Exhibit
99.1
UR-ENERGY
INC.
10758
West Centennial Road, Suite 200
Littleton,
Colorado 80127 USA
NOTICE
OF THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that
the annual and special meeting of the shareholders (the “Meeting”) of Ur-Energy
Inc. (the “Corporation”) will be held at Hampton Inn & Suites, 7611 Shaffer
Parkway, Littleton, Colorado 80127 on Tuesday, April 28, 2009 commencing at
1:00 p.m. (MDT) for the following purposes:
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1.
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to
receive the consolidated financial statements of the Corporation for the
year ended December 31, 2008 together with the report of the auditor
thereon;
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3.
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to
re-appoint PricewaterhouseCoopers LLP as auditors of the Corporation and
to authorize the directors to fix the remuneration of the
auditor;
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4.
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to consider and, if deemed
advisable, to pass, with or without amendment, a resolution to approve the
adoption of the Ur-Energy Inc. Restricted Share Unit Plan (the “RSU Plan
Resolution”);
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5.
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to consider and, if deemed
advisable, to pass, with or without amendment, a resolution to ratify and
confirm the Corporation’s shareholder rights plan agreement (the “Rights
Plan Resolution”); and
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6.
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to
transact such other business as may properly come before the meeting or
any adjournment or adjournments
thereof.
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Accompanying
this notice are the management proxy circular, containing details of the matters
to be dealt with at the Meeting, the audited consolidated financial statements
of the Corporation for the year ended December 31, 2008, together with
management’s discussion and analysis thereon, and a form of proxy.
Shareholders
who are unable to attend the Meeting in person are requested to complete and
sign the accompanying form of proxy and return it by mail in the enclosed return
envelope or by facsimile or by Internet. To be effective, proxies
must be received by the Corporation’s transfer agent, Equity Transfer &
Trust Company, Suite 400, 200 University Avenue, Toronto Ontario M5H 4H1,
Attention: Proxy Department, or by facsimile at 1-416-595-9593 or
Internet prior to 5:00 p.m. (MDT) on Monday, April 27, 2009 or if the Meeting is
adjourned, by no later than 48 hours (excluding Saturdays, Sundays and holidays)
prior to when any adjournment thereof is to be held, or may be deposited with
the Chair of the Meeting at any time prior to the commencement of the Meeting or
any adjournment thereof.
DATED at
Denver, Colorado, this 18th day of March, 2009.
BY
ORDER OF THE BOARD OF DIRECTORS
(Signed) “Paul G. Goss”
Corporate Secretary
UR-ENERGY
INC.
10758
West Centennial Road, Suite 200
Littleton,
Colorado 80127 USA
MANAGEMENT
PROXY CIRCULAR
SOLICITATION
OF PROXIES
This management proxy circular (the
“Circular”) is furnished in connection with the solicitation by the management
of Ur-Energy Inc. (the “Corporation” or “Ur-Energy”) of proxies for use at the
annual and special meeting of shareholders of the Corporation (the “Meeting”) to
be held at Hampton Inn & Suites, 7611 Shaffer Parkway, Littleton, Colorado
80127 on Tuesday, April 28, 2009 commencing at 1:00 p.m. (MDT), and
at any adjournment thereof, for the purposes set forth in the 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 Corporation. All costs of solicitation will be borne by
the Corporation. The information contained herein is given as at
March 18, 2009, unless otherwise indicated.
All
dollar amounts in this Circular are in Canadian dollars, except where indicated
otherwise. References to “$” are to Canadian dollars and reference to
“US$” are to United States dollars. On March 18, 2009, the noon
exchange rate of Canadian currency in exchange for United States currency, as
reported by the Bank of Canada, was CDN$1.00 = US$0.7862.
APPOINTMENT
OF PROXIES
The
persons named in the enclosed form of proxy are officers of the Corporation.
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 Corporation, 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 Corporation as owning common
shares (“Common Shares”), can vote their Common Shares at the
Meeting: in person at the Meeting or by proxy. Should a
Registered Shareholder wish to vote in person at the Meeting, the form of proxy
included with the Circular should not be completed or returned; rather, the
Registered Shareholder should attend the Meeting where his or her vote will be
taken and counted. Should the Registered Shareholder not wish to
attend the meeting or not wish to vote in person, his or her vote may be voted
by proxy through one of the methods described below and the 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 facsimile; or (iii) by Internet. 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 Equity Transfer &
Trust Company (the “Transfer Agent”) using the envelope provided or by mailing
it to Equity Transfer & Trust Company, Attention: Proxy Department, Suite
400, 200 University Avenue, Toronto, Ontario M5H 4H1 or to the Corporate
Secretary of the Corporation at Suite 200, 10758 West Centennial Road,
Littleton, Colorado, 80127, USA, for receipt no later than 5:00 p.m. (MDT) on
Monday, April 27, 2009, or if the Meeting is adjourned, by no later than 48
hours (excluding Saturdays, Sundays and holidays) before any adjourned
Meeting.
Voting by
Facsimile. A Registered Shareholder may vote by facsimile by
completing, dating and signing the enclosed form of proxy and returning it by
facsimile to the Transfer Agent at 1-416-595-9593. The form of proxy
must be received by no later than 5:00 p.m. (MDT) on Monday, April 27, 2009, or
if the Meeting is adjourned, no later than 48 hours (excluding Saturdays,
Sundays and holidays) before any adjourned Meeting.
Voting by
Internet. Registered Shareholders may vote by Internet by
accessing the following
website: www.voteproxyonline.com. When you log on to the
site you will be required to input a control number as instructed on the logon
page. Please see additional information enclosed with the
Circular. Registered Shareholders
may vote by Internet up to 5:00 p.m. (MDT) on Monday, April 27, 2009, or if the
Meeting is adjourned, no later than 48 hours (excluding Saturdays, Sundays and
holidays) before any adjourned Meeting.
A proxy
must be in writing and must be executed 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. Voting by mail is the only method by which a Registered
Shareholder may choose an appointee other than the Management appointees named
on the proxy.
Non-Registered
Shareholders (Beneficial Owners)
In the
Circular and the enclosed form of proxy and Notice, all references to
shareholders are to Registered Shareholders of Common Shares. Only Registered
Shareholders of Common Shares, or the persons they appoint as their proxies, are
permitted to vote at the Meeting. However, in many cases, Common
Shares beneficially owned by a holder (a “Non-Registered Shareholder” or
“Beneficial Owner”) are registered either:
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(a)
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in
the name of an intermediary (an “Intermediary”) that the Non-Registered
Shareholder deals with in respect of the shares, such as, among others,
banks, trust companies, securities dealers or brokers and trustees or
administrators of self-administered RRSPs, RRIFs, RESPs and similar
plans; or
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(b)
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in
the name of a clearing agency such as CDS& Co. (the registration name
for CDS Clearing and Depository Services Inc.) of which the Intermediary
is a participant.
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Common
Shares held by your broker or its nominee can only be voted upon your
instructions. Without specific instructions, your broker, its agent
or its nominee is prohibited from voting your Common Shares. Therefore, beneficial shareholders
should ensure that instructions respecting the voting of their common shares are
communicated to the appropriate person.
There are
two kinds of Beneficial Owners, those who object to their name being made known
to the Corporation, referred to as objecting beneficial owners (“OBOs”) and
those who do not object to the Corporation knowing who they are, referred to as
non-objecting beneficial owners (“NOBOs”). In accordance with the
requirements of National
Instrument 54-101—Communication with Beneficial Owners of Securities of a
Reporting Issuer, the Corporation has opted this year to distribute
copies of the Notice, Circular, the enclosed form of proxy and the Corporation
management's discussion and analysis of financial condition and results of
operations and consolidated financial statements for the fiscal year
ended
December 31,
2008 (collectively, the “Meeting Materials”) to NOBOs directly through the
Transfer Agent. Whereas, the Meeting Materials will continue to be
distributed to OBOs through clearing agencies and Intermediaries, who often use
a service company (such as Broadridge Financial Solutions, Inc. (“Broadridge”))
to forward meeting materials to Non-Registered Shareholders.
The
Meeting Materials are being sent to both Registered and Non-Registered
Shareholders of the securities. If you are a Non-Registered
Shareholder, and the Corporation or its agent has sent these Meeting Materials
directly to you, your name and address and information about your holdings of
common shares, have been obtained in accordance with applicable securities
regulatory requirements from the intermediary holding on your
behalf.
By
choosing to send the Meeting Materials to NOBOs directly, the Corporation (and
not the Intermediary holding on your behalf) has assumed responsibility for (i)
delivering these Meeting Materials to you, and (ii) executing your proper voting
instructions. Please return your voting instructions as specified in
the request for voting instructions.
Objecting
Beneficial Owners
Intermediaries
are required to forward Meeting Materials to OBOs unless an OBO has waived the
right to receive them. Generally, OBOs who have not waived the right to receive
Meeting Materials will usually receive a voting instruction form (“VIF”)
from Broadridge in lieu of the form of proxy from the
Corporation. The VIF will name the same person as the proxy to
represent the shareholder at the Meeting. A shareholder as the right
to appoint a person (who need not be a shareholder of Ur-Energy) other than
persons designated in the VIF, to represent the shareholder at the
Meeting. To exercise this right, the shareholder should insert the
name of the desired representative in the blank space provided in the
VIF. You are asked to complete and return the VIF to Broadridge by
mail or facsimile. Alternatively, you can call Broadridge’s toll free
telephone number or access Broadridge’s Internet website to vote your Common
Shares. Broadridge tabulates the results of all instructions received
and provides appropriate instructions respecting the voting Common Shares to be
represented at the Meeting. If you receive a VIF from Broadridge,
it cannot be used as a proxy to vote Common Shares directly at the Meeting as
the VIF must be returned to Broadridge well in advance of the Meeting in order
to have the Common Shares voted or to appoint an alternative representative to
attend at the Meeting in person to vote such Common Shares.
Non-Objecting
Beneficial Owners
NOBOs can
expect to receive the Meeting Materials with a VIF from the Transfer Agent.
These VIFs are to be completed and returned to the Transfer Agent in the
envelope provided or by following the instructions contained on the VIF for
facsimile, telephone or Internet voting. The Transfer Agent will
tabulate the results of the VIFs received from NOBOs and will provide
appropriate instructions at the Meeting with respect to the shares represented
by the VIFs they receive. If you receive a VIF from the
Transfer Agent, it cannot be used as a proxy to vote Common Shares directly at
the Meeting as the VIF must be returned to Transfer Agent well in advance of the
Meeting in order to have the Common Shares voted or to appoint an alternative
representative to attend at the Meeting in person to vote such Common
Shares.
The
purpose of these procedures is to permit Non-Registered Shareholders to direct
the voting of the shares they beneficially own. Should a Non-Registered
Shareholder who receives either a proxy or a VIF wish to attend and vote at the
Meeting in person (or have another person attend and vote on behalf of the
Non-Registered Shareholder), the Non-Registered Shareholder should strike out
the names of the persons named in the proxy and insert the Non-Registered
Shareholder's (or such other person's) name in the blank space provided or, in
the case of a VIF, follow the corresponding instructions on the
form.
In
any event, Non-Registered Shareholders should carefully follow the instructions
of their Intermediaries and Broadridge or other service company or the Transfer
Agent, as the case may be.
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 (1) by delivering another properly
executed proxy bearing a later date and depositing it as aforesaid, including
within the prescribed time limits noted above; (2) by depositing an
instrument in writing revoking the proxy executed by the shareholder or by the
shareholder's attorney authorized in writing (i) at the head office of the
Corporation with the Corporate Secretary at Suite 200, 10758 West Centennial
Road, Littleton, Colorado, 80127, USA 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 (ii) with the Chair of the Meeting, prior
to its commencement, on the day of the Meeting, or at any adjournment thereof;
(3) by attending the Meeting in person and so requesting; or (4) in
any other manner permitted by law.
A
Non-Registered Shareholder may revoke a VIF or a waiver of the right to receive
Meeting Materials and to vote given to an Intermediary at any time by written
notice to the Intermediary, except that an Intermediary is not required to act
on a revocation of a VIF or of a waiver of the right to receive Meeting
Materials and to vote that is not received by the Intermediary at least seven
days prior to 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 Corporation will be voted for or against, or
voted for or withheld from voting on, the matters 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 FOR the election of management’s
nominees as directors; FOR the appointment of the auditor and
the authorization of the directors to fix the remuneration of the auditor; FOR
the RSU Plan Resolution; FOR the Rights Plan Resolution; and 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.
The
accompanying 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 Corporation 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.
