UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒⌧
Filed by a Party other than the Registrant ☐◻
Check the appropriate box:
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| Preliminary Proxy Statement | ||
| Confidential, for Use of the Commission Only (as permitted by Rule | ||
| Definitive Proxy Statement | ||
| Definitive Additional Materials | ||
| Soliciting Material under | ||
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WESTWATER RESOURCES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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| Fee paid previously with preliminary materials. |
[ ] Fee computed on table in exhibit required by Item25(b) per Exchange Act Rules 14a6(i)(1) and 0-11
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Westwater Resources, Inc. 6950 S. Potomac Street, Suite 300 Centennial, Colorado 80112 www.westwaterresources.net |
NOTICE OF 20202022 ANNUAL MEETING OF STOCKHOLDERS
To the stockholders of Westwater Resources, Inc.:
We will hold our 20202022 Annual Meeting of Stockholders on April 28, 2020 Tuesday, May 10, 2022,at 9:8:00 a.m., local time, at our headquarters,the Grand Bohemian Hotel located at 6950 South Potomac Street, Suite 300, Centennial, Colorado 80112,2655 Lane Park Road in Birmingham, Alabama to consider and vote upon the following matters:
1.Approve the issuance of shares of common stock to Lincoln Park Capital Fund pursuant to Nasdaq Listing Rule 5635(d).
2.Approve an amendment to our 2013 Omnibus Incentive Plan, as amended, to increase the authorized number of shares of common stock available and reserved for issuance under such plan by 350,000 shares, and to modify certain issuance limitations thereunder.
3.Elect as directors the five nominees named in the accompanying proxy statement.
4.Provide advisory approval of our executive compensation.
5.Ratify the appointment of Moss Adams LLP as our independent registered public accountant for 2020.
6.Transact such other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
1. | Elect as directors the five nominees named in the accompanying proxy statement. |
2. | Approve an amendment to our 2013 Omnibus Incentive Plan as amended (“Incentive Plan”) to extend the termination date for the Incentive Plan by 5 years to June 4, 2028. |
3. | Provide advisory approval of our executive compensation. |
4. | Ratify the appointment of Moss Adams LLP as our independent registered public accountant for 2022. |
5. | Transact such other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. |
The Board has fixed the close of business on Monday, March 2, 202014, 2022, as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting or at any adjournment or postponement thereof.
Stockholders are cordially invited to attend the meeting in person. Whether or not you plan to be present at the meeting, you are requested to sign and return the enclosed proxy in the enclosed envelope, or to vote all of your shares over the telephone or over the Internet, so that your shares may be voted in accordance with your wishes and in order that the presence of a quorum may be assured. The giving of such proxy will not affect your right to vote in person, should you later decide to attend the meeting. Please date and sign the enclosed proxy and return it promptly in the enclosed envelope or vote over the telephone or Internet. Your vote is important.
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| By Order of the Board of Directors, |
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| /s/ JOHN W. LAWRENCE |
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| John W. Lawrence, Secretary |
Centennial, Colorado
March 3, 202015, 2022
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Important Notice Regarding the Availability of Proxy Materials |
for the Annual Meeting of Stockholders to be Held on |
The Notice of Annual Meeting, Proxy Statement and |
are available at www.westwaterresources.net. |
20202022 PROXY STATEMENT SUMMARY
This summary highlights selected information contained in this proxy statement, but it does not contain all the information you should consider. We urge you to read the whole proxy statement and our 20192021 Annual Report before you vote. This proxy statement is being made available to stockholders on or about Monday, March 3, 2020.21, 2022.
20202022 ANNUAL MEETING OF STOCKHOLDERS
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VOTING MATTERS AND BOARD RECOMMENDATIONS
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Approval of an extension of the termination date for the 2013 Omnibus Incentive Plan (page 17) | | FOR | |
3. Advisory vote to approve our executive compensation (page | | FOR | |
Ratification of the appointment of Moss Adams LLP as our independent registered public accounting firm for | | FOR | |
EXECUTIVE COMPENSATION HIGHLIGHTS
Our compensation program provides total direct compensation to our named executive officers (“NEOs”) that supports our philosophy of pay-for-performance and alignment of incentives between our management and stockholders. To that end, we have implemented the following policies and practices:
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DIRECTORS OF THE COMPANY AND 20202022 NOMINEES FOR DIRECTOR
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Terence J. Cryan* |
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Christopher M. Jones |
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Marvin K. Kaiser* (1) |
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Tracy D. Pagliara* |
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Karli S. Anderson* |
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Deborah A. Peacock* (2) |
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TABLE OF CONTENTS
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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS |
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DELIBERATIONS OF THE COMPENSATION COMMITTEE REGARDING NEO PERFORMANCE IN 2021 | 29 |
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| Suite 300 |
| Westwater Resources, Inc. 6950 S. Potomac Street, Suite 300 Centennial, Colorado 80112 www.westwaterresources.net |
20202022 ANNUAL MEETING OF STOCKHOLDERS
This proxy statement is furnished in connection with the solicitation of proxies by Westwater Resources, Inc. (“Westwater” or the “Company”) on behalf of its Board of Directors for the 20202022 Annual Meeting of Stockholders (“Annual Meeting”).
Questions and Answers About the Annual Meeting
Q: Why am I receiving this proxy statement?
A:You are receiving this proxy statement because you have been identified as a holder of the Company’s common stock as of the close of business on Monday, March 2, 2020,14, 2022, the record date for the 20202022 Annual Meeting of Stockholders.
Q:When and where is the Annual Meeting?
A: The Annual Meeting will take place on April 28, 2020Tuesday, May 10, 2022, at 9:8:00 a.m., local time, at our headquarters, located at 6950 South Potomac Street, Suite 300, Centennial, Colorado 80112.the Grand Bohemian Hotel, 2655 Lane Park Road, Birmingham, Alabama 35233.
Q: What are holders of commons stock being asked to vote on?
A: Holders of common stock are being asked to:
| Proposal |
| Proposal 2: Approve an amendment to the Westwater Resources, Inc. 2013 Omnibus Incentive Plan, as amended, to |
| Proposal 3 |
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In addition, we may consider such other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
Q: Why is the Company seeking stockholder approval of the common stock issuance proposal?
A: As a result of our listing on The Nasdaq Capital Market, issuances of our common stock are subject to the Nasdaq Marketplace Rules, including Rule 5635(d), which requires us to obtain stockholder approval prior to the issuance of securities in connection with a transaction, other than a public offering, involving the sale, issuance or potential issuance by us of more than 19.99 percent of our outstanding shares of our common stock (or securities convertible
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into or exercisable for shares of our common stock) at a price less than the lower of (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement (the “Nasdaq 20% Rule”).
Future sales under the Purchase Agreement may result in the issuance by us of more than 19.99% of our outstanding shares of our common stock, which requires stockholder approval for purposes of Nasdaq Listing Rule 5635(d). Accordingly, we are seeking approval from our stockholders of the proposed issuances of shares under the Purchase Agreement.
Q: Why is the Company seeking an amendment to the 2013 Omnibus Incentive Plan?
A: The Company has not awarded significant equity to officers, employees or non-employee directors for the last several years. This amendment will allow the Company to continue to grant stock-based awards overuntil June 4, 2028, which will allow the next several yearsCompany to continue to align executive compensation with stockholder value.
Q: Who is eligible to vote at the Annual Meeting?
A: Holders of common stock as of the close of business on Monday, March 2, 2020,14, 2022, the record date for the Annual Meeting, or their duly authorized proxy holders, are eligible to vote. As of the close of business on the record date, there were 4,299,73141,103,423 shares of common stock outstanding and entitled to vote at the Annual Meeting.
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If you own shares that are registered in the name of someone else, such as a broker, bank or other nominee, you need to direct that organization to vote those shares or obtain an authorization from them and vote the shares yourself at the meeting.
Q: How many votes do stockholders have?
A: Holders of common stock are entitled to cast one vote on each proposal properly brought before the Annual Meeting for each share of common stock that such holder owned at the close of business on the record date.
As of the record date,March 3, 2022, directors and executive officers of the Company as a group beneficially owned and were entitled to vote approximately 27,952343,246 shares of common stock, representing less thanapproximately 1% of the shares of common stock entitled to vote at the Annual Meeting. All of the directors and executive officers of the Company who are entitled to vote at the Annual Meeting have advised the Company that they intend to vote their shares of common stock in favor of each of the proposals, although such persons have not entered into agreements obligating them to do so.
Q: What vote is required to approve each of the proposals?
A: Assuming a quorum is present:
| Election of Directors: For Proposal |
| All Other Proposals: For the other proposals and any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting, the affirmative vote of a majority of the votes cast on such proposals or other business at the Annual Meeting in person or by proxy is required for approval. Abstentions and “broker non-votes” are not treated as cast either for or against any such proposals or other business, and therefore will not affect the outcome of the vote. |
Q: What constitutes a quorum for the Annual Meeting?
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A: The presence in person or by proxy of the holders of one-third of the votes entitled to be cast at the Annual Meeting constitutes a quorum under the Company’s bylaws. The Company will treat shares of common stock represented by a properly signed and returned proxy, including abstentions and broker non-votes, as present at the Annual Meeting for the purposes of determining the existence of a quorum. If a quorum is not present, the holders of record of a majority of such shares present and entitled to vote may adjourn the Annual Meeting until a quorum is obtained.
Q: How does the Board recommend that I vote?
A: The Board unanimously recommends that you vote “FOR”“FOR” each of the proposals, including each director nominee.
Q: What happens if I don’t vote?
A: If you are the beneficial owner of shares held in “street name” (that is, if you hold your shares through a broker, bank or other holder of record), the broker, bank or other holder of record who holds your shares of common stock will have authority to vote on “routine” proposals, such as the ratification of the appointment of Moss Adams LLP as our independent registered public accountants for 20192022 (Proposal 5), and if you have not submitted voting instructions to the broker, bank or other nominee.4).
However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to non-routine matters, such as the approvalelection of the common stock issuance proposaldirectors (Proposal 1), the approval of an amendmentthe amendments to the Westwater Resources, Inc. 2013 Omnibus Incentive Plan (Proposal 2), the election of directors (Proposal 3), and advisory approval of our executive compensation (Proposal 4).3), if you have not submitted voting instructions to the broker, bank or other nominee. As a result, absent specific instructions from the beneficial owner of such shares, brokers, banks or other holders of record
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are not empowered to vote such shares on non-routine matters, which we refer to as a “broker non-vote.” The effect of not instructing your broker, bank or other holder of record regarding how you wish your shares to be voted will NOT be counted as “FOR” or “AGAINST” for these non-routine matters, and will NOT have an effect on Proposals 1, 2, 3 or 4.3.
No matter how many or few shares you own you are encouraged to vote and have your voice heard.
Q: What do I need to do now?
A: After carefully reading and considering the information contained in this proxy statement, please vote promptly by calling the toll-free number listed on your proxy card, accessing the Internet website listed on your proxy card or by completing, signing and dating your proxy card and returning it by mail in the enclosed postage-paid envelope.
If you hold your stock in “street name” through a bank or broker, you must direct your bank or broker to vote in accordance with the instructions you have received from your bank or broker. Submitting your proxy by telephone, Internet or mail or directing your bank or broker to vote your shares will ensure that your shares are represented and voted at the Annual Meeting. For information on how to vote your shares in person at the Annual Meeting, see “Can I attend the Annual Meeting and vote my shares in person?” below.
Q: How do I vote?
A: Stockholders of record may vote, either in person or by proxy, through the following methods:
| Via the Internet: You may vote by proxy via the Internet by following the instructions on the proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. |
| By Telephone: You may vote by proxy by calling the toll-free number found on the proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. |
| By Mail: You may vote by proxy by filling out the proxy card and sending it back in the envelope provided. |
| In Person: You may attend the Annual Meeting and vote in person. |
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If you are a beneficial owner of shares held in “street name” (that is, if you hold your shares through a broker, bank or other holder of record), you can vote in one of four ways:
| Via the Internet: You may vote by proxy via the Internet by following the instructions on the voting instruction form accompanying the proxy materials. |
| By Telephone: You may vote by proxy by calling the toll-free number found on the voting instruction form. |
| By Mail: You may vote by proxy by filling out the voting instruction form and sending it back in the envelope provided. |
| In Person: You must obtain a legal proxy from the organization that holds your shares if you wish to attend the Annual Meeting and vote in person. You will need to ask the broker, bank or other nominee holding your shares for a legal proxy and bring the legal proxy with you to the Annual Meeting. You will not be able to vote your shares at the meeting without a legal proxy. If you request a legal proxy, any previously executed proxy will be revoked, and your vote will not be counted unless you appear at the Annual Meeting and vote in person or legally appoint another proxy to vote on your behalf. |
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Q: How will my proxy be voted?
A: All shares of common stock represented at the Annual Meeting by properly executed proxy cards, voted over the telephone or voted over the Internet will be voted in accordance with the instructions indicated on those proxies. If you hold shares in your name and sign and return a proxy card or submit a proxy by telephone or over the Internet without giving specific voting instructions, your shares will be voted “FOR” each director nominee and all other proposals.
Q: If my broker holds my shares in “street name,” will my broker automatically vote my shares for me?
A: No. If you do not provide your broker with instructions on how to vote your “street name” shares, your broker will not be permitted to vote on non-routine matters on your behalf. You should therefore be sure to provide your broker with instructions on how to vote your shares, following the directions your broker provides to you. Please check the voting form used by your broker to see if the broker offers telephone or Internet voting.
All stockholders are urged to have their voices heard on these important matters – please vote your shares today.
Q: Can I attend the Annual Meeting and vote my shares in person?
A: Yes. All stockholders, including stockholders of record and stockholders who hold their shares through banks, brokers, custodians or any other record holder, are invited to attend the Annual Meeting. Holders of record of common stock as of the record date can vote in person at the Annual Meeting. If you are not a stockholder of record, you must obtain a valid proxy, executed in your favor, from the record holder of your shares, such as a bank, broker, custodian or other record holder, to be able to vote in person at the Annual Meeting.
If you plan to attend the Annual Meeting, you must hold your shares in your own name, have a letter or recent brokerage statement from the record holder of your shares confirming your ownership or have a valid proxy authorizing you to vote shares at the meeting, and you must bring a form of personal photo identification with you in order to be admitted. The Company reserves the right to refuse admittance to anyone without proper proof of share ownership, proper authorization to vote shares, or proper photo identification.
Q: What does it mean if I receive more than one set of materials?
A: This means you own shares of the Company that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker, or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must complete, sign, date and return all of the proxy cards or follow the instructions for any alternative voting procedures on each of the
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proxy cards you receive in order to vote all of the shares you own. Each proxy card you receive will come with its own postage-paid return envelope; if you vote by mail, make sure you return each proxy card in the return envelope that accompanied that proxy card.
Q: What can I do if I want to change or revoke my vote?
A: You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by voting again at a later date through any of the methods available to you, by attending the Annual Meeting and voting in person, or if you are a holder of record, by giving written notice of revocation to the Company prior to the time the meeting begins. Written notice of revocation should be mailed to: Westwater Resources, Inc., Attention: Secretary, 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112.
If you hold your shares in “street name,” and wish to change or revoke your vote, please refer to the information on the voting instruction form included with these materials and forwarded to you by your bank, broker, custodian or other record holder to see your voting options.
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Q: Whom should I call if I have questions about the Annual Meeting?
A: You should call Alliance Advisors,contact Christopher Rice, our proxy solicitor at (973) 873‑7700Morrow Soladi, at 800 662-5200 or at WWR@info.morrowsodali.com, or contact John Lawrence, our corporate secretary,Corporate Secretary, at (303) 531‑0516.303-531-0516 or at jlawrence@westwaterresources.net.
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APPROVAL, PURSUANT TO NASDAQ LISTING RULE 5635(d),ELECTION OF DIRECTORS
The Board has nominated five directors for election at the Annual Meeting. The directors will hold office from election until the next Annual Meeting of Stockholders and until their successors are elected and qualified or until their death, resignation, or removal. All of the nominees are currently directors. Terence J. Cryan, Tracy D. Pagliara, Karli S. Anderson, and Deborah A. Peacock were elected by the stockholders at the 2021 Annual Meeting. Mr. Potter was appointed to the Board effective February 26, 2022, following the resignation of Christopher M. Jones on February 25, 2022.
If your proxy is properly completed and received in time for the Annual Meeting, and if your proxy does not indicate otherwise, the represented shares will be voted “FOR” each of the directors presented below. We have no reason to believe that any of the nominees for director will be unable to serve if elected. However, if any of these nominees becomes unavailable, the persons named in the proxy intend to vote for any alternate designated by the current Board. Proxies cannot be voted for a greater number of persons than the nominees named.
The paragraphs below describe each nominee’s individual management and leadership experience for at least the last five years, which the Company believes, in the aggregate, creates a well-rounded and capable Board of Directors and contributes to the overall effectiveness of our Board and each of its Committees. As a result of the Company’s continuing efforts to diversify the Board of Directors, two-thirds of the independent Directors are female. Each nominee is an incumbent director, with Mr. Potter having joined the Board effective February 26, 2022. Each nominee consents to being named herein and to serve on the Board if elected. There are no family relationships among any director, executive officer or any person nominated or chosen by us to become a director.
