Item 1.01 Entry into a Material Definitive Agreement.
On April 14, 2016, Energy Fuels Inc. (the “Registrant”) entered
into a First Supplemental Indenture among the Registrant, CST Trust Company, as
the Canadian warrant agent and American Stock Transfer & Trust Company, LLC
(“AST”), as the United States warrant agent (the “Supplemental Indenture”). The
Supplemental Indenture amends the warrant indenture entered between the
Registrant and CST on March 14, 2016, as further described in the Registrant’s
Form 8-K filed with the United States Securities and Exchange Commission on
March 14, 2016.
The Supplemental Indenture was entered into to add AST as the
United States warrant agent.
The foregoing summary of certain provisions of the Supplemental
Indenture is qualified in its entirety by reference to the Supplemental
Indenture, a copy of which is filed as Exhibit 4.1 to this Current Report on
Form 8-K.
Item 5.02 Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On April 14, 2016, the Board of Directors of the Registrant
appointed Mark Chalmers as the Chief Operating Officer of the Registrant
effective July 2016. Mr. Chalmers will oversee all of the Registrant’s
conventional and
in situ
(“ISR”) uranium production operations.
Mr. Chalmers (58 years of age) brings an extensive background
in both the U.S. and global uranium mining and processing industries to the
Registrant. From 2011 to 2015, Mr. Chalmers served as Executive General Manager of
Production for Paladin Energy Ltd., a uranium producer with assets in Australia
and Africa, including the Langer Heinrich and Kayelekera mines, where he oversaw
sustained, significant increases in production while reducing operating costs.
He also possesses extensive experience in ISR uranium production, including
management of the Beverley Uranium Mine owned by General Atomics (Australia),
and the Highland mine owned by Cameco Corporation (USA). Mr. Chalmers has also
consulted to several of the largest players in the uranium supply sector,
including BHP Billiton, Rio Tinto, and Marubeni, and currently serves as the
Chair of the Australian Uranium Council, a position he has held since 2007.
There are no family relationships among Mr. Chalmers and the
members of the Board of Directors of the Registrant or the other members of
senior management of the Registrant.
In conjunction with the appointment, the Registrant entered
into an employment agreement with Mr. Chalmers effective April 14, 2016,
pursuant to which Mr. Chalmers will commence employment with the Registrant on July
1, 2016. The employment agreement has a term of two years, commencing on July 1,
2016, and will automatically renew for additional one year terms unless either
party provides a notice not to renew at least 90 days prior to the end of the
initial two-year term or any subsequent one-year term. Mr. Chalmers’ base salary
is $290,000 per annum, subject to review and increase at the discretion of the
Registrant. Mr. Chalmers is also entitled to receive benefits such as health
insurance, vacation and other benefits consistent with the then applicable
Registrant benefit plans to the same extent as other employees of the Registrant
with similar position or level. In addition, Mr. Chalmers is eligible for the
award of annual cash incentive compensation, in accordance with the Registrant’s
Short Term Incentive Plan and to receive compensation under the Registrant’s
2015 Omnibus Equity Incentive Plan, although any such bonuses or compensation
are at the discretion of the Registrant. At the time Mr. Chalmers employment
begins he will be granted restricted stock units with a full value of $100,000,
of which 50% will vest on January 29, 2017, an additional 25% will vest on
January 27, 2018 and the remaining 25% will vest on January 27, 2019. Mr.
Chalmers will also receive $30,000 for relocation expenses from his home in
Australia.
The Registrant may terminate Mr. Chalmers’ employment for just
cause, without just cause or in the event of a disability. Mr. Chalmers may
terminate his employment for “good reason” upon occurrence of any of the
following: (i) a material reduction or diminution in his level of responsibility
or office; (ii) a reduction in his compensation level, taken as a whole, of more
than five percent; (iii) a proposed forced relocation to another geographic
location greater than 50 miles from his current location; or (iv) notice is not
given on or before March 3, 2018 that Mr. Chalmers will be promoted to Chief
Executive Officer of the Registrant.
In the event Mr. Chalmers’ employment is terminated by the
Registrant without just cause or upon a disability, or Mr. Chalmers elects to
resign for good reason, or upon his death, he or his estate will be entitled to
severance pay (the “Severance Amount”) in an amount equal to a severance factor
times his base salary at the time of termination plus the greater of (a) the
severance factor times the highest aggregate cash bonus paid to him in any one
of the previous three years; or (b) 15% times his base salary at the time of
termination. The severance factor is one and one half (1.5) so long as Mr.
Chalmers is Chief Operating Officer of the Registrant. If Mr. Chalmers is promoted
to President of the Registrant, the Severance Factor will become two (2.0) . If Mr.
Chalmers is promoted to President and Chief Executive Officer or Chief Executive
Officer of the Registrant, the severance factor will become two and one half (2.5).
Further, in the event that upon a change of control, Mr.
Chalmers’ employment is terminated and/or the successor entity does not assume
and agree to perform all of the Registrant’s obligations under Mr. Chalmers’
employment agreement with the Registrant, then Mr. Chalmers’ employment will be
deemed to have been terminated without just cause and Mr. Chalmers will be
entitled to receive the same Severance Amount as described above for a
termination without just cause under the normal course. In addition, if Mr.
Chalmers’ employment is terminated without just cause or for a disability, or
Mr. Chalmers elects to resign for good reason, within 12 months after a change
in control, then, in addition to the payment of the Severance Amount described
above, all of Mr. Chalmers’ unvested stock options and restricted stock units
will automatically vest.
Mr. Chalmers is subject to non-competition and non-solicitation
provisions during the term of his employment agreement and for a period of
12-months after termination, under which Mr. Chalmers may not perform services
for or acquire a beneficial interest (other than a beneficial interest of less
than 1% of the outstanding shares of a public company) in any business in North
America that competes with the Registrant without the prior written approval of
the Registrant, and may not solicit any business from any customer, client or
business relation of the Registrant, or hire or offer to hire or entice any
officer, employee consultant or business relation away from the Registrant.
The foregoing summary of the material terms of the employment
agreement is subject to the full terms of the employment agreement which will be
attached to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2016.