wellfield readiness for ramp-up.

 

We have maintained our Lost Creek assets and retained core technical, operational and management staff to run the safest, optimal operations, and to be prepared to ramp-up when market conditions improve. With initial wellfield development costs of approximately $14 million, these measures also provide us with the operational leverage for an efficient and low-cost ramp-up at Lost Creek. When we obtain sales contracts and/or market and other conditions warrant, we will ramp-up production at Lost Creek. Development and construction of Shirley Basin may also proceed if market conditions permit. Current conditions are encouraging. However, there can be no certainty of the timing for contracts, whether through the new U.S. uranium reserve or with utilities.

 

We will continue to concentrate on operating safely in an environmentally sound fashion, focusing on the health and well-being of our employees, including in the continuing circumstances surrounding COVID-19, while returning value to our shareholders.

 

As a uranium producer, we are advancing the interests of clean energy, thereby contributing in positive ways to address the challenges of global climate change. Uranium fuels carbon-free, emission-free nuclear power which is a clean, cost-effective, and reliable form of electrical power. Nuclear power is estimated to provide more than 50 percent of the carbon-free electricity in the U.S. and approximately one-third of carbon-free electricity worldwide.

 

We have made great strides in reducing water consumption at our Lost Creek Mine through the implementation of a Class V treatment system that includes water treatment and injection of the clean water into a shallow formation where it can be accessed by future generations. Since implementation of the Class V system, the generation of wastewater during production has been reduced by 18 percent. To further reduce water consumption and enhance IX effectiveness, a pre-IX filtration and wastewater treatment facility is being contemplated and lab tested. The system, as envisioned, will allow for more effective use of current and future deep disposal wells working in conjunction with the Class V water recycling system while preserving precious water resources. Our goal is to reduce wastewater generation by at least 70 percent. 

 

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Additional Compensation Practices

 

Share Ownership Guidelines

 

All of our executive officers and directors are encouraged to have a significant long-term financial interest in our Company. In 2009, to encourage alignment of the interests of the executive officers and directors with those of our shareholders, our Board mandated that each executive officer of Ur-Energy, whether then appointed or appointed thereafter, is required to invest on a pre-determined schedule an amount equal to the executive officer’s annual base salary in shares or securities redeemable into shares. In 2012, the Board approved additional guidelines (the “Guidelines”) related to the mandate, such that the requirement of share ownership be met on or before the later of (i) December 31 of the fifth year after an executive officer becomes subject to the Guidelines, or (ii) December 31 of the third year from the effective date of the change in the executive officer’s annual base salary. The investment amount is calculated using the amount of the annual base salary of the executive officer at the later of (i) the date the executive officer became subject to the Guidelines, or (ii) the date of the most recent increase to annual base salary. Compliance is evaluated once per year, at December 31. At December 31, 2021, all executive officers meet the Guidelines or are on-track to meet the Guidelines within the prescribed timeframes. The share ownership requirements are also applicable to the non-executive directors who, since 2012, are required to invest an amount equal to three times their annual retainer. See discussion under “Share Ownership Guidelines for Directors,” below.

 

Anti-Hedging Policy; Pledging

 

We have a formal anti-hedging policy which prohibits our executive officers and directors from engaging in hedging or similar monetization transactions with respect to the Company’s securities, including, but not limited to, through the use of financial instruments such as exchange funds, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments, or through the establishment of a short position in the Company’s securities.

 

The Board has not formally adopted a policy restricting the pledging of its Common Shares held by executive officers or directors as, historically, there has been little or no pledging of the Company’s shares by our executive officers or directors. Currently, only one insider has pledged Common Shares; those pledged Common Shares represent less than one percent of our issued and outstanding shares. Among the directors and executive officers, there have been no other pledged Common Shares of the Company. See notes to Security Ownership of Management table, above.

 

Clawback Policy

 

The Company has adopted a clawback policy pursuant to which the Company would be entitled to recoup incentive compensation amounts paid to executive officer(s) in the event of a future restatement of financial results and other specified events. This policy covers all incentive cash and equity compensation, including any cash bonuses, RSUs or stock options received by the executives. It provides that the Board may direct the Company to recoup the incentive cash and equity compensation of the executive(s) at fault if all three of the following events occur:

 

 

·

the Company makes an accounting restatement of our financial statements if there is a material financial reporting non-compliance under securities laws; and

 

 

 

 

·

the executive(s) engaged in gross negligence, intentional misconduct or fraud which caused or significantly contributed to the restatement; and

 

 

 

 

·

the executive(s) was overcompensated with respect to incentive cash and equity compensation during the year(s) subject to the restatement.

 

If all three of the preceding events occur, the Board, following review and recommendation by the Compensation Committee, will decide when and how the policy will apply. The Company may recoup the portion of incentive cash and equity compensation received by the executive(s) at fault during the year(s) subject to the restatement that is in excess of the incentive compensation that would have been received based on the restated results.

 

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Tax and Accounting Considerations

 

The Compensation Committee considers tax and accounting rules and regulations when structuring our executive compensation program. Our plans and programs are designed to comply with or be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “IRS Code”), which regulates deferred compensation and provides for potentially early taxation and a 20% additional tax on non-compliant arrangements. Equity awards are accounted for under FASB ASC Topic 718, which requires the recognition of expense for the fair value of such awards, and the Compensation Committee considers the accounting expense of such awards when authorizing grants under both equity compensation plans.

 

Compensation Consultant Fees

The Compensation Committee utilized third-party consulting services of Roger Gurr & Associates (“RG&A”) in conjunction with the review of non-executive director compensation, and paid fees related to the review in 2022 the amount of $18,000. Additionally, management and the Compensation Committee continue to utilize online data sources.

 

 

 

 

EXECUTIVE COMPENSATION

 

Say on Pay Advisory Vote

 

In 2021, our shareholders approved our compensation program for our Named Executive Officers by a vote in favor of 80%. For the past five years, our advisory “say on pay” vote has averaged approximately 90% in favor. The Compensation Committee believes the results of our advisory votes on “say on pay” continue to confirm that the clear majority of our shareholders are satisfied with our executive compensation policies and decisions, and that our executive compensation program effectively aligns the interests of our Named Executive Officers with the interests of our shareholders.

 

Our prior reviews of survey data from our peer groups, utilizing publicly available data and studies, indicated that our executive officers remain behind the median ranges of our comparator companies, with certain exceptions. As discussed above, in 2021 the challenging uranium market conditions and effects of COVID-19 persisted and, as such, we chose to defer a formal review of executive compensation until 2022, because no changes were anticipated to be made in executive compensation in 2021 except for the cost-of living adjustment to salary. As in years past, this adjustment was made at the same level for our executive officers as for non-executive staff. This was the first adjustment to executive compensation levels of any sort since a cost-of-living adjustment in 2019.

 

Pursuant to our Board’s recommendation, we continue with an annual advisory (non-binding) say on pay vote. Although our compensation program has changed little in recent years, and we did not and do not currently anticipate that the structure of the compensation program will change significantly, we believe that an annual update for our shareholders is appropriate. Based upon the advisory vote by our shareholders in 2020, concerning “say when on pay,” our Board adopted an annual advisory vote for “say on pay.” Our next say when on pay vote will be in 2026.

 

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Summary Compensation Table

 

The following table sets forth the summary information concerning compensation earned during the financial years ended December 31, 2021, 2020 and 2019 by our Named Executive Officers serving at December 31, 2021.

 

Name and principal position (1)

 

Year

 

Salary

($)

 

 

Bonus (2)

($)

 

 

Stock

awards (3)(4)(5)

($)

 

 

Option

awards

  (3)(4)(5)

($)

 

 

Non-equity incentive plan compensation

($)

 

Change in pension value and nonqualified deferred compensation

($)

 

All other

 compensation (6)

($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeffrey T. Klenda

 

2021

 

 

448,454

 

 

 

213,318

 

 

 

54,359

 

 

 

112,070

 

 

Nil

 

Nil

 

Nil

 

 

 

828,201

 

President and

 

2020

 

 

441,662

 

 

 

176,665

 

 

 

54,160

 

 

 

102,064

 

 

Nil

 

Nil

 

Nil

 

 

 

774,551

 

Chief Executive Officer

 

2019

 

 

426,050

 

 

 

112,183

 

 

 

62,082

 

 

 

109,917

 

 

Nil

 

Nil

 

Nil

 

 

 

710,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roger L. Smith

 

2021

 

 

294,364

 

 

 

105,020

 

 

 

29,735

 

 

 

61,301

 

 

Nil

 

Nil

 

 

11,762

 

 

 

502,182

 

Chief Financial Officer and

 

2020

 

 

289,900

 

 

 

86,970

 

 

 

29,625

 

 

 

55,828

 

 

Nil

 

Nil

 

 

11,596

 

 

 

473,919

 

Chief Administrative Officer

 

2019

 

 

282,425

 

 

 

54,487

 

 

 

33,958

 

 

 

60,124

 

 

Nil

 

Nil

 

 

11,297

 

 

 

442,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Penne A. Goplerud

 

2021

 

 

264,632

 

 

 

94,409

 

 

 

26,730

 

 

 

55,110

 

 

Nil

 

Nil

 

 

10,585

 

 

 

451,466

 

General Counsel and

 

2020

 

 

260,624

 

 

 

78,187

 

 

 

26,634

 

 

 

50,190

 

 

Nil

 

Nil

 

 

10,425

 

 

 

426,060

 

Corporate Secretary

 

2019

 

 

253,908

 

 

 

48,945

 

 

 

30,529

 

 

 

54,052

 

 

Nil

 

Nil

 

 

10,156

 

 

 

397,590

 

____________ 

(1)

Each of the NEOs (Messrs. Klenda and Smith, and Ms. Goplerud), and each of our other executive officers, has an employment agreement with the Company, as have been amended from time to time. See discussion under “Employment Agreements with Named Executive Officers” above and “Potential Payments Upon Termination or Change of Control – Employment Agreements with our Named Executive Officers” below.

 

 

(2)

Annual incentive plan awards are shown in the year earned, although they are typically determined in the first calendar quarter based upon performance to objectives for the preceding year. The 2019 STIP awards for the executive officers, which would have been paid in 2020, were postponed by the Board in deference to the effects of and uncertainty caused by the COVID-19 pandemic. These STIPs were considered in 2021 and the determination was made by the Board to pay the 2019 STIPs at a rate reduced by 50%. Additionally, in early 2021, the Board determined that the STIP awards for executives for 2020, to be paid in 2021, would initially be paid at a reduced rate of 50%; with the reservation by the Board that it might consider the feasibility of making some additional payout of the 2020 STIPs as may be suggested by the Compensation Committee. In July 2021, the second 50% of the 2020 STIP awards was paid.

 

 

(3)

Issuances of share-based and option-based awards in conjunction with the LTIP are shown in the year they were issued.

 

 

(4)

Canadian dollar figures have been converted to U.S. dollar figures at the average exchange rate for 2021 of C$1.00 = US$0.7977496; 2020 of C$1.00 = US$0.7461412; and for 2019 of C$1.00 = US$0.7537308 as quoted by Bank of Canada on its website www.bankofcanada.com.

 

 

(5)

For additional information regarding the fair value of stock options and RSUs, as at December 31, 2021 (using the Company’s TSX closing stock price of C$1.54 (~US$1.22) on the last trading day of 2021), see Annual Report on Form 10-K, note 13 to Financial Statements, which has been filed with the SEC at https://www.sec.gov/edgar.shtml and with Canadian securities regulators, and is available at https://sedar.com.

 

 

(6)

Reflects only the Company’s matching contribution toward the executive’s 401(k) retirement account. Other aspects of compensation or perquisites are of a non-material value, and/or are provided to executive officers in the same fashion as all employees of the Company (e.g., healthcare, disability, and other insurances).

 

EQUITY INCENTIVE PLANS

 

The following table sets forth certain summary information concerning our equity compensation plans as at December 31, 2021. Directors, officers, employees, and consultants are eligible to participate in the Option Plan. Directors and employees, including executive officers, are eligible to participate in the RSU&EI Plan.

 

 

Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights

Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (2)

(US$)

Number of Common Shares Remaining for Future Issuance (Excluding Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights)

Equity compensation plans approved by securityholders (1)

11,075,684

$ 0.68

9,510,541

Equity compensation plans not approved by security-holders

-

-

-

____________ 

(1)

Our shareholders have approved both the Option Plan and the RSU&EI Plan (formerly, the RSU Plan), and are asked to do so on a routine, every three-year basis.

 

 

(2)

The exercise price represents the weighted exercise price of the 10,064,424 outstanding stock options at December 31, 2021.

 

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Stock Options and the Amended and Restated Restricted Share Unit and Equity Incentive Plan

 

We adopted the Ur-Energy Inc. Amended and Restated Stock Option Plan in 2005 in order to advance our interests by providing directors, officers, employees and consultants with a financial incentive tied to the Company’s long-term financial performance and continued service to or employment with us. Subsequently, we adopted the Ur-Energy Inc. Restricted Share Unit Plan, as thereafter amended, as part of our overall stock-based compensation plan. The RSU&EI Plan has allowed participants to earn Common Shares over time, rather than options that give participants the right to purchase shares at a set price.

 

A total of up to 10% of Ur-Energy’s issued and outstanding Common Shares may be reserved for issuance pursuant to the Plans, in the aggregate. At April 8, 2022, we have listed and reserved 20,346,803 Common Shares of the 21,862,283 total Common Shares that may be reserved under the Plans, in the aggregate. We have 17,158,490 Common Shares reserved under the Option Plan, and 3,188,313 Common Shares reserved under the RSU&EI Plan. Therefore, up to 1,515,480 Common Shares are available to be reserved under the Plans.

 

Of the shares currently reserved, 9,999,602 options for Common Shares have been granted and are outstanding, as of April 8, 2022, or approximately 4.6% of our issued and outstanding Common Shares. There are 1,011,660 RSUs that have been granted and are outstanding as of April 8, 2022, or approximately 0.5% of our issued and outstanding Common Shares. Historically, we have allocated approximately 80% of those reserved shares to the Option Plan and 20% to the RSU&EI Plan, and award grants using a ratio of 4:1 Options to RSUs. The number of shares reserved is subject to adjustment if the Common Shares are subdivided, consolidated, converted or reclassified or the number of Common Shares varies as a result of a stock dividend or an increase or a reduction in our share capital. Dividends or dividend equivalents on unvested awards of all types are generally subject to the same vesting conditions as the underlying awards to which they relate. The run rate (or “burn rate”) on the equity plans for the past three years is as follows:

 

Equity Compensation Plans

2021

2020

2019

Stock Option Plan

0.7%

1.8%

1.8%

RSU&EI Plan (RSU Plan)

0.1%

0.4%

0.4%

  

As at April 8, 2022, the closing price of our Common Shares on the NYSE American was $1.78 and on the TSX was C$2.23.

 

Option Plan

 

Under the Option Plan, options may be granted to our directors, executive officers, eligible employees and consultants. As at April 8, 2022, there are 11 employees and six non-executive directors who are eligible to participate in the Option Plan. The Option Plan was most recently approved by shareholders on May 7, 2020.

 

The maximum number of Common Shares that may be reserved for issuance to any one person under the Option Plan is five percent of the number of Common Shares outstanding at the time of reservation. The options are personal and non-assignable. Option holders do not have any shareholder rights (and, specifically, shall not be entitled to dividends) with respect to options unless and until the options are exercised and Common Shares are issued in the name of the option holder. The exercise price for Common Shares subject to an option is determined by the Board of Directors at the time of grant and may not be less than the market price of the Common Shares at the time the option is granted. Market price at any date in respect of the Common Shares means the closing price of the Common Shares on the TSX (or, if the Common Shares are not then listed and posted for trading on the TSX, then on the recognized stock exchange on which such Common Shares are listed or posted or, if such Common Shares are not so listed on any recognized stock exchange, then on the over-the-counter market on which they are traded or posted as selected for such purpose by the Compensation Committee or in accordance with Section 5.5 of the Option Plan) on the immediately preceding trading day.