Following each nominee’s biography below, we have highlighted certain notable skills and qualifications that contributed to his or her selection as a member of our Board of Directors.
Name |
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| Director Since |
| Primary Occupation |
Terence J. Cryan | | 59 | | 2017; 2006-2016 | | Chairman of the Board, Westwater Resources, Inc. (Executive Chairman since February 26, 2022) and Managing Director, MACCO Restructuring Group, LLC |
Chad M. Potter | | 47 | | 2022 | | President and Chief Executive Officer, Westwater Resources, Inc. |
Tracy D. Pagliara | | 59 | | 2017 | | President & CEO of Williams Industrial Services Group, Inc. |
Karli S. Anderson | | 48 | | 2018 | | Executive Vice President, ESG & IR, Summit Materials, Inc. |
Deborah A. Peacock | | 65 | | 2020 | | President, CEO & Managing Director, Peacock Law P.C. |
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE ISSUANCE OF MORE THAN 19.99% OF THE COMPANY’S ISSUED AND OUTSTANDING COMMON STOCK PURSUANT TO A PURCHASE AGREEMENT TO BE ENTERED INTO BETWEEN THE COMPANY AND LINCOLN PARK CAPITAL FUND, LLC WITHIN 90 DAYS FOLLOWING THE DATE OF THE 2020 ANNUAL MEETINGNOMINEES NAMED BELOW.
Within 90 days after the dateDIRECTOR NOMINEES
Terence J. Cryan
Director, Executive Chairman of the 2020 Annual Meeting, we intendBoard and Member of the Safety and Sustainability Committee
Terence J. Cryan rejoined the Westwater Resources Board as its Chairman in August 2017, and he became Executive Chairman on February 26, 2022. He previously served as a director from October 2006 to enter intoMarch 2016, served as Westwater’s Interim President and Chief Executive Officer from September 2012 to March 2013, and served as Chairman of the Board from June 2014 through March 2016. Mr. Cryan is also Chairman of the Board of Ocean Power Technologies, Inc. where he has served as a purchase agreement (the “Purchase Agreement”director since October 2012.
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Mr. Cryan currently serves as a Managing Director of MACCO Restructuring Group, LLC, which provides qualified interim leadership and advice to stakeholders across a broad spectrum of business sectors. Mr. Cryan served as President and Chief Executive Officer of Global Power Equipment Group Inc. (now known as Williams Industrial Services Group), a formpublicly traded provider of construction and maintenance services to power, energy and industrial customers, from March 2015 until July 2017. Previously, Mr. Cryan served as Co-founder and Managing Director of Concert Energy Partners, an investment and private equity firm based in New York City from 2001 until 2015. Prior to that, Mr. Cryan was a Senior Managing Director in the Investment Banking Division at Bear Stearns. Additionally, Mr. Cryan was a Managing Director, Head of the Energy and Natural Resources Group and member of the Investment Banking Operating Committee at Paine Webber which he joined following its acquisition of Kidder, Peabody in 1994. From 2007 to 2010, Mr. Cryan also served as President and Chief Executive Officer of Medical Acoustics LLC.
Mr. Cryan served as a Director on the Board of Global Power Equipment Group Inc. from January 2008 until July 2017. Mr. Cryan was previously a Director on the Board of Superior Drilling Products, Inc. from June 2014 to December 2016. He was also previously a director of The Providence Service Corporation from May 2009 to May 2011, and Gryphon Gold Corporation from August 2009 to December 2012. Mr. Cryan has also been an adjunct professor at the Metropolitan College of New York Graduate School of Business. Mr. Cryan received a Master of Science degree in Economics from the London School of Economics in 1984 and a Bachelor of Arts degree in Economics from Tufts University in 1983. Mr. Cryan is described below)a Board Leadership Fellow and member of the National Association of Corporate Directors.
Mr. Cryan’s extensive financial industry experience provides him with Lincolna wealth of knowledge in dealing with financial, accounting and regulatory matters. Mr. Cryan’s prior professional experience also permits him to provide valuable advice to the Company with respect to potential capital raising and merger and acquisition transactions, and his prior Board service and service as Interim President and Chief Executive Officer of the Company provides him a deep understanding of the operations of the Company.
Chad M. Potter
Director, President and Chief Executive Officer
Chairman of the Safety and Sustainability Committee
Chad M. Potter was elected as President and Chief Executive Officer and was appointed a director on February 26, 2022. Mr. Potter joined Westwater in August 2021 and served as Chief Operating Officer (COO) until he was elected President and CEO. Prior to that, Mr. Potter was the COO and Vice President of Operations of American Consolidated Industries, Inc., a producer of steel products, from April 2019 to August 2021. As a senior member of the American Consolidated Industries executive team, he led all operating activities for the company’s four business units and was responsible for safety, profitability, strategic growth, preventative/predictive maintenance, and acquisitions. Prior to his time at American Consolidated Industries, Inc., Mr. Potter served in various management roles at Nucor Steel Corporation, a producer of steel and related products, from July 2004 to February 2019, including as CEO for Nucor-JFE Steel Mexico, a joint venture between Nucor Steel Corporation and JFE Steel Corporation, and as Division Controller of Nucor Steel Decatur, LLC. Before joining Nucor Steel Corporation, Mr. Potter held various operations and accounting roles at Hobart Corporation (2001-2004), Park Capital Fund, LLCElectrochemical Corporation (1999-2001) and Hypercom (1995-1999). Mr. Potter holds a Master of Business Administration from Morehead State University and received his Bachelor of Science in Business from Wright State University.
Mr. Potter has worked on the Company’s Coosa Graphite Project in Kellyton, Alabama since August 2021. He is a recognized leader in the metals industry and known for implementing safe and profitable business practices. He has the necessary experience, executive aptitude, industry expertise, leadership know-how and a track record of world-class safety procedure to serve the Company well through the construction and operation of the Coosa Graphite Project.
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Tracy D. Pagliara
Director, Chairman of the Nominating and Corporate Governance Committee and Member of the Audit Committee and the Compensation Committee
Tracy D. Pagliara has served as a director since July 2017. Since April 2018, Mr. Pagliara has been serving as CEO of Williams Industrial Services Group Inc. (f/k/a Global Power Equipment Group, Inc.), a publicly traded provider of construction and maintenance services to power, energy and industrial customers (“Lincoln Park”Williams”). From July 2017 to April 2018, Mr. Pagliara served as Co-President and Co-CEO of Williams. Mr. Pagliara joined Williams in April 2010 as General Counsel, Secretary and Vice President, Business Development and served in multiple other positions of increasing responsibility, including Senior Vice President, Administration, prior to his appointment as Co-President and Co-CEO in July 2017. Prior to joining Williams in April 2010, Mr. Pagliara served as the Chief Legal Officer of Gardner Denver, Inc., a leading global manufacturer of highly engineered compressors, blowers, pumps, and other fluid transfer equipment, from August 2000 through August 2008. He also had responsibility for other roles during his tenure with Gardner Denver, including Executive Vice President of Administration, Chief Compliance Officer, and Corporate Secretary. Prior to joining Gardner Denver, Mr. Pagliara held positions of increasing responsibility in the legal departments of Verizon Communications/GTE Corporation from August 1996 to August 2000 and Kellwood Company from May 1993 to August 1996, ultimately serving in the role of Assistant General Counsel for each company. Mr. Pagliara has a B.S. in Accounting and a J.D. from the University of Illinois. He is a member of the Missouri and Illinois State Bars and a Certified Public Accountant.
Mr. Pagliara brings to the Board extensive experience advising public companies and companies in the energy industry, in addition to companies with similar capital needs to Westwater. Mr. Pagliara’s background in accounting will also permit him to contribute substantially as a member of the Audit Committee.
Karli S. Anderson
Director, Chair of the Compensation Committee and Member of the Audit Committee and the Safety and Sustainability Committee
Karli S. Anderson is Executive Vice President, Environmental, Social, Governance and Head of Investor Relations at Summit Materials, Inc., a leading vertically-integrated materials company with operations throughout North America. She is responsible for the Safety, Environmental, Social and Governance, and Investor Relations functions of Summit Materials, Inc. She previously served as Vice President, Investor Relations for Royal Gold, Inc., a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties, and similar production-based interests with over 190 properties on six continents. Previously, from 2010 to 2013, Ms. Anderson was a Senior Director of Investor Relations for Newmont Mining Corporation, one of the world’s largest gold producers. Ms. Anderson’s 20 years of capital markets experience includes stockholder engagement related to environmental, social and governance (ESG) factors with both equity and fixed income investors as well as proxy advisory firms. From 2012 to 2018, Ms. Anderson served as Chairman of the Board of the Denver Gold Group, an organization representing seven-eighths of the world’s publicly traded gold and silver companies. Ms. Anderson holds a registration rights agreementBachelor’s Degree in telecommunications from Ohio University, a Masters of Business Administration (finance) from the Wharton School at the University of Pennsylvania. Ms. Anderson is a Governance Fellow and member of the National Association of Corporate Directors.
Ms. Anderson’s insights and guidance, her wealth of experience in the mining industry leading an environmental and safety function, as well as her advocacy towards greater corporate governance within the investment community, will continue to be critical assets to Westwater.
Deborah A. Peacock
Chair of the Audit Committee and Member of the Compensation and Nominating and Corporate Governance Committees
Ms. Peacock is an attorney licensed to practice law in New Mexico, Colorado, and New York, and she is a Registered Patent Attorney. Ms. Peacock is also a Registered Professional Engineer in Colorado and New Mexico. Ms. Peacock is the President, CEO, Managing Director, and owner of Peacock Law P.C. located in Albuquerque, New
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Mexico, which she founded in April 1995. In 2014, Ms. Peacock co-founded the Greater New Mexico Chapter of Women Corporate Directors.
Since 2011, Ms. Peacock has served on the Board of Regents of New Mexico Institute of Mining & Technology and currently serves as the Chair. Ms. Peacock has served on the New Mexico Mining Safety Board from 2015 until 2021. Since 2017, Ms. Peacock has served on the Board of Directors of THEMAC Resources Group, Ltd. (and Chairs its Corporate Governance Committee and is a member of its Audit Committee) as well as its wholly-owned subsidiary New Mexico Copper Corp. Since 2017, Ms. Peacock has served on the Board of Directors of New Mexico Gas Company, and since 2018 she has served on the Board of Directors of Emera Technologies, LLC – both wholly-owned subsidiaries of Emera, Inc. Ms. Peacock has served on the Board of New Mexico Angels since 2005. In addition to her current Board service, Ms. Peacock previously served on the Board of The Georgia O’Keeffe Museum located in Santa Fe, New Mexico and both its Audit and Executive Committees, and as Chair of its Audit Committee. She previously served on the New Mexico Environmental Improvement Board and as Chair for four years.
Ms. Peacock obtained her Bachelors of Science degree (B.S.) in Metallurgical Engineering from the Colorado School of Mines, and her Law Degree (J.D.) from Harvard Law School. She is also a Governance Fellow with the National Association of Corporate Directors. Ms. Peacock brings to the Board extensive experience in or with corporate governance, financial oversight, ESG, a wide variety of business and corporate legal matters including intellectual property and mergers & acquisitions, and has knowledge of mining and metallurgy industries, environmental regulations, permitting, and community involvement and engagement.
The Company’s business and affairs are overseen by the Board pursuant to the Delaware General Corporation Law and the Company’s Amended and Restated Bylaws, as amended (the “Registration AgreementBylaws”) pursuant. Members of the Board are kept informed of the Company’s business through discussions with the Chairman and key members of management, by reviewing materials provided to which Lincoln Park will purchasethem and by participating in Board and Committee meetings. All members of the Board are elected annually by the stockholders.
Regular attendance at Board meetings and the Annual Meeting is expected of each director. Our Board held 15 meetings during 2021. No director attended fewer than 75% of the total number of Board and applicable Committee meetings in 2021. The independent directors met in executive session at several of the Board meetings held in 2021. All of the directors at the time attended the 2021 Annual Meeting of Stockholders.
The Company’s governing documents allow the roles of Chairman (or Executive Chairman) and Chief Executive Officer to be filled by the same or different individuals. This approach allows the Board flexibility to determine whether the two roles should be separate or combined based upon the Company’s needs and the Board’s assessment of the Company’s leadership from us uptime to time. Currently, Mr. Cryan serves as Executive Chairman and Mr. Potter serves as Chief Executive Officer.
Determination of 2022 Director Nominees
Each of the director nominees at the 2022 Annual Meeting are existing directors of the Company. Mr. Cryan, Mr. Pagliara, Ms. Anderson, and Ms. Peacock were elected by the stockholders at the 2021 Annual Meeting. Mr. Potter was appointed to the Board effective February 26, 2022, following the retirement of Christopher M. Jones on February 25, 2022. Mr. Jones served on the Westwater Board of its Directors from March 2013 until February 2022.
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The Board annually reviews all relationships that directors have with the Company to affirmatively determine whether the directors are “independent” under NYSE American listing standards. The Board has determined that each of Mr. Pagliara, Ms. Anderson, and Ms. Peacock are “independent” and as a result, each existing member of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee is “independent.” Mr. Cryan was determined an aggregate“independent” director until February 26, 2022, when he began serving as Executive Chairman. In arriving at the foregoing independence determination, the Board considered transactions and relationships between each director or any member of $12.0 million worth of our common stock. We anticipateher or his immediate family and the Company, its subsidiaries, or its affiliates. The Board has determined that the Purchase Agreementdirectors designated as “independent” have no relationship with the Company that would interfere with the exercise of their independent judgment in carrying out the responsibilities of a director.
Interested parties, including the Company’s stockholders, desiring to communicate with the Board members, including its non-management directors as a group, may do so by mailing a request to the Corporate Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112. Pursuant to the instruction of the Company’s non-management directors, the Secretary will review inquiries and if they are relevant to, and consistent with our operations, policies and procedures, they will be substantially similarforwarded to the purchase agreement dated June 6, 2019 betweendirector or directors to whom they are addressed. Inquiries not forwarded will be retained by the Company and Lincoln Park (the “Existing Purchase Agreement”), withwill be made available to any director upon request.
Committees of the Purchase Agreement relating to $12.0 million insteadBoard
The Board has established four standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Safety and Sustainability Committee. The table below indicates the members of $10.0 million worth of common stock and the other differences noted below. We are submitting this Proposal 1 to you in order to obtain the requisite stockholder authorization in accordance with The Nasdaq Listing Rules to sell shares of our common stock, if we so choose, to Lincoln Park in excess of 19.99% of our outstanding shares of common stockeach standing Board Committee as of March 14, 2022.
| | | | | | | | | |
| | | | Nominating and | Safety and | ||||
Board Member | | Audit | | | Compensation | | Corporate Governance | | Sustainability |
Terence J. Cryan + | | | | | x | ||||
Chad M. Potter # | | | | | Ch. | ||||
Tracy D. Pagliara * | x | | x | Ch. | | ||||
Karli S. Anderson * | x | | Ch. | x | |||||
Deborah A. Peacock * | | Ch. | | | x | | x | | |
+ | Mr. Cryan was an Independent Director through February 25, 2022. He became Executive Chairman on February 26, 2022, and as a result he is no longer an Independent Director. |
# | Mr. Potter was appointed to the Board effective February 26, 2022, following the retirement of Christopher M. Jones on February 25, 2022. Also on February 26, 2022, Mr. Potter was elected the Company’s President and Chief Executive Officer. Mr. Potter is not an Independent Director. |
* | Independent Director. |
Each of the date we enter intoCompany’s Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Safety and Sustainability Committee operates under a charter, adopted by the Purchase Agreement, as more fully described below.
UnderBoard, which is available on the terms and subjectCompany’s website at www.westwaterresources.net under “Corporate Governance,” or in print, without charge, to any stockholder who sends a request to the conditionsoffice of the Purchase Agreement, we will have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park will be obligated to purchase up to $12.0 million worthCorporate Secretary of shares of common stock. Such sales of common stockWestwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112. The functions performed by us, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 24‑month period beginning on the date on which the conditions to commencement of sales under the Purchase Agreement are satisfied (the “Commencement Date”). We will not have the right to commence any sales to Lincoln Park under the Purchase Agreement until each of the conditions set forthstanding Committees are briefly described below.
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We have a separately-designated Audit Committee composed solely of independent directors. The Audit Committee held four meetings in 2021.
The Audit Committee’s primary responsibilities are to:
● | assist the Board in discharging its responsibilities with respect to the accounting policies, internal controls and financial reporting of the Company; |
● | monitor compliance with applicable laws and regulations, standards and ethical business conduct, and the systems of internal controls; |
● | assist the Board in its oversight of the qualifications, independence and performance of the registered public accounting firm engaged to be the independent auditor of the Company; and |
● | prepare the Audit Committee report required to be included in the Company’s proxy statements. |
The Board has determined that Ms. Peacock, the Purchase Agreement, all of which are outside of Lincoln Park’s control, will have been satisfied, including without limitation that a registration statement covering the resale by Lincoln ParkChair of the shares issuable underAudit Committee, and Mr. Pagliara, a member of the Purchase Agreement shall have been declared effectiveAudit Committee, each satisfies the criteria adopted by the Securities and Exchange Commission (the “SEC(“SEC”) to serve as an “audit committee financial expert.”), In addition, the Board has determined that each of Ms. Peacock, Mr. Pagliara, and that no stop order with respect to the registration statement shall be pending or threatened by the SEC.