VOTING
SHARES AND PRINCIPAL SHAREHOLDERS
As at
March 18, 2009, the authorized capital of the Corporation consisted of an
unlimited number of Common Shares, of which 93,893,607 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 March 23, 2009 (the
“Record Date”) is entitled to one vote for each Common Share held by him or her.
The affirmative vote of a majority of the votes cast at the Meeting is required
for approval of each matter set forth in this Circular.
In
accordance with the Canada Business Corporations Act,
the Corporation 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, namely, March 23, 2009, will be entitled to vote the Common
Shares shown opposite his or her name on the list at the Meeting.
As of
March 18, 2008, to the knowledge of the directors and senior officers of the
Corporation, the following persons beneficially own, directly or indirectly, or
exercise control or direction over more than 10% of the Common
Shares:
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Name
of Holder
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Number
of Common Shares of the Corporation
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Percentage
of Issued and Outstanding Common Shares of the
Corporation
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BlackRock,
Inc.(1)
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11,326,450
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12.1%
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(1) As
reported by BlackRock, Inc. on Form 13G dated January 13, 2009 filed with the US
Securities and Exchange Commission.
PARTICULARS
OF MATTERS TO BE ACTED UPON
Election
of Directors
The
articles of the Corporation provide that the board of directors of the
Corporation (the “Board of Directors”) shall consist of a minimum of one and a
maximum of ten directors, the number of which is currently fixed at
six.
The
following table lists certain information concerning the nominees for election
as directors of the Corporation. The information as to principal occupations and
the number of Common Shares beneficially owned or over which control or
direction is exercised by each nominee has been furnished by the respective
nominees individually.
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Name
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Position
with Corporation and
Principal
Occupation Within
the
Past Five Years
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Period(s)
of
Service
as a
Director
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Common
Shares
Beneficially
Owned or
Subject
to Control
or
Direction
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Jeffrey
T. Klenda
Golden,
Colorado
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Chair
and Executive Director
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August
2004 – present
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777,225
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W.
William Boberg
Morrison,
Colorado
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President,
Chief Executive Officer and Director
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January
2006 – present
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550,000
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James
M. Franklin (2)
Ottawa,
Ontario
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Director,
Consulting Geologist / Adjunct Professor of Geology Queen’s University,
Laurentian University and University of Ottawa
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March
2004 – present
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100,000
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Paul
Macdonell (1)(2)(3)(4)
Mississauga,
Ontario
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Director
Senior
Mediator, Government of Canada
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March
2004 – present
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20,000
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Robert
Boaz (1)(2)(3)
Mississauga,
Ontario
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Director
Mining
Company Executive
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March
2006 – present
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Nil
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Thomas
Parker (1)(2)(3)
Kalispell,
Montana
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Director
Mining
Company Executive
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July
2007 – present
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4,000
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(1)
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Member
of the Audit Committee.
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(2)
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Member
of the Compensation Committee. James Franklin was an ex officio
member of the Compensation Committee from July 2007 to January 28,
2008.
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(3)
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Member
of the Corporate Governance and Nominating
Committee.
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(4)
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Mr.
Macdonell was a former director of Wedge Energy International Inc.
(“Wedge”) . Wedge was subject to a Management Cease Trade Order
imposed by the Ontario Securities Commission (“OSC”) on May 31, 2007 for
the late filing of Wedge’s financial statements for the period ended March
31, 2007. The Order was lifted by the OSC on August 14,
2007.
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Jeffrey T. Klenda, B.A. Chair & Executive
Director
Mr.
Klenda graduated from the University of Colorado in 1980 and began his career as
a stockbroker specializing in venture capital offerings. Prior to joining the
Corporation in 2004 as a director, he worked as a Certified Financial Planner
and was a member of the International Board of Standards and
Practices. In 1988, he started Klenda Financial Services, an
independent financial services company providing investment advisory services to
high-end individual 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. Mr. Klenda became the Chair of
the Board of Directors and Executive Director of the Corporation in January
2006. Mr. Klenda is currently a director and chair of the board of
directors of Aura Silver Resources Inc.
W. William (Bill) Boberg, M.Sc., P. Geo President, Chief Executive Officer
& Director
Mr.
Boberg is the Corporation’s President and Chief Executive Officer and a director
(since January 2006). Previously, Mr. Boberg was the Corporation’s
senior U.S. geologist and VP U.S. Operations (September 2004 to January 2006).
Before his initial involvement with the Corporation in 2004, he was a consulting
geologist having over 35 years experience investigating, assessing and
developing a wide variety of mineral resources in a broad variety of geologic
environments in western North America, South America and
Africa. Companies that Mr. Boberg has worked for include 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 twenty years experience exploring
for uranium in the continental US. He discovered the Moore Ranch Uranium
Deposit, 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 geologist), the Denver Regional Exploration Society and the
American Association of Petroleum Geologists. Mr. Boberg is also a
director for Aura Silver Resources Inc. (since June 2008).
James M. Franklin, Ph. D., FRSC, P. Geo Director & Chair of the
Technical Committee
Dr.
Franklin has over 40 years experience as a geologist. He is a Fellow of the
Royal Society of Canada. Since January 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 as Chief Geoscientist, Earth Sciences Sector, the Geological Survey of
Canada in 1998. Since that time, he has been a consulting geologist and is
currently a director of Aura Silver Resources Inc. (since October 2003), RJK
Exploration Ltd. (since July 2001) and Spider Resources Ltd. (since July
2006).
Paul Macdonell, Diploma Public Admin. Director & Chair of Compensation
Committee
Mr.
Macdonell is a Senior Mediator, Federal Mediation and Conciliation Service for
the Government of Canada. Previously Mr. Macdonell was employed since 1976 by
the Amalgamated Transit Union, serving as President of the Union from 1996 to
2000 and Financial Secretary 1991 to 1995. Mr. Macdonell was
Municipal Councillor of the City of Cumberland from 1978 to 1988 and was on the
City’s budget committee during that time. He graduated (diploma) at University
of Western Ontario in Public Administration and completed programs at University
of Waterloo (Economic Development Certificate), The George Meany Centre in
Washington (Labour Studies) and Harvard University (Program on Negotiations).
Robert Boaz, M. Economics, Hon. BA Director & Chair of the
Corporate Governance
and
Nominating Committee
Mr. Boaz
has 18 years in the investment banking business after a career in the power and
natural gas industry, working in management positions for Ontario Hydro,
Saskatchewan Power and Consumers Gas. He has held senior management
positions in a number of firms in the investment industry with direct
responsibilities related to research, portfolio management, institutional sales
and investment banking. From 2004 to March 2006, Mr. Boaz was
Managing Director Investment Banking with Raymond James Ltd. in
Toronto. From 2000 to 2004 Mr. Boaz was Vice President and Head of
Research and in-house portfolio strategist for Dundee Securities
Corporation. Mr. Boaz is the President, Chief Executive Officer and a
director of Aura Silver Resources Inc., a director of AuEx Ventures Inc. and
chair of the board of directors and audit committee of Solex Resources
Corp.
Thomas Parker, M. Sc., P.E. Director & Chair of the Audit
Committee
Mr.
Parker has worked extensively in senior management positions in the mining
industry for the past 43 years. 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 is President and CEO of
US Silver Corporation before which he was President and CEO of Gold Crest Mines,
Inc., a Spokane-based gold exploration company. Prior to Gold Crest, he was the
President and CEO of High Plains Uranium, Inc. a junior uranium mining company
acquired by Energy Metals in January 2007. Mr. Parker also spent 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 with, including Costain Minerals Company, ARCO, Kerr McGee Coal
Company and Conoco. He also has worked in the potash, limestone,
talc, coal and molybdenum industries and has extensive experience in Niger,
France and Venezuela.
Management
of the Corporation 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. Each
director elected will hold office until the next annual meeting of shareholders
of the Corporation or until his successor is elected or appointed.
Corporate
Cease Trade Orders or Bankruptcies
Except as
noted under “Election of Directors”, none of the directors or officers of the
Corporation 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 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.
Penalties
or Sanctions
None of
the directors or officers of the Corporation has been subject to any penalties
or sanctions imposed by a court relating to Canadian securities legislation or
by a Canadian securities regulatory authority or has entered into a settlement
agreement with a Canadian 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 Corporation 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.
Appointment
of Auditors
At the
Meeting, it is proposed to re-appoint PricewaterhouseCoopers LLP, Chartered
Accountants, as auditors of the Corporation to hold office until the next annual
meeting of shareholders with their remuneration to be fixed by the Board of
Directors. PricewaterhouseCoopers LLP and its affiliates have been the auditors
of the Corporation since December 2004.
The fees
accrued for audit and audit-related services in relation to the Corporation’s
financial year ended December 31, 2008 performed by PricewaterhouseCoopers LLP
were $90,000 which is payable in 2009. The aggregate fees billed by
PricewaterhouseCoopers LLP for all non-audit services rendered to the
Corporation during 2008 were $198,242, of which $109,753 was paid in 2009.
The Audit Committee has determined that the nature of the non-audit services
rendered during 2008, and the aggregate fees billed in respect of those
services, were consistent with maintaining the auditors’
independence.
Approval
of the RSU Plan Resolution
At the
Meeting, shareholders will be asked to consider, and, if thought advisable, to
pass, with or without variation, a resolution substantially in the form set out
in Schedule A attached to this Circular, to confirm and approve the Ur-Energy
Inc. Restricted Share Unit Plan (the “RSU Plan”), a copy of which is attached as
Schedule B to this Circular. The Board of Directors adopted the RSU Plan on
February 5, 2009 upon the approval of the Toronto Stock Exchange but subject to
shareholder approval. The Corporation adopted the RSU Plan as part of
the Corporation’s overall stock-based compensation plan. The RSU Plan
allows participants to earn actual common shares of the Corporation over time,
rather than options that give participants the right to purchase stock at a set
price.
The
Corporation continues to have the Ur-Energy Inc. Stock Option Plan 2005, as
amended (the “Option Plan”), more fully described under the heading “Stock
Options”. Combined the Option Plan and, if approved, the RSU Plan
will provide that the maximum number of Common Shares available for issuance in
the aggregate under both plans is equal to 10% of the number of Common Shares
outstanding at the time of grant. The Corporation on a going forward
basis expects to allocate approximately 80% of the number of Common
Shares
eligible for grant to the Option Plan, currently, 7,459,440 shares and
approximately 20% of the number of Common Shares eligible for grant to the RSU
Plan, currently, 1,864,860 shares.
The rules
of the Toronto Stock Exchange provide that an issuer must have approved by its
securityholders every three years after the institution of a plan which does not
have a fixed maximum number of securities issuable thereunder, which is the case
of the combined Option Plan and RSU Plan of the Corporation, which provides that
the maximum number of Common Shares available for issuance in the aggregate
under both plans is equal to 10% of the number of Common Shares outstanding at
the time of grant. The RSU Plan will need to be approved by
shareholders at a meeting of shareholders by 2012.
The RSU
Plan is a plan which includes directors, executive officers and employees of the
Corporation. The Board of Directors has appointed the Compensation
Committee to approve which persons are entitled to participate in the RSU Plan
and the number of RSUs to be awarded to each participant. RSUs
awarded to participants are credited to an account that is established on their
behalf and maintained in accordance with the RSU Plan. Each RSU
awarded conditionally entitles the participant to the delivery of one common
share (or cash in lieu of such share) upon attainment of the RSU vesting
period. RSUs awarded to participants vest in accordance with the
terms of the RSU Plan. All RSUs awarded vest over a two year period,
50% of the RSUs awarded to each participant vesting on the first anniversary of
the date of grant and 50% vesting on the second anniversary of the date of
grant. On voluntary termination of employment, or resignation of a
director from the Board of Directors, all unvested RSUs are forfeited.
Additional details of the RSU Plan are outlined below and a copy of the full RSU
Plan is attached at Schedule B to this Circular:
· the RSU Plan provides for
the Corporation to redeem Restricted Share Units for cash or Common Shares from
treasury to satisfy all or any portion of the RSU awards;
· the maximum number of
Common Shares available for issuance under both the RSU Plan and the Option Plan
is 10% of the issued and outstanding shares and remains at the same level as
currently been approved (i.e. there will be NO increase in the maximum number of
Common Shares available for issuance under the Option Plan and RSU
Plan)
· in the event of a Change
of Control (as defined in the RSU Plan) the Corporation shall redeem 100% of the
Restricted Share Units granted to participants
· in the event of an
involuntary termination of an employee of the Corporation, other than for cause,
or a director who is not re-elected the Corporation shall redeem the Restricted
Share Units for cash
In
February 2009, the Corporation awarded a total of 1,017,828 RSUs to
approximately 49 directors, executive officers and employees, however, all RSU
awards are subject to the approval of the RSU Plan by
shareholders. In the event that shareholders do not approve the RSU
Plan, such grants will cease to exist.
