●

ELECTION OF DIRECTORS: To elect seven directors of the Company for the ensuing year. See the sections entitled “The Election of Directors” in the Circular.

●

APPOINTMENT OF AUDITORS: To approve the re-appointment of KPMG LLP as the Company’s auditor for the upcoming year, and to authorize the directors to fix its remuneration. See the section entitled “The Re-Appointment of the Auditor” in the Circular.

●

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.

●

OTHER BUSINESS: To transact such other business as may properly come before the Meeting or any adjournment thereof.

 

- 2 -

 

2023 DENISON NOTICE OF MEETING

 

 2024 DENISON NOTICE OF MEETING

 

 

 

 

 

 

 

 

●

If you are a registered holder of Shares, you have been sent a proxy form.

●

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.

  - 1 -

 

 - 2 -

 

●

FOR the re-appointment of KPMG LLP as the Company’s independent auditor until the next Annual Meeting of Shareholders, and authorization of the Board to fix its remuneration;

●

FOR the election as directors of all nominees listed in this Circular; and

●

FOR the non-binding advisory vote on executive compensation.

  - 3 -

 

(i)

agree to receive all documents to which they are entitled electronically, rather than by mail; and 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”)).

  - 4 -

 

(ii)

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.

  - 5 -

 

  - 6 -

 

  - 8  -

 

  - 9  -

 

  - 10  -

 

1.

Each nominee has provided or confirmed the information about the securities that he or she owns or over which he or she exercises control or direction.

2.

The “Total Value” disclosed above has been calculated as the market value of the Shares and share units (and excluding options) on March 21, 2024 of $2.63 per share or underlying share.

3.

The calculated value of Mr. Cates’ Share and full-value equity holdings as at March 21, 2024 was: Shares: $5,523,000; Share Units: $7,835,000.

●

Financial accreditation and/or financial literacy

●

Sound business experience and expertise

●

Corporate governance experience

●

Experience in government relations, operations and regulatory issues

●

Industry specific experience and knowledge, including mining and metallurgy, energy, and occupational health and safety

●

Sustainability knowledge, including environmental impacts and management, climate change risks and opportunities, community outreach and stakeholder engagement

●

Financing and merger/acquisition experience

●

Risk management and/or cyber security experience

●

Strong reputation within the financial and business communities Candidacy consistent with the Diversity Policy and the targets set thereunder

 

 

 - 11  -

 

●

●

Candidacy consistent with attaining inclusion and diversity beyond gender

●

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

 

  - 12  -

 

  - 13-

 

  - 14 -

 

1.

Mr. Hochstein, who is not standing for re-election, attended 100% of Board and applicable Committee meetings in 2023.

2.

Mr. Hong was appointed to the Board on March 27, 2024.

  - 15 -

 

●

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;

●

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.

  - 16 -

 

●

●

Brian Edgar

●

  - 17 -

 

1.

These amounts include accruals for fees billed outside the period to which the services related.

2.

The aggregate fees billed for audit services of the Company’s consolidated financial statements, including services normally provided by an auditor for statutory or regulatory filings or engagements and other services only the auditor can reasonably provide. The Audit Fees in 2023 and 2022 include fees related to reviews of interim consolidated financial statements (2023: $105,930; 2022: $95,230) and the extensive work required of the auditor to support, and conduct consent procedures in connection with, the Company’s various equity issuances (2023: $96,300; 2022: $80,250).

3.

The aggregate fees billed for specified audit procedures, 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. Audit-related fees in 2023 and 2022 were billed for certain specified procedures engagements and the audit of certain subsidiary financial statements.

4.

The aggregate fees billed for tax compliance, tax advice, and tax planning services, such as transfer pricing and tax return preparation.

5.

The aggregate fees billed for professional services other than those listed in the other three columns.

  - 18 -

 

●

●

●

Brian Edgar (Chair)

●

●

  - 19 -

 

●

Ron Hochstein (Chair)

●

●

●

David Neuburger (Chair)

●

  - 20 -

 

●       

compliance with applicable laws

●       

conflicts of interest

●       

quality of disclosure and accountability

●       

reporting illegal or unethical behavior

●       

human rights

●       

compliance with anti-bribery and corruption laws in Canada and other jurisdictions

●       

insider trading

●       

confidentiality and corporate opportunity

  - 21 -

 

  - 22 -

 

  - 23 -

 

  - 24 -

 

  - 25 -

 

●

receives periodic, and at least annual, reports from management and Board committees with respect to the identification, assessment, management and mitigation of the principal risks to the Company;

●

reviews the Company’s risk management framework;

●

reviews and discusses with management significant risk exposures and the processes and procedures with respect to risk assessment and risk management; and

●

satisfies itself that systems are in place which are designed to effectively monitor and manage the assessed principal risks.