Following the Commencement Date, under the Purchase Agreement, on any business day selected by us, we may direct Lincoln Park to purchase up to 20,000 shares of common stock on such business day (each, a “Regular Purchase”), provided, however, that (i) the Regular Purchase may be increased to up to 30,000 shares, provided that the closing sale price of our common stock is not below $7.00 on the purchase date, (ii) the Regular Purchase may be increased to up to 40,000 shares, provided that the closing sale price of our common stock is not below $8.00 on the purchase date, and (iii) the Regular Purchase may be increased to up to 50,000 shares, provided that the closing sale priceMs. Anderson, constituting all current members of the common stockAudit Committee, is not below $9.00 on the purchase date, subject in each case to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction to be provided in the Purchase Agreement. In each case, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $600,000.
The purchase price for Regular Purchases will equal the lesser of (i) 93 percent of the lowest sale price of our common stock on the purchase date, or (ii) 93 percent of the arithmetic average of the three lowest closing sale prices for our common stock during the ten consecutive trading days ending on the trading day immediately preceding the purchase date. A purchase notice for a Regular Purchase may only be issued after the markets have closed (i.e., after 4:00 pm eastern time), which ensures that the purchase price is always known and fixed at the time the purchase notice is issued.
On any trading day when the closing price of our common stock is above a threshold to be determined and when the maximum Regular Purchase has been made as described above, we will also have the right (but not the obligation), in our sole discretion, to present Lincoln Park with a purchase notice for an accelerated purchase. An accelerated purchase directs Lincoln Park to purchase up to the lesser of (i) three times the number of shares purchased pursuant to a Regular Purchase, or (ii) 30 percent of the trading volume on the date of the accelerated purchase at a purchase price equal to the lesser of the closing price in the date of the accelerated purchase, or 93 percent of the volume weighted average price on the date of the accelerated purchase.
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Lincoln Park will not have the right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park will be obligated to make purchases as we direct, subject to certain conditions. In all instances, we may not sell shares of our common stock to Lincoln Park under the Purchase Agreement if it would result in Lincoln Park beneficially owning more than 9.99% of our common stock. There will be no upper limits on the price per share that Lincoln Park must pay for shares of common stock. There will be no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park. There will be no limitations on use of proceeds, financial or business covenants, restrictions on future funding, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. The Purchase Agreement may be terminated by us at any time, at our discretion, without any penalty or cost to us. We currently intend to use any net proceeds from the sale of securities to Lincoln Park to pursue the Company’s strategy to expand into the battery materials marketplace, to maintain the Company’s uranium assets as an option, as well as for working capital and general corporate purposes.
Requirement to Seek Stockholder Approval
As a result of our listing on The Nasdaq Capital Market, issuances of our common stock are subject to the Nasdaq Marketplace Rules, including Rule 5635(d), which requires us to obtain stockholder approval prior to the issuance of securities in connection with a transaction, other than a public offering, involving the sale, issuance or potential issuance by us of more than 19.99 percent of our outstanding shares of our common stock (or securities convertible into or exercisable for shares of our common stock) at a price less than the lower of (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (ii) the average closing price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement (the “Nasdaq 20% Rule”).
Under the Nasdaq 20% Rule, in no event may we issue or sell to Lincoln Park under the Purchase Agreement more than 19.99% of the shares of our common stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”) unless (i) we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap or (ii) the average price of all applicable sales of common stock to Lincoln Park under the Purchase Agreement equals or exceeds the price of the common stock on the date that the Purchase Agreement is executed, such that issuances and sales of the common stock to Lincoln Park under the Purchase Agreement would be exempt from the Exchange Cap limitation under applicable Nasdaq rules. In any event, the Purchase Agreement will specifically provide that we may not issue or sell any shares of our common stock under the Purchase Agreement if such issuance or sale would breach any applicable Nasdaq rules.
Based on the closing sale price of our common stock as reported on The Nasdaq Capital Market on March 2, 2020, to fully utilize the $12.0 million expected to be available to us, we would need to issue 6.3 million shares of common stock to Lincoln Park, which would be in excess of the Nasdaq 20% Rule. Accordingly, in order to be able to sell to Lincoln Park the full amount available under the Purchase Agreement, we are seeking stockholder approval to issue more than 19.99% of our outstanding shares as of the date we enter into the Purchase Agreement with Lincoln Park.
In order to comply with the Nasdaq 20% Rule and to satisfy conditions under the Purchase Agreement, we are seeking stockholder approval to permit issuance of more than 19.99% of our common stock to Lincoln Parkindependent director pursuant to the Purchase Agreement. We are seeking stockholder approval for the issuance of up to 8.0 million shares of our common stockrequirements under the Purchase Agreement. We would seek additional stockholder approval before issuing more than such 8.0 million shares.
Existing Purchase Agreement and Timing of New Purchase Agreement
We entered into the Existing Purchase Agreement with Lincoln Park on June 6, 2019. Through the date of this proxy statement, we have sold 2,054,534 shares of common stock for aggregate gross proceeds of $6.5 million under the Existing Purchase Agreement, and $3.5 million of the $10.0 million total commitment under the Existing Purchase Agreement remains available for sale. On August 6, 2019, our stockholders approved the sale of up to 3,200,000 shares of our common stock under the Existing Purchase Agreement, and we may sell up to an additional 1,145,466 shares under the Existing Purchase Agreement without seeking additional stockholder approval in compliance with the Nasdaq 20%
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Rule. In addition to the Existing Purchase Agreement, we entered into a securities purchase agreement with Lincoln Park on May 24, 2019 pursuant to which we issued and sold to Lincoln Park (i) 104,294 shares of our common stock and (ii) warrants to initially purchase an aggregate of up to 182,515 shares of our common stock at an exercise price of $5.062 per share, for aggregate gross proceeds of $550,751. The transaction closed May 30, 2019. The prior transaction did not impose any obligation on either the Company or Lincoln Park to enter into the Existing Purchase Agreement or new Purchase Agreement.
We are seeking stockholder approval of this Proposal 1 at the Annual Meeting to avoid the expense and delay required for a special meeting of stockholders, which we anticipate would be necessary if the Company were to wait until it no longer satisfies the conditions for selling shares to Lincoln Park under the Existing Purchase Agreement. We anticipate that we will enter into the new Purchase Agreement within 90 days of the date of the Annual Meeting. If we do not enter into the new Purchase Agreement within such 90‑day period, we will seek additional stockholder approval before issuing shares of common stock under the new Purchase Agreement in excess of the Exchange Cap. We will terminate the Existing Purchase Agreement at the same time or before entering into the new Purchase Agreement with Lincoln Park.
Effect of Failure to Obtain Stockholder Approval
If the stockholders do not approve this Proposal 1, we will be unable to issue shares of common stock to Lincoln Park pursuant to the Purchase Agreement in excess of the Exchange Cap. The Company anticipates it would need to seek alternative sources of financing, which may include additional transactions with Lincoln Park.
Reasons for Transaction and Effect on Current Stockholders
The Board of Directors has determined that the Purchase Agreement with Lincoln Park is in the best interests of the Company and its stockholders because the right to sell shares to Lincoln Park provides the Company with a reliable source of capital and the ability to access that capital when and as needed.
The Purchase Agreement will not affect the rights of the holders of outstanding common stock, but the sale of shares to Lincoln Park pursuant to the terms of the Purchase Agreement will have a dilutive effect on the existing stockholders, including the voting power and economic rights of the existing stockholders. If we were to sell to Lincoln Park all 8.0 million shares we are seeking stockholder approval to issue under the Purchase Agreement, Lincoln Park would have purchased approximately 65% of the outstanding shares of the Company after such issuances.
Notwithstanding the foregoing, the Purchase Agreement will provide that the Company shall not issue, and Lincoln Park shall not purchase, any shares of our common stock under the Purchase Agreement if such shares proposed to be issued and sold, when aggregated with all other shares of our common stock then owned beneficially (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934 (“Exchange Act”) and NYSE American listing standards and is able to read and understand the Company’s financial statements.
The Compensation Committee held five meetings in 2021. The Compensation Committee is responsible for assisting the Board in setting the compensation of the Company’s directors and executive officers and administering and implementing the Company’s incentive compensation plans and equity-based plans. The Compensation Committee’s duties and responsibilities are to:
● | review and approve corporate goals and objectives relevant to the compensation of the Company’s executive officers; |
● | evaluate the performance of the Company’s executive officers in light of such goals and objectives; and |
● | determine and approve executive officer compensation based on such evaluation. |
The Compensation Committee also reviews and discusses the Compensation Discussion and Analysis appearing in the Company’s proxy statements with management, and based on such review and discussions, has recommended to the Board that the Compensation Discussion and Analysis set forth herein be included in this proxy statement.
Under the Compensation Committee Charter, the Compensation Committee has the authority to retain compensation consultants. NFP Compensation Consulting (f/k/a Longnecker and Associates) was engaged in the Spring of 2021 to review the Company’s compensation program for named executive officers. Meridian Compensation Partners was engaged in March 2018 to review our Long-Term Incentive program to ensure it was competitive as amended)an incentive and retention program. See the discussion under the heading “Compensation Discussion and Analysis” for further information regarding the executive compensation programs. The Compensation Committee also has the authority to obtain advice and assistance from executives, internal or external legal, accounting, or other advisors as it determines necessary to carry out its duties.
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The Compensation Committee may delegate its authority to determine the amount and form of compensation paid to non-executive employees and consultants to officers and other appropriate supervisory personnel. It may also delegate its authority (other than its authority to determine the compensation of the Chief Executive Officer) to a subcommittee of the Compensation Committee. Finally, to the extent permitted by Lincoln Parkapplicable law, the Compensation Committee may delegate to one or more officers (or other appropriate personnel) the authority to recommend stock options and other stock awards for employees who are not executive officers or members of the Board.
The Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee held one meeting in 2021. The Nominating and Corporate Governance Committee’s duties and responsibilities are to:
● | recommend to the Board director nominees for the annual meeting of stockholders; |
● | recommend and approve compensation for the independent directors; |
● | identify and recommend candidates to fill vacancies occurring between annual stockholder meetings; and |
● | oversee all aspects of corporate governance of the Company. |
The Nominating and Corporate Governance Committee of the Board identifies director candidates based on input provided by a number of sources, including members of the Nominating and Corporate Governance Committee, other directors, our stockholders, members of management and third parties. The Nominating and Corporate Governance Committee does not distinguish between nominees recommended by our stockholders and those recommended by other parties. Any stockholder recommendation must be sent to the Corporate Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112, and must include detailed background information regarding the suggested candidate that demonstrates how the individual meets the Board membership criteria discussed below. The Nominating and Corporate Governance Committee also has the authority to consult with or retain advisors or search firms to assist in the identification of qualified director candidates.
As part of the identification process, the Nominating and Corporate Governance Committee takes into account each candidate’s business and professional skills, experience serving in management or on the board of directors of companies similar to the Company, financial literacy, independence, personal integrity and judgment. In conducting this assessment, the Nominating and Corporate Governance Committee will, in connection with its assessment and recommendation of candidates for director, consider diversity (including, but not limited to, gender, race, ethnicity, age, experience and skills) and such other factors as it deems appropriate given the then-current and anticipated future needs of the Board and the Company, and to maintain a balance of perspectives, qualifications, qualities and skills on the Board. The Board does not have a formal diversity policy for directors. However, the Board is committed to an inclusive membership. Although the Nominating and Corporate Governance Committee may seek candidates that have different qualities and experiences at different times in order to maximize the aggregate experience, qualities and strengths of the Board members, nominees for each election or appointment of directors will be evaluated using a substantially similar process. Incumbent directors who are being considered for re-nomination are re-evaluated both on their performance as directors and their continued ability to meet the required qualifications.
The Safety and Sustainability Committee
On May 21, 2021, the Board changed the name of its former Health, Safety, Environment and Public Affairs Committee to the Safety and Sustainability Committee. The Safety and Sustainability Committee held one meeting in 2021. The Safety and Sustainability Committee’s primary responsibility is for management of health, safety, loss prevention, operational security, sustainable development, environmental management and affairs, community relations,
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human rights, government relations and communications issues relating to the Company, including compliance with laws and regulations. The Committee’s primary purposes are to:
(a) | health, safety, loss prevention issues and operational security; and |
(b) | issues relating to sustainable development, environmental management and affairs, community relations, human rights, government relations and communications; and |
(2) | assist the Board in its oversight of: |
(a) | health, safety, loss prevention and operational security issues relating to the Company; |
(b) | sustainable development, environmental affairs, relations with communities and civil society, government relations, communications issues and human rights relating to the Company; |
(c) | the Company’s compliance with regulations and policies that provide processes, procedures, and standards to follow in accomplishing the Company’s goals and objectives relating to: |
(i) | health, safety, loss prevention issues and operational security; and |
(ii) | sustainable development, environmental management affairs, community relations, human rights, government relations and communications issues; and |
(d)management of risk related thereto.
The Company has adopted a Code of Ethics for Senior Financial Officers, which is applicable to the Company’s executive chairman, chief executive officer, chief financial officer, chief accounting officer, general counsel, controller, and treasurer, and a Code of Business Conduct and Ethics, which is applicable to all directors, officers, and employees. Copies of the codes are available on the Company’s website at https://westwaterresources.net/corporate/corporate-governance/ or in print, without charge, to any stockholder who sends a request to the office of the Corporate Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112. In the event that the Company makes any amendment to, or grants any waiver from, a provision of the Code of Ethics for Senior Financial Officers that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer, controller, or certain other senior officers and requires disclosure under applicable SEC rules, the Company intends to disclose such amendment or waiver and the reasons for the amendment or waiver on the Company’s website or, as required by NYSE American rules, file a Current Report on Form 8-K with the SEC reporting the amendment or waiver.
The Company’s Internet website address is provided as an inactive textual reference only. The information provided on the website is not incorporated into, and does not form a part of, this proxy statement.
The Company’s general policy with respect to related party transactions is included in its Code of Business Conduct and Ethics, the administration of which is overseen by the Audit Committee. Directors and officers are required to report any transaction that the Company would be required to disclose pursuant to Item 404(a) of Securities and Exchange Commission Regulation S-K (a “Related Party Transaction”) to the Audit Committee.
The Company collects information about potential Related Party Transactions in its annual questionnaire completed by directors and officers. Potential Related Party Transactions are subject to the review and approval of the non-interested members of the Audit Committee. In determining whether to approve any such transaction, the Audit Committee will consider such factors as it deems relevant, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in arm’s length negotiations with an unrelated third party.
Board Oversight of Risk Management
The Board has overall responsibility for risk oversight with a focus on the most significant risks facing the Company. The Board relies upon the President and Chief Executive Officer to supervise day-to-day risk management, who reports directly to the Board and certain Committees on such matters as appropriate.
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The Board is also responsible for oversight of the Company’s efforts to address ESG matters. The Company has a long history of environmental leadership, especially with regard to state and federal regulations as they apply to our former uranium operations. In addition, we have performed our work without serious injury for several years – emblematic of our approach to safe work practices, procedures and leadership. As part of our environmental sustainability efforts as we develop our graphite business, the Westwater team has developed, and made a provisional patent application for, a process that purifies graphite with a lighter environmental footprint than processes used by others in our business. Also, as part of our ongoing efforts to provide for diversity at the Board of Directors, two-third of the independent Directors are females.
The Board delegates certain oversight responsibilities to its Committees. For example, while the primary responsibility for financial and other reporting, internal controls, compliance with laws and regulations and ethics rests with the management, the Audit Committee provides risk oversight with respect to the Company’s financial statements, the Company’s compliance with legal and regulatory requirements and corporate policies and controls, and the independent auditor’s selection, retention, qualifications, objectivity and independence. Additionally, the Compensation Committee provides risk oversight with respect to the Company’s compensation programs, and the Nominating and Corporate Governance Committee provides risk oversight with respect to the Company’s governance structure and processes and succession planning. The Board and each Committee consider reports and presentations from the members of management responsible for the matters considered to enable the Board and each Committee to understand and discuss risk identification and risk management.
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The Audit Committee, operating under a written charter adopted by the Board, reports to and acts on behalf of the Board by providing oversight of the Company’s independent auditors and the Company’s financial management and financial reporting procedures. Management has primary responsibility for preparing the Company’s financial statements and establishing and maintaining effective internal financial controls and for the public reporting process. Moss Adams LLP, the Company’s independent registered public accountants, is responsible for auditing those financial statements and expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles.
In this context, the Audit Committee reviewed and discussed with management and Moss Adams LLP the audited financial statements for the year ended December 31, 2021, the Moss Adams audit fees, and management’s assessment of the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with Moss Adams LLP the matters that are required to be discussed by the applicable Public Company Accounting Oversight Board and SEC standards. Moss Adams LLP has provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding Moss Adams LLP’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Moss Adams LLP that firm’s independence. The Audit Committee also concluded that Moss Adams LLP’s provision of audit and non-audit services to the Company and its affiliates would resultis compatible with Moss Adams LLP’s independence.