 

Options vest over a three-year period: one-third on the first anniversary, one-third on the second anniversary and one-third on the third anniversary of the grant; dividends, for all awards, shall not be payable on unvested options; the term of all options is five years. Option expiration dates are not extended during blackouts. Additionally, in no event shall more than five percent of the shares available for issuance under the Option Plan have a stated vesting/exercisability schedule of less than one year from the date of grant. The aggregate number of Common Shares issued to insiders within any 12-month period, or issuable to insiders at any time, under the Stock Option Plan and any other security-based compensation arrangement of the Company, may not exceed 10% of the total number of issued and outstanding Common Shares during such time.

 

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Options granted under the Option Plan are subject to early termination under certain circumstances, including (i) one year after the death of the option holder, (ii) three months after the option holder’s resignation or dismissal without cause as an employee or consultant, or (iii) immediately upon the option holder’s dismissal for cause as an employee. In each case, only options vested at the time of the event which gave rise to such early termination may be exercised by the option holder during such period. The Option Plan also provides that upon a change of control all options under the Option Plan vest immediately and are immediately exercisable.

 

The Option Plan and the terms of any outstanding option may be amended at any time by the Board subject to any required regulatory or shareholder approvals, provided that where such an amendment would prejudice the rights of an option holder under any outstanding option, the consent of the option holder is required to be obtained. Amendments requiring shareholder approval are those amendments set forth in the TSX Company Manual. Amendments that do not require shareholder approval are “housekeeping” amendments such as amendments to the Option Plan to comply with regulatory requirements, amendments related to the administration of the Option Plan and to change the eligibility requirements under the Option Plan and terms and conditions on which the options may be granted. The Option Plan may be suspended, terminated or discontinued in the sole discretion of our Board of Directors.

 

Stock options are generally treated as ordinary compensation income as and when Common Shares are issued to the participant upon exercise of the award, however, in the case of Incentive Stock Options, the options may be taxable at long-term capital gains tax rates when the issued Common Shares are sold so long as certain conditions are met. If the participant is an employee, the compensation income may be subject to withholding for income and employment tax purposes. The Company is generally entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant, subject to possible limitations imposed by the IRS Code. Please note that the foregoing description is based upon U.S. federal income tax laws in effect on the date of this Circular and does not purport to be complete, and does not discuss state, local or non-U.S. tax consequences.

  

Amended and Restated Restricted Share Unit and Equity Incentive Plan (RSU&EI Plan)

 

The RSU&EI Plan was originally adopted (then, as the RSU Plan) by the Board of Directors on May 7, 2010 and, as previously amended, was approved in its entirety most recently by our shareholders on May 2, 2019. Our shareholders approved amendments to the then-existing RSU Plan, on June 3, 2021, including the renaming of the plan as the “Amended and Restated Restricted Share Unit and Equity Incentive Plan.”

 

The RSU&EI Plan is also described in Proposal No. 4, above, and the full text of the plan is attached as Schedule A of this Circular. As discussed above under “Particulars of Matters to Be Acted Upon,” the TSX rules provide that all eligible insiders, in order to participate in the RSU&EI Plan, may not vote on the renewal of the RSU&EI Plan resolution as set forth in Proposal No. 4. Accordingly, the resolution must be passed by a majority of votes, excluding 6,201,821 Common Shares held by certain insiders of the Company and their affiliates. Also as set forth above in Proposal No. 4, there is no request of an increase in the percentage number of shares available for issuance under the RSU&EI Plan.

 

Under the RSU&EI Plan, awards of Restricted Share Units (RSUs), performance share units (PSUs) and direct share issuances of Common Shares (DSIs), may be granted to directors and employees, including executive officers, of the Company as possible eligible participants. As of April 8, 2022, there are 11 employees and six non-executive directors who are eligible to participate in the RSU&EI Plan. Our Board has appointed the Compensation Committee to determine which persons are entitled to participate in the plan and the number of awards to be awarded to each participant. The plan does not limit the participation of any specific eligible participant including insiders except to the total of 10% of our issued and outstanding Common Shares which may be reserved for issuance pursuant to the Plans, in the aggregate.

 

Restricted Share Units

 

RSUs awarded to participants are credited to a notional account that is established on their behalf and maintained in accordance with the plan. Each RSU awarded conditionally entitles the participant to the delivery of one Common Share (or cash in lieu of such share at the Compensation Committee’s discretion) upon attainment of the RSU vesting period. Grants of RSUs vest 100% on the two-year anniversary of the date of the grant. Upon payment by the corporation of a dividend, each outstanding RSU is credited with a dividend equivalent equal to the dividend paid per share, which dividend equivalent is then converted into additional RSUs that are subject to the same vesting schedule as the RSUs to which they relate. The plan permits the Company to either redeem RSUs for cash or issue Common Shares from treasury to satisfy all or any portion of a vested RSU award. If redeemed for cash, RSUs will be redeemed for an amount equal to fair market value which means the closing price of the Common Shares on the TSX on the business day immediately prior to the redemption date, or if the shares are not listed on the TSX, then on such other stock exchange or quotation system as may be selected by the Compensation Committee, provided that, if the Common Shares are not listed or quoted on any other stock exchange or quotation system, then the fair market value will be the value determined by the Compensation Committee in its sole discretion acting in good faith. The redemption date of any RSU will not be after the end of the calendar year which is three years following the end of the year in which services to which the grant of such RSU relates were performed by the participant.

 

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Table of Contents

 

In the event of a change of control, as defined in the plan, we are required to redeem 100% of the RSUs granted to participants. In the event of an involuntary termination of an employee, other than for cause, or a director who is not re-elected, we are required to redeem the RSUs for cash. Rights respecting RSUs shall not be transferable or assignable other than by will.

 

Performance Share Units

 

PSUs are performance-based awards that may entitle the recipient to receive Common Shares (or cash in lieu of shares at the Compensation Committee’s discretion) upon attainment of one or more performance goals over a designated performance period set forth in the PSU grant agreement. Each award of PSUs will contain a target number of PSUs that may be earned, with the actual number earned to be determined pursuant to a formula set forth in the PSU grant agreement based on the extent to which corresponding performance criteria have been attained during the performance period. Upon payment by the corporation of a dividend, each outstanding target PSU is credited with a dividend equivalent equal to the amount of the dividend paid per share, which dividend equivalent is then converted into additional PSUs that are subject to the same performance conditions and formula and vest at the same time as the PSUs to which they relate.

  

Unless settled earlier in accordance with the plan, earned PSUs will be settled on or within 30 days after the end of the performance period. The plan permits the Company to either settle PSUs for cash or issue Common Shares from treasury to satisfy all or any portion of a PSU award. If settled for cash, PSUs will be settled for an amount equal to fair market value which means the closing price of the Common Shares on the TSX on the business day immediately prior to the settlement date, or if the shares are not listed on the TSX, then on such other stock exchange or quotation system as may be selected by the Compensation Committee, provided that, if the Common Shares are not listed or quoted on any other stock exchange or quotation system, then the fair market value will be the value determined by the Compensation Committee in its sole discretion acting in good faith.

 

In the event of a change of control, as defined in the plan, the performance period of each outstanding PSU shall be deemed to have ended and the Compensation Committee shall determine the number of PSUs earned based upon performance (under a specific award) to the time of change of control, subject to certain discretionary determinations of the Committee under the plan. Unless otherwise provided in a PSU grant agreement, upon a participant’s termination of employment or other service or death prior to the end of the performance period for an award of PSUs, such PSUs shall be forfeited.

 

Direct Share Issuances

 

Subject to applicable securities law requirements as well as the rules of the exchanges under which our shares trade, DSIs awarded to participants are awards of Common Shares granted in such amounts and subject to such terms and conditions as the Compensation Committee determines in its sole discretion. It is anticipated that the DSIs will complement our other bonus program awards in instances when such an award of DSIs is made in lieu of a routine (STIP) or extraordinary cash bonus, as a milestone award (outside PSU grant terms), or other circumstances in which this use of our equity compensation plans is deemed appropriate in the discretion of the Compensation Committee. DSIs may be fully vested on the grant date or may be subject to vesting, as determined by the Compensation Committee. DSIs that are subject to a vesting schedule may not be transferred prior to vesting. Dividends on unvested DSIs may be paid in cash or may be reinvested in additional Common Shares, in either case subject to the same vesting schedule as the DSI to which they relate.

 

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Table of Contents

 

Unless otherwise provided in the DSI grant agreement that is subject to vesting, upon a participant’s termination of employment or other service or death, the provisions related to termination and death as set forth under the heading “Restricted Share Units” above shall apply by analogy. Any unvested Common Shares that do not vest as a result of the participant’s termination of employment of other service or death shall be immediately forfeited and returned to the corporation without the payment of any consideration.

 

Administration of the RSU&EI Plan and Tax Consequences

 

The Board may from time to time amend or suspend the RSU&EI Plan and may at any time terminate the plan. No such amendment, suspension or termination shall adversely affect the rights of any eligible person with respect to outstanding and unredeemed awards under the plan credited to that person without that holder’s consent. Amendments requiring shareholder approval are those amendments set forth in the TSX Company Manual, such as the percentage of the issued and outstanding Common Shares available to be granted under the RSU&EI Plan, an extension of the term for redemption of RSUs or settlement of PSUs held by a participant and amendments to Section 8.1 of the RSU&EI Plan. Amendments that do not require shareholder approval are “housekeeping” amendments such as amendments to the RSU&EI Plan to comply with regulatory requirements, amendments related to the administration of the plan and to change the eligibility requirements under the plan and terms and conditions on which the awards may be granted.

 

RSUs and PSUs are generally treated as ordinary compensation income as and when Common Shares are issued to the participant upon vesting or settlement of the award and DSIs are treated as ordinary compensation income at the time of grant if fully vested under the plan or, if such grant is subject to vesting under the RSU&EI Plan, at the time of vesting of the Common Shares. If the participant is an employee, this income is subject to withholding for income and employment tax purposes. The Company is generally entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant. Please note that the foregoing description is based upon U.S. federal income tax laws in effect on the date of this Circular and does not purport to be complete, and does not discuss state, local or non-U.S. tax consequences.

 

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Table of Contents

 

Outstanding Equity Awards at December 31, 2021

 

The following table sets forth information concerning the value vested or earned in respect of incentive plan awards during the year ended December 31, 2021 by each of the Named Executive Officers.

 

 

 

Option-based Awards

 

Share-based Awards

 

Name

 

Number of

securities underlying unexercised options

(#)

exercisable

 

 

Number of securities underlying unexercised options (#)

unexercisable

 

 

Equity incentive plan awards: number of securities underlying unexercised options (#)

 

Option exercise price (C$)

 

 

Option expiration date

 

Number of shares or units of stock that have not vested (#)

 

 

Market value of shares or units of stock that have not vested (US$)

 

 

Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)

 

Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeffrey T. Klenda

 

 

239,422

 

 

Nil

 

 

Nil

 

 

0.90

 

 

12/15/22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

111,036

 

 

Nil

 

 

Nil

 

 

0.93

 

 

08/20/23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103,831

 

 

Nil

 

 

Nil

 

 

0.91

 

 

12/14/23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

278,029

 

 

 

139,015

 

 

Nil

 

 

0.79

 

 

11/05/24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

153,621

 

 

 

307,244

 

 

Nil

 

 

0.63

 

 

11/13/25

 

 

 

 

 

 

 

 

 

 

 

 

 

Nil

 

 

 

189,285

 

 

Nil

 

 

1.44

 

 

08/27/26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

115,217

 

 

 

139,954

 

 

Nil

 

Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

47,320

 

 

 

57,480

 

 

Nil

 

Nil

 

Roger L. Smith

 

 

170,788

 

 

Nil

 

 

Nil

 

 

0.90

 

 

12/15/22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

79,206

 

 

Nil

 

 

Nil

 

 

0.93

 

 

08/20/23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

74,067

 

 

Nil

 

 

Nil

 

 

0.91

 

 

12/14/23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

152,079

 

 

 

76,040

 

 

Nil

 

 

0.79

 

 

11/05/24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

84,029

 

 

 

168,058

 

 

Nil

 

 

0.63

 

 

11/13/25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nil

 

 

 

103,536

 

 

Nil

 

 

1.44

 

 

08/27/26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

63,022

 

 

 

76,553

 

 

Nil

 

Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

25,884

 

 

 

31,441

 

 

Nil

 

Nil

 

Penne A. Goplerud

 

 

153,546

 

 

Nil

 

 

Nil

 

 

0.90

 

 

12/15/22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71,211

 

 

Nil

 

 

Nil

 

 

0.93

 

 

08/20/23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

66,588

 

 

Nil

 

 

Nil

 

 

0.91

 

 

12/14/23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

136,721

 

 

 

68,360

 

 

Nil

 

 

0.79

 

 

11/05/24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75,543

 

 

 

151,087

 

 

Nil

 

 

0.63

 

 

11/13/25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nil

 

 

 

93,081

 

 

Nil

 

 

1.44

 

 

08/27/26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

56,658

 

 

 

68,883

 

 

Nil

 

Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

23,269

 

 

 

28,265

 

 

Nil

 

Nil

 

  

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

 

Employment Agreements with our Named Executive Officers

 

As discussed above, our Named Executive Officers have employment agreements with the Company, as have been amended from time to time. Relevant to potential payments to be made upon termination without cause or change of control, the agreements provide that an executive officer is entitled to certain amounts, based upon the executive’s then-current base salary. As discussed below, our employment agreements, and the Company’s equity compensation plans, specify the obligations of the Company to the executive officers in the event of termination or change of control.

 

Equity Award Provisions

 

Upon separation of employment of any of our executive officers, including under circumstances of termination without cause or change of control, the Option Plan and RSU&EI Plan govern the treatment of outstanding equity compensation in the form of vested stock options and RSUs, PSUs or DSIs not yet redeemed. All vested options of Designated Officers (all of our current executive officers, as defined by the plan and resolution of our Board) will expire on the expiration date identified at the grant of the option, and all unvested options will expire upon termination.

 

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The RSU&EI Plan provides that the RSUs of an employee who is an eligible person who is involuntarily terminated without cause, shall be redeemed for cash at a fair market value on the redemption/termination date. In the event of a change of control, as defined in the plan, all of the RSUs granted and outstanding will be redeemed as soon as reasonably practical and not later than 30 days following the redemption date associated with the change of control. The RSU&EI Plan provides for redemption, instead of cancellation, of outstanding RSUs at the date of redemption for retiring directors and executive officers, which is defined as a threshold of combined service and age of 65 years, and a minimum of five years of service to the Corporation. At this time, the Board has not made other grants under the plan. Treatment of awards of other share units and Common Shares is governed by the RSU&EI Plan.

 

Change of Control and Termination Benefits Tables

 

Each of our executive officers has entered into an employment agreement that provides for certain payments if the executive’s employment is terminated in connection with a change of control. In addition, upon the occurrence of a change of control, all of the executive officer’s unvested options and RSUs will vest. The table below shows the amounts that would be payable or vest assuming that a change of control occurred on December 31, 2021 and that Named Executive Officer’s employment terminated on that date. The Compensation Committee has established a policy that the Company will not enter into an employment agreement with any new executive officer that includes a single-trigger severance arrangement.

 

 

 

Cash

 

 

Equity

 

 

Pension

/NQDC

 

Perquisites/

benefits

 

Tax reimbursement

 

Other

 

Total

 

Name

 

($)(1)

 

 

($)(2)

 

 

($)

 

($)

 

($)

 

($)

 

($)

 

Jeffrey T. Klenda

 

 

1,391,208

 

 

 

1,015,760

 

 

Nil

 

Nil

 

Nil

 

Nil

 

 

2,406,968

 

Roger L. Smith

 

 

761,020

 

 

 

593,185

 

 

Nil

 

Nil

 

Nil

 

Nil

 

 

1,354,205

 

Penne A. Goplerud

 

 

547,300

 

 

 

533,285

 

 

Nil

 

Nil

 

Nil

 

Nil

 

 

1,080,585

 

____________ 

(1)

Pursuant to their respective employment agreements, Mr. Klenda is entitled to payment of an amount equal to three-years of his then-current salary; Mr. Smith is entitled to payment of an amount equal to 2.5 years of his then-current salary. Ms. Goplerud is entitled to payment of an amount equal to two years’ salary, based upon her then-current salary. At December 31, 2021, our two other executive officers were entitled to payment of an amount equal to two years base salary, based upon then-current salary.

