UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934 (Amendment No. ___)
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
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☐
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Preliminary
Proxy Statement
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☐
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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☐
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Soliciting
Material under §240.14a-12
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NIOCORP
DEVELOPMENTS LTD.
(Name of Registrant As Specified In Its Charter)
NOT
APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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☐
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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☐
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Fee
paid previously with preliminary materials.
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☐
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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NIOCORP
DEVELOPMENTS LTD.
NOTICE
OF MEETING
AND
MANAGEMENT
INFORMATION
AND
PROXY CIRCULAR
for
the
Annual
General Meeting of Shareholders
to
be held on
November
7, 2019
The
attached Notice of Meeting, Management Information and Proxy Circular and form of proxy and notes thereto for the 2019 annual
general meeting of shareholders are first being made available to shareholders of the Company on or about September 19, 2019.
NIOCORP
DEVELOPMENTS LTD.
NOTICE
OF MEETING
NOTICE
IS HEREBY GIVEN THAT the 2019 annual general meeting of shareholders (the “Meeting”) of NioCorp Developments
Ltd. (the “Company”) will be held on Thursday, November 7, 2019, at 10:00 a.m. at the offices of Davis, Graham
& Stubbs, 1550 17th Street, Suite 500, Denver, Colorado, 80202 for the following purposes:
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1.
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to
set the number of directors for the ensuing year at six;
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2.
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to
elect six directors to hold office until the next annual general meeting;
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3.
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to
appoint BDO USA, LLP as auditors of the Company to hold office until the next annual
general meeting and to authorize the Board of Directors to fix their remuneration through
the Audit Committee.; and
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4.
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to
transact such other business as may properly come before the Meeting or any adjournment
or postponement thereof.
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Being
made available along with this Notice of Meeting are (i) the Management Information and Proxy Circular; (ii) a form of proxy and
notes thereto; and (iii) the Company’s annual report to shareholders (collectively, the “Meeting Materials”).
The
Company’s Board of Directors has fixed September 12, 2019, as the record date for the Meeting.
If
you are a registered shareholder of the Company and are unable to attend the Meeting in person, you may vote: (i) via the
Internet ; (ii) by calling a toll-free telephone number; or (iii) if you received your proxy materials by mail, by dating and
executing the form of proxy for the Meeting and depositing it by hand delivery or by mail with Computershare Investor Services
Inc., Proxy Dept., 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 or by facsimile to 1-866-249-7775 (within North
America) or 1-416-263-9524 (outside North America). Instructions for telephone and Internet voting are included in the notice
that the Company mailed to shareholders on or about September 19, 2019. All instructions are also listed in the form of proxy
and notes thereto. Your proxy or voting instructions must be received in each case no later than 10:00 a.m., Mountain time, on
November 5, 2019, or no later than 48 hours before the Meeting is reconvened following any adjournment or postponement.
If
you are a non-registered shareholder of the Company and receive these materials through your broker or another intermediary,
please complete and return the materials in accordance with the instructions provided to you by your broker or such other intermediary.
The
Meeting Materials are first being made available to shareholders of the Company on or about September 19, 2019.
DATED
at Centennial, Colorado, this 19th day of September, 2019.
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BY ORDER OF THE BOARD OF DIRECTORS
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/S/ MARK A. SMITH
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MARK A. SMITH
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Chief Executive Officer
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NIOCORP
DEVELOPMENTS LTD.
7000
South Yosemite Street, Suite 115
Centennial,
CO 80112
MANAGEMENT
INFORMATION AND PROXY CIRCULAR
MANAGEMENT
SOLICITATION OF PROXIES
This
Management Information and Proxy Circular (“Information Circular”) is furnished to you, as a holder of common shares
in the capital of the Company (“Common Shares”), in connection with the solicitation of proxies by management and
the Board of Directors (the “Board”) of NioCorp Developments Ltd. (“we,” “us,” or the “Company”)
for use at the Annual General Meeting of Shareholders of the Company (the “Meeting”) to be held on Thursday, November
7, 2019, at 10:00 a.m. at the offices of Davis, Graham & Stubbs, 1550 17th Street, Suite 500, Denver, Colorado,
80202 and at any adjournment of the Meeting for the purposes set forth in the accompanying Notice of Meeting.
It
is anticipated that the Notice of Meeting, this Information Circular, our Annual Report to Shareholders and the accompanying form
of proxy (collectively, the “Meeting Materials”) will be first made available to shareholders on or about September
19, 2019. Unless otherwise stated, the information contained in this Information Circular is given as of September 12, 2019.
The
principal executive office of the Company is located at 7000 South Yosemite Street, Suite 115, Centennial, Colorado 80112. The
registered and records office of the Company is located at 595 Burrard Street, Suite 2600, Vancouver, British Columbia V7X 1L3
(ATTN: Blake, Cassels & Graydon LLP).
All
references to currency in this Information Circular are in United States dollars, unless otherwise indicated.
Information
regarding the proxies being solicited in connection with the Meeting is set out in the section below under the heading “Information
about Proxies.”
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 7,
2019
The
Company is making the Meeting Materials available electronically via the Internet. The Company is mailing to shareholders a notice
containing instructions on how to access and review the Meeting Materials and vote online (the “Notice of Internet Availability
of Meeting Materials”). If you received such a notice, you will not receive a printed copy of the Meeting Materials
in the mail unless requested. If you would like a printed copy of the Meeting Materials, follow the instructions for requesting
them that are included in the notice.
INFORMATION
ABOUT PROXIES
Solicitation
of Proxies
The
Company will conduct its solicitation of proxies and our officers, directors and employees may, without receiving special compensation,
contact shareholders by telephone, electronic means or other personal contact. We will not specifically engage employees to solicit
proxies. We will pay the expenses of this solicitation; however, we do not reimburse shareholders, nominees or agents (including
brokers holding shares on behalf of clients) for their costs of obtaining authorization from their principals to sign proxies.
While no arrangements have been made to date, the Company may contract for the solicitation of proxies for the Meeting. Such
arrangements would include customary fees which would be borne by the Company.
Appointment
of Proxyholder and Return of Proxy
The
persons named in the form of proxy for the Meeting attached hereto as Schedule A are officers of the Company and nominees
of management. A shareholder has the right to appoint some other person, who need not be a shareholder, to represent such shareholder
at the Meeting by inserting that other person’s name in the blank space provided on the form of proxy. If a shareholder
appoints one of the persons designated in the accompanying form of proxy as a nominee and does not direct the said nominee to
vote “FOR,” “AGAINST” or “ABSTAIN,” or “FOR” or “WITHHOLD,” as applicable,
or where instructions on the form of proxy are uncertain with respect to which an opportunity to specify how the Common Shares
registered in the name of such registered shareholder shall be voted, the proxy shall be voted “FOR” the resolution.
In
order for a proxy to be valid, it must be:
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(a)
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signed
by the registered shareholder whose name appears thereon or by such registered shareholder’s
attorney authorized in writing, or if the registered shareholder is a corporation, by
a duly authorized representative on behalf of such corporation; and
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(b)
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returned
in one of the following manners:
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(i)
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by
hand delivery or by mail addressed to Computershare Investor Services Inc., Proxy Dept.,
100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, and received by 10:00 a.m.,
Mountain time, on November 5, 2019, or no later than 48 hours before the Meeting is reconvened
following any adjournment or postponement;
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(ii)
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by
facsimile to Computershare Investor Services Inc. at 1-866-249-7775 (within North America)
or 1-416-263-9524 (outside North America) and received by 10:00 a.m., Mountain time, on
November 5, 2019, or no later than 48 hours before the Meeting is reconvened following
any adjournment or postponement; or
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(iii)
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by
deposit with the chair of the Meeting prior to commencement of the Meeting.
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An
executed proxy that is returned undated will be deemed to be dated the date of the mailing of the form of proxy by the Company
or its agent.
Alternatively,
a registered shareholder may vote via the Internet or by telephone by following the instructions included in the Notice of Internet
Availability of Meeting Materials, in each case no later than 10:00 a.m., Mountain time, on November 5, 2019, or no later than
48 hours before the Meeting is reconvened following any adjournment or postponement. All instructions for how to vote are also
listed in the accompanying form of proxy and notes thereto.
Revocation
of Proxy
If
you are a registered shareholder who has returned a valid proxy or voting instructions, you may revoke your proxy at any time
before it is exercised. In addition to revocation in any other manner permitted by law, a registered shareholder who has given
a proxy may revoke it by:
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(a)
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signing
a proxy bearing a later date; or
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(b)
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signing
a written notice of revocation in the same manner as the form of proxy is required to
be signed as set out in the notes to the proxy.
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The
later proxy or the notice of revocation must be delivered to the office of the Company’s registrar and transfer agent or
to the Company’s principle executive offices at any time up to and including the last business day before the scheduled
time of the Meeting or the reconvening of the Meeting following any adjournment, or to the chair of the Meeting on the day of
the Meeting or the reconvening of the Meeting following any adjournment.
You
may also revoke your proxy or voting instructions by voting via Internet or telephone at a later date than the date of the proxy,
or by attending the meeting and voting in person.
If
you are a non-registered shareholder (a “Beneficial Shareholder”) who wishes to revoke a VIF (as defined below)
or to revoke a waiver of your right to receive Meeting Materials and to give voting instructions, you must give written instructions
to your broker, agent, trustee or other intermediary through which you hold your Common Shares in accordance with the applicable
procedures and deadlines of your broker, agent, trustee or other intermediary.
Voting
of Proxies and Exercise of Discretion by Proxyholders
The
persons named in the accompanying form of proxy will vote or withhold from voting the Common Shares represented by the proxy in
accordance with your instructions, provided your instructions are clear. You may indicate the manner in which the persons
named in the form of proxy are to vote on any matter by marking an “X” in the appropriate space. If you have specified
a choice on any matter to be acted on at the Meeting, your shares will be voted or withheld from voting accordingly. If you do
not specify a choice or where you specify both choices for any matter to be acted on, your shares will be voted in accordance
with management’s recommendations on such matters.
The
form of proxy gives the persons named as proxy holders discretionary authority regarding amendments or variations to matters identified
therein and any other matter that may properly come before the Meeting. As of the date of this Information Circular, our management
is not aware of any such amendment, variation or other matter proposed or likely to come before the Meeting. However, if any such
amendment, variation or other matter properly comes before the Meeting, the persons named in the form of proxy intend to vote
on such other business in accordance with their judgement.
Voting
by Beneficial Shareholders
The
information set out in this section is important to many shareholders as a substantial number of shareholders hold their Common
Shares through a broker, agent, trustee or other intermediary.
Beneficial
Shareholders should note that only proxies deposited by registered shareholders whose names appear on the share register of the
Company as of September 12, 2019, the record date for the Meeting, may be recognized and acted upon at the Meeting. If Common
Shares are shown on an account statement provided to a Beneficial Shareholder by a broker, then in almost all cases the name of
such Beneficial Shareholder will not appear on the share register of the Company. Such Common Shares will most likely be registered
in the name of the broker or an agent of the broker. In Canada, the vast majority of such shares will be registered in the name
of “CDS & Co.,” the registration name of CDS Clearing and Depositary Services Inc., and in the United States,
the vast majority will be registered in the name of “Cede & Co.,” the registration name of the Depository Trust
Company, which entities act as nominees for many brokerage firms. Common Shares held by brokers, agents, trustees or other intermediaries
can only be voted by those brokers, agents, trustees or other intermediaries in accordance with instructions received from Beneficial
Shareholders. As a result, Beneficial Shareholders should carefully review the voting instructions provided by their intermediary
with this Information Circular and ensure they communicate how they would like their Common Shares voted in accordance with those
instructions.
Intermediaries
will frequently use service companies to forward proxy solicitation information to Beneficial Shareholders. Generally, a Beneficial
Shareholder who has not waived the right to receive such information will either:
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(a)
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be
given a form of proxy which (i) has already been signed by the intermediary (typically
by a facsimile, stamped signature), (ii) is restricted as to the number of shares beneficially
owned by the Beneficial Shareholder, and (iii) must be completed, but not signed, by
the Beneficial Shareholder and deposited with Computershare Investor Services Inc.; or
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(b)
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more
typically, be given a voting instruction form (“VIF”), which (i) is
not signed by the intermediary, and (ii) when properly completed and signed by the Beneficial
Shareholder and returned to the intermediary or its service company, will constitute
voting instructions which the intermediary must follow.
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VIFs
should be completed and returned in accordance with the specific instructions noted on the VIF. The purpose of this procedure
is to permit Beneficial Shareholders to direct the voting of the Common Shares which they beneficially own.
Please
return your voting instructions as specified in the VIF. Beneficial Shareholders should carefully follow the instructions set
out in the VIF, including those regarding when and where the VIF is to be delivered.
Although
Beneficial Shareholders may not be recognized directly at the Meeting for the purpose of voting Common Shares registered in the
name of their broker, agent, trustee or other intermediary, a Beneficial Shareholder may attend the Meeting as a proxyholder for
a shareholder and vote Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting or have someone
else attend on their behalf and indirectly vote their Common Shares as proxyholder for the registered shareholder should contact
their broker, agent, trustee or other intermediary well in advance of the Meeting to determine the steps necessary to permit them
to indirectly vote their Common Shares as a proxyholder.
Securities
Entitled to Vote
The
Company is authorized to issue an unlimited number of Common Shares, of which 234,293,107 Common Shares are issued and outstanding
as of September 12, 2019. There is only one class of shares.
The
Board of Directors has fixed September 12, 2019 as the record date for the purpose of determining the shareholders entitled to
receive notice of and vote at the Meeting. Persons who are registered shareholders at the close of business on September 12, 2019
will be entitled to receive notice of, attend, and vote at the Meeting. By ballot, every shareholder and proxyholder will have
one vote for each share. Other than with respect to the election of directors, a majority (i.e., at least 50% plus one vote) of
the votes cast will be required to pass an ordinary resolution at the Meeting, and at least two-thirds of the votes cast will
be required to pass a special resolution at the Meeting.
Broker
Non-Votes, Abstentions and Quorum
Brokers
and other intermediaries, holding shares in street name for their customers, are required to vote the shares in the manner directed
by their customers. Under the rules of the New York Stock Exchange (“NYSE”), brokers are prohibited from giving
proxies to vote on non-routine matters (including, but not limited to, non-contested director elections) unless the beneficial
owner of such shares has given voting instructions on the matter.
The
absence of a vote on a matter where the broker has not received written voting instructions from a Beneficial Shareholder is referred
to as a “broker non-vote.” Any shares represented at the Meeting but not voted (whether by abstention, broker non-vote
or otherwise) will have no impact on any matters to be acted upon at the Meeting.
Under
the Articles of the Company, a quorum for the transaction of business at the Meeting is one or more persons present and being,
or representing by proxy, two or more shareholders entitled to attend and vote at the Meeting.
Abstentions
will be counted as present for purposes of determining the presence of a quorum at the Meeting but will not be counted as votes
cast. Broker non-votes will not be counted as present for purposes of determining the presence of a quorum for purposes at the
Meeting and will not be voted.
Accordingly,
neither abstentions nor broker non-votes will have any effect on the outcome of the votes on the matters to be acted upon at the
Meeting.
INTERESTS
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None
of the directors or executive officers of the Company, nor any person who has held such a position since the beginning of the
last completed financial year of the Company, nor any proposed nominee for election as a director of the Company, nor any associate
or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of beneficial ownership
of securities or otherwise, in any matter to be acted on at the Meeting.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth the beneficial ownership of Common Shares of NioCorp for the following: (1) each person who is known
by NioCorp to own beneficially more than 5% of the outstanding shares of NioCorp’s Common Stock; (2) each of the Named Executive
Officers (as defined in the “Fiscal 2019 Summary Compensation Table”, below); (3) each of NioCorp’s directors;
and (4) all directors and executive officers of NioCorp as a group.
Beneficial
ownership of Common Shares in the table below is determined in accordance with the rules of the U.S. Securities and Exchange Commission
(the “SEC”) and includes voting or investment power with respect to the Common Shares. Common Shares that may
be acquired by an individual or group within 60 days of September 12, 2019, pursuant to the exercise of options to purchase Common
Shares (“Options”) or Common Shares purchase warrants (“Warrants”), are deemed to be outstanding
for the purpose of computing the percentage ownership of such individual or group but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown in the table. Percentage of ownership is based on 234,293,107
Common Shares outstanding as of September 12, 2019.
Except
as indicated in footnotes to this table, we believe that the shareholders named in this table have sole voting and investment
power with respect to all Common Shares shown to be beneficially owned by them, based on information provided to us by such shareholders.
Unless otherwise indicated, the address for each director and executive officer listed is:
c/o NioCorp Developments Ltd., 7000 South Yosemite Street, Suite 115, Centennial, CO 80112.