Based on the considerations referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2021, be included in the beneficial ownershipCompany’s Annual Report on Form 10-K for 2021 and selected Moss Adams LLP as the independent registered public accountants for the Company for 2022.
The Report was submitted by Lincoln Park and its affiliatesthe following members of more than 9.99%the Audit Committee of our then issued and outstanding shares of common stock. This beneficial ownership limitation limits the number of shares Lincoln Park may beneficially own at any one timeBoard:
Deborah A. Peacock, Chair
Tracy D. Pagliara
Karli S. Anderson
The information contained in the foregoing Audit Committee Report shall not be deemed to 9.99% of our outstanding common stock. Consequently, the number of shares Lincoln Park may beneficially own in compliancebe “soliciting material” or “filed” with the beneficial ownership limitation may increase over timeSEC, nor shall such information be incorporated by reference into a future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the numberExchange Act, except to the extent the Company specifically incorporates this Report by reference therein.
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In 2021, following the annual stockholders meeting on May 21, 2021, the annual cash retainer of outstanding sharesnon-employee directors increased from $50,000 to $60,000, earned at a rate of our common stock increases over time. Lincoln Park may sell some or all$15,000 per quarter. The compensation of the shares it purchases underCompany’s Chairman of the Purchase Agreement, permitting itBoard, Mr. Cryan, was increased following the annual stockholders meeting from $27,500 per quarter, to purchase$35,000 per quarter. Effective February 26, 2022, Mr. Cryan is paid an additional shares in compliance$12,500 per month for his service as Executive Chairman. All of the Company’s directors are also reimbursed for reasonable out-of-pocket expenses related to attendance at Board and Committee meetings.
In addition, compensation for each non-employee director for each committee served upon increased from $1,250 per quarter to $2,500 per quarter, with the beneficial ownership limitation. Chair of each committee earning an additional $2,500 per quarter for such service.
Also, each non-employee director was provided with a stock award valued at $70,000 following the annual general meeting of stockholders held in May 2021.
The beneficial ownership limitation reflectsfollowing table summarizes all compensation earned by non-employee directors in the requirements of Nasdaq Listing Rule 5635(b), which requires stockholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the Company. Generally, Nasdaq considers a change of control to have occurred when, as a result of an issuance, an investor would own, or have the right to acquire, 20% or more of our outstanding shares of common stock and such ownership is the largest ownership position. We are not seeking stockholder approval to lift such 9.99% beneficial ownership limitation. However, even with the beneficial ownership limitation, Lincoln Park may be in a position to exert influence over the Company and there is no guarantee that the interests of Lincoln Park will align with the interests of other stockholders.year ended December 31, 2021.
| | | | | | |
| | Fees Earned | | | | |
| | or | | Stock | | |
|
| Paid in Cash |
| Awards |
| Total |
Name | | ($) | | ($) (1) | | ($) |
Terence J. Cryan + |
| 150,495 |
| 70,000 |
| 220,495 |
Tracy D. Pagliara |
| 80,247 |
| 70,000 |
| 150,247 |
Karli S. Anderson |
| 90,247 |
| 70,000 |
| 160,247 |
Deborah A. Peacock |
| 82,198 |
| 70,000 |
| 152,198 |
+ | Mr. Cryan was an Independent Director through February 25, 2022. He became Executive Chairman on February 26, 2022, and as a result he is no longer an Independent Director. |
(1) | Represents the grant date fair value of equity awards granted during 2021 in accordance with FASB ASC Topic 718. See Note 8—Stock Based Compensation of the Notes to Consolidated Financial Statements in Item 8 of the Annual Report on Form 10 K for a discussion of valuation assumptions for stock and option awards. |
8
If this Proposal 1 is approved by our stockholders, we will be able to issue shares in a greater number than permitted by the Exchange Cap to Lincoln Park under the Purchase Agreement, provided we enter into the Purchase Agreement within 90 days of the date of the Annual Meeting. The number of shares of commonRestricted Stock Units (“RSUs”) and vested and unvested stock that we may issue would fluctuate from time to time based on the price of our common stock, however we would seek additional stockholder approval before issuing more than 8.0 million shares under the Purchase Agreement. We would also seek additional stockholder approval before agreeing to any increase in the value of the shares of common stock we may issue to Lincoln Park under the Purchase Agreement above $12.0 million.options held by each non-employee director at fiscal year-end 2021 is shown below:
| | | | | | |
|
| Number of |
| Number of |
| Restricted |
Name | | Vested Options | | Unvested Options | | Stock Units |
Terence J. Cryan + |
| 32,397 |
| 21,256 |
| — |
Tracy D. Pagliara |
| 32,397 |
| 21,256 |
| — |
Karli S. Anderson |
| 31,451 |
| 21,256 |
| — |
Deborah A. Peacock |
| 31,451 |
| 21,256 |
| — |
+ | Mr. Cryan was an Independent Director through February 25, 2022. He became Executive Chairman on February 26, 2022, and as a result he is no longer an Independent Director. |
In addition, the additional shares that we could issue to Lincoln Park will result in greater dilution to existing stockholders and may result in a decline in our stock price or greater price volatility.
Each addition share of common stock that would be issuable to Lincoln Park would have the same rights and privileges as each share of our currently authorized common stock.
Vote Required and Recommendation of the Board of Directors
If a quorum is present, the number of affirmative votes cast in favor of this Proposal 1 must exceed the number of votes cast against the proposal for approval of this proposal. Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE ISSUANCE OF SHARES OF COMMON STOCK TO LINCOLN PARK IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(d).
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AMENDMENT TO OUR 2013 OMNIBUS INCENTIVE PLAN
The Westwater Resources, Inc. 2013 Omnibus Incentive Plan (the “2013 OIP”“Incentive Plan”) is the sole active plan that provides for equity incentive compensation to our eligible directors, officers, employees, and non-employee directors.consultants. The Board believes that the 2013 OIPIncentive Plan is in the best interests of the Company and our stockholders as equity awards help to attract, retain, and motivate the directors, officers, and employees of the Company to achieve long-term performance goals and enable them to participate in the long-term growth of the Company. In addition, the Board views equity awards as an important form of compensation for our executive officers, which aligns the interests of the stockholders and the Company’s executive officers.
Stockholders originally approved the 2013 OIPIncentive Plan at our annual meeting on June 4, 2013 annual meeting of2013. Over the ensuing 8½ years, the Incentive Plan was utilized by the Board to make awards to eligible directors, officers, employees, and consultants, and the stockholders authorizingroutinely approved amendments to the issuance of upIncentive Plan to 1,666 shares of our common stock, plus (y)increase the number of shares available for awards under our prior equity plans as of June 4, 2013, plus (z)that purpose. When the last amendment to the Incentive Plan was approved by the stockholders on May 21, 2021, the Board anticipated that the number of shares relatedthen available within the Incentive Plan would be sufficient for approximately two years of awards, i.e., through the remainder of 2021 and through at least all of 2022. The Board has concluded that sufficient shares still remain in the Incentive Plan, and so this year’s amendment does not seek to awards outstanding under our prior equity plans asincrease the number of shares.
When approved by the stockholders on June 4, 2013, which thereafter terminate by expiration, forfeiture, cancellation or otherwise without the issuanceIncentive Plan had a specified term of such shares.
On July 18, 2017, ourten (10) years, meaning that it would expire (unless extended) on June 4, 2023. The Board has determined that it is in the best interest of the stockholders approvedand the Company to ensure the continued availability of the Incentive Plan. Accordingly, on March 11, 2022, the Board authorized, subject to stockholder approval, an amendment to the 2013 OIPIncentive Plan to increase the authorized number of shares of common stock available and reserved for issuance under such planextend its term by 20,000 shares, and to re-approve the material terms of the performance goals under such plan.
On April 18, 2019, our stockholders approved another amendment to the 2013 OIP to increase the authorized number of shares of common stock available and reserved for issuance under such plan by 66,000 shares, and approved amendments to the limitations on the number of shares that may be issued to individual recipients in any calendar year.
On February 13, 2020, our Board approved, subject to stockholder approval at the Annual Meeting, an amendment to the 2013 OIP to authorize 350,000 additional shares for issuance under the 2013 OIP. This amount represents approximately 8.4%, on a fully diluted basis, of the 4,160,723 shares of our common stock that was outstanding as of February 7, 2020, and as such, represents minimal risk of dilutionfive (5) years or overhang. Our Board also approved, subject to stockholder approval at the Annual Meeting, amendments to the limitations on the number of shares that may be issued to individual recipients in any calendar year, as discussed further herein.
Our Board and its Compensation Committee believe that stock-based awards are important in recruiting and retaining highly qualified officers, employees and non-employee directors. The 2013 OIP, as proposed to be amended, will allow the Company to continue to grant stock-based awards over the next several years and will continue to permit us the flexibility to determine the types and specific terms of awards made to participants. This flexibility allows us to make future awards based on our objectives of aligning compensation with stockholder value.until June 4, 2028.
The following table summarizes the number of shares of common stock subject to outstanding stock-basedequity awards under the 2013 OIPIncentive Plan and our prior equity plans, along with the shares remaining available for issuance under the 2013 OIP,Incentive Plan, in each case as of December 31, 2019:March 3, 2022:
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| |||||
|
|
|
| As a % of Common Stock |
| |||||
|
| Numbers of Shares |
| Outstanding (1) |
| |||||
| | | | | | |||||
|
| |
| As a % of Common Stock |
| |||||
| | Numbers of Shares | | Outstanding (1) |
| |||||
Stock options outstanding (2) |
| 37,786 |
| 1.13 | % |
| 277,576 |
| 0.79 | % |
Restricted stock units outstanding |
| — |
| — |
|
| 247,761 |
| 0.70 | % |
Restricted stock awards outstanding |
| — |
| — |
|
| — |
| — | |
Shares available for grant |
| 45,886 |
| 1.37 | % |
| 1,268,108 |
| 3.59 | % |
(1) |
| Based on |
(2) |
| The weighted average exercise price of the outstanding stock options as of December 31, |
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Upon stockholder approval of the amendment to the 2013 OIP, it will become effective. If the stockholders do not approve the amendment to the 2013 OIP, it will not become effective, the existing 2013 OIP will continue in effect, and we may continue to grant awards under the existing 2013 OIP, subject to its terms, conditions and limitations.
Our executive officers and directors have an interest in this proposal as they would be eligible to receive awards under the amended 2013 OIP.
A copy of the proposed amendment is attached to this proxy statement as Appendix A, and a full copy of the 2013 OIP as amended is attached hereto as Appendix B.
The Board recommends a vote FOR the approval of the amendment to the 2013 OIP.
The spot price of uranium has declined significantly over the last several years, from approximately $39.60 per pound in June 2013 to less than $18/lb. in the fall of 2017, and rebounding to only $25/lb. at the end of 2019. Prices at this low level have not been seen by the industry in decades. Like many uranium companies, we have experienced a sharp decline in the value of our common stock, from $1,800 per share at the time of stockholder approval of the 2013 OIP in June 2013 to $2.05 as of February 7, 2020.
While weWe have made strides to better position the Company for growth and future success over the past several years, including by embarking on a growth strategy in the lithiumbattery materials and battery graphite industries, weenergy storage industry. We are committed to further improving the Company’s performance, and significant continued effort, focus and dedication will be necessary from our management and employees to do so. We believe it will be critical to our future success that we take steps to maintain the competitiveness of our incentive pay programs and that we continue to tightly align these incentive opportunities with the interests of our stockholders.
To achieve these critical objectives, as discussed more fully below, we are seeking to extend the term of the Incentive Plan for an additional shares for issuance under the 2013 OIP and modification of certain issuance limitations thereunder.5 years, or until June 4, 2028.
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Retaining and Attracting Employees
Our ability to recruit, retain, reward, and motivate employees and officers depends in part on our ability to offer competitive equity compensation. We believe we would be at a competitive disadvantage if we could not continue to use stock-basedequity awards to recruit and compensate these individuals.
We have continued to face industry and economic headwinds and experienced challenges relating to our market capitalization. Given our stock price and market capitalization, delivering competitive compensation to our employees will require granting more shares as compared to our prior practice and grants made by our peer companies with higher stock values. Despite the resulting additional dilution, we believe that it is critical that we continue to retain our employees by delivering competitive levels of equity compensation.
By approving the amendment to the 2013 OIP, based on our current stock price, we anticipate we could deliver competitive equity compensation and grant stock-based awards for the next several years, assuming no significant declines in the value of our equity.
Aligning our Employees’ Interests with our Stockholders
We believe that the use of stock-basedequity awards as part of our compensation program is important to our continued success because it fosters a pay-for-performancepay for performance culture, which is an important element of our overall compensation program. We believe stock-basedequity compensation motivates employees to create stockholder value because the value employees realize from stock-basedequity compensation is directly aligned with creation of stockholder value as reflected by the share price of the Company.
11
As discussed above, we believe that stock-basedequity compensation aligns the goals and objectives of our employees with the interests of our stockholders and promotes a focus on long-term value creation. This long-term alignment between our employees and the interests of our stockholders is critical as our management strives to execute on our vision and growth plans. Stock-basedEquity awards that are subject to time-based orand performance-based vesting criteria are designed to help retain our management and employees during this period of development and will motivate them to attain our potential.
Given our stock price, all of our outstanding stock options are significantly underwater, meaning they have an exercise price greater than $2.05 per share (the closing price of our common stock on February 7, 2020). Stock option awards that are significantly underwater no longer have the same retentive or incentive capacity, making our ability to grant new stock awards at current stock prices even more important. In addition, the value of unvested restricted stock and restricted stock units has declined significantly from the time of grant.
If we do not have the flexibility to grant stock-basedequity awards made available by the increased reserve under the amendment to the 2013 OIP,Incentive Plan, we may need to increase the cash component of our employees’ compensation in order to remain market competitive. Increasing cash compensation would increase our cash compensation expense and would divert cash that could otherwise be invested in the Company’s business.
We are requesting approval of the amendment to the 2013 OIPIncentive Plan in order to continue to recruit and retain the key employee talent that is vital to the execution of our vision and growth plans and to continue to tightly align compensation opportunities with the creation of stockholder value.
Corporate Governance Considerations
As discussed in more detail below, our 2013 OIPIncentive Plan includes provisions designed to serve stockholders’ interests and promote effective corporate governance, including the following:
| No “Evergreen Provision.”The |
| No Discounted Awards. The |
| No Re-pricing without Stockholder Approval. The |
Background for Approval of Additional Shares
As of December 31, 2019, we had 45,886 shares available for issuance of future stock-based awards under the 2013 OIP. In setting and recommending to stockholders the additional number of shares to be authorized for issuance under the 2013 OIP, as amended, the Board considered the following information:
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12
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|
| % of Weighted |
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|
| Average Number of |
|
|
| Options |
| RSUs |
| Restricted |
|
|
| Shares Outstanding |
|
Fiscal Year |
| Granted |
| Granted |
| Stock Granted |
| Total |
| During Year |
|
2019 |
| 20,943 |
| — |
| — |
| 20,943 |
| 1.07 | % |
2018 |
| 8,974 |
| — |
| — |
| 8,974 |
| 0.46 | % |
2017 |
| 3,783 |
| 6,081 |
| — |
| 9,864 |
| 0.50 | % |
|
|
|
|
|
|
The major features of the 2013 OIP, as proposed to be amended, are summarized below.
Background for Modification of Issuance Limitations
Section 6.2 of the 2013 OIP currently sets certain limitations on the number of awards that may be granted to individual award recipients in a calendar year. In particular:
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|
While the Board believes that the cash-settled performance-based award limitations remain appropriate, the Board also believes that the decrease in the Company’s stock price has resulted in the share limitations being too restrictive for the 2013 OIP to remain an effective compensatory tool. For example, 400,000 shares of restricted stock were worth $3,596,000 at the time of the Company’s 2019 annual meeting of stockholders (based on a closing price of $8.99 on April 18, 2019), while 400,000 shares of restricted stock were worth only $820,000 as of February 7, 2020 (based on a closing price of $2.05 per share).
13
Description of the 2013 Omnibus Incentive Plan
Including the proposed amendment, the following is a general description of the material features of the 2013 OIPIncentive Plan and its operation. A copy of the 2013 OIPIncentive Plan is attached as Appendix B to this Proxy Statement. The description below is qualified in its entirety by the detailed provisions of the 2013 OIP,Incentive Plan, which are set forth in Appendix B,, and the proposed amendment, which is set forth in Appendix A.A. Because participation in and the types of awardawards to be granted under the 2013 OIPIncentive Plan are subject to the discretion of our Compensation Committee, the benefits or amounts that will be received by any participant or group of participants are not currently determinable.
18
Eligibility
All of our officers, directors and employees, and the officers, directors and employees of our subsidiaries and affiliates, are eligible to receive awards under the 2013 OIP.Incentive Plan. In addition, consultants, advisers, and certain other individuals whose participation in the 2013 OIPIncentive Plan is determined to be in the best interests of the Company by the Compensation Committee may participate. Incentive shareHowever, non-qualified stock options however, are only available to our employees. As of December 31, 2019, we estimate that approximately2021, 11 individuals were eligible to receive awards under the 2013 OIP.Incentive Plan.