  - 26 -

 

  - 27 -

 

  - 28 -

 

  - 29 -

 

1. 

No retainer would be payable to any director who attends less than 50% of Board meetings.

  - 30 -

 

1. 

Represents the fair value at date of grant of awards made under the Share Unit Plan and Option Plan determined using the closing price of the Shares on the TSX on the trading day prior to the grant date.

2. 

Mr. Jeong resigned from the Board during 2023, as a result of which certain share-based and option-based awards expired unvested during 2023.

3. 

Directors fees for Mr. An and Mr. Jeong were paid to KHNP Canada Energy Ltd.

4. 

Directors fees for Ms. Traub were paid to Cassels Brock & Blackwell LLP, some of which included BC PST.

5. 

Includes additional fees of $6,400 earned by Ms. Volker for attendance at SOX meetings in 2023.

1. 

All options with an expiry date of March 13, 2028 were unvested as at December 31, 2023.

2. 

Option values have been calculated using the closing price of the Shares on the TSX on the last trading date of 2023 of $2.32, less the applicable exercise price of the options.

3. 

Mr. An resigned from the Board effective March 12, 2024, at which time all unvested equity expired.

  - 31 -

 

1.

As share units have vested, some directors have deferred and others have elected for share settlement.

Share units granted to-date vest equally over three years. Share unit values have been calculated using the closing price of the Shares on the TSX on the last trading date of 2023 of $2.32.

1.

The value vested during the year reflects the aggregate dollar value that would have been realized if the options that vested in 2023 were exercised on their vesting dates.

2.

The value vested during the year reflects the aggregate dollar value that would have been realized if the share units that vested in 2023 were exercised on their vesting dates. Share units have a Nil exercise price.

  - 32 -

 

●

Common Shares: The value of the Shares is equal to the actual purchase price. For Shares acquired through the exercise of stock options, the Shares issued upon exercise will be valued at the closing price of the Shares on the TSX on the day before exercise. For Shares acquired through the vesting of RSUs, the value of these Shares shall be calculated as the greater of the market value of the RSUs under the Share Unit Plan at the date of grant and the closing price of the Shares on the day before issue.

●

RSUs (and other full value equity awards): The value of the RSUs shall be equal to the closing price of the Shares on the TSX on the day before grant.

●

Equity Owned Prior to Joining the Board: Notwithstanding the foregoing, the value of Shares an individual owned prior to becoming subject to the share ownership requirement shall be equal to the greater of their cost of acquisition or the value of the holdings using the closing price of the Shares on the TSX on the day before the individual becomes subject to the requirement.

1.

Cash retainer as Board member and/or Board Chair for the year ended December 31, 2023.

2.

Calculated in accordance with the share ownership requirement as of March 21, 2024.

3.

Exempt from share ownership requirement: nominee director for whom cash retainer is paid to employer.

  - 33 -

 

●

Overseeing a structured annual compensation process, to align management’s objectives with the strategy of the Company and minimize discretion in the award of bonuses, by:

o

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;

o

Considering the Company’s performance relative to its peers when reviewing the corporate performance component of the NEO’s annual bonus; and

o

Not guaranteeing the payment of an annual bonus (as a result of which, the NEOs could receive no annual bonus under the annual compensation structure); Engaging compensation consultants, to review and provide recommendations with respect to compensation matters, including compensation relative to peers;

  - 34 -

 

●

●

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;

●

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 the longer term growth of the Company;

●

Aligning the measurement date for the assessment of corporate performance with the date used to approximate the value of stock-based compensation instruments, so as to eliminate the risk of timing bias amongst significant company news and developments;

●

Instituting a share ownership requirement for executive officers;

●

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.

  - 35 -

 

  - 36 -

 

  - 37 -

 

  - 38 -

 

(a)

Individual and Corporate Performance: the assessment of individual and corporate performance (as detailed above), linking the magnitude of equity-based compensation to the objectives and achievements of each executive officer.