The Board
of Directors is of the view that it is in the best interests of the Corporation
to adopt the RSU Plan, which will continue to enable the Board of Directors to
grant options to directors, officers, employees or consultants of the
Corporation and its subsidiaries as a means of attracting highly qualified
directors, executive officers and employees who will be motivated towards the
success of the Corporation and to encourage share ownership in the Corporation
by directors, executive officers and employees who work on behalf of the
Corporation. In addition, the RSU Plan also will assist in providing
directors and executive
officers
with equity ownership in the Corporation which will align their interests with
those of the shareholders.
In order
to be effective, the RSU Plan Resolution must be approved by a vote of a
majority of the votes cast at the Meeting, in person or by proxy, excluding
1,461,584 Common Shares held by certain insiders of the Corporation and their
affiliates.
Recommendation
of Ur-Energy’s Board of Directors
After
careful consideration, the Board of Directors has determined that the RSU Plan
Resolution is in the best interests of the Corporation’s
shareholders. The Board of Directors unanimously approved the RSU
Plan Resolution and recommends approval of the resolution by the Corporation’s
shareholders.
Approval
of the Shareholder Rights Plan Resolution
At the
Meeting, shareholders will be asked to consider and, if deemed advisable,
approve a resolution (the “Rights Plan Resolution”), the full text of which is
reproduced as Schedule C to this Circular, to ratify and confirm the
shareholder rights plan agreement dated as of November 7, 2008 between the
Corporation and Equity Transfer & Trust Company (the “Rights Plan”). A
summary of the Rights Plan text is provided at Schedule D to this Circular. The
full text of the Rights Plan is available on SEDAR at www.sedar.com and Edgar at
www.sec.gov and is incorporated by reference into this Circular.
Many
public companies in Canada have shareholder rights plans in effect. While
securities legislation in Canada requires a take-over bid to be open for at
least 35 days, the Board of Directors is concerned that this is too short a time
if the Corporation is subject to unsolicited take-over bids to be able to
respond to and ensure that shareholders are offered full and fair value for
their shares. The Rights Plan is designed to give the Corporation and its
shareholders sufficient time to evaluate any unsolicited take-over bid and, if
appropriate, to seek out alternatives to maximize shareholder value. The Board
of Directors is also concerned that current Canadian take-over bid rules permit
a person or company to obtain control or effective control of the Corporation
without treating all shareholders equally. The Rights Plan is not intended to
prevent a take-over bid or deter offers for shares. It is designed to encourage
any bidder to provide shareholders with equal treatment and full and fair value
for their shares. The Rights Plan is also not intended to secure the continuance
in office of the existing members of the Board of Directors or management, or to
avoid an acquisition of control of the Corporation in a transaction that is fair
and in the best interests of shareholders.
The
Rights Plan came into effect on its approval by the Board of Directors on
November 7, 2008. The Board of Directors believes that the Rights Plan is in the
best interests of the Corporation and its shareholders. The Rights Plan was not
adopted by the Board in response to any specific proposal or intention to
acquire control of the Corporation. Subject to approval of the Rights Plan
Resolution and periodic confirmation by shareholders, the Rights Plan will
remain in effect until the close of business on the day of the ninth annual
meeting following the Meeting. In addition, the Rights Plan must be reconfirmed
by more than 50% of the votes cast at each of the third and sixth annual
meetings of the Corporation’s shareholders following the Meeting.
The
approval of shareholders at the Meeting holding a majority of the votes cast is
required to approve the Rights Plan Resolution.
Recommendation
of Ur-Energy’s Board of Directors
After
careful consideration, the Board of Directors has determined that the Rights
Plan Resolution is in the best interests of the Corporation’s
shareholders. The Board of Directors unanimously approved the Rights
Plan Resolution and recommends approval of the resolution by the Corporation’s
shareholders.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Philosophy
The
Corporation is committed to managing its human resources. The
Corporation believes that the caliber and commitment of its executive officers
are critical to the continued success and performance of the Corporation and the
overall commitment of the Corporation’s employees.
The
Compensation Committee reviews and makes recommendations to the Board of
Directors with respect to the overall approach to compensation for Ur-Energy and
specifically with respect to the executive officers of the Corporation,
including the President and Chief Executive Officer, and the remuneration of
directors.
During
2008, the Compensation Committee undertook a comprehensive review of the
Corporation’s total direct compensation program which included competitive
market data, pay grades, share ownership guideline and short term and
long term incentives. To facilitate the process, the Committee
engaged 3XCD Inc., a consulting firm, to assist them. See heading
“Review of 2008 Compensation Program and Implementation of 2009 Compensation
Program” below.
The
Corporation has employment contracts with its employed executive officers as
more fully described under the heading “Employment
Agreements”. During 2008, the Compensation Committee’s approach to
compensation for the executive officers was to provide a base salary and
long-term incentives in the form of stock options. See the section
below entitled “Stock Options”. During the year, the Compensation
Committee also considered the addition of a variable cash incentive component in
the form of a short-term incentive plan. After careful consideration,
the Compensation Committee did not implement the short-term incentive plan for
the year ended December 31, 2008. Additionally, the executive
officers’ base salaries were not increased during 2008.
The
Corporation continues to have one executive officer located in Canada who is a
consultant to the Corporation and the Compensation Committee reviews the billing
rates and longer term incentives in the form of stock options with respect to
this executive officer on an annual basis.
Compensation
Structure
The
Corporation’s compensation program consists of base salary, long term equity
incentives, perquisites including personal benefits. The compensation
program is designed to provide motivation and incentives to its executive
officers and employees with a view toward enhancing shareholder value while
successfully implementing the Corporation’s objectives. The
Compensation Committee and management of the Corporation periodically review the
compensation program to ensure that it is consistent with the Corporation’s goal
of attracting, retaining and motivating its executive officers and
employees.
Base
Salary
Base
salary is the non-variable portion of cash compensation earned or paid to the
executive officers and employees of the Corporation. The Corporation
provides its executive officers and employees with base salaries to compensate
them for services rendered during the fiscal year and to aid in attracting and
retaining
quality
employees. The Compensation Committee reviews the base salary for each executive
officer of the Corporation annually or upon a promotion or other change in job
responsibility, based on the individual’s level of responsibility, the
importance of the position to the Corporation and the individual’s contribution
to the Corporation’s performance. The Compensation Committee also
assesses base salary relative to a group of peer companies with similar scope
and operations to ensure that it is positioned competitively with executive
officers in similar roles at other peer companies.
The 2008
base salaries of Mr. Boberg, Mr. Smith, Mr. Heili, Mr. Klenda, and Mr. Goss
remained the same as their 2007 base salaries and were unchanged as at March 18,
2009. Mr. Backer’s salary was increased in April 2008 to bring his
salary to a competitive level based on the Compensation Committee’s
analysis. Mr. Pitman’s billing rate also remained unchanged in 2008,
as a consultant to the Corporation.
Total
Cash Compensation
Total
cash compensation includes base salary and any variable short-term cash
incentive compensation. During 2008, the Corporation did not have a
short-term incentive plan and no short-term incentive compensation was earned or
paid to the executive officers or employees of the Corporation.
Long
Term Equity Incentives
During
2008, the only long-term incentive plan (“LTIP”) component in place was the
Corporation’s 2005 Stock Option Plan (“Option Plan”). A more detailed
discussion of the Option Plan can be found under the heading “Stock
Options”. The Option Plan is a long-term incentive plan for the
executive officers and other employees of the
Corporation. Participation in the Option Plan is determined by the
Compensation Committee, taking into account the recommendations of the CEO. The
purpose of the Option Plan is to provide eligible participants with the
opportunity to own shares of the Corporation, enhance the Corporation’s ability
to attract, retain and motivate key personnel, reward participants for strong
performance, and align the participant’s interests with those of the
shareholders.
During
2008, certain executive officers and employees voluntarily relinquished certain
options for Common Shares which had been granted at prices of $4.75 per share
and higher. These options were then cancelled by the Corporation and
returned to the available pool under the Option Plan.
Perquisites
including Benefits
The
Corporation provides employees, including its executive officers who are
employees of the Corporation, with perquisites including personal benefits that
the Corporation believes are reasonable and consistent with its overall
compensation program to better enable the Corporation to attract and retain
quality employees for key positions. The Corporation periodically reviews the
levels of other perquisites provided to the employees and executive officers to
ensure competitiveness and value.
Executive
officers who are employees of the Corporation also participate in healthcare and
other benefit programs on the same terms as other employees of the
Corporation.
Review
of the 2008 Compensation Program and Implementation of the 2009 Compensation
Program
During
2008, the Compensation Committee undertook a comprehensive review of the
Corporation’s total direct compensation program which included competitive
market data, pay grades, share ownership guideline and short term and long term
incentives. To facilitate the process, the Committee engaged 3XCD
Inc., a consulting firm, to assist them. The Compensation Committee
compared key elements of total compensation
for the
executive officers against peer group survey data provided by
3XCD. The key elements of compensation compared included base-salary,
total cash compensation and total direct compensation. The peer group
consisted of 31 companies within the mining and energy sectors, with specific
focus on the uranium sector including: Energy Metals Corp., Geomet
Inc., Khan Resources Inc., Mega Uranium Ltd., Paladin Resources Limited,
Strathmore Minerals Corp., Uranerz Energy Corp., Uranium Resources Inc., and
CanAlaska Uranium Ltd. Although 3XCD provided advice to the
Compensation Committee, the terms of the Corporation’s executive compensation
program are determined by the Compensation Committee and reflect other factors
and considerations than only those provided by 3XCD.
The
Compensation Committee completed their review of the Corporation’s compensation
program at the end of 2008. Subsequently, in January 2009, the
Compensation Committee recommended to the Board of Directors a 2009 Compensation
Program. The key elements of the 2009 Compensation Program will
include base-salary, short term incentive plan, long term equity incentives and
perquisites which includes personal benefits.
Base
Salary
The
Compensation Committee’s approach to base salary is unchanged. The
Compensation Committee will continue to review the base salary for each
executive officer of the Corporation annually or upon a promotion or other
change in job responsibility, based on the individual’s level of responsibility,
the importance of the position to the Corporation and the individual’s
contribution to the Corporation’s performance. The Compensation
Committee will continue to review the base salary relative to a group of peer
companies with similar scope and operations to ensure that it is positioned
competitively with executive officers in similar roles at other peer
companies.
Short
Term Incentive Plan
In 2009,
the Corporation will introduce a variable short-term incentive plan
(“STIP”). The STIP will comprise the variable component of total cash
compensation and will be performance based. The purpose of including
performance-based incentive compensation as part of the total cash compensation
is to encourage and reward individual contributions and drive behaviors to meet
corporate objectives and business strategy, while at the same time promoting
teamwork and shareholder value.
Corporate
objectives and business strategy will be determined by the Board of Directors,
taking into account the recommendations of the CEO. The STIP program
will be based on corporate objectives, personal objectives, and where
appropriate operating objectives and will tie directly to the Corporation’s
business strategy. Payouts within the STIP program will be based upon
individual and team performance on year-over-year achievement of set
objectives. The Compensation Committee and the Board of Directors
will determine and exercise discretion over each executive officer’s STIP
payout.
Long
Term Incentive Plan
In 2009,
and subject to shareholder approval at this Meeting, the Corporation will
introduce a restricted share unit plan (“RSU Plan”) as a component of the
Corporation’s LTIP program, in addition to the Corporation’s Option
Plan. The RSU Plan will be an equity-based incentive plan which is
more fully described under the heading “Approval of the RSU Plan
Resolution”. The RSU Plan allows participants to earn actual shares
of the Corporation over time, rather than options that give the participant the
right to purchase shares at a set price. The RSU Plan provides an
additional means of attracting highly-qualified directors, executive officers
and employees who will be motivated toward the success of the Corporation and
encourages share ownership in the Corporation by the participant. In
addition, through share ownership, the RSU Plan also will encourage the
alignment the participant’s interests with those of the
shareholders. The Compensation Committee will
make
recommendations to the Board of Directors for an LTIP program which includes
certain awards under the RSU Plan and/or the Option Plan.
Concerning
the Corporation’s STIP and LTIP programs, the Compensation Committee and the
Board of Directors has the power to, among other things, determine (i) those
individuals who will participate, (ii) the level of participation of each
participant, and (iii) the time or times when the participant’s rights will
vest. The Compensation Committee determines annually the portion of
the incentive pool to be allocated to the executive officers and employees,
based upon the recommendations of the CEO. These determinations are
primarily based upon the participant’s level of seniority and responsibility
within the Corporation.