Administration of the 2013 OIPIncentive Plan
The 2013 OIPIncentive Plan is administered by our Compensation Committee, and our Compensation Committee determines all awards, all terms and conditions of awards. and the number of shares of common stock subject to awards under the 2013 OIP.Incentive Plan for officers, employees, and consultants. The Nominating and Corporate Governance Committee determines the number of shares of common stock subject to awards under the Incentive Plan for non-employee directors. Each member of our Compensation Committee and each member of our Nominating and Corporate Governance Committee is both a “non-employee director” within the meaning of Rule 16b‑316b-3 of the Exchange Act, and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code. Our Compensation Committee also determines who will receive awards under the 2013 OIP, the types of award and their terms and conditions and the number of shares of common stock subject to awards, if an award is equity-based. Our Compensation Committee also interprets the provisions of the 2013 OIP.Incentive Plan. During any period of time in which we do not have a Compensation Committee, the 2013 OIPIncentive Plan will be administered by the Board of Directors or another committee appointed by the Board of Directors. References herein to our Compensation Committee include a reference to the Board of Directors or another committee appointed by the Board of Directors for those periods in which the Board of Directors or such other committee appointed by the Board of Directors is acting.
Stock Authorization
The maximum number of shares of common stock available for awards under the 2013 OIPIncentive Plan is equal to the sum of (x) 45,8861,268,108 shares (includingthat existed within the additional 350,000 shares subject to the amendment),Incentive Plan on March 3, 2022, plus (y) the number of shares available for awards under our prior equity plans as of June 4, 2013, plus (z) the number of shares related toincluding any awards outstandingmade under our prior equitythose plans as of June 4, 2013 which thereafterthat terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such shares. In connection with stock splits, distributions, recapitalizations and certain other events, the Board of Directors will make proportionate adjustments that it deems appropriate in the aggregate number of shares of common stock that may be issued under the 2013 OIP and the terms of outstanding awards. If any awards terminate, expire or are canceled, forfeited, exchanged or surrendered without having been exercised or paid or if any awards are forfeited or expire or otherwise terminate without the delivery of any shares of common stock, the shares of common stock subject to such awards will again be available for purposes of the 2013 OIP. However, the number of shares of common stock available for issuance under the 2013 OIP will not be increased by the number of shares of common stock (i) tendered or withheld or subject to an award surrendered in connection with the purchase of shares of common stock upon exercise of an option, (ii) deducted or delivered from payment of an award in connection with our tax withholding obligations, or (iii) purchased by us with the proceeds from option exercises.cancellation.
The maximum number of shares of common stock subject to options or stock appreciation rights that can be issued under the 2013 OIPIncentive Plan to any person is 40,000400,000 shares in any single calendar year, which limitation would increase to 400,000 shares pursuant to the amendment.year. The maximum number of shares that can be issued under the 2013 OIPIncentive Plan to any person other than pursuant to an option or stock appreciation right is 40,000400,000 shares in any single calendar year, which limitation would increase to 400,000 shares pursuant to the amendment.year. The maximum amount that may be paid as a cash-
14
settledcash-settled performance-based award for a performance period of twelve months or less to any person eligible for an award is $400,000 and the maximum amount that may be paid as a cash-settled performance-based award for a performance period of greater than twelve months to any person eligible for an award is also $400,000.
Share Usage
Each share subject to an award, including through dividend reinvestment rights, is counted against the share issuance limit on a one-for-one basis. The number of shares subject to a stock appreciation right is also counted against the share issuance limit on a one-for-one basis, regardless of the number of shares actually issued to settle the stock appreciation right. An award that, by its terms, cannot be settled in shares of stock will not count against the share issuance limit.
No Repricing
Except in connection with certain corporate transactions, no amendment or modification may be made to an outstanding stock option or stock appreciation right, including by replacement with or substitution of another award type, that would reduce the exercise price of the stock option or stock appreciation right or would replace any stock option or stock appreciation right with an exercise price above the current market price with cash or another security, in each case without the approval of our stockholders (although appropriate adjustments may be made to outstanding stock options and stock appreciation rights to achieve compliance with applicable law, including the Internal Revenue Code).
Options19
Types of Awards Available Under the Incentive Plan
The 2013 OIP authorizes our Compensation Committee to grant incentiveIncentive Plan allows for several different types of awards and sets forth the various terms and conditions associated with those awards. In sum, the following six type of awards can be made: (1) stock options (under Section 422 of the Internal Revenue Code) and optionsincluding those that do not qualify as incentive stock options. The exercise price of each option is determined by our Compensation Committee, provided that the price cannot be less than 100% of the fair market value of a share of common stock on the date on which the option is granted. If we were to grant incentive stock options to any stockholder owning more than 10% of our common stock (a “10% stockholder”), the exercise price may not be less than 110% of the fair market value of a share of our common stock on the date of grant.
The term of an option cannot exceed 10 years from the date of grant. If we were to grant incentive stock options to any 10% stockholder, the term cannot exceed five years from the date of grant. Our Compensation Committee determines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which options may be exercised. Options may be made exercisable in installments. The exercisability of options may be accelerated by our Compensation Committee.
The exercise price for any option or the purchase price for shares of restricted stock is generally payable (i) in cash or cash equivalents, (ii) to the extent the award agreement provides, by the surrender of shares of common stock (or attestation of ownership of such shares) with an aggregate fair market value on the date on which the option is exercised or the date shares are tendered to satisfy the purchase price, of the exercise or purchase price, (iii) with respect to an option only, to the extent the award agreement provides, by payment through a broker in accordance with procedures established by us, or (iv) to the extent the award agreement provides and/or unless otherwise specified in an award agreement, any other form permissible by applicable laws, including net exercise and service to us.
Stock Awards
The 2013 OIP also provides for the grant ofoptions; (2) stock awards which includesincluding restricted stock, unrestricted stock, and stock units. An award of shares of common stock may be subject to restrictions on transferability and other restrictions as our Compensation Committee determines in its sole discretion on the date of grant. The restrictions, if any, may lapse over a specified period of time or through the satisfaction of conditions, in installments or otherwise, as our Compensation Committee may determine. A participant who receives restricted stock will have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote and the right to receive dividends or distributions on the shares of stock, except that the Board of Directors may require any dividends to be reinvested in shares of stock. A participant who receives stock units will have no such rights. During the period, if any, when stock awards are non-transferable or
15
forfeitable, a participant is prohibited from selling, transferring, assigning, pledging, exchanging, hypothecating or otherwise encumbering or disposing of his or her shares of award stock.
Stock Appreciation Rights
The 2013 OIP authorizes our Compensation Committee to grantunits; (3) stock appreciation rights that provide the recipient with the right to receive, upon exercise of the stock appreciation right, cash, shares of common stock or a combination of the two. The amount that the recipient will receive upon exercise of the stock appreciation right generally will equal the excess of the fair market value of shares of our common stock on the date of exercise over the fair market value of shares of our common stock on the date of grant. Stock appreciation rights will become exercisable in accordance with terms determined by our Compensation Committee. Stock appreciation rights may be granted in tandem with an option grant or independently from an option grant. The term of a stock appreciation right cannot exceed 10 years from the date of grant.
Performance Based-Awards
The 2013 OIP also authorizes our Compensation Committee to grantrights; (4) performance-based awards. Performance-based awards are awards of options, stock appreciation rights, restricted stock, stock units,awards; (5) dividend equivalents; and (6) other equity-based awards, orincluding those payable in cash, that are made subject to the achievement of performance goals over a performance period specified by our Compensation Committee. Our Compensation Committee determines the applicable performance period, the performance goals and such other conditions that apply to the performance-based award. Performance goals may relate to our financial performance, the participant’s performance or such other criteria as determined by ourthe Compensation Committee.
Dividend Equivalents
Our Compensation Committee may grant dividend equivalents in connection with the grant For a complete description of any equity-based award. Dividend equivalents may be paid currently or accrued as contingent cash obligationseach award and may be payable in cash, shares of common stock or a combination of the two. Our Compensation Committee will determine the terms of any dividend equivalents. No dividend equivalent rights can be granted in tandem with an option or stock appreciation right.
Other Equity-Based Awards
Our Compensation Committee may grant other types of stock-based awards under the 2013 OIP. Other equity-based awards are payable in cash, shares of common stock or other equity, or a combination thereof, and may be restricted or unrestricted, as determined by our Compensation Committee. Any dividends paid on equity-based awards which vest or are earned based upon the achievement of performance goals shall not vest unless such performance goals are achieved. Thetheir specific terms and conditions, that apply to other equity-based awards are determined by our Compensation Committee.see Appendix B.
Recoupment
Award agreements for awards granted pursuant to the 2013 OIPIncentive Plan provide for mandatory repayment by the recipient to us of any gain realized by the recipient to the extent the recipient is in violation of or in conflict with certain agreements with us (including but not limited to an employment or non-competition agreement) or upon termination for “cause” as defined in the 2013 OIP,Incentive Plan, applicable award agreement, or any other agreement between us and the grantee. Awards are also subject to mandatory repayment to the extent the grantee is or becomes subject to any clawback or recoupment right we may have or to the extent any law, rule or regulation imposes mandatory recoupment.
Change in Control
If the Company experiences a change in control in which outstanding awards that are not exercised prior to the change in control will not be assumed or continued by the surviving entity: (i) except for performance-based awards, all shares of restricted stock and restricted stock units will vest and the underlying shares of common stock and all dividend equivalent rights will be delivered immediately before the change in control; and (ii) either or both of the following actions will be taken: (a) all options and stock appreciation rights will become exercisable 15 days before the change in control
16
and terminate upon the completion of the change in control, or (b) the Compensation Committee may elect, in its sole discretion to cash out all options, stock appreciation rights, restricted stock and stock units before the change in control for an amount equal to, in the case of restricted stock or stock units, the formula or fixed price per share paid to stockholders pursuant to the change in control, in the case of options or stock appreciation rights, such formula or fixed price reduced by the option price or stock appreciation right price applicable to the award. In the case of performance-based awards denominated in shares of common stock, if more than half of the performance period has lapsed, the awards will be converted into shares of restricted stock or stock units based on actual performance to date. If less than half of the performance period has lapsed, or if actual performance is not determinable, the awards will be converted into shares of restricted stock or stock units assuming target performance has been achieved.
A change in control under the 2013 OIPIncentive Plan occurs if:
| a person, entity or affiliated group (with certain exceptions, including for certain existing stockholders) acquires, in a transaction or series of transactions, 50% or more of the total combined voting power of our outstanding securities; |
| individuals who constitute the Board cease for any reason to constitute a majority of the Board of Directors, treating any individual whose election or nomination was approved by a majority of the incumbent directors as an incumbent director for this purpose; |
| the Company consolidates or merges with or into any other entity, or any other entity consolidates or merges with us, other than any such transaction in which the 100% of the total combined voting power of our outstanding securities remains with the holders of securities who held such voting power immediately prior to such transaction; or |
| the Company sells or disposes of all or substantially all of its assets. |
20
Adjustments for Stock Dividends and Similar Events
The Compensation Committee will make appropriate adjustments in outstanding awards and the number of shares of common stock available for issuance under the 2013 OIP,Incentive Plan, including the individual limitations on awards, to reflect stock splits and other similar events.
Amendment or Termination
The Board of Directors may amend, suspend or terminate the 2013 OIPIncentive Plan at any time; provided that no amendment, suspension or termination may adversely impair the benefits of participants with outstanding awards without the participants’ consent or violate our plan’s prohibition on repricing. Our stockholders must approve any amendment if such approval is required under applicable law or stock exchange requirements. Our stockholders also must approve any amendment that changes the no-repricing provisions of the 2013 OIP.Incentive Plan. The 2013 OIPIncentive Plan has a term that expires ten years after stockholder approval of the plan, i.e., on June 4, 2023, but it may be earlier terminated by the Board of Directors at any time. With this amendment the Board has approved, subject to stockholder approval, changing the term by adding another five years or until June 4, 2028.
Equity Compensation Plan Information
The table appearing on page 1922 provides information as of December 31, 2019 2021,with respect to the shares of the Company’s common stock that may be issued under the equity compensation plans of the Company. Our only active equity plan is our 2013 OIP.Incentive Plan.
Federal Income Tax Consequences
Incentive Stock Options. The grant of an option will not be a taxable event for the grantee or for the Company. A grantee will not recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain realized upon a disposition of our common stock received pursuant to the exercise of an
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incentive stock option will be taxed as long-term capital gain if the grantee holds the shares of common stock for at least two years after the date of grant and for one year after the date of exercise (the “holding period requirement”). We will not be entitled to any business expense deduction with respect to the exercise of an incentive stock option, except as discussed below.
For the exercise of an option to qualify for the foregoing tax treatment, the grantee generally must be our employee or an employee of a subsidiary from the date the option is granted through a date within three months before the date of exercise of the option.
If all of the foregoing requirements are met except the holding period requirement mentioned above, the grantee will recognize ordinary income upon the disposition of the common stock in an amount generally equal to the excess of the fair market value of the common stock at the time the option was exercised over the option exercise price (but not in excess of the gain realized on the sale). The balance of the realized gain, if any, will be capital gain. We will be allowed a business expense deduction to the extent the grantee recognizes ordinary income.
Non-Qualified Options. The grant of an option will not be a taxable event for the grantee or the Company. Upon exercising a non-qualified option, a grantee will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a non-qualified option, the grantee will have taxable capital gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the shares of common stock (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised).
We will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
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Restricted Stock. A grantee who is awarded restricted stock will not recognize any taxable income for federal income tax purposes in the year of the award, provided that the shares of common stock are subject to restrictions (that is, the restricted stock is nontransferable and subject to a substantial risk of forfeiture). The fair market value of the common stock on the date the restrictions lapse (less the purchase price, if any) will be treated as compensation income to the grantee and will be taxable in the year the restrictions lapse and dividends paid while the common stock is subject to restrictions will be subject to withholding taxes. We will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
Stock Units. There are no immediate tax consequences of receiving an award of stock units under the 2013 OIP.Incentive Plan. A grantee who is awarded stock units will be required to recognize ordinary income in an amount equal to the fair market value of shares issued to such grantee at the end of the restriction period or, if later, the payment date. We will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
Dividend Equivalent Rights. Participants who receive dividend equivalent rights will be required to recognize ordinary income in an amount distributed to the grantee pursuant to the award. We will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
Stock Appreciation Rights. There are no immediate tax consequences of receiving an award of stock appreciation rights under the 2013 OIP.Incentive Plan. Upon exercising a stock appreciation right, a grantee will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. We will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOUA VOTE FOR“FOR” THE APPROVAL OF THE AMENDMENT TO THE WESTWATER RESOURCES, INC. 2013 OMNIBUS INCENTIVE PLAN, TO INCREASEEXTENDING THE AUTHORIZED NUMBERTERM OF SHARES OF COMMON STOCK AVAILABLE AND
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RESERVED FOR ISSUANCE UNDER SUCHTHE PLAN BY 350,000 SHARES, ALONG WITH THE MODIFICATION TO THE ISSUANCE LIMITATIONS DESCRIBED HEREIN.FIVE YEARS UNTIL JUNE 4, 2028.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of December 31, 20192021, with respect to the shares of common stock that may be issued under our equity compensation plans.
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Equity compensation plans approved by security holders (1)(2)(3) |
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ELECTION OF DIRECTORS
The Board has nominated five directors for election at the Annual Meeting. The directors will hold office from election until the next Annual Meeting of Stockholders and until their successors are elected and qualified or until their death, resignation or removal. All of the nominees are currently directors, with the exception of Deborah A. Peacock, and they were elected by the stockholders at the 2019 Annual Meeting. The Nominating and Governance Committee recommended Ms. Peacock as a nominee for election following a search utilizing its experience and the Women’s Leadership Foundation.
If your proxy is properly completed and received in time for the Annual Meeting, and if your proxy does not indicate otherwise, the represented shares will be voted “FOR” each of the directors presented below. We have no reason to believe that any of the nominees for director will be unable to serve if elected. However, if any of these nominees becomes unavailable, the persons named in the proxy intend to vote for any alternate designated by the current Board. Proxies cannot be voted for a greater number of persons than the nominees named.
The paragraphs below describe each nominee’s individual management and leadership experience for at least the last five years, which the Company believes, in the aggregate, creates a well-rounded and capable Board of Directors and contributes to the overall effectiveness of our Board and each of its Committees. Each nominee is an incumbent director, other than Ms. Peacock. Each nominee consents to being named herein and to serve on the Board if elected. There are no family relationships among any director, executive officer or any person nominated or chosen by us to become a director.
Following each nominee’s biography below, we have highlighted certain notable skills and qualifications that contributed to his or her selection as a member of our Board of Directors.
Name |
| Age |
| Director Since |
| Primary Occupation |
Terence J. Cryan |
| 57 |
| 2017; 2006‑2016 |
| Chairman of the Board, Westwater Resources, Inc. and Co-Founder, Concert Energy Partners |
Christopher M. Jones |
| 61 |
| 2013 |
| President and Chief Executive Officer, Westwater Resources, Inc. |
Tracy D. Pagliara |
| 57 |
| 2017 |
| President & CEO of Global Power Equipment Group, Inc. |
Karli S. Anderson |
| 46 |
| 2018 |
| Vice President, Summit Materials, Inc. |
Deborah A. Peacock |
| 63 |
| 2020 |
| President, CEO & Managing Director, Peacock Law, P.C. |
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED BELOW.