(b)

Scope of Role & Responsibility: an employee’s level of responsibility and ability to impact the Company’s results. For example, the following target rates, as a percentage of base salary, have been set for long-term incentive grants for high performing executives:

  - 39 -

 

  - 40 -

 

1. 

Granted pursuant to the Share Unit Plan. The fair value was determined using the closing price of the 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 and expected stock price volatility, life and dividend yield.

3. 

The non-equity annual incentive plan awards were earned in the fiscal year noted and were paid in the following fiscal year. For 2023, NEO bonuses were approved in February 2024. In 2021, these amounts include certain special grants of equity made, in the following year, in lieu of cash bonuses: $200,000 for Mr. Cates; $40,000 for Ms. Sidle; $40,000 for Ms. Willett; and $120,000 for Mr. McDonald.

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 2023, 2022 and 2021, respectively as applicable, as follows (i) for Mr. Cates: $29,876, $24,912, $22,500; (ii) for Ms. Sidle: $10,597, $8,152, $6,791; (iii) for Mr. Himbeault: $15,300, $10,496; (iv) for Ms. Smith, $19,699, $18,479, $15,248; (v) for Ms. Willett: $12,258, $9,364, $8,600; and (vi) for Mr. McDonald: $13,028, $15,000, $12,944. For Mr. McDonald, this also included amounts in connection with the termination of his employment in October 2023, in the amount of $592,920 as well as $55,965 in short term disability payments.

5. 

Where special grants of equity were made in lieu of cash bonuses, the equity grants are made in the following year (see note 3 for more details) and the fair value of the awards granted in such year, shown in the table, has been reduced by the amount that was recorded under “Non-Equity Annual Incentive Plan” in the prior year, to ensure bonus compensation is not double-counted when settled with equity instead of cash.

6. 

Mr. Himbeault joined Denison in January 2022; and Ms. Sidle was promoted to Vice President Finance in September 2021, Interim CFO in September 2023, and CFO in December 2023.

  - 41 -

 

  - 42 -

 

  - 43 -

 

  - 44 -

 

  - 45 -

 

1.

The option value vested during the year reflects the aggregate dollar value that would have been realized if the options that vested in 2023 were exercised on their 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.

3.

In connection with the termination of his employment with Denison in 2023, all of Mr. McDonald’s outstanding option-based and share-based awards vested.

  - 46 -

 

1.

PSUs were received as special grant in 2018, as approved by Shareholders on May 3, 2018, to address investor feedback and increase NEOs’ equity stake in the Company. Each of Ms. Sidle and Mr. Himbeault received pro-rated grants of PSUs after their promotion in 2021 and appointment in 2022, respectively.

2.

Share unit values have been calculated using the closing price of the Shares on the TSX on December 31, 2023 of $2.32.

  - 47 -

 

1.

Option values have been calculated using the closing price of the Shares on the TSX on the last trading day of 2023 of $2.32, less the applicable exercise price of the outstanding options. As at December 31, 2023, 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.

●

Common Shares: The value of the Shares is equal to the actual purchase price. For Shares acquired through the exercise of stock options, the Shares issued upon exercise will be valued at the closing price of the Shares on the TSX on the day before exercise. For Shares acquired through the vesting of PSUs or RSUs, the value of these Shares shall be calculated as the greater of the market value of the PSUs or RSUs under the Share Unit Plan at the date of grant and the closing price of the Shares on the day before issue.

●

RSUs: The value of the RSUs shall be equal to the closing price of the Shares on the TSX on the day before grant.

●

PSUs: The value of unvested PSUs shall be equal to half of their market value at the time of grant as determined using the closing price of the Shares on the TSX on the day before grant. The value of vested PSUs shall be equal to the closing price of the Shares on the TSX on the day before grant.

●

Equity Owned Prior to Requirement: Notwithstanding the foregoing, the value of equity an individual owned prior to becoming subject to the share ownership requirement shall be equal to the greater of their cost of acquisition or the value of the holdings using the closing price of the Shares on the TSX on the day before the individual becomes subject to the requirement.

  - 48 -

 

1.

The base salary for each NEO disclosed above is as at December 31, 2023.

2.

The equity values of Shares, PSUs and RSUs held by the NEOs have been calculated in accordance with the share ownership requirement as of March 21, 2024.