Name and Address of Beneficial Owner
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Position
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Amount and Nature of Beneficial Ownership
(1)
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Percent of Common Shares
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Mark A. Smith, PE, Esq
Highlands Ranch, Colorado, USA
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President, Chief Executive Officer and Chairman
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21,410,445
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(2)
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9.04
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%
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Neal Shah
Superior, Colorado, USA
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Chief Financial Officer
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1,279,500
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(3)
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0.54
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%
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Scott Honan
Centennial, Colorado, USA
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Vice President, Business Development
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1,505,000
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(4)
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0.64
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%
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Jim Sims
Golden Colorado, USA
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Vice-President, External Affairs
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1,383,419
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(5)
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0.59
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%
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Joseph A. Carrabba
Key Largo, Florida, USA
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Lead Director
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1,262,500
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(6)
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0.54
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%
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Michael Morris
San Luis Obispo, California, USA
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Director
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1,105,250
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(7)
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0.47
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%
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David C. Beling
Grand Junction, Colorado, USA
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Director
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1,300,000
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(8)
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0.55
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%
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Anna Castner Wightman
Omaha, Nebraska, USA
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Director
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1,152,000
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(9)
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0.49
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%
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Nilsa Guerrero-Mahon
Brighton, Colorado, USA
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Director
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650,000
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(10)
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0.28
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%
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All current directors, executive officers and named executive officers as a group (10 persons)
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32,860,066
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13.31
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%
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(1)
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Calculated
in accordance with Rule 13d-3 of the Exchange Act.
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(2)
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As
of September 12, 2019, Mr. Smith beneficially owns 18,885,445 outstanding Common Shares.
In addition, he beneficially owns 2,525,000 vested Options comprised of the following:
(i) on January 19, 2016, Mr. Smith was granted 750,000 Options to purchase Common Shares
for a period of five years at a price of C$0.62 per Common Share which vest over a period
of 18 months with 100% having vested at this time; (ii) on March 6, 2017, Mr. Smith was
granted 650,000 Options to purchase Common Shares for a period of five years at a price
of C$0.76 per Common Share which vest over a period of 18 months with 100% having vested
at this time (iii) on November 9, 2017, Mr. Smith was granted 750,000 Options to purchase
Common Shares for a period of five years at a price of C$0.47 per Common Share; and (iv)
on November 15, 2018, Mr. Smith was granted 750,000 Options to purchase Common Shares
for a period of five years at a price of C$0.54 per Common Share which will vest over
a period of 18 months with 50% having vested at this time.
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(3)
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As
of September 12, 2019, Mr. Shah beneficially owns 54,500 outstanding Common Shares. In
addition, he beneficially owns 1,225,000 vested Options comprised of the following: (i)
on January 19, 2016, Mr. Shah was granted 350,000 Options to purchase Common Shares for
a period of five years at a price of C$0.62 per Common Share which vest over a period
of 18 months with 100% having vested at this time; (ii) on March 6, 2017, Mr. Shah was
granted 400,000 Options to purchase Common Shares for a period of five years at a price
of C$0.76 per Common Share which vest over a period of 18 months with 100% having vested
at this time; (iii) on November 9, 2017, Mr. Shah was granted 300,000 Options to purchase
Common Shares for a period of five years at a price of C$0.47 per Common Share; and (iv)
on November 15, 2018, Mr. Shah was granted 350,000 Options to purchase Common Shares
for a period of five years at a price of C$0.54 per Common Share which will vest over
a period of 18 months with 50% having vested at this time.
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(4)
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As
of September 12, 2019, Mr. Honan beneficially owns 130,000 outstanding Common Shares.
In addition, he beneficially owns 1,375,000 vested Options comprised of the following:
(i) on January 19, 2016, Mr. Honan was granted 500,000 Options to purchase Common Shares
for a period of five years at a price of C$0.62 per Common Share which vest over a period
of 18 months with 100% having vested at this time; (ii) on March 6, 2017, Mr. Honan was
granted 400,000 Options to purchase Common Shares for a period of five years at a price
of C$0.76 per Common Share which vest over a period of 18 months with 100% having vested
at this time; (iii) on November 9, 2017, Mr. Honan was granted 300,000 Options to purchase
Common Shares for a period of five years at a price of C$0.47 per Common Share; and (iv)
on November 15, 2018, Mr. Honan was granted 350,000 Options to purchase Common Shares
for a period of five years at a price of C$0.54 per Common Share which will vest over
a period of 18 months with 50% having vested at this time.
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(5)
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As
of September 12, 2019, Mr. Sims beneficially owns 8,419 outstanding Common Shares. In
addition, he beneficially owns 1,375,000 vested Options comprised of the following: (i)
on January 19, 2016, Mr. Sims was granted 500,000 Options to purchase Common Shares for
a period of five years at a price of C$0.62 per Common Share which vest over a period
of 18 months with 100% having vested at this time; (ii) on March 6, 2017, Mr. Sims was
granted 400,000 Options to purchase Common Shares for a period of five years at a price
of C$0.76 per Common Share which vest over a period of 18 months with 100% having vested
at this time; (iii) on November 9, 2017, Mr. Sims was granted 300,000 Options to purchase
Common Shares for a period of five years at a price of C$0.47 per Common Share; and (iv)
on November 15, 2018, Mr. Sims was granted 350,000 Options to purchase Common Shares
for a period of five years at a price of C$0.54 per Common Share which will vest over
a period of 18 months with 50% having vested at this time.
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(6)
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As
of September 12, 2019, Mr. Carrabba beneficially owns 100,000 outstanding Common Shares.
In addition, he beneficially owns 1,162,500 vested Options comprised of the following:
(i) on January 19, 2016, Mr. Carrabba was granted 400,000 Options to purchase Common
Shares for a period of five years at a price of C$0.62 per Common Share which vest over
a period of 18 months with 100% having vested at this time; (ii) on March 6, 2017, Mr.
Carrabba was granted 350,000 Options to purchase Common Shares for a period of five years
at a price of C$0.76 per Common Share which vest over a period of 18 months with 1000%
having vested at this time; (iii) on November 9, 2017, Mr. Carrabba was granted 250,000
Options to purchase Common Shares for a period of five years at a price of C$0.47 per
Common Share; and (iv) on November 15, 2018, Mr. Carrabba was granted 325,000 Options
to purchase Common Shares for a period of five years at a price of C$0.54 per Common
Share which will vest over a period of 18 months with 50% having vested at this time.
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(7)
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As
of September 12, 2019, Mr. Morris beneficially owns 55,250 outstanding Common Shares.
He shares both voting and investment power with respect to all such Common Shares with
his wife. In addition, he beneficially owns 1,050,000 vested Options comprised of the
following: (i) on January 19, 2016, Mr. Morris was granted 300,000 Options to purchase
Common Shares for a period of five years at a price of C$0.62 per Common Share which
vest over a period of 18 months with 100% having vested at this time; (ii) on March 6,
2017, Mr. Morris was granted 350,000 Options to purchase Common Shares for a period of
five years at a price of C$0.76 per Common Share which vest over a period of 18 months
with 100% having vested at this time; and (iii) on November 9, 2017, Mr. Morris was granted
250,000 Options to purchase Common Shares for a period of five years at a price of C$0.47
per Common Share; and (iv) on November 15, 2018, Mr. Morris was granted 300,000 Options
to purchase Common Shares for a period of five years at a price of C$0.54 per Common
Share which will vest over a period of 18 months with 50% having vested at this time.
|
|
(8)
|
As
of September 12, 2019, Mr. Beling beneficially owns 350,000 outstanding Common Shares
held in the name of The Beling Family Trust. He shares both voting and investment power
with respect to all such Common Shares with his wife as the only trustees of The Beling
Family Trust. In addition, he beneficially owns 950,000 vested Options comprised of the
following: (i) on January 19, 2016, Mr. Beling was granted 300,000 Options to purchase
Common Shares for a period of five years at a price of C$0.62 per Common Share and vest
over a period of 18 months with 100% having vested at this time; (ii) on March 6, 2017,
Mr. Beling was granted 300,000 Options to purchase Common Shares for a period of five
years at a price of C$0.76 per Common Share which vest over a period of 18 months with
100% having vested at this time; (iii) on November 9, 2017, Mr. Beling was granted 200,000
Options to purchase Common Shares for a period of five years at a price of C$0.47 per
Common Share; and (iv) on November 15, 2018, Mr. Smith was granted 300,000 Options to
purchase Common Shares for a period of five years at a price of C$0.54 per Common Share
which will vest over a period of 18 months with 50% having vested at this time.
|
|
(9)
|
As
of September 12, 2019, Ms. Wightman beneficially owns 2,000 outstanding Common Shares.
She shares both voting and investment power with respect to all such Common Shares with
her husband. In addition, she beneficially owns 1,150,000 vested Options comprised of
the following: (i) on July 21, 2016, Ms. Wightman was granted 500,000 Options to purchase
Common Shares for a period of five years at a price of C$0.94 which vest over a period
of 18 months with 100% having vested at this time; (ii) on March 6, 2017, Ms. Wightman
was granted 300,000 Options to purchase Common Shares for a period of five years at a
price of C$0.76 per Common Share which vest over a period of 18 months with 100% having
vested at this time; (iii) on November 9, 2017, Ms. Wightman was granted 200,000 Options
to purchase Common Shares for a period of five years at a price of C$0.47 per Common
Share; and (iv) on November 15, 2018, Ms. Wightman was granted 300,000 Options to purchase
Common Shares for a period of five years at a price of C$0.54 per Common Share which
will vest over a period of 18 months with 50% having vested at this time.
|
|
(10)
|
As
of September 12, 2019, Ms. Guerrero-Mahon beneficially owns 650,000 vested Options comprised
of the following: (i) on November 9, 2017, Ms. Guerrero-Mahon was granted 500,000 Options
to purchase Common Shares for a period of five years at a price of C$0.47 per Common
Share; and (ii) on November 15, 2018, Ms. Guerrero-Mahon was granted 300,000 Options
to purchase Common Shares for a period of five years at a price of C$0.54 per Common
Share which will vest over a period of 18 months with 50% having vested at this time.
|
Security
Ownership of Certain Beneficial Owners
As
of September 12, 2019, the Company is not aware of any persons that beneficially own more than 5% of its outstanding Common Shares
who does not serve as an executive officer or director of the Company.
Speculative
Transaction by Employees/Directors Is Not Permitted
The
Company’s insider trading policy prohibits officers and directors of the Company or their designees from engaging in speculative
transactions involving the Company’s securities, including buying the Company’s securities on margin and short-selling.
Change
in Control Arrangements
As
of September 12, 2019, there are no arrangements known to us that would result in a change in control of the Company. We are not,
to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government.
PARTICULARS
OF MATTERS TO BE ACTED UPON
I
- ELECTION OF DIRECTORS
Directors
of the Company are elected at each annual general meeting of shareholders and hold office until the next annual general meeting
of shareholders or until that person sooner ceases to be a director. The shareholders will be asked to pass an ordinary resolution
to set the number of directors of the Company at six for the next year, subject to any increases permitted by the Company’s
Articles. The number of directors will be approved if the affirmative vote of at least a majority of Common Shares present or
represented by proxy at the Meeting and entitled to vote thereat are voted in favour of setting the number of directors at six.
Management recommends a vote “FOR” in respect of the resolution to set the number of directors of the Company at
six.
Unless
you provide other instructions, the proxy will be voted for the nominees listed below. Management does not expect that any of
the nominees will be unable to serve as a director. If before the Meeting any vacancies occur in the slate of nominees listed
below, the person named in the proxy will exercise his or her discretionary authority to vote the Common Shares represented by
the proxy for the election of another person or persons as directors to fill such vacancies.
The
following are the Company’s six current directors. Management has nominated each of the persons named in the table below
for election as director. The information concerning current directors and proposed nominees has been furnished by each of them:
Name
|
|
Age
|
|
|
Position
|
|
Date of Appointment
|
Mark A. Smith
|
|
|
60
|
|
|
CEO, President, Executive Chairman and Director
|
|
CEO and Director:
September 23, 2013
President and Executive Chairman: May 31, 2015
|
Joseph A. Carrabba
|
|
|
67
|
|
|
Lead Director
|
|
December 15, 2014
|
Michael Morris
|
|
|
73
|
|
|
Director
|
|
July 27, 2014
|
David C. Beling
|
|
|
78
|
|
|
Director
|
|
June 6, 2011
|
Anna Castner Wightman
|
|
|
52
|
|
|
Director
|
|
February 23, 2016
|
Nilsa Guerrero-Mahon
|
|
|
58
|
|
|
Director
|
|
September 28, 2017
|
The
following sets forth a brief description of the business experience of each director of the Company, including current directorships
and directorships held during at least the past five years:
Current
Directors
Mark
Smith – Executive Chairman, Director, President and Chief Executive Officer
Mr.
Smith has 38 years of experience in operating, developing, and financing mining and strategic materials projects in the Americas
and abroad. In September 2013, he was appointed Chief Executive Officer (“CEO”) and a Director of NioCorp.
From April 2015 to September 2019, Mr. Smith served as the President and Director for Largo Resources Ltd.(“Largo”),
a mineral company with an operating property in Brazil and projects in Brazil and Canada. In addition, from April 2015 to October
2018, Mr. Smith also served as the CEO of Largo. Mr. Smith has also served on the Board of Directors of IBC Advanced Alloys Corp.,
a leading beryllium and copper advanced alloys company (“IBC”), since May 2016. From October 2008 through December
2012, Mr. Smith served as President, Chief Executive Officer and Director of Molycorp, Inc., a rare earths producer (“Molycorp”),
where he was instrumentally involved in taking it from a private company to a publicly traded company with a producing mine. From
November 2011 through May 2015, he served on the Board of Directors at Avanti Mining, a mining company (TSX-V: AVT; Avanti Mining
changed its name to AlloyCorp in early 2015). From December 2012 through September 2013, he served as the Managing Director of
KMSmith LLC, a business strategy and finance advisory firm, where he served as a consultant.
Prior
to Molycorp, Mr. Smith held numerous engineering, environmental, and legal positions within Unocal Corporation, a former petroleum
explorer and marketer (“Unocal”), and later served as the President and Chief Executive Officer of Chevron
Mining Inc., a coal and metal mining company (“Chevron Mining”). Mr. Smith also served for over seven years
as the shareholder representative of CBMM, a private company that currently produces approximately 85% of the world supply of
niobium. During his tenure with Chevron Mining, Mr. Smith was responsible for Chevron Mining’s three coal mines, one molybdenum
mine, a petroleum coke calcining operation and Molycorp’s Mountain Pass mine. At Unocal, he served as the Vice-President
from June 2000 to April 2006, and managed the real estate, remediation, mining and carbon divisions. Mr. Smith is a Registered
Professional Engineer and serves as an active member of the State Bars of California and Colorado. He received his Bachelor of
Science degree in Agricultural Engineering from Colorado State University in 1981 and his Juris Doctor, cum laude, from Western
State University, College of Law, in 1990.
Mr.
Smith’s extensive leadership, management, strategic planning, and strategic materials industry expertise through his various
leadership and directorship roles in public companies large and small makes him well-qualified to serve as a member of the board
of directors of NioCorp.
Joseph
Carrabba – Lead Director
Until
September 2018, Mr. Carrabba served as the President and Chief Executive Officer of Ram River Coal Corporation, a Canadian company
holding a 100% interest in property that contains two metallurgical coal deposits in Alberta, Canada, a position which he had
held since 2017. Until April 2018, Mr. Carrabba also served as Chief Executive Officer and President of Irati Energy Corporation,
an oil and gas exploration company focused on southern Brazil oil shale development projects, a position he had held since April
2016. Previously, Mr. Carrabba served as Chairman, Chief Executive Officer and President of Cleveland-Cliffs Inc. (formerly Cliffs
Natural Resources Inc.), an international mining and natural resources company, from 2005 until his retirement in 2013. Prior
to joining Cleveland-Cliffs Inc. in 2005, Mr. Carrabba served for more than 20 years in a variety of leadership capacities at
Rio Tinto, a global mining company, at locations worldwide, including the United States, Asia, Australia, Canada and Europe Mr.
Carrabba has been a director of Aecon Group Inc. since 2013, TimkenSteel Corporation since 2014, and Winston Gold since July 2019.
Mr. Carrabba formerly was a director of Newmont Mining Corporation, Cleveland-Cliffs Inc., KeyBank Corporation, Lithium X Energy
Corp, and Fura Gems Inc. He holds a bachelor’s degree in geology from Capital University and his MBA from Frostburg State
University in Maryland. Mr. Carrabba’s qualification to serve on our Board is based upon his many years of leadership and
executive experience in large publicly traded companies in the mining and materials processing industries.
Michael
Morris – Director
Mr.
Morris was formerly the Chairman of the Board of Heritage Oaks Bankcorp, the holding company of Heritage Oaks Bank. When Heritage
Oaks Bank merged with Pacific Premier Bancorp on April 1, 2017, Mr. Morris became a member of the Pacific Premier Bancorp Board
of Directors. He joined Heritage Oaks’ Board in January 2001 and assumed the Board chairmanship in 2007. In addition, Mr.