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Terence J. CryanChairman of the Board and Chairman of the Nominating and Corporate Governance Committee
Terence J. Cryan rejoined the Westwater Resources Board as its Chairman in August 2017. He previously served as a director from October 2006 to March 2016, served as Westwater’s Interim President and Chief Executive Officer from September 2012 to March 2013, and served as Chairman of the Board from June 2014 through March 2016. Mr. Cryan is also Chairman of the Board of Ocean Power Technologies, Inc. where he has served as a director since October 2012.
Mr. Cryan served as President and Chief Executive Officer of Global Power Equipment Group Inc. from March 2015 until July 2017. Previously, Mr. Cryan served as Co-founder and Managing Director of Concert Energy Partners, an investment and private equity firm based in New York City from 2001 until 2015. Prior to that, Mr. Cryan was a Senior Managing Director in the Investment Banking Division at Bear Stearns. Additionally, Mr. Cryan was a Managing Director, Head of the Energy and Natural Resources Group and member of the Investment Banking Operating Committee at Paine Webber which he joined following its acquisition of Kidder, Peabody in 1994. From 2007 to 2010, Mr. Cryan also served as President and Chief Executive Officer of Medical Acoustics LLC.
Mr. Cryan served as a Director on the Board of Global Power Equipment Group Inc. from January 2008 until July 2017. Mr. Cryan was previously a Director on the Board of Superior Drilling Products, Inc. from June 2014 to December 2016. He was also previously a director of The Providence Service Corporation from May 2009 to May 2011 and Gryphon Gold Corporation from August 2009 to December 2012. Mr. Cryan has also been an adjunct professor at the Metropolitan College of New York Graduate School of Business and is a frequent speaker at finance and energy & natural resources industry gatherings. Mr. Cryan received a Master of Science degree in Economics from the London School of Economics in 1984 and a Bachelor of Arts degree in Economics from Tufts University in 1983. Mr. Cryan is a Board Leadership Fellow and member of the National Association of Corporate Directors.
Mr. Cryan’s extensive financial industry experience and educational background in economics provide him with a wealth of knowledge in dealing with financial, accounting and regulatory matters. Mr. Cryan’s prior professional experience also permits him to provide valuable advice to the Company with respect to potential capital raising and merger and acquisition transactions, and his prior Board service and service as Interim President and Chief Executive Officer of the Company provides him a deep understanding of the operations of the Company.
Christopher M. JonesPresident and Chief Executive OfficerChairman of the Health, Safety, Environment and Public Affairs Committee
Christopher M. Jones has served as President and Chief Executive Officer and a director since April 2013 and served as the interim Chairman of the Board from March 2016 to August 2017. Mr. Jones has more than 30 years’ experience in the mining industry and was most recently President, Chief Executive Officer and a director of Wildcat Silver Corporation from August 2008 to May 2012, where he and his team effectively doubled the size of Wildcat Silver’s resources twice using proven metallurgical technologies. Prior to that, Mr. Jones was the Chief Operating Officer and the Mining General Manger at Albian Sands Energy from April 2004 to June 2008. Mr. Jones also held management positions at RAG Coal West Inc., Phelps Dodge Sierrita Corp. and Cyprus Amax Coal Company. He is a member of the American Institute of Mining, Metallurgical, and Petroleum Engineers and is a Professional Engineer registered in Utah and Alberta as well as a member of the National Association of Corporate Directors. Mr. Jones received a Bachelor of Science degree in Mining Engineering at the South Dakota School of Mines and a Master of Business Administration degree from Colorado State University.
Mr. Jones has extensive executive and leadership experience as a result of his prior employment in management roles at other companies within the mining industry, which enables him to provide valuable counsel to Westwater on issues of strategic planning and corporate governance. Mr. Jones’ extensive experience engaging First Nations peoples in Canada, leading efforts to secure ISO 14001 certifications, and receiving national safety awards for safe mine performance will help secure success for Westwater as it develops businesses in the energy materials sector. In addition, Mr. Jones has a
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history of leading various mining and production operations, as well as exploration and development projects, which will be useful to Westwater in its efforts to develop its asset base in New Mexico, Nevada, and Utah, and position its South Texas operations for a return to production.
Tracy D. PagliaraMember of the Audit, Compensation and Nominating and Corporate Governance Committees
Tracy D. Pagliara has served as a director since July 2017. Since April 2018, Mr. Pagliara has been serving as CEO of Williams Industrial Services Group Inc. (f/k/a Global Power Equipment Group, Inc.), a publicly traded provider of construction and maintenance services to the power, energy and industrial customers (“Williams”). From July 2017 to April 2018, Mr. Pagliara served as Co-President and Co-CEO of Williams. Mr. Pagliara joined Williams in April 2010 as General Counsel, Secretary and Vice President, Business Development and served in multiple other positions of increasing responsibility, including Senior Vice President, Administration Officer, prior to his appointment as Co-President and Co-CEO in July 2017. Prior to joining Williams in April 2010, Mr. Pagliara served as the Chief Legal Officer of Gardner Denver, Inc., a leading global manufacturer of highly engineered compressors, blowers, pumps and other fluid transfer equipment, from August 2000 through August 2008. He also had responsibility for other roles during his tenure with Gardner Denver, including Executive Vice President of Administration, Chief Compliance Officer, and Corporate Secretary. Prior to joining Gardner Denver, Mr. Pagliara held positions of increasing responsibility in the legal departments of Verizon Communications/GTE Corporation from August 1996 to August 2000 and Kellwood Company from May 1993 to August 1996, ultimately serving in the role of Assistant General Counsel for each company. Mr. Pagliara has a B.S. in Accounting and a J.D. from the University of Illinois. He is a member of the Missouri and Illinois State Bars and a Certified Public Accountant.
Mr. Pagliara brings to the Board extensive experience advising public companies and companies in the energy industry, in addition to companies with similar capital needs to Westwater. Mr. Pagliara’s background in accounting will also permit him to contribute substantially as a member of the Audit Committee.
Karli S. AndersonChairman of the Compensation Committee and Member of the Health, Safety and Environment Committee
Karli S. Anderson is Vice President, Investor Relations at Summit Minerals, Inc., a leading vertically-integrated materials company with operations throughout North America. She previously served as Vice President, Investor Relations for Royal Gold, Inc., a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties, and similar production-based interests with over 190 properties on six continents. Previously, from 2010 to 2013, Ms. Anderson was a Senior Director of Investor Relations for Newmont Mining Corporation, one of the world’s largest gold producers. Ms. Anderson’s 15 years of capital markets experience includes shareholder engagement related to environmental, social and governance (ESG) factors with both equity and fixed income investors as well as proxy advisory firms. From 2012 to 2018, Ms. Anderson served as Chairman of the Board of the Denver Gold Group, an organization representing seven-eighths of the world’s publicly traded gold and silver companies. Ms. Anderson holds a Bachelor’s Degree in telecommunications from Ohio University, a Masters of Business Administration (finance) from the Wharton School at the University of Pennsylvania and is in the process of completing her Master’s Degree in Professional Accounting from Colorado State University. Ms. Anderson is a Governance Fellow and member of the National Association of Corporate Directors.
Ms. Anderson’s insights and guidance, her wealth of experience in the mining industry, as well as her advocacy towards greater corporate governance within the investment community, will continue to be critical assets to Westwater.
Deborah A. Peacock
Ms. Peacock is a nominee for election to the Board of Directors at the 2020 Annual Meeting. Ms. Peacock is an attorney licensed to practice law in New Mexico, Colorado and New York, and she is a Registered Patent Attorney. Ms. Peacock is also a Registered Professional Engineer in Colorado and New Mexico. Ms. Peacock is the President, CEO, Managing Director and owner of Peacock Law P.C. located in Albuquerque, New Mexico, which she founded in
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April 1995. In 2014, Ms. Peacock co-founded the Greater New Mexico Chapter of Women Corporate Directors and currently serves on its Board.PROPOSAL 3
Since 2011, Ms. Peacock has served on the Board of Regents of New Mexico Institute of Mining & Technology and currently serves as the Chair. Ms. Peacock has served on the New Mexico Mining Safety Board since 2015. Since 2017, Ms. Peacock has served on the Board of Directors of THEMAC Resources Group, Ltd. (and Chairs its Corporate Governance Committee and is a member of its Audit Committee) as well as its wholly-owned subsidiary New Mexico Copper Corp. Since 2017, Ms. Peacock has served on the Board of Directors of New Mexico Gas Company, and since 2018 she has served on the Board of Directors of Emera Technologies, LLC – both wholly-owned subsidiaries of Emera, Inc. Ms. Peacock has served on the Board of New Mexico Angels since 2005. In addition to her current Board service, Ms. Peacock previously served on the Board of The Georgia O’Keeffe Museum located in Santa Fe, New Mexico and both its Audit and Executive Committees, and as Chair of its Audit Committee. She previously served on the New Mexico Environmental Improvement Board and as Chair for four years.
Ms. Peacock obtained her bachelors of science degree (B.S.) in Metallurgical Engineering from the Colorado School of Mines, and her law degree (J.D.) from Harvard Law School. She is also a Governance Fellow with the National Association of Corporate Directors. Ms. Peacock will bring to the Board extensive experience in or with corporate governance, financial oversight, a wide variety of business and corporate legal matters including intellectual property and mergers & acquisitions, and has knowledge of mining and metallurgy industries, environmental regulations, permitting, and community involvement and engagement.
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The Company’s business and affairs are overseen by the Board pursuant to the Delaware General Corporation Law and the Company’s Amended and Restated Bylaws, as amended (the “Bylaws”). Members of the Board are kept informed of the Company’s business through discussions with the Chairman and key members of management, by reviewing materials provided to them and by participating in Board and Committee meetings. All members of the Board are elected annually by the stockholders.
Regular attendance at Board meetings and the Annual Meeting is expected of each director. Our Board held 19 meetings during 2019. No director attended fewer than 75% of the total number of Board and applicable Committee meetings (held during the period that such director served) in 2019. The independent directors met in executive session at several of the Board meetings held in 2019. All of the directors at the time attended the 2019 Annual Meeting of Stockholders.
The Company’s governing documents allow the roles of Chairman and Chief Executive Officer to be filled by the same or different individuals. This approach allows the Board flexibility to determine whether the two roles should be separate or combined based upon the Company’s needs and the Board’s assessment of the Company’s leadership from time to time. Currently, Mr. Cryan serves as Chairman and Mr. Jones serves as Chief Executive Officer.
Determination of 2020 Director Nominees
Each of the director nominees at the 2020 Annual Meeting are existing directors of the Company and stood for election and were elected at the Company’s 2019 Annual Meeting of Directors, with the exception of Ms. Peacock. Ms. Peacock’s selection as a candidate for Westwater’s Board of directors was the result of a search conducted by the Nominating and Governance Committee of the Board utilizing its experience and the Women’s Leadership Foundation, among other sources. Criteria for financial experience, diversity, and public company experience at a senior level were used as part of the selection process. Marvin K. Kaiser served on the Westwater Board of its Directors since 2007 and is not a nominee for election at the 2020 Annual Meeting.
The Board annually reviews all relationships that directors have with the Company to affirmatively determine whether the directors are “independent” under Nasdaq listing standards. The Board has determined that each of Ms. Anderson and Peacock and Messrs. Cryan, Kaiser and Pagliara are “independent” and as a result, each existing member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee is “independent.” In arriving at the foregoing independence determination, the Board considered transactions and relationships between each director or any member of her or his immediate family and the Company, its subsidiaries or its affiliates. The Board has determined that the directors designated as “independent” have no relationship with the Company that would interfere with the exercise of their independent judgment in carrying out the responsibilities of a director. Ms. Peacock is presented as a nominee for election to the Board at the 2020 Annual Meeting, and if elected by the stockholders her membership on the Board committees will be determined after the 2020 Annual Meeting.
Interested parties, including the Company’s stockholders, desiring to communicate with the Board members, including its non-management directors as a group, may do so by mailing a request to the Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112. Pursuant to the instruction of the Company’s non-management directors, the Secretary will review inquiries and if they are relevant to, and consistent with our operations, policies and procedures, they will be forwarded to the director or directors to whom they are addressed. Inquiries not forwarded will be retained by the Company and will be made available to any director upon request.
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The Board has established four standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Health, Safety, Environment and Public Affairs Committee. The table below indicates the members of each standing Board Committee as of March 2, 2020.
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* independent director
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Each of the Company’s Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee operates under a charter, adopted by the Board, which is available on the Company’s website at www.westwaterresources.net under “Corporate Governance,” or in print, without charge, to any stockholder who sends a request to the office of the Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112. The functions performed by each of the standing Committees are briefly described below.
We have a separately-designated Audit Committee composed solely of independent directors. The Audit Committee held four meetings in 2019.
The Audit Committee’s primary responsibilities are to:
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The Board has determined that Mr. Kaiser, the chairman of the Audit Committee, satisfies the criteria adopted by the SEC to serve as an “audit committee financial expert.” In addition, the Board has determined that each of Messrs. Kaiser and Pagliara and Ms. Anderson, constituting all current members of the Audit Committee, is an independent director pursuant to the requirements under the Exchange Act and Nasdaq listing standards and is able to read and understand the Company’s financial statements.
The Compensation Committee held seven meetings in 2019. The Compensation Committee is responsible for assisting the Board in setting the compensation of the Company’s directors and executive officers and administering and
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implementing the Company’s incentive compensation plans and equity-based plans. The Compensation Committee’s duties and responsibilities are to:
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The Compensation Committee also reviews and discusses the Compensation Discussion and Analysis appearing in the Company’s proxy statements with management, and based on such review and discussions, has recommended to the Board that the Compensation Discussion and Analysis set forth herein be included in this proxy statement.
Under the Compensation Committee Charter, the Compensation Committee has the authority to retain compensation consultants. Meridian Compensation Partners was engaged in March 2018 to review our Long-Term Incentive program to ensure it was competitive as an incentive and retention program. See the discussion under the heading “Compensation Discussion and Analysis” for further information regarding the executive compensation programs. The Compensation Committee also has the authority to obtain advice and assistance from executives, internal or external legal, accounting or other advisors as it determines necessary to carry out its duties.
The Compensation Committee may delegate its authority to determine the amount and form of compensation paid to non-executive employees and consultants to officers and other appropriate supervisory personnel. It may also delegate its authority (other than its authority to determine the compensation of the Chief Executive Officer) to a subcommittee of the Compensation Committee. Finally, to the extent permitted by applicable law, the Compensation Committee may delegate to one or more officers (or other appropriate personnel) the authority to recommend stock options and other stock awards for employees who are not executive officers or members of the Board.
The Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee held one meeting in 2019. The Nominating and Corporate Governance Committee’s duties and responsibilities are to:
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The Nominating and Corporate Governance Committee of the Board identifies director candidates based on input provided by a number of sources, including members of the Nominating and Corporate Governance Committee, other directors, our stockholders, members of management and third parties. The Nominating and Corporate Governance Committee does not distinguish between nominees recommended by our stockholders and those recommended by other parties. Any stockholder recommendation must be sent to the Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112, and must include detailed background information regarding the suggested candidate that demonstrates how the individual meets the Board membership criteria discussed below. The Nominating and Corporate Governance Committee also has the authority to consult with or retain advisors or search firms to assist in the identification of qualified director candidates.
As part of the identification process, the Nominating and Corporate Governance Committee takes into account each candidate’s business and professional skills, experience serving in management or on the board of directors of companies similar to the Company, financial literacy, independence, personal integrity and judgment. In conducting this assessment, the Nominating and Corporate Governance Committee will, in connection with its assessment and
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recommendation of candidates for director, consider diversity (including, but not limited to, gender, race, ethnicity, age, experience and skills) and such other factors as it deems appropriate given the then-current and anticipated future needs of the Board and the Company, and to maintain a balance of perspectives, qualifications, qualities and skills on the Board. The Board does not have a formal diversity policy for directors. However, the Board is committed to an inclusive membership. Although the Nominating and Corporate Governance Committee may seek candidates that have different qualities and experiences at different times in order to maximize the aggregate experience, qualities and strengths of the Board members, nominees for each election or appointment of directors will be evaluated using a substantially similar process. Incumbent directors who are being considered for re-nomination are re-evaluated both on their performance as directors and their continued ability to meet the required qualifications.
The Health, Safety, Environment and Public Affairs Committee
The Health, Safety, Environment and Public Affairs Committee held one meeting in 2019. Its function is to provide oversight to the Company as the Company undertakes and conducts, in compliance with all regulatory, statutory and the Company’s policies, its operations in an economically and socially responsible manner, with due regard to the safety and health of its employees, the impact of its operations on the natural environment, and the social, economic, health and environmental-related impacts in the communities in which the Company operates.