 

 

(2)

These amounts represent equity values based upon the closing price of our Common Shares on the TSX on the last trading day of 2021 (C$1.54/US$1.22) Klenda (stock options: $813,326; RSUs: $197,434); Smith (stock options: $485,190; RSUs: $107,994); and Goplerud (stock options: $436,197; RSUs: $97,088).

 

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Each executive’s amount of severance is calculated solely based upon then-current salary (i.e., without cash bonus value included) and are reflected in the table below. The following summarizes the compensation or other benefits which would be owed and paid to our executive officers if employment is terminated for the specified reasons, effective December 31, 2021. We believe that these terms are fair and are competitive with the market and our peer group, based upon industry and geographical practices.

 

Type of Termination

Severance Payment(1)(2)

STIP Bonus

Stock Options

RSUs(3)

 

 

 

 

 

Resignation or Retirement

CEO will receive three-year salary payment, based on current salary, per agreement

 

Other executive officers, no severance payment

Pro rata entitlement to discretionary bonus, per agreement

Unvested options are cancelled; vested options expire at date on option for current executive officers (as a “Designated Officer” per Section 6.7 of Plan)

RSUs are cancelled unless retirement provision is satisfied; RSUs will be carried with the executive until redemption, if the executive has combined service and age of 65 years, and a minimum of five years of service to the Company

 

 

 

 

 

Termination without cause

CEO: three-year salary payment, based upon then-current salary

 

CFO: 2.5-year salary payment, based upon then-current salary.

 

Other executive officers: two-year salary payment, based upon then-current salary

Pro rata entitlement to discretionary bonus, per agreement

Unvested options are cancelled; vested options expire at date on option for current executive officers (as a “Designated Officer” per Section 6.7 of Plan)

Outstanding RSUs are redeemed for cash at fair market value, as defined in the Plan

 

 

 

 

 

Termination for cause

None

Possible pro rata share entitlement

None

None

 

 

 

 

 

Change of control (and/or termination within 24 months of a change of control)

CEO: three-year salary payment, based upon then-current salary

 

Other executive officers’ payment based on then-current base salary (CFO 2.5 years; Vice Presidents and Corporate Secretary two years)

Pro rata entitlement to discretionary bonus, per agreement

All options become fully vested and exercisable

Outstanding RSUs are redeemed for cash at fair market value, as defined in the Plan

 

 

 

 

 

Death

CEO: three-year salary payment, based on then-current salary

• •

Other executive officers, no severance payment

Pro rata entitlement to discretionary bonus, per agreement

Unvested options are cancelled; vested options expire at the earlier of expiry at date on option or one year from the date of death (with discretion of Board as per Section 6.3(b) of Plan to extend)

RSUs are redeemed (Section 3.2 of Plan); date of death is redemption date

 

 

 

 

 

____________ 

(1)

At December 31, 2021, Mr. Klenda, our CEO, was entitled to a salary of $463,736 per year (three years base salary is a total of $1,391,208). Current salaries of our CFO, Mr. Smith, and our other executive officers, and their severance entitlements, are as follows: Mr. Smith: annual salary $304,408 (2.5 years base salary is $761,020); Ms. Goplerud: annual salary $273,650 (two-years base salary is $547,300). At December 31, 2021, our other two executives, Messrs. Hatten and Cash were each entitled to two-years base salary on an event of severance as specified in their respective employment agreements. Subsequent to December 31, 2021, Mr. Cash was named Chief Executive Officer of the Company on March 1, 2022, with a salary of $400,000 and severance to be paid 2.5 years of base salary under the same circumstances it was due to him as a Vice President, such that a severance payment owed to Mr. Cash would be $1,000,000.

 

 

(2)

Accrued paid time off is paid to the executive officer at the time of termination, according to Company policy and applicable law.

 

 

(3)

The RSU&EI Plan sets forth the settlement of PSUs and DSIs for participants in the plan, including executive officers. Any future awards of PSUs and DSIs will be governed by the plan and individual grant agreements. See discussion above under “Stock Options and the Amended and Restated Restricted Share Unit and Equity Incentive Plan.”

 

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COMPENSATION OF DIRECTORS

 

We conduct routine reviews of the total compensation of our non-executive directors on an internal basis, utilizing data about our peers which we obtain through public sources. Additionally, on a time-to-time basis, we have engaged independent third-party compensation advisors to review the total compensation of our directors. Results of these reviews in recent years indicated that while our non-executive director cash retainer and equity-based compensation remained generally within a range of the median of the comparator group, compensation has been consistently at the lower end of the range. This has been particularly true of the cash retainer for our directors.

 

The Board approved the last change to the director annual retainer at year-end 2018, after which time our non-executive directors have been paid a cash retainer of $41,000 annually. With that adjustment, the payment of fees for attendance at Board meetings was eliminated, while payment for attendance at committee meetings continued unchanged. Committee meeting fees were paid as follows during 2021: $500 per Audit Committee meeting and $250 per meeting for other committees. In addition, time incurred for work related to a director’s assignment to a particular committee, not including preparation for and attendance at regular meetings, is compensated at the rate of $250/half day and $500/full day, to be monitored by the Compensation Committee and reported to the Board.

 

Most recently, in addition to the Committee’s internal review and consideration in 2021, the review of total compensation for our non-executive directors involved retaining an independent third-party compensation advisor, Roger Gurr & Associates (“RG&A”). The review concluded that total compensation for the non-executive directors remained below median. Because the annual retainer continued to lag behind the peer compactors, it was concluded that, in the best interests of retaining current directors and looking ahead to recruitment of non-executive members of our board, an appropriate adjustment should be made. The annual retainer was increased to $75,000, effective November 1, 2021. RG&A noted the competitive market in the U.S. and Canada particularly warranted the adjustment. In subsequent action, following year-end, the Board, upon the recommendation of the Compensation Committed, eliminated all meeting attendance fees.

 

The Compensation Committee intends to continue its review with RG&A in 2022 to examine the Company’s compensation program further and to undertake an independent review of executive compensation.

  

Total compensation for our non-executive directors for the year ended December 31, 2021, is set forth here:

 

 

 

Fees earned(1)

 

 

Share-based awards(2)

 

 

Option-based awards(3)

 

 

Non-equity incentive plan compensation

 

Pension value

 

All other compensation

 

Total

 

Name

 

 

 

 $

 

 

 $

 

 

 $

 

 $

 

 $

 

$

 

W. William Boberg

 

 

47,917

 

 

 

25,231

 

 

 

52,018

 

 

Nil

 

Nil

 

Nil

 

 

125,166

 

Rob Chang

 

 

50,667

 

 

 

25,231

 

 

 

52,018

 

 

Nil

 

Nil

 

Nil

 

 

127,916

 

James M. Franklin

 

 

48,417

 

 

 

25,231

 

 

 

52,018

 

 

Nil

 

Nil

 

Nil

 

 

125,666

 

Gary C. Huber

 

 

51,667

 

 

 

25,231

 

 

 

52,018

 

 

Nil

 

Nil

 

Nil

 

 

128,916

 

Thomas H. Parker

 

 

50,417

 

 

 

25,231

 

 

 

52,018

 

 

Nil

 

Nil

 

Nil

 

 

127,666

 

Kathy E. Walker

 

 

49,917

 

 

 

25,231

 

 

 

52,018

 

 

Nil

 

Nil

 

Nil

 

 

127,666

 

____________ 

(1)

As discussed, the annual retainer of the non-executive directors was approved to be changed to $75,000 effective November 1, 2021.

 

 

(2)

Each of our non-executive directors received a grant of 21,964 RSUs on August 27, 2021.

 

 

(3)

Each of our non-executive directors received options for 87,858 Common Shares on August 27, 2021, at an exercise price of C$1.44. These options expire on August 27, 2026.

 

In addition to other compensation received by our directors, a long-standing policy of the Company provides that a non-executive director serving on ad hoc or special committees of the Board, which may be constituted from time to time, is entitled to additional director fees, to be determined in accordance with additional duties and requirements requested of those individuals from time to time. There currently are no such ad hoc or special committees of the Board of Directors.

 

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Share Ownership Guidelines for Non-Executive Directors

 

Our non-executive directors also are encouraged to have a significant long-term financial interest in the Company. In 2009, the Compensation Committee recommended, and Board of Directors adopted, a resolution requiring mandatory minimum share ownership by the non-executive directors to encourage the alignment of their interests with those of our shareholders. Pursuant to the mandate, and subsequent amendments in 2012 through the Share Ownership Guidelines, our non-executive directors are required to invest an amount equal to three times the non-executive director’s annual retainer in shares or securities redeemable into shares on or before the later of (i) December 31 of the fifth year of the non-executive director becoming subject to the requirement, or (ii) December 31 of the third year from the effective date of the change in retainer. The retainer amount is to be calculated using the amount of the annual retainer at the later of (i) the date the non-executive director becomes subject to the requirement, or (ii) the date of the most recent annual retainer increase. At December 31, 2021, all non-executive directors meet the Share Ownership Guidelines or are on-track to meet the Guidelines within the prescribed timeframes.

  

Equity Grants to Non-Executive Directors

 

Our non-executive directors are eligible to receive grants of options and grants under the RSU&EI Plan at the discretion of the Board, and received such grants in 2021 as indicated in the following table:

 

Incentive Plan Awards - Value Vested or Earned During the

 

Financial Year Ended December 31, 2021

 

 

 

Option-based Awards

 

Share-based Awards

 

 

Non-equity incentive plan compensation

 

Name

 

Number of Securities Underlying Options Vested

(#)

 

 

Value vested during the year

($)

 

Number of Shares or Units of Shares Vested

(#)

 

 

Value vested during the year

($)

 

 

Value earned during the year

($)

 

W. William Boberg

 

 

171,929

 

 

Nil

 

 

48,394

 

 

 

91,111

 

 

Nil

 

Rob Chang

 

 

238,596

 

 

Nil

 

 

48,394

 

 

 

91,111

 

 

Nil

 

James M. Franklin

 

 

171,929

 

 

Nil

 

 

48,394

 

 

 

91,111

 

 

Nil

 

Gary C. Huber

 

 

171,929

 

 

Nil

 

 

48,394

 

 

 

91,111

 

 

Nil

 

Thomas H. Parker

 

 

171,929

 

 

Nil

 

 

48,394

 

 

 

91,111

 

 

Nil

 

Kathy E. Walker

 

 

171,929

 

 

Nil

 

 

48,394

 

 

 

91,111

 

 

Nil

 

 

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Table of Contents

 

The following table sets forth information concerning the value vested or earned in respect of incentive plan awards during the year ended December 31, 2021, by each of our non-executive directors.

  

Outstanding Equity Awards at December 31, 2021

 

 

 

Option-based Awards

 

 

Share-based Awards

 

 

 

Number of securities underlying unexercised options

 

 

Option exercise price

 

 

Option expiration

 

Value of unexercised in-the-money options

 

 

Number of shares or units of shares that have not vested

 

 

Market or payout value of share-based awards that have not vested

 

Name

 

(#)

 

 

(C$)

 

 

date

 

($)

 

 

(#)

 

 

($)

 

W. William Boberg

 

 

120,000

 

 

 

0.90

 

 

12/15/22

 

 

60,577

 

 

 

 

 

 

 

 

 

 

55,653

 

 

 

0.93

 

 

08/20/23

 

 

26,777

 

 

 

 

 

 

 

 

 

 

50,527

 

 

 

0.91

 

 

12/14/23

 

 

25,108

 

 

 

 

 

 

 

 

 

 

193,574

 

 

 

0.79

 

 

11/05/24

 

 

114,514

 

 

 

 

 

 

 

 

 

 

213,914

 

 

 

0.63

 

 

11/13/25

 

 

153,543

 

 

 

 

 

 

 

 

 

 

87,858

 

 

 

1.44

 

 

08/27/26

 

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

 

 

 

 

53,479

 

 

 

64,961

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

 

 

 

 

21,964

 

 

 

26,680

 

Rob Chang

 

 

200,000

 

 

 

0.77

 

 

03/30/23

 

 

121,470

 

 

 

 

 

 

 

 

 

 

 

 

55,653

 

 

 

0.93

 

 

08/20/23

 

 

26,777

 

 

 

 

 

 

 

 

 

 

 

 

50,527

 

 

 

0.91

 

 

12/14/23

 

 

25,108

 

 

 

 

 

 

 

 

 

 

 

 

193,574

 

 

 

0.79

 

 

11/05/24

 

 

114,514

 

 

 

 

 

 

 

 

 

 

 

 

213,914

 

 

 

0.63

 

 

11/13/25

 

 

153,543

 

 

 

 

 

 

 

 

 

 

 

 

87,858

 

 

 

1.44

 

 

08/27/26

 

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

 

 

 

 

53,479

 

 

 

64,961

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

 

 

 

 

21,964

 

 

 

26,680

 

James M. Franklin

 

 

120,000

 

 

 

0.90

 

 

12/15/22

 

 

60,577

 

 

 

 

 

 

 

 

 

 

 

 

55,653

 

 

 

0.93

 

 

08/20/23

 

 

26,777

 

 

 

 

 

 

 

 

 

 

 

 

50,527

 

 

 

0.91

 

 

12/14/23

 

 

25,108

 

 

 

 

 

 

 

 

 

 

 

 

193,574

 

 

 

0.79

 

 

11/05/24

 

 

114,514

 

 

 

 

 

 

 

 

 

 

 

 

213,914

 

 

 

0.63

 

 

11/13/25

 

 

153,543

 

 

 

 

 

 

 

 

 

 

 

 

87,858

 

 

 

1.44

 

 

08/27/26

 

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

 

 

 

 

53,479

 

 

 

64,961

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

 

 

 

 

21,964

 

 

 

26,680

 

Gary C. Huber

 

 

120,000

 

 

 

0.90

 

 

12/15/22

 

 

60,577

 

 

 

 

 

 

 

 

 

 

 

 

55,653

 

 

 

0.93

 

 

08/20/23

 

 

26,777

 

 

 

 

 

 

 

 

 

 

 

 

50,527

 

 

 

0.91

 

 

12/14/23

 

 

25,108

 

 

 

 

 

 

 

 

 

 

 

 

193,574

 

 

 

0.79

 

 

11/05/24

 

 

114,514

 

 

 

 

 

 

 

 

 

 

 

 

213,914

 

 

 

0.63

 

 

11/13/25

 

 

153,543

 

 

 

 

 

 

 

 

 

 

 

 

87,858

 

 

 

1.44

 

 

08/27/26

 

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

 

 

 

 

53,479

 

 

 

64,961

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

 

 

 

 

21,964

 

 

 

26,680

 

Thomas H. Parker

 

 

120,000

 

 

 

0.90

 

 

12/15/22

 

 

60,577

 

 

 

 

 

 

 

 

 

 

 

 

55,653

 

 

 

0.93

 

 

08/20/23

 

 

26,777

 

 

 

 

 

 

 

 

 

 

 

 

50,527

 

 

 

0.91

 

 

12/14/23

 

 

25,108

 

 

 

 

 

 

 

 

 

 

 

 

193,574

 

 

 

0.79

 

 

11/05/24

 

 

114,514

 

 

 

 

 

 

 

 

 

 

 

 

213,914

 

 

 

0.63

 

 

11/13/25

 

 

153,543

 

 

 

 

 

 

 

 

 

 

 

 

87,858

 

 

 

1.44

 

 

08/27/26

 

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

 

 

 

 

53,479

 

 

 

64,961

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

 

 

 

 

21,964

 

 

 

26,680

 

Kathy E. Walker

 

 

200,000

 

 

 

0.73

 

 

09/07/22

 

 

127,780

 

 

 

 

 

 

 

 

 

 

 

 

120,000

 

 

 

0.90

 

 

12/15/22

 

 

60,577

 

 

 

 

 

 

 

 

 

 

 

 

55,653

 

 

 

0.93

 

 

08/20/23

 

 

26,777

 

 

 

 

 

 

 

 

 

 

 

 

50,527

 

 

 

0.91

 

 

12/14/23

 

 

25,108

 

 

 

 

 

 

 

 

 

 

 

 

193,574

 

 

 

0.79

 

 

11/05/24

 

 

114,514

 

 

 

 

 

 

 

 

 

 

 

 

213,914

 

 

 

0.63

 

 

11/13/25

 

 

153,543

 

 

 

 

 

 

 

 

 

 

 

 

87,858

 

 

 

1.44

 

 

08/27/26

 

 

6,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/13/22

 

 

 

 

 

 

53,479

 

 

 

64,961

 

 

 

 

 

 

 

 

 

 

 

08/27/23

 

 

 

 

 

 

21,964

 

 

 

26,680

 

 

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Table of Contents

 

REPORT OF THE AUDIT COMMITTEE

 

To the Board of Directors of Ur-Energy Inc.:

 

Management is responsible for our internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of our financial statements in accordance with U.S. generally accepted accounting principles (“US GAAP”) and the standards of the Public Company Accounting Oversight Board (“PCAOB”) and to issue an opinion on our financial statements. Our responsibility is to monitor and oversee those processes. We hereby report to the Board of Directors that, in connection with the financial statements for the year ended December 31, 2021, we have:

 

 

·

reviewed and discussed the audited consolidated financial statements with management and the independent accountants;

 

 

 

 

·

discussed with the independent accountants the matters required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU section 380), as modified by SAS 89 and SAS 90; and

 

 

 

 

·

received the written disclosures and the letter from the independent accountants required by PCAOB Rule 3526, as may be modified or supplemented, and discussed with the independent accountants the accountants’ independence.

