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
x
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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x
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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
December 5, 2018
The attached Notice of Meeting, Management
Information and Proxy Circular and form of proxy and notes thereto for the 2018 annual general meeting of shareholders are first
being made available to shareholders of the Company on or about October 26, 2018.
NIOCORP DEVELOPMENTS LTD.
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN THAT the 2018 annual
general meeting of shareholders (the “
Meeting
”) of NioCorp Developments Ltd. (the “
Company
”)
will be held on Wednesday, December 5, 2018, at 10:00 a.m. at the Hilton Denver Inverness, 200 Inverness Drive West, Englewood,
Colorado 80112 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 October 18, 2018, 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 October
26, 2018. 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 December 3, 2018, 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 October 26, 2018.
DATED at Centennial, Colorado, this 18
th
day of October, 2018.
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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 Wednesday, December 5, 2018, at 10:00 a.m. at the Hilton
Denver Inverness, 200 Inverness Drive West, Englewood, Colorado 80112 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 October 26, 2018. Unless otherwise stated, the information
contained in this Information Circular is given as of October 18, 2018.
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 DECEMBER 5, 2018
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 December 3, 2018, 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 December 3, 2018, 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 December 3, 2018, 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 October 18, 2018,
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 221,846,266 Common Shares are issued and outstanding as of October 18, 2018. There is only one
class of shares.
The Board of Directors has fixed October
18, 2018 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 October 18, 2018 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
Ownership by Management
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 October 18, 2018, 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 221,846,266 Common Shares outstanding as
of October 18, 2018.
The following table sets forth the beneficial
ownership of Common Stock of NioCorp as of June 30, 2018 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 2018 Summary Compensation Table”, below); (3) each of NioCorp’s directors; and (4) all directors
and executive officers of NioCorp as a group. 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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21,035,445
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(2)
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9.39
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%
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Neal Shah
Superior, Colorado, USA
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Chief Financial Officer
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1,104,500
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(3)
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0.50
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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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1,330,000
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(4)
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0.60
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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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1,208,419
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(5)
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0.54
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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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1,100,000
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(6)
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0.49
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%
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Michael Morris
San Luis Obispo, California, USA
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Director
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955,250
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(7)
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0.43
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%
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David C. Beling
Grand Junction, Colorado, USA
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Director
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1,150,000
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(8)
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0.52
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%
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Anna Castner Wightman
Omaha, Nebraska, USA
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Director
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1,002,000
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(9)
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0.45
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%
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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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Nilsa Guerrero-Mahon
Brighton, Colorado, USA
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Director
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500,000
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(10)
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0.22
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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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31,110,066
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13.37
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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 October 18, 2018, Mr. Smith beneficially owns 18,770,445 outstanding Common Shares. He beneficially
owns 115,000 exercisable Warrants. Each Warrant entitles Mr. Smith to acquire one Common Share at a price of C$0.75 until January
2019. In addition, he beneficially owns 2,150,000 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 and (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.
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(3)
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As of October 18, 2018, Mr. Shah beneficially owns 54,500 outstanding Common Shares. In addition,
he beneficially owns 1,050,000 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; and (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.
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(4)
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As of October 18, 2018, Mr. Honan beneficially owns 130,000 outstanding Common Shares. In addition,
he beneficially owns 1,200,000 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; and (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.
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(5)
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As of October 18, 2018, Mr. Sims beneficially owns 8,419 outstanding Common Shares. In addition,
he beneficially owns 1,200,000 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; and (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.
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(6)
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As of October 18, 2018, Mr. Carrabba beneficially owns 100,000 outstanding Common Shares. In addition,
he beneficially owns 1,000,000 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; and (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.
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(7)
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As of October 18, 2018, 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 900,000
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.
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(8)
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As of October 18, 2018, 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 800,000 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; and (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.
|
|
(9)
|
As of October 18, 2018, 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 1,000,000
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; and (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.
|
|
|
|
|
(10)
|
As of October 18, 2018, Ms. Guerrero-Mahon beneficially owns 500,000 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.