The Company has adopted a Code of Ethics for Senior Financial Officers, which is applicable to the Company’s chief executive officer, chief financial officer, controller, treasurer and chief internal auditor, and a Code of Business Conduct and Ethics, which is applicable to all of directors, officers and employees. Copies of the codes are available on the Company’s website at http://www.westwaterresources.net/corporate/corporate-governance or in print, without charge, to any stockholder who sends a request to the office of the Secretary of Westwater Resources, Inc. at 6950 S. Potomac Street, Suite 300, Centennial, Colorado 80112. In the event that the Company makes any amendment to, or grants any waiver from, a provision of the Code of Ethics for Senior Financial Officers that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer, controller, or certain other senior officers and requires disclosure under applicable SEC rules, the Company intends to disclose such amendment or waiver and the reasons for the amendment or waiver on the Company’s website or, as required by Nasdaq rules, file a Current Report on Form 8 K with the SEC reporting the amendment or waiver.
The Company’s Internet website address is provided as an inactive textual reference only. The information provided on the website is not incorporated into, and does not form a part of, this proxy statement.
The Company’s general policy with respect to related party transactions is included in its Code of Business Conduct and Ethics, the administration of which is overseen by the Audit Committee. Directors and officers are required to report any transaction that the Company would be required to disclose pursuant to Item 404(a) of Securities and Exchange Commission Regulation S-K (a “Related Party Transaction”) to the Audit Committee.
The Company collects information about potential Related Party Transactions in its annual questionnaire completed by directors and officers. Potential Related Party Transactions are subject to the review and approval of the non-interested members of the Audit Committee. In determining whether to approve any such transaction, the Audit Committee will consider such factors as it deems relevant, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in arm’s length negotiations with an unrelated third party.
The Company was not a party to any Related Party Transaction since the beginning of 2018.
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Board Oversight of Risk Management
The Board has overall responsibility for risk oversight with a focus on the most significant risks facing the Company. The Board relies upon the President and Chief Executive Officer to supervise day-to-day risk management, who reports directly to the Board and certain Committees on such matters as appropriate.
The Board delegates certain oversight responsibilities to its Committees. For example, while the primary responsibility for financial and other reporting, internal controls, compliance with laws and regulations and ethics rests with the management, the Audit Committee provides risk oversight with respect to the Company’s financial statements, the Company’s compliance with legal and regulatory requirements and corporate policies and controls, and the independent auditor’s selection, retention, qualifications, objectivity and independence. Additionally, the Compensation Committee provides risk oversight with respect to the Company’s compensation programs, and the Nominating and Governance Committee provides risk oversight with respect to the Company’s governance structure and processes and succession planning. The Board and each Committee consider reports and presentations from the members of management responsible for the matters considered to enable the Board and each Committee to understand and discuss risk identification and risk management.
The Audit Committee, operating under a written charter adopted by the Board, reports to and acts on behalf of the Board by providing oversight of the Company’s independent auditors and the Company’s financial management and financial reporting procedures. Management has primary responsibility for preparing the Company’s financial statements and establishing and maintaining effective internal financial controls and for the public reporting process. Moss Adams LLP, the Company’s independent registered public accountants, is responsible for auditing those financial statements and expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles.
In this context, the Audit Committee reviewed and discussed with management and Moss Adams LLP the audited financial statements for the year ended December 31, 2019, the Moss Adams audit fees, and management’s assessment of the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with Moss Adams LLP the matters that are required to be discussed by the applicable Public Company Accounting Oversight Board and SEC standards. Moss Adams LLP has provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding Moss Adams LLP’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Moss Adams LLP that firm’s independence. The Audit Committee also concluded that Moss Adams LLP’s provision of audit and non-audit services to the Company and its affiliates is compatible with Moss Adams LLP’s independence.
Based on the considerations referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2019 be included in the Company’s Annual Report on Form 10‑K for 2019 and selected Moss Adams LLP as the independent registered public accountants for the Company for 2020.
The Report was submitted by the following members of the Audit Committee of the Board:
Marvin K. Kaiser, Chairman
Tracy D. Pagliara
Karli S. Anderson
The information contained in the foregoing Audit Committee Report shall not be deemed to be “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into a future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent the Company specifically incorporates this Report by reference therein.
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In 2019, the compensation of non-employee directors consisted of an annual $50,000 cash retainer, earned at a rate of $12,500 per quarter. The compensation of the Company’s current Chairman of the Board, Mr. Cryan, consisted of $27,500 per quarter. All of the Company’s directors are also reimbursed for reasonable out-of-pocket expenses related to attendance at Board and Committee meetings.
In addition, each non-employee director earned $1,250 per quarter for each committee served upon, with the Chairman of each committee earning either an additional $2,500 per quarter (in the case of the Audit and Compensation Committees) or $1,250 per quarter (in the case of the Nominating and Corporate Governance and the Health, Safety, Environment and Public Affairs Committees) for such service.
The following table summarizes all compensation earned by directors, excluding Mr. Jones, whose compensation is set forth in the 2019 Summary Compensation Table, in the year ended December 31, 2019.
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Terence J. Cryan |
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| 120,000 |
Marvin K. Kaiser |
| 75,000 |
| — |
| 75,000 |
Patrick N. Burke |
| 21,766 |
| — |
| 21,766 |
Tracy D. Pagliara |
| 65,000 |
| — |
| 65,000 |
Karli S. Anderson |
| 72,295 |
| — |
| 72,295 |
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EXECUTIVES ANDADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
The executive officers serve at the discretion of the Board. All officers are employed on a full-time basis. The following table identifies the Company’s executive officers as of February 26, 2022.
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Name |
| Age | | | Position |
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Chad M. Potter | | 46 | | + | President and Chief Executive Officer |
Jeffrey L. Vigil | |
| | | Vice President—Finance, |
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| Chief Accounting Officer and Controller |
John W. Lawrence | | 60 | | ** | General Counsel & Corporate Secretary |
* | Mr. Cryan began serving as Executive Chairman on February 26, 2022. |
+ | Mr. Potter was appointed President and CEO on February 26, 2022, replacing Mr. Jones in those roles. Mr. Jones retired on February 25, 2022. |
** | Mr. Lawrence has been serving in a contractual capacity as General Counsel since October 2012 and as Corporate Secretary since May 2013. Mr. Lawrence joined the Company as an employee on February 26, 2022, and he will continue to serve as General Counsel and Corporate Secretary. |
Christopher M. JonesTerence J. Cryan – please see above under “Proposal 3:1: Election of Directors” for information about ChristopherTerence J. Cryan, the Company’s Executive Chairman
Chad M. Jones,Potter – please see above under “Proposal 1: Election of Directors” for information about Chad M. Potter, the Company’s President and Chief Executive Officer.
Jeffrey L. Vigil joined the Company as Vice President—Finance and Chief Financial Officer in June 2013. Mr. Vigil is a mining industry financial veteran with more than thirty years of financial management experience in both production stage and development stage enterprises. Previously, he served in various financial positions, including Chief Financial Officer, at Energy Fuels, a uranium company, from April 2009 to May 2013, where he was responsible for financial and management reporting, equity financings, tax planning and compliance, treasury functions and risk management. Mr. Vigil also managed financial, operational, and legal due diligence for a number of acquisitions. Prior to Energy Fuels, he served as Chief Financial Officer for Koala Corporation. Mr. Vigil is a graduate of the University of Wyoming with a Bachelor of Science degree in Accounting and is a licensed Certified Public Accountant in the stateState of Colorado.
Steven M. Cates joined the Company as Chief Accounting Officer and Controller in May 2021. Mr. Cates has over 20 years of financial and accounting experience in various industries including mining, oil and gas, real estate, and public accounting. Prior to joining Westwater, Mr. Cates served as the Vice President - Controller for Apartment Income REIT Corp. (NYSE: AIRC), formerly part of Apartment Investment and Management Company (NYSE: AIV), a real estate investment trust focused on apartment communities, from May 2019 to April 2021. Prior to his time at Apartment Income REIT Corp., Mr. Cates served as corporate controller for Caliber Midstream Partners, LP, an energy and oil infrastructure company, from September 2016 to May 2019, and previously, Mr. Cates held various accounting and financial reporting roles at American Midstream Partners, LP (2013-2016), Newmont Mining Corporation (NYSE: NEM) (2012-2013), and Thompson Creek Metals Company Inc. (2009-2012). Mr. Cates began his career at KPMG in 2002, where he most recently served as senior manager for audit and advisory services. Mr. Cates earned a Bachelor of Science degree in Accounting from the University of Redlands and is a Certified Public Accountant in the State of Colorado.
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John W. Lawrence has served the Company in a contractual capacity as General Counsel since October 2012 and as Corporate Secretary since May 2013. Mr. Lawrence became an employee of the Company in February 2022. Mr. Lawrence has over thirty-five years of legal and engineering experience for publicly traded companies. Previously, he served as General Counsel and Corporate Secretary for Ocean Power Technologies, Inc. (NYSE: OPTT), a renewable energy company providing electric power and communications solutions, and related services for remote offshore applications from June 2014 to January 2022. In addition, he served as General Counsel and Corporate Secretary for Louisiana Energy Services, LLC, a commercial uranium enrichment facility located in New Mexico and operating under the privately-owned, international consortium known as Urenco, from 2003 to 2008. Prior to 2003 and between 2008 and 2012, Mr. Lawrence was associated with several national law firms including Winston & Strawn, Shaw, Pittman, Potts & Trowbridge, and LeBoeuf, Lamb, Greene & MacRae. Mr. Lawrence holds a Juris Doctorate from Catholic University and received his Bachelor of Science in Nuclear Engineering from Purdue University.
Previously Dain A. McCoig was identified as an executive officer. Mr. McCoig joined the Company in 2004 as Plant Engineer and was promoted to Kingsville Dome Plant Supervisor in 2005, Senior Engineer in August 2008, Manager—Manager – South Texas Operations in April 2010, Vice President—South Texas Operations in January 2013 and Vice President—Operations in May 2018. Mr. McCoig earned a Bachelor of Science degree in Mechanical Engineering from Colorado School of Mines in 2002 and attained his certification as a Professional Engineer from the Texas Board of Professional Engineers in 2010.
Compensation Discussion and Analysis
In this section and the sections that follow, we discuss the Company’s compensation philosophy, and describe the compensation program for the senior executive team.team, and address a fundamental objective of aligning executive compensation with the long-term interests of stockholders. We explain how the Board’s Compensation Committee determines compensation for its senior executives and its rationale for specific 2019 decisions. We2021 decisions, and we also discuss numerous changesprovide a summary of the recent historical activities by the Compensation Committee has madethat are still relevant to its program over the last two years to address recent failed “Say-on-Pay” proposals and to advance its fundamental objective: aligning executive compensation with the long-term interests of stockholders.decision-making.
The Compensation Discussion and Analysis describes the compensation of the following named executive officers (“NEOs”) that were in place as of December 31, 2021. The philosophy presented below is expected to be applied by the Board to the NEOs”): that will be in place during Fiscal Year 2022 (see above).
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Name |
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| Title | |
Christopher M. Jones + | | President, Chief Executive Officer, and Director |
Jeffrey L. Vigil | | Vice |
Dain A. McCoig * | | Vice |
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+ | Mr. Jones retired from Westwater Resources on February 25, 2022. |
* | Mr. McCoig is discussed here as he served as an executive officer in 2021. Mr. McCoig is currently not serving as an executive officer in 2022. |
The Company’s executive compensation program is designed to attract and retain qualified management personnel, to align the Company’s management interests with that of its stockholders, and to reward exceptional organizational and individual performance. Performance of the Company’s executives is evaluated based on financial and non-financial goals that balance achievement of short-terms goals related to the continued improvement of the Company’s business and long-term goals that seek to maximize stockholder value.
As a result of a negative outcome on Westwater’s “Say-on-Pay” vote at the annual meetings of stockholders in April 2018 and April 2019, the Board and Compensation Committee took the following actions:
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Further discussion regarding Westwater’s specific performance and goal attainment, and changes made to its executive compensation program in response to the negative “Say-on Pay” vote, are included below.
Philosophy and Objectives of Our Compensation Plan
The Company’s compensation program is centered around a philosophy that focuses on management retention, alignment of interests between management and the stockholders and pay-for-performance compensation. The Company believes this philosophy allows the Company to compensate its NEOs competitively, while simultaneously ensuring continued development and achievement of key business strategy goals. The Compensation Committee firmly believes that the Company’s pay-for-performance philosophy should recognize both short- and long-term performance and should
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include both cash and equity compensation arrangements that are supported by strong corporate governance, including active and effective oversight by the Compensation Committee.
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The Compensation Committee has outlined the following objectives for compensation of our NEOs and considers such objectives in making compensation decisions:
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Objective | Description | |
Attraction and Retention | | The Company provides competitive compensation to its NEOs and |
Pay for Performance | | A significant portion of each NEO’s compensation is “at-risk” or variable, based on predetermined performance criteria. Such criteria include both short- and long-term goals, as well as financial and non-financial goals. The Compensation Committee considers each of these criteria in making its compensation decisions each year. |
Pay Mix | | The Company uses a variety of fixed-pay and incentive compensation forms, including cash, stock, options and RSUs. |
Alignment of Incentives | | The Company requires its CEO and CFO to obtain a significant stock ownership stake in the Company and tie a meaningful portion of NEO compensation to awards that vest over multi-year periods. |
Competitive Packages | | The Company evaluates its compensation program in an effort to provide a competitive compensation package to each NEO that takes into account their responsibilities, performance and organization. |
How Executive Compensation is Determined
Role of the Compensation Committee
The Compensation Committee oversees the Company’s executive compensation programs. Additionally, the Compensation Committee is charged with the review and approval of all annual compensation decisions relating to the NEOs and other Company officers.
The Compensation Committee is composed entirely of independent, non-management members of the Board. Each member of the Compensation Committee is both a “non-employee director” within the meaning of Rule 16b‑316b-3 of the Exchange Act, and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code. No Compensation Committee member participates in any of the Company’s employee compensation programs. Each year the Company reviews any and all relationships that each director has with the Company, and the Board subsequently reviews these findings. The responsibilities of the Compensation Committee, as stated in its charter, include the following:
| review and make such recommendations to the Board as the Compensation Committee deems advisable with regard to all incentive-based compensation plans and equity-based plans; |
| review and approve the corporate goals and objectives that may be relevant to the compensation of |
| evaluate the performance of the NEOs and other Company officers in light of the goals and objectives that were set and determine and approve the compensation of the NEOs and other Company officers based on such evaluation; and |
| review and approve the recommendations of the CEO with regard to the compensation of all officers of the Company other than the CEO. |
Role of Management
The Compensation Committee considers input from the CEO when making executive compensation decisions for the other NEOs.NEOs and other Company officers. The CEO’s input is useful because the CEO reviews and observes the
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performance of the other NEOs.NEOs and other Company officers. No other NEO or Company officer is present or privilegedprivy to the recommendations of the CEO to the Compensation Committee. The Compensation Committee and the Board of Directors determine the compensation of the CEO without any management input.
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Financial and Non-Financial Performance Goals
The Compensation Committee believes that a significant portion of each NEO’s and other Company officer’s compensation should be tied to the Company’s performance measured against specific financial performance targets. The Company measures financial performance awards against certain operational cost targets, budget targets and exploration, development and production restoration and/or reclamation objectives. The Compensation Committee also believes that a significant portion of NEO compensation for the NEOs and other Company officers should be tied to the creation and protection of stockholder value through the achievement of non-financial performance goals and core values. Both financial and non-financial performance goals have changed from time to time and will continue to change as the conditions of the Company and the graphite lithium and uranium marketsmarket evolve. The Company’s core values are identified below.
Core Values: Continuous Improvementimprovement in:
● | Safety: |
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o | Of our environment; |
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oOf each other;
oOf our environment;
oOf the communities where we work;
oOf our assets; and
oOf our reputation.
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o | Of our reputation. |
● | Cost management: |
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oEveryone manages cost;
oFocus on first quartile cost performance; and
oEffective and efficient use of our cash.
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o | Highest level of performance every day; |
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o | Conservative promises well kept. |
oImproving our processes every day;
oLeadership with integrity counts;
oEmpowered people make the difference; and
oConservative promises well kept.
Peer Group Analysis and Use of Compensation Consultants
The Company has historically evaluated its compensation program against the programs at other companies in order to ensure its compensation program is competitive. Peer companies were selected based on (i) revenue scope within a reasonable range, (ii) asset size within a reasonable range of the Company’s asset size, and (iii) miningenergy technology companies with operational scope comparable to that of the Company – specifically, mining companies with operational activities versus pure “junior” developmental/exploration companies.Company. During 2018,2021, the Compensation Committee utilized the services of MeridianNFP Compensation Partners which reviewedConsulting (f/k/a Longnecker & Associates) to help identify an appropriate group of peer companies and to assist the Board in structuring Westwater’s LTIlong-term incentive program to ensure it was competitive as an incentive and retention program.
In June 2013, Westwater adopted the 2013 Omnibus Incentive Plan (the “2013 OIP”“Incentive Plan”) to provide flexibility in structuring its executive compensation program and to ensure that it would have a sufficient number of shares of common stock available for equity-based awards that it expects to make to eligible individuals over the next several years. The 2013 OIPIncentive Plan replaced all prior plans and no more awards were granted under any of the prior plans following the adoption of the 2013 OIP.Incentive Plan.