 

Based on the discussions and our review described above, we recommended to the Board of Directors that the audited financial statements for the year ended December 31, 2021, be included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021.

 

Respectfully submitted,

 

The Audit Committee of Ur-Energy Inc.

Thomas Parker, Chair

Gary C. Huber

Kathy E. Walker

Rob Chang

 

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Table of Contents

 

STATEMENT OF CORPORATE GOVERNANCE PRACTICES

 

Introduction

 

Our Board of Directors believes that effective corporate governance contributes to improved corporate performance and enhanced shareholder value. The Board has reviewed the corporate governance best practices identified in National Policy 58‑201 Corporate Governance Guidelines and National Instrument 58-101 Disclosure of Corporate Governance Practices (collectively, the “CSA Guidelines”). The Board of Directors is committed to ensuring that the Company follows best practices and continues to develop and enhance such practices.

 

Board Mandate

 

The responsibility of the Board of Directors is to supervise the management of the business and affairs of the Company in accordance with the best interests of the Company and its shareholders. Our Board establishes overall policies and standards for the Company and is engaged in company-wide risk management oversight. When premised upon a reasonable basis, the directors are entitled to rely upon management and the advice of the Company’s outside advisors and auditors. The Board also delegates certain responsibilities to its standing committees, based upon the approved charters of each, which are reviewed on a regular basis.

 

The Board of Directors does not currently have a written mandate or a written description for the Chairman of the Board or the Chief Executive Officer. In discharging its responsibility, the Board routinely reviews the performance and responsibilities of the Chief Executive Office. Further, the Board oversees and reviews the development and implementation of the following significant corporate plans and initiatives:

 

 

·

the identification of the principal risks to the Company’s business and the implementation of systems to manage these risks, whether financial, operational, environmental, safety-related, cyber-security or otherwise;

 

 

 

 

·

the Company’s strategic planning and budgeting process;

 

 

 

 

·

succession planning and determination of relative strengths of existing management including the needs to ensure sufficient depth of management, including appointing, developing and monitoring senior management of the Company;

 

 

 

 

·

shareholder communications, as well as public communications policies and continuous disclosure record of the Company;

 

 

 

 

·

analysis and approval of significant acquisitions and dispositions of mineral properties or other Company assets; and

 

 

 

 

·

monitoring the integrity of the Company’s internal controls and management information systems.

 

When needed, the Board of Directors recruits possible directors from contacts within the mining industry and other strategic areas that will complement the knowledge and depth of the Board. Currently, the Board has determined that seven directors is an appropriate number of directors to oversee and provide guidance to management on the business and affairs of the Company, which is accomplished with the existing members of the Board. However, the Board continues to evaluate its size in conjunction with anticipated further development of our operations and possible growth or other strategic decisions of the Company.

 

Orientation and Continuing Education of our Board Members

 

New directors who join the Board of Directors are provided with the opportunity to meet with the other directors prior to joining the Board. Upon joining the Board, a basic orientation of the Company, the Board of Directors, and the committees of the Board is provided to a new director. All material relationships and agreements, technical reports, and recent continuous disclosure filings are provided and reviewed. In addition, new directors have the opportunity to attend Committee meetings by invitation and to meet with management of the Company to have a better understanding of the business of the Company and its operations. Site visits to our Lost Creek operating uranium ISR facility are strongly encouraged before or shortly after a new director has joined the Board. Most recently, although he is thoroughly familiar with the Company, Mr. Cash has been participating in a board-practices orientation process.

 

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Table of Contents

 

Directors are encouraged to participate in continuing education courses in corporate governance, executive and director compensation and other fields that will assist them in their role as directors of the Company or on various committees and enhance stakeholder confidence. Additionally, our management makes use of a variety of other online governance and board-related resources for the benefit of the Board. Most recently, we have rejoined National Association of Corporate Directors (“NACD”) and look forward to Board members and management enjoying the benefits of NACD’s education programs and online resources. Costs of continuing education are borne by the Company.

 

Throughout the year, directors were provided with regulatory and legal updates on several topics germane to the responsibilities of the Board and standing committees. In 2021, these continued to include regulatory guidance and public health updates related to COVID-19. Additionally, as in years past, updates included cyber and data security (including additional threats during the pandemic); key accounting considerations; risk assessment; corporate governance and disclosure of corporate governance practices, executive and director compensation, and Canadian and U.S. securities law and other legal developments.

 

Reports were routinely received from management regarding current operations, plans and challenges within our business, as well as broader industry issues (e.g., federal and state rulemakings and proposed legislation related to mining, taxation and other matters). In 2021, briefing continued with respect to the development of the DOE national uranium reserve; climate change initiatives and ongoing development of environmental, social, sustainability and governance practices and guidance. Our Board members – who are all knowledgeable about the nuclear industry as well as uranium mining – are provided with comprehensive market and industry updates at each regular Board meeting. In 2021, this included positive developments regarding growing support for nuclear energy and their effects on spot pricing and the uranium equities. Additionally, subscriptions to trade publications are made available to our directors; again, with costs borne by the Company. These updates and routine access to our management permit all directors to remain aware of important developments and issues in the context of our business and the uranium market.

 

Board Composition – Including Diversity, Tenure and Outlook on Set Retirement Age

 

The Board of Directors is composed of eight directors at the date of this Circular. Upon the recommendation of the Corporate Governance and Nominating Committee, our Board of Directors has nominated the following seven current directors for election at the Meeting: W. William Boberg, John W. Cash, Rob Chang, James M. Franklin, Gary C. Huber, Thomas H. Parker, and Kathy E. Walker. Earlier this year, Mr. Klenda announced his retirement, which will become effective following the Meeting. All directors are elected annually. The Corporate Governance and Nominating Committee regularly reviews the profile of the Board members, including the average age and tenure. The Committee has not established a retirement age for the members of the Board, nor a limitation of term of service. These restrictions are considered from time to time by the Committee, including most recently in December 2021.

 

The Committee prefers that our directors, without regard to age or tenure, are rigorously evaluated on their attendance and contributions to the business of the Board and Company. This scrutiny arises in annual assessments of the Board constitution as well as the composition of each standing committee of the Board. Our industry and, specifically, our operations are highly technical, and the Board considers it critical to retain the knowledge base on our Board while we continue to advance operations and plan for renewed full production at Lost Creek, and plan for construction and development of Shirley Basin. Following board refreshment in 2017-2018, with the addition of Ms. Walker and Mr. Chang, we reconstituted our Board committees to best utilize the expertise of our directors (e.g., additional finance and energy sector experience to assist us with strategic planning). Additionally, each is involved with executive management in other industries, and brings enhanced leadership and perspective to many of the universal business, legislative, governance and community issues the Board must navigate.

 

The presence of Ms. Walker now reflects approximately 14% female representation among the seven directors nominated for election at the Meeting. We have a 14% representation of visible minorities among the seven directors nominated for election at the Meeting, as defined by the Employment Equity Act (Canada). Our Board’s diversity members, therefore, represent approximately 29% of the directors nominated for election at the Meeting. Our Board does not have members who are Indigenous peoples or are disabled. See further discussion at Gender Diversity Policy and Diversity Reporting, below.

 

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All of our directors have C-suite experience or, in the case of Dr. Franklin’s service to the Canadian government, the equivalent thereof. Five of our seven directors, Drs. Franklin and Huber, and Messrs. Boberg, Cash and Parker have professional and technical expertise in geology, engineering and mining operations. For more than a decade, Dr. Franklin has been integral to our Board, as its lead technical expert, including chairing the HSE & Technical Committee since its inception. Mr. Boberg, as a director since 2006 and for four and a half years as our President and CEO, has contributed his technical expertise with respect to roll-front uranium deposits like Lost Creek, beginning with the acquisition of Lost Creek in 2005. Mr. Parker has decades of experience in executive management positions with operating mining companies and has lent that expertise to his role as a member of several committees, and as our Lead Director. Dr. Huber contributes his dual expertise in financial matters and geology gained in management roles of both private and public natural resource companies at various stages of development. While the Board has benefitted greatly from Mr. Cash’s regular reports and participation at Board meetings for more than a decade, as CEO and our newest Board member, he will bring nearly 30 years of technical, operational, regulatory, and management expertise to the Board’s consideration of all matters.

 

Collectively, vast knowledge specific to the Lost Creek and Shirley Basin Projects, as well as the uranium industry and market, has been instilled by all our Board members through years of dedication and service to the Company and continues to offer great value. This continuity and growth of expertise has been critical to our development from a uranium explorer into a uranium producer, and in some ways is even more valuable as the Company navigates the current challenges of our industry. We believe that implementing a restriction on tenure or a strictly enforced retirements would unnecessarily deprive the Company of these contributions.

 

As noted, we refreshed our Board, adding to the diversity and diversified skill sets of our Board as Ms. Walker and Mr. Chang joined the Board in 2017 and 2018, respectively. This refreshment of expertise and perspective continues with Mr. Cash being named to the Board in 2022. His wide-ranging uranium industry experiences throughout the past 30 years, including operational and regulatory, place him in a unique seat on our Board.

 

At April 8, 2022, the average age of our seven directors to be voted upon at the Meeting is approximately 67 years of age; the average tenure of those directors is approximately 8.9 years. As described in Proposal No. 1, above, the Corporate Governance and Nominating Committee and our Board have determined that our directors should possess minimum qualifications including high personal and professional ethics; a commitment to the long-term interests of our shareholders demonstrated through service, risk management and share ownership; sufficient time to commit to fulfill duties as a director, including membership on standing committees as requested; active engagement and participation in the meetings of the Board, Board committees on which the member serves and on special projects as may be requested; financial literacy as would be required for service on our Audit Committee; and broad experience in business and/or experience in government, as well as education and technical expertise.

 

At April 8, 2021, our directors include Jeffrey T. Klenda, Chairman of the Board of Directors; W. William Boberg; John W. Cash; Rob Chang; James M. Franklin; Gary C. Huber; Thomas H. Parker, Lead Director; and Kathy E. Walker. Mr. Klenda is not seeking re-election at the Meeting.

 

The residency, age, principal occupation and years of service as a member of our Board for each director is set forth below.

 

Name (Age) and Residency

Position with Company and Principal Occupation Within the Past Five Years

Service as a Director

Jeffrey T. Klenda (65)

Colorado, USA

Chairman of the Board and President

Ur-Energy Chairman of the Board, CEO and President

August 2004 – present

W. William Boberg (82)

Colorado, USA

Director

Presently Retired (2011)

Mining Company Executive

January 2006 – present

John W. Cash (49)

Wyoming, USA

Chief Executive Officer, Director

Ur-Energy Vice President Regulatory Affairs

March 2022 - present

Rob Chang (44)

Ontario, Canada

Director

Chief Executive Officer

Chief Financial Officer / Financial Research Analyst

March 2018 – present

James M. Franklin (79)

Ontario, Canada

Director

Consulting Geologist/Adjunct Professor of Geology Queen’s University, Laurentian University and University of Ottawa

March 2004 – present

Gary C. Huber (70)

Colorado, USA

Director

Presently Retired (2012)

Mining Company Executive

May 2015 – present

Thomas Parker (79)

Montana, USA

Lead Director

Presently Retired (2012)

Mining Company Executive

July 2007 – present

Kathy E. Walker (63)

Kentucky, USA

Director

Director, eKentucky Advanced Manufacturing Institute

Coal trader/Business owner

September 2017 – present

  

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Service on Additional Boards

 

Dr. Franklin is a director of Gold79 Mines Ltd. (since October 2003), and of Nuinsco Resources Ltd. (since June 2018). Mr. Boberg is a director of Gold79 Mines Ltd. (since June 2008). Mr. Chang is a director of Fission Uranium Corp. (since April 2018) and Shine Mineral Corp. (since November 2018).

 

Board Independence

 

Messrs. Boberg, Chang and Parker, Drs. Franklin and Huber, and Ms. Walker are independent directors as determined in accordance with Canadian and U.S. securities laws and the rules of the NYSE American. In determining whether a director is independent, the Board of Directors considers the specific circumstances of a director and the nature, as well as materiality, of any relationship between the director and Ur-Energy.

 

Committee Membership

 

During 2021, our directors provided expertise and leadership to our Board committees as follows:

 

Independent Board Members

Committees/Memberships

Audit

Compensation

Corporate Governance / Nominating

Treasury and Investment(1)

Health, Safety and Environment (HSE) & Technical

Thomas H. Parker (Lead Director)

Chair

 

 

Chair

W. William Boberg

 

 

 

Rob Chang

 

 

James M. Franklin

 

 

Chair

Gary C. Huber

Chair

Chair

 

Kathy E. Walker

 

 

 

____________ 

(1)

Roger Smith, CFO of the Company, serves as a non-director member of the Treasury and Investment Committee.

 

Family Relationships

 

None of our directors is related to any of our executive officers.

 

Involvement in Certain Legal Proceedings

 

Corporate Cease Trade Orders or Bankruptcies

 

None of the directors or officers of the Company is, or has been within the ten years before the date of this Circular, a director or officer of any other issuer that, while that person was acting in that capacity, was the subject of a cease trade or similar order or an order that denied the issuer access to any statutory exemptions under Canadian or U.S. securities legislation for a period of more than 30 consecutive days or was declared bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver-manager or trustee appointed to hold the assets of that company.

 

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Penalties or Sanctions

 

None of the directors or officers of the Company has been subject to any penalties or sanctions imposed by a court relating to Canadian or U.S. securities legislation or by a Canadian or U.S. securities regulatory authority or has entered into a settlement agreement with a Canadian or U.S. securities regulatory authority or been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

 

Personal Bankruptcies

 

None of the directors, or officers, of the Company has, during the ten years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or has been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver-manager or trustee appointed to hold the assets of the director or officer.

 

Leadership Structure and Board’s Role in Risk Oversight

 

Mr. Klenda became our Chairman and Executive Director in 2006. He assumed the role of Acting Chief Executive Officer in May 2015, and thereafter was named President and Chief Executive Officer in December 2016, while remaining Chairman of the Board. Because of Mr. Klenda’s role from the inception of the Company, our Corporate Governance and Nominating Committee considered, from time to time, the functions customarily assigned to a director serving in the role of an independent lead director.

 

In December 2014, at the conclusion of our first full year of operations at our Lost Creek Mine, the Corporate Governance and Nominating Committee determined that establishment of the role of lead director of our Board of Directors would enhance the communications within the Board, among its committees, and with management. The Committee recommended and the Board approved a policy statement for such an independent lead director’s position at any time that the chairman of the Board is not an independent director. In that event, under the adopted policy, the Corporate Governance and Nominating Committee may suggest an independent director to serve as lead independent director (“Lead Director”), who shall be approved by a majority of the independent directors. In December 2014, Mr. Parker was approved by a majority of the independent directors to serve as the Lead Director of our Board and continues to serve in that role to date.