The Board
of Directors also may amend, suspend or discontinue the STIP and LTIP programs
at any time, subject to the receipt of regulatory approvals. No amendment,
suspension or discontinuance of the STIP and LTIP programs may contravene the
requirements of the TSX or any other applicable law.
Share
Ownership Guidelines
In 2009,
the Board of Directors has also mandated that each executive officer of the
Corporation, whether currently appointed or appointed in the future, will be
required to invest an amount equal to one times the executive officer’s annual
base salary in shares or securities exercisable into shares on or before the
latest of (i) December 31, 2013, or (ii) the fifth anniversary of the executive
officer’s appointment. The investment amount will be calculated using
the amount of the base salary of the executive officer at the latest of (i)
January 1, 2009, or (ii) the date of executive officer’s
appointment.
2009
Compensation Program Objectives
The
Compensation Committee has implemented the above changes in an effort to balance
the motivational elements of the performance-based STIP program with retention
awards under the LTIP program in an effort to align the interests of its
executive officers and employees with those of the shareholders while
promoting shareholder value. The Corporation’s executive
officer compensation program is designed to provide motivation and incentives to
its executives with a view to:
|
|
·
|
enhancing
shareholder value and successfully implementing the Corporation’s business
strategy and objectives;
|
|
|
·
|
attracting
and retaining key employees;
|
|
|
·
|
recognizing
the scope and level of responsibility of each
position;
|
|
|
·
|
providing
a competitive level of total compensation to all executives;
and
|
|
|
·
|
rewarding
superior performance and
achievement.
|
The
Corporation evaluates both performance and compensation to ensure that the
Corporation’s compensation philosophy and objectives are met.
EXECUTIVE
COMPENSATION
Compensation
of Executive Officers
The
following table sets forth the summary information concerning compensation paid
to or earned during the most recently completed financial year by the
Corporation’s Chief Executive Officer and Chief Financial Officer and the three
highest paid executive officers, who were serving as executive officers at
December 31, 2008 (collectively, the “Named Executive Officers”).
Summary
Compensation Table (13)
Name
and principal position
|
|
|
|
|
Non-equity
incentive plan
compensation
($)
|
|
All
other
compensation
($)
|
|
|
|
Long-term
incentive
plans
|
|
W.
William Boberg(1)(14)
President,
Chief Executive Officer and Director
|
2008
2007
2006
|
$255,843
$247,250
Nil
|
Nil
|
$68,000
(7)
$980,000
$508,000
12)
|
Nil
|
Nil
|
Nil
|
Nil
Nil
$290,613
|
$323,843
$1,227,250
$798,613
|
|
Roger
Smith(2)(14)
Chief
Financial Officer and Vice President, Finance, IT &
Administration
|
2008
2007
2006
|
$239,853
$142,010
Nil
|
Nil
|
$34,000
(8)
$724,500
Nil
|
Nil
|
Nil
|
Nil
|
Nil
Nil
Nil
|
$273,853
$866,510
Nil
|
|
Harold
Backer(3)(14)
Executive
Vice President, Geology & Exploration
|
2008
2007
2006
|
$213,203
$148,350
Nil
|
Nil
|
$51,000
(9)
$367,500
$254,000
|
Nil
|
Nil
|
Nil
|
Nil
Nil
Nil
|
$264,203
$515,850
$254,000
|
|
Wayne
Heili(4)(14)
Vice
President, Mining & Engineering
|
2008
2007
2006
|
$223,863
$169,091
Nil
|
Nil
|
$34,000
(10)
$1,780,000
Nil
|
Nil
|
Nil
|
Nil
|
Nil
Nil
Nil
|
$257,863
$1,949,091
Nil
|
|
Jeffrey
Klenda(5)(14)
Chair
and Executive Director
|
2008
2007
2006
|
$204,675
$176,300
Nil
|
Nil
|
$68,000
(11)
$490,000
$508,000
|
Nil
|
Nil
|
Nil
|
Nil
Nil
$124,000
|
$272,675
$666,300
$632,000
|
|
(1)
|
Mr.
Boberg was a consultant to the Corporation from September 21, 2004 to
December 31, 2006. Mr. Boberg entered into an employment
agreement with the Corporation dated January 1, 2007. Mr.
Boberg was confirmed as President and Chief Executive Officer on May 29,
2006 after having been appointed President, Acting Chief Executive Officer
and a Director on January 11, 2006. Previously, from September
2004 to January 11, 2006, Mr. Boberg had been a consultant and Vice
President, US Operations of the
Corporation.
|
|
(2)
|
Roger
Smith joined the Corporation in May 2007 and was appointed to the position
of Chief Financial Officer. In August 2007, Mr. Smith was
further appointed as Vice President, Finance, IT &
Administration.
|
|
(3)
|
Mr.
Backer was a consultant to the Corporation from May 2005 to December 31,
2006. Mr. Backer entered into an employment agreement with the
Corporation on January 1, 2007.
|
|
(4)
|
Mr.
Heili joined the Corporation in February 2007 and was appointed to the
position of Vice President, Mining & Engineering. Until
April 23, 2007, Mr. Heili worked for the Corporation on a part time basis
for a reduced salary while finalizing certain personal
matters.
|
|
(5)
|
Mr.
Klenda became a director of the Corporation in August 2004 and Chair of
the Board of Directors and Executive Director in January
2006. Mr. Klenda was a consultant to the Corporation from
August 2004 to December 31, 2006. Mr. Klenda entered into an
employment agreement with the Corporation on January 1,
2007.
|
|
(6)
|
All
executive officers of the Corporation who were with the Corporation prior
to January 1, 2007 were consultants to the
Corporation.
|
|
(7)
|
In
2008, Mr. Boberg received options for 80,000 Common Shares on May 8, 2008
at a price of $1.65 per share. These options expire on May 8,
2013. In 2007, Mr Boberg received options for 400,000 Common Shares on May
22, 2007, at a price of $4.75.
|
|
|
These
options were to expire on May 15, 2012. In 2006, Mr. Boberg
received options for 400,000 Common Shares on April 21, 2006 at a price of
$2.35 per share. These options expire on April 21,
2011. On September 30, 2008, Mr. Boberg voluntarily forfeited
options for 400,000 Common Shares which were granted on May 22, 2007 at a
price of $4.75 per share and these options were subsequently cancelled by
the Corporation.
|
|
(8)
|
In
2008, Mr. Smith received options for 40,000 Common Shares on May 8, 2008
at a price of $1.65 per share. These options expire on May 8,
2013. In 2007, Mr. Smith received options for 225,000 Common
Shares on May 22, 2007 at a price of $4.75 per share. These
options were to expire on May 15, 2012. Mr. Smith also received
options for 112,500 Common Shares on August 9, 2007 at a price of
$3.00. These options expire on August 9, 2012. On September 30,
2008, Mr. Smith voluntarily forfeited options for 225,000 Common Shares at
a price of $4.75 per share which were granted on May 22, 2007 and these
options were subsequently cancelled by the
Corporation.
|
|
(9)
|
In
2008, Mr. Backer received options for 60,000 Common Shares on May 8, 2008
at a price of $1.65 per share. These options expire on May 8,
2013. In 2007, Mr. Backer received options for 150,000 Common
Shares on May 22, 2007 at a price of $4.75 per share. These
options were to expire on May 15, 2012. In 2006, Mr. Backer
received options for 200,000 Common Shares on April 21, 2006 at a price of
$2.35 per share. These options expire on April 21,
2011. On September 30, 2008, Mr. Backer voluntarily forfeited
options for 150,000 Common Shares at a price of $4.75 per share which were
granted on May 22, 2007 and these options were subsequently cancelled by
the Corporation.
|
|
(10)
|
In
2008, Mr. Heili received options for 40,000 Common Shares on May 8, 2008
at a price of $1.65 per share. These options expire on May 8,
2013. In 2007, Mr. Heili received options for 600,000 Common Shares,
subject to certain performance milestones, on February 19, 2007 at a price
of $5.03 per share. These options were to expire on February
15, 2012. Mr. Heili also received options for 100,000 Common
Shares on August 9, 2007 at a price of $3.00 per share. These
options expire on August 9, 2012. On September 30, 2008,
Mr. Heili voluntarily forfeited options for 600,000 Common Shares at a
price of $5.03 per share which were granted on February 19, 2007 and these
options were subsequently cancelled by the
Corporation.
|
|
(11)
|
In
2008, Mr. Klenda received options for 80,000 Common Shares on May 8, 2008,
at a price of $1.65 per share. These options expire on May 8,
2013. In 2007, Mr. Klenda received options for 200,000 Common
Shares on May 22, 2007 at a price of $4.75 per share. These
options were to expire on May 15, 2012. In 2006, Mr. Klenda
received options for 400,000 Common Shares on April 21, 2006 at a price of
$2.35 per share. These options were to expire on April 21,
2011. On September 30, 2008, Mr. Klenda voluntarily forfeited
options for 200,000 Common Shares at a price of $4.75 per share which were
granted on May 22, 2007 and these options were subsequently cancelled by
the Corporation.
|
|
(12)
|
Mr.
Boberg received an additional 300,000 Common Shares in 2006, at a price of
$1.89 per share, as a performance bonus for services rendered to the
Corporation.
|
|
(13)
|
United
States dollar figures have been converted to Canadian dollar figures at
the average exchange rate for 2008 of US$1.00 =CDN$1.06601429 as posted by
the Bank of Canada.
|
|
(14)
|
Subject
to shareholder approval of the RSU Plan Resolution at this Meeting, RSU
awards were granted on February 9, 2009 as follows: Mr. Boberg
(107,143 shares); Mr. Smith (72,321 shares); Mr. Backer (64,286 shares);
Mr. Heili (101,250 shares) and Mr. Klenda (68,571
shares).
|
Stock
Options
The
Corporation adopted the Ur-Energy Inc. Stock Option Plan 2005, as amended, in
order to advance the interests of the Corporation by providing directors,
officers, employees and consultants with a financial incentive tied to the
long-term financial performance of the Corporation and continued service or
employment with the Corporation.
A total
of 10% of the Corporation’s issued and outstanding Common Shares are reserved
for issuance pursuant to the Option Plan. As noted under the heading “RSU Plan
Resolution” the Board of Directors adopted an RSU Plan on February 5, 2009 and
granted certain awards under the RSU Plan subject to shareholder
approval. The numbers set forth in this paragraph assume the adoption
of the RSU Plan and the award of those RSU grants. As at March 18,
2009, this represented 9,324,300 Common Shares. Of these, 8,264,356
(representing 8.8% of the currently outstanding Common Shares) are issuable upon
the exercise of currently outstanding options and RSU grants and 1,059,944
Common Shares (representing 1.1% of the currently outstanding Common Shares) are
available for future option or RSU grants. 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 the share capital of the
Corporation. If the RSU Plan Resolution is adopted at this Meeting,
10% of the issued and outstanding shares will be allocated in the aggregate for
the Option Plan and RSU Plan. The Corporation expects going forward
that approximately 80% of the shares will be allocated to the Option Plan and
20% to the RSU Plan. See heading “RSU Plan Resolution” for more
details on the RSU Plan.
Under the
Option Plan, options may be granted to all directors, officers, employees and
consultants of the Corporation. The maximum number of Common Shares that may be
reserved for issuance to any one person under the Option Plan is 5% of the
number of Common Shares outstanding at the time of reservation. 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. Options are generally
exercisable as to 10% immediately on the date of grant; with an additional 22%
becoming exercisable four and one-half months after the date of grant; 22%
becoming exercisable nine months after the date of grant; 22% thirteen and
one-half months after the date of grant; and, the balance of 24% eighteen months
after the date of grant, subject to the right of the Board of Directors to
determine at the time of a particular grant that such options will become
exercisable on different dates. An option may be for a term of up to five years
and may not be assigned.
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 (iii) immediately upon the option holder’s dismissal for cause
as an employee. In each case, only options exercisable 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 on a change of
control all options under the Option Plan vest immediately and are immediately
exercisable. On November 8, 2007, the Board amended the Option Plan
to allow the CEO the ability to grant options for up to an aggregate 100,000
Common Shares between Board meetings to non-executive employees and
consultants. All such grants must be reported to the Board at the
next meeting. This amendment did not require shareholder
approval.
The
Option Plan and the terms of any outstanding option may be amended at any time
by the Board of Directors 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.
The
following table sets forth information concerning option-based and share-based
awards granted by the Corporation to each of the Named Executive Officers during
the financial year ended December 31, 2008.