|
Security Ownership of Certain Beneficial
Owners
As of October 18, 2018, 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 October 18, 2018, 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
|
|
59
|
|
CEO, President, Executive Chairman and Director
|
|
CEO and Director:
September 23, 2013
President and Executive Chairman: May 31,
2015
|
Joseph A. Carrabba
|
|
66
|
|
Lead Director
|
|
December 15, 2014
|
Michael Morris
|
|
72
|
|
Director
|
|
July 27, 2014
|
David C. Beling
|
|
77
|
|
Director
|
|
June 6, 2011
|
Anna Castner Wightman
|
|
51
|
|
Director
|
|
February 23, 2016
|
Nilsa Guerrero-Mahon
|
|
57
|
|
Director
|
|
September 28, 2017
|
The following sets forth a brief description
of the business experience of each director of the Company:
Current Directors
Mark Smith – Executive Chairman,
Director, President and Chief Executive Officer
Mr. Smith has 37 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. Since April 2015, Mr. Smith has also
served as the President, Chief Executive Officer, and Director for Largo Resources Ltd., a mineral company with an operating property
in Brazil and projects in Brazil and Canada. 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
Mr. Carrabba served as the Chairman, President
and Chief Executive Officer of Cliffs Natural Resources Inc., a publicly-held international mining and natural resources company,
from September 2007 until his retirement in November 2013. From 2013 until the present day, he has served as CEO of Irati Energy,
a private mining company in Brazil, and as a corporate director and consultant. Prior to joining Cliffs Natural Resources Inc.,
Mr. Carrabba gained broad experience in the mining industry throughout Canada, the United States, Asia, Australia and Europe. He
was the former General Manager of Weipa Bauxite Operation of Comalco Aluminum and served in a variety of leadership capacities
at Rio Tinto, a global mining company, including as President and Chief Operating Officer of Rio Tinto’s Diavik Diamond Mines,
Inc. Mr. Carrabba is also a director of Newmont Mining Corporation, TimkenSteel Corporation, the Aecon Group, and Fura Gems Inc.
In addition, he was a director of KeyCorp from November 2009 until May 2017. 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 53 years of experience and has been on the board of directors of 14 mining companies starting in 1981. He
has served as President, CEO, 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 served on the Board of Directors of Animas Resources Ltd.
(TSX-V) from June 2012 to April 2014.
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 Chief Financial Officer (“
CFO
”)
and Controller for global corporations in the technology, energy, and government sectors, Ms. Guerrero-Mahon provides consulting
and other 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 as the Vice Chair of the
Board of Directors of Centura Health Mountains & North Denver Operating Group, the largest division in the Centura Health Care
System, a position she has held since 2016. 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.
Since 2009, Ms. Guerrero-Mahon has served as a gubernatorial appointed Board Member of the State of Colorado Financial Services
Commission. Since 2008, she has served as a Principal consultant with NG Mahon Business Consulting. 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 long 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 or issuers with a class of securities registered under Section
12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act).
Name of Director
|
|
Other Reporting Issuer (or equivalent)
|
|
Exchange
|
Joseph Carrabba
|
|
Newmont Mining Corporation
|
|
NYSE
|
|
|
TimkenSteel Corp.
|
|
NYSE
|
|
|
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)
($)
|
|
2018
|
|
|
138,000
|
|
|
|
—
|
|
|
|
8,608
|
|
|
|
—
|
|
2017
|
|
|
290,000
|
|
|
|
—
|
|
|
|
16,347
|
|
|
|
—
|
|
|
(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. 2017 Audit
Fees include fees for consent reviews and comfort letters related to regulatory filings in the United States and Canada.
|
|
(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, 2018 and 2017, 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, 2018 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 October 18, 2018, 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 803A of the NYSE MKT Company Guide 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
November 9, 2017 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, 2018.
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:
|
·
|
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;
|
|
·
|
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, 2018. 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, 2018. Board members are not required
to attend the Company’s annual general meetings of shareholders, and Mr. Smith and Ms. Guerrero-Mahon were the only directors
at the meeting held on November 9, 2017.
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, 2018, 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
|
|
|
4
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Joseph Carrabba
|
|
|
3
|
|
|
|
N/A
|
|
|
|
1
|
|
David Beling
|
|
|
4
|
|
|
|
2
|
(2)
|
|
|
1
|
|
Michael Morris
|
|
|
4
|
|
|
|
4
|
|
|
|
1
|
|
Anna Castner Wightman
|
|
|
4
|
|
|
|
4
|
|
|
|
N/A
|
|
Nilsa Guerrero-Mahon
|
|
|
3
|
(1)
|
|
|
3
|
(3)
|
|
|
N/A
|
|
|
(1)
|
Ms. Guerrero-Mahon was appointed to the Board on September 28, 2017 and attended 100% of the Board
meetings held subsequent to that date.
|
|
(2)
|
Mr. Beling served on the Audit Committee through November 9, 2017 and attended 100% of the Audit
Committee meeting held through that date.
|
|
(3)
|
Ms. Guerrero-Mahon was appointed to serve on the Audit Committee on September 28, 2017 and attended
100% of the Audit Committee meetings held subsequent to that date.
|
Mandate of the Board
The Board has not adopted a written mandate.