 

Pursuant to the policy statement approved by the full Board, the responsibilities of the Lead Director include:

 

 

·

When necessary, act as the principal liaison between the independent directors and the Chairman of the Board and Chief Executive Officer;

 

 

 

 

·

Call and chair, at least annually, a meeting of the independent directors;

 

 

 

 

·

Preside at meetings of the Board of Directors where the Chairman of the Board is not available or where the Chairman has stated a real or perceived conflict of interest concerning a matter before the Board; and

 

 

 

 

·

During merger or acquisition discussions or activities, be advised by management at early-stage discussions, and chair any Board appointed special committee composed of independent directors to review and make recommendations regarding the proposed transaction, subject to any conflict of interest which would require the appointment of a different lead independent director being approved by a majority of the independent directors for such specified purpose.

 

Further, the policy statement provides that the Lead Director shall serve until such time as he or she ceases to be a director, resigns as Lead Director, is replaced as Lead Director by a majority of the independent directors, or is replaced by an independent Chairman of the Board elected by a majority of the independent directors of the Board. The performance of a Lead Director is to be reviewed annually as a part of the normal Board evaluation process. Mr. Parker’s performance as Lead Director has been reviewed annually, most recently in December 2021.

 

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The Board oversees the risks involved in our operations as part of its general oversight function, integrating risk management into the Company’s compliance policies and procedures. While the Board has the ultimate oversight responsibility for the risk management process, the Audit Committee, the Compensation Committee and the Technical Committee have certain specific responsibilities relating to risk management. Among other things, the Audit Committee addresses risk assessment and risk management, and reviews major risk exposures (whether financial, operating, cyber-security or otherwise) and the guidelines and policies that management has put in place to govern the process of assessing, controlling, mitigating, managing and reporting such exposures. When recommending to the Board appropriate compensation for executive officers, the Compensation Committee considers the nature, extent and acceptability of risks that the executive officers may be encouraged to take by any incentive compensation. The Compensation Committee also oversees human resources and talent management risks, succession risk and planning. The HSE & Technical Committee continues with its role of overseeing our mineral resources and related operational risks, and now with ongoing operations at Lost Creek, oversees health, safety and environmental risks. The Board also satisfies its risk oversight responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from executive officers responsible for oversight of particular risks within the Company.

 

Majority Voting Policy

 

The Company has adopted a majority voting policy for the election of directors at uncontested meetings which can be viewed on our website at https://www.ur-energy/investors/corporate-governance/governance-documents. The policy provides that, in an uncontested election, each director must be elected by a majority of the votes cast with respect to that director’s election. Votes will not be deemed cast if no authority or discretion is given (for example, a broker non-vote). If a director does not receive a majority (50% + 1) of the votes cast as to his or her election, the candidate will forthwith submit to the Board a notice of resignation and shall not participate in any meeting of the Board or any of its committees while the resignation is considered. The Corporate Governance and Nominating Committee will expeditiously consider the candidate’s resignation and make recommendation to the Board whether to accept it. In considering the candidate’s resignation, the Committee and the Board shall only refuse to accept such resignation if there are exceptional circumstances.

 

Code of Ethics and Other Policies

 

We have adopted a Code of Ethics (“Code”) which applies to our principal executive officer, principal financial officer, principal accounting officer or controller and others performing similar functions. The Code has been filed on Form 8‑K and is available on our website at https://www.ur‑energy.com/investors/corporate-governance/governance-documents/. The Code is designed to reasonably deter wrongdoing and to promote honest and ethical conduct; full, fair, accurate, timely and understandable disclosure in reports; compliance with applicable governmental laws, rules and regulations; prompt internal reporting of the violations of the Code; and adherence to the Code. We intend to disclose any amendment or waiver (including any implicit waiver) of the Code on our website at https://www.ur‑energy.com/investors/corporate-governance/governance-documents/ within four business days following such amendment or waiver. Since its adoption, there have been no waivers of the Code.

 

We also have adopted a Code of Business Conduct and Ethics which applies to all employees, officers and directors, which also may be accessed on our website. Both the Code and the Code of Business Conduct and Ethics are reviewed routinely, most recently in December 2021. We maintain a separate Whistleblower Policy statement as a part of our Whistleblower Program. The policy provides a link to the provider’s confidential reporting website and is also found on our website at https://www.ur‑energy.com/investors/corporate-governance/governance-documents/.

 

Policies Concerning Confidentiality, Public Disclosure and Restrictions on Trading Securities

 

We have also adopted various policies related to trading restrictions, disclosure requirements and confidentiality obligations which have been amended and restated from time to time, most recently amended effective December 16, 2016. The Corporate Governance and Nominating Committee oversees the implementation and compliance of these policies, which are set out in the “Ur-Energy Inc. Policies Concerning Confidentiality, Public Disclosure and Restrictions on Trading Securities.” These policies are available on our website at https://www.ur‑energy.com/investors/corporate-governance/governance-documents/. All directors, officers and employees of the Company are expected to be familiar with and adhere to the policies.

 

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Gender Diversity Policy and Diversity Reporting

 

The Board of Directors adopted a Gender Diversity policy in 2014 by which the Company seeks to encourage the identification, recruitment, development and, ultimately, retention of talented women at all levels including on its Board. The Board believes that a board made up of highly qualified directors, from diverse backgrounds, promotes better corporate governance and improves business outcomes. We were fortunate in 2017 to have Kathy Walker join our Board. Her presence now reflects approximately 14% female representation of our directors nominated for election at the Meeting. As set forth above, we also have a 14% representation of visible minorities of our directors nominated for election at the Meeting.

 

The inclusion of women and members of diversity extends to our Board composition, and consideration of the level of representation on the Board by women and other designated groups will continue to be an important consideration during searches for qualified new Board members as those needs may arise. The Company embraces the proposition that more women on boards is advantageous. We remain duty bound to recruit and invest in the best available talent based upon education, experience and personal skills and qualities. Although the Board is not at this time endorsing a quota or target, it does commit to seeking and having increasing representation of women on the Board, in executive management and throughout the Company.

 

There has not been systemic consideration of the effectiveness or measures taken under the policy. However, as additional refreshment of the non-executive directors of our Board occurs and/or additional expansion is contemplated, the Governance Committee will continue to review additional qualified female candidates who are placed before it, The Committee will also continue to consider thoroughly the qualifications of all candidates brought forward for consideration.

 

The Company has one female executive officer, Penne Goplerud, who has been our General Counsel and Corporate Secretary since 2011. Among our current five-person management team, this is a 20% representation by women. Prior to her appointment as a member of our executive officers, Ms. Goplerud served the Company as Associate General Counsel from 2007, and as outside counsel from 2005 until she joined us in 2007 as an employee. We restructured certain of the respective responsibilities of our executives in 2015 and again in 2019 when our executive group was reduced in number. With our current operations, we continue to find that a smaller structure for our executive team works well, further enhances communication and best facilitates numerous management responsibilities. Consideration is ongoing of the requirements and appropriate size of our executive group following Mr. Klenda’s retirement in June 2022.

 

Total Number of Directors Nominated for Election to the Board of Directors

and Senior Management Members

Board of Directors

Seven (7)

 

Diversity of the Directors Nominated for Election to the Board of Directors

Gender

One (1)

Visible Minority

One (1)

 

Diversity of Members of Senior Management(1)

Female

One in Five (20%)

____________________

 

(1)

At the date of this Circular, our executive management team numbers five. Absent additions to our executive group following Mr. Klenda’s retirement in June 2022, Ms. Goplerud will be one of four executive officers (or, 25% of the executive group).

 

At this time, we have not established a policy or targets for additional representation in identified diversity groups (women, visible minorities, Aboriginal, and disabled individuals) in our executive group. We have no executives who are visible minorities, Aboriginal or disabled. If or as the executive group is expanded or current members may depart and be replaced, whether following Mr. Klenda’s retirement, as we anticipate returning to full production operations or as our business otherwise grows and develops demonstrating additional needs, we believe that experience, merit and skill sets must be considered when candidates are evaluated, together with a thoughtful consideration of all types of diversity. We remain committed to equality of opportunity and look forward to facilitating any appropriate increase in representation of women and other diverse groups in our management structure based upon merit and overall qualifications.

 

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Meetings of the Board and Committees

 

The Board of Directors meets at least four times a year and more frequently if required. In 2021, the Board of Directors met eight times. Additionally, the Board of Directors took 10 actions by written resolutions. The Board of Directors from time to time holds a portion of its meetings when management departs, and the independent directors meet in camera. Management may be asked to depart a meeting for in camera sessions at such other meetings as the independent directors deem appropriate from time to time. During 2021 the Board held one meeting during which non-director executives were excused for a portion of the meeting. Additionally, the independent directors met in camera without executive management on at least one occasion. A separate meeting of the independent directors was held in December 2021.

 

Board Committees

 

There are five permanent committees of the Board of Directors: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, the Treasury & Investment Committee and the HSE & Technical Committee. The Board of Directors may also appoint other temporary or permanent committees from time to time for particular purposes.

 

The following sets out a summary of the responsibilities and activities of the Board Committees and the Report of the Audit Committee. The charters of each of the permanent standing committees may be found on our website https://www.ur-energy/investors/corporate-governance/.

 

Audit Committee

 

The Audit Committee assists the Board of Directors in carrying out its responsibilities relating to corporate accounting and financial reporting practices, as well as oversight of internal controls, and the Whistleblower Program. The duties and responsibilities of the Audit Committee include the following:

 

 

·

reviewing for recommendation to the Board of Directors for its approval the principal documents comprising our continuous disclosure record, including interim and annual financial statements and management’s discussion and analysis;

 

 

 

 

·

recommending to the Board of Directors a firm of independent auditors for appointment by the shareholders and reporting to the Board of Directors on the fees and expenses of such auditors. The Audit Committee has the authority and responsibility to select, evaluate and, if necessary, replace the independent auditor. The Audit Committee has the authority to approve all audit engagement fees and terms and the Audit Committee, or a member of the Audit Committee, must review and pre-approve any non-audit services provided to the Company by our independent auditor and consider the impact on the independence of the auditor;

 

 

 

 

·

reviewing periodic reports from the Chief Financial Officer;

 

 

 

 

·

discussing with management and the independent auditor, as appropriate, any audit problems or difficulties and management’s response; and

 

 

 

 

·

establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, including through the Whistleblower Program.

 

The Audit Committee maintains direct communication during the year with our independent auditor and with our executive officers and other personnel responsible for accounting and financial matters.

 

During 2021, the members of the Audit Committee were Thomas Parker (Chair), Rob Chang, Gary Huber, and Kathy Walker. The members of the Audit Committee were in 2021, and are currently, independent directors pursuant to National Instrument 52-110 Audit Committees (“NI 52-110”) and the listing standards of the NYSE American. Each of the members is financially literate as defined in NI 52-110 and financially sophisticated under the NYSE American rules. The Audit Committee has confirmed each member as an “audit committee financial expert” as that term is currently defined by the rules of the SEC.

 

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During 2021, the Audit Committee met five times, and took one action by written resolution. The activities of the Audit Committee over the past year included the following:

 

 

·

review of our annual financial statements and management’s discussion and analysis prior to filing with the regulatory authorities;

 

 

 

 

·

review of our quarterly interim financial statements and management’s discussion and analysis prior to filing with regulatory authorities;

 

 

 

 

·

review of periodic reports from the Chief Financial Officer;

 

 

 

 

·

review of applicable corporate disclosure reporting and control processes, including Chief Executive Officer and Chief Financial Officer certifications;

 

 

 

 

·

review of reports from our external firm for testing of internal controls;

 

 

 

 

·

review Audit Committee governance practices to ensure its terms of reference incorporate all regulatory requirements;

 

 

 

 

·

oversee the Company’s Whistleblower Program, including training regarding the program;

 

 

 

 

·

assess and manage risk, including those risks presented by cyber-security and related threats, including receiving presentations by management related to these threats;

 

 

 

 

·

received presentations on new regulatory matters and accounting pronouncements;

 

 

 

 

·

review of the Audit Committee Charter; and

 

 

 

 

·

review of the engagement letter with the independent auditors and annual audit fees prior to approval by the Board of Directors, and pre-approving non-audit services and their cost prior to commencement.

 

The Audit Committee has recommended to the Board of Directors that Ur-Energy shareholders be requested to re-appoint PricewaterhouseCoopers LLP, Chartered Professional Accountants, as the independent auditor for 2022.

 

The Audit Committee reviews its charter on a yearly basis and did so most recently on December 13, 2021. The Committee’s charter was last substantively amended in 2016. The qualifications of each of the members of the Audit Committee are set forth above as a part of Proposal No. 1.

 

Compensation Committee

 

The Compensation Committee assists the Board of Directors in carrying out its responsibilities relating to personnel matters, including performance, compensation practices and rates. The Compensation Committee establishes annual objectives against which to assess members of management including the Chief Executive Officer. The Committee reviews and makes recommendations to the Board with respect to employee and consultant compensation arrangements including equity compensation. The Compensation Committee reviews its charter on a yearly basis and did so most recently on December 15, 2021. The Committee’s charter was last substantively amended in 2018.

 

The Compensation Committee met formally three times in 2021. Additionally, the Committee took six actions by written resolution during 2021. Portions of meetings are conducted without management present, including specifically for the purpose of discussing the compensation of the Chief Executive Officer. Additionally, the Compensation Committee considers various matters related to the Company’s compensation program, executive and director compensation, share ownership guidelines for directors and executive officers (including compliance), the equity compensation plans, and presentations on trends in governance and compensation including “say on pay.” The Compensation Committee annually reviews the results of the “say on pay” vote of our shareholders. The Compensation Committee is authorized to engage, at the Company’s expense, compensation consulting firms or other professional advisors as necessary to assist in discharging its responsibilities as it did in connection with the retention of RG&A as described above.

  

During 2021, the members of the Committee were Gary Huber (Chair), Rob Chang and James Franklin. The members of the Compensation Committee were in 2021, and are currently, independent under applicable law and the rules of the NYSE American. As well, at least two members of the Committee (all three, currently) qualify as “outside” directors within the meaning of U.S. Internal Revenue Code Section 162(m) and as “non-employee” directors within the meaning of Rule 16b-3 under the Exchange Act, as amended. The qualifications of each of the members of the Compensation Committee are set forth above as a part of Proposal No. 1.

 

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Corporate Governance and Nominating Committee

 

The Corporate Governance and Nominating Committee assists the Board of Directors with determining the director nominees for election to the Board, recommending candidates to fill vacancies, other succession planning, the composition of the committees of the Board and monitoring compliance with corporate governance regulatory requirements. In performing its duties, the Committee will review and consider director nominees recommended by shareholders. The Committee also conducts Board member evaluations and evaluation of the Lead Director on an annual basis, while considering the overall composition and appropriate size of the Board.

 

The Corporate Governance and Nominating Committee reviews its charter on a yearly basis and did so most recently on December 15, 2021. The Committee’s charter was last substantively amended in 2017.

 

During 2021, the members of the Committee were Gary Huber (Chair), William Boberg, Rob Chang and James Franklin. The Corporate Governance and Nominating Committee met twice during 2021 and took one action by written resolution. The members of the Corporate Governance and Nominating Committee were in 2021, and are currently, independent under the rules of the NYSE American. The qualifications of each of the members of the Corporate Governance and Nominating Committee are set forth above as a part of Proposal No. 1.

 

During 2021, the Corporate Governance and Nominating Committee received presentations about the Company’s directors’ and officers’ liability program and insurance coverage; and updates regarding environmental, social and governance (ESG) guidance and practices. The Committee reviewed generally our corporate policies including the Code of Ethics, Whistleblower Policy, and Ur‑Energy Inc. Policies Concerning Confidentiality, Public Disclosure and Restrictions on Trading Securities. The Committee also considers the Company’s risks and risk management.

 

Treasury & Investment Committee

 

The Treasury & Investment Committee assists the Board of Directors by centralizing oversight of all treasury activities of the Company, insofar as practical, and coordinating our banking, cash management, investment and funding arrangements. The Committee also formulates and implements the Treasury and Investment Policy, reviewing it from time to time. The Committee’s charter, as last substantively amended in 2014, provides that the Committee consist of the Chief Financial Officer and at least two independent members of the Board of Directors. The Committee reviews its charter on an annual basis and did so most recently on December 13, 2021.