Option
Grants During the Financial Year Ended December 31, 2008
|
|
|
|
Number
of
securities
underlying
unexercised
options
(#)
|
Option
exercise
price
($)
|
|
Value
of
unexercised
in-the-money
options
($)
|
Number
of
shares
or units
of
shares that
have
not vested
(#)
|
Market
or
payout
value of
share-based
awards
that
have
not vested
($)
|
|
W.
William Boberg
|
80,000
|
$1.65
|
May
8, 2013
|
-0-
|
Nil
|
Nil
|
|
Roger
Smith
|
40,000
|
$1.65
|
May
8, 2013
|
-0-
|
Nil
|
Nil
|
|
Harold
Backer
|
60,000
|
$1.65
|
May
8, 2013
|
-0-
|
Nil
|
Nil
|
|
Wayne
Heili
|
40,000
|
$1.65
|
May
8, 2013
|
-0-
|
Nil
|
Nil
|
|
Jeffrey
Klenda
|
80,000
|
$1.65
|
May
8, 2013
|
-0-
|
Nil
|
Nil
|
The
following table sets forth information concerning the value vested or earned in
respect of incentive plan awards during the financial year ended December 31,
2008, by each of the Named Executive Officers.
Incentive
Plan Awards – Value Vested or Earned During the Year Ended December 31,
2008
|
|
Option-based
awards – Value
vested
during the year
($)
|
Share-based
awards – Value
vested
during the year
($)
|
Non-equity
incentive plan
compensation
– Value
earned
during the year
($)
|
|
W.
William Boberg
|
960
|
Nil
|
Nil
|
|
Roger
Smith
|
480
|
Nil
|
Nil
|
|
Harold
Backer
|
720
|
Nil
|
Nil
|
|
Wayne
Heili
|
480
|
Nil
|
Nil
|
|
Jeffrey
Klenda
|
960
|
Nil
|
Nil
|
Employment
Contracts
The
Corporation entered into an employment agreement with Mr. W. William Boberg
dated January 1, 2007, as amended. Mr. Boberg is entitled to a salary
of US$240,000 per year and a discretionary bonus to be set by the Board of
Directors. Mr. Boberg is entitled to receive stock option grants
under the terms and conditions of the Option Plan and as determined by the Board
of Directors. In the event that the Corporation terminates the
employment agreement with Mr. Boberg for non-causal reasons, Mr. Boberg will be
entitled to a lump sum payment equivalent to two years base
salary. In the event of a change of control of the Corporation, Mr.
Boberg may be entitled to a lump sum payment equivalent to two years base
salary. Mr. Boberg is subject to non-competition and non-solicitation
restrictions for a period of one year upon termination of the employment
agreement.
The
Corporation entered into an employment agreement with Mr. Roger Smith dated May
15, 2007, as amended. Mr. Smith is entitled to a salary of US$225,000
per year and a discretionary bonus to be set up by the Board of
Directors. Mr. Smith is entitled to receive stock option grants under
the terms and conditions of the Option Plan and as determined by the Board of
Directors. In the event that the Corporation terminates the
employment agreement with Mr. Smith for non-causal reasons, Mr. Smith will be
entitled to a lump sum payment equivalent to two years base
salary. In the event of a change of control of the Corporation, Mr.
Smith may be entitled to a lump sum payment equivalent to two years base
salary. Mr. Smith is subject to non-competition and non-solicitation
restrictions for a period of one year upon termination of the employment
agreement.
The
Corporation entered into an employment agreement with Mr. Harold Backer dated
January 1, 2007, as amended. Mr. Backer is entitled to a salary of
US$200,000 per year and a discretionary bonus to be set by the Board of
Directors of the Corporation. Mr. Backer is entitled to receive stock
option grants under the terms and conditions of the Option Plan and as
determined by the Board of Directors. In the event the Corporation
terminates the employment agreement with Mr. Backer for non-causal reasons, Mr.
Backer will be entitled to a lump sum payment equivalent to two years base
salary. In the event of change of control of the Corporation, Mr.
Backer may be entitled to a lump sum payment equivalent to two years base
salary. Mr. Backer is subject to non-competition and non-solicitation
restrictions for a period of one year upon termination of the employment
agreement.
The
Corporation entered into an employment agreement with Mr. Wayne Heili dated
February 19, 2007, as amended. Mr. Heili is entitled to
a salary of US$210,000 per year and a discretionary bonus to be set by the Board
of Directors of the Corporation. Mr. Heili is entitled to receive
stock option grants under the terms and
conditions
of the Option Plan and as determined by the Board of Directors. In
the event the Corporation terminates the employment agreement with Mr. Heili for
non-causal reasons, Mr. Heili will be entitled to a lump sum payment equivalent
to two years base salary. In the event of change of control of the
Corporation, Mr. Heili may be entitled to a lump sum payment equivalent to two
years base salary. Mr. Heili is subject to non-competition and
non-solicitation restrictions for a period of one year upon termination of the
employment agreement.
The
Corporation entered into an employment agreement with Mr. Jeffrey Klenda dated
January 1, 2007, as amended. Mr. Klenda is entitled to a salary of
US$192,000 per year and a discretionary bonus to be set by the Board of
Directors. Mr. Klenda is entitled to receive stock option grants
under the terms and conditions of the Option Plan and as determined by the Board
of Directors. In the event that the Corporation terminates the
employment agreement with Mr. Klenda for non-causal reasons, Mr. Klenda will be
entitled to a lump sum payment equivalent to two years base
salary. In the event of a change of control of the Corporation, Mr.
Klenda may be entitled to a lump sum payment equivalent to two years base
salary. Mr. Klenda is subject to non-solicitation restrictions for a
period of one year upon termination of the employment agreement.
On
December 31, 2008, all the executive employment agreements were amended to
insert necessary provisions for compliance with Section 409A provision of the
Internal Revenue Code of 1986, as amended, including the timing of payments or
deferred compensation in the event of a change of control or termination from
the Corporation.
Performance
Graph
The
following graph illustrates the period from January 1, 2006 to December 31, 2008
and reflects the cumulative shareholder return of an investment in Common Shares
of the Corporation compared to the cumulative return of an investment in the
S&P/TSX Composite Index since November 29, 2005 assuming that
C$100 was invested and, where applicable, reinvestment of
dividends.
Indebtedness
of Directors, Executive Officers and Others
At no
time since the beginning of the Corporation’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 Corporation 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 Corporation or any of its subsidiaries.
Compensation
of Directors
The
Compensation Committee and the Board of Directors has instituted compensation
arrangements for non-management directors. Commencing in the second
quarter of 2007, each non-management director receives a quarterly amount of
$3,000 and for each meeting that the director attends in person $1,000 and by
telephone $500. Newly appointed directors are each eligible to
receive an initial grant of options in the discretion of the Board of Directors.
Non-management directors are also eligible to receive grants of options at the
discretion of the Board of Directors.
In
addition to other compensation received by directors of the Corporation, it was
determined by the Compensation Committee and the Board of Directors that
non-management directors participating on ad hoc or special committees
of the Board of Directors, which may be constituted from time to time, would be
entitled to additional director fees, to be determined in accordance with
additional duties and requirements requested of those individuals from time to
time. In respect of the Ad Hoc Committee on Screech Lake, it was
determined that non-management directors would receive fees of $1,000 per day
spent in respect of the Ad Hoc Committee activities except in the event that
such non-management director is already under a consulting agreement with the
Corporation.
Non-Management
Director Compensation for the Financial Year Ended December 31,
2008
|
|
|
|
|
Non-equity
incentive plan compensation
($)
|
|
All
other
compensation
($)
|
|
|
Paul
Macdonell (3)
|
$20,000
|
Nil
|
$34,000
|
Nil
|
Nil
|
Nil
|
$54,000
|
|
James
Franklin (3)
|
Nil
|
Nil
|
$34,000
|
Nil
|
Nil
|
$43,891
(1)
|
$77,891
|
|
Robert
Boaz (3)
|
$21,000
|
Nil
|
$34,000
|
Nil
|
Nil
|
$58,500
(2)
|
$113,500
|
|
Thomas
Parker (3)
|
$20,751
|
Nil
|
$34,000
|
Nil
|
Nil
|
Nil
|
$54,751
|
(1) Dr.
Franklin has a consulting agreement with the Corporation and invoices the
Corporation on an hourly basis for consulting projects on which he is
involved.
(2) Mr.
Boaz has received additional per diem fees as a director for his work on the Ad
Hoc Committee on Screech Lake.
(3)
Subject to shareholder approval of the RSU Plan Resolution at this Meeting, RSU
awards were granted on February 9, 2009 to each of Messrs. Macdonell, Boaz and
Parker, and Dr. Franklin in the amount of 12,857 shares.
In
December 2008, the Compensation Committee reviewed the director compensation and
recommended changes to the director compensation scheme which was adopted by the
Compensation Committee and the Board of Directors in January
2009. Commencing in 2009, each non-management director will receive a
base retainer in cash of US$18,000 and will be eligible to receive grants of
options and RSU awards at the discretion of the Board of
Directors. In addition, the Compensation Committee and Board of
Directors adopted a resolution requiring mandatory ownership of the
non-management directors to encourage the alignment of interests between the
Corporation and its shareholders. Non-management directors are
required
to invest
an amount equal to the non-management director’s annual retainer in shares or
securities exercisable into shares on or before the latest of (i) December 31,
2013, or (ii) the fifth anniversary of the non-management director’s election or
appointment. The retainer amount will be calculated using the amount
of the annual retainer at the latest of (i) January 1, 2009, or (ii) the date of
the non-management director’s election or appointment.
Directors’
and Officers’ Liability Insurance
The
Corporation has entered into a directors’ and officers’ liability insurance
policy for the benefit of the directors and officers of the Corporation and its
subsidiaries. The annual limit for all claims under the policy is US$5 million,
subject to a per claim deductible that ranges from nil to US$50,000 depending on
the nature of any claim. The annual premium payable by the Corporation under the
policy is US$50,000. The Corporation’s current coverage under the policy
continues until April 8, 2009 and is in the process of being
renewed.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table sets forth certain summary information concerning the
Corporation’s equity compensation plans as at December 31,
2008. Directors, officers, employees and consultants are eligible to
participate in the Option Plan.
|
|
Number
of Common
Shares
to be Issued Upon
Exercise
of Outstanding
Options
|
Weighted
Average
Exercise
Price of
Outstanding
Options (C$)
|
Number
of Common Shares
Remaining
for Future
Issuance
(Excluding Common
Shares
to be Issued Upon
Exercise
of Outstanding Options)
|
|
Equity
compensation plans
approved
by securityholders
(Ur-Energy
Inc. Stock Option Plan 2005). (1)(2)
|
6,228,700
|
1.95
|
2,936,900
|
|
Total
|
6,228,700
|
|
2,936,900
|
(1) The
Board of Directors approved the RSU Plan on February 5, 2009. In the
event that the RSU Plan Resolution is approved by shareholders at this meeting,
the Corporation will also have an RSU Plan. Under the RSU Plan,
subject to shareholder approval of the RSU Plan, RSU awards equivalent to
1,017,828 Common Shares have been granted. As both the Option Plan
and RSU Plan in the aggregate can not exceed 10% of the issued and outstanding
Common Shares of the Corporation, the number of Common Shares currently
remaining for future issuance, taking into account the grants under the RSU
Plan, if approved, is 1,059,944 as of March 18, 2009.
(2) The
numbers reflected in this chart, as of December 31, 2008, are cumulative numbers
following the voluntary forfeited and cancellation of options price at $4.75 per
share or higher which concluded on September 30, 2008 whereby in the aggregate
options 2,490,000 Common Shares were voluntarily forfeited by executive
officers, directors, employees and consultants of the Corporation and
subsequently cancelled by the Corporation.
INTERESTS
OF INSIDERS IN MATERIAL TRANSACTIONS
Except as
otherwise disclosed in this Circular, no insider of the Corporation or proposed
nominee for election as a director of the Corporation, nor any of their
respective associates or affiliates, has had any material interest, direct or
indirect, in any transaction since the commencement of the Corporation’s last
financial year
or in any
proposed transaction which has materially affected or will materially affect the
Corporation or any of its subsidiaries.
Certain
of the Corporation’s directors and officers also serve as directors and officers
of one or more mining and exploration companies. Such directors and
officers are also in many cases shareholders of one or more of the foregoing
companies. 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 in other areas of mineral resources and precious metals.