The mandate of the Board, as prescribed by the
Business Corporations Act
(British Columbia) (the “
BCBCA
”),
is to manage or supervise the management of the business and affairs of the Company and to act with a view to the best interests
of the Company. In doing so, 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. At this stage of the Company’s development, the Board does
not believe it is necessary to adopt a written mandate, as sufficient guidance is found in the applicable corporate legislation
and regulatory policies.
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 not developed a written position
description for the Chairman of the Board, or for the CEO. To date, given the size of the Company and its stage of development,
the Board does not believe that formal written position descriptions of the position of the Chairman of the Board or the CEO are
required, and that good business practices and the common law provide guidance as to what is expected of each of such positions.
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 the NYSE MKT rules 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, 2018, 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:
|
·
|
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;
|
|
·
|
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; and
|
|
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 the rules of the NYSE MKT 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, 2018, the Audit
Committee reviewed and discussed the audited annual financial statements for the year ended June 30, 2018, 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 such other matters as required to be communicated
by the independent auditors in accordance with Audit Standard 1301: Communications with Audit Committees.
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.
The Company was obligated to file, and
has filed, an annual report on Form 10-K for the fiscal year ended June 30, 2018 because it is subject to the reporting requirements
of the Exchange Act as of October 13, 2016. 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, 2018 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, 2019.
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, effective August 2015. 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 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, 2018, 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 an 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, 2018,
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 2018 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, 2018, 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, 2018, 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 2018 Director Compensation
For fiscal year 2018, 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 2018 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, 2018:
Name
|
|
Option Awards
(1)
($)
|
|
|
Total
($)
|
|
Joseph Carrabba
|
|
$
|
31,319
|
|
|
$
|
31,319
|
|
David Beling
|
|
$
|
25,055
|
|
|
$
|
25,055
|
|
Michael Morris
|
|
$
|
31,319
|
|
|
$
|
31,319
|
|
Anna Castner Wightman
|
|
$
|
25,055
|
|
|
$
|
25,055
|
|
Anna Guerrero-Mahon
(2)
|
|
$
|
62,638
|
|
|
$
|
62,638
|
|
|
(1)
|
Reflects the grant date fair value of the Option awards granted during the 2018 fiscal year, consisting
of 250,000 Options for each of Messrs. Carrabba and Morris, 200,000 Options for each of Mr. Beling and Ms. Castner Wightman, and
500,000 Options for Ms. Guerrero-Mahon, in each case at an exercise price of $0.37 per share (using an exchange rate of C$1.2692
to US$1.00) on November 9, 2017, 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, 2018. The aggregate number of Option awards outstanding for each non-employee director listed in the table above
at the end of fiscal 2018 was as follows: Mr. Carrabba, 1,000,000 Options; Mr. Beling, 800,000 Options; Mr. Morris, 900,000 Options;
Ms. Wightman, 1,000,000 Options; and Ms. Guerrero-Mahon, 500,000 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.
However, Options granted during fiscal year 2018 were fully vested on the grant date.
|
|
(2)
|
Ms. Guerrero-Mahon was appointed to the board on September 28, 2017; however, her initial Options
were not awarded until November 9, 2017.
|
For the fiscal year ended June 30, 2018,
the directors of the Company did not receive a cash fee 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 2018 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 October 18, 2018, the executive officers
of the Company, their ages, their business experience and their principal occupation during the past five years were as follows:
Name
|
|
Age
|
|
Position
|
|
Date of Appointment
|
Mark A. Smith
|
|
59
|
|
CEO, President, Executive Chairman and Director
|
|
CEO and Director:
September 23, 2013
President and Executive Chairman: May 31,
2015
|
Neal Shah
|
|
44
|
|
Chief Financial Officer
|
|
July 1, 2016
|
Scott Honan
|
|
47
|
|
Vice President, Business Development
|
|
May 6, 2014
|
John Ashburn, Jr.
