<PAGE> 1
EXHIBIT 3
2001
INTERNATIONAL URANIUM CORPORATION
NOTICE OF ANNUAL MEETING AND
MANAGEMENT PROXY CIRCULAR
<PAGE> 2
2
INTERNATIONAL URANIUM CORPORATION
2
INTERNATIONAL URANIUM CORPORATION
<PAGE> 3
INTERNATIONAL URANIUM CORPORATION
(INCORPORATED UNDER THE LAWS OF ONTARIO)
MANAGEMENT PROXY CIRCULAR
All dollar amounts in this Management Proxy Circular refer to United States
currency, unless otherwise noted.
SOLICITATION OF PROXIES
This circular is furnished in connection with the solicitation by the management
of International Uranium Corporation (the "Corporation") of proxies to be used
at the annual meeting of the shareholders of the Corporation to be held at the
Vancouver offices of the Corporation at Suite 1320, 885 West Georgia Street,
Vancouver, British Columbia, on Thursday, February 15, 2001, at the hour of
10:00 o'clock in the forenoon (Vancouver time) for the purposes set forth in the
enclosed notice. It is not intended to use the accompanying proxy for the
purposes of voting on the consolidated financial statements of the Corporation
and its subsidiaries prepared for the fiscal year ended September 30, 2000 and
the reports of management and the auditors.
THIS SOLICITATION IS MADE BY THE MANAGEMENT OF THE CORPORATION. It is expected
that the solicitation will be primarily by mail. Proxies may also be solicited
personally or by telephone by officers, directors and regular employees of the
Corporation without special compensation. No solicitation will be made by
specifically engaged employees or soliciting agents. The cost of solicitation
will be borne by the Corporation. Except as otherwise stated, the information
contained herein is given as of December 20, 2000.
The Corporation has distributed copies of the notice of annual meeting of
shareholders, this circular and forms of proxy (collectively, the "documents")
to clearing agencies, securities dealers, banks and trust companies, or their
nominees ("intermediaries"), for onward distribution to shareholders of the
Corporation whose shares are held by or in the custody of those intermediaries
("non-registered shareholders"). The intermediaries are required to forward the
documents to non-registered shareholders.
The solicitation of proxies from non-registered shareholders will be carried out
by intermediaries, or by the Corporation if the names and addresses of
non-registered shareholders are provided by the intermediaries. The cost of the
solicitation will be borne by the Corporation.
Non-registered shareholders who wish to file proxies should follow the
directions of their intermediary with respect to the procedure to be followed.
Generally, non-registered shareholders will either:
(a) be provided with a form of proxy executed by the intermediary but
otherwise not completed. The non-registered shareholder may complete the
proxy and return it directly to the Corporation's transfer agent; or
(b) be provided with a request for voting instructions. The intermediary is
required to send the Corporation an executed form of proxy completed in
accordance with any voting instructions received by it.
APPOINTMENT, REVOCATION AND VOTING OF PROXIES
THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY ARE DIRECTORS OR OFFICERS OF THE
CORPORATION. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON TO REPRESENT
THE SHAREHOLDER AT THE MEETING OR ANY ADJOURNMENT THEREOF MAY DO SO EITHER BY
INSERTING THE PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY OR
BY COMPLETING ANOTHER PROPER FORM OF PROXY AND, IN EITHER CASE, DEPOSITING THE
COMPLETED PROXY AT THE OFFICE OF COMPUTERSHARE INVESTOR SERVICES INC. (FORMERLY
MONTREAL TRUST COMPANY OF CANADA) AT THE ADDRESS SPECIFIED IN THE PROXY NOT LESS
THAN FORTY-EIGHT (48) HOURS (EXCLUDING SATURDAYS AND HOLIDAYS) BEFORE THE TIME
OF THE MEETING OR ANY ADJOURNMENT THEREOF, OR WITH THE CHAIRMAN OF THE MEETING
PRIOR TO THE COMMENCEMENT OF THE MEETING OR ANY ADJOURNMENT thereof.