In 2008, the Corporation recognized a potential conflict which had arisen in
respect of the independence of Robert Boaz, due to the composition of another
reporting issuer’s compensation committee and the provisions set forth in NI
52-110. Upon recognition of the issue, adjustments were made to
ensure compliance with NI 52-110 and no other situations
of potential conflict have arisen as a result of the cross directorships and
cross shareholdings. Except as otherwise disclosed in this Circular, no person
who has been a director or officer of the Corporation since the commencement of
the Corporation’s last financial year, nor any proposed nominee for election as
a director of the Corporation, nor any of their respective associates or
affiliates, has any material interest, direct or indirect, in any matter to be
acted upon at the Meeting.
STATEMENT
OF CORPORATE GOVERNANCE PRACTICES
Introduction
The Board
of Directors believes that effective corporate governance contributes to
improved corporate performance and enhanced shareholder value. The Board of
Directors 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 Corporation follows best practices and is
continuing to develop such practices.
Board
Mandate
The
responsibility of the Board of Directors is to supervise the management of the
business and affairs of the Corporation in accordance with the best interests of
the Corporation and all of its shareholders. The Board of Directors
does not currently have a written mandate or a written description for the Chair
of the Board of Directors or the Chief Executive Officer. In
discharging its responsibility, the Board of Directors reviews the performance
and responsibilities of the President and Chief Executive Officer and oversees
and reviews the development and implementation of the following significant
corporate plans and initiatives:
|
|
·
|
the
Corporation’s strategic planning and budgeting
process;
|
|
|
·
|
the
identification of the principal risks to the Corporation’s business and
the implementation of systems to manage these
risks;
|
|
|
·
|
succession
planning, including appointing, training and monitoring senior
management;
|
|
|
·
|
the
Corporation’s public communications policies and continuous disclosure
record; and
|
|
|
·
|
the
Corporation’s internal controls and management information
systems.
|
The Board
of Directors meets at least four times a year, and more frequently if required.
In 2008, the Board of Directors met eleven times. In addition, the
Board of Directors took three actions by written resolution. The
Board of Directors has a regular policy of holding a portion of its quarterly
meetings where management departs and the independent directors meet in camera and at such other
meetings as the independent directors deem appropriate from time to
time.
The Board
of Directors recruit possible directors from contacts within the mining industry
or other strategic areas that will compliment the knowledge and depth of the
Board of Directors. The Board of Directors determined that six
directors was an appropriate number of directors to oversee and provide guidance
to management on the business and affairs of the Corporation.
In
addition, new directors who join the Board of Directors are provided with a
basic orientation of the Corporation, the Board of Directors, the committees of
the Board of Directors and meet with the other directors prior to joining the
Board of Directors. In addition, new directors have the opportunity
to meet with management of the Corporation to have an understanding of the
business of the Corporation and its operations. Directors are
encouraged to participate in corporate governance and education courses that
will assist them in their role as directors of the Corporation or on various
committees.
Board
Composition
As of the
time of the Meeting, the Board of Directors is composed of six directors. All
directors are elected annually.
The
current slate of six directors includes Mr. W. William Boberg, the President and
Chief Executive Officer of the Corporation, Dr. James Franklin, Mr. Jeffrey
Klenda, Chair of the Board of Directors of the Corporation, Mr. Paul Macdonell,
Mr. Robert Boaz and Mr. Thomas Parker. Messrs. Macdonell, Boaz and
Parker are independent directors as determined by the CSA Guidelines (i.e., each
is independent of management and free from any interest in and any business or
other relationship with the Corporation which could reasonably be expected to
interfere with the exercise of the director’s judgment). Dr. Franklin
is a consultant to several companies and received consulting fees of $43,891
from the Corporation during 2008 and, therefore, is considered by the Board of
Directors as being independent of management. Mr. Boaz has been
working on the Ad Hoc Special Committee for Screech Lake and as such as received
directors’ fees, approved by the Board of Directors, in the amount of $1,000 per
day in respect of Mr. Boaz involvement in the Ad Hoc Special
Committee. In 2008, Mr. Boaz received $58,500 from the Corporation
for his work with the Ad Hoc Committee in addition to his regular director
fees. The Board of Directors considers Mr. Boaz to be independent.
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 the Corporation.
In
November 2008, the Corporate Governance and Nominating Committee reviewed and
discussed establishing the role of Lead Director of the Board of
Directors. The Committee examined the functions customarily assigned
to a director serving in the role of lead director and upon further review
determined that the establishment of the role of Lead Director at the
Corporation at this time would not enhance the communications within the board,
among its committees, and with management.
Several
of the directors are directors for other reporting issuers or the equivalent, as
disclosed in the directors’ biographies provided above.
Board
Committees
There are
four permanent Board of Directors committees: the Audit Committee, the
Compensation Committee, the Corporate Governance and Nominating Committee and
the Technical Committee (formerly known as the Geoscience Advisory and Oversight
Committee). The Board of Directors may also appoint other temporary or permanent
committees from time to time for particular purposes.
The
following sets out the Report of the Audit Committee as well as a summary of the
responsibilities and activities of the other Board of Directors
committees.
Audit
Committee
The Audit
Committee assists the Board of Directors in carrying out its responsibilities
relating to corporate accounting and financial reporting practices. 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 the Corporation’s 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 Corporation by the Corporation’s 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.
|
The Audit
Committee maintains direct communication during the year with the Corporation’s
independent auditor and the Corporation’s officers responsible for accounting
and financial matters.
All of
the members of the Audit Committee, Messrs. Macdonell, Boaz and Parker, are
independent directors pursuant to National Instrument 52-110 Audit
Committees (“NI 52-110”) and the listing standards of the NYSE Amex. Each
of the members is financially literate as defined in NI 52-110. The
Audit Committee has designated Robert Boaz as an “audit committee financial
expert” as that term is defined as currently defined by the rules of the US
Securities and Exchange Commission regulating these disclosures. The members of
the Audit Committee during 2008, and currently, are Thomas Parker (Chair,
commencing May 2008), Robert Boaz and Paul Macdonell (Chair, January to May
2008).
Report of the Audit
Committee
During
2008, the Audit Committee met five times. The activities of the Audit
Committee over the past year included the following:
|
|
·
|
reviewing
annual financial statements of the Corporation and management’s discussion
and analysis prior to filing with the regulatory
authorities;
|
|
|
·
|
reviewing
the quarterly interim financial statements of the Corporation and
management’s discussion and analysis prior to filing with regulatory
authorities;
|
|
|
·
|
reviewing
periodic reports from the Chief Financial
Officer;
|
|
|
·
|
reviewing
applicable Canadian corporate disclosure reporting and control processes,
including Chief Executive Officer and Chief Financial Officer
certification;
|
|
|
·
|
reviewing
Audit Committee governance practices to ensure its terms of reference
incorporate all regulatory requirements;
and
|
|
|
·
|
reviewing
the engagement letter with the independent auditors and annual audit fees
prior to approval by the Board of Directors, as well as pre-approving
non-audit services and their cost prior to
commencement.
|
The Audit
Committee has reviewed and discussed with management and the independent
auditors the Consolidated Financial Statements of the Corporation as at December
31, 2008 and Management’s Discussion and Analysis. Based on that review and on
the report of the independent auditor of the Corporation, the Audit Committee
recommended to the Board of Directors that such Financial Statements and
Management’s Discussion and Analysis be approved and filed with Canadian
regulatory authorities.
The Audit
Committee has recommended to the Board of Directors that the shareholders of the
Corporation be requested to re-appoint PricewaterhouseCoopers LLP, Chartered
Accountants, as the independent auditor for 2009.
The Audit
Committee reviews its charter on a yearly basis. A copy of the Amended and
Restated Audit Committee Charter adopted on August 7, 2008 is attached as an
appendix to the Form 20-F (Annual Information Form) of the Corporation for the
year ended December 31, 2008, which is available electronically at
www.sedar.com. The Form 20-F (Annual Information Form) also contains
disclosure relating to the composition of the Audit Committee and the
qualifications of each of its members.
Compensation
Committee
The
Compensation Committee assists the Board of Directors in carrying out its
responsibilities relating to personnel matters, including performance,
compensation and succession. The Compensation Committee has prepared
terms of reference which include annual objectives against which to assess
members of management including the President and Chief Executive Officer,
reviewing and making recommendations to the Board of Directors with respect to
employee and consultant compensation arrangements including stock options and
management succession planning. The Compensation Committee reviews
its charter on a yearly basis.
The
Compensation Committee met seven times in 2008. Portions of meetings
are conducted without management present, including for the purpose of
specifically discussing the compensation of the President and Chief Executive
Officer. The members of the Committee during 2008, and currently, are
Paul Macdonell (Chair), Thomas Parker and Robert Boaz. All the
members of the Compensation Committee are independent pursuant to NI 52-110 and
the listing standards of the NYSE Amex. James Franklin was an ex
officio member of the Compensation Committee from July 2007 to January 28,
2008.
As part
of the Compensation Committee’s ongoing review of compensation of executive
officers and directors of the Corporation, the Compensation Committee hired the
consulting firm of 3XCD Inc. to conduct a review of the Corporation’s current
compensation model and to recommend changes including the implementation of
short term and long term incentives for executive officers and employees within
the Corporation. A more detailed description of the compensation
recommendations is outlined under the heading “Compensation Discussion and
Analysis”.
Corporate
Governance and Nominating Committee
The Board
of Directors constituted a Corporate Governance and Nominating Committee on
December 17, 2007. The Corporate Governance and Nominating Committee
assists the Board of Directors with determining the slate of director nominees
for election to the Board of Directors, recommending candidates to fill
vacancies, the composition of the Committees of the Board of Directors and
monitoring compliance with corporate governance regulatory
requirements. The Corporate Governance and Nominating
Committee
Charter
was adopted by the Board of Directors on December 17, 2007. The
Corporate Governance and Nominating Committee reviews its charter on a yearly
basis.
The
members of the Corporate Governance and Nominating Committee are Robert Boaz
(Chair, commencing May 2008), Paul Macdonell (Chair, January 2008 to May 2008)
and Thomas Parker. The Corporate Governance and Nominating Committee
met four times in 2008.All members of the Corporate Governance and Nominating
Committee are independent pursuant to NI 52-110.
Technical Committee
The Board
of Directors constituted a Technical Committee (formerly known as the Geoscience
Advisory and Oversight Committee) on January 29, 2008. The Technical Committee
assists the Board of Directors in receiving, reviewing and evaluating the
quality, effectiveness and progress of exploration and development
projects. The Technical Committee also advises on matters related to
new and updated technologies which may be employed by the Corporation and to
review environmental matters and protocols with respect to the Corporation’s
projects. The Technical Committee “Mandate and Guidelines” document
was adopted by the Board of Directors on January 29, 2008.
The
members of the Technical Committee are James Franklin (Chair), Thomas Parker and
W. William Boberg. There are several members of management and
consultants who participate in the Technical Committee. The Technical
Committee formally met one time in 2008, with multiple other informal meetings
taking place on an as-needed basis. The members of the Technical
Committee are not required to be independent pursuant to NI 52-110.
Ad
Hoc Special Committee related to Screech Lake
As of
December 2007, an Ad Hoc Committee on matters related to Screech Lake was
constituted by the Board of Directors. The Ad Hoc Committee consists
of Robert Boaz (Chair), James Franklin and Paul Pitman and certain members of
management who participate in the Special Committee projects. The Ad
Hoc Committee was established to explore, review and recommend to the Board of
Directors various activities, methods and directions to advance the
Corporation’s project at Screech Lake in the Northwest Territories.
During
2008, Mr. Boaz on behalf of the Ad Hoc Special Committee and the Corporation has
been involved in ongoing discussions with the Akaitcho First Nations and, in
particular, the community of Lutsel K'e, with the objective, ultimately, of
reaching one or more exploration agreements with the First Nations with respect
to the Screech Lake property. Screech Lake is situated in the eastern
Northwest Territories, on land claimed by the Akaitcho to be their traditional
lands. The consultations of Mr. Boaz and others in management of the Corporation
have included meetings with relevant government ministries and agencies such as
the Indian and Northern Affairs Canada as well as the Northwest Territories
& Nunavut Chamber of Mines. Consultations are continuing with an objective
of signing exploration agreements with certain of the Akaitcho and other First
Nations communities during 2009 which recognizes the concern over minimizing
disruption due to exploration to wildlife, fishing, water quality and cultural
values of the Akaitcho First Nations. Such agreements would facilitate the
Corporation being able to re-submit an application to the Mackenzie Valley Land
and Water Board for a drilling permit with the ultimate goal being able to
conduct a drilling program and further exploration at the Screech Lake
property. In addition to meetings with community representative and
governmental authorities, the Ad Hoc Committee members have met, informally, and
conferred with various members of management on numerous occasions.