|
|
63
|
|
Vice President, General Counsel and Corporate Secretary
|
|
April 2, 2015
|
Jim Sims
|
|
57
|
|
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, Inc. 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, Inc. 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 25 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 37 years of experience,
including 27 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, Inc. 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 25 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, Inc. 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 ending June 30, 2018 and 2017 for the individual who served as the Company’s CEO during fiscal year
2018, 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 2018 Summary Compensation Table
Name and Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
|
Option
Awards (1)
($)
|
|
|
Total
($)
|
|
Mark A Smith, Chief Executive Officer, President
|
|
2018
|
(2)
|
$
|
270,000
|
|
|
$
|
93,957
|
|
|
$
|
363,957
|
|
|
|
2017
|
(2)
|
$
|
270,000
|
|
|
$
|
198,688
|
|
|
$
|
468,688
|
|
Scott Honan, Vice President Business Development
|
|
2018
|
|
$
|
225,000
|
|
|
$
|
37,583
|
|
|
$
|
262,583
|
|
|
|
2017
|
|
$
|
225,000
|
|
|
$
|
122,269
|
|
|
$
|
347,269
|
|
Neal Shah, Chief Financial Officer
|
|
2018
|
|
$
|
200,000
|
|
|
$
|
37,583
|
|
|
$
|
237,583
|
|
|
|
2017
|
|
$
|
200,000
|
|
|
$
|
122,269
|
|
|
$
|
322,269
|
|
Jim Sims, Vice President External Affairs
|
|
2018
|
|
$
|
200,000
|
|
|
$
|
37,583
|
|
|
$
|
237,583
|
|
|
|
2017
|
|
$
|
200,000
|
|
|
$
|
122,269
|
|
|
$
|
322,269
|
|
|
(1)
|
Reflects the grant date fair value of the Option awards granted during the reported fiscal years.
Fiscal year 2018 grants consisted of 750,000 Options for Mr. Smith and 300,000 Options for each of Messrs. Honan, Shah and Sims,
in each case at an exercise price of $0.37 per share (using an exchange rate of C$1.2692 to US$1.00) on November 9, 2017. 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, 2018.
|
|
(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, 2018.
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, 2018.
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 2018.
Option-Based Awards
The incentive portion of each named executive
officer’s compensation package consists primarily of Options awarded under the 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, 2018,
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 9, 2017, each with an exercise price per share of C$0.47:
Mr. Smith, 750,000 Options; Mr. Honan, 300,000 Options; Mr. Shah, 300,000 Options; and Mr. Sims, 300,000 Options. These Options
vested at 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, 2018, KMSmith would have been entitled to a payment of $270,000.
No other named executive officer is party
to an employment agreement with the Company.
Stock Options Under Long-Term Incentive
Plan
In accordance with the Long-Term Incentive
Plan, the Company granted Options to its named executive officers during the Company’s 2018 fiscal year; no other equity-based
awards were granted to the named executive officers during the 2018 fiscal year.
The following table sets forth the outstanding
equity awards for each named executive officer at June 30, 2018. The Company has not granted full value stock-based awards to any
of its named executive officers.
Outstanding Equity Awards at 2018 Fiscal
Year-End
|
|
Option Awards
|
Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)
|
|
|
Option
Exercise
Price ($)
(2)
|
|
|
Option
Expiration
Date
|
Mark A. Smith
|
|
11/9/2017
|
|
|
750,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
1/19/2016
|
|
|
750,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
487,500
|
|
|
|
162,500
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
1,987,500
|
|
|
|
162,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neal Shah
|
|
11/9/2017
|
|
|
300,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
1/19/2016
|
|
|
350,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
300,000
|
|
|
|
100,000
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
950,000
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Honan
|
|
11/9/2017
|
|
|
300,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
1/19/2016
|
|
|
500,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
300,000
|
|
|
|
100,000
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
1,100,000
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jim Sims
|
|
11/9/2017
|
|
|
300,000
|
|
|
|
—
|
|
|
$
|
0.36
|
|
|
11/9/2022
|
|
|
1/19/2016
|
|
|
500,000
|
|
|
|
—
|
|
|
|
0.47
|
|
|
1/19/2021
|
|
|
3/6/2017
|
|
|
300,000
|
|
|
|
100,000
|
|
|
|
0.58
|
|
|
3/6/2022
|
Total
|
|
|
|
|
1,100,000
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total for all Named Executive Officers:
|
|
|
|
|
5,137,500
|
|
|
|
462,500
|
|
|
|
|
|
|
|
|
(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 an exchange rate of C$1.3168 to US$1.00 on June 30, 2018.
|
Retirement Plan Benefits
Each named executive officer is eligible
to participate in the Company’s 401(k) savings plan, which is designed to reward continued employment with the Company and
assist participants with financial preparation for retirement. All amounts credited under the 401(k) savings plan relate to participant
contributions. The Company does not currently make matching or other contributions to the 401(k) savings plan.
