Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Director Resignation and Appointment
Effective as of March 31, 2022, Kenneth J. Mushinski resigned as a director of Rare Element Resources Ltd. (the “Registrant”) and as a member of the Nominating, Corporate Governance and Compensation Committee (the “NCG&C Committee”) of the board of directors of the Registrant (the “Board”). His resignation was not the result of any disagreement with the Registrant on any matter related to the Registrant’s operations, policies or practices.
On March 31, 2022, pursuant to the terms of the Investment Agreement, dated October 2, 2017, between Synchron, a California corporation and the Registrant’s largest shareholder (“Synchron”), and the Registrant, Synchron designee Nicole J. Champine was appointed to the Board. In addition, Ms. Champine (i) was named a member of the NCG&C Committee of the Board and (ii) entered into an indemnity agreement with the Registrant on the same terms as those contained in the indemnity agreements with the Registrant’s other directors. Ms. Champine is the Vice President and General Counsel of Cordillera Corporation, an affiliate of Synchron.
Chief Financial Officer Appointment
On March 28, 2022, Wayne E. Rich was appointed as the Chief Financial Officer of the Registrant.
Mr. Rich, 57, most recently served as Vice President of Finance, Treasurer and Corporate Secretary of Eden Innovations LLC from August 2017 to March 2022. He served as Chief Financial Officer of Star Mountain Resources, Inc. from November 2015 to January 2017, and as Chief Financial Officer of Northern Zinc, LLC from May 2015 to November 2015, when it was acquired by Star Mountain Resources, Inc., which filed for Chapter 11 bankruptcy protection in February 2018. Mr. Rich served in various capacities at Prospect Global Resources, Inc., a publicly traded mining company, including as Chief Financial Officer and Vice President of Finance (September 2011–December 2012) and Senior Vice President of Accounting and Treasury (December 2012–May 2014). From October 2008 to September 2011, he served as Treasurer and Director of Corporate Finance of Thompson Creek Metals Inc., a publicly traded metals and mining company. Prior to that, he served in several capacities at The Doe Run Resources Corporation, an integrated mining and metals manufacturing company, from August 1998 to October 2008, including as Treasurer (April 2007–October 2008) and Assistant Treasurer (July 2004–April 2007). Mr. Rich began his career with KPMG Peat Marwick. Mr. Rich holds a Master’s in Business Administration from Illinois State University and a Bachelor’s of Science in Accountancy from Eastern Illinois University. There are no family relationships between Mr. Rich and any director or executive officer of the Registrant, and there are no transactions between Mr. Rich and the Registrant that require disclosure pursuant to Item 404 of Regulation S-K.
Pursuant to an employment agreement (the “Employment Agreement”) between Mr. Rich and Rare Element Resources, Inc., a Wyoming corporation and wholly owned subsidiary of the Registrant (the “Company”), (i) Mr. Rich’s initial annual base salary is US$215,000, (ii) Mr. Rich will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board, and (iii) Mr. Rich will be eligible to participate in the employee benefit programs of the Registrant.
Pursuant to the terms of the Employment Agreement, Mr. Rich is entitled to separation benefits in the event that his employment is terminated by the Company without “cause” (as defined in the Employment Agreement) or by Mr. Rich for “good reason” (as defined in the Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material geographic relocation, a material breach of the Employment Agreement by the Company or the failure by the Company to maintain reasonable directors and officers liability insurance acceptable to the Board, in each case which the Company has failed to cure. The severance payment to be received by Mr. Rich upon termination under the circumstances described above will be equal to one year of Mr. Rich’s base salary in effect on the date of termination and paid to Mr. Rich in a lump sum 60 days after the date of such termination. In addition, Mr. Rich’s equity incentive awards will vest as of the date of termination, provided that Mr. Rich executes a general release of claims.
Pursuant to the terms of the Employment Agreement, Mr. Rich will be indemnified by the Company for all losses, settlements and other amounts arising from all claims or proceedings in which Mr. Rich may be involved relating to the business or affairs of the Company if in each case Mr. Rich acted in good faith and in a manner that he believed to be in the best interest of the Company, and his conduct did not constitute gross negligence or willful or wanton misconduct. In