A proxy given by a shareholder for use at the meeting or any adjournment thereof
may be revoked at any time prior to its use. In addition to revocation in any
other manner permitted by law, a proxy may be revoked by an instrument in
writing executed by the shareholder or by the shareholder's attorney authorized
in writing or, if the shareholder is a corporation, under its corporate seal or
by an officer or attorney thereof duly authorized, and deposited at the
registered office of the Corporation at any time up to and including the last
business day preceding the day of the meeting, or any adjournment thereof, at
which the proxy is to be
1
INTERNATIONAL URANIUM CORPORATION
<PAGE> 4
used, or with the Chairman of the meeting on the day of the meeting, or any
adjournment thereof, and upon either of such deposits the proxy is revoked. The
registered office of the Corporation is located at: Scotia Plaza, Suite 2100, 40
King St. West, Toronto, Ontario, Canada, M5H 3C2.
The form of proxy affords the shareholder an opportunity to specify that the
shares registered in the shareholder's name shall be voted or withheld from
voting in respect of the election of each of management's nominees for directors
as set out in this circular as directors of the Corporation and the
reappointment of PricewaterhouseCoopers LLP as auditors of the Corporation at a
remuneration to be fixed by the board of directors of the Corporation (the
"Board").
On any ballot that may be called for, the shares represented by proxies in
favour of management nominees will be voted or withheld from voting in respect
of the election of each of management's nominees for directors as set out in
this circular as directors of the Corporation and the reappointment of
PricewaterhouseCoopers LLP as auditors at a remuneration to be fixed by the
Board, in each case in accordance with the specifications made by shareholders
in the manner referred to above.
IN RESPECT OF PROXIES IN WHICH THE SHAREHOLDERS HAVE NOT SPECIFIED THAT THE
PROXY NOMINEES ARE REQUIRED TO VOTE OR WITHHOLD FROM VOTING IN RESPECT OF THE
ELECTION OF EACH OF MANAGEMENT'S NOMINEES FOR DIRECTORS AS SET OUT IN THIS
CIRCULAR AS DIRECTORS OF THE CORPORATION AND THE REAPPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS AUDITORS AT A REMUNERATION TO BE FIXED BY THE
BOARD, THE SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL
BE VOTED IN FAVOUR OF THE ELECTION OF EACH OF MANAGEMENT'S NOMINEES FOR
DIRECTORS AS SET OUT IN THIS CIRCULAR AS DIRECTORS OF THE CORPORATION AND IN
FAVOUR OF THE REAPPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS AUDITORS AT A
REMUNERATION TO BE FIXED BY THE BOARD.
THE ENCLOSED FORM OF PROXY CONFERS DISCRETIONARY AUTHORITY ON THE PERSONS NAMED
IN IT WITH RESPECT TO AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED IN THE
NOTICE OF MEETING OR OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF. At the time of printing of this circular the management
of the Corporation knows of no other matters to come before the meeting other
than the matters referred to in the notice of meeting. However, if any other
matters which are not now known to management should properly come before the
meeting or any adjournment thereof, the shares represented by proxies in favour
of management nominees will be voted on such matters in accordance with the best
judgment of the proxy nominee.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
As at the date hereof, there are 65,525,066 common shares of the Corporation
outstanding. Each shareholder is entitled to one vote for each common share
shown as registered in the shareholder's name on the record date. The directors
have fixed the close of business on January 5, 2001, as the record date for the
meeting. Only shareholders of record as at the close of business on January 5,
2001, are entitled to receive notice of and to attend and vote at the meeting
except to the extent that a person has transferred the ownership of any such
shares after that date and the transferee requests not later than 10 days before
the meeting that its name be included in the list of shareholders entitled to
vote at the meeting, in which case the transferee is entitled to vote its shares
at the meeting.
The following table sets forth the only persons who, to the knowledge of the
directors and officers of the Corporation, beneficially own or exercise control
or direction over shares carrying more than 10% of the voting rights attached to
all shares of the Corporation:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE
---------------- ---------------- ----------
<S> <C> <C>
Lundin, Adolf H. 22,500,000 34.3%
</TABLE>
ELECTION OF DIRECTORS
The Board consists of seven (7) directors to be elected annually. Each director
will hold office until the next annual meeting of shareholders or until his
successor is duly elected unless his office is earlier vacated in accordance
with the by-laws of the Corporation. It is intended that on any ballot that may
be called for relating to the election of directors, the shares represented by
proxies in favour of management nominees will be voted in favour of the election
of each of such persons as directors of the Corporation, unless a shareholder
has specified in its proxy that the shareholder's shares are to be withheld from
voting in the election of directors.