Morris has worked since 1972 at Andre, Morris & Buttery, a professional law corporation, where he now serves as Senior Principal
and Chairman of the Board. From 2000 to late 2006, Mr. Morris served on the board of Molycorp, a rare earths producer, which at
the time was a wholly owned subsidiary of Unocal and then Chevron Mining Inc. a wholly-owned subsidiary of Chevron Corporation.
Mr. Morris was the only independent director of Molycorp at that time. Mr. Morris is a graduate of Georgetown University and received
his law degree from the University of San Francisco School of Law. He has practiced business and environmental law for over 40
years. Mr. Morris served as a member of the Board of Governors and Vice President of the State Bar of California. He served as
a 1st Lieutenant in the U.S. Army from 1970 to 1972.
Mr.
Morris’ qualification to serve on our Board is based on his years of senior executive leadership with publicly traded companies
and his long experience in the financial, banking, legal, and manufacturing fields.
David
Beling – Director
Mr.
Beling is a Registered Professional Mining Engineer with 54 years of experience and has been on the board of directors of 14 mining
companies starting in 1981. He has served as President, CEO, Chief Financial Officer (“CFO”) and a director
of Bullfrog Gold Corp., a gold exploration and development company, since July 2011 and was the Executive Vice President and Chief
Operating Officer of Geovic Mining Corp. from 2004 to 2010. Mr. Beling has examined, significantly reviewed or been directly involved
with 88 underground mines, 131 open pit mines and 164 process plants in the global metal, energy and industrial mineral sectors.
His employment included 14 years with five majors, then 38 years of employment and consulting for 25 junior mining companies.
Mr.
Beling’s qualification to serve on our Board is based upon his decades of senior leadership and executive positions with
companies in the mining and minerals processing sectors.
Anna
Castner Wightman – Director
A
sixth generation Nebraskan and a graduate of Nebraska Wesleyan University, Ms. Wightman serves as a Senior Director for First
National Bank of Omaha, Nebraska, a position she has held since 2000. Prior to that, she worked for the Greater Omaha Chamber
of Commerce and served in the U.S. Congress for former Congressman Bill Barrett and former Congresswoman Virginia Smith, both
of whom represented the 3rd Congressional District of Nebraska. Ms. Wightman serves on the Boards of Directors of the Nebraska
Chamber of Commerce, Rose Theater for Performing Arts, and Joslyn Castle.
Ms.
Wightman’s qualification to serve on our Board is based on her extensive executive experience in the banking and financial
services sectors, and her deep knowledge of the Nebraska business and public policy landscapes.
Nilsa
Guerrero-Mahon – Director
A
former CFO and Controller for global corporations in the technology, energy, and government sectors, Ms. Guerrero-Mahon provides
consulting services to domestic and international corporations as the principal at NG Mahon Business Consulting, LLC, a business
consulting service, a position she has held since 2008. In addition, Ms. Guerrero-Mahon currently serves on the Board of the State
of Colorado Division of Securities. From 2016 to August 2019 she served on the Board of Directors of Centura Health Mountains
& North Denver Operating Group, the largest division in the Centura Health Care System. From 2014 to 2016, she served as the
Vice Chair of the Board of Directors and Chaired the Strategy Committee at St. Anthony Hospital, now a member of the Centura Health
Mountains & North Denver Operating Group. From 2009 to 2017, Ms. Guerrero-Mahon served as a gubernatorial appointed Board
Member of the State of Colorado Financial Services Commission. Among other prior positions, from 2005 to 2007, she was the Global
Services Controller at Microsoft Corporation, overseeing internal controls and corporate finance activities. Ms. Guerrero-Mahon
received an Executive MBA from the Daniels College of Business at the University of Denver and a BS in Business Administration
- Accounting from the Interamerican University in San Juan, Puerto Rico, and is a Certified Public Accountant registered in the
State of Colorado.
Ms.
Guerrero-Mahon’s qualification to serve on our Board is based on her extensive executive leadership with publicly traded
companies and her extensive experience in the financial and technology fields.
Arrangements
between Officers and Directors
To
our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors
or nominees, pursuant to which the officer was selected to serve as an officer.
None
of the above directors or nominees has entered into any arrangement or understanding with any other person pursuant to which he
or she was, or is to be, elected as a director of the Company or a nominee of any other person.
Family
Relationships
There
are no family relationships among any of our directors, nominees or executive officers.
Other
Directorships
Except
as listed below, no directors or nominees of the Company are also directors of reporting issuers.
Name of Director
|
|
Other Reporting Issuer (or equivalent)
|
|
Exchange
|
Joseph Carrabba
|
|
Newmont Mining Corporation
|
|
NYSE
|
|
|
TimkenSteel Corp.
|
|
NYSE
|
|
|
Winston Gold Corp.
|
|
CSE
|
|
|
Aecon Group Inc.
|
|
TSX
|
|
|
Fura Gems Inc.
|
|
TSX-V
|
David Beling
|
|
Bullfrog Gold Corp.
|
|
OTCQB
|
Michael Morris
|
|
Pacific Premier Bancorp
|
|
NASDAQ
|
Mark A. Smith
|
|
Largo Resources Ltd.
|
|
TSX
|
|
|
IBC Advanced Alloys Corp.
|
|
TSX-V
|
Legal
Proceedings
No
director, nominee or executive officer of the Company is a party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.
During
the past ten years none of the persons serving as executive officers and/or directors of the Company and, with respect to promoters
or control persons, for the past five years, none have been the subject matter of any of the legal proceedings that are required
to be disclosed pursuant to Item 401(f) of Regulation S-K. Further, no such legal proceedings are believed to be contemplated
by governmental authorities against any director or executive officer.
No
proposed director of the Company is or has been, within the past 10 years, a director, CEO or CFO of any company that, while the
person was acting in that capacity:
|
(a)
|
was
subject to an “order,” as that term is defined in Form 51-102F5 Information
Circular, that was issued while the proposed director was acting in the capacity
as director, CEO or CFO; or
|
|
(b)
|
was
subject to an order that was issued after the proposed director ceased to be a director,
CEO or CFO and which resulted from an event that occurred while that person was acting
in the capacity as director, CEO or CFO.
|
No
proposed director of the Company is or has been, within the past 10 years, a director or executive officer of any company that,
while that person was acting in that capacity or within a year of that person ceasing to act in that capacity, became 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 its assets.
No
proposed director of the Company has, within the past 10 years, become 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 the proposed director.
Voting
Procedures for the Election of Directors
Cumulative
voting (i.e., a form of voting where shareholders are permitted to cast all of their aggregate votes for a single nominee) will
not be permitted. The directors must be elected by an affirmative vote of a plurality of the votes cast, either in person or by
proxy, at the Meeting on this matter. Abstentions will not be counted FOR or WITHHELD for any nominee to the Board.
Majority
Voting Policy
On
January 22, 2016, the Board adopted a majority voting policy. Pursuant to the majority voting policy, the form of proxy for meetings
of the shareholders of the Company at which directors are to be elected provide the option of voting in favor, or withholding
from voting, for each individual nominee to the Board. If, with respect to any particular nominee, the number of shares withheld
from voting exceeds the number of shares voted in favor of the nominee, then the nominee will be considered to have not received
the support of the shareholders, and such nominee is expected to submit his or her resignation to the Board, to take effect on
acceptance by the Board.
The
Compensation and Organization Committee of the Board (the “Compensation Committee”) will decide whether to
recommend to the Board that the Board request the resignation of the director. In recommending to the Board whether to request
the resignation of the director or not, the Compensation Committee will review the results of the shareholder vote, applicable
regulatory requirements in respect of the constitution of the Board and certain of its committees and, in respect of incumbent
directors, the particular director’s attendance at Board and committee meetings, the contribution of the director to Board
and committee discussions and the director’s performance assessment, if any. In addition, it will consider what, if any,
expressed reasons for a withheld vote have been given, the merits of such reasons and the ability to rectify concerns.
The
Board will have the final determination whether to accept the resignation. If the resignation is accepted, subject to any corporate
law restrictions, the Board may:
|
(a)
|
leave
the resultant vacancy in the Board unfilled until the next annual general meeting of
shareholders of the Company;
|
|
(b)
|
fill
the vacancy by appointing a director whom the Board considers to merit the confidence
of the shareholders; or
|
|
(c)
|
call
a special meeting of the shareholders of the Company to consider the election of a nominee
recommended by the Board to fill the vacant position.
|
Directors
who do not submit their resignation in accordance with the majority voting policy will not be re-nominated for election at the
next shareholders’ meeting at which directors are to be elected. The majority voting policy applies only in the case of
an uncontested director election, meaning the number of nominees for election as directors is equal to the number of directors
to be elected.
Management
recommends a vote “FOR” each of the nominees for director. Unless otherwise instructed, the proxies given pursuant
to this solicitation will be voted “FOR” the nominees listed above.
II
- APPOINTMENT OF AUDITORS
The
Company has proposed the appointment of BDO USA, LLP Certified Public Accountants (“BDO USA, LLP”), as auditors
of the Company to hold office until the next annual general meeting of shareholders of the Company or until a successor is appointed.
It is proposed that the remuneration to be paid to the auditors be fixed by the Board through the Audit Committee of the Board
(the “Audit Committee”). BDO USA, LLP was originally appointed as the Company’s auditors on June 24,
2015.
The
Audit Committee recommends the appointment of BDO USA, LLP as our auditors to hold office until the Company’s next annual
general meeting of shareholders. The Audit Committee proposes that the Board be authorized to fix the remuneration to be paid
to the auditors.
Representatives
from BDO USA, LLP are expected to be present at the Meeting and they will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
Principal
Accountant Fees and Services
The
following table presents fees for professional services rendered by BDO USA, LLP for each of the last two fiscal years for the
audit of the Company’s annual financial statements and review of financial statements included in the Company’s filings
and fees billed for other services rendered by BDO USA, LLP during those periods.
Fiscal
Year Ending
June 30,
|
|
|
Audit Fees(1)
($)
|
|
|
Audit Related Fees(2)
($)
|
|
|
Tax Fees(3)
($)
|
|
|
All Other Fees(4)
($)
|
|
2019
|
|
|
|
136,000
|
|
|
|
|
|
|
|
7,155
|
|
|
|
|
|
2018
|
|
|
|
138,000
|
|
|
|
—
|
|
|
|
8,608
|
|
|
|
—
|
|
(1)
|
“Audit
Fees” include fees necessary to perform the annual audit and quarterly reviews
of the Company’s consolidated financial statements. Audit Fees include fees for
review of tax provisions and for accounting consultations on matters reflected in the
financial statements. Audit Fees also include audit or other attest services required
by legislation or regulation, such as comfort letters, consents, reviews of securities
filings and statutory audits.
|
(2)
|
“Audit-Related
Fees” include services that are traditionally performed by the auditor. These audit-related
services include employee benefit audits, due diligence assistance, accounting consultations
on proposed transactions, internal control reviews and audit or attest services not required
by legislation or regulation.
|
(3)
|
“Tax
Fees” include fees for all tax services other than those included in “Audit
Fees” and “Audit-Related Fees.” This category includes fees for tax
compliance, tax planning and tax advice. Tax planning and tax advice includes assistance
with tax audits and appeals, tax advice related to mergers and acquisitions, and requests
for rulings or technical advice from tax authorities. For the financial years ended June
30, 2019 and 2018, these tax services included the preparation of Canadian and U.S. federal
and state tax returns and tax planning and tax advice services.
|
(4)
|
“All
Other Fees” includes all other non-audit services.
|
Pre-approval
Policies
The
Audit Committee’s policy has been to pre-approve all audit, audit-related and non-audit services performed by our independent
auditors and to subsequently review the actual fees and expenses paid to our independent auditors. Accordingly, the Audit Committee
pre-approved all audit, audit-related and non-audit services performed by BDO USA, LLP and subsequently reviewed the actual fees
and expenses paid to BDO USA, LLP. The Audit Committee has determined that the fees paid to BDO USA, LLP for services are compatible
with maintaining BDO USA, LLP’s independence as our auditors. All of the services provided by BDO USA LLP during the year
ended June 30, 2019 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Voting
Procedures for Appointment of Auditor
The
auditors must be appointed, and the approval of the proposal that the auditor’s remuneration be fixed by the Board through
the Audit Committee, must be passed by an affirmative vote of a simple majority of the votes cast, either in person or by proxy,
at the Meeting on this matter. Abstentions will not be counted FOR or AGAINST the matter.
Management
recommends a vote “FOR” (i) the appointment of BDO USA, LLP as auditors of the Company to hold office until the next
annual general meeting and (ii) the authorization of the Board to fix their remuneration through the Audit Committee. Unless otherwise
instructed, the proxies given pursuant to this solicitation will be voted “FOR” (i) the appointment of BDO USA, LLP
as auditors of the Company to hold office until the next annual general meeting and (ii) the authorization of the Board to fix
their remuneration through the Audit Committee.
CORPORATE
GOVERNANCE
Corporate
governance relates to the activities of the Board, the members of which are elected by and are accountable to the shareholders,
and takes into account the role of the individual members of management who are appointed by the Board and who are charged with
the day-to-day management of the Company. The Board is committed to sound corporate governance practices that are both in the
interest of its shareholders and contribute to effective and efficient decision making. National Policy 58-201 Corporate Governance
Guidelines (“NP 58-201”) establishes corporate governance guidelines that apply to all Canadian public
companies. The Company has reviewed its own corporate governance practices in light of these guidelines. In certain cases, the
Company’s practices comply with the guidelines; however, the Board considers some of the guidelines not to be suitable for
the Company at its current stage of development, and therefore, these guidelines have not been adopted at this time. The Board
will consider the matter in the future as the Company’s development progresses, and such guidelines may be applicable to
the Company’s then-level of development. National Instrument 58-101 (“NI 58-101”) mandates disclosure
of corporate governance practices for non-Venture Issuers in Form 58-101F1, which disclosure is set out below.
Director
Independence
As
of September 12, 2019, the Company’s Board consists of Messrs. Smith, Carrabba, Beling, and Morris as well as Mmes. Wightman
and Guerrero-Mahon. The Company utilizes the definition of “independent” as it is set forth in Section 303A of the
NYSE Listed Company Manual (“Section 303A”) and National Instrument 52-110 Audit Committees (“NI
52-110”). Further, the Board considers all relevant facts and circumstances in its determination of independence of
all members of the Board (including any relationships). Currently, Messrs. Carrabba, Beling and Morris and Mmes. Wightman and
Guerrero-Mahon are considered independent directors.
At
all times since the Company’s December 5, 2018 annual general meeting of shareholders, the Board has consisted of a majority
of independent directors. NP 58-201 suggests that the board of directors of every listed company should be constituted with a
majority of individuals who qualify as “independent” directors under NI 52-110, which provides that a director is
independent if he or she has no direct or indirect “material relationship” with such company. “Material relationship”
is defined as a relationship that could, in the view of a company’s board of directors, reasonably interfere with the exercise
of a director’s independent judgment. Of the proposed nominees for election at the Meeting, one, being Mark A. Smith, is
an “insider,” as a management director, and accordingly, is not considered by the Board to be “independent.”
The remaining five proposed nominees, being Messrs. Carrabba, Beling and Morris and Mmes. Wightman and Guerrero-Mahon, are each
considered by the Board to be “independent,” within the meaning of NI 52-110. Thus, assuming that all the proposed
nominees are elected as directors, the Board will continue to be composed of a majority of independent directors.
The
Chair of the Board is Mark A. Smith, who is not independent. The Company’s Lead Director, Joseph Carrabba, is independent.
The independent directors do not have regularly scheduled meetings in the absence of the non-independent directors and management
but can do so on an ad hoc basis, at the expense of the Company, as they see fit. The independent directors did not meet
as a group, on a formal basis, without the non-independent directors or management being present during the financial year ended
June 30, 2019.
The
Board created the Lead Director role as an integral part of a leadership structure that promotes strong, independent oversight
of NioCorp’s management and affairs. The Lead Director, who must be independent, has the following primary responsibilities:
|
●
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working
with the Chairman to develop and approve Board agendas and meeting schedules;
|
|
●
|
advising
the Chairman as to the quality, quantity, and timeliness of the information sent to the
Board;
|
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●
|
developing
agendas for and chairing executive sessions of the Board (in which the independent directors
meet without management); and
|
|
●
|
acting
as a liaison between the independent directors and the Chairman and CEO.
|
Joseph
Carrabba has served as the Lead Director since December 2014.
In
assessing Form 58-101F1 and making the foregoing determinations, the circumstances of each director have been examined in relation
to a number of factors, including discussions with each director, a review of the résumés of the directors, and
the corporate relationships and other directorships held by each of them.