Summary
of Memberships on Permanent Committees and Record of Attendance for
2008
During
the year ended December 31, 2008, the Board of Directors and its permanent
committees held
the following numbers of meetings:
| |
Board of
Directors |
11
(1) |
| |
Audit
Committee (“AC”) |
5 |
| |
Compensation
Committee (“CC”) |
7 |
| |
Corporate
Governance and Nominating Committee (“CGN”) |
4 |
| |
Total number
of meetings held |
28 |
|
(1)
|
In
addition to the eleven meetings held by the Board of Directors, three
actions were taken by resolution in
writing.
|
|
Director
|
Committee
Memberships
|
Board
Meetings
Attended
|
Committee
Meetings
Attended
|
|
Jeffrey
T. Klenda
|
|
11
|
|
|
James
M. Franklin
|
TC
|
8
|
TC
– 1
|
|
Paul
Macdonell
|
AC,
CC, CGN
|
9
|
AC
– 5, CC – 7, CGN – 4
|
|
Robert
Boaz
|
AC,
CC, CGN
|
11
|
AC
– 5, CC – 7, CGN – 4
|
|
W.
William Boberg
|
TC
|
11
|
TC-
1
|
|
Thomas
Parker
|
AC,
CC, CGN, TC
|
9
|
AC
– 4, CC – 7, CGN- 4,TC -1
|
Other
Policies
The
Corporation adopted a written Code of Business Conduct and Ethics (the “Code”)
on August 9, 2007 and amended and restated the Code on January 29, 2008 and
August 7, 2008. All directors, officers and employees of the Corporation are
expected to be familiar with the Code and to adhere to those principles and
procedures set forth in the Code that apply to them. The Corporate
Governance and Nominating Committee oversees the implementation of the Code and
compliance with various regulatory requirements. The Amended and
Restated Code of Business Conduct and Ethics is available at the Corporation’s
website at www.ur-energy.com.
The
Corporation also adopted various policies related to trading restrictions,
disclosure requirements and confidentiality obligations on January 29, 2008. The
Corporate Governance and Nominating Committee oversees the implementation and
compliance of these policies. These policies, the “Ur-Energy Inc. Policies
Concerning Confidentiality, Public Disclosure and Restrictions on Trading
Securities” are available at the Corporation’s website. All
directors, officers and employees of the Corporation are expected to be familiar
with and adhere to the policies.
Shareholder
Feedback
The Board
of Directors believes that management should speak for the Corporation 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 of behalf of
the Corporation from time to time. Management meets regularly with
shareholders and others in the investment community to receive and respond to
shareholder feedback.
The Board
of Directors regularly reviews the Corporation’s major communications with
shareholders and the public, including continuous disclosure documents and
periodic press releases in accordance with the Corporation’s
policies.
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 the Corporation. Meetings of the
Board of Directors are held, as required, to specifically review and deal with
long-term strategies of the Corporation as presented by senior members of
management.
The Board
of Directors appreciates the value of having selected executive officers attend
board meetings to provide information and opinions to assist the directors in
their deliberations. The Chair arranges for the attendance of executive officers
as well as managers for consultation including technical presentations at board
meetings in consultation with the President and Chief Executive
Officer.
SHAREHOLDER
PROPOSALS
All
proposals of the Corporation’s shareholders intended to be presented at the
Corporation’s annual and special meeting of shareholders in 2010, must be
received by the
Corporation’s Corporate Secretary no later than January 15, 2010 for inclusion
in the proxy circular related to that meeting. The Corporation’s next
annual and special meeting of shareholders is planned for April
2010.
ADDITIONAL
INFORMATION
Additional
financial information for the Corporation is available in the Corporation’s
audited consolidated financial statements for the year ended December 31, 2008
and related management’s discussion and analysis of financial condition and
results of operations for the year ended December 31, 2008, which have been
filed with Canadian securities regulators and are available under the
Corporation’s profile at www.sedar.com.
Upon
request made to the Secretary of the Corporation at 10758
West Centennial Road, Suite 200, Littleton, Colorado 80127 USA Telephone: (720)
981-4588, the Secretary will provide a shareholder of the Corporation with a
copy of its audited consolidated financial statements for the year ended
December 31, 2008 and related management’s discussion and analysis of financial
condition and results of operations for the year ended December 31,
2008.
APPROVAL
BY BOARD OF DIRECTORS
The
contents and the sending of this Circular have been approved by the Board of
Directors of the Corporation.
DATED at
Denver, Colorado, this 18th day of March, 2009.
|
|
By
Order of the Board of Directors
/s/
W. William Boberg
President
and Chief Executive Officer
|
SCHEDULE
A
RSU
Plan Resolution
RESOLVED
THAT:
|
1.
|
the
adoption of the Ur-Energy Inc. Restricted Share Unit Plan (the “RSU
Plan”), which was adopted by resolution of the Board of Directors on
February 5, 2009, be and is hereby confirmed and approved;
and
|
|
2.
|
any
director or officer of the Corporation be and each of them is hereby
authorized, for and on behalf of the Corporation, to do such things 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.
|
SCHEDULE
B
Ur-Energy
Inc.
Restricted
Share Unit Plan
Effective
February 5, 2009
TABLE
OF CONTENTS
|
SECTION 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
|
| |
|
|
SECTION 2
ELIGIBILITY AND PARTICIPATION
|
3
|
| |
|
|
|
2.1
|
Eligibility
|
3
|
|
2.2
|
Rights
Under the Plan
|
3
|
|
2.3
|
Copy
of Plan
|
3
|
|
2.4
|
Limitation
on Rights
|
3
|
|
2.5
|
Grant
Agreements
|
3
|
|
2.6
|
Maximum
Number of Common Shares
|
4
|
| |
|
|
SECTION 3
RESTRICTED SHARE UNITS
|
4
|
| |
|
|
|
3.1
|
Grant
of Restricted Share Units
|
|
|
3.2
|
Redemption
of Restricted Share Units
|
|
|
3.3
|
Compliance
With Tax Requirements
|
|
|
3.4
|
Payment
of Dividend Equivalents
|
|
|
3.5
|
Adjustments
|
5
|
|
3.6
|
Offer
for Common Shares – Change of Control
|
6
|
| |
|
| SECTION 4
EVENTS AFFECTING ENTITLEMENT |
6
|
| |
|
|
|
4.1
|
Termination
of Employment or Election as a Director
|
6
|
|
4.2
|
Death
|
6
|
|
4.3
|
No
Grants Following Last Day of Active Employment
|
6
|
| |
|
|
SECTION 5
ADMINISTRATION
|
7
|
| |
|
|
|
5.1
|
Transferability
|
7
|
|
5.2
|
Administration
|
7
|
|
5.3
|
Records
|
7
|
|
5.4
|
Statements
|
7
|
|
5.5
|
Legal
Compliance
|
8
|
| |
|
|
SECTION 6
AMENDMENT AND TERMINATION
|
8
|
| |
|
|
|
6.1
|
Amendment
|
8
|
|
6.2
|
Termination
of Plan
|
9
|
| |
|
|
SECTION 7
GENERAL
|
9
|
| |
|
|
|
7.1
|
Rights
to Common Shares
|
9
|
|
7.2
|
No
Right to Employment
|
9
|
|
7.3
|
Right
to Funds
|
9
|
|
7.4
|
Successors
and Assigns
|
9
|
|
7.5
|
Severability
|
10
|
|
7.6
|
Code
Section 409A
|
10
|
ARTICLE 1
GENERAL
PROVISIONS
This
Restricted Share Unit 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.
As used
in the Plan, the following terms have the following meanings:
|
|
(a)
|
“Board”
means the Board of Directors of the
Corporation;
|
|
|
(b)
|
“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.
|
|
|
(c)
|
“Code”
means the US Internal Revenue Code of 1986, as
amended;
|
|
|
(d)
|
“Committee”
means the Compensation Committee of the Board or such other persons
designated by the Board;
|
|
|
(e)
|
“Common
Share” means a common share in the capital of the
Corporation;
|
|
|
(f)
|
“Corporation”
means Ur-Energy Inc. and its successors and
assigns;
|
|
|
(g)
|
“Director”
means a non-Employee director of the Board of the
Corporation;
|
|
|
(h)
|
“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;
|
|
|
(i)
|
“Eligible
Person” means an Employee or a Director who is designated as an Eligible
Person pursuant to
Section 2.1;
|
|
|
(j)
|
“Employee”
means an employee of the Corporation or a
Subsidiary;
|
|
|
(k)
|
“Fair
Market Value” means the closing price of the Common Shares on the Toronto
Stock Exchange on the Business Day immediately prior to the Redemption
Date, 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;
|
|
|
(l)
|
“Grant
Date” means any date determined from time to time by the Committee as a
date on which a grant of Restricted Share Units will be made to one or
more Eligible Persons under this
Plan;
|
|
|
(m)
|
“Plan”
means the Ur-Energy Inc. Restricted Share Unit Plan, as amended from time
to time;
|
|
|
(n)
|
“Redemption
Date” in respect of any Restricted Share Unit means (A) 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 (B) 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,
unless (i) an earlier date has been approved by the Committee as the
Redemption Date in respect of such Restricted Share Unit, or (ii) Section
0, 0, 0, or 0 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;
|
|
|
(o)
|
“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 0),
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;
|
|
|
(p)
|
“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
|
|
|
(q)
|
“Subsidiary”
has the meaning set out in the Securities Act
(Ontario).
|
The Plan
shall be effective February 5, 2009 with respect to the Eligible Person payable commencing in
and with respect to the 2009 fiscal year; provided that 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
This Plan
applies to those Employees and Directors whom the Committee designates as
eligible for a grant of Restricted Share Units pursuant to Section
0. The Committee shall make such a designation prior to each Grant
Date.
|
2.2
|
Rights
Under the Plan
|
Subject
to Sections 4 and 5, an Eligible Person who has been granted Restricted Share
Units shall continue to have rights in respect of such Restricted Share Units
until such Restricted Share Units have been redeemed for cash or shares in
accordance with this Plan.
The
Corporation shall provide each Eligible Person with a copy of this Plan
following the initial grant of Restricted Share Units to such Eligible Person
and shall provide each Eligible Person with a copy of all amendments to this
Plan.
Nothing
in this Plan shall confer on any Employee or Director any right to be designated
as an Eligible Person or to be granted any Restricted Share
Units. 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. A grant of Restricted Share Units to an Eligible Person on
one or more Grant Dates shall not be construed to create a right to a grant of
Restricted Share Units on a subsequent Grant Date.
Each
grant of Restricted Share Units shall be evidenced by a written agreement
executed by the Eligible Person in substantially the form appended
hereto. An Eligible Person will not be entitled
to any
grant of Restricted Share Units 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 0,
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 upon the redemption of all Restricted Share Units 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, shall not
exceed ten percent (10%) of the issued and outstanding shares of the Corporation
as at the Grant Date of each Restricted Share Unit 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, and 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 to be granted to each Eligible Person in the
Committee’s sole discretion.
|
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
|
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 the Restricted Share Units, 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.
|
3.4
|
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.
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
Restricted Share Units credited to Eligible Persons and outstanding under the
Plan, provided that any such adjustment will not otherwise extend the Redemption
Date otherwise applicable. 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 Restricted Share Units 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.
|
3.6
|
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 0: (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
EVENTS
AFFECTING ENTITLEMENT
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4.1
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Termination
of Employment or Election as a
Director
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(a)
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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.
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(b)
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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 0, the Redemption
Date shall be 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.
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(c)
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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 4.1(c), the Redemption Date
shall be the date on which the annual or special meeting is
held.
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All of
the Restricted Share Units of an Eligible Person who dies shall be redeemed in
accordance with Section 0. For the purposes of the foregoing,
the Redemption Date shall be the date of the Eligible Person’s
death.
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4.3
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No
Grants Following Last Day of Active
Employment
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In the
event of termination of any Eligible Person’s employment with the Corporation,
such Eligible Person shall not be granted any Restricted Share Units pursuant to
Section 0 after the last day of active employment of such Eligible
Person. Without limiting the generality of the foregoing and of
Section 0, 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 be awarded additional
Restricted Share Units, and shall not
be
awarded any Restricted Share Units, pursuant to Section 0 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 be awarded Restricted Share Units pursuant
to Section 0 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.
ARTICLE 5
ADMINISTRATION
Rights
respecting Restricted Share Units shall not be transferable or assignable other
than by will or the laws of decent and distribution.
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 Restricted Share Units
to satisfy any such policy.
The
Corporation will maintain records indicating the number of Restricted Share
Units credited to an Eligible Person under the Plan from time to time and the
Grant Dates of such Restricted Share Units. Such records shall be
conclusive as to all matters involved in the administration of this
Plan.