2
INTERNATIONAL URANIUM CORPORATION
<PAGE> 5
In the following table and notes is stated the name of each person proposed to
be nominated by management for election as a director, all other positions and
offices with the Corporation and any significant affiliate now held by him, if
any, his principal occupation or employment, the period or periods of service as
a director of the Corporation and the approximate number of shares of the
Corporation beneficially owned by him directly or indirectly or over which he
exercises control or direction:
<TABLE>
<CAPTION>
COMMON SHARES OF
THE CORPORATION
BENEFICIALLY OWNED,
DIRECTLY OR
PERIOD OF INDIRECTLY, OR
NAME AND MUNICIPALITY OF SERVICE AS A CONTROLLED OR PRESENT PRINCIPAL OCCUPATION AND POSITION WITH THE
RESIDENCE DIRECTOR DIRECTED CORPORATION
------------------------ ------------ --------------------- --------------------------------------------------
<S> <C> <C> <C>
LUKAS H. LUNDIN May 9, 1997 Chairman of the Board of the Corporation; Director
Vancouver, BC to and officer of a number of publicly-traded natural
present 458,500 resource companies, including: Santa Catalina
Mining Corp., International Curator Resources
Ltd., Tenke Mining Corp., Tanganyika Oil Company
Ltd. and South Atlantic Resources Ltd.
RON F. HOCHSTEIN April 6, 2000 President and Chief Executive Officer of the
Lakewood, CO to 100,000 Corporation since April 6, 2000; from January 31,
present 2000 to April 6, 2000, Vice President and Chief
Operating Officer of the Corporation
EARL E. HOELLEN May 9, 1997 Self-employed businessman; October 24, 1996 to
Englewood, CO to 750,000 April 6, 2000, President and Chief Executive
present Officer of the Corporation.
WILLIAM A. RAND May 9, 1997 Self-employed businessman.
Vancouver, BC to Nil*
present
JOHN H. CRAIG May 9, 1997 Lawyer, partner of Cassels Brock & Blackwell LLP
Toronto, ON to 155,000
present
CHRISTOPHER J. F. HARROP May 9, 1997 November 1994 to present, Senior Vice-President
Toronto, ON to 300,926 and Director, Canaccord Capital Corp.
present
DAVID C. FRYDENLUND May 9, 1997 Vice President, General Counsel, Chief Financial
Lone Tree, CO to 200,000 Officer and Corporate Secretary of the
present Corporation.
</TABLE>
*A total of 200,000 shares are held in the name of Rand Edgar Capital Corp., a
company which is owned by the families of Mr. Rand and of a business associate
of Mr. Rand.
Each of the above nominees was elected to his present term of office at the
annual meeting of shareholders of the Corporation held on March 17, 2000, except
for Mr. Ron Hochstein who was appointed a director of the Corporation on April
6, 2000 to fill the vacancy created by the resignation of Mr. Adolf H. Lundin as
a director of the Corporation.
The information as to shares beneficially owned or over which the directors
exercise control or direction, not being within the knowledge of the
Corporation, has been furnished by the respective directors individually.
All of the above-named nominees have held their present positions or other
executive positions with the same or associated firms or organizations during
the past five years, except as follows:
3
INTERNATIONAL URANIUM CORPORATION
<PAGE> 6
o Mr. Ron Hochstein was Vice President, Corporate Development of the
Corporation from October 11, 1999 to January 30, 2000, and was an
engineering consultant with the AGRA-Simons Mining Group, an engineering
and consulting firm, from July 1995 to October 1999.
o During the period August 1998 to August 1999, Mr. Harrop was Chairman and
a director of Northern Securities Inc.
o During the period July 1996 to July 1997, Mr. Frydenlund was
Vice-President of Namdo Management Services Ltd., a management services
company. Prior to July 1996, Mr. Frydenlund was a partner with the law
firm of Ladner Downs.