Board
Meetings
The
Board held a total of four meetings during the fiscal year ended June 30, 2019. None of our directors attended fewer than 75%
of the total number of Board meetings and meetings of the committees on which the director served during the fiscal year ended
June 30, 2019. Board members are not required to attend the Company’s annual general meetings of shareholders, and Mr. Smith
was the only director at the meeting held on December 5, 2018.
The
attendance record of each director at full Board meetings and with respect to meetings of any committees of which he/she is a
member held during the fiscal year ended June 30, 2019, either in person or by conference telephone, are as follows:
Name of Director
|
|
Full Board Meetings
(4 total)
|
|
|
Audit Committee
(4 total – decisions reflected in consent resolutions)
|
|
|
Compensation and Organization Committee
(1 total)
|
|
Mark A. Smith
|
|
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4
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Joseph Carrabba
|
|
|
3
|
|
|
|
N/A
|
|
|
|
1
|
|
David Beling
|
|
|
4
|
|
|
|
N/A
|
|
|
|
1
|
|
Michael Morris
|
|
|
4
|
|
|
|
4
|
|
|
|
1
|
|
Anna Castner Wightman
|
|
|
3
|
|
|
|
4
|
|
|
|
N/A
|
|
Nilsa Guerrero-Mahon
|
|
|
4
|
|
|
|
4
|
|
|
|
N/A
|
|
Mandate
of the Board
The
Board has a written mandate that provides that the Board’s fundamental objective is the creation of shareholder value, including
the protection and enhancement of the value of the Company’s assets. The Board oversees the management of the Company’s
affairs directly and through the operation of its standing committees. In fulfilling its mandate, the Board, among other matters,
is responsible for reviewing and approving the Company’s overall business strategies and its annual business plan, reviewing
and approving the annual corporate budget and forecast, reviewing and approving significant capital investments outside the approved
budget, reviewing major strategic initiatives to ensure that the Company’s proposed actions accord with its stated shareholder
objectives, reviewing succession planning, assessing management’s performance against approved business plans and industry
standards, reviewing and approving the financial statements, reports and other disclosure issued to shareholders, ensuring the
effective operation of the Board and safeguarding shareholders’ equity interests through the optimum utilization of the
Company’s capital resources. The Board also takes responsibility for identifying the principal risks of the Company’s
business and for ensuring these risks are effectively monitored and mitigated to the extent reasonably practicable. In keeping
with its overall responsibility for the stewardship of the Company, the Board is responsible for the integrity of the Company’s
internal control and management information systems (primarily through the Audit Committee) and for the Company’s policies
respecting corporate disclosure and communications.
Position
Descriptions
The
Board has developed a written position description for the Chairman of the Board and the Lead Director. The primary responsibilities
of the Lead Director are set forth above under “Director Independence.” To date, given the size of the Company and
its stage of development, the Board does not believe that a formal written position description for the position of the CEO is
required, and that good business practices and the common law provide guidance as to what is expected of the position.
The
general duties of the CEO are as set forth in the Smith Agreement (as described elsewhere in this Information Circular), which
were developed by the Board, in consultation with the CEO, at the time the Smith Agreement was entered into and set forth the
expectations of the role and position to be fulfilled by the CEO. Pursuant to the Smith Agreement, the Company (acting through
the Board) has the ability to modify such duties as required, but it has not found it necessary to do so.
The
charters for each of the Compensation Committee and the Corporate Responsibility Committee contain a general description of the
roles and tasks required to be performed by the Chair of the relevant committee.
Orientation
and Continuing Education
The
Board provides ad hoc orientation for new directors. New non-management directors are briefed on the overall role of the
Board, its committees and its directors, as well as the Company’s strategic plans, short, medium and long term corporate
objectives, current mineral properties and ongoing exploration programs, business risks and mitigation strategies, corporate governance
guidelines and existing Company policies when they become directors. However, there is no formal orientation for new members of
the Board, and this is considered to be appropriate, given the Company’s size and current level of operations. If the growth
of the Company’s operations and/or increased Board turnover warrants it, the Board would consider implementing a formal
orientation process.
The
skills and knowledge of the Board as a whole is such that no formal continuing education process is currently deemed required.
The Board is comprised of individuals with varying backgrounds, who have, both collectively, and in most cases individually, extensive
experience in running and managing public companies in the natural resource sector, and several directors are also directors of
other resource companies. Board members are encouraged to communicate with management, auditors and technical consultants to keep
themselves current with industry trends and developments and changes in legislation, with management’s assistance. The Company
will pay the reasonable costs of attendance by directors at continuing education courses and seminars with respect to corporate
governance, directors’ duties and obligations and similar matters. Board members have full access to the Company’s
records.
Reference
is made to the heading “I - Election of Directors,” under “Particular Matters to Be Acted Upon” in this
Information Circular, for a description of the principal occupations of the proposed nominees for election as members of the Board.
Board
Committees
Our
Board has established an Audit Committee, a Compensation and Organization Committee, and a Corporate Responsibility Committee,
each of which operates under a written charter that has been approved by the Board.
Our
Board has determined that the members of the Audit Committee and Compensation Committee are independent directors under Section
303A and NI 52-110, including, in the case of all of the members of our Audit Committee, the independence requirements contemplated
by Rule 10A-3 under the Exchange Act. In making such determination, the Board considered the relationships that each director
has with our Company and all other facts and circumstances that the Board deemed relevant in determining director independence,
including the beneficial ownership of our Common Shares by each director.
Audit
Committee and Audit Committee Financial Experts
Our
Audit Committee is currently comprised of Anna Castner Wightman, Michael Morris, and Nilsa Guerrero-Mahon. Our Board has determined
that Mr. Morris and Ms. Guerrero-Mahon are financial experts, as defined by the rules of the SEC and Canadian rules and regulations.
The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. During the fiscal year ended June
30, 2019, the Audit Committee met four times. A copy of the Audit Committee Charter is available on the Company’s website
at www.niocorp.com.
The
Audit Committee’s general duties and responsibilities are to:
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●
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oversee
the accounting and financial reporting processes of the Company and the audit of its
financial statements, including: (i) the integrity of the Company’s financial statements;
(ii) the Company’s compliance with legal and regulatory requirements; and (iii)
the external auditors’ qualifications and independence;
|
|
●
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resolve
disagreements (if any) between management and the external auditor regarding financial
reporting;
|
|
●
|
serve
as an independent and objective party to monitor the Company’s financial reporting
processes and internal control systems;
|
|
●
|
review
and appraise the audit activities of the Company’s external auditors;
|
|
●
|
provide
open lines of communication among the external auditors, financial and senior management
and the Board for financial reporting and control matters and meet periodically with
management and with the external auditors;
|
|
●
|
review
the annual and interim consolidated financial statements of the Company, including the
related notes, and management’s discussion and analysis thereof, for the purpose
of recommending approval by the Board prior to release;
|
|
●
|
assist
the Board in the discharge of its fiduciary responsibilities relating to the Company’s
accounting principles, reporting practices and internal controls;
|
|
●
|
provide
oversight of the management of the Company in designing, implementing and maintaining
an effective system of internal controls;
|
|
●
|
report
periodically its findings and recommendations to the Board; and
|
|
●
|
review
and revise the Audit Committee Charter as necessary with the approval of the Board provided
that the Audit Committee Charter may be amended and restated from time to time without
the approval of the Board to ensure that the composition of the Audit Committee and the
responsibilities and powers of the Audit Committee comply with the applicable laws and
stock exchange rules.
|
The
complete duties and responsibilities of the Audit Committee are more particularly set out in the Audit Committee Charter.
Relevant
Education and Experience of Audit Committee Members
The
education and experience of each member of the Audit Committee relevant to the performance of his/her responsibilities as an Audit
Committee member and, in particular, any education or experience that would provide the member with the following items, are included
in the Audit Committee members’ biographies as set forth in “Particular Matters to Be Acted Upon, I - Election of
Directors,” above:
|
1.
|
an
understanding of the accounting principles used by the Company to prepare its financial
statements;
|
|
2.
|
the
ability to assess the general application of such accounting principles in connection
with the accounting for estimates, accruals and reserves;
|
|
3.
|
experience
preparing, auditing, analyzing or evaluating financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to the breadth
and complexity of issues that can reasonably be expected to be raised by the Company’s
financial statements or experience actively supervising one or more persons engaged in
such activities;
|
|
4.
|
an
understanding of internal controls and procedures for financial reporting; and
|
|
5.
|
an
understanding of audit committee functions.
|
Reliance
on Certain Exemptions
Since
the commencement of the Company’s most recently completed financial year, the Company has not relied on the exemptions in
section 2.4 (De Minimis Non-audit Services), 3.2 (Initial Public Offerings), 3.4 (Events Outside Control of Member),
3.5 (Death, Disability or Resignation of Audit Committee Member) of NI 52-110 or an exemption from NI 52-110, in whole
or in part, granted by a securities regulator under Part 8 (Exemptions) of NI 52-110.
Reliance
on the Exemption in subsection 3.3(2) or section 3.6
Since
the commencement of the Company’s most recently completed financial year, the Company has not relied on the exemptions in
subsection 3.3(2) (Controlled Companies) or section 3.6 (Temporary Exemption for Limited and Exceptional Circumstances).
Reliance
on section 3.8
Since
the commencement of the Company’s most recently completed financial year, the Company has not relied upon section 3.8 (Acquisition
of Financial Literacy) for any of the audit committee members.
Audit
Committee Oversight
Since
the commencement of the Company’s most recently completed financial year, there has not been a recommendation of the Audit
Committee to nominate or compensate an external auditor which was not adopted by the Board.
Audit
Committee Report
The
Company’s Audit Committee oversees the Company’s financial reporting process on behalf of the Board. The Committee
has three members, each of whom is “independent” as determined under Rule 10A-3 of the Exchange Act and Section 303A
and applicable Canadian rules and regulations. The Audit Committee operates under a written charter adopted by the Board.
The
Audit Committee assists the Board by (1) overseeing the integrity of the Company’s financial reporting and internal control,
(2) overseeing the independence and performance of the Company’s independent auditors (3) and providing an avenue of communication
between management, the independent auditors and the Board.
In
the course of conducting its oversight responsibilities regarding the Company’s audited annual financial statements for
the year ended June 30, 2019, the Audit Committee reviewed and discussed the audited annual financial statements for the year
ended June 30, 2019, which appear in the Company’s Annual Report to Shareholders with management and the Company’s
independent auditors. The Audit Committee reviewed accounting principles, practices and judgments, as well as the adequacy and
clarity of the notes to the financial statements.
The
Audit Committee reviewed the independence and performance of the independent auditors who are responsible for expressing an opinion
on the conformity of the audited financial statements with accounting principles generally accepted in the United States and has
discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company
Accounting Oversight Board and the SEC.
The
Committee meets with the independent auditors to discuss their audit plans, scope and timing on a regular basis, with or without
management present. The Committee has received the written disclosures and the letter from the independent auditors required by
applicable requirements of the Public Company Accounting Oversight Board for independent auditor communications with audit committees
concerning independence, as may be modified or supplemented, and has discussed with BDO USA, LLP its independence from the Company.
Based
on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, that the
audited financial statements for the fiscal year ended June 30, 2019 be included in the Company’s Annual Report filed on
Form 10-K. The Committee and the Board have also recommended the selection of BDO USA, LLP as independent auditors for the Company
for the fiscal year ending June 30, 2020.
Submitted
by:
Nilsa
Guerrero-Mahon
Michael
Morris
Anna
Castner Wightman
Compensation
Committee
The
Board has established the Compensation Committee and has adopted a written charter for the Compensation Committee. The overall
purpose of the Compensation Committee is to act on behalf of the Board and in the best interest of the Company’s shareholders
to support the Company’s efforts to attract, retain, develop and reward employees to achieve its annual and strategic objectives.
The written charter for the Compensation Committee sets out the role of the Chair of the Compensation Committee. The written charter
does not provide for the delegation of the Compensation Committee’s authority to other persons or committees. Pursuant to
the Company’s Long-Term Incentive Plan, however, the Compensation Committee may delegate its powers, rights and duties under
the plan to a committee of the Board or to other persons, subject to applicable law. The Compensation Committee is comprised of
Joseph Carrabba as the Chairman, David Beling, and Michael Morris. All members of the Compensation Committee are independent.
None of the members of our Compensation Committee has been one of our officers or employees at any time. During the fiscal year
ended June 30, 2019, the Compensation Committee met one time. A copy of the Compensation Committee charter is available on the
Company’s website at www.niocorp.com.
The
responsibilities of the Compensation Committee generally include: (1) recommending compensation policies to the Board for approval
and thereafter implementing such policies; (2) ensuring the Company has programs in place to attract and develop management of
the highest caliber and a process to provide for the orderly succession of management; (3) assessing and reporting to the Board
on the performance of the CEO; (4) reviewing the compensation of the CEO and other officers and members of the Board and making
recommendations in respect thereof to the Board; (5) reviewing and approving any proposed amendments to the Company’s Long-Term
Incentive Plan; (6) making recommendations to the Board concerning equity compensation grants; and (7) overseeing and considering
the implications and risks associated with the Company’s compensation policies.
The
Compensation Committee is responsible for assisting the Board in monitoring, reviewing and approving compensation policies and
practices of the Company and its subsidiaries and administering the Company’s Long-Term Incentive Plan. With regard to the
CEO, the Compensation Committee is responsible for reviewing and approving corporate goals and objectives relevant to the CEO’s
compensation, evaluating the CEO’s performance in light of those goals and objectives and making recommendations to the
Board with respect to the CEO’s compensation level based on this evaluation. In consultation with the CEO, the Compensation
Committee makes recommendations to the Board on the framework of executive remuneration and its cost and on specific remuneration
packages for each of the directors and officers other than the CEO, including recommendations regarding awards under equity compensation
plans. For more information regarding the role of executive officers in determining or recommending the amount or form of executive
compensation, see “Executive Compensation” below. The Compensation Committee also reviews executive compensation disclosure
before the Company publicly discloses the information. The Compensation Committee’s decisions are typically reflected in
consent resolutions.
The
members of the Compensation Committee are all current or former executive officers or directors of public companies in the mineral
exploration, mining, and manufacturing sectors and each has experience in reviewing and establishing compensation for executives
in companies at a similar size and stage of development as the Company. The Compensation Committee members’ collective skills
and experience within the resource sector provides them with an understanding of the Company’s success factors and risks
and enables them to make decisions on the suitability of the Company’s compensation policies and practices.
Members
of the Compensation Committee review compensation paid for directors and named executive officers of companies of similar size
and stage of development in the mineral exploration industry and determine appropriate compensation reflecting the need to provide
incentive and compensation for the time and effort expended by the directors and senior management while taking into account the
financial and other resources of the Company. In setting the compensation, the Compensation Committee reviews the performance
of the non-executive officers in light of the Company's objectives and considers other factors that may have impacted the success
of the Company in achieving its objectives over the preceding year.
Compensation
Committee Interlocks and Insider Participation
During
the fiscal year ended June 30, 2019, Joseph Carrabba, David Beling and Michael Morris served on the Compensation Committee. None
of these individuals was an employee or an officer of the Company during the 2019 fiscal year, was formerly an officer of the
Company, or had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. In addition, during the
fiscal year ended June 30, 2019, none of our executive officers served on the compensation committee or full board of any company
for which any of Messrs. Carrabba, Beling, or Morris served as an executive officer.
Corporate
Responsibility Committee
The
Corporate Responsibility Committee is responsible for assisting the Board in overseeing (i) the Company’s environmental,
safety and health and corporate social responsibility policies and programs and (ii) the Company’s environmental, safety
and health and corporate social responsibility performance. The Corporate Responsibility Committee is comprised of Anna Castner
Wightman as the Chairperson, Mark Smith and Joseph Carrabba. There were no meetings of the Corporate Responsibility Committee
during the fiscal year ended June 30, 2019, as planned Company activities in the Elk Creek Project area were minimal.
Nomination
of Directors
The
Company does not have a nominating committee, and the Board as a whole is responsible for reviewing proposals for new nominees
to the Board and conducting such background reviews, assessments, interviews and other procedures as it believes necessary to
ascertain the suitability of a particular nominee. The Board believes that given the small size of the Board and preponderance
of independent directors on the Board that a separately designated nominating committee is not required to maintain Board independent
oversight and ensure the selection of qualified nominees to the Board. Further, the Board believes that discussing and selecting
nominees with the entire Board provides a better assessment of nominees for future Board cohesion. The selection of potential
nominees are generally the result of recruitment efforts by individual Board members, including both formal and informal discussions
among Board members and with the CEO, and are usually based upon the desire to have a specific set of skills or expertise included
on the Board. The Board does not have a written policy with respect to the director nomination process.
The
appointment of new directors (either to fill vacancies or to add additional directors as permitted by applicable corporate legislation)
or the nomination for election as a director of a person not currently a director by the shareholders at an annual general meeting
is carried out by the Board.