Termination and Change of Control
Benefits
Except as described above, the Company
has not entered into any plans or arrangements in respect of remuneration received or that may be received by the named executive
officers in respect of compensating such officers or directors in the event of a change of control, termination of employment (as
a result of resignation, retirement, change of control, etc.) or a change in responsibilities following a change of control.
EQUITY
COMPENSATION PLANS
The Company has maintained equity compensation
plans under which Options have been granted. Option grants have been determined by the Company’s directors and are only provided
in compliance with applicable laws and regulatory policy. The following information is provided with respect to compensation plans
(including individual compensation arrangements) under which equity securities are authorized for issuance as of June 30, 2018.
Equity Compensation Plan Information
|
Plan Category
|
|
Number of Securities to
be issued upon
Exercise of
Outstanding Options,
Warrants, and Rights
|
|
|
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants,
and Rights
|
|
|
Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected in Second Column)
|
|
Equity Compensation Plans Approved by Security Holders
(1)
|
|
|
15,587,409
|
|
|
C$
|
0.65
|
|
|
|
4,864,486
|
(2)
|
Equity Compensation Plans Not Approved by Security Holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
15,587,409
|
|
|
C$
|
0.65
|
|
|
|
4,484,486
|
(2)
|
|
(1)
|
Represents Options granted pursuant to the Company’s 2016 Incentive Stock Option Plan (the
“
Option Plan
”) and the Long-Term Incentive Plan.
|
|
(2)
|
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 15,104,909 Options outstanding under the Option Plan and the Long-Term Incentive Plan, which number represents approximately
6.8% of the Company’s currently issued and outstanding Common Shares.
In fiscal year 2018, we granted awards
under the Long-Term Incentive Plan covering 3,925,000 Common Shares. Based on 207,255,111 basic weighted average Common Shares
outstanding for fiscal year 2018, our burn rate was 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 RSUs and 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 October 18, 2018, 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 October 18, 2018, 11,662,409 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, 2013 to June 30, 2018, with cumulative total returns for the
S&P/TSX Composite Index and S&P/TSX Mining Index:
Overall, the Company’s cumulative
return was materially greater than 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 2018 Annual Report on Form 10-K under
the heading “Certain Relationships and Related Person Transactions.”
An “informed person” means:
|
(a)
|
a director or executive officer of the Company;
|
|
(b)
|
a director or executive officer of a person or company that is itself an informed person or subsidiary
of the Company;
|
|
(c)
|
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
|
|
(d)
|
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 information regarding
transactions between the Company (and its subsidiaries) and its officers, directors and significant shareholders since July 1,
2014. 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, 2018 and
2017, the Company paid interest of $176,000 and $71,000, respectively, under the Smith Loans, with $70,000 remaining payable as
of June 30, 2018.
On April 6, 2018, 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, 2019
and June 16, 2019, respectively.
As of October 18, 2018, there was $1,000,000
and $480,000 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.
SECTION
16(
a
) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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. Officers, directors and
greater than ten percent beneficial owners are required by applicable regulations to furnish the Company with copies of all Section
16(a) forms they file.
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 2018, all filing
requirements applicable to reporting persons were met.
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 June 28, 2019.
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 September 11, 2019. If a shareholder proposal, other than a director nomination,
is not submitted to the Company by September 11, 2019, 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 2018 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. Any interested
party may inspect information filed by the Company, without charge, at the public reference facilities of the SEC at its principal
office at 100 F. Street, N.E., Washington, D.C. 20549. Any interested party may obtain copies of all or any portion of the information
filed by the Company at prescribed rates from the Public Reference Section of the SEC at its principal office at 100 F. Street,
N.E., Washington, D.C. 20549. In addition, 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, 2018. 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 18th
day of October, 2018.
BY ORDER OF THE BOARD
NIOCORP DEVELOPMENTS LTD.