If any of the above-named nominees is for any reason unavailable to serve as a
director, proxies in favour of management will be voted for another nominee in
their discretion unless the shareholder has specified in the proxy that its
shares are to be withheld from voting in the election of directors.
The Board does not have an executive committee. The Board has established an
Audit Committee, a Compensation Committee, a Corporate Governance and Nominating
Committee and an Environment, Health and Safety Committee. The following table
sets out the members of such Committees:
<TABLE>
<CAPTION>
CORPORATE GOVERNANCE ENVIRONMENT, HEALTH AND
AUDIT COMMITTEE COMPENSATION COMMITTEE AND NOMINATING COMMITTEE SAFETY COMMITTEE
--------------- ---------------------- ------------------------ -----------------------
<S> <C> <C> <C>
William A. Rand Lukas H. Lundin Christopher J.F. Harrop Christopher J.F. Harrop
John H. Craig William A. Rand William A. Rand David C. Frydenlund
Christopher J.F. Harrop John H. Craig John H. Craig John H. Craig
</TABLE>
APPOINTMENT AND REMUNERATION OF AUDITORS
In the past, the Board has negotiated with the auditors of the Corporation on an
arm's length basis in determining the fees to be paid to the auditors. Such fees
have been based upon the complexity of the matters in question and the time
incurred by the auditors. Management believes that the fees negotiated in the
past with the auditors were reasonable in the circumstances and would be
comparable to fees charged by auditors providing similar services.
PricewaterhouseCoopers LLP was first appointed as auditors of the Corporation on
May 9, 1997. Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted in favour of the reappointment of
PricewaterhouseCoopers LLP, Chartered Accountants, as auditors of the
Corporation to hold office until the close of the next annual meeting of the
Corporation, at a remuneration to be determined by the Board.
EXECUTIVE COMPENSATION
The following table summarizes the compensation of each of the named executive
officers of the Corporation for the fiscal year ended September 30, 2000, as
well as the fiscal periods ended September 30, 1999 and September 30, 1998.
4
INTERNATIONAL URANIUM CORPORATION
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------------------------------------------
AWARDS PAYOUTS
-------------------------------------------
OTHER ANNUAL SECURITIES RESTRICTED
COMPEN- UNDER SHARES OR LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS SATION OPTIONS/SARS RESTRICTED PAYOUTS COMPENSATION
POSITION YEAR (US$)(1) (US$) (US$) GRANTED(#) SHARE UNITS(US$) (US$) (US$)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
------------------------- --------- -------------- --------- ------------- --------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ron F. Hochstein 2000 128,000 Nil Nil 1,250,000 Nil Nil Nil
President and Chief 1999 Nil Nil Nil Nil Nil Nil Nil
Executive Officer(2)(3) 1998 Nil Nil Nil Nil Nil Nil Nil
David C. Frydenlund, 2000 158,400 Nil 9,000(5) 700,000 Nil Nil Nil
Vice President, General 1999 152,100(4) Nil 9,000(5) 200,000 Nil Nil Nil
Counsel, Chief 1998 150,000 Nil 9,000(5) Nil Nil Nil Nil
Financial Officer, and
Corporate Secretary(2)
Earl E. Hoellen, 2000 104,769 Nil 2,024(9) Nil Nil Nil 90,948(6)
(former President and 1999 180,000 Nil 2,500(9) 375,000 Nil Nil Nil
Chief Executive 1998 180,000 Nil 2,500(9) Nil Nil Nil Nil
Officer)(6)
Harold R. Roberts, 2000 50,268 Nil 1,229(9) Nil Nil Nil 40,195(7)
(former Vice President, 1999 140,000 Nil 2,525(9) 75,000 Nil Nil Nil
Operations)(7) 1998 140,000 Nil 2,025(9) Nil Nil Nil Nil
Rick L. Townley, 2000 56,269 Nil 844(9) Nil Nil Nil 26,250(8)
(former Vice President 1999 105,000 Nil 2,500(9) Nil Nil Nil Nil
Finance, Chief 1998 105,000 Nil 2,500(9) Nil Nil Nil Nil
Financial Officer and
Treasurer)(8)
</TABLE>
NOTES TO SUMMARY COMPENSATION TABLE
(1) The Corporation's currency for disclosure purposes is US dollars which
are the functional currency of the Corporation's operations.