Recommendations
to the Board
The
Board will consider recommendations for director nominees made by shareholders and others. For consideration by the Board, the
nominating shareholder or other person must provide the Company’s Vice President, General Counsel and Corporate Secretary
John F. Ashburn, Jr., at the Company’s principal executive offices, with information about the nominee, including the detailed
background of the suggested candidate.
Outside
of the participation of Mark A. Smith, the CEO, on the Board as a director, no shareholder or shareholders holding 5% or more
of the Company’s outstanding stock, either individually or in aggregate, has recommended a nominee for election to the Board
as of the date of this Information Circular.
Board
Diversity
The
Board has not adopted a written policy or set targets relating to the identification and nomination of diverse directors or executive
officers as it does not believe, at the present time, that it is necessary for the Company to have a written policy. The Board
is committed to nominating the best individuals with relevant board and industry experience to fill director roles and executive
officer positions. The Board believes that diversity is important to ensure that Board members and senior management provide the
necessary range of perspectives, experience and expertise required to achieve the Company’s goals and strategic objectives.
The Board recognizes that gender diversity is a significant aspect of diversity and acknowledges the important role that women
with appropriate and relevant skills and experience can play in contributing to diversity of perspective in the boardroom and
in senior management roles.
The
Board reviews the general and specific criteria applicable to candidates to be considered for nomination to the Board. The Board
aims to maintain the composition of the Board in a way that provides the best mix of skill and experience to guide the Company’s
long-term strategy and ongoing business operations. Accordingly, in searches for new directors or officers, the Board considers
the level of gender and cultural representation and diversity within its leadership ranks, and this is just one of several factors
used in its search process.
Currently,
the Company has two female board members and no female executive officers.
Assessments
The
Board has traditionally monitored, but not formally assessed, its performance or the performance of individual directors or committee
members or their contributions. The Compensation Committee has, as part of its mandate, the responsibility for evaluating the
performance of the CEO and Chair of the Board. In the future, the Compensation Committee may consider appropriate processes for
evaluations of individual directors and may review the processes adopted by similar sized public natural resource companies in
order to assist it in this regard.
Board
of Directors Tenure
The
Board has not adopted policies imposing an arbitrary term or retirement age limit in connection with individuals nominated for
election as directors as it does not believe that such a limit is in the best interests of the Company at this time. The Board
annually reviews the composition of the Board, including the age and tenure of individual directors. The Board strives to achieve
a balance between the desire to have a depth of experience from its members and the need for renewal and new perspectives.
Insider
Participation and Other Relationships
Mark
A. Smith, our CEO, is also a member of our board of directors.
Since
June 17, 2015, we have certain debt obligations to Mr. Smith as more fully described under “Certain Relationships and Related
Person Transactions.”
Ethical
Business Conduct
The
Board expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent
with the highest level of integrity. Management is expected to execute the Company’s business plan and to meet performance
goals and objectives according to the highest ethical standards.
In
addition, directors and senior officers are bound by the provisions of the Company’s Articles and the BCBCA, which set forth
how any conflicts of interest are to be dealt with. In particular, any director who has a material interest in a particular transaction
is required to disclose such interest and to refrain from voting with respect to the approval of any such transaction.
Code
of Business Conduct and Ethics
Our
Board has adopted a written Code of Business Conduct and Ethics applicable to our employees, officers and directors, including
those officers responsible for financial reporting. The Code of Business Conduct and Ethics is available on our website at www.niocorp.com.
If the Board amends the Code of Business Conduct and Ethics or grants a waiver, including an implicit waiver, from the Code of
Business Conduct and Ethics, the Company will disclose the information on its internet website. The waiver information will remain
on the website for at least twelve months after the initial disclosure of such waiver. Given the current size of the Company workforce,
and the lack of significant operations, the Board monitors compliance through periodic discussions with executive management.
Board
Role in Risk Oversight
Our
Board is responsible for overseeing the Company’s management of risk. The Board strives to effectively oversee the Company’s
enterprise-wide risk management in a way that balances managing risks with enhancing the long-term value of the Company for the
benefit of the shareholders. The Board understands that its focus on effective risk oversight is critical to setting the Company’s
tone and culture towards effective risk management. To administer its oversight function, the Board seeks to understand the Company’s
risk philosophy by having discussions with management to establish a mutual understanding of the Company’s overall appetite
for risk. Our Board maintains an active dialogue with management about existing risk management processes and how management identifies,
assesses and manages the Company’s most significant risk exposures. Our Board expects frequent updates from management about
the Company’s most significant risks so as to enable it to evaluate whether management is responding appropriately.
Our
Board relies on each of its committees to help oversee the risk management responsibilities relating to the functions performed
by such committees. Our Audit Committee periodically discusses with management the Company’s major financial risk exposures
and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk
management policies. Our Compensation Committee helps the Board to identify the Company’s exposure to any risks potentially
created by our compensation programs and practices. Each of these committees is required to make regular reports of its actions
and any recommendations to the Board, including recommendations to assist the Board with its overall risk oversight function.
Board
Leadership Structure
The
Board has reviewed the Company’s current Board leadership structure in light of the composition of the Board, the Company’s
size, the nature of the Company’s business, the regulatory framework under which the Company operates, the Company’s
shareholder base, the Company’s peer group and other relevant factors. Considering these factors, the Board has determined
not to have a separate CEO and Chairman of the Board and to have a separate Lead Director who is independent. The Chairman of
the Board is a non-executive position. The Board has determined that this structure is currently the most appropriate Board leadership
structure for the Company. The Board noted the following factors in reaching its determination:
|
●
|
The
Board acts efficiently and effectively under its current structure.
|
|
●
|
The
structure of the same individual holding the positions of CEO and Chairman of the Board,
with a separate, independent Lead Director, puts the Company in the best position to
efficiently handle major issues facing the Company on a day-to-day and long-term basis,
while ensuring that the Board is in the best position to have an independent director
identify key risks and developments facing the Company and to have those risks and developments
brought promptly to the Board’s attention.
|
|
●
|
This
structure eliminates the potential for confusion and duplication of efforts at the highest
executive level.
|
|
●
|
Companies
within the Company’s peer group utilize similar Board structures.
|
Fiscal
2019 Director Compensation
For
fiscal year 2019, the Company had six directors, one of which is also a named executive officer, Mr. Smith. For a description
of the compensation paid to Mr. Smith, see “Fiscal 2019 Summary Compensation Table” below.
The
following table sets forth all compensation the Company granted to our directors, other than Mark A. Smith, for the fiscal year
ended June 30, 2019:
Name
|
|
Option Awards(1)
($)
|
|
|
Total
($)
|
|
Joseph Carrabba
|
|
$
|
52,844
|
|
|
$
|
52,844
|
|
David Beling
|
|
$
|
48,779
|
|
|
$
|
48,779
|
|
Michael Morris
|
|
$
|
48,779
|
|
|
$
|
48,779
|
|
Anna Castner Wightman
|
|
$
|
48,779
|
|
|
$
|
48,779
|
|
Anna Guerrero-Mahon
|
|
$
|
48,779
|
|
|
$
|
48,779
|
|
|
(1)
|
Reflects
the grant date fair value of the Option awards granted during the 2019 fiscal year, consisting of 325,000 Options for Mr. Carrabba
and 300,000 Options for each remaining Board member, in each case at an exercise price of $0.41 per share (using a spot exchange
rate of C$1.3202 to US$1.00) on November 15, 2018, computed in accordance with Financial Accounting Standards Board Accounting
Standards Codification (“FASB ASC”) Topic 718. Assumptions used in the calculation of these amounts are described
in Note 8 in the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K
for the fiscal year ended June 30, 2019. The aggregate number of Option awards outstanding for each non-employee director listed
in the table above at the end of fiscal 2019 was as follows: Mr. Carrabba, 1,325,000 Options; Mr. Beling, 1,100,000 Options; Mr.
Morris, 1,200,000 Options; Ms. Wightman, 1,300,000 Options; and Ms. Guerrero-Mahon, 800,000 Options. Unvested Options held by
directors generally vest as follows: 50% six months after the grant date, 25% 12 months after the grant date, and the remainder
18 months after the grant date.
|
For
the fiscal year ended June 30, 2019, the directors of the Company did not receive a cash fee (or any other compensation) for serving
on the board of directors of the Company. The directors of the Company have no standard compensation arrangements, or any other
arrangements, with the Company, except as herein disclosed. Executive officers of the Company who also act as directors of the
Company do not receive any additional compensation for services rendered in such capacity. See “Fiscal 2019 Summary Compensation
Table” below.
Communications
with Directors
We
have not adopted a formal process for shareholder communications with the Board. We believe it is appropriate not to have a formal
process for shareholder communications with the Board because historically we have received such shareholder communications very
infrequently. Nevertheless, we have tried to ensure that the views of shareholders are heard by the Board or individual directors,
as applicable, and that appropriate responses are provided to shareholders in a timely manner. We believe our responsiveness to
shareholder communications to the Board has been good. A shareholder may submit any communication with directors to us at our
corporate offices, to the attention of John F. Ashburn, Jr., Vice President, General Counsel and Corporate Secretary.
EXECUTIVE
OFFICERS
As
of September 12, 2019, the executive officers of the Company, their ages, their business experiences and their principal occupations
during the past five years were as follows:
Name
|
|
Age
|
|
|
Position
|
|
Date of Appointment
|
Mark A. Smith
|
|
60
|
|
|
CEO, President, Executive Chairman and Director
|
|
CEO and Director:
September 23, 2013
President and Executive Chairman: May 31, 2015
|
Neal Shah
|
|
45
|
|
|
Chief Financial Officer
|
|
July 1, 2016
|
Scott Honan
|
|
48
|
|
|
Vice President, Business Development
|
|
May 6, 2014
|
John Ashburn, Jr.
|
|
64
|
|
|
Vice President, General Counsel and Corporate Secretary
|
|
April 2, 2015
|
Jim Sims
|
|
58
|
|
|
Vice President, External Affairs
|
|
November 2, 2015
|
Executive
officers serve at the pleasure of the Board. The following sets forth a brief description of the business experience of each executive
officer of the Company:
Mark
Smith – Executive Chairman, Director, President and Chief Executive Officer
Please
see the description of Mr. Smith’s business experience under “Particulars of Matters to Be Acted Upon — I –
Election of Directors,” above.
Neal
Shah – Chief Financial Officer
Mr.
Shah joined NioCorp in September 2014 as Vice President of Finance, and now serves as the Company’s CFO. Mr. Shah served
as Finance Manager at Covidien Ltd., a medical device company since acquired by Medtronic, from May 2014 through September 2014.
From April 2011 until May 2014, he held the positions of Senior Manager of Corporate Development and M&A and more recently
the Director of Strategy and Business Planning at Molycorp. Mr. Shah graduated from the University of Colorado with a BSc in Mechanical
Engineering in 1996, and from Purdue University with an MBA in 2002. Since the completion of his MBA, Mr. Shah also held key finance
roles with Intel Corporation and IBM.
Scott
Honan – Vice President, Business Development
Mr.
Honan joined NioCorp in May 2014 and now serves as Vice President, Business Development. He also serves as President of Elk Creek
Resources Corporation, the NioCorp subsidiary that is developing the Elk Creek Project in Nebraska. Prior to his work at NioCorp,
Mr. Honan served in several leadership capacities at Molycorp from February 2001 until May 2014, including as Vice President/Director
Health, Environment, Safety and Sustainability and General Manager and Environmental Manager from July 2011 to May 2014. With
over 26 years of experience in the gold and rare earth industries, Mr. Honan is a graduate of Queen’s University in Mining
Engineering in both Mineral Processing (B.Sc. Honors) and Environmental Management (M.Sc.) disciplines.
John
Ashburn, Jr. – Vice President, General Counsel and Corporate Secretary
An
attorney with 38 years of experience, including 28 years in extractive industries, Mr. Ashburn joined NioCorp in January 2015
and was appointed to Vice President, General Counsel and Corporate Secretary in April 2015. Since April 2018, Mr. Ashburn has
also served as the Chief Legal Officer of International Battery Metals, Inc. He served as Vice President, Chief Legal Officer
and a member of the Board of Directors of Simbol, Inc., a privately held development stage Lithium production company, from May
2013 until January 2015, and was Executive Vice President and General Counsel of Molycorp from December 2008 until April 2013.
Prior to that, he held senior legal positions with Chevron and Unocal. Mr. Ashburn holds a Juris Doctorate from Northern Illinois
University, School of Law.
Jim
Sims - Vice President, External Affairs
Mr.
Sims has more than 26 years of experience in devising and executing marketing, media relations, public affairs, and investor relations
operations for companies in the mining, chemical, manufacturing, utility, and renewable energy sectors. He joined NioCorp in November
2015, after serving for more than five years as Director (and then Vice President) of Corporate Communications for Molycorp from
March 2010 through November 2015. Since May 2016, Mr. Sims has also served as Director of Investor and Public Relations for IBC.
Mr. Sims was President and CEO of Policy Communications, Inc. from 1998 until 2010, and served as White House Director of Communications
for the Energy Policy Development Group. A former U.S. Senate Chief of Staff, he is the co-founder and former Executive Director
of the Geothermal Energy Association, and he has served as Board Chairman of the Rare Earth Technology Alliance. He is an honors
graduate of Georgetown University.
EXECUTIVE
COMPENSATION
The
following table sets out the compensation for the fiscal years ended June 30, 2019 and 2018 for the individual who served as the
Company’s CEO during fiscal year 2019, as well as the Company’s three other most highly compensated executive officers
other than the CEO who were serving at the end of the last fiscal year, including two executive officers who were equally compensated
(collectively, the “named executive officers”):
Fiscal
2019 Summary Compensation Table
Name
and Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
|
Option
Awards
(1)
($)
|
|
|
Total
($)
|
|
Mark
A Smith, Chief Executive Officer, President (2)
|
|
2019
|
|
$
|
270,000
|
|
|
$
|
121,947
|
|
|
$
|
391,947
|
|
|
|
2018
|
|
$
|
270,000
|
|
|
$
|
93,957
|
|
|
$
|
363,957
|
|
Scott Honan,
Vice President Business Development
|
|
2019
|
|
$
|
225,000
|
|
|
$
|
56,909
|
|
|
$
|
281,909
|
|
|
|
2018
|
|
$
|
225,000
|
|
|
$
|
37,583
|
|
|
$
|
262,583
|
|
Neal Shah,
Chief Financial Officer
|
|
2019
|
|
$
|
200,000
|
|
|
$
|
56,909
|
|
|
$
|
256,909
|
|
|
|
2018
|
|
$
|
200,000
|
|
|
$
|
37,583
|
|
|
$
|
237,583
|
|
Jim Sims,
Vice President External Affairs
|
|
2019
|
|
$
|
200,000
|
|
|
$
|
56,909
|
|
|
$
|
256,909
|
|
|
|
2018
|
|
$
|
200,000
|
|
|
$
|
37,583
|
|
|
$
|
237,583
|
|
|
(1)
|
Reflects
the grant date fair value of the Option awards granted during the reported fiscal years. Fiscal year 2019 grants consisted of
750,000 Options for Mr. Smith and 350,000 Options for each of Messrs. Honan, Shah and Sims, in each case at an exercise price
of $0.41 per share (using a spot exchange rate of C$1.3202 to US$1.00) on November 15, 2018. Grant date fair values were computed
in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are described in Note 8 in the Company’s
consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30,
2019.
|
|
(2)
|
Disclosed
amounts paid to KMSmith LLC, an entity controlled by Mr. Smith.
|
Narrative
Disclosure to Summary Compensation Table
Compensation
Governance
The
Company’s Compensation Committee determines an appropriate amount of compensation for the Company’s executives, reflecting
the need to provide incentives and compensation for the time and effort expended by the executives while taking into account the
financial and other resources of the Company. The Compensation Committee has the authority to engage and compensate, at the expense
of the Company, any outside advisor that it determines to be necessary to permit it to carry out its duties (including compensation
consultants and advisers), but it did not retain any such outside consultants or advisors during the fiscal year ended June 30,
2019.
Compensation
Program Design
The
Board, in conjunction with the Compensation Committee, determines compensation and rewards to senior management on the basis of
individual and corporate performance, both in the short term and the long term, while at the same time being mindful of the responsibility
that the Company has to its shareholders. In general, the Compensation Committee considers that its compensation program should
be relatively simple in concept, given the current stage of the Company’s development, and that its focus should be balanced
between reasonable current compensation and longer-term compensation tied to performance of the Company as a whole.
The
Compensation Committee has not established a formal set of benchmarks or performance criteria to be met by the Company’s
named executive officers; rather, the members of the Compensation Committee use their own subjective assessments of the level
of success of the Company to determine, collectively, whether or not the named executive officers are successfully achieving the
Company’s business plan and strategy and the degree to which they have performed in that regard. The Compensation Committee
has not established any set or formal formula for determining named executive officer compensation, either as to the amount thereof
or the specific mix of compensation elements, and compensation (and adjustments from time to time) is set through informal discussions
at the Compensation Committee level.