The 2013 OIPIncentive Plan provides the Compensation Committee substantial flexibility in structuring awards that meet the objectives outlined above. In particular, the 2013 OIPIncentive Plan permits the grant of performance-based and time-based
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RSUs, with many possible performance criteria available as the Compensation Committee determines to be appropriate. In addition to RSUs, the 2013 OIPIncentive Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards. All of the Company’s officers, directors and employees, and the officers, directors and employees of our subsidiaries and affiliates are eligible to receive awards under the 2013 OIP.Incentive Plan. In addition, consultants,
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advisors, and certain other individuals whose participation in the 2013 OIPIncentive Plan is determined to be in the best interests of the Company by the Compensation Committee may participate. Incentive share options, however, are only available to employees. Please see Proposal 2 for further information about the 2013 OIPIncentive Plan and certaina proposed amendmentsamendment to the 2013 OIP.Incentive Plan to extend its term for another 5 years or until June 4, 2028.
The 2013 OIPIncentive Plan is administered by the Compensation Committee. The Compensation Committee also interprets the provisions of the 2013 OIP.Incentive Plan. The Compensation Committee also determines whowhich officers, employees and consultants if any will receive awards under the 2013 OIP,Incentive Plan, the types of awardawards made, the terms and conditions of awards, and the number of shares of common stock subject to an award, if the award is equity-based.
Executive Compensation Elements
The following table illustrates the principal elements of the Company’s executive compensation program, each of which is evaluated and updated on an annual basis by the Compensation Committee:
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In addition to the above-mentioned elements, the Company also provides a retirement, health and welfare benefit component to the executive compensation program.
Actions Taken by the Board and the Compensation Committee as a Result of the Failed Say-on-Pay Proposals
The Compensation Committee takes shareholder feedback seriously. The Committee considers the results of the advisory vote of the stockholders at each annual meeting as the Committee completes its annual review of each pay element and the compensation packages provided to our NEOs. Based on its review and analysis as well as stockholder outreach in 2018 and 2019, the Compensation Committee regularly evaluates whether the compensation program provides a competitive pay-for-performance package that effectively incentivizes its NEOs to maximize stockholder value. The Compensation Committee will continue to consider the outcome of the Company’s Say-on-Pay votes and its stockholder views when making future compensation decisions for our NEOs.
At our 2018 Annual Meeting, 51% of the shares cast on the Say-on-Pay proposal voted against the compensation paid to our NEOs, 45% voted to approve such compensation, and 4% abstained. Due to the results of the Say-on-Pay vote, the Compensation Committee initiated and directed a comprehensive review of the Company’s compensation policies and practices. The Board of Directors directed management to contact some of our largest stockholders to determine how the Company can improve its executive compensation practices. As a result of investor outreach, the Compensation Committee did not award short-term incentive (STI) bonuses to NEOs for 2018. In addition, since total shareholder return in 2018 did not meet specific performance objectives identified in the 2017 LTI goals set by the Compensation Committee, 2018 performance-based RSUs were forfeited.
Also in direct response to the failed Say-on-Pay proposal at the 2018 Annual Meeting, the Board of Directors held a meeting on January 29, 2019 and therein accepted an offer from Patrick Burke to step-down as Chairman of the Compensation Committee. At the same meeting, the Board appointed Karli Anderson to the Compensation Committee, and also appointed her to serve as the new Chairman of the Compensation Committee effective immediately. Mr. Burke continued to serve on the Compensation Committee until April 18, 2019, when the 2019 annual general meeting of stockholders was held and Mr. Burke’s term as a director ended.
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At our 2019 Annual Meeting, 45% of the shares cast on the Say-on-Pay proposal voted against the compensation paid to our NEOs, 39% voted to approve such compensation, and 26% abstained. In direct response to the failed Say-on-Pay proposals at the 2018 and 2019 Annual Meetings, the Compensation Committee of the Board of Directors held meetings on August 6, 2019 and August 15, 2019 and therein directed the Westwater management team to prepare a survey of stockholders in order to solicit their input regarding the Company’s compensation structure for its named executive officers. The stockholder survey was conducted in December 2019 and its results are discussed below.
Deliberations of the Compensation Committee in 2019
The Compensation Committee of the Board of Directors currently consists of three independent directors: Ms. Anderson (as Chair), and Tracy D. Pagliara and Marvin K. Kaiser. In 2019, the Compensation Committee held seven meetings and its members engaged in numerous additional informal telephone conference calls. At every meeting in 2019, the Compensation Committee discussed executive compensation issues and made several significant decisions involving both short-term incentive (STI) awards and long-term incentive (LTI) awards for the named executive officers, as follows:
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othat the three NEOs would forego an STI award for 2018 in light of the failed Say-on-Pay proposal at the 2018 Annual Meeting and the absence of specific STI goals and objectives for 2018; and
othat two-thirds of previously issued LTI awards that were tied to shareholder performance metrics would be forfeited because those metrics were not met.
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oin direct response to failed Say-on-Pay proposals at the 2018 and 2019 Annual Meetings of Stockholders, the Compensation Committee discussed the value of conducting a survey of the Company’s stockholders in matters involving executive compensation and directed the Westwater management team to prepare such a survey for consideration by the Committee and eventual posting on the Company’s website after the third quarter financials were issued; and
ore-affirming its decision not to issue STI awards to the three NEOs for fiscal year 2018 but concluding that, as appropriate, STI and LTI awards for performance in fiscal year 2019 could be determined, in part, based upon extraordinary circumstances in 2019; and
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oLTI awards made in July 2018 that were conditioned upon a stockholder approval of an increase to the 2013 Omnibus Incentive Plan, which occurred at the 2019 Annual Meeting in April 2019, should be made; and
othe nature of the stockholder survey as well as the method and timing of its availability was discussed.
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othe Committee acknowledged that the STI goals established at the beginning of 2019 and decided against changing those goals despite changes in the Company’s business activities, which occurred throughout the year, making some of those goals unachievable;
othe Committee recognized that some of the Company business activities that occurred in 2019 may warrant a discretionary STI award and requested the Westwater management team to address those issues separately; and
othe Committee requested that its deliberations during fiscal 2019 on executive compensation be incorporated into the Compensation Discussion & Analysis in this proxy statement.
2019 Stockholder Survey on Executive Compensation
As noted above, on August 6, 2019 and on August 15, 2019, the Compensation Committee of the Board of Directors held meetings and therein directed the Westwater management team to prepare a survey of stockholders regarding the Company’s compensation structure for its NEOs. Through informal discussions with Westwater’s management team, the Compensation Committee and other members of the Board of Directors participated in the development of the survey questions. On December 7, 2019, the Chairman of the Board approved the survey and issued a letter to the Company’s stockholders encouraging their participation. Immediately thereafter the Westwater management team posted the survey to the Company’s website, caused the survey also to be posted to website of a third-party service provider, and sent a broadcast email message to approximately 2,500 addresses from Westwater’s investor relations database alerting them to the availability of the survey.
The survey was posted for approximately two (2) months and during that time Westwater received 64 responses, of which 55 responses indicated that they owned Westwater common stock. All responses were provided anonymously. The survey revealed that the stockholders are aligned with the Board of Directors in their expectations regarding compensation planning for the Company’s NEOs. The stockholders agreed with the Board that NEO incentive compensation should emphasize goal achievement, should be “at risk” and should be tied to approved key performance indicators. In addition, the stockholders agreed that STI and LTI awards should be granted when the Westwater management team is challenged with and achieves goals that include specific performance criteria, but if those criteria are not satisfied, the STI or LTI award should be “at risk” – i.e., the failure to achieve a goal forfeits in part or in whole the incentive compensation that is tied to the goal.
The survey also reveals that the stockholders would prefer LTI awards issued to NEOs to consist principally of performance-based stock awards and to a lesser extent time-based awards. When evaluating the long-term performance of the Company’s executive management team, the preference is to reward in greater proportion the achievement of specific goals, with the remainder tied to length of service. Finally, the surveyed stockholders believe that approximately one-quarter of the total NEO compensation should involve equity compensation.
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2019 STI and LTI Goals and Objectives
The Company did not have proper goals and objectives for STI awards in place for 2018, which contributed in part to the decision by the Compensation Committee not to make an STI award to the NEOs for fiscal 2018. The Company had LTI goals and objectives from 2017 that were both performance-based and time-based, and which were operative in 2018; however, the performance-based portions of those 2017 LTIs were not met and they lapsed in 2018. The Company had only time-based LTI goals in 2018, which were operative in both 2018 and 2019.
In early 2019, the Compensation Committee directed the Westwater management team to prepare both STI and LTI goals for 2019 and beyond, and to present them to the Committee for consideration and approval. As noted above, on February 14, 2019, the Compensation Committee held a meeting and therein considered 2019 STI goals and 2019 LTI goals that were presented by Westwater management and discussed whether different goals should be added to or substituted for the 2019 STIs. The Committee directed the management team to work towards the proposed goals while recognizing that changes could be made after further consideration by the Committee. On April 2, 2019, the Compensation Committee held a meeting and therein approved the following 2019 STIs and 2019 LTIs based upon input received from the Westwater management team, all of which goals were substantially uncertain of achievement as of April 2, 2019:
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The Compensation Committee’s evaluation of the NEO’s performance in fiscal 2019 against the 2019 STI goals, as well as the evaluation of NEO’s performance against the 2017 LTI goals and the 2018 LTI goals is discussed below.
Evaluation of NEO performance in fiscal 2019
The 2019 compensation mix for the NEOs demonstrates the Company’s philosophy regarding significant long-term and performance-based compensation. Over 22% of the total compensation of CEO, and approximately 18% of total compensation for all of NEOs, was performance-based and not guaranteed. The Compensation Committee anticipates granting additional long-term performance-based and time-based equity awards to executive officers during the course of 2020 to continue aligning their long-term incentives with those of stockholders.
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The following is a summary of the components of the compensation policy for NEOs. As described in greater detail below, for 2020 short-term and long-term incentive programs were effective for each NEO—specifically, Messrs. Jones, Vigil and McCoig.
Base Salary
The
Annual fixed cash compensation
Attract and retain qualified and high performing executives
Short-Term Incentive Compensation Committee establishes base salaries for our executives
Annual compensation based on the scopeachievement of predetermined performance goals
Incentivize NEOs and Company officers to achieve the short-term performance goals established by the Compensation Committee
Long-Term Incentive Compensation
Long-term equity awards granted as time-based and performance-based RSUs or stock options
Retain NEOs and Company officers and align their responsibilities, and takes into account competitive market compensation paid by comparable mining industry companies. The Company believes that a competitive compensation program will enhance its ability to attract and retain senior executives. In each case,interests with the interests of the stockholders
In addition to the above-mentioned elements, the Company also provides a retirement, health, and welfare benefit component to the executive compensation program.
Favorable Vote on the Say-on-Pay Proposal in 2021, and Historical Comparison 2018 through 2020
The Board and the Compensation Committee takes stockholder feedback seriously. The Committee considers the results of the advisory vote of the stockholders at each annual meeting as the Committee completes its annual review of each pay element and the compensation packages provided to our NEOs.
At our 2021 Annual Meeting, 84% of the shares cast on the Say-on-Pay proposal voted to approve the compensation paid to our NEOs, 13% voted against such compensation, and 3% abstained. ��Those results are markedly improved from the 2018, 2019 and 2020 Annual Meetings. The following table illustrates the change over time. Although results are improving year-over-year, the Board and the Compensation Committee will continue to focus on
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driving NEO performance against specific goals and ensuring the interest of management and stockholders are aligned properly.
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| For Say-on-Pay | Against Say-on-Pay | Abstain from Say-on-Pay |
2021 Annual Meeting | 84% | 13% | 3% |
2020 Annual Meeting | 72% | 26% | 2% |
2019 Annual Meeting | 39% | 45% | 16% |
2018 Annual Meeting | 45% | 51% | 4% |
Due to the results of the Say-on-Pay vote at the 2018 Annual Meeting, the Compensation Committee initiated and directed a comprehensive review of the Company’s compensation policies and practices. The Board of Directors directed management to contact some of our largest stockholders to determine how the Company could improve its executive compensation practices. As a result of investor outreach, the Compensation Committee did not award short-term incentive (STI) bonuses to NEOs for 2018. In addition, since total stockholder return in 2018 did not meet specific performance objectives identified in the 2017 LTI goals set by the Compensation Committee, 2018 performance-based RSUs were forfeited.
Also in direct response to the Say-on-Pay proposal at the 2018 Annual Meeting, the Board of Directors held a meeting on January 29, 2019, and therein appointed Karli S. Anderson to the Compensation Committee, and also appointed her to serve as the new Chair of the Compensation Committee effective immediately. The former Chair continued to serve on the Compensation Committee until April 18, 2019, when the 2019 annual general meeting of stockholders was held and his term as a director ended.
In direct response to the Say-on-Pay proposals at the 2018 and 2019 Annual Meetings, the Compensation Committee of the Board of Directors held meetings in August 2019 and therein directed the Westwater management team to prepare a survey of stockholders in order to solicit their input regarding the Company’s compensation structure for its named executive officers. On December 7, 2019, the Chairman of the Board approved the survey and issued a letter to the Company’s stockholders encouraging their participation. Immediately thereafter the Westwater management team posted the survey to the Company’s website, caused the survey also to be posted to the website of a third-party service provider, and sent a broadcast email message to approximately 2,500 addresses from Westwater’s investor relations database alerting them to the availability of the survey.
The survey was posted for approximately three weeks and during that time Westwater received 62 responses, of which 58 responses indicated that they owned Westwater common stock. All responses were provided anonymously. The survey revealed that the stockholders are aligned with the Board of Directors in their expectations regarding compensation planning for the Company’s NEOs. The stockholders agreed with the Board that NEO incentive compensation should emphasize goal achievement, should be “at risk” and should be tied to approved key performance indicators. In addition, the stockholders agreed that STI and LTI awards should be granted when the Westwater management team is challenged with and achieves goals that include specific performance criteria, but if those criteria are not satisfied, the STI or LTI award should be “at risk” – i.e., the failure to achieve a goal, forfeits in part or in whole the incentive compensation that is tied to the goal.
The survey also reveals that the stockholders would prefer LTI awards issued to NEOs to consist principally of performance-based stock awards and to a lesser extent time-based awards. When evaluating the long-term performance of the Company’s executive management team, the preference is to reward in greater proportion the achievement of specific goals, with the remainder tied to length of service. Finally, the surveyed stockholders believe that approximately one-quarter of the total NEO compensation should involve equity compensation.
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Deliberations of the Compensation Committee Regarding NEO Performance in 2021
The Compensation Committee of the Board of Directors currently consists of three independent directors: Ms. Anderson (as Chair), and Tracy D. Pagliara and Deborah A. Peacock. In 2021, the Compensation Committee held five meetings and its members engaged in numerous additional informal telephone conference calls. At every meeting in 2021, the Compensation Committee discussed executive compensation issues and made several significant decisions involving the STI plan and the LTI plan for the named executive officers, as follows:
● | On February 8, 2021, the Compensation Committee |
● | On February 15, 2021, the Compensation Committee held a meeting to |
● | On May 10, 2021, the Compensation Committee held a meeting to discuss detailed findings and recommendations on NEO compensation from their compensation consultant, NFP Compensation Consulting (f/k/a Longnecker & Associates). The Committee discussed the proper peer group to use when evaluating
|
● | On |
● | On December 20, 2021, the Compensation Committee held a meeting to consider whether and to what extent the NEOs had satisfied the FY2021 STI Plan
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● | On January 18, 2022, the Board held a meeting to discuss whether the NEOs had satisfied the FY2021 LTI Plan objectives. The Committee considered the analysis performed by the CFO that |
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2021 Grants of 2021 Plan-Based Awards
2021 STI Plan Awards
The 2021 STI plan goals were approved by the Compensation Committee in February 2021, and those goals are detailed below along with performance success measurements. On December 20, 2021, the Compensation Committee determined that the management team achieved 82.5 percent of the total STI goals:
● | 2021 STI Goal 1: Lost time and environmental incident free, and ESG reporting system in place supporting plan for |
o | The Company achieved this goal. |
● | 2021 STI Goal 2: Feasibility Study completion (weighted at 30%). |
o | The Company achieved this goal. |
● | 2021 STI Goal 3: MOU/LOI with at least 2 lithium-ion battery (“LiB”) customers (weighted at 15%). |
o | The Company partially achieved this goal. |
● | 2021 STI Goal 4: Sample shipments to 10 customers at appropriate quality standards (weighted at 25%). |
o | The Company achieved and |
● | 2021 STI |
o | The Company partially achieved this goal. The Committee recognized that the
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● | 2021 LTI Plan Awards |
The 2021 LTI plan goals were approved by the Compensation Committee and the Board in May 2021, and those goals are detailed below along with performance success measurements. In January 2022, the Board determinations regarding the LTI goals during 2021 are as follows:
● | 2021 LTI Tranche 1 – time-based vesting over three |
o | On December 31, 2021, all Company personnel included in |
The Compensation Committee considers the anticipated tax treatment to the Company when determining executive compensation. It should be noted that there are many factors which are considered by the Compensation Committee in determining executive compensation, and the Compensation Committee retains flexibility in establishing the Company’s executive compensation programs.
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The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to
o | Therefore, the Board |
This Report
● | 2021 LTI Tranche 2 – performance-based vesting over three years (weighted one-third), which for December 31, 2021, was |