(2) Each of Messrs. Ron F. Hochstein and David C. Frydenlund have contracts
of employment with the Corporation's subsidiary, International Uranium
(USA) Corporation. There is no compensatory plan or arrangement
provided in such contracts in respect of resignation, retirement,
termination, change in control of the Corporation or responsibilities.
The expiry date of the employment contracts are October 13, 2001 for
Mr. Hochstein and June 30, 2001 for Mr. Frydenlund.
(3) Mr. Hochstein commenced employment with the Corporation on October 11,
1999. During the period January 31, 2000 to April 6, 2000, Mr.
Hochstein held the position of Vice President and Chief Operating
Officer of the Corporation. Mr. Hochstein was appointed President and
Chief Executive Officer of the Corporation on April 6, 2000.
(4) During the fiscal year ended September 30, 1999, a total of $152,100
was earned by Mr. Frydenlund of which $150,000 was paid and $2,100 had
been accrued. This accrual was paid in fiscal 2000.
(5) Other annual compensation is $9,000, being the dollar value of imputed
interest benefits from a loan provided to Mr. Frydenlund.
(6) Mr. Hoellen resigned as President and Chief Executive Officer of the
Corporation on April 6, 2000. Compensation figures disclosed for the
fiscal year ended September 30, 2000 for Mr. Hoellen represent the
amounts earned between October 1, 1999 and April 6, 2000. Mr. Hoellen
received $90,000 as a severance payment and $948 for medical insurance
coverage subsequent to his resignation.
5
INTERNATIONAL URANIUM CORPORATION
<PAGE> 8
(7) Mr. Roberts resigned as Vice President, Operations, of the Corporation
on January 31, 2000. Compensation figures disclosed for the fiscal year
ended September 30, 2000 for Mr. Roberts represent amounts earned
between October 1, 1999 and January 31, 2000. Mr. Roberts received
$35,000 as a severance payment and $5,195 for medical insurance
coverage subsequent to his resignation.
(8) Mr. Townley resigned as Vice President, Finance, Chief Financial
Officer and Treasurer of the Corporation on April 6, 2000. Compensation
figures disclosed for the fiscal year ended September 30, 2000 for Mr.
Townley represent amounts earned between October 1, 1999 and April 6,
2000. Mr. Townley received $26,250 as a severance payment.
(9) Amounts represent 401K matching contributions made to the named
executive's retirement account per the Corporation's 401K Benefit Plan
available to all eligible employees.
There were no long-term incentive plan awards made to any of the named executive
officers of the Corporation during the most recently completed financial year.
In addition, there are no plans in place with respect to any of the named
individuals for termination of employment or change in responsibilities under
employment contracts, apart from those separately disclosed herein.
No options or SARs were repriced during the most recently completed financial
year. The following table summarizes individual grants of options to purchase or
acquire securities of the Corporation or any of its subsidiaries (whether or not
in tandem with SARs) and freestanding SARs made during the most recently
completed financial year to each of the named executive officers:
OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR
<TABLE>
<CAPTION>
MARKET VALUE
OF SECURITIES
SECURITIES % OF TOTAL EXERCISE UNDERLYING
UNDER OPTIONS/ OPTIONS/SARS OR OPTIONS/SARS
SARS GRANTED TO BASE PRICE ON THE DATE OF
GRANTED EMPLOYEES IN (CDN$/ GRANT (CDN$/ EXPIRATION
NAME (#) FINANCIAL YEAR SECURITY) SECURITY) DATE
(a) (b) (c) (d) (e) (f)
------ -------------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Ron F. Hochstein 1,000,000 27.7% 0.20 0.19 May 22/2003
250,000 6.9% 0.75 0.26 Oct 10/2002
David C. Frydenlund 700,000 19.4% 0.20 0.19 May 22/2003
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
OPTIONS/SARS AT
UNEXERCISED OPTIONS/SARS AT FISCAL YEAR
FISCAL YEAR END END (1)
SECURITIES ACQUIRED AGGREGATE (#) EXERCISABLE/
ON EXERCISE VALUE REALIZED EXERCISABLE/ UNEXERCISABLE
NAME (#) (CDN$) UNEXERCISABLE (CDN$)
(a) (b) (c) (d) (e)
---- ------------------- -------------- --------------------------- ---------------
<S> <C> <C> <C> <C>
Ron F. Hochstein Nil Nil 1,250,000 130,000
David C. Frydenlund Nil Nil 900,000 91,000
Earl E. Hoellen Nil Nil 375,000 Nil
Harold R. Roberts Nil Nil Nil(2) Nil
Rick L. Townley Nil Nil Nil(2) Nil
</TABLE>
6
INTERNATIONAL URANIUM CORPORATION
<PAGE> 9
(1) Based on the closing price of the common shares of the Corporation on The
Toronto Stock Exchange on Friday, September 29, 2000 of Cdn$0.33.