Key
Elements of Named Executive Officer Compensation
Base
Salaries
The
members of the Compensation Committee use their own experience and familiarity with the industry, and consider the factors described
above, to determine what they believe to be reasonable base salaries for our named executive officers. The base salaries of the
named executive officers are set at levels which are considered by the members of the Compensation Committee to be competitive,
thereby enabling the Company to compete for and retain executives critical to the long-term success of the Company. Initially,
base salaries (or, for Mr. Smith, base consulting fees) are set through negotiation when executive officers join the Company (with
direct input from the Compensation Committee) and are subsequently reviewed each fiscal year to determine if adjustments are required.
There were no changes to named executive officer salaries during the fiscal year ended June 30, 2019.
Bonus
Compensation
The
Board has discretion, where deemed appropriate and financially affordable for the Company, to grant a cash bonus to a named executive
officer based on the performance of both the individual named executive officer and the Company. No such cash bonuses were granted
to any named executive officer during fiscal 2019.
Option-Based
Awards
The
incentive portion of each named executive officer’s compensation package consists primarily of Options awarded under the
Company’s Long-Term Incentive Plan. Share ownership opportunities through the grant of Options are provided to align the
interests of senior management of the Company with the longer-term interests of the shareholders of the Company.
The
Long-Term Incentive Plan is administered by the Compensation Committee, and is intended to advance the interests of the Company
through the motivation, attraction and retention of officers and other key employees, directors and consultants of the Company
and affiliates of the Company and to secure for the Company and its shareholders the benefits inherent in the ownership of Common
Shares of the Company by officers and other key employees, directors and consultants of the Company and affiliates of the Company.
Grants of Options under the Long-Term Incentive Plan are proposed/recommended by the CEO, and reviewed by the Compensation Committee.
The Compensation Committee can approve, modify or reject any proposed grants, in whole or in part. In general, the allocation
of available Options among the eligible participants in the Long-Term Incentive Plan is on an ad hoc basis, and there is no set
formula for allocating available Options, nor is there any fixed benchmark or performance criteria to be achieved in order to
receive an award of or vest in Options.
The
Compensation Committee does not consider the accounting value of any such Option grants in determining the number of Options to
award to any individual, as any such “value” is an accounting measure that is not relevant to incentivizing the individual.
The timing of the grants of Options is determined by the Compensation Committee, and there is no regular interval for the awarding
of Option grants. In general, a higher level of responsibility will result in a larger grant of Options. Because the number of
Options available is limited, in general, the Compensation Committee aims to have individuals at what it subjectively considers
to be the same levels of responsibility holding equivalent numbers of Options, with additional grants being allocated for individuals
who the Compensation Committee believes are in a position to more directly affect the success of the Company through their efforts.
The
Compensation Committee looks at the overall number of Options held by an individual (plus the exercise prices and remaining terms
of existing Options and whether any previously granted Options have expired out of the money or were exercised) and takes such
information into consideration when reviewing proposed new grants. After considering the CEO’s recommendations and the foregoing
factors, the resulting proposed Option grant (if any) is then submitted to the Board for approval.
During
the fiscal year ended June 30, 2019, the Compensation Committee approved all recommendations for the grant of Options proposed
by management, and the named executive officers were granted the following number of Options effective November 15, 2018, each
with an exercise price per share of C$0.54 ($0.41 per share, using a spot exchange rate of C$1.3202 to US$1.00 on November 15,
2018): Mr. Smith, 750,000 Options; Mr. Honan, 350,000 Options; Mr. Shah, 350,000 Options; and Mr. Sims, 350,000 Options. These
Options generally vest on the following schedule: 50% six months after the grant date, 25% 12 months after the grant date, and
the remainder 18 months after the grant date. Options generally remain exercisable until five years after the grant date.
Employment
Agreements
The
Company and KMSmith, LLC (“KMSmith”) entered into a Consulting Agreement effective September 23, 2013 (the
“Smith Agreement”). Under the terms of the Smith Agreement, KMSmith, through Mark Smith, performs the duties
and responsibilities of the Chief Executive Officer of the Company and related services, for an indefinite term at a base rate
of $270,000 per year, generally payable in equal monthly installments of $22,500. KMSmith also received a one-time signing bonus
of $165,000. Any other bonuses and incentive payments are payable at the discretion of the Board. Mr. Smith is eligible to receive
Options under the Long-Term Incentive Plan, as determined by the Board.
The
Company may terminate the Smith Agreement at any time without notice or payment if (1) KMSmith commits a material breach of the
Smith Agreement (subject to a cure period in certain circumstances), (2) Mr. Smith dies or becomes permanently disabled, or (3)
certain other “for cause” scenarios occur (as further described in the Smith Agreement). In the event the Smith Agreement
is terminated by the Company for any other reason or if KMSmith terminates the Smith Agreement on the occurrence of a Triggering
Event, the Company shall pay KMSmith a lump sum termination fee equal to the annual salary in effect at the termination date as
well as the average of any annual bonuses or other cash incentive payments for two calendar years immediately preceding the year
the termination occurs. A Triggering Event is defined as: a substantial change in the nature of services to be performed by KMSmith;
a material breach by the Company of the Smith Agreement that is not remedied within 30 days of notice; the cessation of the Company
as a going concern; the failure of the Company to pay a material amount due pursuant to the Smith Agreement within 30 days of
the due date; or a material reduction in salary or any other form of compensation payable by the Company to KMSmith, except where
all senior executives or consultants of the Company are subject to relatively similar reductions in such values. KMSmith may terminate
the Smith Agreement for a reason other than a Triggering Event on 90 days’ written notice and, should the Company immediately
accept such termination notice, it shall pay KMSmith the sum of $69,904. Should a change of control of the Company occur (as that
term is defined in the Smith Agreement) and, within one year, either a Triggering Event occurs and KMSmith terminates the Smith
Agreement or KMSmith’s engagement is terminated by the Company under circumstances that would give rise to a termination
payment in the absence of a change of control, then KMSmith shall be entitled to receive an amount equal to the annual salary
in effect at the termination date as well as the average of any annual bonuses or other cash payments for two calendar years immediately
preceding the year the termination occurs. In the event KMSmith is entitled to a termination payment with respect to a change
of control, any Options previously granted to Mr. Smith shall become fully vested and shall remain exercisable for the original
term of grant despite a termination of KMSmith. Termination payments under the Smith Agreement are generally contingent on a release
of claims by KMSmith. The Smith Agreement also includes customary confidentiality and six-month employee non-solicitation provisions.
If
the Smith Agreement is terminated by the Company for any reason other than as set out in the Smith Agreement, if KMSmith terminates
the Smith Agreement on the occurrence of a Triggering Event, or should a change of control of the Company occur and within one
year, either a Triggering Event occurs and KMSmith terminates the Smith Agreement or KMSmith’s engagement is terminated
without the occurrence of a Triggering Event, effective as of June 30, 2019, KMSmith would have been entitled to a payment of
$270,000.
No
other named executive officer is party to an employment agreement with the Company.
Stock
Options Under Long-Term Incentive Plan
In
accordance with the Long-Term Incentive Plan, the Company granted Options to its named executive officers during the Company’s
2019 fiscal year; no other equity-based awards were granted to the named executive officers during the 2019 fiscal year.
The
following table sets forth the outstanding equity awards for each named executive officer at June 30, 2019. The Company has not
granted full value stock-based awards to any of its named executive officers.
Outstanding
Equity Awards at 2019 Fiscal Year-End
|
|
Option Awards
|
Name
|
|
Grant Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1)
|
|
|
|
Option
Exercise
Price ($)(2)
|
|
|
Option
Expiration
Date
|
Mark A. Smith
|
|
11/9/2017
|
|
|
750,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
11/15/2018
|
|
|
375,000
|
|
|
|
375,000
|
|
|
|
0.41
|
|
|
11/15/2023
|
|
|
1/19/2016
|
|
|
750,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
650,000
|
|
|
|
—
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
2,525,000
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neal Shah
|
|
11/9/2017
|
|
|
300,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
11/15/2018
|
|
|
175,000
|
|
|
|
175,000
|
|
|
|
0.41
|
|
|
11/15/2023
|
|
|
1/19/2016
|
|
|
350,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
400,000
|
|
|
|
—
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
1,225,000
|
|
|
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Honan
|
|
11/9/2017
|
|
|
300,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
11/15/2018
|
|
|
175,000
|
|
|
|
175,000
|
|
|
|
0.41
|
|
|
11/15/2023
|
|
|
1/19/2016
|
|
|
500,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
400,000
|
|
|
|
—
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
1,375,000
|
|
|
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jim Sims
|
|
11/9/2017
|
|
|
300,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
11/15/2018
|
|
|
175,000
|
|
|
|
175,000
|
|
|
|
0.41
|
|
|
11/15/2023
|
|
|
1/19/2016
|
|
|
500,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
400,000
|
|
|
|
—
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
1,375,000
|
|
|
|
175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,500,000
|
|
|
|
900,000
|
|
|
|
|
|
|
|
|
(1)
|
Unvested
Options generally vest as follows: 50% six months after the grant date, 25% 12 months after the grant date, and the remainder
18 months after the grant date. Options generally remain exercisable until five years after the grant date.
|
|
(2)
|
Based
on a spot exchange rate of C$1.3087 to US$1.00 on June 30, 2019.
|
Retirement
Plan Benefits
Each
named executive officer is eligible to participate in the Company’s 401(k) savings plan, which is designed to reward continued
employment with the Company and assist participants with financial preparation for retirement. All amounts credited under the
401(k) savings plan relate to participant contributions. The Company does not currently make matching or other contributions to
the 401(k) savings plan.
Termination
and Change of Control Benefits
Except
as described above, the Company has not entered into any plans or arrangements in respect of remuneration received or that may
be received by the named executive officers in respect of compensating such officers or directors in the event of a change of
control, termination of employment (as a result of resignation, retirement, change of control, etc.) or a change in responsibilities
following a change of control.
EQUITY
COMPENSATION PLANS
The
Company has maintained equity compensation plans under which Options have been granted. Option grants have been determined by
the Company’s directors and are only provided in compliance with applicable laws and regulatory policy. The following information
is provided with respect to compensation plans (including individual compensation arrangements) under which equity securities
are authorized for issuance as of June 30, 2019.
Equity
Compensation Plan Information
|
|
Plan Category
|
|
|
Number of Securities to be Issued Upon
Exercise of
Outstanding Options, Warrants, and Rights
|
|
|
|
Weighted-Average Exercise Price of Outstanding
Options, Warrants,
and Rights(2)
|
|
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Second Column)
|
|
Equity Compensation Plans Approved by Security Holders (1)
|
|
|
19,449,909
|
|
|
|
C$ 0.62
|
|
|
|
1,001,986
|
(3)
|
Equity Compensation Plans Not Approved by Security Holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
19,449,909
|
|
|
|
C$ 0.62
|
|
|
|
1,001,986
|
(3)
|
|
(1)
|
Represents
Options granted pursuant to the Company’s 2016 Incentive Stock Option Plan (the “Option Plan”) and the
Long-Term Incentive Plan.
|
|
(2)
|
Or
$0.47 per share, based on a spot exchange rate of C$1.3087 to US$1.00 as of June 30, 2019.
|
|
(3)
|
Generally,
the aggregate number of Common Shares reserved for issuance to participants under the Long-Term Incentive Plan, together with
all other security based compensation arrangements of the Company, including with respect to Options outstanding under the Option
Plan, may not exceed 10% of the issued and outstanding Common Shares from time to time, and the Common Shares reserved for issuance
upon settlement of share units shall not exceed 5% of the issued and outstanding Common Shares from time to time. Further, and
subject to the adjustment provisions of the Long-Term Incentive Plan, the aggregate number of Common Shares actually issued or
transferred by the Company upon the exercise of Incentive Stock Options (as defined below) will not exceed 20,451,895 Common Shares.
Common Shares subject to any grant (or any portion thereof) that are issued upon exercise or settlement, forfeited, surrendered,
cancelled, unearned or otherwise terminated will again be available for grant under the Long-Term Incentive Plan.
|
Description
of the Long-Term Incentive Plan
On
November 9, 2017, NioCorp’s shareholders approved the adoption of the Long-Term Incentive Plan.
As
of the date of this Information Circular there are 19,449,909 Options outstanding under the Option Plan and the Long-Term Incentive
Plan, which number represents approximately 8.3% of the Company’s currently issued and outstanding Common Shares.
The
following table presents the burn rates for the Long-Term Incentive Plan since inception:
Fiscal Year Ending
June 30
|
|
Number of awards granted
|
|
Weighted average number of Common Shares outstanding
|
|
Burn rate
|
|
2019
|
|
4,445,000
|
|
223,160,189
|
|
2.0%
|
|
2018
|
|
3,925,000
|
|
207,255,111
|
|
1.9%
|
|
General
Description of the Plan
The
Long-Term Incentive Plan is administered by the Compensation Committee. Options are granted by the Board based upon the recommendations
of the Compensation Committee. The Long-Term Incentive Plan will remain in effect, unless sooner terminated, until November 9,
2027, at which time it will terminate. After the Long-Term Incentive Plan is terminated, no grants may be made under the Long-Term
Incentive Plan but grants previously made will remain outstanding in accordance with their applicable terms and conditions and
the Long-Term Incentive Plan’s terms and conditions. A brief description of the Long-Term Incentive Plan is as follows:
Eligibility
Under
the Long-Term Incentive Plan, the Board may in its discretion from time to time grant Options and share units in the form of Restricted
Share Units (“RSUs”) and Performance Share Units(“PSUs”) to directors, employees and certain
other service providers (as defined in the Long-Term Incentive Plan) of the Company and affiliated entities selected by the Board.
As of September 12, 2019, there were approximately ten employees, five independent directors, and three to five other service
providers of the Company expected to participate in the Long-Term Incentive Plan.
Administration
The
Long-Term Incentive Plan will generally be administered by the Board, which will have full and complete discretionary authority
to, among other things, and subject to the express limitations under the Long-Term Incentive Plan: (1) interpret the Long-Term
Incentive Plan and grant agreements thereunder; (2) determine the eligible persons who may receive grants under the Long-Term
Incentive Plan and the terms of such grants (including the number of Common Shares subject to such grants or the value of such
grants and the applicable vesting conditions); and (3) amend the terms of a grant agreement or other documents evidencing grants.
The Board may, in its discretion, but subject to applicable law and stock exchange requirements, delegate its powers under the
Long-Term Incentive Plan to a committee of the Board, or to a person or persons, as it may determine from time to time. However,
the Board will not delegate any such powers with respect to the grant, amendment, administration or settlement of any award to
the extent delegation is not consistent with applicable law or stock exchange requirements, and provided that the composition
of the committee of the Board, person or persons, as the case may be, will comply with applicable law and stock exchange requirements.
Further, provided it complies with the Long-Term Incentive Plan, the Board may appoint or engage a trustee, custodian or administrator
to administer or implement the Long-Term Incentive Plan or any aspect of it.
Share
Limits
Subject
to adjustment as described in the Long-Term Incentive Plan, the aggregate number of Common Shares that may be reserved for issuance
to participants under the Long-Term Incentive Plan, together with all other security based compensation arrangements of the Company,
including with respect to Options outstanding under the Option Plan, may not exceed 10% of the issued and outstanding Common Shares
from time to time, and the Common Shares reserved for issuance upon settlement of share units shall not exceed 5% of the issued
and outstanding Common Shares from time to time. The Long-Term Incentive Plan limits the maximum number of Common Shares issued
to insiders (as defined under TSX rules for this purpose) within any one-year period, or issuable to insiders at any time, in
the aggregate, under all security-based compensation arrangements (including the Long-Term Incentive Plan) to 10% of the then
issued and outstanding Common Shares. The Long-Term Incentive Plan also limits the aggregate number of Common Shares that may
be reserved for issuance to any one participant under the Long-Term Incentive Plan, together with all other security-based compensation
arrangements of the Company, to 5% of the then issued and outstanding Common Shares (on a non-diluted basis). Under the Long-Term
Incentive Plan, Options and share units granted to non-employee directors, together with all other equity awards, are limited
to an annual equity award value of C$150,000 per non-employee director. The total value of Options issuable to a non-employee
director in a one-year period is limited to C$100,000. Further, and subject to the adjustment provisions of the Long-Term Incentive
Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of Incentive Stock
Options (as defined below) will not exceed 20,451,895 Common Shares.
For
purposes of computing the total number of Common Shares available for grant under the Long-Term Incentive Plan or any other security-based
compensation arrangement of the Company, Common Shares subject to any grant (or any portion thereof) that are issued upon exercise
or settlement, forfeited, surrendered, cancelled, unearned or otherwise terminated will again be available for grant under the
Long-Term Incentive Plan.