 

During 2021, the members of the Treasury & Investment Committee were Thomas Parker (Chair), and Kathy Walker, and our Chief Financial Officer, Roger Smith. The Treasury & Investment Committee met twice during 2021.

 

HSE & Technical Committee

 

The Health, Safety and Environment & Technical Committee (the “HSE & Technical Committee”) assists the Board of Directors with reserve and resource matters relating to our mineral properties; technical matters relating to our exploration, development, permitting, construction, operations, reclamation and restoration activities; health, safety and environmental matters relating to our operations and activities; and compliance with legal requirements relating to reserve and resource matters, technical matters, and health, safety and environmental matters. The Committee’s charter is reviewed annually, including most recently on December 13, 2021.

  

The members of the HSE & Technical Committee are James Franklin (Chair) (Professional Geologist), William Boberg (Professional Geologist), Thomas Parker (Professional Engineer), and Gary Huber (Professional Geologist). The members of the Committee are not required to be independent. Currently, however, all members are independent. Members of executive management routinely participate in the Committee meetings. Because of the significance of the physical and environmental safety and operational matters overseen by the Committee, a standing invitation has been extended by the Committee for all directors and executive officers to attend the Committee’s meetings. We continued this practice in 2021. However, as a part of more frequently held video conference meetings of the Board, and other efficiencies, we adapted our processes to receive operational and technical matters which have more routinely been received by the Committee to be a part of the management report to the full Board. Additionally, the Committee held two formal meetings during 2021. We anticipate the Committee may return to holding quarterly meetings as we return to full production operations.

 

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In recent years, the HSE & Technical Committee has conducted certain of its reviews by means of informal meetings, including in-house technical sessions at the Lost Creek site. In 2021, with operations continuing on a controlled, lower production rate and in recognition of precautions and travel restrictions imposed due to COVID-19, the HSE & Technical Committee did not travel to Lost Creek.

  

Summary of Memberships on Permanent Committees and Record of Attendance for 2021

 

During the year ended December 31, 2021, the Board of Directors and its permanent committees met as follows:

 

Board of Directors

 

 

8 (1)

Audit Committee (“AC”)

 

 

5

 

Compensation Committee (“CC”)

 

 

3

 

Corporate Governance and Nominating Committee (“CGN”)

 

 

2

 

HSE & Technical Committee (“HSE&TC”)

 

 

2

 

Treasury & Investment Committee (“TIC”)

 

 

2

 

Total number of meetings held

 

 

22

 

____________ 

(1)

In addition to the eight meetings held by the Board of Directors, 10 actions were taken by resolution in writing.

 

For 2021, attendance by our directors at scheduled Board and assigned Committee meetings is set forth below. All directors had better than 85% attendance at all meetings, with only two directors having missed any meeting. Additionally, Roger Smith, CFO of the Company, who serves as a member of the Treasury and Investment Committee, attended 100% of the meetings of that committee.

  

 

Board Meetings

Committee Meeting Memberships and Meetings Attended

Director

Attended

AC

CC

CGN

TIC

HSE&TC

Jeffrey T. Klenda

8/8

-

-

-

-

-

James M. Franklin

7/8

-

2/3

2/2

-

2/2

W. William Boberg

8/8

-

-

2/2

-

2/2

Thomas H. Parker

8/8

5/5

-

-

2/2

2/2

Gary C. Huber

8/8

5/5

3/3

2/2

-

2/2

Kathy E. Walker

7/8

5/5

-

-

2/2

-

Rob Chang

8/8

5/5

3/3

2/2

-

-

  

Board Attendance at Shareholder Meeting

 

It has been the Company’s practice and expectation that its directors attend the annual shareholders’ meetings. In 2021, due to the continuing impacts and traveling restrictions caused by COVID-19, we held an in-person meeting, with participation by our directors being facilitated through a teleconference / webcast platform. All of our directors attended the annual and special meeting of shareholders.

 

Shareholder Feedback

 

The Board of Directors believes that management should speak for the Company in its communications with shareholders and others in the investment community and that the Board of Directors should be satisfied that appropriate investor relations programs and procedures are in place. The Board of Directors has approved these policies, including the designation of spokespersons in behalf of the Company, from time to time. The Board of Directors regularly reviews the Company’s major communications with shareholders and the public, including continuous disclosure documents and periodic press releases in accordance with the Company’s policies.

 

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Shareholder Communication with the Board

 

We believe that it is important to maintain good shareholder relations. The Board of Directors will give appropriate attention to all written communications that are submitted by shareholders. Any shareholder wishing to send communications to the Board, or a specific committee of the Board, should send such communication to the Corporate Secretary of the Company by email to legaldept@Ur‑Energy.com or by mail to Ur-Energy Inc. Board of Directors, c/o Corporate Secretary, 10758 West Centennial Road, Suite 200, Littleton, Colorado, USA 80127. All communications shall state the type and amount of the Company’s securities held by the shareholder and shall clearly state that the communication is intended to be shared with the Board, or if applicable, with a specific committee of the Board. The Corporate Secretary shall forward all such communications to the Board or the specific committee, as appropriate.

 

Expectations of Management

 

The Board of Directors believes that it is appropriate for management to be responsible for the development of long-term strategies for our Company. Meetings of the Board of Directors are held, as required, to specifically review and deal with long-term strategies of the Company as presented by senior members of management.

 

The Board of Directors appreciates the value of having its executive officers attend board meetings to provide information and opinions to assist the Directors in their deliberations. The Chair, in consultation with the Chief Financial Officer and Corporate Secretary, arranges for the attendance of executive officers for consultation including technical presentations at Board meetings.

 

INDEBTEDNESS OF DIRECTORS AND OFFICERS

 

At no time since the beginning of the Company’s last financial year was any director, executive officer, proposed nominee for election as a director, or any of their respective associates, indebted to the Company or any of its subsidiaries, nor was the indebtedness of any such person to another entity the subject of any guarantee, support agreement, letter of credit or similar arrangement provided by the Company or any of its subsidiaries.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

None of our directors or officers has had any material interest, direct or indirect, in any material transaction since the incorporation of Ur-Energy or in any proposed transaction which has or may materially affect Ur-Energy.

  

As discussed in their biographies set forth herein, certain of our directors and/or officers are also directors and/or officers of one or more other mining or natural resources companies. Our directors and officers are also in many cases shareholders of one or more mining or natural resources companies. Consequently, there exists the possibility for such directors and/or officers to be in a position of conflict. While there is a potential for conflicts of interest to arise in such situations, that potential is minimized because of the nature of these other companies including those in other areas of mineral resources and precious metals. Any decision made by any of these directors and/or officers will be made in accordance with their duties and obligations to deal fairly and in good faith with Ur‑Energy and such other companies. In addition, at meetings of the Board, any director with an interest in a matter being considered will declare such interest and refrain from voting on such matter.

 

The Audit Committee is charged with reviewing and approving in advance any transaction with any “related person,” as that term is defined under applicable U.S. securities laws. Except as previously disclosed, there have been no transactions between the Company and any “related person” since the beginning of the Company’s last fiscal year that would be required to be disclosed under applicable U.S. securities laws.

 

HOUSEHOLDING

 

The bank, broker or other nominee for any shareholder who is a beneficial owner, but not the record holder, of the Company’s Common Shares may deliver only one copy of the Circular to multiple shareholders who share the same address, unless that broker, bank or other nominee has received contrary instructions from one or more of the shareholders. The Company will deliver promptly, upon written or oral request, a separate copy of the Circular to a shareholder at a shared address to which a single copy of the document was delivered. Shareholders who wish to receive a separate copy of the Circular now, or a separate copy of the Notice of Internet Availability or Circular in the future, should write to us at: Ur-Energy Inc., 10758 West Centennial Road, Suite 200, Littleton, Colorado 80127, Attention: Corporate Secretary. Beneficial owners sharing an address who are receiving multiple copies of the Circular and wish to receive a single copy of the Notice of Internet Availability or Circular in the future will need to contact their broker, bank or other nominee to request that only a single copy be mailed to all shareholders at the shared address in the future.

 

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Table of Contents

 

ACCOMPANYING FINANCIAL INFORMATION AND INCORPORATION BY REFERENCE

 

Additional financial information for the Company is available in the Company’s audited consolidated financial statements for the year ended December 31, 2021, and related management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021, included in the Annual Report on Form 10‑K which has been filed with the SEC at https://www.sec.gov/edgar.shtml, and with Canadian securities regulators at https://sedar.com.

 

ANNUAL REPORT TO SHAREHOLDERS

 

The Company’s Annual Report on Form 10-K for the year ended December 31, 2021, may be accessed at https://www.sec.gov/edgar.shtml.

 

SHAREHOLDER PROPOSALS

 

All proposals of the Company’s shareholders intended to be presented at the Company’s annual meeting of shareholders in 2022 must meet the requirements set forth in Section 137 of the Canada Business Corporations Act (CBCA) and Rule 14a-8 of the Exchange Act. Pursuant to the CBCA, proposals must be received by the Company’s Corporate Secretary no later December 22, 2022, in order to be included in the Management Proxy Circular for the Company’s 2023 annual meeting. The Company’s next annual meeting of shareholders is planned for May 2023.

 

As to any proposal that a shareholder intends to present to shareholders other than by inclusion in our Management Proxy Circular for our 2022 annual meeting of shareholders, the proxies named in our proxy for that meeting will be entitled to exercise their discretionary voting authority on that proposal unless we receive notice of the matter to be proposed not later than March 1, 2023. Even if proper notice is received on or prior to that date, the proxies named in our proxy for that meeting may nevertheless exercise their discretionary authority with respect to such matter by advising shareholders of that proposal and how they intend to exercise their discretion to vote on such matter, unless the shareholder making the proposal solicits proxies with respect to the proposal to the extent required by Rule 14a-4(c)(2) under the Exchange Act.

 

AVAILABILITY OF DOCUMENTS

 

Upon request made to the Corporate Secretary of Ur-Energy at 10758 West Centennial Road, Suite 200, Littleton, Colorado 80127 or by email at legaldept@Ur-Energy.com (Telephone: +1 720-981-4588 ext. 250), the Corporate Secretary will provide to any shareholder of the Company entitled to vote at the Annual Meeting, free of charge, by first class mail within one business day of receipt of written request, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (including exhibits) as filed with the SEC and with the Canadian securities authorities. Due to continuing remote-work arrangements, we may be able to respond to your request more quickly by email request and response.

 

OTHER MATTERS

 

Our management and the Board of Directors know of no other matters to be brought before the Meeting. If other matters are presented properly to the shareholders for action at the Meeting and any postponements and adjournments thereof, it is the intention of the proxy holders named in the proxy to vote in their discretion on all matters on which the Common Shares represented by such proxy are entitled to vote.

 

There have been no other proposals made by shareholders for consideration at this Meeting, nor are there any other proposals to be addressed at the Meeting but not included in this Circular.

 

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APPROVAL

 

The contents and mailing of this Circular have been approved by the Board of Directors of the Company.

 

You are urged to promptly complete, sign, date and return your proxy, or to vote online or by telephone as set forth above. You may revoke your proxy at any time before it is voted. If you attend the Meeting in person, and you are a Registered Shareholder, you may vote your shares at the time of the Meeting.

 

 

 

BY ORDER OF THE BOARD OF DIRECTORS,

 

 

 

 

 

 

 

 /s/ Jeffrey T. Klenda

 

 

 

Jeffrey T. Klenda, Chairman

 

 

49

 

SCHEDULE A

 

A-1

 

Ur-Energy Inc.

 

Amended and Restated Restricted Share Unit and Equity Incentive Plan

 

Originally Effective May 7, 2010

 

As amended and restated on April 13, 2021

 

 

Table of Contents

 

ARTICLE 1 GENERAL PROVISIONS

 

 

1

 

1.1

 

Purpose

 

 

1

 

1.2

 

Definitions

 

 

1

 

1.3

 

Effective Date

 

 

3

 

1.4

 

Governing Law; Subject to Applicable Regulatory Rules

 

 

3

 

ARTICLE 2 ELIGIBILITY AND PARTICIPATION

 

 

3

 

2.1

 

Eligibility

 

 

3

 

2.2

 

Rights Under the Plan

 

 

4

 

2.3

 

Copy of Plan

 

 

4

 

2.4

 

Limitation on Rights

 

 

4

 

2.5

 

Grant Agreements

 

 

4

 

2.6

 

Maximum Number of Common Shares

 

 

4

 

ARTICLE 3 RESTRICTED SHARE UNITS

 

 

 

 

3.1

 

Grant of Restricted Share Units

 

 

4

 

3.2

 

Redemption of Restricted Share Units

 

 

5

 

3.3

 

Payment of Dividend Equivalents

 

 

5

 

3.4

 

Offer for Common Shares – Change of Control

 

 

5

 

ARTICLE 4 PERFORMANCE SHARE UNITS

 

 

5

 

4.1

 

Grant of Performance Share Units

 

 

5

 

4.2

 

Settlement of Earned Performance Share Units

 

 

5

 

4.3

 

Payment of Dividend Equivalents

 

 

6

 

4.4

 

Termination of Employment

 

 

6

 

4.5

 

Change of Control

 

 

6

 

ARTICLE 5 DIRECT SHARE ISSUANCES

 

 

6

 

5.1

 

Direct Share Issuances

 

 

6

 

5.2

 

Vesting

 

 

7

 

5.3

 

Termination of Employment

 

 

7

 

5.4

 

Change in Control

 

 

7

 

ARTICLE 6 EVENTS AFFECTING ENTITLEMENT

 

 

 

 

6.1

 

Termination of Employment or Election as a Director

 

 

7

 

6.2

 

Death

 

 

8

 

6.3

 

No Grants Following Last Day of Active Employment

 

 

8

 

ARTICLE 7 ADMINISTRATION

 

 

9

 

7.1

 

Adjustments

 

 

9

 

7.2

 

Compliance with Tax Requirements

 

 

9

 

7.3

 

Transferability

 

 

9

 

7.4

 

Administration

 

 

9

 

7.5

 

Records

 

 

10

 

7.6

 

Statements

 

 

10

 

7.7

 

Legal Compliance

 

 

10

 

ARTICLE 8 AMENDMENT AND TERMINATION

 

 

10

 

8.1

 

Amendment

 

 

10

 

8.2

 

Termination of Plan

 

 

11

 

ARTICLE 9 GENERAL

 

 

11

 

9.1

 

Rights to Common Shares

 

 

11

 

9.2

 

No Right to Employment

 

 

11

 

9.3

 

Right to Funds

 

 

11

 

9.4

 

Successors and Assigns

 

 

11

 

9.5

 

Severability

 

 

12

 

9.6

 

Code Section 409A

 

 

12

 

 

i

 

ARTICLE 1  

GENERAL PROVISIONS

 

1.1

Purpose

 

This Amended and Restated Restricted Share Unit and Equity Incentive Plan is established as a vehicle by which equity-based incentives may be awarded to retain employees, to recognize and reward their significant contributions to the long-term success of the Corporation including to align the employees and directors interests more closely with the shareholders of the Corporation.

 

1.2

Definitions

 

As used in the Plan, the following terms have the following meanings:

 

 

(a)

“Award” means the grant of a Restricted Share Unit award, a Performance Share Unit award, or a Direct Share Issuance under the Plan.

 

 

 

 

(b)

“Board” means the Board of Directors of the Corporation;

 

 

 

 

(c)

“Change of Control” includes:

 

 

 

 

 

(i)

the acquisition by any persons acting jointly or in concert (as determined by the Securities Act (Ontario)), whether directly or indirectly, of voting securities of the Corporation that, together with all other voting securities of the Corporation held by such persons, constitute in the aggregate more than 50% of all outstanding voting securities of the Corporation;

 

 

 

 

(ii)

an amalgamation, arrangement or other form of business combination of the Corporation with another corporation that results in the holders of voting securities of that other corporation holding, in the aggregate, more than 50% of all outstanding voting securities of the corporation resulting from the business combination;

 

 

 

 

(iii)

the sale, lease or exchange of all or substantially all of the property of the Corporation to another person, other than in the ordinary course of business of the Corporation or to a Related Entity; or

 

 

 

 

(iv)

any other transaction that is deemed to be a “Change of Control” for the purposes of this Plan by the Board in its sole discretion;

 

 

 

 

provided, however, with respect to Section 409A Covered Awards, a transaction will not be deemed to be a Change in Control unless such transaction constitutes a “change in control event” within the meaning of Section 409A of the Code.