●

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.

  - 49 -

 

1.

The amount shown represents the incremental value of the NEOs’ unexercised in-the-money equity as at December 31, 2022, based on the closing price of the Shares on the TSX on December 31, 2022 of $1.55 and 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.

2.

The amounts shown represent the amounts paid in connection with the termination of Mr. McDonald’s employment with the Company in 2023.

  - 50 -

 

1. 

The Company’s Shareholder approved equity plans are the Option Plan and the Share Unit Plan.

2. 

The maximum number of Shares issuable under the Option Plan is 39,670,000. As at December 31, 2023, 28,725,593 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, 2023, 11,526,368 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, 2023, the granted and outstanding share units had a fair value of $2.32 per unit, based on the closing price of the Shares on the TSX on December 29, 2023 (the last trading date prior to December 31, 2023).

  - 51 -

 

●

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 and, for grants prior to 2022, vesting of options in two equal parts on each of the first and second anniversaries of the grant date. In March 2022, the Board adopted a practice of vesting options over three years for subsequent grants.

●

Grants are typically done annually. The Compensation Committee takes into account previous grants when it considers recommending to the Board new grants of options.

●

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 49 for more information. The Option Plan provides that options granted to a consultant will terminate 30 days after the consultant agreement terminates.

●

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-based 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.

 

  - 52 -

       

●

●

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 the addition of 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.

●

Certain option grants to the executive officers of the Company may be subject to recovery pursuant to the Company’s Clawback Policy (see page 27 for details).

●

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, 2023 a maximum of 9,536,052 Shares remained authorized for issuance on settlement of share units, representing 1.07% 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. The vesting of PSUs is conditional upon achievement by the holder of defined performance objectives.

●

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. The Board has adopted a practice of granting RSUs with vesting in three equal parts on each of the first, second and third anniversaries of the grant date.

  - 53 -

 

●

Share units are eligible to 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.

●

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.

  - 54 -

 

●

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.

●

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 a 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.

  - 55 -

 

●

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.

●

PSUs granted to-date, to certain executive officers of the Company, vest in tranches provided the holder satisfies the performance conditions to vesting (an overall base level of achievement as assessed pursuant to the Bonus Plan, as described above, or similar assessment). If those vesting conditions are not satisfied, such PSUs would expire unvested.

●

Certain share unit awards to the executive officers of the Company may be subject to recovery pursuant to the Company’s Clawback Policy (see page 27 for details).

  - 56 -

 

●

The Company’s 2023 Annual Report, containing the Company’s consolidated financial statements and related MD&A for its year ended December 31, 2023;

●

Any subsequently filed quarterly report; or

●

The Company’s most recent Annual Information Form or Annual Report on Form 40-F.

  - 57 -

 

1.            

(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

(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;

(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

(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.

  -58-

 

 

2.            

(a)            

Where the Chair of the Board is not an independent director, in accordance with paragraph 1(c) of this Mandate, or the appointment is otherwise recommended by the Corporate Governance and Nominating Committee, the Board will appoint from among the independent directors, upon a recommendation of the Corporate Governance and Nominating Committee, 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 (or Lead Director, in the Chair’s absence or if the Chair is not independent) 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) 

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;

(iii) 

ensure that the Board has an opportunity to meet without members of management, regularly, and without non-independent directors at least once per year;

(iv) 

determine, in consultation with the Board and management, the time and places of the meetings of the Board;

(v) 

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.

(vi) 

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;

(vii) 

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;

(viii) 

preside as chair of each meeting of the Board;

(ix) 

communicate with all members of the Board to co-ordinate their input, ensure their accountability and provide for the effectiveness of the Board;

(x) 

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.

(c)            

In addition to any other duties he or she may perform, the Lead Director will provide leadership for the Board’s independent directors.

(d)            

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;

  -59-

 

 

(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;

(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.

(e)            

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: (i) providing leadership and vision for the Company for it to grow in a sustainable manner; (ii) developing a strategic plan for the Board’s approval, and ensuring implementation of that plan; (iii) overseeing the development and implementation of, and compliance with, key corporate policies and practices, regarding corporate governance, ESG, climate and sustainability, risk identification and management and financial reporting, as well as compliance with applicable legal and regulatory requirements; and (iv) 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)(vii) 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.

  -60-