Subject
to applicable law and stock exchange requirements, in the event of any change in or impact to the Common Shares by reason of any
dividend (other than dividends in the ordinary course), split, recapitalization, reclassification, amalgamation, arrangement,
merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution
of assets, issuance of rights or warrants to purchase securities, combination or exchange of Common Shares or distribution of
rights to holders of Common Shares or any other relevant changes to or impact to the authorized or issued capital of the Company,
if the Board determines that an equitable adjustment should be made, such adjustment shall be made by the Board to (1) the number
of Common Shares subject to the Long-Term Incentive Plan, (2) the securities into which the Common Shares are changed or are convertible
or exchangeable, (3) any Options then outstanding, (4) the exercise price in respect of such Options, (5) the number of share
units outstanding under the Long-Term Incentive Plan, and/or (6) other award terms. However, any such adjustment to the number
of Incentive Stock Options that may be issued or transferred under the Long-Term Incentive Plan will be made only if and to the
extent that such adjustment would not cause any Option intended to qualify as an Incentive Stock Option to fail to so qualify.
Moreover, in the event of any such transaction or event or in the event of a change in control, the Board may provide in substitution
for any or all outstanding grants under the Long-Term Incentive Plan such alternative consideration (including cash), if any,
as it, in good faith, may determine to be equitable in the circumstances and will require in connection therewith the surrender
of all awards so replaced in a manner that complies with Section 409A of the United States Internal Revenue Code (if applicable).
In addition, for each Option with an exercise price greater than the consideration offered in connection with any such transaction
or event or change in control, the Board may in its discretion elect to cancel such Option without any payment to the person holding
such Option.
Performance
Conditions
Grants
under the Long-Term Incentive plan may be subject to performance-based vesting conditions, which may consist of such financial,
personal, operational, transaction-based or other performance criteria as may be determined by the Board and set out in an applicable
grant agreement. Performance-based vesting conditions may apply to an individual participant or to the Company, an affiliate,
the Company and its affiliates as a whole, a business unit of the Company or group comprised of the Company and some affiliates
or a group of affiliates, either individually, alternatively or in any combination, and measured either in total, incrementally
or cumulatively over a specified performance period, on an absolute basis or relative to a pre-established target or milestone,
to previous years’ results or to a designated comparator group or index, or otherwise, provided that the performance period
for measurement or achievement of any such performance criteria (or incremental element thereof) will in all events exceed one
year. When establishing performance-based vesting conditions, the Board may exclude any or all “extraordinary items”
as determined under applicable accounting standards. The Board may provide that performance-based vesting conditions will be adjusted
to reflect events occurring during the performance period that affect the applicable performance-based vesting condition.
Options
Options
granted under the Long-Term Incentive Plan will specify the maximum number of Common Shares that the participant may purchase
under the Options. Options issued under the Long-Term Incentive Plan, unless otherwise designated by the Board in the applicable
grant agreement, will vest with 50% of each grant vesting six-months after the grant date, 25% after twelve months, and the balance
at the 18-month anniversary. Vesting will be based on continued service and may be exercised during a period determined by the
Board, which may not exceed ten years (except in certain situations connection with a blackout period, as further described below).
The exercise price for each share subject to an Option shall be fixed by the Board but, except with respect to certain awards
issued in substitution for, in conversion of, or in connection with an assumption of Options held by awardees of an entity engaging
in a corporate acquisition or merger with the Company or any of its affiliates, under no circumstances shall it be less than 100%
of the closing price per Common Share on the TSX on the trading day immediately preceding such date (the “Market Price”)
on the grant date. The exercise of Options may be subject to vesting conditions, including specific time schedules for vesting
and performance-based conditions. Generally, a participant’s notice of exercise of an Option must be accompanied by payment
of the exercise price. However, upon prior approval of the Board, a participant may elect for a “cashless exercise”
of Options, whereby a Participant can receive in Common Shares the net value of an Option that is exercised without paying the
exercise price directly. A “cashless exercise” entitles the Participant to Common Shares equal to the number determined
by dividing (a) the difference between the Market Price (calculated as at the date of settlement) and the exercise price of such
Option by (b) the Market Price (calculated as at the date of settlement). To date, the Company has not granted any Options under
the Long-Term Incentive Plan. Options granted under the Long-Term Incentive Plan may not provide for dividends or dividend equivalents.
If
the normal expiry date for Options granted under the Long-Term Incentive Plan (other than an Incentive Stock Option or an Option
held by a U.S. taxpayer) falls within a blackout period or within ten business days following the end of a blackout period, then
the expiry date of the Option will, without any further action, be extended to the date that is ten business days following the
end of the blackout period. For this purpose, a “blackout period” is a period of time when, pursuant to any policies
of the Company, any securities of the Company may not be traded by certain persons as designated by the Company, including any
holder of a grant.
Options
granted under the Long-Term Incentive Plan that are intended to qualify as “incentive stock options” under Section
422 of the United States Internal Revenue Code (“Incentive Stock Options”) are subject to additional limitations
as further described in the Long-Term Incentive Plan.
Upon
a participant’s termination for cause, any and all outstanding Options whether vested or unvested are forfeited immediately.
Except as otherwise provided in the applicable grant agreement, upon a participant’s termination without cause, all vested
Options are exercisable for 120 days and all unvested Options are forfeited immediately. Upon a participant’s resignation,
except as otherwise provided in the applicable grant agreement, all vested Options are exercisable for 90 days and all unvested
Options are immediately forfeited. Upon a participant’s death or disability, except as provided in the applicable grant
agreement, all unvested Options are forfeited immediately, and all vested Options will continue to be exercisable for 12 months
from the date of death or disability. The Board may extend the period for exercise of a participant’s Options on the participant’s
termination or disability, but not beyond the original expiry date, and/or allow for continued vesting of the participant’s
Options during the period for exercise or a portion of it. Notwithstanding the above, other than on a termination due to disability
or death, Incentive Stock Options will not be exercisable for longer than three months following the date of termination.
Share
Units
Under
the Long-Term Incentive Plan, eligible participants may be allocated share units in the form of PSUs or RSUs, which represent
the right to receive an equivalent number of Common Shares or amount of cash upon vesting. The issuance of such Common Shares
may be subject to vesting requirements similar to those described above with respect to the exercisability of Options, including
such time or performance-based conditions as may be determined from time to time by the Board in its discretion. The Long-Term
Incentive Plan provides for the express designation of share units as either RSUs, which have primarily time-based vesting conditions
or PSUs, which have primarily performance-based vesting conditions over a specified period. To date, the Company has not allocated
any share units under the Long-Term Incentive Plan. The number of PSUs subject to a PSU grant may be subject to adjustment to
reflect changes in compensation, job duties or other factors.
Except
as otherwise provided in the applicable grant agreement, if and when cash dividends (other than extraordinary or special dividends)
are paid with respect to Common Shares to shareholders of record as of a record date occurring during the period from the grant
date to the date of settlement of the RSUs or PSUs granted thereunder, a number of dividend equivalent RSUs or PSUs, as the case
may be, will be credited to the participant who is a party to such grant agreement. The number of such additional RSUs or PSUs
will be calculated by dividing the aggregate dividends or distributions that would have been paid to such participant if the RSUs
or PSUs held by the participant had been Common Shares by the market price on the date on which the dividends or distributions
were paid on the Common Shares. Such additional RSUs or PSUs granted to a participant will be subject to the same terms and conditions,
including vesting and settlement terms, as the corresponding RSUs or PSUs, as the case may be.
Upon
a participant’s termination for cause, all unvested share units are forfeited immediately. Subject to the terms of the applicable
grant or as determined by the Board, upon a participant’s termination without cause or due to death or disability, all vested
share units will be paid to the participant or the participant’s estate, as applicable. Any unvested share units will be
immediately forfeited, provided that any unvested share units that are subject to performance-based vesting conditions that are
capable of being partially performed, in the Board’s discretion, will become vested on a pro rata basis to reflect the degree
to which the condition has been satisfied (in all cases subject to the terms of the applicable grant). The Board may, at the time
of termination or disability, extend the period for vesting of share units, but not beyond the original end of the applicable
vesting period, or accelerate the vesting of share units, subject to applicable limitations under United States tax law.
Change
in Control
The
vesting of outstanding awards will be accelerated in connection with a change in control if a participant’s employment is
terminated (other than for cause (as defined in the Long-Term Incentive Plan)) or he or she resigns for good reason (as defined
in the Long-Term Incentive Plan), in either case, within one year of the change of control. If any share units are subject to
performance-based vesting conditions, then the vesting of such share units shall accelerate only to the extent that such performance-based
vesting conditions have been satisfied and further provided that if a performance-based vesting condition is, in the Board’s
discretion, capable of being partially performed, then vesting will be accelerated on a pro rata basis to reflect the degree to
which the performance condition has been satisfied, as determined by the Board.
Transfers
The
interest of any participant under the Long-Term Incentive Plan is generally not transferable or assignable, other than by testamentary
disposition by the participant or the laws of intestate succession. In no event will any grant under the Long-Term Incentive Plan
be transferred for value. However, the Long-Term Incentive Plan does provide that with respect to a participant who is not a U.S.
taxpayer, the Board may provide that the participant may assign his or her rights (a) in the case of a transfer without the payment
of any consideration, to the participant’s spouse, former spouse, children, stepchildren, grandchildren, parent, stepparent,
grandparent, sibling, persons having one of the foregoing types of relationship with the participant due to adoption and any entity
in which these persons (or the participant) own more than 50 percent of the voting interests and (b) to an entity in which more
than 50 percent of the voting interests are owned by these persons (or the participant) in exchange for an interest in that entity.
In the event of such transfer or assignment, the grant will generally remain subject to substantially the same terms as were applicable
while held by the participant to whom it was granted. With respect to participants who are U.S. taxpayers, the Board may permit
the participant to transfer Options that are not Incentive Stock Options (“Nonqualified Stock Options”) to
any “family member” in accordance with Form S-8 Registration Statement under the Securities Act of 1933. However,
U.S. taxpayers cannot receive any consideration for the transfer and such transferred Nonqualified Stock Option shall continue
to be subject to the same terms and conditions as were applicable to such Nonqualified Stock Option immediately prior to its transfer.
Clawback
All
grants under the Long-Term Incentive Plan are subject to a clawback (as further described in the Long-Term Incentive Plan) by
the Company, as determined by the Board, in its sole discretion, in the event: (a) the participant fails to comply with any restrictive
covenants; (b) the participant is terminated for cause, or the Board reasonably determines after termination that the participant
could have been terminated for cause; (c) the Board reasonably determines that the participant engaged in conduct that caused
material financial or reputational harm to the Company or engaged in gross negligence, willful misconduct or fraud in the performance
of their duties; or (d) the Company’s financial statements are required to be restated (subject to certain exceptions described
in the Long-Term Incentive Plan) and such restatement discloses materially worse financial results in the opinion of the Board.
In
addition, any grant agreement under the Long-Term Incentive Plan may also provide for the cancellation or forfeiture of a grant
or the forfeiture and repayment to the Company of any gain related to a grant, or other provisions intended to have a similar
effect, upon such terms and conditions as may be required by the Board or under Section 10D of the Exchange Act, and any applicable
rules or regulations promulgated by the U.S. Securities and Exchange Commission or any applicable stock exchange.
Amendment
and Termination
The
following types of amendments to the Long-Term Incentive Plan or the entitlements granted under it (other than certain equitable
antidilution adjustments as provided for under the Long-Term Incentive Plan) require the approval of the shareholders: (a) increasing
the maximum number of Common Shares that may be issued under the Long-Term Incentive Plan; (b) reducing the exercise price of
an outstanding Option (including cancelling and, in conjunction therewith, re-granting within six months an Option at a reduced
exercise price, or substitution of an Option with cash or other awards the terms of which are more favorable to the participant);
(c) extending the term of any grant; (d) amending the assignment rights of participants currently contemplated by the Long-Term
Incentive Plan; (e) expanding the categories of individuals eligible for grants under the Long-Term Incentive Plan; (f) amending
the number of Options or shares units issuable to non-employee directors (g) increasing or removing the percentage limit on Common
Shares issuable or issued to insiders under the Long-Term Incentive Plan; (h) amending the Long-Term Incentive Plan to provide
for other types of equity compensation through equity issuance; (i) amending the Long-Term Incentive Plan, the effect of which
would cause Options held by U.S. taxpayers to no longer receive specific tax treatment under the United States Internal Revenue
Code; and (j) amending the amendment provision or granting additional powers to the Board to amend the Long-Term Incentive Plan
or grants without shareholder approval.
The
Board may approve amendments to the Long-Term Incentive Plan or the entitlements granted under it without shareholder approval,
other than those specified above as requiring approval of the shareholders, subject to any regulatory approvals including, where
required, the approval of the TSX, including: (a) amendments of a “housekeeping” nature; (b) a change to the vesting
provisions of any grants; (c) a change to the termination provisions of any grant that does not entail an extension beyond the
original term of the grant; or (d) amendments to the provisions relating to a change in control.
The
Long-Term Incentive Plan will remain in effect, unless sooner terminated, until the tenth anniversary of its effective date, at
which time it will terminate. After the Long-Term Incentive Plan is terminated, no grants may be made under the Long-Term Incentive
Plan but grants previously made will remain outstanding in accordance with their applicable terms and conditions and the Long-Term
Incentive Plan’s terms and conditions.
Other
Provisions
For
U.S. taxpayers, the Long-Term Incentive Plan includes certain additional limitations intended to comply with or secure an exemption
from Section 409A of the United States Internal Revenue Code.
The
Company will not provide financial assistance to participants to facilitate the purchase of securities under the Long-Term Incentive
Plan.
Substitute
and Assumed Awards
Grants
may be made under the Long-Term Incentive Plan in substitution for or in conversion of, or in connection with an assumption of,
Options, restricted share units, or performance share units held by awardees of an entity engaging in a corporate acquisition
or merger transaction with the Company or any subsidiary of the Company. The grants so made may reflect the original terms of
the awards being assumed or substituted or converted for and need not comply with other specific terms of the Long-Term Incentive
Plan, and may account for Common Shares substituted for the securities covered by the original awards and the number of shares
subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account
for differences in stock prices in connection with the transaction.
Withholdings
The
Company or an affiliate of the Company will withhold or cause to be withheld from any amount payable to a participant, either
under the Long-Term Incentive Plan, or otherwise, such amount as may be necessary to permit the Company or the affiliate, as applicable,
to comply with applicable obligation sunder any federal, provincial, state or local law relating to the withholding of tax or
other required deductions. Subject to applicable law and stock exchange requirements, the Company and any affiliate of the Company
may also satisfy any liability for any such withholding obligations, on such terms and conditions as the Board may determine in
its sole discretion, by (1) requiring such participant to sell any Common Shares and retaining any amount payable which would
otherwise be provided or paid to such participant in connection with any such sale, or (2) requiring, as a condition to the delivery
of Common Shares hereunder, that such participant make such arrangements as the Board may require so that the Company and its
affiliates can satisfy such withholding obligations, including requiring such participant to remit an amount to the Company or
an affiliate in advance, or reimburse the Company or any affiliate for, any such withholding obligations.
Other
Compensation Arrangements
In
addition to the Long-Term Incentive Plan, the Option Plan continues to be in force and governs the outstanding Options granted
under the Option Plan, but no further awards shall be made under the Option Plan. As of September 12, 2019, 11,204,909 Options
remain outstanding under the Option Plan.
Exchange
Controls
There
are no governmental laws, decrees, or regulations in Canada that restrict the export or import of capital, including foreign exchange
controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the securities of
NioCorp, other than Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations for U.S. Residents”
below.
Certain
Canadian Federal Income Tax Considerations for U.S. Residents
The
following summarizes certain Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada)
and the regulations enacted thereunder (collectively, the “Canadian Tax Act”) and the Canada-United States
Income Tax Convention (1980) (the “Convention”) to the holding and disposition of Common Shares.
Comment
is restricted to holders of Common Shares each of whom, at all material times for the purposes of the Canadian Tax Act and the
Convention, (i) is resident solely in the United States, (ii) is entitled to the benefits of the Convention, (iii) holds all Common
Shares as capital property, (iii) holds no Common Shares that are “taxable Canadian property” (as defined in the Canadian
Tax Act) of the holder, (iv) deals at arm’s length with and is not affiliated with NioCorp, (v) does not and is not deemed
to use or hold any Common Shares in a business carried on in Canada, and (vi) is not an insurer that carries on business in Canada
and elsewhere (each such holder, a “U.S. Resident Holder”).
Certain
U.S.-resident entities that are fiscally transparent for United States federal income tax purposes (including limited liability
companies) may not in all circumstances be regarded by the Canada Revenue Agency (the “CRA”) as entitled to
the benefits of the Convention. Members of or holders of an interest in such an entity that holds Common Shares should consult
their own tax advisers regarding the extent, if any, to which the CRA will extend the benefits of the Convention to the entity
in respect of its Common Shares.