 

 

(d)

“Code” means the US Internal Revenue Code of 1986, as amended;

 

 

 

 

(e)

“Committee” means the Compensation Committee of the Board or such other persons designated by the Board;

 

 

 

 

(f)

“Common Share” means a common share in the capital of the Corporation;

 

 

 

 

(g)

“Corporation” means Ur-Energy Inc. and its successors and assigns;

 

 

 

 

(h)

“Direct Share Issuance” means the direct issuance of Common Shares to an Eligible Person.

 

 

 

 

(i)

“Director” means a non-Employee director of the Board of the Corporation;

 

1

 

 

(j)

“Dividend” means a dividend declared and payable on a Common Share in accordance with the Corporation’s dividend policy as the same may be amended from time to time (an “Ordinary Dividend”), and may, in the discretion of the Committee, include a special or stock dividend (a “Special Dividend”) declared and payable on a Common Share;

 

 

 

 

(k)

“Eligible Person” means an Employee or a Director who is designated as an Eligible Person pursuant to Section 2.1;

 

 

 

 

(l)

“Employee” means an employee of the Corporation or a Subsidiary;

 

 

 

 

(m)

“Fair Market Value” means the closing price of the Common Shares on the Toronto Stock Exchange on the Business Day immediately prior to the date for which Fair Market Value is being determined, or if the shares are not listed on the Toronto Stock Exchange, then on such other stock exchange or quotation system as may be selected by the Committee, provided that, if the Common Shares are not listed or quoted on any other stock exchange or quotation system, then the Fair Market Value will be the value determined by the Committee in its sole discretion acting in good faith;

 

 

 

 

(n)

“Grant Date” means any date determined from time to time by the Committee as a date on which an Award is made to one or more Eligible Persons under this Plan;

 

 

 

 

(o)

“Officer” means a person who is an officer of the Corporation within the meaning of Section 1 of the Securities Act (Ontario).

 

 

 

 

(p)

“Performance Period” shall mean the period over which the performance goals with respect to a grant of Performance Share Units is measured.

 

 

 

 

(q)

“Performance Share Unit” means a performance-based Award that entitles the Eligible Person to receive Common Shares based on the attainment of one or more performance goals over a designated Performance Period.

 

 

 

 

(r)

“Plan” means the Ur-Energy Inc. Amended and Restated Restricted Share Unit and Equity Incentive Plan, as amended from time to time;

 

 

 

 

(s)

“Redemption Date” in respect of any Restricted Share Unit means (A) for Restricted Share Units issued prior to March 23, 2015 (the “First Amended Effective Date”), (i) 50% of such Restricted Share Unit on the first anniversary of the Grant Date on which such Restricted Share Unit was granted to the Eligible Person, and (ii) 50% of such Restricted Share Unit on the second anniversary of the Grant Date on which such Restricted Share Unit was granted to the Eligible Person, and (B) for Restricted Shares Units issued on or after First Amended Effective Date, 100% of such Restricted Share Unit on the second anniversary of the Grant Date on which such Restricted Share Unit was granted to the Eligible Person, unless (a) an earlier date has been approved by the Committee as the Redemption Date in respect of such Restricted Share Unit (provided, however, that the Committee shall not designate an earlier Redemption Date in respect of Section 409A Covered Awards), or (b) Section 3.4, 6.1, 6.2 or 8.2, is applicable, in which case the Redemption Date in respect of such Restricted Share Unit shall be the date established as such in accordance with the applicable Section; provided that, notwithstanding any other provision hereof, in no event will the Redemption Date in respect of any Restricted Share Unit be after the end of the calendar year which is three years following the end of the year in which services to which the grant of such Restricted Share Unit relates were performed by the Employee or Director to whom such Restricted Share Unit was granted;

 

 

 

 

(t)

“Reorganization” means any declaration of any stock dividend (other than a Special Dividend in respect of which the Committee, in its discretion, determines that Eligible Persons are to be paid a cash amount pursuant to Section 3.3), stock split, combination or exchange of shares, merger, consolidation, recapitalization, amalgamation, plan of arrangement, reorganization, spin-off or other distribution (other than Ordinary Dividends) of the Corporation assets to shareholders or any other similar corporate transaction or event which the Committee determines affects the Common Shares such that an adjustment is appropriate to prevent dilution or enlargement of the rights of Eligible Persons under this Plan;

 

2

 

 

(u)

“Restricted Share Unit” means one notional Common Share (without any of the attendant rights of a shareholder of such Common Share, including the right to vote such Common Share and the right to receive dividends thereon, except to the extent otherwise specifically provided herein) credited by bookkeeping entry to a notional account maintained by the Corporation in respect of an Eligible Person in accordance with this Plan; and

 

 

 

 

(v)

“Section 409A Covered Award” means any Award granted under the Plan after the Amended Effective Date that constitutes “non-qualified deferred compensation” subject to Section 409A of the Code.

 

 

 

 

(w)

“Separation from Service” has the meaning set forth in Treasury Regulation 1.409A-1(h) applying the default rules thereunder.

 

 

 

 

(x)

“Specified Employee” means a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Code using the identification methodology selected by the Corporation from time to time, or if none, the default methodology set forth in Section 409A of the Code.

 

 

 

 

(y)

“Subsidiary” has the meaning set out in the Securities Act (Ontario).

 

1.3  

 Effective Date

 

The Plan was originally effective May 7, 2010 with respect to the Eligible Person payable commencing in and with respect to the 2010 fiscal year. The Plan was first amended and restated effective March 23, 2015. The Plan is now amended and restated again effective April 13, 2021. No Common Shares may be issued under the Plan until and unless all required regulatory and shareholder approvals have been obtained with respect to the issuance of Common Shares hereunder.

 

1.4

Governing Law; Subject to Applicable Regulatory Rules

 

The Plan shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The provisions of the Plan shall be subject to the applicable by-laws, rules and policies of the Toronto Stock Exchange and applicable securities legislation.

 

ARTICLE 2

ELIGIBILITY AND PARTICIPATION

 

2.1

Eligibility

 

This Plan applies to those Employees and Directors whom the Committee designates as eligible to receive an Award under the Plan. The Committee shall make such a designation prior to each Grant Date.

 

3

 

2.2

Rights Under the Plan

 

Subject to Article 6 and Article 7, an Eligible Person who has been granted an Award shall continue to have rights in respect of such Award until such Award has been redeemed for cash or shares in accordance with this Plan.

 

2.3

Copy of Plan

 

The Corporation shall provide each Eligible Person with a copy of this Plan following the initial Award to such Eligible Person and shall provide each Eligible Person with a copy of all amendments to this Plan.

 

2.4

Limitation on Rights

 

Nothing in this Plan shall confer on any Employee or Director any right to be designated as an Eligible Person or to be granted an Award under the Plan. There is no obligation for uniformity of treatment of Eligible Persons or any group of Employees, Directors or Eligible Persons, whether based on salary or compensation, grade or level or organizational position or level or otherwise. An Award to an Eligible Person on one or more Grant Dates shall not be construed to create a right to an additional Award on a subsequent Grant Date.

 

2.5

Grant Agreements

 

Each Award shall be evidenced by a written agreement executed by the Eligible Person in substantially the form appended hereto or in such other form as may be approved by the Committee from time to time. An Eligible Person will not be entitled to any Award hereunder or any benefit of this Plan unless the Eligible Person agrees with the Corporation to be bound by the provisions of this Plan. By entering into an agreement described in this Section 2.5, each Eligible Person shall be deemed conclusively to have accepted and consented to all terms of this Plan and all bona fide actions or decisions made by the Committee. Such terms and consent shall also apply to and be binding on the legal representative, beneficiaries, heirs and successors of each Eligible Person.

 

2.6

Maximum Number of Common Shares

 

Notwithstanding any provision herein, the aggregate number of Common Shares which may be issuable in respect of Awards under the Plan, in combination with the aggregate number of Common Shares which may be issuable under any and all of the Corporation’s equity incentive plans in existence from time to time, including the Corporation’s Stock Option Plan 2005, as amended from time to time, shall not exceed ten percent (10%) of the issued and outstanding shares of the Corporation as at the Grant Date of each Award under the Plan or such greater number of Common Shares as shall have been duly approved by the Board and, if required by the rules or policies of the Toronto Stock Exchange or any other stock exchange on which the Common Shares of the Corporation may then be listed, by the shareholders of the Corporation. No fractional Common Shares may be issued under the Plan.

 

ARTICLE 3

RESTRICTED SHARE UNITS

 

3.1

Grant of Restricted Share Units

 

On each Grant Date, the Committee shall designate Eligible Persons and determine the number of Restricted Share Units, if any, to be granted to each Eligible Person in the Committee’s sole discretion.

 

4

 

3.2

Redemption of Restricted Share Units

 

 

(a)

Unless redeemed earlier in accordance with this Plan, the Restricted Share Units of each Eligible Person will be redeemed on or within thirty (30) days after the Redemption Date for cash or Common Shares, as determined by the Committee, for an amount equal to the Fair Market Value of a Restricted Share Unit.

 

 

 

 

(b)

If the Committee determines that any Restricted Share Units are to be redeemed for Common Shares, the Eligible Person will be entitled to receive and the Corporation will issue to the Eligible Person a number of Common Shares equal to the Fair Market Value of the Restricted Share Units (net of any applicable statutory withholdings) that have vested on the Redemption Date.

 

3.3

Payment of Dividend Equivalents

 

When Dividends are paid on Common Shares, an Eligible Person shall be credited with Dividend equivalents in respect of the Restricted Share Units credited to the Eligible Person’s account as of the record date for payment of Dividends. Such Dividend equivalents shall be converted into additional Restricted Share Units (including fractional Restricted Share Units) based on the Fair Market Value per Common Share on the date credited, and such new Restricted Share Units shall be paid at the same time as the Restricted Share Units to which the Dividend equivalents related.

 

3.4

Offer for Common Shares – Change of Control

 

Notwithstanding anything else herein to the contrary, in the event of a Change of Control, then the Corporation shall redeem 100% of the Restricted Share Units granted to the Eligible Persons and outstanding under the Plan as soon as reasonably practical, but no later than thirty (30) days following the Redemption Date for cash. For the purposes of this Section 3.4: (i) the Redemption Date shall be the date on which the Change of Control occurs, and (ii) the Fair Market Value of a Restricted Share Unit shall be the greater of (i) the closing price per Common Share on the Toronto Stock Exchange on the Business Day immediately preceding the Redemption Date, and (ii) the price at which Common Shares are taken up under the Change of Control, as applicable.

 

ARTICLE 4

PERFORMANCE SHARE UNITS

 

4.1

Grant of Performance Share Units

 

On each Grant Date, the Committee shall designate Eligible Persons and determine the Performance Share Units, if any, to be granted to each Eligible Person in the Committee’s sole discretion. Each Award of Performance Share Units shall designate a target number of Performance Share Units covered by the Award, with the actual number of Performance Share Units earned (if any) to be based on a formula set forth in the grant agreement related to the attainment of one or more performance goals set forth in the grant agreement over the Performance Period set forth in the grant agreement.

 

4.2

Settlement of Earned Performance Share Units

 

 

(a)

Unless settled earlier in accordance with this Plan, earned Performance Share Units of each Eligible Person will be settled on or within thirty (30) days after the end of the Performance Period applicable to such Performance Share Units for cash or Common Shares, as determined by the Committee.

 

 

 

 

(b)

If the Committee determines that any earned Performance Share Units are to be settled in Common Shares, the Eligible Person will be entitled to receive and the Corporation will issue to the Eligible Person a number of Common Shares equal to the number of earned Performance Share Units (net of any applicable statutory withholdings). If the Committee determines that any earned Performance Share Units are to be settled in cash, the Eligible Person will be entitled to receive and the Corporation will issue to the Eligible Person a cash payment equal to the Fair Market Value (measured as of the settlement date) of a number of Common Shares equal to the number of earned Performance Share Units.

 

5

 

4.3

Payment of Dividend Equivalents

 

When Dividends are paid on Common Shares, an Eligible Person shall be credited with Dividend equivalents in respect of the target number of Performance Share Units credited to the Eligible Person’s account as of the record date for payment of Dividends. Such Dividend equivalents shall be converted into additional Performance Share Units (including fractional Performance Share Units) based on the Fair Market Value per Common Share on the date credited, and such new Performance Share Units shall be earned based on the same performance goals measured over the same Performance Period and shall be paid at the same time as the Performance Share Units to which the Dividend equivalents related.

 

4.4

Termination of Employment

 

Unless otherwise provided in a grant agreement for an Award of Performance Share Units, upon an Eligible Person’s termination of employment or other service or death prior to the end of the Performance Period for an Award of Performance Share Units, such Performance Share Units shall be forfeited. For avoidance of doubt, the provisions of Section 6.1 and 6.2 below shall not apply to Performance Share Units granted hereunder.

 

4.5

Change of Control

 

Upon the occurrence of a Change of Control, the Performance Period of each outstanding Performance Share Unit Award shall be deemed to have ended and the Committee shall determine the number of Performance Share Units earned under each outstanding Performance Share Unit Award based on performance through the date of the Change in Control. The Committee may make adjustments to the performance goals in its sole discretion to account for the truncation of the Performance Period on the date of the Change of Control and the Committee may adopt reasonable procedures for determining the level of achievement of any financial metrics, such as using audited financial statements from the most recently completed fiscal quarter. Earned Performance Share Units shall be settled in cash as soon as reasonably practical, but no later than thirty (30) days following, the Change of Control. For the purposes of this Section 4.5: (i) the Fair Market Value of an earned Performance Share Unit shall be the greater of (i) the closing price per Common Share on the Toronto Stock Exchange on the Business Day immediately preceding the Change of Control, and (ii) the price at which Common Shares are taken up under the Change of Control, as applicable.

 

ARTICLE 5

DIRECT SHARE ISSUANCES

 

5.1

Direct Share Issuances

 

On each Grant Date, the Committee shall designate Eligible Persons and determine the number of Common Shares, if any, to be granted as a Direct Share Issuance to each Eligible Person in the Committee’s sole discretion. Except to the extent restricted under the terms of this Plan or under the applicable grant agreement, an Eligible Person receiving a Direct Share Issuance shall have all of the rights of a shareholder of the Corporation with respect to the Common Shares issued, including the right to vote the Common Shares and the right to receive dividends thereon.

 

6

 

5.2

Vesting

 

Direct Shares Issuances may be fully vested on the Grant Date or may be subject to vesting, as determined by the Committee. Direct Share Issuances that are subject to a vesting schedule may not be transferred prior to vesting.

 

5.3

Termination of Employment

 

Unless otherwise provided in the grant agreement for a Direct Share Issuance that is subject to vesting, upon an Eligible Person’s termination of employment or other service or death, the provisions of Section 6.1 and Section 6.2 shall apply to such Direct Share Issuance by analogy. Any unvested Common Shares that do not vest as a result of the Eligible Person’s termination of employment of other service or death shall be immediately forfeited and returned to the Corporation without the payment of any consideration. Common Shares subject to any Direct Share Issuance may be evidenced in such manner as the Committee shall determine, and if certificated, may be held in escrow with appropriate legends to help enforce any forfeiture described in the Section.

 

5.4

Change in Control

 

Notwithstanding anything else herein to the contrary, unvested Common Shares subject to a Direct Share Issuance shall vest in full immediately prior to the occurrence of a Change of Control.

 

ARTICLE 6

EVENTS AFFECTING ENTITLEMENT

 

6.1

Termination of Employment or Election as a Director

 

 

(a)

Voluntary Termination or Termination for Cause. If an Eligible Person is terminated by the Corporation for cause (as determined by the Corporation), or if an Eligible Person, voluntarily terminates employment for any reason or resigns as a Director, as applicable, all of the Eligible Person’s Restricted Share Units shall be cancelled and no amount shall be paid by the Corporation to the Eligible Person in respect of the Restricted Share Units so cancelled.