(2) Options held by Messrs. Harold R. Roberts and Rick L. Townley expired on
February 29, 2000 and April 6, 2000, respectively, being 30 days after
termination of their employment with the Corporation.
The Corporation does not have any defined benefit or actuarial plans. In
addition, there are no compensatory plans or arrangements in place, including
payments to be received from the Corporation or its subsidiaries, with respect
to any of the above-named executive officers herein, which would result from the
resignation, retirement or any other termination of employment of such person's
employment with the Corporation and its subsidiaries or from a change of control
of the Corporation or any subsidiary of the Corporation or a change in the named
executive officer's responsibilities following a change in control, apart from
those separately disclosed.
The named executive officers are eligible to participate in the Corporation's
Employee Stock Purchase Plan (the "Purchase Plan"). The Purchase Plan was
established by the Board on February 4, 1998 and ratified and approved by
shareholders on March 23, 1998. No purchases were made by the named executive
officers during the recently-completed financial year under the Purchase Plan.
The aggregate indebtedness to the Corporation or any of its subsidiaries of all
officers, directors, employees and former officers, directors and employees of
the Corporation and its subsidiaries as at the date hereof is US$200,000.
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
<TABLE>
<CAPTION>
LARGEST AMOUNT
OUTSTANDING DURING AMOUNT OUTSTANDING
NAME AND PRINCIPAL FISCAL YEAR ENDED AS AT DECEMBER 20,
POSITION INVOLVEMENT OF ISSUER OR SUBSIDIARY SEPTEMBER 30, 2000 2000
(a) (b) (c) (d)
------------------------------------- ------------------------------------------- ---------------------- --------------------
<S> <C> <C> <C>
David C. Frydenlund, Relocation loan made by the Corporation's 200,000(1) 200,000
Vice President, General subsidiary, International Uranium (USA)
Counsel, Chief Financial Officer Corporation
and Corporate Secretary
</TABLE>
(1) Non-interest bearing, full recourse loan, secured by a mortgage interest on
the named executive's principal residence, granted in connection with the
named executive's relocation made on June 24, 1997, and repayable in full
on or before June 30, 2001.
7
INTERNATIONAL URANIUM CORPORATION
<PAGE> 10
COMPENSATION COMMITTEE
The Corporation's Compensation Committee is comprised of three non-executive
directors; namely, Messrs. Lukas H. Lundin, William A. Rand and John H. Craig.
Mr. Lukas H. Lundin is Chairman of the Board. None of the members of the
Committee have any indebtedness to the Corporation or any of its subsidiaries
nor have they any material interest, or have any associates or affiliates which
have any material interest, direct or indirect, in any actual or proposed
transaction in the last financial year which has materially affected or would
materially affect the Corporation or any of its subsidiaries.
REPORT ON EXECUTIVE COMPENSATION
The Corporation's executive compensation program is administered by the
Compensation Committee which is composed of three non-management directors who
are identified above. The Committee meets at least annually to receive
information on and determine matters regarding executive compensation, in
accordance with policies approved by the Board. Recommendations for changes to
the policies are also reviewed on an annual basis to ensure that they remain
current, competitive and consistent with the Corporation's overall goals.