Generally,
a holder’s Common Shares will be considered to be capital property of the holder provided that the holder is not a trader
or dealer in securities, did not acquire, hold, or dispose of the Common Shares in one or more transactions considered to be an
adventure or concern in the nature of trade (i.e. speculation), and does not hold the Common Shares in the course of carrying
on a business.
Generally,
a holder’s Common Shares will not constitute “taxable Canadian property” of the holder at a particular time
at which the Common Shares are listed on a “designated stock exchange” (which currently includes the TSX) unless both
of the following conditions are true:
|
(i)
|
at
any time during the 60-month period that ends at the particular time, 25% or more of
the issued shares of any class of the capital stock of NioCorp were owned by or belonged
to one or any combination of:
|
|
b.
|
persons
with whom the holder did not deal at arm’s length, and
|
|
c.
|
partnerships
in which the holder or a person referred to in clause (B) holds a membership interest directly or indirectly through one or more
partnerships, and
|
|
(ii)
|
at
any time during the 60-month period that ends at the particular time, more than 50% of
the fair market value of the Common Shares was derived directly or indirectly from, one
or any combination of, real or immovable property situated in Canada, “Canadian
resource properties” (as defined in the Canadian Tax Act), “timber resource
properties” (as defined in the Canadian Tax Act), or Options in respect of, or
interests in any of the foregoing, whether or not the property exists.
|
This
summary is based on the current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific
proposals to amend the Canadian Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada)
on or before the date hereof, and the current published administrative and assessing policies of the CRA. It is assumed that all
such amendments will be enacted as currently proposed, and that there will be no other material change to any applicable law or
administrative or assessing practice, although no assurance can be given in these respects. Except as otherwise expressly provided,
this summary does not take into account any provincial, territorial, or foreign tax considerations, which may differ materially
from those set out herein.
This
summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations, and is not
intended to be and should not be construed as legal or tax advice to any particular U.S. Resident Holder. U.S. Resident Holders
are urged to consult their own tax advisers for advice with respect to their particular circumstances. The discussion below is
qualified accordingly.
A
U.S. Resident Holder who disposes or is deemed to dispose of one or more Common Shares generally should not thereby incur any
liability for Canadian federal income tax in respect of any capital gain arising as a consequence of the disposition.
A
U.S. Resident Holder to whom NioCorp pays or is deemed to pay a dividend on the holder’s Common Shares will be subject to
Canadian withholding tax, and NioCorp will be required to withhold the tax from the dividend and remit it to the CRA for the holder’s
account. The rate of withholding tax under the Canadian Tax Act is 25% of the gross amount of the dividend, but should generally
be reduced under the Convention to 15% (or, if the U.S. Resident Holder is a company which is the beneficial owner of at least
10% of the voting stock of NioCorp, 5%) of the gross amount of the dividend. For this purpose, a company that is a resident of
the United States for purposes of the Canadian Tax Act and the Convention and is entitled to the benefits of the Convention shall
be considered to own the voting stock of NioCorp owned by an entity that is considered fiscally transparent under the laws of
the United States and that it is not a resident of Canada, in proportion to the Company’s ownership interest in that entity.
PERFORMANCE
GRAPH
The
following graph compares total cumulative shareholder return for $100 invested in Common Shares from July 1, 2014 to June 30,
2019, with cumulative total returns for the S&P/TSX Composite Index and S&P/TSX Mining Index:
Overall,
the Company’s cumulative return has fallen moderately below the performance of the indices. As an exploration stage company,
executive officer compensation has not historically been adjusted to reflect share performance trends. Since 2013, compensation
to executive officers has remained flat, except for increases supported by additional job responsibilities and/or job promotions.
INDEBTEDNESS
OF DIRECTORS AND EXECUTIVE OFFICERS
None
of our directors or executive officers, proposed nominees for election as directors or associates of any of them, is or has been
indebted to the Company or our subsidiaries at any time since the beginning of the most recently completed financial year, and
no indebtedness remains outstanding as at the date of this Information Circular.
INTEREST
OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
No
informed person of the Company, no proposed nominee for election as a director of the Company and no associate or affiliate of
any of these persons, has any material interest, direct or indirect, in any transaction since the commencement of our last financial
year or in any proposed transaction, which, in either case, has materially affected or will materially affect the Company or any
of our subsidiaries, other than Mark A. Smith, 7000 S. Yosemite Street, Suite 115, Centennial, CO 80112, as disclosed in the Company’s
2019 Annual Report on Form 10-K under the heading “Certain Relationships and Related Person Transactions.”
An
“informed person” means:
|
(d)
|
a
director or executive officer of the Company;
|
|
(e)
|
a
director or executive officer of a person or company that is itself an informed person
or subsidiary of the Company;
|
|
(f)
|
any
person or company who beneficially owns, directly or indirectly, voting securities of
the Company or who exercises control or direction over voting securities of the Company
or a combination of both carrying more than 10 percent of the voting rights attached
to all outstanding voting securities of the Company other than voting securities held
by the person or company as underwriter in the course of a distribution; and
|
|
(g)
|
the
Company, if it has purchased, redeemed or otherwise acquired any of its securities, so
long as it holds any of its securities.
|
MANAGEMENT
CONTRACTS
The
management functions of the Company are not to any substantial degree performed by any person other than the executive officers
and directors of the Company.
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Related
Person Transactions
The
following sets forth certain information regarding transactions between the Company (and its subsidiaries) and its officers, directors
and significant shareholders. There have been no other transactions since the end of the Company’s most recently completed
fiscal year and there are no currently proposed transactions in which the Company was or is to be a participant and the amount
involved exceeds $120,000, and in which any related person (for purposes of Item 404 of Regulation S-K) had or will have a direct
or indirect material interest.
Loan
Transactions:
On
June 17, 2015, the Company entered into a loan (the “Original Smith Loan”) in the amount of $1.5 million with
Mark A. Smith, Chief Executive Officer and Executive Chairman of NioCorp.
On
July 1, 2015, the Company entered into a non-revolving credit facility agreement (the “Revolving Credit Facility”)
in the amount of $2.0 million with Mark Smith and completed a drawdown of $0.5 million on that day, with an additional $0.1 million
drawn under the credit facility on December 2, 2015.
Both
arrangements bear an interest rate of 10%, are secured by the Company’s assets pursuant to a general security agreement,
are subject to both a 2.5% establishment fee and 2.5% prepayment fee.
On
January 13, 2016, the Company repaid 100% of amounts drawn down under the credit facility ($0.6 million), $0.5 million of the
amount due under the Original Smith Loan, plus accrued interest of $108,461.
On
January 16, 2017, the Company and Mr. Smith entered into a credit agreement (the “Smith Credit Agreement”,
together with the Original Smith Loan, the “Smith Loans”) pursuant to which Mr. Smith agreed to make available
to the Company a credit facility of up to $2.0 million. Under the Smith Credit Agreement, Mr. Smith has agreed to advance amounts
requested by the Company under the credit facility (the “Loan”) up to the $2.0 million maximum. The Smith Credit
Agreement is non-revolving and amounts paid back under the terms of the Smith Credit Agreement do not again become available for
drawdowns at the request of the Company.
The
Company will pay interest to Mr. Smith on amounts outstanding under the Loan and on any overdue interest at a rate equal to 10%
per annum, calculated monthly in arrears, through to the date of repayment of the Loan. Interest on the Loan will be computed
on the basis of a 360-day year comprised on twelve 30-day months. Mr. Smith will also receive an establishment fee equal to 2.5%
of the amount of any drawdown payable at the time of the drawdown as consideration of the advancement of such drawdown.
Any
outstanding balance on the Loan, including accrued interest, shall be immediately due and payable by the Company on the date of
expiration of the Smith Credit Agreement or upon the occurrence of an Event of Default (as described below). The Company can pre-pay
the Loan at any time without notice and without penalty or prepayment fees.
Drawdowns
under the Smith Credit Agreement must be made on a business day before the expiration date for a minimum amount of $10,000 and
not cause to total amount advanced to exceed $2,000,000. Further, Mr. Smith must have received the written drawdown request along
with payment of the establishment fee. Each drawdown request is subject to the consent of Mr. Smith, which may be withheld in
Mr. Smith’s sole discretion.
Under
the terms of the Smith Credit Agreement, the Company has covenanted that so long as monies are outstanding under the Loan, it
will: (a) repay, or cause to be repaid, the Loan and all other monies required to be paid to Mr. Smith in accordance with the
Smith Credit Agreement and (b) duly observe and perform all obligations and agreement set forth in the Smith Credit Agreement.
The
following occurrences will trigger an Event of Default under the Smith Credit Agreement, causing the principal amount of the Loan
outstanding, plus accrued interest, costs and all other monies owing to Mr. Smith to immediately become payable upon demand by
Mr. Smith: (a) if the Company shall default in any payment of principal, interest or other amount when the same is required under
the Smith Credit Agreement and such default has continued for a period of seven days after notice in writing has been given by
Mr. Smith to the Company regarding such default, (b) if the Company shall become insolvent, make a general assignment for the
benefit of its creditors, or passes a resolution for the winding-up, merger or amalgamation of the Company, or the Company declares
bankruptcy or a receiver is appointed under applicable law, or a compromise or arrangement is proposed by the Company to its creditors,
or the occurrence of similar events, or (c) if the Company defaults in observing or performing any other covenant or agreement
of the Smith Credit Agreement and such default has continued for a period of seven days after notice in writing has been given
by Mr. Smith to the Company regarding such default.
The
Smith Credit Agreement is secured, along with the $1.0 million outstanding under the Original Smith Loan, by all of the Company’s
assets pursuant to a general security agreement between the Company and Mr. Smith dated June 17, 2015.
During
the years ended June 30, 2019 and 2018, the Company paid interest of $64,500 and $176,000, respectively, under the Smith Loans,
with $70,000 remaining payable as of June 30, 2019.
On
May 14, 2019, the Company and Mr. Smith entered into amending agreements extending the maturity dates of the Original Smith Loan
and the Credit Facility to June 17, 2020 and June 16, 2020, respectively.
As
of September 12, 2019, there was $1,000,000 and $605,000 principal amount outstanding under the Original Smith Loan and the Smith
Credit Agreement, respectively.
Review
and Approval of Related Person Transactions
Other
than as described below, the Company does not currently have in place any specific policy or procedure in respect of the review,
approval or ratification of any transaction required to be reported under Item 404(a) of Regulation S-K. Sections 147-153 of the
BCBCA set out rules and procedures applicable to all British Columbia corporations, pursuant to which a director presented with
a resolution in respect of any matter (including an equity issuance) in respect of which he/she has an interest must disclose
that interest in writing to the Company’s board of directors prior to the approval of such matter. This procedure ensures
that each equity issuance to a director or officer of the Company is approved by all directors of the Company not involved in
such sale. All loan transactions from directors and officers are subject to review and approval by the Board of Directors prior
to acceptance, and are documented in the meeting minutes.
Delinquent
Section 16(a)
Reports
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than ten percent of a
registered class of the Company’s equity securities, to file reports of ownership and changes in ownership of such securities
with the SEC.
Based
upon the review of the copies of Section 16(a) forms received by the Company, and upon written representations from reporting
persons concerning the necessity of filing a Form 5 Annual Statement of Changes in Beneficial Ownership, the Company believes
that, during fiscal 2019, all required reports were filed on a timely basis, other than the filing of a Form 4 for each of Mr.
Ashburn, Mr. Beling, Mr. Carrabba, Ms. Guerrero-Mahon, Mr. Honan, Mr. Morris, Mr. Shah, Mr. Sims, Mr. Smith and Ms. Wightman,
in each case reporting an annual award of stock options on November 15, 2018, which Form 4s were inadvertently filed late due
to an administrative error. The Company has evaluated the cause of such delinquent filings and enacted additional controls to
prevent future delinquent filings.
SHAREHOLDER
PROPOSALS
Under
the Exchange Act, the deadline for submitting shareholder proposals for inclusion in the management information and proxy circular
for an annual general meeting of the Company is calculated in accordance with Rule 14a-8(e) of Regulation 14A under the Exchange
Act. If the proposal is submitted for a regularly scheduled annual general meeting, the proposal must be received at the Company’s
principal executive offices not less than 120 calendar days before the anniversary date of the Company’s management information
and proxy circular released to the Company’s shareholders in connection with the previous year’s annual general meeting.
However, if the Company did not hold an annual general meeting the previous year, or if the date of the current year’s annual
general meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline is
a reasonable time before the Company begins to print and mail its proxy materials. Accordingly, unless the date of the next annual
general meeting is changed by more than 30 days from the date of this year’s meeting the deadline for submitting shareholder
proposals for inclusion in the management information and proxy circular for the next annual general meeting of the Company will
be May 22, 2020.
The
deadline for submitting shareholder proposals, other than director nominations, for the next annual general meeting of shareholders
of the Company, but not for inclusion in the management information and proxy circular, is August 5, 2020. If a shareholder proposal,
other than a director nomination, is not submitted to the Company by August 5, 2020, the Company may still grant discretionary
proxy authority to vote on such shareholder proposal in accordance with Rule 14a-4(c)(1) of Regulation 14A under the Exchange
Act.
In
addition, there are (i) certain requirements relating to shareholder proposals contained in the BCBCA; and (ii) certain requirements
relating to the nomination of directors contained in the Articles of the Company. A shareholder wishing to make a proposal for
consideration at an annual general meeting of the Company or wishing to nominate a person to act as a director of the Company
should ensure they follow the applicable procedures set forth in the BCBCA and the Articles of the Company.
Under
the Company’s advance notice policy, adopted by the shareholders of the Company on December 15, 2014, nominations of persons
for election to the Board at any annual general meeting of the shareholders must be received by the corporate secretary of the
Company not less than 30 days or more than 65 days prior to the date of such meeting; provided, however, that in the event that
the annual general meeting of shareholders is to be held on a date that is less than 50 days after the date on which the first
public announcement of the date of such meeting was made (the “Meeting Notice Date”), such shareholder’s
notice must be so received not later than the close of business on the 10th day following the Meeting Notice Date.
DISSENTERS’
RIGHTS OF APPRAISAL
No
action is proposed herein for which the laws of British Columbia or the Articles of the Company provide a right of a shareholder
to dissent and obtain appraisal of or payment for such shareholder’s Common Shares.
MULTIPLE
SHAREHOLDERS SHARING THE SAME ADDRESS
The
regulations regarding the delivery of copies of proxy materials and annual reports to shareholders permit the Company and brokerage
firms to send one Notice of Internet Availability of Meeting Materials to multiple shareholders who share the same address under
certain circumstances. Shareholders who hold their shares through a broker may have consented to reducing the number of copies
of materials delivered to their address. In the event that a shareholder wishes to revoke such a consent previously provided to
a broker, the shareholder must contact the broker to revoke the consent. In any event, if a shareholder wishes to receive a separate
Notice of Internet Availability of Meeting Materials or other materials for the 2019 Annual Meeting or future annual meetings,
the shareholder may receive copies by contacting the Corporate Secretary at 7000 South Yosemite Street, Suite 115, Centennial,
CO 80112, or by calling (855) 264-6267. Shareholders receiving multiple copies of these documents at the same address can request
delivery of a single copy of these documents by contacting the Company in the same manner. Persons holding shares through a broker
can request a single copy by contacting the broker.
ADDITIONAL
INFORMATION
The
Company is subject to the informational requirements of the Exchange Act and, in accordance therewith, files reports and other
information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other
information regarding the Company and other registrants that file electronically with the SEC at www.sec.gov.
Additional
information about the Company is located on SEDAR at www.sedar.com. Financial information is provided in the Company’s comparative
financial statements and Management’s Discussion and Analysis for its most recently completed financial year ended June
30, 2019. At the written request of any registered shareholder who owns shares on the record date, the Company will provide to
such shareholder, without charge, a paper copy of the Meeting Materials, including the Company’s Annual Report to Shareholders.
If requested, the Company will provide copies of the exhibits for a reasonable fee. Requests for additional paper copies of the
Annual Report, the financial statements and Management’s Discussion and Analysis should be made by writing to the Vice-President,
General Counsel and Corporate Secretary, Mr. John Ashburn, at the following address:
NioCorp
Developments Ltd.
7000
South Yosemite Street, Suite 115
Centennial,
CO 80112
OTHER
MATERIAL FACTS
Management
knows of no other matters to come before the Meeting other than those referred to in the Notice of Meeting. Should any other matters
properly come before the Meeting, the shares represented by the proxy solicited hereby will be voted on such matter in accordance
with the best judgment of the persons voting by proxy.
DATED
at Centennial, Colorado, on the 19th day of September, 2019.
BY
ORDER OF THE BOARD
NIOCORP
DEVELOPMENTS LTD.
/s/ Mark A. Smith
|
|
Mark A. Smith
|
|
President,
Chief Executive Officer, Executive Chairman
and Director
SCHEDULE
A
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