/s/ Mark A. Smith
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Mark A. Smith
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President, Chief Executive Officer, Executive Chairman and Director
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SCHEDULE
A
FORM OF PROXY
8th
floor, 100 University Avenue Toronto, Ontario M5J 2Y1 www.computershare.com BTDQ 000001 SAM SAMPLE 123 SAMPLES STREET SAMPLETOWN
SS X9X X9X CANADA Security Class COMMON SHARES Holder Account Number C9999999999 IND Form of Proxy - Annual General Meeting of
Shareholders to be held on December 5, 2018 This Form of Proxy is solicited by and on behalf of Management. Notes to proxy 1.
Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act
on their behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than
the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).
2. If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.),
then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you must
sign this proxy with signing capacity stated, and you may be required to provide documentation evidencing your power to sign this
proxy. 3. This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy. 4. If this proxy is not dated,
it will be deemed to bear the date on which it is mailed by Management to the holder. 5. The securities represented by this proxy
will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be
voted as recommended by Management. 6. The securities represented by this proxy will be voted in favour or withheld from voting
or voted against each of the matters described herein, as applicable, in accordance with the instructions of the holder, on any
ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities
will be voted accordingly. 7. This proxy confers discretionary authority in respect of amendments or variations to matters identified
in the Notice of Meeting or other matters that may properly come before the meeting or any adjournment or postponement thereof.
8. This proxy should be read in conjunction with the accompanying documentation provided by Management. Proxies submitted must
be received by 10:00 AM, Mountain Time, on December 3, 2018 VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!
To Vote Using the Telephone Call the number listed BELOW from a touch tone telephone. 1-866-732-VOTE (8683) Toll Free To Vote
Using the Internet Go to the following web site: www.investorvote.com Smartphone? Scan the QR code to vote now. To Receive Documents
Electronically You can enroll to receive future securityholder communications electronically by visiting www.investorcentre.com
and clicking at the bottom of the page. If you vote by telephone or the Internet, DO NOT mail back this proxy. Voting by mail
may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.
Voting by mail or by Internet are the only methods by which a holder may appoint a person as proxyholder other than the Management
nominees named on the reverse of this proxy. Instead of mailing this proxy, you may choose one of the two voting methods outlined
above to vote this proxy. To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER listed below. CONTROL
NUMBER 23456 78901 23456 BTDQ_PRX_283310/000001/000001/i Fold Fold
SAM
SAMPLE
C9999999999 IND C04 Appointment of Proxyholder I/We being holder(s)
of NioCorp Developments Ltd. hereby appoint: Mark A. Smith, President, Chief Executive Officer, and Executive Chairman of the
Company, or failing him, John F. Ashburn, Jr. Vice-President, General Counsel, and Corporate Secretary of the Company, OR Print
the name of the person you are appointing if this person is someone other than the Chairman of the Meeting. as my/our proxyholder
with full power of substitution and to attend, act and to vote for and on behalf of the shareholder in accordance with the following
directions (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly come before
the Annual General Meeting of Shareholders of NioCorp Developments Ltd. to be held at 200 Inverness Drive West, Englewood, Colorado
80112, on Wednesday, December 5, 2018 at 10:00 AM, Mountain Time, and at any adjournment or postponement thereof. VOTING RECOMMENDATIONS
ARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES. 1. Number of Directors To set the number of Directors at six. For Against Abstain
2. Election of Directors For Withhold 01. Mark A. Smith 04. David C. Beling 02. Joseph A. Carrabba 05. Anna Castner Wightman For
Withhold 03. Michael Morris 06. Nilsa Guerrero-Mahon For Withhold 3. Appointment of Auditors Appointment of BDO USA, LLP as Auditors
of the Corporation for the ensuing year and authorizing the Directors to fix their remuneration. For Withhold Authorized Signature(s)
- This section must be completed for your instructions to be executed. I/We authorize you to act in accordance with my/our instructions
set out above. I/We hereby revoke any proxy previously given with respect to the Meeting. If no voting instructions are indicated
above, this Proxy will be voted as recommended by Management. Signature(s) Date Interim Financial Statements - Mark this box if
you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail. Annual
Financial Statements - Mark this box if you would like to receive the Annual Financial Statements and accompanying Management’s
Discussion and Analysis by mail. Information Circular - Mark this box if you would like to receive the Information Circular by
mail for the next securityholders' meeting. If you are voting by mail, please be sure to sign and date in the section above, and
mail in the provided envelope. B T D Q 2 8 3 3 1 0 1 P D I Z A R 1 9 9 9 9 9 Fold Fold