 

 

 

 

(b)

Involuntary Termination. The Restricted Share Units of an Eligible Person, other than a Director, who is involuntarily terminated by the Corporation, for reasons other than cause, shall be redeemed for cash at the Fair Market Value of a Restricted Share Unit on the Redemption Date. For the purposes of this Section 6.1(b) the Redemption Date shall be:

 

 

 

 

(i)

for Restricted Share Units other than Section 409A Covered Awards, the date on which the employment of the Eligible Person, other than a Director, is terminated irrespective of any entitlement of the Eligible Person to notice, pay in lieu of notice or benefits beyond the termination date, and

 

 

 

 

(ii)

for Section 409A Covered Awards, the date of the Eligible Person’s Separation from Service; provided, however, that if on such date the Eligible Person is a Specified Employee, then to the extent required by Section 409A(a)(2)(B) of the Code, the Redemption Date shall be the earlier of (i) the expiration of the six (6)-month period measured from the date of the Eligible Person’s Separation from Service, and (ii) the date of the Eligible Person’s death (the “Delay Period”).

7

 

 

 

 

 

(c)

Termination related to Directors. The Restricted Share Units of a Director, who is not re-elected at an annual or special meeting of shareholders shall be redeemed for cash at the Fair Market Value of a Restricted Share Unit on the Redemption Date. For purposes of this Section 6.1(c), the Redemption Date shall be:

 

 

 

 

(i)

for Restricted Share Units other than Section 409A Covered Awards, the date on which the annual or special meeting is held, and

 

 

 

 

(ii)

for Section 409A Covered Awards, the date of the Eligible Person’s Separation from Service.

 

 

 

 

(d)

Retirement of Officers and Directors. Any unvested Restricted Share Units held by the Officer or Director will become fully vested upon such Officer’s or Director’s “Retirement,” which shall mean such Officer’s or Director’s voluntary termination of employment or cessation of services to the Corporation when the Officer’s or Director’s age plus years of service with the Corporation (in each case measured in complete, whole years) equals or exceeds 65, provided that at the date of termination such Officer or Director has completed at least five years of service with the Corporation. Such Restricted Share Units shall be redeemed in accordance with Section 3.2 on their originally scheduled Redemption Dates.

 

6.2

Death

 

All of the Restricted Share Units of an Eligible Person who dies shall be redeemed in accordance with Section 3.2. For the purposes of the foregoing, the Redemption Date shall be the date of the Eligible Person’s death.

 

6.3

No Grants Following Last Day of Active Employment

 

In the event of termination of any Eligible Person’s employment with the Corporation, such Eligible Person shall not be granted any Awards under the Plan after the last day of active employment of such Eligible Person. Without limiting the generality of the foregoing and of Section 2.4, notwithstanding any other provision hereof, and notwithstanding any provision of any employment agreement between any Eligible Person and the Corporation, no Eligible Person will have any right to an Award under the Plan, and shall not be granted any Award under the Plan after the last day of active employment of such Eligible Person on which such Eligible Person actually performs the duties of the Eligible Person’s position, whether or not such Eligible Person receives a lump sum payment of salary or other compensation in lieu of notice of termination, or continues to receive payment of salary, benefits or other remuneration for any period following such last day of active employment. Notwithstanding any other provision hereof, or any provision of any employment agreement between the Corporation and an Eligible Person, in no event will any Eligible Person have any right to damages in respect of any loss of any right to receive an Award under the Plan after the last day of active employment of such Eligible Person and no severance allowance, or termination settlement of any kind in respect of any Eligible Person will include or reflect any claim for such loss of right and no Eligible Person will have any right to assert, claim, seek or obtain, and shall not assert, claim, seek or obtain, any judgment or award in respect of or which includes or reflects any such right or claim for such loss of right.

 

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ARTICLE 7

ADMINISTRATION

 

7.1

Adjustments

 

If any change occurs in the outstanding Common Shares by reason of a reorganization, the Committee, in its sole discretion, and without liability to any person, shall make such equitable changes or adjustments, if any, as it considers appropriate, in such manner as the Committee may consider equitable, to reflect such change or event including, without limitation, adjusting the number of Common Shares subject to Awards outstanding under the Plan, provided that any such adjustment will not otherwise extend the Redemption Date otherwise applicable to Restricted Share Units or the Performance Period applicable to Performance Share Units. The Corporation shall give notice to each Eligible Person of any adjustment made pursuant to this Section and, upon such notice, such adjustment shall be conclusive and binding for all purposes. The existence of outstanding Awards shall not affect in any way the right or power and authority of the Corporation or its shareholders to make or authorize any alteration, recapitalization, reorganization or any other change in the Corporation’s capital structure or its business or any merger or consolidation of the Corporation, any issue of bonds, debentures or preferred or preference shares (ranking ahead of the Common Shares or otherwise) or any right thereto, or the dissolution or liquidation of the Corporation, any sale or transfer of all or any part of its assets or business or any corporate act or proceeding whether of a similar character or otherwise.

 

7.2

Compliance with Tax Requirements

 

In taking any action hereunder, or in relation to any rights hereunder, the Corporation and each Eligible Person shall comply with all provisions and requirements of any income tax, pension plan, or employment or unemployment insurance legislation or regulations of any jurisdiction which may be applicable to the Corporation or Eligible Person, as the case may be. The Corporation shall have the right to deduct from all payments made to the employee in respect of Awards, whether in cash or Common Shares, any federal, provincial, local, foreign or other taxes, Canadian pension plan or employment insurance commission or other deductions required by law to be withheld with respect to such payments. The Corporation may take such other action as the Board or the Committee may consider advisable to enable the Corporation and any Eligible Person to satisfy obligations for the payment of withholding or other tax obligations relating to any payment to be made under this Plan. Each Eligible Person (or the heirs and legal representatives of the Eligible Person) shall bear any and all income or other tax imposed on amounts paid to the Eligible Person (or the heirs and legal representatives of the Eligible Person) under this Plan, including any taxes, interest or penalties resulting from the application of Section 409A of the Code. If the Board or the Committee so determines, the Corporation shall have the right to require, prior to making any payment under this Plan, payment by the recipient of the excess of any applicable Canadian or foreign federal, provincial, state, local or other taxes over any amounts withheld by the Corporation, in order to satisfy the tax obligations in respect of any payment under this Plan. If the Corporation does not withhold from any payment, or require payment of an amount by a recipient, sufficient to satisfy all income tax obligations, the Eligible Person shall make reimbursement, on demand, in cash, of any amount paid by the Corporation in satisfaction of any tax obligation. Notwithstanding any other provision hereof, in taking such action hereunder, the Board and the Committee shall endeavour to ensure that the payments to be made hereunder will not be subject to the “salary deferral arrangement” rules under the income tax act (Canada), as amended, or income tax legislation of any other jurisdiction.

 

7.3

Transferability

 

Rights respecting Awards shall not be transferable or assignable other than by will or the laws of decent and distribution.

 

7.4

Administration

 

The Committee shall, in its sole and absolute discretion, but subject to applicable corporate, securities and tax law requirements: (i) interpret and administer the Plan; (ii) establish, amend and rescind any rules and regulations relating to the Plan; and (iii) make any other determinations that the Committee deems necessary or desirable for the administration and operation of the Plan. The Committee may delegate to any person any administrative duties and powers under this Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems, in its sole and absolute discretion, necessary or desirable. Any decision of the Committee with respect to the administration and interpretation of the Plan shall be conclusive and binding on the Eligible Person and his or her legal representative. The Board may establish policies respecting minimum ownership of Common Shares of the Corporation by Eligible Persons and the ability to elect to have Awards satisfy any such policy.

 

9

 

7.5

Records

 

The Corporation will maintain records indicating the Awards credited to an Eligible Person under the Plan from time to time and the Grant Dates of such Awards. Such records shall be conclusive as to all matters involved in the administration of this Plan.

 

7.6

Statements

 

The Corporation shall furnish annual statements to each Eligible Person indicating the Awards credited to the Eligible Person and the Grant Dates of the Awards and such other information that the Corporation considers relevant to the Eligible Person.

 

7.7

Legal Compliance

 

Without limiting the generality of the foregoing, the Committee may take such steps and require such documentation from Eligible Persons as the Committee may determine are desirable to ensure compliance with all applicable laws and legal requirements, including all applicable corporate and securities laws and regulations of any country, and any political subdivisions thereof, and the by-laws, rules and regulations of any stock exchanges or other organized market on which Common Shares may from time to time be listed or posted and any applicable provisions of the Income Tax Act (Canada), as amended or income tax legislation or any other jurisdiction.

 

ARTICLE 8

AMENDMENT AND TERMINATION

 

8.1

Amendment

 

 

(a)

The Board reserves the right, in its sole discretion, to amend, suspend or terminate the Plan or any portion thereof at any time, in accordance with applicable legislation, without obtaining the approval of shareholders. Notwithstanding the foregoing, the Corporation will be required to obtain, in accordance with the provisions of the rules and policies of the Toronto Stock Exchange, the approval of holders of a majority of shares present and voting in person or by proxy at a meeting of the shareholders of the Corporation for any amendment related to:

 

 

(i)

the percentage of the issued and outstanding Common Shares available to be granted under the Plan;

 

 

 

 

(ii)

a change in the method of calculation of redemption of Restricted Share Units or settlement of Performance Share Units held by Eligible Persons;

 

 

 

 

(iii)

an extension to the term for redemption of Restricted Share Units or settlement of Performance Share Units held by Eligible Persons; and

 

 

 

 

(iv)

amendments to this Section 8.1 of the Plan.

 

 

(b)

Unless an Eligible Person otherwise agrees, any amendment to the Plan or Awards shall apply only in respect of Awards granted on or after the date of such amendment.

 

10

 

 

(c)

Without limiting the generality of the foregoing, the Board may make the following amendments to the Plan, without obtaining shareholder approval:

   

 

(i)

amendments to the terms and conditions of the Plan necessary to ensure that the Plan complies with the applicable regulatory requirements, including the rules of the TSX, in place from time to time;

 

 

 

 

(ii)

amendments to the provisions of the Plan respecting administration of the Plan and eligibility for participation under the Plan;

 

 

 

 

(iii)

amendments to the provisions of the Plan respecting the terms and conditions on which Awards may be granted pursuant to the Plan, including the provisions relating to the payment of Awards; and

 

 

 

 

(iv)

amendments to the Plan that are of a “housekeeping” nature.

              

8.2

 Termination of Plan

 

The Board may from time to time amend or suspend this Plan in whole or in part and may at any time terminate this Plan. No such amendment, suspension or termination shall adversely affect the rights of any Eligible Person at the time of such amendment, suspension or termination with respect to outstanding Awards credited to such Eligible Person without the consent of the affected Eligible Person. If the Board terminates the Plan, no new Awards will be granted to any Eligible Person, but outstanding Awards shall remain outstanding, be entitled to payments and be paid in accordance with the terms and conditions of this Plan existing at the time of termination. This Plan will finally cease to operate for all purposes when the last remaining Eligible Person receives a payment in satisfaction of all outstanding Awards credited to such Eligible Person, or all outstanding Awards credited to such Eligible Person are cancelled pursuant to the provisions thereof.

 

ARTICLE 9

GENERAL

 

9.1

Rights to Common Shares

 

This Plan shall not be interpreted to create any entitlement of any Eligible Person to any Common Shares, or to the dividends payable pursuant thereto, except as expressly provided herein. A holder of Restricted Share Units or Performance Share Units shall not have rights as a shareholder of the Corporation with respect to any Common Shares which may be issuable pursuant to the Restricted Share Units or Performance Share Units so held, whether voting, right on liquidation or otherwise.

 

9.2

No Right to Employment

 

This Plan shall not be interpreted as either an employment or trust agreement. Nothing in this Plan nor any Committee guidelines or any agreement referred to in Section 2.5 nor any action taken hereunder shall be construed as giving any Eligible Person the right to be retained in the continued employ or service of the Corporation or any of its subsidiaries, or giving any Eligible Person or any other person the right to receive any benefits not specifically expressly provided in this Plan nor shall it interfere in any way with any other right of the Corporation to terminate the employment or service of any Eligible Person at any time.

  

9.3

Right to Funds

 

Neither the establishment of this Plan nor the granting of Awards under this Plan shall be deemed to create a trust. Amounts payable to any Eligible Person under the Plan shall be a general, unsecured obligation of the Corporation. The right of the Employee to receive payment pursuant to this Plan shall be no greater than the right of other unsecured creditors of the Corporation.

 

9.4

Successors and Assigns

 

The Plan shall be binding on all successors and assigns of the Corporation and an Eligible Person, including without limitation, the estate of such Eligible Person and the legal representative of such estate, or any receiver or trustee in bankruptcy or representative of the Corporation’s or Eligible Person’s creditors.

 

11

 

9.5

Severability

 

If any provision of the Plan or part hereof is determined to be void or unenforceable in whole or in part, such determination shall not affect the validity or enforcement of any other provision or part thereof.

 

9.6

Code Section 409A

 

 

(a)

Although the Corporation does not guarantee to a Eligible Person any particular tax treatment of an Award, the Awards hereunder are intended to comply with or be exempt from the provisions of Section 409A of the Code, and this Plan shall be administered accordingly. Notwithstanding the foregoing, neither the Corporation, nor its subsidiaries or affiliates, nor any of their officers, directors, employees or representatives shall be liable to the Eligible Person for any interest, taxes or penalties resulting from non-compliance with Section 409A of the Code.

 

 

 

 

(b)

All payments in respect of Restricted Share Units and Performance Share Units other than Section 409A Covered Awards are intended to be “short-term deferrals” exempt from the application of Code Section 409A and are intended to be made no later than the 15th day of the third month after the later of the end of (i) the first calendar year in which the Eligible Person’s right to the payment is no longer subject to a substantial risk of forfeiture or (ii) the first taxable year of the Corporation in which the Eligible Person’s right to payment is no longer subject to a substantial risk of forfeiture.

 

12

 

RESTRICTED SHARE UNIT GRANT AGREEMENT

 

This Restricted Share Unit Grant Agreement is made as of the ___ day of __________, 20__ between _______________________, the undersigned “Eligible Person” (the “Eligible Person”), being an employee or director of Ur-Energy Inc. (the “Corporation”), named or designated pursuant to the terms of the Restricted Share Unit Plan of Ur-Energy Inc. (which Plan, as the same may from time to time be modified, supplemented or amended and in effect is herein referred to as the “Plan”), and the Corporation.

 

In consideration of the grant of Restricted Share Units made to the Eligible Person pursuant to the Plan (the receipt and sufficiency of which are hereby acknowledged), the Eligible Person hereby agrees and confirms that:

 

1.

The Eligible Person has received a copy of the Plan and has read, understands and agrees to be bound by the provisions of the Plan.

 

 

2.

The Eligible Person accepts and consents to and shall be deemed conclusively to have accepted and consented to, and agreed to be bound by, the provisions and all terms of the Plan and all bona fide actions or decisions made by the Board, the Committee, or any person to whom the Committee may delegate administrative duties and powers in relation to the Plan, which terms and consent shall also apply to and be binding on the legal representatives, beneficiaries and successors of the undersigned.

 

 

3.

On ________________, 20__, the Eligible Person was granted __________ Restricted Share Units, which grant is evidenced by this Agreement.

 

 

4.

This Restricted Share Unit Grant Agreement shall be considered as part of and an amendment to the employment agreement between the Eligible Person and the Corporation and the Eligible Person hereby agrees that the Eligible Person will not make any claim under that employment agreement for any rights or entitlement under the Plan or damages in lieu thereof except as expressly provided in the Plan.

   

This Agreement shall be determined in accordance with the laws of Ontario and the laws of Canada applicable therein.

 

Words used herein which are defined in the Plan shall have the respective meanings ascribed to them in the Plan.

 

IN WITNESS WHEREOF, Ur-Energy Inc. has executed and delivered this Agreement, and the Eligible Person has signed, sealed and delivered this Agreement, as of the date first above written.

 

 

UR-ENERGY INC.

 

 

 

 

 

Per:

 

 

 

Name: