Denison Mines Corp 6-K, filed Mar 30, 2021
Denison Mines Corp. (DNN)
6-K
2021-03-30
For: 2021-03-30
View Original
Added on
April 07, 2026
About this 6-K
Denison Mines Corp filed this 6-K on March 30, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
Date: March 30, 2021
Commission File Number: 001-33414
Denison Mines Corp.
(Translation of registrant’s name into
English)
1100-40 University Avenue, Toronto Ontario, M5J 1T1
Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form
40-F.
Form
20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): ☐
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7): ☐
Signatures
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
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Denison Mines Corp.
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/s/ Amanda Willett
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Date: March
30, 2021
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Amanda
Willett
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Vice
President Legal and Corporate Secretary
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EXHIBIT
INDEX
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Exhibit Number
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Description
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99.1
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99.2
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99.3
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99.4
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Exhibit 99.1
NOTICE AND ACCESS NOTIFICATION TO SHAREHOLDERS
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 2021
You are receiving
this notification because Denison Mines Corp. (the
“Company”) has
opted to use the “notice and access” model for the
delivery of its information circular (the “Circular”) to its shareholders in
respect of its annual general meeting of shareholders to be held on
May 6, 2021 (the “Meeting”).
Under
“notice and access”, instead of receiving paper copies
of the Circular, shareholders of record on March 17, 2021 are
receiving this notice with information on how to access the
Circular electronically. Such Shareholders will also receive a
proxy or voting instruction form, as applicable, to use to vote at
or in advance of the Meeting. The use of electronic delivery is
more environmentally friendly and economical; it reduces the
Company’s paper and printing use and the Company’s
printing and mailing costs.
MEETING DATE AND LOCATION:
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WHEN:
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May 6,
2021
11:30 a.m.
(Toronto Time)
There will be no reception or refreshments
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WHERE:
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The offices of
the Corporation
1100 – 40
University Avenue,
Toronto, Ontario
M5J 1T1
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In light of the COVID-19 pandemic, we request that shareholders
do not attend the
meeting in person. Please vote in advance of the
meeting.
SHAREHOLDERS WILL BE ASKED TO CONSIDER AND VOTE ON THE FOLLOWING
MATTERS AT THE MEETING:
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ELECTION OF DIRECTORS: To elect eight
directors of the Company for the ensuing year. See the sections
entitled “The Election of Directors” in the
Circular.
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APPOINTMENT OF AUDITORS: To ratify the
appointment of KPMG LLP as auditors of the Company and appoint them
for the ensuing year and to authorize the directors to fix their
remuneration. See the section entitled “The Appointment of
the Auditor” in the Circular.
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ADVISORY SAY ON EXECUTIVE COMPENSATION:
To consider a non-binding advisory resolution on the
Company’s approach to executive compensation. See the section
entitled “Advisory Vote on the Company’s Approach to
Executive Compensation” in the Circular.
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OTHER BUSINESS: To transact such other
business as may properly come before the Meeting or any adjournment
thereof.
SHAREHOLDERS ARE REMINDED TO REVIEW THE CIRCULAR
PRIOR TO
VOTING.
WEBSITES WHERE THE CIRCULAR IS POSTED:
The Circular for
the Meeting can be viewed online under the Company’s profile
at www.sedar.com or on the
United States Securities and Exchange Commission website at
www.sec.gov or on the
Company’s website at www.denisonmines.com.
The Financial
Statement Request Card is included with the proxy and voting
instruction form.
HOW TO OBTAIN PAPER COPIES OF THE CIRCULAR:
Shareholders may
request paper copies of the Circular and other meeting materials,
including the audited consolidated financial statements of the
Company for the year ended December 31, 2020 and the report of the
auditors thereon and related Management’s Discussion and
Analysis, by first class mail, courier or the equivalent at no cost
to the shareholder. Requests by email to info@denisonmines.com or by calling
toll-free at 1-888-689-7842 may be made up to one year from the
date the Circular was filed on SEDAR.
For shareholders
who wish to receive paper copies of the Circular in advance of the
voting deadline, requests must be received no later than April 23, 2021. The
Circular will be sent to such shareholders within three business
days of their request if such requests are made before the Meeting.
Following the Meeting, the Circular will be sent to such
shareholders within ten days of their request. Requests must be made by email to
info@denisonmines.com or by calling toll-free at
1-888-689-7842.
Those
shareholders with existing instructions on their account to receive
a paper copy of meeting materials will receive a paper copy of the
Circular with this notification.
VOTING:
Your vote is important. Given
the extraordinary social and economic impacts of the COVID-19
pandemic, including
governmental recommendations and/or orders for social distancing
and restrictions on non-essential travel and business activities,
we
request that shareholders do not attend the meeting in
person. We believe it is in the best interests of our
shareholders, directors and employees for shareholders to
communicate their votes and their opinions with the Corporation in
advance of, instead of at, the meeting.
YOU CANNOT VOTE BY RETURNING THIS
NOTICE. To vote your securities, you must vote using the
method set out in the enclosed voting instruction form or
proxy.
Registered Holders are asked to
return your proxies
using the following methods by the proxy deposit date noted on your
proxy, which is by 11:30 a.m. (Toronto Time) on May 4,
2021:
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INTERNET:
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Go
to www.investorvote.com and follow the instructions.
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TELEPHONE:
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You
may enter your voting instructions by telephone at:
1-866-732-8683
(toll free within North America), or 312-588-4290 (international
direct dial)
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FACSIMILE:
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Fax to Computershare at 1-866-249-7775 or
416-263-9524.
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MAIL:
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Complete
the form of proxy or any other proper form of proxy, sign it and
mail it to Computershare at:
Computershare
Investor Services Inc.
Toronto Office,
Proxy Department
100 University
Avenue, 8th Floor
Toronto, Ontario,
Canada M5J 2Y1
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Beneficial Holders are asked to
return your voting instructions using the following methods at
least one business day in advance of the proxy deposit date noted
on your voting instruction form:
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INTERNET:
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Go to www.proxyvote.com and follow the instructions.
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TELEPHONE:
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You may enter
your voting instructions by telephone at: 1-800-474-7493 (English) or 1-800-474-7501 (French).
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MAIL:
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Complete the
voting instruction form, sign it and mail it in the envelope
provided.
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Shareholders with questions about notice and access can call toll
free at 1-888-689-7842.
Exhibit 99.2
NOTICE OF ANNUAL GENERAL
MEETING OF SHAREHOLDERS
You are hereby given notice of Denison Mines
Corp.’s Annual General Meeting of
Shareholders.
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When
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Where
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Thursday, May 6, 2021
11:30 a.m. Meeting
There
will be no reception or refreshments
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The offices of the
Corporation
1100 - 40 University
Avenue
Toronto, Ontario M5J 1T1
Please plan to vote in advance of the meeting and do not attend in
person
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The purpose of the Meeting
is:
(a) to receive the consolidated financial
statements of Denison Mines Corp. for the year ended December 31,
2020, along with the auditor’s report on the
statements;
(b) to ratify the appointment of
KPMG LLP as the Company’s auditors and appoint them for the
upcoming year, and to
authorize the directors to fix their
remuneration;
(c) to elect eight directors to the Board
for the upcoming year;
(d) to consider a non-binding advisory
resolution on the Company’s approach to executive
compensation; and
(e) to transact such other business as may
properly come before the Meeting.
If you held shares in Denison Mines Corp. on
March 17, 2021, you are entitled to receive notice of and vote at
this Meeting or any postponement or adjournment of
it.
Your vote is
important.
Given the extraordinary social and economic impacts of the COVID-19
pandemic, including governmental recommendations and/or orders for
group gatherings, physical distancing and restrictions on
non-essential travel and business activities, we request that
shareholders do not attend the meeting in person. We believe
it is in the best interests of our shareholders, directors and
employees for shareholders to communicate their votes and their
opinions with the Corporation in advance of, instead of at, the
meeting.
The
Corporation is not aware of any items of business to be brought
before the Meeting other than those noted above (and further
described in the accompanying Management Information Circular (the
“Circular”) and there will be no management
presentation on the business and operations of the Corporation at
the Meeting.
This notice is accompanied by the Circular which
describes who can vote, how to vote, and what the Meeting will
cover. We recommend you refer to the Annual General
Meeting page of the Corporation’s website at
www.denisonmines.com
for the most up-to-date information
regarding the meeting and as a method to ask questions of the
directors and/or management in advance of the
meeting.
The 2020 Annual Report, including the audited
consolidated financial statements and related management’s
discussion and analysis for the year ended December 31, 2020, has
been mailed to those
shareholders who requested a copy.
2021 DENISON NOTICE OF
MEETING
This information is also available on
Denison’s website at www.denisonmines.com, on the
System for Electronic Document Analysis and Retrieval
(“SEDAR”) at
www.sedar.com, on
the Electronic Data Gathering, Analysis, and Retrieval system
(“EDGAR”) of the
United States Securities and Exchange Commission at www.sec.gov/edgar or by request
to the Corporate Secretary of the Company at 1100 - 40 University
Avenue, Toronto, Ontario M5J
1T1.
As described in the “notice and
access” notification mailed to shareholders of the Company,
Denison has opted to deliver its Meeting materials to shareholders
by posting them on its website at www.denisonmines.com. The use
of this alternative means of delivery is more environmentally
friendly and more economical as it reduces the Company’s
paper and printing use and the Company’s printing and mailing
costs.
The Meeting materials will be available on the
Company’s website on May 19, 2020 and will remain on the
website for one full year. The Meeting materials will also be
available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar
on March 30, 2021.
Shareholders who wish to receive paper copies of
the Meeting materials prior to the meeting may request copies from
the Company by calling 1-888-689-7842 or by sending an email to
info@denisonmines.com no
later than April 23, 2021. Please note
that we cannot guarantee delivery, and there may be mailing delays
as a result of the COVID-19 pandemic or other
events.
Please vote by using the proxy form or
voting instruction form included with the
“notice and access” notification and return it before
11:30 a.m. (Eastern Time) on May 4, 2021 in accordance with the
instructions provided.
Yours truly,
David Cates
Director, President & Chief Executive
Officer
Dated March 23, 2021
2021 DENISON
NOTICE OF MEETING
Exhibit
99.3
Denison Mines Corp.
Annual General
Meeting
of Shareholders
Thursday, May
6, 2021
Notice of
Meeting &
Management Information
Circular
Dated March 23, 2021
Dated March 23, 2021
Dear Denison
Shareholder,
On behalf of the
Board of Directors, I hereby provide notice to you of
Denison’s annual general meeting of shareholders to be held
on Thursday, May 6, 2021 at the offices of the Corporation, 1100
– 40 University Avenue, Toronto, Ontario,
Canada.
Given the
extraordinary social and economic impacts of the COVID-19 pandemic,
including governmental recommendations and/or orders for physical
distancing and restrictions on group gatherings and non-essential
travel and business activities, we request that
shareholders do not attend the meeting in
person. While
such restrictions, and others of the like, may change by the date
of the meeting, we believe it is in the best interests of our
shareholders, directors and employees for shareholders to communicate their
votes and their opinions with the Corporation in advance of,
instead of at, the meeting.
It is important to vote your shares. The
attached Management Information Circular contains important
information about the matters to come before the meeting, how you
can ask questions of the directors and/or management and how you
can vote in advance of the meeting.
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Globally, 2020 was
highlighted by the far reaching impacts of the COVID-19 pandemic.
Confronted with the varied challenges of the pandemic,
Denison’s resilient teams excelled in 2020 and early 2021
– accomplishing, among other things, a significant de-risking
of our flagship Wheeler River project and delivering positive
results from the Waterbury Lake Preliminary Economic
Assessment.
Denison was not immune to
COVID-19 related operational and other adjustments. In order to
ensure employee safety, support public health efforts to limit
transmission of COVID-19, and exercise prudent financial
discipline, Denison temporarily suspended the formal Environmental
Assessment (“EA”) process for the Wheeler River project
and other discretionary activities in March 2020.
With the
implementation of appropriate health and safety practices and
procedures, Denison was able to resume field operations in the
summer of 2020 and the formal EA process in January 2021. The
Company has ambitious plans for its projects in 2021 and beyond,
including progressing the EA process and the initiation of the
formal feasibility process for Wheeler River.
As we advance
towards our goal of positioning Denison as a high leverage uranium
development company, poised to become Canada’s next uranium
producer, the Board of Directors and the management team thank you
for your continued support of, and interest in,
Denison.
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What's
Inside
Notice of
Meeting
Management Information
Circular
Business of the
Meeting
● Receiving the
Consolidated Financial Statements
● Appointment of
the Auditor
● Election of
Directors
● Non-binding Advisory
Vote on Executive Compensation
Denison’s Corporate Governance
Practices
Director Compensation
Executive
Compensation
Equity Compensation
Plans
● Option
Plan
● Share
Unit Plan
Additional
Information
Appendices:
A - Change of Auditor Reporting
Package
B - Board of Directors’
Mandate
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1
5
14
24
27
41
47
48
51
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Sincerely,
David
Cates,
Director,
President & Chief Executive Officer
NOTICE OF
ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are hereby
given notice of Denison Mines Corp.’s Annual General Meeting
of Shareholders.
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When
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Where
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Thursday, May 6,
2021
11:30 a.m.
Meeting
There
will be no reception or refreshments
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The offices of
the Corporation
1100 – 40
University Avenue,
Toronto, Ontario
M5J 1T1
Please plan to vote in advance of the meeting and do not attend in
person
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The purpose of
the Meeting is:
(a) to
receive the consolidated financial statements of Denison Mines
Corp. for the year ended December 31, 2020, along with the
auditor’s report on the statements;
(b) to
ratify the appointment of KPMG LLP as the Company’s auditors
and appoint them for the upcoming year, and to authorize the
directors to fix their remuneration;
(c) to elect
eight directors to the Board of Directors for the upcoming
year;
(d) to
consider a non-binding advisory resolution on the Company’s
approach to executive compensation; and
(e) to
transact such other business as may properly come before the
Meeting.
If you held
shares in Denison Mines Corp. on March 17, 2021, you are entitled
to receive notice of and vote at this Meeting or any postponement
or adjournment of it.
Your vote is
important. Given the extraordinary social and economic
impacts of the COVID-19 pandemic, including governmental
recommendations and/or orders for group gatherings, physical
distancing and restrictions on non-essential travel and business
activities, we request that
shareholders do not attend the meeting in person. We believe
it is in the best interests of our shareholders, directors and
employees for shareholders to communicate their votes and their
opinions with the Corporation in advance of, instead of at, the
meeting.
The
Corporation is not aware of any items of business to be brought
before the Meeting other than those noted above (and further
described in the accompanying Management Information Circular (the
“Circular”) and there will be no management
presentation on the business and operations of the Corporation at
the Meeting.
This notice is
accompanied by the Circular which describes who can vote, how to
vote, and what the Meeting will cover. We recommend you refer to
the Annual General Meeting page of the Corporation’s website
at www.denisonmines.com
for the most up-to-date information regarding the meeting and as a
method to ask questions of the directors and/or management in
advance of the meeting.
The 2020 Annual
Report, including the audited consolidated financial statements and
related management’s discussion and analysis for the year
ended December 31, 2020, has been mailed to those shareholders who
requested a copy.
2021 DENISON NOTICE OF MEETING
This information
is also available on Denison’s website at www.denisonmines.com, on the
System for Electronic Document Analysis and Retrieval
(“SEDAR”) at
www.sedar.com, on
the Electronic Data Gathering, Analysis, and Retrieval system
(“EDGAR”) of the
United States Securities and Exchange Commission at www.sec.gov/edgar or by request
to the Corporate Secretary of the Company at 1100 - 40 University
Avenue, Toronto, Ontario M5J 1T1.
As described in
the “notice and access” notification mailed to
shareholders of the Company, Denison has opted to deliver its
Meeting materials to shareholders by posting them on its website at
www.denisonmines.com. The use
of this alternative means of delivery is more environmentally
friendly and more economical as it reduces the Company’s
paper and printing use and the Company’s printing and mailing
costs.
The Meeting
materials will be available on the Company’s website on March
30, 2021 and will remain on the website for one full year. The
Meeting materials will also be available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar
on March 30, 2021.
Shareholders who
wish to receive paper copies of the Meeting materials prior to the
meeting may request copies from the Company by calling
1-888-689-7842 or by sending an email to info@denisonmines.com no
later than April 23, 2021. Please note that we cannot guarantee
delivery, and there may be mailing delays as a result of the
COVID-19 pandemic or other events.
Please vote by
using the proxy form or voting instruction form included
with the “notice and access” notification and return it
before 11:30 a.m. (Eastern Time) on May 4, 2021 in accordance with
the instructions provided.
Yours
truly,
David
Cates
Director,
President & Chief Executive Officer
Dated March 23,
2021
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2021 DENISON NOTICE OF MEETING
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MANAGEMENT
INFORMATION CIRCULAR
ABOUT THIS
CIRCULAR
You have received
this Circular because you owned shares of Denison Mines Corp. on
March 17, 2021, the record date. As a Shareholder, you have the
right to vote at the Annual General Meeting of Shareholders on May
6, 2021 (the “Meeting”).
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Management
is soliciting your proxy for the Meeting.
Given the extraordinary
social and economic impacts of the COVID-19 pandemic, including
governmental recommendations and/or orders for physical distancing
and restrictions on group gatherings, non-essential travel and
business activities, we request that
shareholders do not attend the meeting in person. We believe
it is in the best interests of our shareholders, directors and
employees for shareholders to communicate their votes and their
opinions with the Corporation in advance of, instead of at,
the meeting.
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We recommend you refer to the
Annual General Meeting page of the Corporation’s website at
www.denisonmines.com for the most up-to-date information regarding
the meeting and as a method to ask questions of the directors
and/or management in advance of the meeting.
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This Circular
provides the information that you need to have your vote recorded
at the Meeting.
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If you are a registered
holder of Shares, you have been sent a proxy form.
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If your Shares are held by a
nominee, you may receive either a proxy form or voting instruction
form and should follow the instructions provided by the
nominee.
The Corporation is not aware of any items of business to be brought
before the Meeting other than those described in this Management
Information Circular (the “Circular”) and there will be
no management presentation on the business and operations of the
Corporation at the Meeting.
The Board of
Directors has approved the Circular contents and has directed
management to make it available to you. The information in the
Circular is given as of March 23, 2021 unless otherwise
noted.
Management’s
solicitation of proxies is being made by mail and electronic means,
at Denison’s expense. Proxies may also be solicited
personally or by telephone by directors, officers, employees and
agents of the Company.
In this Circular,
Denison or the Company means Denison Mines Corp.,
Shareholders means holders
of Denison’s common shares and Shares means Denison’s common
shares. All amounts are in Canadian
dollars, unless otherwise indicated. References to
USD$
mean United States
dollars.
VOTING
YOUR DENISON SHARES
We
kindly ask that Shareholders do not attend the Meeting in person,
and vote by other means.
Registered Shareholders
If you were a
registered Shareholder on the record date, you may vote in person
at the Meeting or give another person authority to represent you
and vote your Shares at the Meeting, as described below under
“Voting by Proxy”.
Non-Registered Shareholders
Your Shares may
not be registered in your name but in the name of a nominee, which
is usually a trust company, securities broker or other financial
institution. If your Shares are registered in the name of a
nominee, you are a non-registered Shareholder. Your nominee is
entitled to vote the Shares held by it on the record date. Your
nominee is required to seek your instructions as to how to vote
your Shares. You may vote your Shares through your nominee or in
person.
To vote your
Shares through your nominee, you should follow the instructions of
your nominee with respect to the procedures to be followed for
voting. Generally, nominees will provide non-registered
Shareholders with either: (a) a voting instruction form for
completion and execution by you, or (b) a proxy form, executed by
the nominee and restricted to the number of Shares owned by you,
but otherwise uncompleted. These procedures are to permit
non-registered Shareholders to direct the voting of the Shares that
they beneficially own.
If you are a
non-registered Shareholder and would like to vote your Shares in
person at the Meeting, you should take the following
steps:
1. appoint
yourself as the proxyholder by writing your own name in the space
provided on the voting instruction form or proxy form,
and
2. follow
the nominee’s instructions for return of the executed form or
other response.
Do not otherwise complete the form.
Your vote, or your designate’s vote, will be taken at the
Meeting.
There are two
kinds of non-registered Shareholders (i) those who object to their
name being made known to the issuers of securities which they own,
known as objecting beneficial owners or “OBOs” and (ii) those who do not
object to their name being made known to the issuers of securities
they own, known as non-objecting beneficial owners or
“NOBOs”.
In accordance
with the requirements of National Instrument 54-101 of the Canadian
Securities Administrators, Denison has elected to send the notice
of meeting, this Circular and proxy form (collectively, the
“Meeting
Materials”) indirectly to the NOBOs.
Denison intends
to pay for intermediaries such as stockbrokers, securities dealers,
banks, trust companies, trustees and their agents and nominees
(“Intermediaries”) to forward the
Meeting Materials to OBOs.
Voting by Proxy
We are
encouraging all Shareholders to vote by using the proxy form or
voting instruction form provided, instead of attending in person. A
proxy must be in writing and must be executed by you or by your
attorney authorized in writing, unless you have chosen to complete
your proxy by telephone or the internet, as described on the proxy
form or voting instruction form provided.
Your Proxy Vote and Appointing a Proxyholder
On the proxy
form, you can indicate how you want to vote your Shares or you can
let your proxyholder decide for you.
All Shares
represented by properly completed proxies received at the Toronto
office of Computershare Investor Services Inc. by 11:30 a.m. (Eastern time) on May 4,
2021 or not less than 48 hours (excluding Saturdays, Sundays
and holidays) before any adjourned or postponed Meeting will be
voted or withheld from voting at the Meeting. Proxies should be
delivered to:
Computershare
Investor Services Inc. Toronto Office, Proxy
Department
100 University
Avenue, 8th Floor
Toronto, Ontario,
Canada M5J 2Y1
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
For more
information on how to vote, Shareholders may contact Computershare
by telephone at 1-800-564-6253 or by e-mail to
service@computershare.com.
If you give directions on how to vote your
Shares, your proxyholder must vote (or withhold from voting) your
Shares according to your instructions, including on any ballot
votes that take place at the Meeting. If you have not
specified how to vote on a particular matter, then your proxyholder
can vote your Shares as he or she sees fit. Your proxy authorizes
the proxyholder to vote and act for you at the Meeting, including
any continuation after an adjournment of the Meeting.
A proxyholder is
the person you appoint to act on your behalf at the Meeting and to
vote your Shares. You may choose
anyone to be your proxyholder, including someone who is not a
Shareholder of Denison. Simply fill in the name in the blank
space provided on the enclosed proxy form. If you leave the space
in the proxy form blank, the persons designated in the form, who
are officers of Denison, are appointed to act as your proxyholder.
If you have not specified whether
or how to vote on a particular matter and the persons designated in
the form are appointed as your proxyholder, your Shares will be
voted as follows:
●
FOR the ratification of the appointment
of KPMG LLP as the Company’s auditors and appointment of them
as independent auditor until the next Annual Meeting of
Shareholders, and authorization of the Board to fix its
remuneration;
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FOR the election as directors of all
nominees listed in this Circular; and
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FOR the non-binding advisory vote on
executive compensation.
Revoking Your Proxy
If you are a
registered Shareholder who has given a proxy, you may revoke it by
delivering a written notice, stating that you want to revoke your
proxy to: The Corporate Secretary, Denison Mines Corp., 1100 - 40
University Avenue, Toronto, Ontario, Canada M5J 1T1 not less than
48 hours (excluding Saturdays, Sundays and holidays) before the
time of the Meeting, or by attending the Meeting and notifying the
Chair of the Meeting prior to the commencement of the Meeting that
you have revoked your proxy. A registered Shareholder may also
revoke its proxy by completing and signing a proxy bearing a later
date and depositing it with Computershare, provided it is received
not less than 48 hours (excluding Saturdays, Sundays and holidays)
before the time of the Meeting.
The notice can be
from you or your attorney, if he or she has your written
authorization. If the Shares are owned by a corporation, the
written notice must be from its authorized officer or
attorney.
Additional Matters Presented at the Meeting
The proxy form or
voting instruction form provided confers discretionary authority
upon the persons named as proxies with respect to any amendments or
variations to the matters identified in the Notice of Meeting and
with respect to other matters which may properly come before the
Meeting.
If you sign and
return the proxy form and any matter is presented at the Meeting in
addition, as an amendment or a variation to the matters described
in the Notice of Meeting, the Denison officers named as proxies
will vote in their best judgment. When this Circular went to press,
Denison’s management was not aware of any matters to be
considered at the Meeting other than the matters described in the
Notice of Meeting or any amendments or variations to the matters
described in the Notice.
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2021 DENISON MANAGEMENT INFORMATION
CIRCULAR
ELECTRONIC DELIVERY OF DOCUMENTS
Every year, as
required by laws governing public companies, the Company delivers
documentation to shareholders. In order to make this process more
convenient, Shareholders may choose to be notified by email when
the Company’s documentation, including the Meeting materials,
is posted on the Company’s website (www.denisonmines.com) and,
accordingly, such documentation will not be sent in paper form by
mail other than as required by applicable laws.
Delivery in an
electronic format, rather than paper, reduces costs to the Company
and benefits the environment. Shareholders who do not consent to
receive documentation through email notification will continue to
receive such documentation by mail or otherwise, in accordance with
securities laws. By consenting to electronic delivery,
Shareholders:
(i)
agree to receive all
documents to which they are entitled electronically, rather than by
mail; and
(ii)
understand that access to the
internet is required to receive a document electronically and
certain system requirements must be installed (currently Adobe
Acrobat Reader to view Adobe’s portable document format
(“PDF”)). Such
documents may include the interim consolidated financial reports,
the annual report (including audited annual consolidated financial
statements and management’s discussion and analysis
(“MD&A”)),
the notice of annual and/or special meeting and related management
information circular and materials, and other corporate information
about the Company.
|
At any time, Denison may
elect to not send a document electronically, or a document may not
be available electronically. In either case, a paper copy will be
mailed to Shareholders.
Registered Shareholders can
consent to electronic delivery by completing and returning the form
of consent included with the form of proxy. Non-registered
Shareholders can consent to electronic delivery by completing and
returning the appropriate form received from the applicable
intermediary.
|
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Shareholders may request copies of the Meeting
materials by mail at no cost for up to one year from the date the
Information Circular was filed on SEDAR by email to
info@denisonmines.com or by calling
1-888-689-7842. For Shareholders who wish to
receive copies of the Circular in advance of the voting deadline,
requests must be received no later
than April 23, 2021.
|
NOTICE AND
ACCESS
The Company
delivers its Meeting materials to Shareholders by posting them on
its website at www.denisonmines.com, rather
than mailing physical copies of the materials to all Shareholders.
The Meeting materials will be available on the Company’s
website on March 30, 2021 and will remain on the website for one
full year. The Circular will also be available on March 30, 2021 on
the System for Electronic Document Analysis and Retrieval
(“SEDAR”) at
www.sedar.com and
on the Electronic Data Gathering, Analysis, and Retrieval system
(“EDGAR”) of the
United States Securities and Exchange Commission at www.sec.gov/edgar.
The Company has
decided to mail paper copies of the Circular to those registered
and non-registered Shareholders who had previously elected to
receive paper copies of the Company’s Meeting materials. All
other Shareholders will receive a “notice and access”
notification which will contain information on how to obtain
electronic and paper copies of the Circular in advance of the
Meeting and for a full year following the Meeting.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
VOTING
SECURITIES
Denison’s
common shares are the only shares issued by the Company and each
Share entitles the holder to one vote on all matters at the
Meeting. In accordance with the provisions of the Business Corporations Act (Ontario)
(the “OBCA”),
the Company prepared a list of Shareholders on the record date for
the Meeting of March 17, 2021. Each Shareholder named on the list
will be entitled to vote at the Meeting the Shares shown on the
list opposite his or her name.
On March 17,
2021, the Company had 725,459,852 Shares issued and
outstanding.
Principal Holders of Shares
To the knowledge
of Denison’s directors and executive officers, no person or
company beneficially owns or exercises control or direction over,
directly or indirectly, more than 10% of Denison’s
Shares.
Interest of Certain Persons or Companies in Matters to be Acted
Upon
No director or
executive officer or any person
who has held such a position since January 1, 2020, nor any
associate or affiliate of the foregoing persons, has any
material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in matters to be acted upon
at the Meeting other than their election pursuant to the election
of directors, as applicable.
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BUSINESS
OF THE MEETING
The purpose of
the Meeting is:
(a) to
receive the consolidated financial statements of Denison Mines
Corp. for the year ended December 31, 2020, along with the auditor’s report on the
statements;
(b) to
ratify the appointment of KPMG LLP as the Company’s auditors
and appoint them for the upcoming year, and to authorize the
directors to fix the remuneration of the auditor;
(c) to elect
eight directors to the Board for the upcoming year;
(d) to
consider a non-binding advisory resolution on the Company’s
approach to executive compensation; and
(e) to
transact such other business as may properly come before the
Meeting.
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Receiving
the Consolidated Financial Statements
The consolidated
financial statements of the Company for the fiscal year ended
December 31, 2020 are included in Denison’s 2020 Annual
Report, which has been mailed to the Company’s registered and
non-registered Shareholders who requested it. The 2020 Annual
Report is also available on Denison’s website at www.denisonmines.com, on SEDAR
at www.sedar.com
and on EDGAR at www.sec.gov/edgar.shtml.
Management will
be available to discuss Denison’s consolidated financial
results at the Meeting, and Shareholders and proxyholders in
attendance will be given an opportunity to discuss these results
with management. No vote of Shareholders is required with respect
to this item of business.
The Appointment of the Auditor
The Board
recommends the ratification of the appointment of KPMG LLP
(“KPMG”) as the
Company’s independent auditor and their appointment to hold
office until the end of the next annual meeting of shareholders,
with the directors to fix the remuneration to be paid to KPMG for
their services.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Effective October
1, 2020, at the request of the Company, the Company’s prior
auditor, PricewaterhouseCoopers LLP (“PwC”), resigned as auditors of the
Company and KPMG was appointed to fill their vacancy for the fiscal
year ended December 31, 2020.
In accordance
with the requirements of National
Instrument 51-102 of the Canadian Securities Administrators
(“51-102”), a
notice of change of auditors dated October 1, 2020 (the
“Notice of
Change”) was sent to PwC and KPMG, each of whom has
provided a letter to the securities regulatory authorities in each
of the jurisdictions where the Company is a reporting issuer
stating that they agree with the statement made in the Notice of
Change. A “reporting package”, as in 51-102, relating
to the change (comprising the Notice of Change of Auditors from the
Corporation and confirmation letters from each of PwC and KPMG) is
attached to the Circular as Appendix A.
You may either
vote for the ratification
of the appointment of KPMG LLP as
the Company’s auditors and the appointment of them as
Denison’s auditor to hold office until the end of the next
annual meeting, and authorizing the directors to fix the
auditors’ remuneration, or you can withhold your vote. Unless otherwise instructed, the named
proxyholders will vote FOR the ratification of appointment of KPMG
and authorizing their appointment and for the directors to fix
KPMG’s remuneration.
The
Election of Directors
The term of
office of each of the present directors of the Company expires at
the Meeting. The Board has nominated eight directors to be elected
at the Meeting, to serve as a director until the next annual
meeting unless he or she resigns or is otherwise removed from
office earlier. Each of the nominated directors is eligible to
serve as a director and has expressed his or her willingness to do
so.
|
The Board and
Management would like thank two departing directors for their
contributions to the Company: Ms. Catherine Stefan and Mr. Jack
Lundin have not stood for re-election at the Meeting.
The Board is
pleased to introduce two new nominees for the Board: Mr. David
Neuburger and Ms. Jennifer Traub. The Board believes the skills and
experiences these nominees will bring to the Board will be a
tremendous asset to the Company. The other proposed nominees are
currently directors of Denison and have been directors since the
dates indicated below.
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Denison’s
Board recognizes that the quality of its directors is an important
factor in the overall success of the Company. Denison is committed
to ensuring that its Board is composed of members who have the
competencies, capabilities and diversity required to understand
Denison’s business, along with the integrity and motivation
required to properly discharge their fiduciary duties in the long
term best interests of the Company and all of its
Shareholders.
When considering
the Board as a whole and assessing directors’ candidacy for
the Board, the Corporate Governance and Nominating Committee
(“CGN
Committee”) follows established guidelines for the
Board’s composition, including its Diversity Policy (see
“Denison’s Corporate Governance Practices –
Diversity within Denison” on page 16 for a summary) and its
“Guidelines for the
Composition of Denison’s Board”, and seeks
directors that have some or all of the following
attributes:
●
Financial accreditation
and/or financial literacy
●
Sound business experience and
expertise
●
Corporate governance
experience
●
Industry specific experience
and knowledge, including mining and metallurgy and occupational
health and safety
●
Sustainability knowledge,
including stakeholder engagement and environmental
management
●
Experience in government
relations, operations and regulatory issues
●
Financing and
merger/acquisition experience
●
Strong reputation within the
financial and business communities
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
●
Candidacy consistent with the
Diversity Policy and the targets set thereunder
●
Strong board skills, such as
integrity, networking abilities, interpersonal skills, ability to
think strategically and act independently
●
Independence, as such term is
defined by the Canadian Securities Administrators
When determining
nominees for election, the Board also considers the strategic
relationship agreement with KHNP Canada (the “KHNP SRA”). Under the KHNP SRA,
the Board must nominate one person designated by KHNP Canada for
election as a director at any Shareholder meeting where directors
are to be elected, so long as KHNP Canada or an affiliate holds
over 5% of the outstanding Shares. KHNP Canada has designated Mr.
Jun Gon Kim as its nominee. As General Manager of the Nuclear Fuel
Supply Section of KHNP, Mr. Kim brings to the Board substantial
industry-specific experience.
Advance Notice
According to the
Company’s by-laws, the Company must receive advance notice of
nominations of directors by Shareholders. As at the date of this
Circular, the Company has not received notice of any director
nominations in connection with this year’s Meeting.
Accordingly, the only persons currently nominated for election to
the Board at the Meeting are the nominees described
herein.
Majority Voting Policy
Shareholders are
entitled to vote for, or
withhold from voting for,
each individual director nominee at a Shareholders’ meeting.
The Board has adopted a Majority Voting Policy which provides, if
the number of Shares withheld
from any nominee exceeds the number of Shares voted
for the nominee, then such
nominee must immediately tender his or her resignation to the
Board. Denison’s CGN Committee will review the matter and
recommend to the Board whether to accept the resignation or not.
The Board shall accept the resignation absent exceptional
circumstances. The director involved does not participate in any
Board or committee deliberations on the matter. The Board must
announce its decision within 90 days of the applicable Shareholder
Meeting.
The Majority
Voting Policy applies only in circumstances involving an
uncontested election of directors, meaning an election in which the
number of nominees is equal to the number of directors to be
elected.
|
Unless
otherwise instructed, proxies and voting instructions given
pursuant to this solicitation by Denison’s management will be
voted FOR the election of the proposed nominees for
director. If any proposed nominee is unable to serve as a
director or withdraws his or her name, the named proxyholders
reserve the right to nominate and vote for another individual in
their discretion.
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2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
Profiles of the Nominated Directors
The tables below
set forth information about the nominated directors as of March 23,
2021, including their background and experience, main areas of
expertise, other exchange listed company boards of which each is a
member and their equity holdings in the Company.
Each nominee has
provided the information about the securities that he or she owns
or over which he or she exercises control or
direction.
The Board has
adopted a Share ownership requirement. Generally, within 5 years of
joining the Board, non-employee directors must own Shares with a
cost of acquisition equal to three times the value of their annual
retainers. See “Director Compensation - Share Ownership
Requirement” on page 26. The Board exempted nominees of KHNP
Canada from this requirement.
David D.
Cates, 38
Toronto, ON
Canada
Shares:
1,151,750
Options:
4,994,814
Share Units:
2,716,250
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Mr. Cates was
appointed President & CEO of Denison in 2015 and has also
served as Vice President Finance, Tax & Chief Financial Officer
as well as Director, Taxation during his tenure with the Company,
which began in 2008. Mr. Cates also serves on the board of
directors of the Canadian Nuclear Association, a non-profit
organization representing the nuclear industry in Canada. Mr. Cates
is a Chartered Professional Accountant (CPA, CA) and holds Master
of Accounting (MAcc) and Honours Bachelor of Arts (BA) degrees from
the University of Waterloo.
Mr. Cates also
sits on the board of directors of GoviEx Uranium Inc. (TSX-V) and
Skyharbour Resources Ltd. (TSX-V).
Areas of Expertise: Finance, Management,
International Business, Mergers & Acquisitions, the Mining and
Exploration Industry, the Nuclear Energy Industry, Compensation,
Taxation
Denison
Board Details:
● Director since August 9,
2018
● Non-Independent
● Share
ownership requirement does not apply
|
W. Robert
Dengler, 80
Aurora, ON
Canada
Shares:
782,706
Options:
197,000
Share Units:
148,334
|
Robert Dengler
has been a corporate director for over 14 years, after retiring
from his position as Non Executive Vice-Chairman of Dynatec
Corporation in 2006. Mr. Dengler founded Dynatec Corporation and
served as its President and Chief Executive Officer for 25 years
until January 2005. Prior to Dynatec, Mr. Dengler was a partner and
Vice President & General Manager of J.S. Redpath Limited. Mr.
Dengler obtained his B.Sc. from Queen's University in 1964 and was
awarded an Honorary Doctorate of Science from Queen’s
University in 1988.
Areas of Expertise: Finance,
International Business, the Mining and Exploration Industry,
Compensation, Operations
Denison
Board Details:
● Director since December 1,
2006
● Independent
● Member
of the Corporate Governance & Nominating Committee
● Chair
of the Environment, Health and Safety Committee
● Member
of the Technical Committee
● Complies
with Share ownership requirement
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2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
Brian D.
Edgar, 71
Vancouver, BC
Canada
Shares:
120,000
Options:
197,000
Share Units:
181,000
|
Brian Edgar is
the Chairman of Silver Bull Resources Inc., a mineral exploration
company listed on the TSX and the OTCMKTS, a position he has held
since 2010. Before that Mr. Edgar practiced Corporate and
Securities law in Vancouver, BC Canada for 16 years and then in
1992, he co-founded a private investment company, Rand Edgar
Investment Corp. Mr. Edgar has served on public company boards for
over 30 years. Mr. Edgar holds a Bachelor of Arts degree and a Law
degree, both from the University of British Columbia.
Mr. Edgar also
sits on the board of directors of Silver Bull (TSX and
OTCMKTS).
Areas of Expertise: Finance,
International Business, the Mining and Exploration Industry,
Corporate Governance, Compensation
Denison
Board Details:
● Director
since March 22, 2005
● Independent
● Chair
of the Corporate Governance and Nominating Committee
● Member
of the Audit Committee
● Complies
with Share ownership requirement
|
Ron F.
Hochstein, 59
Coquitlam, BC
Canada
Shares:
1,294,224
Options:
197,000
Share Units:
148,334
|
Ron Hochstein is
the President and Chief Executive Officer of Lundin Gold Inc. Mr.
Hochstein served as Executive Chairman of the Company in 2015 and
as President and Chief Executive Officer from 2009 to 2015. Prior
to that, Mr. Hochstein served as President and Chief Operating
Officer starting in 2006 when International Uranium Corporation
(“IUC”) and Denison Mines Inc. (“DMI”)
combined to form the Company. Mr. Hochstein is a Professional
Engineer and holds an M.B.A. from the University of British
Columbia and a B.Sc. from the University of Alberta.
Mr.
Hochstein1 is also a director
of Lundin Gold Inc. (TSX, Nasdaq Stockholm) and Josemaria Resources
Inc. (TSX, Nasdaq Stockholm).
Areas of Expertise: Finance, Management,
International Business, Mining and
Exploration,
Operations, Compensation
Denison
Board Details:
● Director
since April 6, 2000
● Independent
● Member
of the Compensation Committee
● Member
of the Environment, Health and Safety Committee
● Member
of the Technical Committee
● Complies
with Share ownership requirement
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2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
Jun Gon
Kim, 56
Gyeogju-si,
Gyeongsangbuk-do, Republic of Korea
Shares:
Nil
Options:
147,000
Share Units:
116,000
|
Based in Korea,
Mr. Kim is currently General Manager of the Nuclear Fuel Supply
Section of Korea Hydro Nuclear Power (“KHNP”), a
subsidiary of the Korea Electric Power Corporation. Mr. Kim has
professional expertise developed through working in the nuclear
industry and has held various positions at KHNP, including most
recently the General Manager of the Reactor Engineering Team (from
2016 to 2019). Prior to that, Mr. Kim held the positions of Senior
Manager of the Corporate Communications Office and Senior Manager
of the Public Relations Team. Mr. Park has a Bachelor’s
degree in Nuclear Engineering from Hanyang University.
Areas of Expertise: Management,
Operations, Energy, Communications and Public
Relations.
Denison
Board Details:
● Director
since February 17, 2020
● Not
independent
● Exempt
from the share ownership requirement.
|
David
Neuburger, 62
Saskatoon, SK
Canada
Shares:
Nil
Options:
Nil
Share Units:
Nil
|
David Neuburger
is a corporate director and consultant, with more than 30
years’ experience in mining, in executive leadership,
operations management, corporate strategic planning, projects and
mine engineering for companies involved in uranium, gold, nickel
and copper/zinc mining. From October 2013 to February 2018, Mr.
Neuburger was Vice President, General Manager, Kupol Operations for
Kinross Gold Corporation; prior to that, he held the positions of
Vice President, International Mining (April 2010 to March 2013) and
Vice President, Mining Division (December 2004 to March 2010) for
Cameco Corporation. Mr. Neuburger has also volunteered as President
and in other executive committee roles with the Saskatchewan Mining
Association. Mr. Neuburger is a Professional Engineer registered in
Saskatchewan and holds a Master of Business Administration degree
from the University of Saskatchewan and a Bachelor of Engineering
degree in Mining and a Bachelor of Science degree in Biology from
McGill University.
Areas of Expertise: Mining and Energy
Project Economics, Mine Development and Operations
Denison
Board Details:
● Proposed
Nominee to the Board, to be effective May 6, 2021
● Independent
● Share
ownership requirement not yet applicable
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2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
Jennifer
Traub, 49
Vancouver, BC
Canada
Shares:
Nil
Options:
Nil
Share Units:
Nil
|
Jennifer Traub is
a partner in the Securities Group at Cassels Brock & Blackwell
LLP and serves as Co-Chair of the firm’s Mining Group. Ms.
Traub represents both issuers and investment dealers in connection
with public and private securities offerings, mergers and
acquisitions and other financing transactions. She has particular
expertise and experience in the resource sector and has played an
integral role in managing some of the largest and most complex
corporate finance and M&A deals in the mining industry in
Canada. In addition to transactional work, Ms. Traub regularly
advises public companies regarding general corporate and securities
law matters, including continuous disclosure, corporate governance
and Canadian stock exchange issues. Ms. Traub has completed the
Osgoode Certificate in Mining Law and holds a Bachelor of Laws
degree from Osgoode Hall Law School. She is a member of the Law
Societies of BC and Ontario.
Areas of Expertise: Legal, Governance,
Mining Law, M&A and Corporate Finance
Denison
Board Details:
● Proposed
Nominee to the Board, to be effective May 6, 2021
● Independent
● Share
ownership requirement not yet applicable
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Patricia
M. Volker, 62
Burlington, ON
Canada
Shares:
190,550
Options:
147,000
Share Units:
137,334
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Patricia Volker
is a corporate director, whose experience is highlighted by over 17
years of service at the Chartered Professional Accountants of
Ontario, the self-regulating body for Ontario’s Chartered
Professional Accountants, including the roles of Director of
Standards Enforcement and then Director, Public Accounting, which
she held until her retirement on December 31, 2015. Ms. Volker
served in various capacities in the accounting profession during
her 30+ year career and brings a wealth of advisory, public
accounting, banking and regulatory expertise to the Denison Board.
Ms. Volker is a CPA, CA and CMA, holds the ICD.D. designation and
earned a B.Sc. from the University of Toronto. Ms. Volker is on the
board, and serves on committees, for each of Ornge and Burlington
Hydro Inc.
With respect to
the boards of public companies, Ms. Volker is also a director of
The Empire Life Insurance Company (TSX) and Labrador Iron Ore
Royalty Corporation (TSX).
Areas of Expertise: Management and
Finance
Denison
Board Details:
● Director since August 9,
2018
● Independent
● Member
of the Audit Committee
● Chair
of the Compensation Committee
● Sole
director on the Company’s SOX Steering Committee
● Complies
with Share ownership requirement
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Notes to
Profiles of the Nominated Directors:
1.
Ron Hochstein was a director
of Sirocco Mining Inc. (“Sirocco”). Pursuant to a plan
of arrangement completed on January 31, 2014, Canadian Lithium
Corp. amalgamated with Sirocco to form RB Energy Inc.
(“RBI”). In October 2014, RBI commenced proceedings
under the Companies' Creditors Arrangement Act (the
“CCAA”). CCAA proceedings continued in 2015 and a
receiver was appointed in May 2015. The TSX de-listed RBI’s
common shares in November 24, 2014 for failure to meet the
continued listing requirements of the TSX. Ron Hochstein was a
director of RBI from the time of the plan of arrangement with
Canadian Lithium Corp. to October 3, 2014.
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2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
2020 Director Attendance Record
At Denison, we
believe that attendance at meetings is a critical ingredient to an
engaged and effective Board. Personal attendance at Board and
committee meetings is expected of all directors. Directors can
participate by video or tele-conference if they cannot attend in
person. The table below shows the number of Board and committee
meetings each director attended in 2020.
|
Name
|
Board
|
Audit Committee
|
Corporate Governance & Nominating Committee
|
Compensation Committee
|
Environment, Health, Safety & Sustainability
Committee
|
Technical Committee
|
%
|
|
David
Cates
|
7 of 7
|
|
|
|
|
|
100%
|
|
Robert
Dengler
|
7 of 7
|
|
4 of
4
|
|
4 of
4
|
3 of
3
|
100%
|
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Brian
Edgar
|
7 of 7
|
4 of
4
|
4 of
4
|
|
|
|
100%
|
|
Ron
Hochstein
|
7 of 7
|
|
|
3 of
3
|
4 of
4
|
3 of
3
|
100%
|
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Jun Gon
Kim
|
7 of 7
|
|
|
|
|
|
100%
|
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Jack
Lundin1
|
6 of 7
|
|
|
|
3 of
4
|
2 of
3
|
79%
|
|
Catherine
Stefan1
|
7 of 7
|
4 of
4
|
4 of
4
|
|
|
|
100%
|
|
Patricia
Volker
|
7 of 7
|
4 of
4
|
|
3 of
3
|
|
|
100%
|
|
David
Neuburger2
|
n/a
|
|
|
|
|
|
n/a
|
|
Jennifer
Traub2
|
n/a
|
|
|
|
|
|
n/a
|
Notes:
1.
Ms. Stefan and Mr. Lundin
will not be standing for re-election at the Meeting.
2.
Mr. Neuburger and Ms. Traub
are standing for election at the Meeting and have not previously
served.
|
At every Board
and committee meeting, including those held by video and/or
tele-conference, directors have an opportunity to meet in camera
without management present and the independent directors also have
an opportunity to meet without the non-independent directors.
Typically the independent directors also have an in-person session
annually, but this was held virtually via videoconference in 2020
and all independent directors were in attendance.
|
Information about Denison’s Relationship with KEPCO &
KHNP
One of the
nominees for election, Mr. Jun Gon Kim, is employed by KHNP, a
wholly-owned subsidiary of KEPCO and the parent company of KHNP
Canada. KEPCO is the primary electric utility in South Korea. KHNP
operates large nuclear and hydroelectric plants in South Korea,
which are responsible for over 30% of the country's electric power
supply. Through its indirect corporate holdings, KEPCO is a
significant Shareholder of the Company (holding approximately 8.03%
of the Shares of Denison as at March 17, 2021, according to
publicly available information).
Denison and KHNP
Canada entered into an amended and restated strategic relationship
agreement in 2017 (replacing the 2009 agreement with KEPCO), which
provides for the continuation of a long-term collaborative business
relationship. Under the KHNP SRA, so long as KHNP Canada or an
affiliate holds more than 5% of the Shares, the Board must nominate
one person designated by KHNP Canada or its affiliate for election
as a director at any Shareholder meeting where directors are to be
elected.
The KHNP SRA also
provides KHNP Canada (a) a right of first offer if Denison intends
to sell any of its substantial assets and a right to participate in
certain purchases of substantial assets which Denison proposes to
acquire; and (b) the right to participate in future offerings of
Shares of a certain size in order to preserve its interest in the
Company. To date, neither KEPCO nor KHNP have exercised such rights
under the prior strategic relationship agreement or the KHNP SRA,
respectively.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Advisory Vote on the Company’s Approach to Executive
Compensation
The Board has
adopted a non-binding shareholder advisory vote on the
Company’s approach to executive compensation. As a formal
opportunity to provide their views on the disclosed objectives of
the Company’s pay for performance compensation model,
shareholders are asked to review and vote, in a non-binding,
advisory manner, on the following resolution:
BE IT RESOLVED
THAT, on an advisory basis and not to diminish the role and
responsibilities of the Board of Directors, the shareholders accept
the approach to executive compensation as disclosed in the
management information circular of the Company dated March 23,
2021.
The Compensation
Committee, and the Board, will take the results of the vote into
account, as appropriate, when considering future compensation
policies, procedures and decisions (see Executive Compensation for
details regarding the compensation philosophy and guidelines of the
Board and the performance metrics and process used to assess
performance).
Shareholders who
have questions or concerns, or who may vote against the resolution,
are encouraged to contact the Board, to enable the Board to better
understand their concerns.
Shareholders may
either vote for the
non-binding advisory resolution on the Company’s approach to
executive compensation, or vote against. The Board recommends that
Shareholders vote FOR the resolution to accept the Company’s
approach to executive compensation. Unless otherwise instructed, proxies and voting
instructions given pursuant to this solicitation by Denison’s
management will be voted FOR the approval of the
resolution.
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DENISON’S CORPORATE GOVERNANCE PRACTICES
This section of
the Circular describes Denison’s corporate governance
practices with reference to the framework provided in National
Policy 58-201 - Corporate
Governance Guidelines and National Instrument 58-101 -
Disclosure of Corporate Governance
Practices (collectively, the “Governance Guidelines”) of the
Canadian Securities Administrators.
Denison is a
reporting issuer in all of the provinces of Canada and is
classified as a foreign private issuer by the SEC. The Shares trade
on the Toronto Stock Exchange (DML: TSX) and on NYSE American LLC
(DNN: NYSE American). As such, Denison adheres to Canadian
corporate governance requirements and also complies with the
requirements of NYSE American. The Company’s CGN Committee
closely monitors this regulatory environment and, where applicable,
makes recommendations to the Board to modify the Company’s
governance practices as needed.
Denison’s Code of Ethics
The Company is
committed to conducting its business in compliance with the law and
the highest ethical standards. The Company has adopted a written
Code of Ethics which applies to directors, officers and all
employees of the Company. The Code of Ethics sets out principles
and standards for honest and ethical behavior at Denison and covers
the following key areas:
●
compliance with applicable
laws
●
conflicts of
interest
●
quality of disclosure and
accountability
●
compliance with anti-bribery
and corruption laws in Canada and other jurisdictions
●
insider trading
●
confidentiality and corporate
opportunity
●
reporting illegal or
unethical behavior
Directors,
officers or employees who have concerns about violations of laws,
rules or regulations, or the Code of Ethics are to report them to
the Corporate Secretary or to the Chair of the Audit Committee.
Following receipt of any complaints, the Corporate Secretary of the
Company or Chair of the Audit Committee, as the case may be, will
investigate each matter so reported and report to the Audit
Committee. The Audit Committee has primary authority and
responsibility for monitoring compliance with and enforcing the
Code of Ethics, subject to the supervision of the
Board.
The Code of
Ethics is available on the Company’s website at www.denisonmines.com and has
been filed on and is accessible through SEDAR under the
Company’s profile at www.sedar.com.
Whistleblower
Policy
|
The Audit Committee has
established a policy and procedures for the receipt, retention and
treatment of complaints regarding accounting, internal accounting
controls or auditing matters (the “Whistleblower Policy”) to encourage employees,
officers and directors to raise concerns regarding accounting,
internal controls or auditing matters on a confidential basis, free
from discrimination, retaliation or harassment. The Whistleblower
Policy is available on the Company’s website at www.denisonmines.com.
|
|
In support of the
Whistleblower Policy, Denison has established a third party
web-based reporting service so that any employee can report any
issue or instance of misconduct easily and
confidentially.
|
Anti-bribery
Policy
Denison has
adopted an Anti-bribery Policy, the purpose of which is to
reiterate Denison’s commitment to compliance with
Canada’s Corruption of Foreign Public Officials Act
(“CFPOA”), the U.S. Foreign Corrupt Practices Act
(“FCPA”) and any local anti-bribery or anti-corruption
laws that may be applicable. This policy applies to all officers,
directors, employees and agents of the Company, and supplements the
Code of Ethics and all applicable laws.
|
|
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2021
DENISON MANAGEMENT
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The policy
provides guidelines for compliance with the CFPOA, the FCPA and
Company policies applicable to Denison’s operations
world-wide. Denison’s CEO is responsible for administering
and interpreting the policy under the oversight of the Audit
Committee. Denison’s Anti-bribery Policy is available on the
Company’s website at www.denisonmines.com.
The
Disclosure Policy
Denison has a
Disclosure Policy, codifying its ongoing commitment to full and
fair financial disclosure and best practices in corporate reporting
and governance. This policy outlines the internal control
structures that Denison has established to effectively manage the
dissemination of material information to the public and remain
compliant with all applicable legal and business requirements. The
Disclosure Policy is available on the Company’s website at
www.denisonmines.com or on
SEDAR under the Company’s profile at www.sedar.com. Denison has also
adopted a guide for employees on the use of social media in
compliance with the Disclosure Policy.
Shareholder Communications
Denison works to
ensure effective communication between the Company and its
Shareholders and the public. Shareholders, employees and other
interested parties are encouraged to reach out directly to
management and/or the Board of the Company, to communicate any
questions or concerns, and the Company regularly receives and
responds to such inquiries.
The
Company’s representatives are always engaged in investor
relations and other Shareholder and stakeholder outreach, such as
taking part in various public and private conferences throughout
the year, and generally making themselves available to respond to
inquiries and concerns. The Company’s investor relations
procedures are monitored by the Board, and are intended to be a
tool for the concerns of Shareholders and other interested parties
to be addressed on an individual basis. Shareholders and the public
are also informed of developments in the Company by the issuance of
timely press releases and quarterly reports which are also posted
to the Company’s website and filed on SEDAR and
EDGAR.
|
The Board also
adopted the annual Shareholder advisory vote on the Company’s
executive compensation practices, as a means for Shareholders to
provide their views on the Company’s pay for performance
compensation model. While this advisory vote is a useful tool for
the Board and management, Shareholders are encouraged to contact
the Board directly to enable the Board to better understand the
voting results and address any concerns Shareholders may
have.
|
The Board
monitors all the policies and procedures that are in place to
ensure a strong, cohesive, sustained and positive image of the
Company with Shareholders, governments and the public
generally.
Executive Officer Succession Policy
The Board
acknowledges that a change in executive leadership can be a
critical time in a company’s history and that a smooth
transition is essential to maintain the confidence of investors,
business partners, customers and employees and to provide the
incoming officer with a solid platform from which to move the
company forward. In connection therewith, the Board has adopted an
Executive Officer Succession Policy to help Denison plan for and
address a change in leadership, planned or unplanned, to ensure
stability. The policy is periodically reviewed by the Board and
certain matters regarding its administration are delegated to the
CGN Committee.
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DENISON MANAGEMENT
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Board Composition
It is proposed
that Denison’s Board will be comprised of eight directors.
The size and composition of the Board reflects diversity and
breadth of backgrounds and experience that the Board believes is
important for effective governance and oversight of a diversified
and active company.
|
Corporate
governance best practices focus on developing high performing
boards that have integrity and are accountable, independent and
experienced. Under the stewardship of the CGN Committee, the
Denison Board has focused on meeting or exceeding regulatory
guidelines on governance.
|
Denison has not
adopted a term limit or retirement policy; the Board is of the
position that no appreciable benefit would be achieved through the
adoption of such policies. Organically, the Board has seen
significant renewal in recent years, including the appointments of
David Cates and Patricia Volker in 2018, Mr. Kim in 2020 and the
proposed appointments of Mr. Neuburger and Ms. Traub in
2021.
The CGN Committee
solicited feedback from each of the current directors and assessed
the needs and capabilities of the Board. As a result of their
efforts, the nominees (including Mr. Neuburger and Ms. Traub), are
expected to form a well-composed and highly effective Board of
Directors for the Company.
Diversity within Denison
Denison’s
Board recognizes that diversity enriches the decision making
process and is important to the Company’s good governance,
and Board and management at the Company strive to ensure gender
diversity and pay equity amongst its Board, executive officers and
other employees.
The Board has a
Diversity Policy, which clarifies the Company’s commitment to
identifying and considering women for its Board and in senior
officer positions. Upon adoption of the Diversity Policy, Denison
set targets of at least maintaining its current level of female
representation among directors and senior officers. The CGN
Committee reviews the targets each year and measures and reports to
the Board on the Company’s annual and cumulative progress in
achieving the Diversity Policy targets for representation of women
within Denison.
Board Diversity
Along with the
adoption of the Diversity Policy and to further the Board’s
goals of achieving greater gender diversity, the guidelines by
which the CGN Committee considers the composition of the Board and
evaluates candidates, includes a commitment for the CGN Committee
to consider qualified female candidates for nomination to the
Board.
For example, when
Board turnover was being addressed in 2018 and 2021, the Board made
a concerted effort to ensure qualified female candidates were
sought, and the Board was very pleased to have Patricia Volker,
with her rich accounting and finance background, agree to join the
team in 2018 and Ms. Traub, with her extensive and relevant legal
expertise, agree to be put forward as a nominee for appointment in
2021.
|
The CGN Committee
reported Denison’s female Board representation as at December
31, 2020:
● Two female directors on the
Board out of eight directors, representing 25% of the
Board.
● Chairs
of the Board, Audit Committee and Compensation Committee were
female.
|
Diversity of Senior Officers and Management
Similarly,
management of the Company seeks to include women, having the
necessary skills, knowledge and experience, as potential candidates
for senior officer and other positions at the Company. As reported
by the CGN Committee, the female senior officer representation as
at the end of 2020 was as follows:
●
One female senior officer out
of six senior officers, representing 16.7% of the senior
officers.
●
One female out of three
senior officers at the Company’s major subsidiary, DMI,
representing 33.3% of the senior officers of DMI.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Denison’s
team has continued to grow in recent years, with the Company
advancing its flagship Wheeler River project in Northern
Saskatchewan. Many of these new and important portfolios and key
technical positions are led by women, due to the Company’s
focus on hiring the best candidates for the role and ensuring a
balance of gender in those candidates.
|
As at the
end of 2020, Denison’s management team beyond the senior
officer level was comprised of 17 “directors” and
“managers” with responsibilities over various areas
including the Company’s Closed Mines operations, Human
Resources, Wheeler River Project matters, Exploration, Technical
matters, Corporate Social Responsibility, the Environment and
Finance and Financial Reporting. Nine (or 53%) of those directors
and managers were women.
|
Independence
The Board is
responsible for determining whether or not each director is
independent. This assessment is made in accordance with standards
of the Canadian Securities Administrators in National Instrument
52-110 – Audit
Committees (“NI
52-110”) and the Governance Guidelines. With the
assistance of the CGN Committee, the Board reviews each
director’s independence annually and upon the appointment or
election of a new director. The Board last considered this matter
at its meeting on March 4, 2021. The following table sets out the
Board’s determination and reasoning with respect to each
current director and the new nominees for election at the
Meeting:
|
Name
|
Independent
|
Not Independent
|
Commentary on Non-Independence Determinations
|
|
David
Cates
|
|
X
|
As President and
Chief Executive Officer of the Company, Mr. Cates is not
independent.
|
|
Robert
Dengler
|
X
|
|
|
|
Brian
Edgar
|
X
|
|
|
|
Ron
Hochstein
|
X
|
|
|
|
Jun Gon
Kim
|
|
X
|
Mr. Kim is
regarded as having an indirect material relationship which could
reasonably be expected to interfere with his exercise of
independent judgment, considering the Company’s strategic
relationship with KHNP Canada and Mr. Kim’s position with
KHNP.
|
|
Jack
Lundin1
|
|
X
|
Mr. Lundin could
not be regarded as independent, as he is an immediate family member
of Mr. Lukas Lundin, who served as Executive Chair of the Company
until his resignation on Aug. 9, 2018.
|
|
David
Neuburger
|
X
|
|
|
|
Catherine
Stefan1
|
X
|
|
|
|
Jennifer
Traub
|
X
|
|
|
|
Patricia
Volker
|
X
|
|
|
Note:
1.
Ms. Stefan and Mr. Lundin
will not be standing for re-election at the Meeting.
The Board
currently has eight directors, five of whom are independent (63%
independent). Assuming election of each nominee for election at the
Meeting, the Board will be composed of eight directors, six of whom
are independent (75% independent).
In addition, the
Board believes that adequate structures and processes are in place
to facilitate the functioning of the Board independently of
management, including:
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|
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2021
DENISON MANAGEMENT
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● The
Board has an independent Chair
|
Catherine Stefan
served as the independent Chair of the Board.
The Chair
facilitates the functioning of the Board independently of
management, serves as an independent leadership contact for
directors and assists in maintaining and enhancing the quality of
the Company’s corporate governance.
Ms. Stefan will
not stand for re-election at the Meeting, and the intention is for
the independent directors elected at the Meeting to elect a Chair
to serve after the Meeting. The Chair will be tasked with leading
and managing the Board in a manner that ensures it functions
independently of management, in an effective and efficient
manner.
|
|
● The
Audit, Compensation and Corporate Governance Committees of the
Board are entirely independent.
|
The Audit,
Compensation and CGN Committees are composed entirely of
independent directors.
It is the
intention for the directors elected at the Meeting to approve the
constitution of the standing committees going forward, to be
composed of independent directors.
|
|
● The
Board regularly meets without management.
|
The Board has an
opportunity to meet in camera without management at every Board and
committee meeting. In 2020, the independent directors met formally
five times.
Only independent
directors attend any in camera sessions of the Audit Committee,
Compensation Committee and CGN Committee, as all of the members of
these committees are independent.
|
|
● The
Board, a committee or an individual director may engage an
independent advisor.
|
Committees, and
individual directors in appropriate circumstances and with the
authorization of the applicable committee or the Chair, may engage
independent advisors at the expense of the Company.
|
The Board takes
steps to ensure directors exercise independent judgment in
considering transactions and agreements in respect of which a
director or executive officer has a material interest. Such steps
have included the adoption of the Code of Ethics, which provides
examples of conflicts of interests and outlines the procedure to be
followed in situations that present an actual or potential conflict
of interest (including reporting such conflict or potential
conflict to the Chair of Denison’s Audit
Committee).
The Role of the Board
The Board is responsible for overseeing the
management of the business and affairs of Denison, with a view to
the long-term best interests of the Company. The Board has adopted a formal mandate setting out
the role and responsibilities of the Board (see Appendix
B).
In discharging
its stewardship over the Company, the Board has undertaken the
following specific duties and responsibilities:
●
satisfying itself as to the
integrity of the Chief Executive Officer and other executive
officers and as to a culture of integrity throughout the
Company;
●
approving, supervising and
providing guidance to management on the Company’s strategic
planning process;
●
identifying the principal
risks of the Company’s business and ensuring
management’s implementation and assessment of appropriate
risk management systems;
●
ensuring that the Company has
highly qualified management and adequate and effective succession
plans for senior management;
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
●
overseeing the
Company’s communications policy with its Shareholders and
with the public generally; and
●
assessing directly and
through its Audit Committee, the integrity of the Company’s
internal control and management information systems.
Generally,
decisions relating to matters that are not in the ordinary course
or involve material expenditures or commitments on the part of the
Company require prior approval of the Board. Any responsibility
which is not delegated to management or a Board committee remains
with the Board.
|
Corporate Social Responsibility & Sustainability
The Board places
a high value on governance, corporate social responsibility and
sustainability, recognizing the importance of understanding the
impact of the Company’s strategies on its stakeholders, and
how such understanding can contribute to the long-term
sustainability of the corporation’s business, help identify
and manage risk and lead to transformative
opportunities.
An issue of great
importance for Denison and the Board is its desire to operate its
business in a progressive and sustainable manner that respects
Indigenous rights and advances reconciliation with Indigenous
peoples. The Board obtains specific reporting from management on
its corporate social responsibility and sustainability goals and
efforts, particularly the Company’s efforts at strengthening
its relationships with Indigenous peoples interested in our current
and proposed operations.
|
The Role of the Chair
In order to delineate the roles and
responsibilities of the Chair of the Board, the Board has adopted a
written position description. The responsibilities of the
Chair of the Board include presiding over Board meetings, assuming
principal responsibility for the Board’s operation and
functioning independent of management and ensuring that Board
functions are effectively carried out. The responsibilities and
authorities of the Chair of each committee of the Board are set out
in the mandate for each committee and in the Board’s mandate.
Generally, the Chair of a committee leads and oversees the
activities of the committee to ensure that it fulfills its mandate
and operates independently of management.
The Role of the CEO
Denison’s
Chief Executive Officer (“CEO”) is appointed by the
Board and the Board has adopted a position description for the CEO.
Subject to the oversight of the Board, the CEO is responsible for
the management of the Company’s business, providing
leadership and vision, developing and recommending significant
corporate strategies and objectives for approval by the Board, and
developing and recommending to the Board annual operating budgets.
Each year, the CEO develops annual objectives which are reviewed
and approved by the Compensation Committee and then reported to the
Board. The CEO is accountable to the Board and its committees, and
the Compensation Committee conducts a formal review of his
performance each year. The Board has also established limits of
authority for the CEO; these are described in the Company’s
delegation of authority policy, which is regularly reviewed and
updated.
Board
Committees
|
To assist
the Board with its responsibilities, the Board has five standing
committees (the Audit Committee, the Compensation Committee, the
CGN Committee and the Environment, Health, Safety &
Sustainability Committee (the “EHSS Committee”) and the Technical
Committee).
|
|
Each of the committees has
responsibility in its area of expertise for identifying the
principal risks in Denison’s business and monitoring
management’s implementation and assessment of appropriate
risk management systems.
|
Each standing committee has a
written mandate and reviews its mandate annually. Copies of the
standing committee mandates are available on the Company’s
website.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
The Audit Committee
The Audit
Committee has three members:
●
Catherine Stefan
(Chair)
●
Brian Edgar
●
Patricia Volker
The Board has
satisfied itself that all members of the Audit Committee are
independent and financially literate for the purposes of NI 52-110
and the requirements of NYSE American. All three members are also
considered by the Company to have financial expertise within the
meaning of the Sarbanes Oxley Act
of 2002. Ms. Stefan is a Chartered Accountant and a
Chartered Professional Accountant with a Bachelor of Commerce
degree, and has held the position of Senior Vice President of a
public company and served on other public company boards and audit
committees. Mr. Edgar has a law degree and practiced for 16 years
in corporate finance law, has served as President and Chief
Executive Officer of a public company and served on public company
boards and audit committees for over 30 years. Ms. Volker is a
Chartered Professional Accountant, Chartered Accountant and a
Certified Management Accountant and has served in various
capacities in the accounting profession during her 30+ year career
and brings a wealth of advisory, public accounting, banking and
regulatory expertise to the Denison Board. Ms. Volker also serves
on the audit committee of two other public companies (including one
as chair) and chairs the finance and audit committee of a private
organization board.
The Audit
Committee oversees the accounting and financial reporting processes
of the Company and its subsidiaries and all audits and external
reviews of the financial statements of the Company, on behalf of
the Board. The Audit Committee is also responsible for examining
all financial information, including annual and quarterly financial
statements, prepared for securities commissions and similar
regulatory bodies prior to filing or delivery of the
same.
The Audit
Committee recommends to the Board the firm of independent auditors
to be nominated for appointment by the Shareholders. All auditing
services and non-audit services to be provided to the Company are
pre-approved by the Audit Committee, in part to ensure that the independence of the Company’s
auditor is not compromised through engaging it for other
services. The Audit Committee reviews, on a continuous
basis, any reports prepared by the Company’s auditor relating
to the Company’s accounting policies and procedures, as well
as internal control procedures and systems.
The following
table discloses the fees billed to the Company by its independent
auditors during the last two fiscal years.
|
Financial
Year
|
|
Audit-Related
|
|
|
|
Ending
|
Audit Fees(1)
|
Fees (2)
|
Tax Fees (3)
|
All Other Fees(4)
|
|
December 31,
2019
|
$180,775
|
$116,567
|
Nil
|
Nil
|
|
December 31,
2020
|
$112,837
|
$273,208(5)
|
24,015(6)
|
Nil
|
Notes:
1.
The aggregate fees billed for
audit services of the Company’s consolidated financial
statements.
2.
The aggregate fees billed for
assurance and related services that are reasonably related to the
performance of the audit or review of the Company’s financial
statements and are not disclosed in the Audit Fees column. Fees
relate to reviews of interim consolidated financial statements,
specified audit procedures not included as part of the audit of the
consolidated financial statements and consent procedures in
connection with various equity issuance documents.
3.
The aggregate fees billed for
tax compliance, tax advice, and tax planning services, such as
transfer pricing and tax return preparation.
4.
The aggregate fees billed for
professional services other than those listed in the other three
columns.
5.
The increase in Audit-Related
Fees in 2020 relates to the extensive work required of the auditors
to support the Company’s 2020 equity issuances, including the
completion and filing of a short-form prospectus and a short form
base shelf prospectus.
6.
The increase in Tax Fees is a
result of the change in the Company’s auditor to KPMG LLP,
which has historically been engaged by the Company to provide it
with corporate tax advice.
7.
Fees for 2019 relate to the
Company’s previous auditor, PwC; fees in 2020 include $59,337
of audit fees and $192,959 of audit related fees for professional
services billed by PwC.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
The Audit
Committee also oversees the Company’s internal audit function
and oversees the Code of Ethics, the Whistleblower Policy and the
Anti-bribery Policy and reviews each such policy annually. The
Audit Committee has the responsibility for oversight of internal
controls, including the Company’s Internal Audit Charter, and
the Company’s senior internal auditor reports directly to the
Chair of the Audit Committee on matters related to internal
accounting controls. For additional information regarding the audit
committee required by NI 52-110, please refer to the
Company’s Annual Information Form under the heading
“Standing Committees – Audit
Committee”.
The Audit
Committee is required to meet a minimum of four times each year,
and it met four times in 2020. It met in camera without management
present at every meeting with the external auditor.
The Compensation Committee
The Compensation
Committee currently has two members, each of whom is independent
for the purposes of section 1.4 of NI 52-110:
●
Patricia Volker
(Chair)
●
Ron Hochstein
In accordance
with its mandate, members of the Compensation Committee must be
independent and have experience and skills relevant to executive
compensation. Ms. Volker draws on the skills and knowledge of
executive compensation and disclosure issues acquired during her
varied career as a Chartered Professional Accountant, Chartered
Accountant and a Certified Management Accountant. Ms. Volker also
sits on the compensation committees of two other public company
boards. Mr. Hochstein brings over 20 years of first-hand experience
working with executive compensation in the mining industry,
including in his current position of Chief Executive Officer of
Lundin Gold Corp.
The Compensation
Committee is responsible for the Company’s executive
compensation policy and determines the general compensation
structure, policies and programs of the Company, including the
extent and level of participation in incentive programs, for
recommendation to the Board.
The Compensation
Committee evaluates the Chief Executive Officer’s performance
and recommends to the Board the elements and amounts of the Chief
Executive Officer’s compensation. The Compensation Committee
reviews management’s recommendations for, and approves the
compensation of, the other officers of the Company. The
Compensation Committee also reviews and approves the executive
compensation disclosure included in the Company’s Circular
each year.
The Compensation
Committee has also been mandated to review the adequacy and form of
the compensation of directors and to ensure that such compensation
realistically reflects the responsibilities and risks involved in
being an effective director.
The Compensation
Committee is responsible for considering any risks associated with
the Company’s compensation policies and practices and the
steps that may be taken to mitigate any identified
risks.
The Compensation
Committee met three times in 2020 to address matters pertaining to
its mandate.
The Corporate Governance and Nominating Committee
The CGN Committee
has three members, each of whom is independent for the purposes of
section 1.4 of NI 52-110:
●
Brian Edgar
(Chair)
●
Bob Dengler
●
Catherine Stefan
This Committee is
responsible for Denison’s approach to corporate governance,
monitors the regulatory environment and recommends changes to the
Company’s practices when appropriate. The CGN Committee
oversees the effective functioning of the Board and the
relationship between the Board and management.
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The CGN Committee
ensures that the Board can function independently of management as
required, makes recommendations with respect to the appointment of
an independent Chair of the Board or Lead Director, identifies
individuals qualified to become new Board members and recommends to
the Board the director nominees at each annual meeting of
Shareholders and, with the assistance of the Board and, when
necessary, develops an orientation and education program for new
recruits to the Board.
In identifying
possible nominees to the Board, the CGN Committee considers the
competencies and skills necessary for the Board as a whole, the
skills of existing directors and the competencies and skills each
new nominee will bring to the Board, as well as whether or not each
nominee will devote sufficient time and resources to the Board and
whether he or she is independent within the meaning of the
Governance Guidelines.
The CGN Committee
also annually reviews and makes recommendations to the Board with
respect to: (i) the size and composition of the Board; (ii) the
independence of Board members; (iii) the composition of the
committees of the Board; (iv) the effectiveness and contribution of
the Board, its committees and individual directors, having
reference to their respective mandates, charters and position
descriptions; and (v) compliance with and amendments to the Board
mandates, policies and guidelines.
Early in each
year the CGN Committee distributes, receives and reviews the
results of written board effectiveness assessments. The assessments
question members of the Board as to their level of satisfaction
with the functioning of the Board, its interaction with management
and the performance of the standing committees of the Board. The
Board members also conduct peer reviews and a self-assessment as to
their effectiveness as a Board member. After the assessments are
reviewed, the CGN Committee reports to the Board as to the results
and makes recommendations to the Board to improve the
Company’s corporate governance practices. This process occurs
prior to the consideration by the CGN Committee of nominations for
Board member elections at the annual meeting of Shareholders each
year. In addition, the CGN Committee reviews the Company’s
disclosure of its corporate governance practices in the
Company’s Circular each year.
The CGN is also
responsible for talent and succession risk. In particular, the CGN
Committee has been delegated certain responsibilities under the
Company's Executive Officer Succession Policy, which include
reviewing the current state of succession planning matters and
reporting to the Board on its findings and recommendations;
assuring that Denison has in place appropriate planning to address
emergency CEO succession planning in the event of extraordinary
circumstances; and reviewing the policy and Denison’s CEO
succession plans at least annually.
The CGN Committee
met four times during 2020.
The Environment, Health, Safety & Sustainability
Committee
The EHSS
Committee has three members:
●
Bob Dengler
(Chair)
●
Ron Hochstein
●
Jack Lundin
The mining
industry, by its very nature, can have an impact on the natural
environment and can involve certain risks to employees. As a
result, environmental planning and compliance and safety programs
must play a very important part in the operations of any company
engaged in these activities.
The Company takes
these issues very seriously and in 2021 has renewed the EHSS
Committee’s mandate to oversee the Company’s commitment
to responsible mineral exploration and development through safe,
environmentally sound and sustainable business
practices.
The EHS Committee
met four times during 2020.
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
The Technical Committee
The Technical
Committee has three members:
●
Bob Dengler
(Chair)
●
Ron Hochstein
●
Jack Lundin
The Technical
Committee has been formed to assist in fulfilling the Board’s
oversight responsibilities for significant technical and
operational matters, policies and programs of the Company. The
Technical Committee does not have regularly scheduled meetings. At
any time, the Board or management of the Company may recommend
specific matters for the consideration of the Technical
Committee.
The Technical
Committee’s responsibilities may include (a) reviewing the
technical and operational programs of the Company and any
significant technical risks, mitigation strategies and
opportunities associated with the Company’s projects; and (b)
reporting to the Board with respect to matters within any
applicable mandate.
The Technical
Committee met three times in 2020.
Director Education
The Board
encourages directors and senior management to participate in
appropriate professional and personal development activities,
courses and programs, and supports management’s commitment to
the training and development of all permanent
employees.
Director
education is implemented in the following ways at
Denison:
|
● Management
Presentations to the Board and to Committees
|
When appropriate,
management prepares and presents relevant information to Board
members. For instance:
1. At
each quarterly Board meeting, management provides the Board with
industry and market updates
2. Denison’s
Chief Financial Officer ensures that the Audit Committee is
apprised of relevant developments and issues
3. The
Company’s VP Legal provides updates regarding applicable
corporate governance or related developments
|
|
● An
on-line board portal dedicated exclusively to the
Board
|
In addition to
storing meeting materials, Denison’s board portal houses a
reference manual, which includes corporate information, industry
information, regulatory and governance updates and corporate
policies. As a hosted website dedicated to our Board, the portal is
current and available to directors wherever they are.
In 2020, the
Board Portal was updated with various information,
including:
1. Annual
Memorandum on Corporate Governance Updates
2. Recent
Publications on Best Practices, such as:
a. Directors’
and officers’ duties, particularly during
COVID-19
b. Considerations
for Boards with respect to ESG matters
c. Industry
information, from uranium industry publications
|
|
● Updates
and Subscriptions
|
Management
distributes updates, newsletters and articles on industry
information to the Board on a regular basis via email.
Additionally, the Company maintains subscriptions to newsletters on
topics of interest for circulation to the Board.
|
|
● Third-Party
Presentations for the Board
|
Annually,
industry or legal speakers have provided topical presentations via
webinar or other presentation to Denison’s Board. In
addition, KHNP is invited to provide industry updates to the Board,
and the Company’s external auditor provides director
education when requested and warranted.
|
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
The Chair of the
CGN Committee also coordinates an interview and orientation package
for new Board members, covering a range of topics applicable to the
role of the director and the Board.
Directors’
and Officers’ Liability Insurance
The Company
maintains liability insurance for its directors and officers acting
in their respective capacities in an aggregate amount of
$40,000,000, subject to a deductible of $2,000,000 per occurrence
for insured claims including claims under securities laws for which
the Company has provided an indemnity. There is no deductible for
non-indemnified claims. The current policy is for the period from
November 1, 2020 to November 1, 2021. The premium paid by the
Company in 2020 for its directors’ and officer’s
liability insurance was $390,778. No amounts were paid by
individual directors and officers for this coverage.
DIRECTOR COMPENSATION
Denison
recognizes the contribution that its directors make to the Company
and seeks to compensate them accordingly. The Compensation
Committee is responsible for making recommendations as to director
compensation for the Board’s consideration and approval. When
annually reviewing the Board’s compensation arrangements, the
Compensation Committee considers the following
objectives:
|
● Board
compensation should be competitive to attract talent.
|
Compensation is
set at a level that will attract desirable candidates and retain
current directors. Denison recognizes that there is considerable
competition for qualified directors in the mining
sector.
|
|
● Board
compensation should reward directors appropriately.
|
Denison
recognizes that directors need to be compensated fairly for their
time and efforts and the risks and responsibilities which they
assume as directors in an increasingly complex regulatory
environment.
|
|
● Board
compensation should align the interests of directors with those of
the Shareholders.
|
Denison’s
compensation package, including fees, share units and options,
coupled with the Share ownership requirement imposed on directors,
aligns directors’ interests with those of its
Shareholders.
|
|
● Board
compensation should be fair.
|
Denison seeks to
reward its directors reasonably and on par with directors of
comparable companies.
|
Cognizant of
current market trends in directors’ compensation, and its
broader commitment to enhance governance practices, the Board
revised the director compensation structure in 2018, including the
grant of Restricted Share Units under the Company’s Share
Unit Plan.
For 2019 and
2020, having considered the Company's current operations and
financial resources, the Compensation Committee did not recommend
to the Board any further changes in compensation.
Cash
Compensation
In 2020,
Denison’s director cash compensation included an annual
retainer which varied depending on a director’s role on the
Board, an annual chair fee for serving as a committee chair and an
annual committee membership fee for serving on a committee of the
Board. The table below sets out non-employee directors’
retainers and fees as at December 31, 2020.
|
Annual Retainer1
|
CAD$
|
|
Non-employee
Directors
|
30,000
|
|
Committee / Chair Fees
|
CAD$
|
|
Board
Chair
|
10,000
|
|
Audit Committee
Chair
|
15,000
|
|
Other Committee
Chairs
|
8,500
|
|
Committee
membership2
|
3,000
|
Note to Cash
Compensation:
1.
No retainer is payable to any
director who attends less than 50% of Board meetings.
2.
The Technical Committee
members received a $5,000 annual fee for their participation with
that committee.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Denison also
reimburses directors for any reasonable travel and out-of-pocket
expenses relating to their duties as directors.
Equity
Compensation
The Board
believes that equity grants help to align directors’
interests with those of Shareholders and also provide additional
incentive to directors for corporate performance. In 2020, Denison
compensated its directors through the grant of share units under
the Company’s Share Unit Plan (the “Share Unit Plan”).
Effective March
16, 2020, 38,000 Restricted Share Units (“RSUs”) were granted to each
Denison director. In 2019 and 2018, 32,000 RSUs and 33,000 RSUs,
respectively, had been issued to each director. In prior years,
directors had been granted stock options, pursuant to
Denison’s Share Option Plan (the “Option Plan”).
2020
Director Compensation
The table below
sets out what Denison paid to non-employee directors in retainers
and fees for 2020.
|
Name
|
Retainer and Fees Earned
|
Share-based Awards
|
Option-based Awards
|
All Other Compensation
|
Total
|
|
|
($)
|
($)1
|
($)
|
($)
|
($)
|
|
Robert
Dengler
|
38,000
|
13,300
|
Nil
|
Nil
|
51,300
|
|
Brian
Edgar
|
41,500
|
13,300
|
Nil
|
Nil
|
54,800
|
|
Ron
Hochstein
|
38,000
|
13,300
|
Nil
|
Nil
|
51,300
|
|
Jack
Lundin
|
35,000
|
13,300
|
Nil
|
Nil
|
48,300
|
|
Jun Gon
Kim2
|
30,000
|
13,300
|
Nil
|
Nil
|
43,300
|
|
Catherine
Stefan
|
58,000
|
13,300
|
Nil
|
Nil
|
71,300
|
|
Patricia
Volker3
|
44,300
|
13,300
|
Nil
|
Nil
|
57,600
|
Notes to 2020
Director Compensation:
1.
Represents the fair value of
awards made under the Share Unit Plan for the applicable year. The
fair value is determined using the closing price of the Shares on
the TSX on the trading day prior to the grant date.
2.
Directors fees for Mr. Kim
were paid to KHNP Canada Energy Ltd.
3.
Ms. Volker received $2,800
for attendance at SOX meetings in 2020 in addition to her annual
retainer.
Directors’
Outstanding Option-Based Awards
Each non-employee
director’s option-based awards outstanding at the end of 2020
is as follows:
|
Name2
|
Number of
Shares underlying unexercised options (#)
|
Option
exercise price ($)
|
Option
expiration date
|
Value of
unexercised in-the- money options ($)1
|
|
Robert
Dengler
|
50,000
|
0.64
|
March 10,
2021
|
10,000
|
|
|
50,000
|
0.85
|
March 8,
2022
|
Nil
|
|
Total
|
100,000
|
|
|
|
|
Brian
Edgar
|
50,000
|
0.64
|
March 10,
2021
|
10,000
|
|
|
50,000
|
0.85
|
March 8,
2022
|
Nil
|
|
Total
|
100,000
|
|
|
|
|
Ron
Hochstein
|
50,000
|
0.64
|
March 10,
2021
|
10,000
|
|
|
50,000
|
0.85
|
March 8,
2022
|
Nil
|
|
Total
|
100,000
|
|
|
|
|
Catherine
Stefan
|
50,000
|
0.64
|
March 10,
2021
|
10,000
|
|
|
50,000
|
0.85
|
March 8,
2022
|
Nil
|
|
Total
|
100,000
|
|
|
|
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Notes to
Directors’ Outstanding Option-Based Awards:
1.
Option values have been
calculated using the closing price of the Shares on the TSX on the
last trading date of 2020 of $0.84 per share, less the applicable
exercise price of the options. All these options have
vested.
2.
No options have been granted
to directors since Ms. Volker and Messrs. Lundin and Kim joined the
Board.
Directors’
Outstanding Share-Based Awards
Each non-employee
director’s share-based awards outstanding at the end of 2020
is as follows:
|
Name
|
UnvestedShare Units
(#)
|
Market or
payout value of Unvested Share Units2
($)
|
Vested but Unpaid Share
Units1
(#)
|
Market or
payout value of Vested but Unpaid Share Units2
($)
|
|
Robert
Dengler
|
70,334
|
59,081
|
0
|
Nil
|
|
Brian
Edgar
|
70,334
|
59,081
|
32,666
|
27,439
|
|
Ron
Hochstein
|
70,334
|
59,081
|
0
|
Nil
|
|
Jack
Lundin
|
59,334
|
49,841
|
10,666
|
8,959
|
|
Jun Gon
Kim
|
38,000
|
31,920
|
0
|
Nil
|
|
Catherine
Stefan
|
70,334
|
59,081
|
0
|
Nil
|
|
Patricia
Volker
|
59,334
|
49,841
|
0
|
Nil
|
Notes to
Directors’ Outstanding Share-Based Awards:
1.
As share units have vested,
some directors have deferred and others have elected for share
settlement.
2.
Share units granted in 2018
(33,000 RSUs), 2019 (32,000 RSUs) and 2020 (38,000 RSUs) vest
equally over three years. Share unit values have been calculated
using the closing price of the Shares on the TSX on December 31,
2020 (last trading date of 2020) of $0.84 per share.
Value Vested or Earned in 2020
The following
table sets out for each non-employee director the value of the
Company’s equity plan compensation vested or earned during
the financial year ended December 31, 2020. The Company had no
non-equity incentive plan compensation for directors at December
31, 2020.
|
Name
|
Option-based awards
Value vested during the year1
($)
|
Share-based awards
Value vested during the year2
($)
|
|
Robert
Dengler
|
N/A
|
7,381
|
|
Brian
Edgar
|
N/A
|
7,381
|
|
Ron
Hochstein
|
N/A
|
7,381
|
|
Jack Lundin
3
|
N/A
|
3,146
|
|
Jun Gon Kim
3
|
N/A
|
N/A
|
|
Catherine
Stefan
|
N/A
|
7,381
|
|
Patricia Volker
3
|
N/A
|
3,146
|
Notes to
Value Vested or Earned in 2020:
1.
All options were fully vested
by the end of 2019; no options vested in 2020.
2.
The value vested during the
year reflects the aggregate dollar value that would have been
realized if the share units that vested in 2020 were exercised on
their vesting dates. Share units have a Nil exercise
price.
3.
No options were granted to
directors after 2017, and Messrs. Lundin and Kim and Ms. Volker
joined the board in or after 2018. Mr. Kim did not have vested
equity in 2020.
Share Ownership Requirement
The Board has a
Share ownership requirement, which requires all non-employee
directors to own Shares (including RSUs) with a cost of acquisition
(or deemed cost at time of grant) equal to three times the value of
their annual cash retainers within five years of becoming a
non-employee director or an increase in their cash
retainer.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
The Board has
exempted nominees of KHNP, the Company’s largest shareholder,
from this requirement. In 2020, all directors were in compliance
with the Share ownership requirement (owning sufficient Shares,
being within the five year period of becoming a non-employee
director or otherwise exempt).
EXECUTIVE COMPENSATION
This section of
the Circular discusses Denison’s executive compensation
program and the pay decisions affecting its Named Executive
Officers (Denison’s CEO, CFO and the other three most highly
compensated executive officers, collectively, the
“NEOs”). The
NEOs for 2020 were:
|
NEO
|
Position(s)
during 2020
|
|
David
Cates
|
President &
Chief Executive Officer
|
|
Mac
McDonald
|
Executive Vice
President & Chief Financial Officer
|
|
David
Bronkhorst
|
Vice President
Operations
|
|
Tim
Gabruch
|
Vice President
Commercial
|
|
Michael
Schoonderwoerd
|
Vice President
Controller
|
The Objectives of the Company’s Compensation
Program
Denison strives
to improve Shareholder value through sustainable corporate
performance. The Company recognizes that its employees and, in
particular, the leaders within the organization have a significant
impact on Denison’s success.
|
In support of its
goal, Denison’s executive compensation program has three
objectives:
1. Align the
interests of its executive officers with the long-term interests of
the Company and its Shareholders.
2. Link
compensation to the performance of both the Company and the
executive.
3. Compensate
executive officers at a level and in a manner that ensures that
Denison is capable of attracting and retaining talented
executives.
|
Managing Risk
When determining
an executive’s compensation package, the Compensation
Committee seeks to balance: (A) annual performance incentives,
which are awarded based on success against pre-established
short-term corporate and individual goals, with (B) long-term
incentive payments focused on longer term performance of the
Company, including stock option grants under the Option Plan and
share units granted under the Share Unit Plan. The Compensation
Committee also considers the implications of each of the various
components of the Company’s compensation policies and
practices to ensure that executive officers are not inappropriately
motivated towards shorter-term results or excessive risk taking or
illegal behaviour.
The Compensation
Committee uses a number of strategies to reduce the risk associated
with compensation, including:
●
Reviewing and approving
annual individual objectives of executives and then assessing
performance against these objectives when: (a) awarding the
individual performance component of the annual bonus, and (b)
determining the quantum of any equity grants;
●
Considering the
Company’s performance relative to its peers when reviewing
the corporate performance component of the NEO’s annual
bonus;
●
Engaging compensation
consultants, to review and provide recommendations with respect to
compensation matters, including compensation relative to
peers;
●
Making the annual bonus
payment of the CEO and the CFO conditional upon a claw back
agreement, whereby each of them personally agrees to reimburse any
portion of their bonus payment which is awarded for achievements
that are found to involve their fraud, theft or other illegal
conduct;
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
●
Setting equity compensation
granting policies, including setting standard vesting and/or
settlement terms for share unit and stock option grants, which
align equity holders’ interests with longer term growth of
the Company;
●
Acknowledging the
Board’s role in overseeing compensation policies and
practices and exercising discretion to adjust payouts up or down;
and
●
Prohibiting Denison’s
directors and officers from purchasing financial instruments that
are designed to hedge or offset a decrease in market value of the
Shares.
Compensation
Decision-Making
At the beginning
of each year, the Board reviews the Company’s performance and
the analysis and recommendations of the Compensation Committee in
respect of NEO compensation. As applicable, the Compensation
Committee provides to the Board (a) its assessment of the
competitiveness of base salaries within Denison's peer group, (b)
its recommendations for annual performance incentives for the
Company’s executives, based on the prior year’s
performance of such executives and the Company as a whole, and (c)
its recommendations regarding base salaries, long term incentive
awards and annual performance objectives for the current fiscal
year.
The Compensation
Committee reviews all of Denison’s policies and programs
relating to executive compensation and makes recommendations to the
Board. This process involves:
|
● Benchmarking
and Executive Incentive Bonus Plan review
|
The Compensation
Committee periodically reviews Denison’s compensation
practices against a peer group of companies to ensure that the
Company’s compensation is in line with industry. At the same
time, the Compensation Committee reviews the Executive Incentive
Bonus Plan (the “Bonus
Plan”) annually and considers if any modifications are
required.
|
|
● Establishing
objectives to measure performance
|
The objectives of
the CEO are reviewed by the Compensation Committee and recommended
to the Board for ultimate approval. The Compensation Committee
reviews and approves the annual objectives of the other
NEOs.
|
|
● Evaluating
performance
|
The performance
of the CEO is reviewed by the Compensation Committee. The
performance of the other NEOs is reviewed by the CEO and reported
to the Compensation Committee.
|
|
● Determining
compensation packages
|
The CEO’s
base salary and bonus grants are calculated, reviewed by the
Compensation Committee and recommended to the Board for ultimate
approval. The base salaries and bonuses of the other NEOs are
reviewed and approved by the Compensation Committee. The Board
approves all equity based grants.
|
Compensation
Consultant Advice
In 2017, Denison
retained the services of Global Governance Advisors ("GGA") to review and report on the
competitiveness of the Company’s long-term incentive plan,
after the Company received feedback from certain investors,
suggesting the Company’s management could hold more equity in
the Company.
Looking ahead to
2021 compensation matters, the Compensation Committee initiated a
fulsome review of the Company’s director and executive
compensation programs in late 2020, including the engagement of GGA
to analyze the compensation of the Company’s directors and
executives. As a result of the Compensation Committee’s
review, modifications to the director and executive compensation
arrangements, to further align Denison with its peers, have been
approved to take effect in 2021.
Benchmarking
Denison seeks to
provide competitive total compensation packages to its executive
officers to ensure that it attracts and retains the most talented
individuals.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Accordingly, the
Compensation Committee relies on input from independent
compensation advisors from time to time and other outside
information, including the insight of Board members.
Denison’s target compensation position is the median against
a peer group of similar type and size of Canadian mining
companies.
Part of
GGA’s mandate in 2017 was the review the Company’s peer
group, as well as an assessment of the Company’s long term
incentive plan.
The following
criteria were used in creating the Company’s peer group:
North American-based companies, with a preference for Canadian
headquartered companies listed on the TSX, at the pre-production
stage of development, focused on exploration and development of
precious metals or other minerals with three or more current
expansion projects and generally of a similar size (0.5x to 2.0x)
in terms of total assets and market capitalization. Based on these
factors, it was determined that the following companies were
suitable peer comparators for consideration in determining levels
of senior executive compensation: Alexco Resources Corp., Energy
Fuels Inc., UR-Energy Inc., Largo Resources Inc., NexGen Energy
Ltd., Roxgold Inc., Fission Uranium Corp., Seabridge Gold Inc.,
Continental Gold Inc., Sabina Gold & Silver Corp., Lundin Gold
Inc., Altius Minerals Corporation, Polymet Mining Corp., Premier
Gold Mines Limited, Mountain Province Diamonds Inc. and Platinum
Group Metals Ltd.
The results of
the 2017 benchmarking review by GGA illustrated that the
Company’s then-current pay mix was disproportionately
weighted to base pay, as compared to its peers, and that the long
term incentive portion of the pay mix was lacking. Accordingly, the
Compensation Committee made modifications to its approach for the
issuance of long term incentive awards, with a focus on the
issuance of equity compensation in the form of stock options and
share units. Going forward, the Compensation Committee will
continue to evaluate the overall appropriateness of the
Company’s NEO compensation.
Executive
Compensation-Related Fees
Fees of (a)
$13,808 were payable to GGA for services rendered to the Company in
2017; and (b) $46,815 were payable to GGA for services rendered to
the Company in 2020 on account of a fulsome review of peer group,
director compensation and executive compensation for
2021.
Compensation Framework
The Company uses
three key compensation components to achieve the executive
compensation program’s objectives: base salary, annual
performance incentive and long-term incentive.
Base Salary
Base salary is a
fixed component of pay that compensates executives for fulfilling
their roles and responsibilities and aids in attracting and
retaining the qualified executives. Base salaries are reviewed
annually to ensure that they reflect how an individual fulfills his
or her responsibilities and to ensure that Denison’s
compensation stays competitive.
Annual Performance Incentives
Denison’s
annual performance incentive is a short-term variable element of
compensation in the form of a cash bonus. Based on a recommendation
of the Compensation Committee, Denison’s Board has approved
the Bonus Plan for Denison’s CEO, CFO and Vice-Presidents.
Depending on an executive’s position within the Company, his
or her bonus represents a varying percentage of his or her target
total compensation. Denison’s most senior executives have the
highest amount and proportion of annual incentive compensation as
follows:
CEO – up to 80% of base
salary
CFO – up to 50% of base
salary
VP – up to 40% of base
salary
|
|
|
|
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
|
The stated goal
of Denison’s compensation program is to improve Shareholder
value through sustainable corporate performance. Linking corporate
and personal performance to support this goal, Denison has
incorporated two performance measures into its bonus
calculations:
1. Corporate
performance (quantitative, with reference to shareholder
return)
2. Individual
performance (quantitative, plus qualitative assessment of
individual performance)
|
Corporate Performance
Measures: Denison has chosen to measure
corporate performance using recognized and objective measurements
for Shareholders:
Shareholder Return (SR)
measures, on the last day of the year, how well management has
enhanced Denison’s Share price.
Shareholder Return Relative to
Industry (SRI) measures the
return of Denison’s Shareholders relative to the uranium
industry’s return to shareholders.
The allocation of
the Corporate Performance measure is 50% to the SR measure and 50%
to the SRI measure. This allocation is intended to ensure alignment
of bonus compensation with shareholder return, while incentivizing
management to outperform the Company’s peers, even in times
when market conditions are challenging.
The calculation of SRI under the Executive
Incentive Bonus Plan is based upon an annual selection of a peer
group of five directly comparable companies (selected at the
beginning of the year), which are expected to be the five largest
pure uranium producers, developers and/or explorers with a market
capitalization under $3 billion (small to mid-cap range) (the
“SRI
Peer Group”).
For
2020, the SRI Peer Group was comprised of NexGen Energy Ltd.,
Fission Uranium Corp., Uranium Energy Corp., Paladin Energy Ltd.
and Energy Fuels Inc., which at the time of peer group formation in
January 2020, collectively held assets in Canada, the United States
and Europe with a combined market capitalization of approximately
$1.4 billion.
The annual target
for SR is set at the beginning of the year and determined by the
Compensation Committee in consultation with the CEO. The actual
results of the Corporate Performance Measures are determined based
on the Company’s share price at the end of the fiscal year.
To eliminate the impact of a single trade at the close of the
trading day, the share price used to evaluate SR and SRI will
generally be the single day volume weighted average on the last
trading day of the year.
Individual Performance
Measures: Denison’s qualitative
performance measurements reflect the performance of individuals and
their teams in meeting Denison's annual business objectives. They
include health, safety and environment metrics, budget cost control
and execution of key business activities. For example, if in any
year the Company suffers a fatality at any of its operations, the
performance measurement of health, safety and environment component
of the individual performance measure will be assessed at 0% for
all executives under the plan.
Each year, the
CEO meets with the executives to develop a set of Individual
Performance Measures and to set objectives for the year, which are
then presented to and approved by the Compensation Committee. The
CEO also presents his Individual Performance Measures to the
Compensation Committee for recommendation to the Board for
approval.
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DENISON MANAGEMENT
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Bonus Weighting and Proportions
The following are
the performance measure categories, and their weighting, for each
executive in 2020.
|
|
Corporate
(%)
|
Individual
(%)
|
|
CEO
|
70
|
30
|
|
CFO
|
60
|
40
|
|
VP
|
50
|
50
|
For each
Performance Measure, there are three levels of
achievement:
|
|
Base
Target
|
Stretch
Target
|
Breakthrough
Target
|
|
CEO
|
Up to
50%
|
60%
|
80%
|
|
CFO
|
Up to
30%
|
40%
|
50%
|
|
VP
|
Up to
20%
|
30%
|
40%
|
Long-Term Incentives
Equity based
compensation, such as stock option and share unit grants to
executives, play an important role in helping Denison meet the
objectives of its compensation program. Equity compensation rewards
long-term growth and an appreciation in Share price, thus creating
Shareholder value. Additionally, equity compensation is commonplace
in the Canadian mining industry and is an important part of keeping
Denison’s compensation competitive with that of its
peers.
The Compensation
Committee has a “Stock Based
Compensation Grant Policy” (the “Grant
Policy”), which provides for a uniform granting practice for
eligible employees at Denison. Under the Grant Policy, equity
grants are made annually following the release of year end
results.
For stock
options, the exercise price will be set in accordance with the
Option Plan and the Company’s Disclosure Policy. The Option
Plan is described in detail starting on page 42 of this Circular.
All options granted pursuant to the Grant Policy have a five year
term, with half of the options granted vesting on the first
anniversary of the grant, with the remainder vesting on the second
anniversary.
Under the
Company’s Share Unit Plan, share units can be granted as
Restricted Share Units (where the Shares typically vest after the
passage of a pre-determined amount of time) or Performance Share
Units (where the Shares will only become issuable if, at the time
of vesting, certain pre-determined performance conditions have been
met). Any such grants would be in keeping with the policies of the
Compensation Committee, and in keeping with the provisions of the
Grant Policy and Share Unit Plan. The Share Unit Plan is described
in detail starting on page 43 of this Circular.
The magnitude of
an equity compensation grant for an employee is based
on:
(a)
Scope of
Role & Responsibility: an employee’s level of
responsibility and ability to impact the Company’s results;
and
(b)
Individual
and Corporate Performance: the assessment of individual and
corporate performance (as detailed above) may be factored into
determining the quantity of equity compensation to be granted to
Denison’s executive officers, linking the magnitude of equity
based compensation to the objectives and achievements of each
executive officer.
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DENISON MANAGEMENT
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Compensation of Named Executive Officers
The table below
is a summary of base salary, incentive-based awards and other
compensation awarded to the NEOs in the last three financial
years.
Summary Compensation Table
|
Name and
PrincipalPosition
|
Year
|
Salary($)
|
Share-based
awards1($)
|
Option-based
awards2($)
|
Non-equity
Annual Incentive Plans3($)
|
All other compensation4
($)
|
Total compensation
($)
|
|
David
Cates
President and
CEO
|
2020
2019
2018
|
318,370
313,040
306,300
|
159,153
321,115
627,900
|
124,068
167,025
130,251
|
183,460
134,920
147,630
|
25,412
24,295
25,343
|
810,463
960,395
1,237,424
|
|
Mac
McDonald
Executive Vice
President & CFO
|
2020
2019
2018
|
271,210
258,790
253,210
|
124,028
230,540
460,850
|
96,726
123,420
106,856
|
105,110
84,540
82,040
|
24,913
23,648
22,874
|
621,987
720,938
925,830
|
|
David
Bronkhorst
Vice President
Operations5
|
2020
2019
2018
|
240,000
60,000
Nil
|
117,275
Nil
Nil
|
28,224
51,562
Nil
|
83,400
Nil
Nil
|
21,977
5,520
Nil
|
490,876
117,082
Nil
|
|
Tim
Gabruch
Vice President
Commercial5
|
2020
2019
2018
|
238,130
234,140
76,667
|
39,540
229,840
Nil
|
30,576
37,995
62,746
|
Nil
60,870
15,300
|
17,084
16,696
4,629
|
325,330
579,541
159,342
|
|
Michael
Schoonderwoerd
Vice President
Controller
|
2020
2019
2018
|
205,470
202,030
197,680
|
33,588
70,635
209,950
|
26,166
33,915
30,987
|
58,680
49,390
48,530
|
28,922
25,368
27,055
|
352,826
381,338
514,112
|
Notes to
Summary Compensation Table:
1.
Granted pursuant to the Share
Unit Plan. The fair value was determined using the closing price of
Denison’s shares on the trading day prior to the accounting
grant date.
2.
This amount represents the
fair value, on the date of grant, of awards made under the Option
Plan for the applicable financial year. The grant date fair value
has been calculated using the Black Scholes option-pricing model.
The key assumptions and estimates used for the calculation of the
grant date fair value under this model include the risk-free
interest rate, expected stock price volatility, expected life and
expected dividend yield. Reference is made to the disclosure
regarding the Option Plan in Note 18 in the Consolidated Financial
Statements for the Year Ended December 31, 2020 available on SEDAR
and EDGAR.
3.
These amounts were earned in
the fiscal year noted and were paid in the following fiscal year.
For 2020, NEO bonuses were approved in March 2021. For 2019, 100%
of the NEO bonuses were paid by special grant of RSUs. For 2018,
50% of the NEO bonuses were paid in cash, with 50% of the bonuses
paid by a special grant of RSUs.
4.
These amounts consist of car
allowance, travel-to-work or parking benefits, life insurance
premiums and retirement savings benefits. The retirement savings
benefits component exceeds 25% of the benefits included under the
heading “All Other Compensation”, in 2020, 2019 and
2018, respectively as applicable, as follows (i) for Mr. Cates:
$15,388, $12,522, $12,252; (ii) for Mr. McDonald: $10,849, $10,352,
$10,128; (iii) for David Bronkhorst: $16,800, $4,200; (iv) for Mr.
Gabruch: $11,906, $11,707, $3,067; and (v) for Mr. Schoonderwoerd:
$16,181, $14,142, $13,837.
5.
Mr. Bronkhorst joined Denison
in October 2019; Mr. Gabruch joined Denison in September 2018 and
departed in February 2020, prior to the assessment and grant of
2020 NEO bonuses.
None of the NEOs
received any non-equity awards under a long-term incentive plan,
and the Company does not have any defined benefit or actuarial
plans for active employees.
|
|
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DENISON MANAGEMENT
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Five-Year Trend Discussion
The annual
compensation in the graphs below reflect total compensation for the
CEO and the four other NEOs disclosed each year, rather than
compensation from 2016 to 2020 for the current NEOs who may not
have been NEOs in prior years. For example, neither Mr. Gabruch nor
Mr. Bronkhorst were NEOs in 2018, and thus their compensation for
that year is not included in “Other NEO Pay” in 2018,
and instead it reflects the compensation of the individuals who
were NEOs in that year.
Base Salaries:
After
consultation with GGA on NEO Compensation in 2015, the Compensation
Committee approved moderate increases in salary compensation for
the NEOs for 2016. In 2017, the Compensation Committee deemed a
further modest increase in salary compensation appropriate, in
consideration of the team’s achievements. In light of market
conditions in 2018, 2019 and 2020, the Compensation Committee
approved only cost of living adjustments for each NEO base
salary.
In connection
with his promotion to President and CEO in 2015, from his prior
role as CFO, the Compensation Committee approved a 33.9% increase
in Mr. Cates' salary, increasing it to $250,000. Mr. Cates’
salary was later increased to $270,000 for 2016 and $300,000 for
2017, in response to industry benchmarking and corporate
achievements, with a small cost of living adjustment increasing it
to $306,300 for 2018, $313,040 for 2019 and $318,370 for
2020.
When Mr. McDonald
was appointed CFO in March 2015 his salary was set at $205,000 and
he received increases to $220,000 in 2016 and $248,000 in 2017 to
bring his salary closer to market benchmarks, with a cost of living
adjustment to $253,210 in 2018 and $258,790 in 2019, and a small
increase to $269,500 in 2020 reflecting a cost of living increase
and his promotion to Executive Vice President. Mr. Bronkhorst
joined the Company in September 2019, as VP Operations, with a
salary of $240,000, which remained unchanged in 2020. Mr. Gabruch
joined the Company in September 2018, as VP Commercial, and his
compensation was set at $230,000 for 2018, $234,140 for 2019 and
$238,130 for 2020. Mr. Schoonderwoerd was appointed VP Controller
in January 2013. In 2017, Mr. Schoonderwoerd’s salary was
$193,610, which was modestly increased to $197,680 in 2018,
$202,030 in 2019 and $205,470 in 2020.
Equity Compensation:
In part due to
investor feedback suggesting that the Company’s relatively
young roster of NEOs could hold more equity in the Company, GGA was
engaged in March 2017 to provide a report, in part, on the
competitiveness of the Company’s long-term incentive plan.
After consideration, in 2017 the Compensation Committee approved
both an “ordinary” grant of options (with the grant of
2,065,000 options to NEO’s in accordance with the
Company’s Stock Option Grant Policy) and a
“special” grant of options (with the additional grant
of 1,735,000 stock options), thereby increasing the NEOs’
stake in the Company’s equity. As a result, equity
compensation saw a larger than typical increase in 2017. The
“special” grant of options was also intended to
compensate NEOs for what was assessed as under-optioning the
previous year, based on the most recent benchmarking provided by
GGA.
In addition, the
Compensation Committee considered the form of equity being issued
pursuant to the Company’s long-term incentive plan with
reference to the March 2017 GGA report, which noted that the grant
of share units under a share unit plan would assist management in
increasing their respective share ownership levels in response to
investor feedback. As a result, the Company’s Share Unit
Plan, providing for the issuance of Restricted Share Units and
Performance Share Units was adopted in March 2018 and each NEO
received a grant of both Performance Share Units, intended to be a
one-time special grant to increase NEO equity holdings, and
Restricted Share Units, as part of the annual bonus assessment. As
a result, equity compensation saw a larger than typical increase in
2018. On joining Denison, each of Mr. Gabruch and Mr. Bronkhorst
each received a pro rata grant of Performance Share Units in 2019
and 2020, respectively, to bring their holdings in line with the
other NEOs. There were no options or other equity compensation held
by the NEOs that were re-priced downward during the most recently
completed financial year of the Company.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
Performance Graphs
Cumulative Value of $100 Investment
The following
graph compares the cumulative total shareholder return for $100
invested in the Shares on the Toronto Stock Exchange for the
Company’s five most recently completed financial years with
the cumulative total shareholder return of the S&P/TSX
Composite Index for the same period. The Share performance as set
out in the graph does not necessarily indicate future price
performance. The Shares trade on the TSX under the symbol
“DML”.
Data
supplied by the TSX.
Five-Year Trend in NEO Total Compensation
Compared to Denison Cumulative Value of $100
Investment
To evaluate the
trend in Denison compensation levels in relation to Share
performance as measured in the graph above, Denison relied on the
total annual compensation awarded for fiscal years 2016 through
2020 on the same basis as is currently disclosed in the
“Summary Compensation Table” above, using the fiscal
year 2016 as a base amount for comparing changes in compensation
over time.
Denison
Share data supplied by the TSX.
For 2018, the
chart above reflects the one-time special grant to increase NEO
equity holdings. See “Compensation of Named Executive
Officers – Five Year Trend Discussion” for more
details.
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Annual Performance Incentives
Denison's NEOs
were eligible to receive a bonus for the year ended December 31,
2020, in accordance with the Company’s Bonus Plan. As
previously discussed, computation of bonuses is based on
assessments of corporate and individual performance.
2020
Corporate Performance
As explained on
page 30 of the Circular, Corporate Performance Measures are
assessed by looking at Shareholder Return (SR) and Shareholder
Return Relative to Industry (SRI). The Compensation Committee had
set a base target of 8% SR for 2020. For SRI, the performance of
the Company’s selected SRI Peer Group is used as the bench
mark for measuring industry performance. In 2020, the market cap
weighted share price performance of the SRI Peer Group (when
comparing their share price on the last trading day of the year in
2019 against 2020) was +115.83%.
When the
Compensation Committee assessed the Company’s performance in
2020, it determined that Denison’s SR for the year was
+66.37%. This performance significantly exceeded the 8% SR target,
more than double the threshold for “breakthrough” level
of performance based on this measure. However, the Company’s
performance did not meet or exceed the SRI benchmark of +115.83%.
As a result, no bonus on account of SRI was approved to be paid to
NEOs for 2020 performance.
2020
Individual Performance
In March 2020,
the Board of Directors approved individual objectives for Mr. Cates
upon the recommendation of the Compensation Committee. In March
2021, the Compensation Committee assessed Mr. Cates' performance
against these objectives to determine his entitlement under the
Bonus Plan. The Compensation Committee determined that Mr. Cates
had substantially completed his objectives, and the results of the
Compensation Committee’s review are summarized, in part, as
follows:
|
Objective
|
|
Assessment
|
|
1. Raise
sufficient new capital to allow for the advancement of the Wheeler
River project, consistent with the Board approved project
development plans for 2020 and into 2021.
|
√
|
● Despite the challenge of the
COVID-19 pandemic, the related changes in plans for 2020 and market
disruptions that defined most of 2020, the Company was successful
in obtaining funding for 2021 and into 2022.
|
|
2. Advance
relations with Indigenous groups, with respect to the support for
Wheeler River environmental assessment and other permitting
processes.
|
√
|
● The COVID-19 pandemic
disrupted the Company’s plans for Indigenous engagement in
2020 with the decision in March to suspend the formal Environmental
Assessment (‘EA’) process for Wheeler River, but the
Company was proactive in assisting communities with their COVID-19
response, and continued to advance discussions with local
Indigenous groups and communities in support of a future resumption
of the EA. The Company was also proud to announce a unique
collaboration with the Ya’thi Néné Lands and
Resources related to the Waterbury Preliminary Economic Assessment,
resulting in the renaming of the Waterbury Lake J Zone deposit, to
a Dené name, Tthe Heldeth Túé.
|
|
3. Drive the
development of the Wheeler River project, consistent with the
Company’s objective of becoming the next uranium producer in
the Athabasca Basin.
|
√
|
● The 2020 Wheeler ISR field
program included an “optimized” program to ensure
impact to schedule from the COVID-19 suspension of the EA was
minimized. The technical team’s efforts were focused on
project de-risking, including the completion of a meaningful
trade-off study on the use of a modified freeze “wall”
design at Phoenix. On the exploration side, discoveries of new
mineralization were made at K-West and Phoenix Zone C, each with
the potential to develop into future satellite deposits for the ISR
operation planned at Phoenix.
|
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
|
4. Obtain
financing to fund continued exploration activities at Wheeler River
and other high priority properties to the end of 2021 and
beyond.
|
√
|
● Successfully completed a
non-brokered private placement offering of flow-through shares, the
proceeds of which would fund Q1 2021 exploration.
|
|
5. Continue
to dynamically manage the Company’s strategic resource base
and evaluate opportunities to upgrade or enhance the
Company’s exploration portfolio projects outside of Wheeler
River.
|
√
|
● The Company evaluated various
options to manage its strategic resource base throughout 2020,
including the advancement of the Tthe Heldeth Túé
deposit through to a Preliminary Economic Assessment and the
completion of a sale of a non-uranium portfolio asset.
|
|
6. Meet or
surpass operating plan / budget objectives.
|
√
|
● As a result of the COVID-19
pandemic, operating plans for 2020 were subject to significant
change during the year. However, positive results were achieved,
including the results from the Closed Mines group exceeding budget
by approximately 50%.
|
|
7. Continue
to enhance the scope of the Company’s investor relations and
stakeholder relations activities to ensure investors and analysts
are well informed and the market value of the Company is
maximized.
|
√
|
● Marketing plans were
significantly disrupted by the impact of the COVID-19 pandemic,
with most in-person marketing cancelled after March 2020 until
virtual marketing commenced in the second half of the year. The
fourth quarter of the year saw enhanced opportunities for investor
relations activities, with various virtual conferences and 1-on-1
meetings coordinated with the release of Company news.
|
|
8. Continue
to instill a culture of 100% regulatory EH&S
compliance
|
√
|
● Consistently positive
Environment, Health and Safety reports from operations continue to
speak to Denison’s overall commitment to a culture of 100%
regulatory and environmental compliance.
|
|
9. Continue
to instill a culture of 100% ethical business conduct and zero
tolerance
|
√
|
● Denison continues to be
committed to maintaining a culture of 100% ethical business conduct
and a reputation amongst industry participants and regulators as
being highly reputable and ethical.
|
Each of the other
NEO's eligible for a bonus for 2020 set individual performance
objectives for 2020, and the Compensation Committee assessed their
performance against these objectives for determining an award under
the Bonus Plan. Considering the considerable efforts undertaken by
the relatively small management team to finance the Company and
maintain material progress for its projects in the face of the
COVID-19 pandemic, the Compensation Committee directed there be
applied a further discretionary adjustment factor of 1.25 to the
assessed amounts.
In looking at Mr.
McDonald's performance over 2020, the Compensation Committee
determined that Mr. McDonald met or exceeded his bonus targets on
nearly all of his objectives. Among targets which he surpassed, Mr.
McDonald (a) worked with the CEO to raise capital to support
near-term and long-term Wheeler River project development
activities, and (b) was a key contributor to corporate development,
capital raising, investor relations and other strategic activities
during the year.
The Compensation
Committee concluded that Mr. Bronkhorst’s performance in 2020
had met or exceeded objectives in 2020, including (a) completing
all budgeted & funded activities related to Wheeler River on
schedule and budget to continue to de-risk the project, most
notably the freeze “wall” trade-off study, which led to
a design change for the project, with the potential to offer
significant advantages over the previously planned freeze
“dome”, and (b) the oversight of the Waterbury Lake
Preliminary Economic Assessment for the Tthe Heldeth
Túé deposit. Mr. Bronkhorst’s Project Development
team saw the most upheaval in its plans and objectives for 2020 as
a result of the COVID-19 pandemic, with the temporary suspension of
the Environmental Assessment process in 2020 and the cancellation
of certain budgeted field work.
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
The team was able
to redeploy its internal resources to advance its high-value
programs and projects, including the completion of advanced desktop
studies and other works related to the de-risking the Phoenix
deposit in-situ recovery project.
Mr.
Schoonderwoerd met or exceeded expectations during 2020, most
notably by (a) leading the Company’s efforts to upgrade its
accounting ERP system, (b) providing leadership in the preparation
of budgets and the budget processes for Wheeler River evaluation
activities; and (c) continuing to take ownership of the
Company’s tax reporting and compliance
responsibilities.
All
aforementioned NEOs were recognized as exceeding their objectives
in 2020 relating to health and safety, as the Company had no lost
time accidents and was 100% compliant with applicable environmental
and health and safety laws and regulations.
Mr. Gabruch
departed Denison in early 2021, prior to the assessment of his
eligibility and performance under the Bonus Plan, and no bonus was
granted to Mr. Gabruch for 2020.
Based on the
foregoing, the assessment of the following NEOs’ bonus
entitlement was:
|
Name
|
Corporate
Calc./Max
|
Individual
Calc./Max1
|
Total
Calc./Max
|
|
David
Cates
|
35.0% /
56.0%
|
22.6% /
24.0%
|
57.6% /
80.0%
|
|
|
$111,430
|
$72,030
|
$183,460
|
|
Mac
McDonald
|
18.7% /
30.0%
|
20.3% /
20.0%
|
39.0% /
50.0%
|
|
|
$50,530
|
$54,580
|
$105,110
|
|
David
Bronkhorst
|
12.5% /
20.0%
|
22.3% /
20.0%
|
34.8% /
40.0%
|
|
|
$30,000
|
$53,400
|
$83,400
|
|
Mike
Schoonderwoerd
|
12.5% /
20.0%
|
16.1% /
20.0%
|
28.6% /
40.0%
|
|
|
$25,680
|
$33,000
|
$58,680
|
Note:
1.
Considering the considerable
efforts undertaken by the relatively small management team to
finance the Company and maintain material progress for its projects
in the face of the COVID-19 pandemic, the Compensation Committee
directed there be applied a further discretionary adjustment factor
of 1.25 to the assessed amounts.
Long Term Incentive Plan Awards
In years prior to
2018, the Company employed two forms of incentive plans to award
its employees for individual and Company performance, namely
option-based awards and non-equity based awards in the form of cash
bonuses. In March 2018, the Board adopted the Share Unit Plan and
now the Company is able to grant share-based incentives. See
“Equity Compensation Plans” below, for more
information.
Value Vested or Earned during 2020
The table below
sets out information concerning the value of incentive plan awards,
including option-based and non-equity incentive plan compensation,
vested or earned during the financial year ended December 31, 2020
for each NEO.
|
Name
|
Option-based awards Value vested during year($)1
|
Share-based awardsValue vested during year($)2
|
Non-equity incentive plan compensation – Value earned during
the year($)
|
|
David
Cates
|
(201,429)
|
143,801
|
183,460
|
|
Mac
McDonald
|
(156,418)
|
104,468
|
105,110
|
|
David
Bronkhorst
|
(14,605)
|
Nil
|
83,400
|
|
Tim
Gabruch
|
(29,825)
|
31,753
|
Nil
|
|
Michael
Schoonderwoerd
|
(50,875)
|
41,401
|
58,680
|
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
Note for
Value Vested or Earned During 2020:
1.
The option value vested
during the year reflects the aggregate dollar value that would have
been realized if the options that vested in 2020 were exercised on
their vesting date. Numbers in brackets constitute a negative
value. For options, a negative value indicates that the exercise
price of the options exceeds the market value of Denison’s
shares on the vesting date.
2.
The share unit value vested
during the year reflects the aggregate dollar value realizable if
the shares were issued on their vesting date.
Outstanding Share-Based Awards
The following
table sets out for each NEO the number and value of their share
units outstanding on December 31, 2020.
|
Name
|
UnvestedShare Units
(#)1
|
Market or
payout value of Unvested Share Units
($)2
|
Vested but
Unpaid Share Units
(#)
|
Market or
payout value of Vested but Unpaid Share Units
($)
|
|
David
Cates
|
1,253,251
RSUs
|
1,052,731
|
390,999
RSUs
|
328,439
|
|
|
390,000
PSUs
|
327,600
|
260,000
PSUs
|
218,400
|
|
Total
|
|
1,380,331
|
|
546,839
|
|
Mac
McDonald
|
897,084
RSUs
|
753,551
|
296,666
RSUs
|
249,199
|
|
|
270,000
PSUs
|
226,800
|
180,000
PSUs
|
151,200
|
|
Total
|
|
980,351
|
|
400,399
|
|
David
Bronkhorst
|
125,500
RSUs
|
105,420
|
Nil
RSUs
|
Nil
|
|
|
180,000
PSUs
|
151,200
|
Nil
PSUs
|
Nil
|
|
Total
|
|
256,620
|
|
Nil
|
|
Tim
Gabruch
|
321,667
RSUs
|
270,200
|
29,333
RSUs
|
24,640
|
|
|
180,000
PSUs
|
151,200
|
60,000
PSUs
|
50,400
|
|
Total
|
|
421,400
|
|
75,040
|
|
Michael
Schoonderwoerd
|
328,751
RSUs
|
276,151
|
91,999
RSUs
|
77,279
|
|
|
150,000
PSUs
|
126,000
|
100,000
PSUs
|
84,000
|
|
Total
|
|
402,151
|
|
161,279
|
Notes for
Outstanding Share-Based Awards:
1.
The PSUs were received as
special grant of performance share units in 2018, as approved by
Shareholders on May 3, 2018, to further address investor feedback
and increase NEOs’ equity stake in the Company. Mr. Gabruch
joined Denison in September 2018, received a prorated grant of PSUs
in 2019. Mr. Bronkhorst joined Denison in October 2019, received a
prorated grant of PSUs in 2020.
2.
Share unit values have been
calculated using the closing price of the Shares on the TSX on
December 31, 2020 of $0.84 per share.
3.
In 2020, 100% of 2019 bonus
entitlements to NEOs were paid with equity compensation, with the
grant of restricted share units, to provide for further equity
investment in the Company by the NEO’s, and to allow for
conservation of the Company’s cash for investment in the
Company’s 2020 objectives: Cates, 335,250; McDonald, 209,750;
Gabruch, 151,000; and Schoonderwoerd, 122,750.
Outstanding Option-Based Awards
The following
table sets out for each NEO the number and value of their options
outstanding on December 31, 2020.
|
Name
|
Shares underlying unexercised options (#)
|
Option
exercise price ($)
|
Option
expiration date
|
Value of unexercised in-the- money options ($)1
|
|
David
Cates
|
355,7502
|
0.64
|
Mar 10,
2021
|
71,150
|
|
|
1,927,6003
|
0.85
|
Mar 10,
2022
|
Nil
|
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
|
Name
|
Shares underlying unexercised options (#)
|
Option
exercise price ($)
|
Option
expiration date
|
Value of unexercised in-the- money options ($)1
|
|
|
774,2144
|
0.60
|
Mar 11,
2023
|
185,811
|
|
|
655,000
|
0.68
|
Mar 10,
2024
|
104,800
|
|
|
844,000
|
0.46
|
Mar. 8,
2025
|
320,720
|
|
Total
|
4,556,564
|
|
|
682,481
|
|
Mac
McDonald
|
260,3002
|
0.64
|
Mar 10,
2021
|
52,060
|
|
|
1,400,9003
|
0.85
|
Mar 10,
2022
|
Nil
|
|
|
627,1814
|
0.60
|
Mar 11,
2023
|
150,523
|
|
|
484,000
|
0.68
|
Mar 10,
2024
|
77,440
|
|
|
658,000
|
0.46
|
Mar. 8,
2025
|
250,040
|
|
Total
|
3,430,381
|
|
|
530,063
|
|
David
Bronkhorst
|
254,000
|
0.61
|
Nov. 10,
2024
|
58,420
|
|
|
192,000
|
0.46
|
Mar 8,
2025
|
72,960
|
|
Total
|
446,000
|
|
|
131,380
|
|
Tim
Gabruch
|
274,000
|
0.68
|
Sep 3,
2023
|
43,840
|
|
|
149,000
|
0.68
|
Mar 10,
2024
|
23,840
|
|
|
208,000
|
0.46
|
Mar. 8,
2025
|
79,040
|
|
Total
|
631,000
|
|
|
146,720
|
|
Michael
|
126,5502
|
0.64
|
Mar 10,
2021
|
25,310
|
|
Schoonderwoerd
|
533,2003
|
0.85
|
Mar 10,
2022
|
Nil
|
|
|
229,7484
|
0.60
|
Mar 11,
2023
|
55,140
|
|
|
133,000
|
0.68
|
Mar 10,
2024
|
21,280
|
|
|
178,000
|
0.46
|
Mar. 8,
2025
|
67,640
|
|
Total
|
1,200,498
|
|
|
169,370
|
Notes for
Outstanding Option-Based Awards:
1.
Option values have been
calculated using the closing price of the Shares on the TSX on
December 31, 2020 of $0.84 per share, less the applicable exercise
price of the outstanding options. As at December 31, 2020, some of
the options had not fully vested. The above value of unexercised
in-the-money options has been computed assuming that all of the
options have vested.
2.
Comprised in part of a
special stock option grant to each NEO in lieu of cash payments, on
account of NEO 2015 bonuses: Cates, 198,750; McDonald, 135,300; and
Schoonderwoerd, 56,550.
3.
Comprised in part of special
stock option grants to each NEO (a) in lieu of cash payments, on
account of NEO 2016 bonuses: Cates, 477,600; McDonald, 282,900; and
Schoonderwoerd, 163,200; and (b) to address investor feedback and
increase NEOs’ equity stake in the Company: Cates, 653,000;
McDonald, 520,000; and Schoonderwoerd, 172,000.
4.
Comprised in part of special
stock option grants to each NEO in lieu of cash payments on account
of NEO 2017 bonuses: Cates, 198,214; McDonald, 154,181; and
Schoonderwoerd, 95,748.
Loans to Executives
As of the date of
this Circular, Denison and its subsidiaries had no loans
outstanding to any current or former NEOs, except routine
indebtedness as defined under Canadian securities
laws.
Compensation on Termination
Messrs. McDonald,
Bronkhorst, Gabruch and Schoonderwoerd all had similar written
executive employment agreements with the Company at the end of the
financial year, which set out their rights in the event of
termination, including termination without cause or termination by
the executive for "Good Reason" (as defined below).
Upon termination
of the employment agreement by either party for any reason, the NEO
shall be paid all compensation earned by him (regardless of whether
yet paid) as of the effective date of termination. In the event
that the NEO's employment is terminated (a) by the Company for a
reason other than
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
just cause or (b)
by the NEO in the event of a Good Reason, the NEO will be entitled
to a payment equal to 18 months’ salary and a bonus payment
in an amount equal to the bonus payment earned by such NEO for the
fiscal year ending immediately prior to the effective date of
termination.
Pursuant to Mr.
Cates' executive employment agreement with the Company, upon
termination of the employment agreement by either party for any
reason, Mr. Cates shall be paid all compensation earned by him
(regardless of whether yet paid) as of the effective date of
termination. In the event that Mr. Cates's employment is terminated
(a) by the Company for a reason other than just cause or (b) by Mr.
Cates in the event of a Good Reason, Mr. Cates will be entitled to
(i) a payment equal to 24 months’ salary, (ii) a bonus
payment in an amount equal to the bonus payment earned by Mr. Cates
for the fiscal year ending immediately prior to the effective date
of termination, and (iii) a payment equivalent to 19% of the amount
determined pursuant to (i) as compensation for discontinued
benefits.
In each contract,
a Good Reason means:
●
the assignment of any duties
inconsistent with the status of the executive's assigned office or
a material alteration in the executive’s duties,
responsibilities, status or reporting relationship;
●
a reduction in the
executive’s annual base salary;
●
requiring the executive to be
based in a different location;
●
any other events or
circumstances which would constitute a constructive dismissal at
common law; or
●
a “change of
control” of the Company. A “change of control”
means (a) the acquisition of control or direction by any holder of
the voting rights of 50% or more of the Shares, (b) a cessation of
the incumbent directors constituting a majority of the Board when
the incumbent directors do not recommend or approve of the
replacement directors, or (c) the approval by the Shareholders of
(i) a business arrangement (such as an amalgamation, arrangement or
merger) not approved by the Board which results in the current
Shareholders immediately thereafter not holding more than 50% of
the Shares; (ii) the liquidation, dissolution or winding up of the
Company; or (iii) the sale, lease or other disposition of all or
substantially all of the assets of the Company.
Pursuant to the
Company's Option Plan, subject to a specific provision in an NEO
employment agreement, all options held by directors and employees
of the Company vest immediately following a change of control,
which is defined in the Option Plan as the acquisition of 30% or
more of the then outstanding Shares or a sale by the Company of
substantially all of its assets. All options are then exercisable
for a period of 60 days following the close of any such
transaction.
Pursuant to the
Share Unit Plan, subject to the provisions of any NEO employment
agreement, all non-performance conditioned SUs vest in the event of
a Termination on Change of Control, (a) all unvested RSUs
outstanding shall immediately vest on the date of such termination;
and (b) all unvested PSUs (with performance criteria outstanding)
shall vest on the date of such termination using an Adjustment
Factor as determined by the Compensation Committee. See
“Equity Compensation Plans – Share Unit
Plan”.
Pursuant to the
employment agreements for each of Messrs. Cates, McDonald,
Bronkhorst, Gabruch and Schoonderwoerd, if the NEO's employment
agreement is terminated by the Company without cause or by the NEO
for Good Reason, any of such NEO's unvested stock options will
automatically vest and all stock options held by the NEO will be
exercisable for a 90-day period.
The table below
is a summary of the compensation that would have been paid to the
NEOs if any of them had been terminated on December 31, 2020, which
includes situations of termination without cause and termination
without cause in the event of a change of control.
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
|
Name
|
Separation Pay($)
|
Bonus Payment($)
|
Value of In-the- Money Equity
Awards1,2($)
|
Payment in lieu of Benefits ($)
|
Total($)
|
|
David
Cates
|
636,740
|
134,920
|
2,609,651
|
120,981
|
3,502,292
|
|
Mac
McDonald
|
406,815
|
84,540
|
1,910,813
|
Nil
|
2,402,168
|
|
David
Bronkhorst
|
360,000
|
Nil
|
388,000
|
Nil
|
748,000
|
|
Tim
Gabruch
|
357,195
|
60,870
|
643,160
|
Nil
|
1,061,225
|
|
Michael
Schoonderwoerd
|
308,205
|
49,390
|
732,800
|
Nil
|
1,090,395
|
Notes to
Termination Payouts:
1.
Includes the value of options
and share units. Option and share unit values have been calculated
using the closing price of the Shares on the TSX on December 31,
2020 of $0.84 per share.
2.
The amount shown represents
the incremental value of the NEOs’ unexercised in-the-money
equity as at December 31, 2020, assuming all of the options and
share units have vested. The Company would not be required to make
any cash payment for this amount upon termination of the
NEO.
EQUITY COMPENSATION PLANS
Denison’s
Option Plan is a fixed number share option plan under which a
maximum of 39,670,000 Shares have been authorized for issuance on
the exercise of options, representing 5.84% of the Company’s
issued and outstanding Shares as at December 31, 2020. The Option
Plan was first implemented in 1997, and was amended and updated
(with shareholder and regulatory approval) in 2006 and then again
in 2013.
Denison’s
Share Unit Plan is a fixed number share unit plan under which a
maximum of 15,000,000 Shares have been authorized for issuance. The
Share Unit Plan was first implemented by the Board on March 8,
2018, ratified and confirmed by Shareholders at the Annual General
and Special Meeting of Shareholders held on May 3,
2018.
On December 31,
2020, there were an aggregate of 15,077,243 options, 5,691,899 RSUs
and 2,020,000 PSUs outstanding under their respective plans. For
the fiscal years ended December 31, 2018, 2019 and 2020 (a) the
annual burn rate for all of Denison’s equity compensation
arrangements is 1.23%, 0.88% and 1.15%, respectively; (b) the
annual burn rate for securities issued under the Option Plan is
0.61%, 0.51% and 0.58%, respectively; and (c) the annual burn rate
for securities issued under the Share Unit Plan was 0.62%, 0.37%
and 0.56%, respectively.
As at December
31, 2020, the number and price of Shares to be issued under the
Option Plan and Share Unit Plan, and the percentage relative to the
number of issued and outstanding Shares of the Company, was as
follows:
|
|
|
|
2021 DENISON MANAGEMENT INFORMATION CIRCULAR
|
Plan
Category
|
Number of
Shares to be Issued upon Exercise of Outstanding Equity
Compensation
(a)
|
The number in (a) as Percentage of Issued and Outstanding
Shares
|
Weighted – Average Exercise Price of Outstanding Equity
Compensation
(b)
|
Number of Shares Remaining Available for Future Issuance Under
Equity Plan
(excluding
Shares reflected in (a))
|
Percentage of Issued and Outstanding Shares
|
|
Equity
Compensation Plans Approved by Shareholders1
- Option
Plan
- Share Unit
Plan
|
15,077,243
7,711,899
|
2.22%
1.14%
|
$0.67
N/A4
|
16,268,4072
6,495,8193
|
2.40%
0.96%
|
|
Equity
Compensation Plans Not Approved by Shareholders
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Notes:
1.
The Company’s
Shareholder approved equity plans are the Option Plan and the Share
Unit Plan. Reference is made to the disclosure regarding the Option
Plan and the Share Unit Plan in Note 18 in the Consolidated
Financial Statements for the Year Ended December 31, 2020, which
are available on SEDAR and EDGAR.
2.
The maximum number of shares
issuable under the Option Plan is 39,670,000. As at December 31,
2020, 23,401,593 options had been granted (less cancellations)
since the Option Plan’s inception in 1997.
3.
The maximum number of shares
issuable under the Share Unit Plan is 15,000,000. As at December
31, 2020, 8,504,181 share units had been granted (less
cancellations) since the Share Unit Plan’s inception in March
2018.
4.
The share units issued under
the Share Unit Plan do not have an exercise price and they entitle
the holder to Shares upon vesting and settlement. As at December
31, 2020, the issued and outstanding share units had a fair value
of $0.84 per unit, based on the closing price of the Shares on the
TSX on that date.
Option Plan
The purpose of
the Option Plan is to attract, retain and motivate the
Company’s directors, officers, key employees and consultants
and to align their interests with those of the Company and its
Shareholders. The Compensation Committee administers grants under
the Option Plan. All grants are subject to the approval of the
Board.
Below are the key
provisions of Denison’s Option Plan:
●
A maximum of 39,670,000
Shares are currently authorized for issuance under the Option
Plan.
●
Denison’s directors,
officers, employees and consultants of the Company or a subsidiary
of the Company or any employee of a management company providing
services to the Company or a subsidiary of the Company are eligible
to participate under the Option Plan.
●
Options cannot have a term of
over ten years; however, since 2011, the Board has adopted a
practice of granting options with five year terms, with vesting in
two equal parts on the first anniversary and the second anniversary
from the grant date. The Compensation Committee takes into account
previous grants when it considers new grants of
options.
●
Grants are typically done
annually. The Board fixes the exercise price of an option at the
time of the grant at the TSX closing price of Shares on the trading
day immediately before the date of the grant, and the exercise
price cannot be lower than this price.
●
If a director, officer or an
employee leaves the Company, all of their options will expire 30
days after they cease to be a director or an employee, except the
expiry period is extended if the options would otherwise expire
during a period of time when trading Shares is restricted. In
certain cases, individual employment agreements may vary vesting
rights and expiry periods upon termination or upon a change of
control. See “Compensation on Termination” starting on
page 39 for more information. The Option Plan provides that options
granted to a consultant will terminate 30 days after the consultant
agreement terminates.
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
●
The Option Plan does not
provide for a restriction on the maximum number of securities
issuable to any one person or company. However, no more than 10% of
total Shares issued and outstanding can be reserved for issuance to
insiders in a one-year period under the Option Plan and any other
security based compensation arrangement, and no more than 10% of
total Shares issued and outstanding can be issued to all insiders
in a one-year period under the Option Plan and any other share
compensation arrangement. Options cannot be transferred to another
person.
●
The following kinds of
changes require Shareholder approval under the terms of the Option
Plan:
✓
any change to the number of
Shares that can be issued under the plan, including increasing the
fixed maximum number of Shares, or changing from a fixed maximum
number to a fixed maximum percentage of Shares
✓
any change that increases the
number of categories of people who are eligible to receive options,
if it could increase the participation of insiders
✓
the addition of any form of
financial assistance or any amendment to a financial assistance
provision which is more favourable to participants
✓
the addition of a cashless
exercise feature which does not provide for a full deduction of the
number of underlying Shares from the plan reserve
✓
the addition of a deferred or
restricted share unit or any other provision which results in
Shares being received while no consideration is received by
Denison
✓
discontinuance of the Option
Plan
✓
any other amendments that
could lead to a significant dilution of the Company’s
outstanding Shares or may provide additional benefits to
participants under the Option Plan, especially insiders, at the
expense of the Company and its existing Shareholders
●
No change to the Option Plan
can alter or affect the rights of an option holder in a negative
way without his or her consent, except as described in the Option
Plan.
●
The Board has the power,
subject to regulatory approval where required, to make a limited
number of changes to the Option Plan, including amendments of a
house keeping nature, changes to the vesting provisions of an
option, a change to the termination provisions of an option,
provided that the extension does not go beyond the original expiry
date of the option and add a cashless exercise feature that
provides for a full deduction of Shares from the plan
reserve.
●
The Company prohibits the
giving of financial assistance to facilitate the purchase of Shares
to directors, officers or employees who hold options granted under
the Option Plan.
●
Option grants to the CEO and
the CFO are conditional upon a claw back agreement, whereby each of
them personally agrees to reimburse any portion of their bonus
payment (including options granted pursuant thereto) which is
awarded for achievements that are found to involve their fraud,
theft or other illegal conduct.
Share Unit Plan
The
Company’s goal with equity compensation in general is for it
to act as an important tool to help motivate directors, officers,
key employees and consultants, attract and retain the best people,
and to align the participant’s interests with those of the
Company and its Shareholders. The purpose of the Share Unit Plan is
to update the Company’s equity compensation program, bringing
it in line with current market practices, and to create more
flexibility in the types of incentive awards that may be made to
eligible participants.
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
The Share Unit
Plan was adopted in March 2018 (and ratified by Shareholders on May
3, 2018), after the Company received feedback from certain
investors suggesting the Company’s management could hold more
equity in the Company. As a result of that feedback, GGA was
requested to provide a report, in part, on the competitiveness of
the Company’s long-term incentive plan. In Part, the GGA
report noted that the grant of share units under a share unit plan
would assist management in increasing their respective share
ownership levels and increase their exposure to the share price, in
a different way than more traditional stock option
ownership.
Below are the key
provisions of Denison’s Share Unit Plan:
●
The Share Unit Plan
authorizes a maximum of 15,000,000 Shares for issuance thereunder.
As a result of settlement of Shares under the Share Unit Plan since
its inception, as at December 31, 2020 a maximum of 14,207,718
Shares remained authorized for issuance on settlement of Share
Units, representing 2.09% of the Company’s then issued and
outstanding Shares.
●
Participants may be granted
restricted share units (“RSUs”) or performance share
units (“PSUs”) or any combination of the
foregoing.
●
Eligible participants in the
Share Unit Plan are Denison’s directors, officers, employees
and consultants of the Company or an affiliate of the Company or
any employee of a management company providing services to the
Company or an affiliate of the Company.
●
Grants are anticipated to be
done annually.
●
The Board will approve the
terms of the RSUs and PSUs, as applicable, at the time of grant of
the applicable Share Units, and each grant letter will describe the
vesting and settlement provisions.
●
Share Units will be settled
on the first business day following the applicable vesting date,
unless the holder of the Share Unit has elected to defer
settlement.
●
Participants shall be
entitled to elect, by written notice to the Company, to defer the
settlement of their Share Units until the date which is the earlier
of (i) the date to which the participant has elected to defer
receipt of Shares in accordance with Section 3.4 of the Share Unit
Plan; and (ii) the date of the Participant’s Retirement,
Resignation, Termination with Cause or Termination Without Cause or
Termination after Change of Control of the Company (as each term is
defined in the Share Unit Plan).
●
The Board will have the
option, at the time of the grant of the Share Units, to allow a
participant to elect to settle their Share Units in cash instead of
Shares issued from treasury. If, at the time of settlement, the
participant elects to settle in cash, the cash payment will be
determined by the number of Shares the participant would be
eligible to receive multiplied by the market value, as calculated
in accordance with the Share Unit Plan. The Company has the right
to override the participant’s election and settle such RSUs
or PSUs in shares issued from treasury. If a participant has
elected to defer settlement, they will no longer be entitled to
elect to receive cash on settlement of their Share
Units.
●
Subject to the terms of the
grant letter or a participant’s employment
agreement:
●
in the event of Termination
Without Cause: (a) if the participant has been continuously
employed for at least two years, (i) any unvested RSUs will
automatically vest and become available for settlement, and (i) the
unvested PSUs will vest using an Adjustment Factor as determined by
the Board, and (b) if the participant has been continuously
employed for less than two years, all of the unvested RSUs and PSUs
shall become void and the participant shall have no entitlement to
the issuance of Shares under such Share Units.
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
●
in the event of the
Retirement of a participant, their unvested Share Units will
automatically vest on the date of Retirement and the Shares
underlying such Share Units will be issued to the participant as
soon as reasonably practical thereafter.
●
in the event of the death of
a participant, their unvested Share Units will automatically vest
on the date of death and the Shares underlying all Share Units will
be issued to the participant’s estate as soon as reasonably
practical thereafter.
●
in the event of the
disability of a participant (as may be determined in accordance
with the policies, if any, or general practices of the Company or
any subsidiary), any of their unvested Share Units will
automatically vest on the date on which the participant is
determined to be totally disabled and the Shares underlying the
Share Units held will be issued to the Participant as soon as
reasonably practical thereafter.
●
in the event of a Termination
on Change of Control, (a) all unvested RSUs outstanding shall
immediately vest on the date of such termination; and (b) all
unvested PSUs (with performance criteria outstanding) shall vest on
the date of such termination using an Adjustment Factor as
determined by the Board.
●
Except pursuant to (a) a will
or by the laws of descent and distribution, or (b) any registered
retirement savings plans or registered retirement income funds of
which the participant is and remains the annuitant, no Share Unit
and no other right or interest of a participant is assignable or
transferable.
●
Unless the Company has
received requisite shareholder approval, under no circumstances
shall the Share Unit Plan, together with all other security based
compensation arrangements of the Company (including the Option
Plan), result, at any time, in: (i) the aggregate number of Shares
reserved for issuance to insiders (as a group) at any point in time
exceeding 10% of the Company’s issued and outstanding Shares;
(ii) the issuance to insiders (as a group), within a
one‐year period, of
an aggregate number of Shares exceeding 10% of the Company’s
issued and outstanding Shares; (iii) the aggregate number of Shares
reserved for issuance to all non‐employee directors of the
Company exceeding 1% of the Company’s issued and outstanding
Shares; or (iv) the grant to any individual non‐employee director of the Company
of more than $150,000 worth of Shares annually. Subject to
compliance with the foregoing, the Share Unit Plan does not provide
for a restriction on the maximum number of securities issuable to
any one person or company.
●
Shareholder and applicable
stock exchange approvals will be required for any amendment,
modification or change to the provisions of the Share Unit Plan
which would:
✓
materially increase the
benefits to the holder of the Share Units who is an Insider to the
material detriment of the Company and its
shareholders;
✓
increase the maximum number
of Shares which may be issued from treasury pursuant to Share Units
granted pursuant to the Share Unit Plan (other than by virtue of
adjustments pursuant to the Share Unit Plan);
✓
extend the expiry date for
Share Units granted to Insiders under the Share Unit
Plan;
✓
permit Share Units to be
transferred, other than for normal estate settlement purposes or
transfers to any registered retirement savings plans or registered
retirement income funds of which the participant is and remains the
annuitant;
✓
remove or exceed the Insider
participation limits set forth in the Share Unit Plan;
✓
amend the definition of
“Participant” to allow for additional categories of
Participants or otherwise materially modify the eligibility
requirements for participation in the Share Unit Plan;
or
✓
modify the amending
provisions in section 4.5 of the Share Unit Plan.
2021
DENISON MANAGEMENT
INFORMATION CIRCULAR
●
The Board has the power,
subject to regulatory approval where required, to make a limited
number of changes to the Share Unit Plan, including amendments of a
house keeping nature, changes to the vesting or settlement
provisions of an Share Unit, a change to the termination provisions
of a Share Unit or the Share Unit Plan, any amendment respecting
the administration of the Share Unit Plan, and any amendments to
reflect changes to applicable securities or tax laws or that are
otherwise necessary to comply with applicable law or the
requirements of the applicable stock exchanges or other regulatory
body having authority over the Company, the Share Unit Plan, the
participants, or the Shareholders.
●
In the event of a Takeover
Bid, if a bona fide Offer for Shares is made, the Board will have
the sole discretion to amend, abridge or otherwise eliminate any
vesting schedule related to each participant’s Share Units so
that notwithstanding the other terms of this Plan, the underlying
Shares may be conditionally issued to each participant holding
Share Units so (and only so) as to permit the participant to tender
the Shares pursuant to the Offer.
●
In the event of a Change of
Control, the Board has the right to provide for the conversion or
exchange of any outstanding Share Units into or for units, rights
or other securities in any entity participating in or resulting
from a Change of Control, provided that the value of previously
granted Share Units and the rights of participants are not
materially adversely affected by any such changes. If the successor
entity does not assume or provide valuable substitute security for
the outstanding Share Units, (a) the Plan will be terminated
effective immediately prior to the Change of Control, (b) all RSUs
will vest and a specified number of outstanding PSUs will vest, as
determined in the Board’s discretion using an Adjustment
Factor (in accordance with the Share Unit Plan), and (c) the Share
Units will automatically convert into the entitlement to receive a
cash payment, to be paid by the Company in the same manner and
timing as the underlying Share Unit would have been in accordance
with the Plan, provided however, that such cash payment will not be
paid later than December 31 of the third calendar year following
the year in which the services giving rise to the award were
rendered.
●
If a dividend becomes payable
by the Company on its Shares, at the Board’s discretion
participants may be entitled to be credited with dividend
equivalent payments in the form of additional RSUs and/or PSUs, as
applicable, which additional units will be settled at the same time
that the underlying RSUs and/or PSUs, as applicable, are
settled.
●
Pursuant to the Share Unit
Plan and the applicable policies and procedures of the Company, any
Share Unit Awards granted to the CEO and CFO are conditional upon a
claw back agreement, whereby each of them personally agrees to
forfeit or reimburse any portion of their bonus payment, including
PSUs, RSUs or Shares issued thereunder, which were awarded for
achievements that are found to involve their fraud, theft or other
illegal conduct.
The Board or
the Compensation Committee administer grants under the Share Unit
Plan, and subject to the terms of the Share Unit Plan, certain
Grant Letters may alter the terms of the Share Unit Plan as it
applies to any particular participant’s grant of Share Units.
In addition, in certain cases, individual employment agreements may
vary the rights of participants. All grants are subject to the
approval of the Board, unless the Board delegates such approval to
the Compensation Committee.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
No informed
person, including any director, proposed director or executive
officer of the Company, had any material interest, direct or
indirect, in any transaction since the commencement of the
Company's most recently completed financial year or in any proposed
transaction which has materially affected or would materially
affect the Company or any of its subsidiaries.
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2021 DENISON MANAGEMENT INFORMATION CIRCULAR
ADDITIONAL INFORMATION
Additional
information relating to the Company is available on Denison’s
website at www.denisonmines.com, on SEDAR
under the Company’s profile at www.sedar.com and on EDGAR at
www.sec.gov/edgar.shtml.
Financial information related to the Company is contained in the
Company’s financial statements and related management’s
discussion and analysis for its most recently completed financial
year.
You may request a
printed copy of the following documents free of charge by writing
to the Corporate Secretary of the Company at 1100 - 40 University
Avenue, Toronto, Ontario M5J 1T1:
●
The Company’s 2020
Annual Report, containing the Company’s consolidated
financial statements and related MD&A for its year ended
December 31, 2020;
●
Any subsequently filed
quarterly report; or
●
The Company’s most
recent Annual Information Form or Annual Report on Form
40-F.
APPROVAL
The contents and
the sending of this Circular to Shareholders, the directors and the
auditor of the Company have been approved by the
Board.
By Order of the
Board of Directors,
Catherine
Stefan
Chair of the
Board
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2021 DENISON MANAGEMENT INFORMATION CIRCULAR
APPENDIX A
CHANGE OF AUDITOR REPORTING PACKAGE
DENISON MINES CORP.
NOTICE OF CHANGE OF AUDITOR
(National Instrument 51-102 – Continuous Disclosure
Obligations)
TO:
Ontario Securities
Commission
British Columbia
Securities Commission
Alberta
Securities Commission
Financial and
Consumer Affairs Authority of Saskatchewan
Manitoba
Securities Commission
Autorité des
marchés financiers
Financial and
Consumer Services Commission (New Brunswick)
Nova Scotia
Securities Commission
Office of the
Superintendent of Securities, Service Newfoundland and
Labrador
Office of
Superintendent of Securities, Government of Prince Edward
Island
Office of
Superintendent of Securities, Northwest Territories
Office of the
Yukon Superintendent of Securities
Nunavut
Securities Office
AND TO:
PricewaterhouseCoopers LLP
(“PwC”)
KPMG LLP
(“KPMG”)
RE:
Notice Regarding Change of
Auditor Pursuant to Section 4.11 of National Instrument 51-102
– Continuous Disclosure
Obligations (“NI
51-102”)
Notice is hereby
given of a change of the auditor of Denison Mines Corp. (the
“Company”)
pursuant to section 4.11 of NI 51-102.
1.
Effective October 1, 2020
(the “Effective
Date”), PwC, at the request of the Company, has
resigned as auditors of the Company and KPMG has been appointed as
auditors of the Company to fill the vacancy.
2.
The resignation of PwC and
appointment of KPMG were considered and approved by the Company's
Board of Directors. The Company will ask that the shareholders of
the Company ratify the appointment of KPMG at the next annual
meeting of the shareholders of the Company.
3.
There have been no modified
opinions in PwC’s reports for the Company’s two most
recently completed fiscal years or for any period subsequent to
the most recently completed period for which an audit report was
issued and preceding the Effective Date.
4.
There were no reportable
events (as defined in NI 51-102) in connection with the audits for
the period commencing at the beginning of the Company’s two
most recently completed financial years and ending on the Effective
Date.
DATED the 1st day of October,
2020.
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DENISON MINES CORP.
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by
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“Gabriel McDonald”
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Gabriel
McDonald
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Executive VP
& CFO
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2021 DENISON MANAGEMENT INFORMATION CIRCULAR
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KPMG
LLP
Bay
Adelaide Centre
333 Bay
Street, Suite 4600 Toronto, ON M5H 2S5 Canada
Tel
416-777-8500
Fax
416-777-8818
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Alberta Securities
Commission
British
Columbia Securities Commission
The
Manitoba Securities Commission
Financial and Consumer
Services Commission, New Brunswick
Office of
the Superintendent of Securities, Service Newfoundland and
Labrador
Office of
Superintendent of Securities, Northwest Territories
Nova
Scotia Securities Commission
Nunavut
Securities Office
Ontario Securities
Commission
The Office of
the Superintendent of Securities, Consumer, Corporate and Insurance
Services Division, Prince Edward Island
Autorité des
marchés financiers
Financial
and Consumer Affairs Authority of Saskatchewan
Office of
the Yukon Superintendent of Securities
October 5,
2020
Dear
Sir/Madam
Re: Notice
of Change of Auditors of Denison Mines Corp.
We
have read the Notice of Denison Mines Corp. dated October 1, 2020
and are in agreement with the statements contained in such
Notice.
Signed "KPMG
LLP"
Yours very
truly,
Chartered Professional
Accountants, Licensed Public Accountants
KPMG LLP
is a Canadian limited liability partnership and a member firm of
the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a
Swiss entity.
KPMG
Canada provides services to KPMG LLP.
October 5, 2020
To:
British Columbia
Securities Commission
Alberta
Securities Commission
Financial and Consumer Affairs Authority of
Saskatchewan
The Manitoba Securities
Commission
Ontario Securities Commission
Autorité des marchés financiers
(Québec)
Financial and Consumer Services Commission (New
Brunswick)
Nova Scotia Securities
Commission,
Office of the Superintendent of Securities
Service Newfoundland & Labrador,
Office of the Superintendent of Securities
Government of Prince Edward Island,
Office of the Superintendent of Securities
Northwest Territories
Office of the Yukon Superintendent of
Securities
Nunavut Securities Office
We have read the statements made by Denison Mines
Corp. in the attached copy of change of auditor notice dated
October 1, 2020, which we understand will be filed pursuant to
Section 4.11 of National Instrument 51-102.
We agree with the statements in the change of
auditor notice dated October 1, 2020. Yours very
truly,
/s/ PricewaterhouseCoopers
LLP
Chartered Professional
Accountants
PricewaterhouseCoopers
LLP
PwC Tower, 18 York Street,
Suite 2600, Toronto, Ontario, Canada M5J 0B2 T: +1 416 815 5003, F:
+1 416 814 3220, www.pwc.com/ca
“PwC” refers to
PricewaterhouseCoopers LLP, an Ontario limited liability
partnership.
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APPENDIX B
MANDATE OF THE BOARD, POSITION DESCRIPTIONS
AND LIMITS TO MANAGEMENT’S RESPONSIBILITIES
The Board of
Directors of Denison Mines Corp. has adopted this written mandate
and position descriptions for the Board, the Chair of the Board,
the Chair of each Committee of the Board and the Chief Executive
Officer (“CEO”), including the definition of the limits
to management’s responsibilities.
On at least an
annual basis, the Corporate Governance and Nominating Committee
shall review and assess the adequacy of this mandate and make a
recommendation to the Board regarding updating or amending the
same.
1.
MANDATE AND POSITION
DESCRIPTION FOR THE BOARD
(a)
The Board has adopted the
following mandate in which it explicitly acknowledges
responsibility for the stewardship of the Company and, as part of
the overall stewardship responsibility, responsibility for the
following matters:
(i)
to the extent feasible,
satisfying itself as to the integrity of the CEO and other
executive officers and that
the CEO and other
executive officers create a culture of integrity throughout the
organization;
(ii)
the strategic planning
process and approving, on at least an annual basis, a strategic
plan which takes into account, among other things, the
opportunities and risks of the business;
(iii) the
identification of the principal risks of the Company’s
business and ensuring the implementation of appropriate systems to
manage these risks;
(iv)
succession planning,
including appointing, training and monitoring of senior
management;
(v)
the Company’s
communications policy; and
(vi)
the Company’s internal
control and management information systems.
(b)
The Board takes its
responsibilities very seriously and expects that all directors will
participate in Board and Committee meetings on a regular basis, to
the extent reasonably practicable, and will review all meeting
materials in advance of each meeting. Attendance of directors shall
be taken at each Board meeting by the Corporate Secretary or
Assistant Corporate Secretary.
(c)
At all times, a majority of
the Board will satisfy the independence requirements set out by the
Canadian Securities Administrators in National Policy 58-201 and
any other applicable laws and regulations as the same may be
amended from time to time. The independent directors shall meet at
least once per year to discuss the Company’s
matters.
(d)
The Company, together with
its subsidiaries, is committed to conducting its business in
compliance with the law and the highest ethical standards, and to
the highest standards of openness, honesty and accountability that
its various stakeholders are entitled to expect. The Audit
Committee of the Board has established a Policy and Procedures for
the Receipt, Retention and Treatment of Complaints Regarding
Accounting or Auditing Matters, and the Company has established a
Code of Ethics for Directors, Officers and Employees, which
establishes procedures for directors, officers and employees to
report any concerns or questions they may have about violations of
the Code or any laws, rules or regulations. In addition, the Board
will consider adopting other measures for receiving feedback from
stakeholders if at any time the Board or its independent directors
consider the foregoing to be inadequate.
(e)
All new directors will
receive a comprehensive orientation. This orientation may vary from
director to director, depending on his or her expertise and past
experience, but in each case will be sufficient to ensure that each
director fully understands the role of the Board and its
committees, the contribution individual directors are expected to
make (including the commitment of time and resources that is
expected) and an understanding of the nature and operation of the
Company’s business.
(f)
The Board will provide
continuing education opportunities for all directors, where
required, so that individual directors may maintain or enhance
their skills and abilities as directors, as well as to ensure that
their knowledge and understanding of the Company’s business
remains current.
(g)
Prior to nominating or
appointing individuals as directors, the Board will consider the
advice and input of the Corporate Governance and
Nominating Committee on all relevant matters,
including:
(i)
the appropriate size of the
Board, with a view to facilitating effective decision making;
(ii)what competencies and skills the Board, as a whole, should
possess; and
(iii)
what competencies and skills
each existing director possesses.
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2.
POSITION DESCRIPTIONS FOR THE
CHAIR OF THE BOARD, THE LEAD DIRECTOR, THE CHAIR OF BOARD
COMMITTEES AND THE CEO
(a)
Where the Chair of the Board
is not an independent director, in accordance with paragraph 1(c)
of this Mandate and upon recommendation of the Corporate Governance
and Nominating Committee, the Board will appoint from among the
independent directors, a Lead Director to serve as such until the
next meeting of shareholders where directors are elected, unless
otherwise removed by resolution of the Board of
Directors.
(b)
The Chair of the Board, if
independent, or the Lead Director will:
(i)
act as the effective leader
of the Board and ensure that the Board’s agenda will enable
it to successfully carry out its duties;
(ii)
provide leadership for the
Board’s independent directors;
(iii)
organize the Board to
function independently of management, and ensure that the
responsibilities of the Board are well understood by both the Board
and management and that the boundaries between the Board and
management responsibilities are clearly understood and
respected;
(iv)
ensure that the Board has an
opportunity to meet without members of management, regularly, and
without non-independent directors at least once per
year;
(v)
determine, in consultation
with the Board and management, the time and places of the meetings
of the Board;
(vi)
manage the affairs of the
Board, including ensuring that the Board is organized properly,
functions effectively and meets its obligations and
responsibilities and mandates, where appropriate, through its duly
appointed committees, including:
o
ensuring that the Board works
as a cohesive team and providing the leadership essential for this
purpose;
o
ensuring that the resources
available to the Board (in particular timely and relevant
information) are adequate to support its work;
o
ensuring that a process is in
place by which the effectiveness of the Board and its committees is
assessed on a regular basis;
o
ensuring that a process is in
place by which the contribution of individual directors to the
effectiveness of the board and committees is assessed on a regular
basis; and
o
ensuring that, where
functions are delegated to appropriate committees, the functions
are carried out and results are reported to the Board.
(vii)
ensure that the Board has a
succession planning process is in place to appoint the Chief
Executive Officer and other members of management when
necessary;
(viii)
co-ordinate with management
and the Corporate Secretary or Assistant Corporate Secretary to
ensure that matters to be considered by the Board are properly
presented and given the appropriate opportunity for
discussion;
(ix)
preside as chair of each
meeting of the Board;
(x)
communicate with all members
of the Board to co-ordinate their input, ensure their
accountability and provide for the effectiveness of the
Board;
(xi)
in consultation with the CEO,
and as appropriate, be available to, and respond to inquiries from,
internal and external stakeholders; and
(xi)
act as liaison between the
Board and management to ensure that relationships between the Board
and management are conducted in a professional and constructive
manner, which will involve working with the Chief Executive Officer
to ensure that the conduct of Board meetings provides adequate time
for serious discussion of relevant issues and that the Company is
building a healthy governance culture.
The Chair of the
Board or the Lead Director may, as the case may be, delegate or
share, where appropriate, certain of these responsibilities with
any committee of the Board.
(c)
Any special responsibilities
and authorities of the Chair of any committee of the Board will be
set out in the Terms of Reference/Mandate for the Committee. In
general, the Chair of a Committee shall lead and oversee the
Committee to ensure that it fulfills its mandate as set out in the
Committee’s Terms of Reference/Mandate. In particular, the
Chair shall:
(i)
organize the Committee to
function independently of management, unless specifically provided
otherwise in the Committee’s Mandate;
(ii)
ensure that the Committee has
an opportunity to meet without members of management as
necessary;
(iii)
determine, in consultation
with the Committee and management, the time and places of the
meetings of the Committee;
(iv)
manage the affairs of the
Committee, including ensuring that the Committee is organized
properly, functions effectively and meets its obligations and
responsibilities;
(v)
co-ordinate with management
and the Secretary to the Committee to ensure that matters to be
considered by the Committee are properly presented and given the
appropriate opportunity for discussion;
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2021 DENISON MANAGEMENT INFORMATION CIRCULAR
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(vi)
provide advice and counsel to
the CEO and other senior members of management in the areas covered
by the Committee’s mandate;
(vii)
preside as chair of each
meeting of the Committee; and
(viii)
communicate with all members
of the Committee to co-ordinate their input, ensure their
accountability and provide for the effectiveness of the
Committee.
(d)
The CEO, subject to the
authority of the Board, shall have general supervision of the
business and affairs of the Company and such other powers and
duties as the Board may specify, from time to time. These
responsibilities shall include making recommendations to the Board
regarding the implementation, performance and monitoring, as the
case may be, of each of the items referred to in paragraphs 2(b)(i)
to (b)(viii) of this mandate and ensuring that procedures are in
place and followed by the Company so that each of those items and
any other requirement of the Board is implemented, performed and
monitored in a prudent and responsible manner in accordance with
the determinations of the Board. The Board will develop and approve
periodically, as the Board considers necessary, the corporate goals
and objectives that the CEO is responsible for
meeting.
3.
LIMITS ON THE CEO’S
AUTHORITY
(a)
Unless specifically
instructed otherwise by the Board, and except as set out in Section
127(3) of the Ontario Business
Corporations Act (the “OBCA”), the CEO of the
Company has the responsibility and authority to transact any
business or approve any matter:
(i)
in the ordinary course of
business of the Company; and
(ii)
that is not in the ordinary
course of business of the Company, but that is not likely to result
in a material change, within the meaning of the Ontario
Securities Act, with
respect to the Company; and
(b)
In addition to those matters
referred to in Section 127(3) of the OBCA, Board approval is
required with respect to any business or matter that is not in the
ordinary course of business of the Company and that is likely to
result in a material change, within the meaning of the Ontario
Securities Act, with
respect to the Company.
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Denison Mines
Corp.
1100 - 40
University Avenue
Toronto, ON M5J
1T1
T 416 979 1991 F
416 979 5893 www.denisonmines.com
TSX:
DML
NYSE American:
DNN
Exhibit 99.4
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8th Floor, 100 University Avenue
Toronto, Ontario M5J 2Y1
www.computershare.com
Security
Class
Holder
Account Number
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Fold
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Form of Proxy -
Annual General Meeting to be held on May 6,
2021
This Form of Proxy is solicited by and on
behalf of Management.
Notes to proxy
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1.
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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).
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2.
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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.
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3.
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This proxy should be signed in the exact manner
as the name(s) appear(s) on the proxy.
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4.
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If this proxy is not dated, it will be deemed to
bear the date on which it is mailed by Management to the
holder.
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5.
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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.
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6.
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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.
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7.
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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.
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8.
This proxy should be read in conjunction with the accompanying
documentation provided by Management.
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Proxies submitted must be received by 11:30
a.m., Eastern Time, on May 4, 2021.
VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A
DAY 7 DAYS A WEEK!
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To Vote Using the
Telephone
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To Vote Using the
Internet
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To Receive Documents
Electronically |
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• Call the number listed BELOW from a touch tone
telephone.
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• Go to the
following web site:
www.investorvote.com
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•
You can enroll to receive future securityholder
communications electronically by
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visiting www.investorcentre.com and
clicking at the bottom of the page
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1-866-732-VOTE (8683) Toll Free
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• Smartphone?
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Scan the QR
code to vote now.
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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
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Appointment of
Proxyholder
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I/We, being
holder(s) of DENISON MINES CORP. hereby appoint:
David Cates of Toronto, or failing this person, Gabriel
McDonald of Oakville
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OR
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Print the name
of the person you are appointing if this person is someone other
than the Management Nominees listed herein.
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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
direction (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 DENISON MINES CORP. to be
held at the offices of Denison Mines Corp., 1100 - 40 University
Avenue, Toronto, Ontario, Canada on May 6, 2021 at 11:30 a.m.
(Eastern Time) and at any adjournment or postponement
thereof.
VOTING RECOMMENDATIONS ARE INDICATED BY
HIGHLIGHTED
TEXT OVER THE
BOXES.
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1. Election of Directors
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For
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Withhold
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For
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Withhold
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For
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Withhold
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01. David D.
Cates
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☐
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☐
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02. W. Robert
Dengler
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☐
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☐
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03. Brian D. Edgar
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☐
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☐
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Fold
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04. Ron F. Hochstein
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☐
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☐
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05. Jun Gon
Kim
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☐
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☐
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06.
David
Neuburger
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☐
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☐
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07. Jennifer Traub
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☐
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☐
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08.
Patricia M.
Volker
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☐
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☐
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For
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Withhold
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2. Appointment of Auditors
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☐
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☐
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||||||
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Ratification of the
appointment of KPMG LLP as auditors, approval of appointment for
the ensuing year and authorizing the Directors to fix the auditor
remuneration.
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||||||||||||
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For
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Against
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||||||||||||
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3. Executive Compensation
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☐
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☐
|
Fold
|
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||||||
|
On an advisory basis and
not to diminish the role and responsibilities of the Board of
Directors, acceptance of the approach to executive compensation as
disclosed in the Circular.
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||||||||||||||||||
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Other
Business
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||||||
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To transaction such
other business as may properly be brought before the meeting or at
any adjournments or postponements thereof.
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Authorized Signature(s) - This section must be
completed for your instructions to be executed.
|
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Signature(s)
|
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|
|
Date
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|
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.
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DD / MM / YY
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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 not mailing back your proxy, you may register online to
receive the above financial report(s) by mail at
www.computershare.com/mailinglist.
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+
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D S M Q
|
|
308220
|
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A R 1
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