The
Corporation shall furnish annual statements to each Eligible Person indicating
the number of Restricted Share Units credited to the Eligible Person and the
Grant Dates of the Restricted Share Units and such other information that the
Corporation considers relevant to the Eligible Person.
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 6
AMENDMENT
AND TERMINATION
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(a)
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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
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:
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(i)
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the
percentage of the issued and outstanding Common Shares available to be
granted under the Plan;
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(ii)
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a
change in the method of calculation of redemption of Restricted Share
Units held by Eligible Persons; and
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(iii)
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an
extension to the term for redemption of Restricted Share Units held by
Eligible Persons.
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(b)
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Unless
an Eligible Person otherwise agrees, any amendment to the Plan or
Restricted Share Unit shall apply only in respect of Restricted Share
Units granted on or after the date of such
amendment.
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(c)
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Without
limiting the generality of the foregoing, the Board may make the following
amendments to the Plan, without obtaining shareholder
approval:
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(i)
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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;
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(ii)
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amendments
to the provisions of the Plan respecting administration of the Plan and
eligibility for participation under the
Plan;
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(iii)
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amendments
to the provisions of the Plan respecting the terms and conditions on which
Restricted Share Units may be granted pursuant to the Plan,
including the provisions relating to the payment of the Restricted Share
Units; and
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(iv)
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amendments
to the Plan that are of a “housekeeping”
nature.
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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 and
unredeemed Restricted Share Units credited to such Eligible Person without the
consent of the affected Eligible Person. If the Board terminates the
Plan, no new Restricted Share Units will be awarded to any Eligible Person, but
outstanding and unredeemed previously credited Restricted Share Units shall
remain outstanding, be entitled to payments as provided under Section 0, 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 and unredeemed Restricted Share Units credited
to such Eligible Person, or all outstanding and unredeemed Restricted Share
Units credited to such Eligible Person are cancelled pursuant to the provisions
thereof.
ARTICLE 7
GENERAL
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7.1
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Rights
to Common Shares
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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 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 so held, whether
voting, right on liquidation or otherwise.
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7.2
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No
Right to Employment
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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 0 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.
Neither
the establishment of this Plan nor the granting of Restricted Share Units 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.
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7.4
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Successors
and Assigns
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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.
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.
The
payments hereunder in redemption of the Restricted Share Units are intended to
be exempt from the provisions of Section 409A of the Code, as all such payments
will be made no later than the 15th day of
the third month after the later 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. Notwithstanding the foregoing, neither the
Corporation, nor its subsidiaries or affiliates, not 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.
RESTRICTED SHARE UNIT GRANT
AGREEMENT
RESTRICTED
SHARE UNIT PLAN OF UR-ENERGY
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:
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3.
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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.
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4.
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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.
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|
5.
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On
________________, 20__, the Eligible Person was granted __________
Restricted Share Units, which grant is evidenced by this
Agreement.
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6.
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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.
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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.
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UR-ENERGY
INC.
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Per:
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ELIGIBLE
PERSON
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PRINT
NAME:
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SCHEDULE
C
Rights
Plan Resolution
RESOLVED THAT:
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1.
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the
shareholder rights plan agreement dated as of November 7, 2008 between the
Corporation and Equity Transfer & Trust Company is hereby ratified and
confirmed; and
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2.
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any
officer or director is hereby authorized to execute and deliver any
documents, instruments or other writings and to do all other acts that may
be necessary or desirable to give effect to the foregoing
resolution.
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SCHEDULE
D
Description
of Rights Plan
The
following is a summary of the principal terms of the Rights Plan, which summary
is qualified by and is subject to the full terms and conditions of the Rights
Plan. Except as otherwise defined herein, capitalized terms used herein have the
meanings ascribed thereto in the Rights Plan.
Issue
of Rights
Shareholder
rights plans involve the distribution of securities in the form of rights
granted one for one in respect of each outstanding share. In the case of the
Rights Plan, effective as of November 7, 2008 (the “Effective Date”), one right
(a “Right”) was issued and attached to each outstanding common share of the
Corporation. One Right will also be issued and attach to each common share of
the Corporation issued thereafter, subject to the limitations set forth in the
Rights Plan. The Rights will trade attached to the common shares until the
occurrence of a triggering event whereupon the Rights detach from the common
shares and become tradable as separate securities.
Acquiring
Person
An
“Acquiring Person” is a person that Beneficially Owns 20% or more of the
outstanding common shares. An Acquiring Person does not, however, include any
person that becomes the Beneficial Owner of 20% or more of the common shares as
a result of certain exempt transactions. These exempt transactions include,
among others, acquisitions by investment managers, pension plans and other
similar entities with no present intention to take control of the
Corporation.
Rights
Exercise Privilege
The
Rights will trade separately from the common shares to which they are attached
and will become exercisable from and after the Separation Time. The “Separation
Time” is the earlier of (A) the close of business on the tenth trading day after
the earlier of (i) the date of public announcement by the Corporation or an
Acquiring Person of facts indicating that a person has become an Acquiring
Person, (ii) the date of the commencement of, or first public announcement of
the intent of any person (other than the Corporation or any subsidiary of the
Corporation) to commence, a take-over bid (other than a Permitted Bid or
Competing Permitted Bid); and (iii) two days following the date on which a
Permitted Bid or Competing Permitted Bid ceases to be such; and (B) in the case
of (ii) or (iii) above, any later business day as may be determined at any time
or from time to time by the Board. If any take-over bid expires, is cancelled,
terminated or otherwise withdrawn prior to the Separation Time, such take-over
bid shall be deemed for the purposes of the definition of Separation Time never
to have been made.
Flip-In
Event
A
transaction in which a person becomes an Acquiring Person is referred to as a
“Flip-in Event”. Any Rights held by an Acquiring Person on or after the earlier
of the Separation Time or the first date of public announcement by the
Corporation or an Acquiring Person that an Acquiring Person has become such,
will become void upon the occurrence of a Flip-in Event. Subject to adjustment
as provided in the Rights Plan, each Right will entitle the holder to purchase
one common share for an exercise price (the “Exercise Price”) equal to $100.
After the close of business on the tenth business day after the first public
announcement of the occurrence of a Flip-in Event, the Rights (other than those
held by the Acquiring Person) will entitle the holder to purchase, for the
Exercise Price, that number of common shares having an aggregate market price
(based on the prevailing market price at the time of the occurrence of the
Flip-in Event) equal to twice the Exercise Price. For example, if at the time of
the occurrence of a Flip-in Event, the Exercise Price is $100 and
the
common shares have a market price of $10, the holder of each Right would be
entitled, upon payment of $100 to receive 20 common shares at an effective price
of $5 per common share, being 50% discount to the then market
price.
Impact
Once Rights Plan is Triggered
Upon a
Flip-in Event occurring and the Rights separating from the attached common
shares, reported earnings per common share on a fully diluted or non-diluted
basis may be affected. Holders of Rights who do not exercise their Rights upon
the occurrence of a Flip-in Event may suffer substantial dilution. The
consequence of a Flip-in Event, for all practical purposes, is to ensure that
potential Acquiring Persons deal with and obtain the concurrence of the Board or
proceed by way of a Permitted Bid. By permitting holders of Rights other than an
Acquiring Person to acquire common shares of the Corporation at a discount to
market value, the Rights may cause substantial dilution to a person or group
that acquires 20% or more of the common shares of the Corporation other than by
way of a Permitted Bid or Competing Permitted Bid or other than in circumstances
where the Rights are redeemed or the Board waives the application of the Rights
Plan.
Certificates
and Transferability
Prior to
the Separation Time, certificates for common shares will also evidence one Right
for each common share represented by the certificate. Certificates issued after
the Effective Date will bear a legend to this effect. Rights are also attached
to common shares outstanding at the close of business on the Effective Date,
although share certificates issued as at that date will not bear such a legend.
Prior to the Separation Time, Rights will not be transferable separately from
the attached common shares. From and after the Separation Time, the Rights will
be evidenced by rights certificates which will be transferable and traded
separately from the common shares.
Permitted
Bids
The
Rights Plan is not triggered if an offer would allow sufficient time for the
shareholders to consider and react to the offer and would allow shareholders to
decide to tender or not tender without the concern that they will be left with
illiquid common shares should they not tender.
A
“Permitted Bid” is a take-over bid where the bid is made by way of a take-over
bid circular and is a bid that complies with the following: (A) the take-over
bid must be made to all shareholders other than the bidder; and (B) (i) the
take-over bid must not permit the bidder to take up any common shares that have
been tendered pursuant to the take-over bid prior to the expiry of a period not
less than 60 days after the take-over bid circular is sent to shareholders, and
(ii) then only if at such time more than 50% of the common shares held by the
independent shareholders (which term generally includes shareholders other than
the bidder, its affiliates, associates and persons acting jointly or in concert
with the bidder), have been deposited or tendered pursuant to the take-over bid
and not withdrawn.
A
“Competing Permitted Bid” is a take-over bid that satisfies all the criteria of
a Permitted Bid except that since it is made after a Permitted Bid the time
period for any take up and payment of common shares tendered under a Competing
Bid is not 60 days, but is instead no earlier than the later of 35 days after
the date of announcement of the Competing Permitted Bid and the earliest date
for take up and payment of common shares under any other Permitted Bid or
Competing Permitted Bid then in existence. Permitted Bids and Competing
Permitted Bids are not required to be approved by the Board and such bids may be
made directly to shareholders. Acquisitions of common shares made pursuant to a
Permitted Bid or a Competing Permitted Bid do not give rise to a Flip-in
Event.
Waiver
and Redemption
The Board
may, prior to the occurrence of a Flip-in Event, waive the application of the
Rights Plan to a particular Flip-in Event which would occur as a result of a
take-over bid made under a circular prepared in accordance with applicable
securities laws to all holders of common shares. In such event, the Board shall
be deemed to also have waived the application of the Rights Plan to any other
Flip-in Event occurring as a result of any other takeover bid made under a
circular prepared in accordance with applicable securities laws to all holders
of common shares prior to the expiry of any take-over bid for which the Rights
Plan has been waived or deemed to have been waived. Until the occurrence of a
Flip-in Event, the Board may with the prior written consent of the shareholders
waive the application of the Rights Plan to a particular Flip-in Event that
would occur by reason of an acquisition of common shares otherwise than pursuant
to a take-over bid made under a circular prepared in accordance with applicable
securities laws to all holders of common shares.
The Board
may also waive the application of the Rights Plan to any inadvertent Flip-In
Event on the condition that the person who inadvertently triggered the Flip-In
Event reduces its beneficial ownership of common shares such that such person is
no longer an Acquiring Person. Until the occurrence of a Flip-in Event, the
Board may with the prior written consent of the shareholders or, prior to the
Separation Time, the holders of Rights elect to redeem all but not less than all
of the then outstanding Rights at a redemption price of $0.00001 (subject to
adjustment) per Right. In the event that a person acquires common shares
pursuant to a Permitted Bid, Competing Permitted Bid or pursuant to take-over
made by way of a take-over bid circular for which the Board has waived the
application of the Rights Plan, then the Board shall, immediately upon the
consummation of such acquisition, without further formality, be deemed to have
elected to redeem the Rights at the redemption price.
Supplement
and Amendments
Prior to
the ratification and confirmation of the Rights Plan by shareholders, the
Corporation may, without the approval of holders of common shares or Rights,
amend, supplement or restate the Rights Plan in order to make any changes which
the Board acting in good faith may deem necessary or desirable. Following
shareholder ratification and confirmation of the Rights Plan, the Corporation
may, without the approval of the holders of common shares or Rights, make
amendments to (i) correct clerical or typographical errors and (ii) to maintain
the validity and effectiveness of the Rights Plan as a result of any change in
applicable law, rule or regulatory requirement. Any amendment referred to in
(ii) must, if made before the Separation Time, be submitted for approval to the
holders of common shares at the next meeting of shareholders and, if made after
the Separation Time, must be submitted to the holders of Rights for
approval.
At any
time before the Separation Time, the Corporation may with prior written consent
of the shareholders amend, vary or rescind any of the provisions of the Rights
Plan or the Rights, whether or not such action would materially adversely affect
the interests of the Rights generally, in order to effect any amendments,
variations or rescissions of any of the provisions of this Agreement which the
Board, acting in good faith, considers necessary or desirable. At any time after
the Separation Time, the Corporation may with prior written consent of the
holders of Rights amend, vary or rescind any of the provisions of the Rights
Plan or the Rights, whether or not such action would materially adversely affect
the interests of the Rights generally.