The Committee's terms of reference include the responsibility to determine the
level of compensation paid to the President and Chief Executive Officer of the
Corporation and other senior management and executive officers of the
Corporation.
The guiding philosophy of the Committee in determining compensation for
executives is the need to provide a compensation package that is competitive and
motivating; will attract and retain qualified executives; and encourage and
motivate performance. Performance includes achievement of the Corporation's
strategic objective of growth and the enhancement of shareholder value through
increases in the stock price resulting from advances in the Corporation's
business, continued low cost operations and enhanced cash flow and earnings.
In establishing compensation for executive officers, the Committee takes into
consideration individual performance, responsibilities, length of service and
levels of compensation provided by industry competitors. Such compensation is
comprised primarily of a base salary and participation in the Corporation's
incentive stock option and 401K plans, and may also consist of bonuses and other
perquisites which are awarded on an occasional basis. Stock options align the
interests of the executive officers and other key employees with the long-term
interests of shareholders and provide competitive performance incentive
compensation. Grants are made to executive officers after taking into
consideration position level, overall individual performance, anticipated future
contribution to the Corporation's success, and the ability of the individual to
influence business performance.
Compensation is generally reviewed in the early part of each year having regard
to the prior year's performance both at a corporate level and individually in
order to determine compensation adjustments for the following year. Incentive
stock options were granted to Messrs. Ron F. Hochstein and David C. Frydenlund
during the year entitling them to purchase up to 1,000,000 and 700,000 common
shares of the Corporation, respectively, at an exercise price of CDN$0.20 per
share at any time up to May 22, 2003. It was felt by the Board that the issuance
of these options was an appropriate way to continue to provide incentive to
Messrs. Hochstein and Frydenlund to create shareholder value. In addition, the
Committee determined to increase Mr. Hochstein's salary by approximately 15% for
the fiscal period ended September 30, 2001 to reflect his new position of
President and Chief Executive Officer. The Committee has recommended to the
Board that the current levels of compensation for other Named Executive Officers
remain unchanged for the fiscal period ending September 30, 2001. The Committee
was satisfied that the current salary levels of such persons reflect competitive
practices in the marketplace in which the Corporation competes to attract and
retain qualified executives.
Submitted on behalf of the Compensation Committee
William A. Rand
Lukas H. Lundin
John H. Craig
8
INTERNATIONAL URANIUM CORPORATION
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the Corporation's cumulative total shareholder
return with the cumulative total return of the TSE 300 Composite Index, assuming
a Cdn$100 investment in common shares on May 16, 1997 (the Corporation's initial
trading date) and reinvestment of dividends, and the TSE Metals and Minerals
Index, during the period. All currency references in the graph are to Canadian
dollars.
[GRAPH]
<TABLE>
<CAPTION>
MAY 16, 1997 SEPTEMBER 30, 1997 SEPTEMBER 30, 1998 SEPTEMBER 30, 1999 SEPTEMBER 29, 2000
------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
IUC 100.00 103.97 35.71 21.43 26.19
TSE 300 100.00 112.69 89.86 111.37 166.12
TSE METALS & MINERALS 100.00 88.42 53.70 71.47 62.14
</TABLE>
COMPENSATION OF DIRECTORS
A. Standard Compensation Arrangements
None of the directors of the Corporation were compensated by the Corporation and
its subsidiaries during the most recently completed financial year for their
services in their capacity as directors, nor were any amounts paid to directors
for committee participation or special assignments. All expenses incurred by
directors in respect of their duties are reimbursed by the Corporation.
B. Other Arrangements
None of the directors of the Corporation were compensated in their capacity as
director by the Corporation and its subsidiaries during the most recently
completed financial year pursuant to any other arrangement or in lieu of any
standard arrangement.
C. Compensation for Services
Since the commencement of the recently completed financial year, the law firm of
Cassels Brock & Blackwell, Barristers and Solicitors of which Mr. John H. Craig
is a partner, was paid $16,606 for legal services rendered as solicitors for the
Corporation.
Subsequent to the retirement of Mr. Earl E. Hoellen as President and Chief
Executive Officer of the Corporation, a company controlled by Mr. Hoellen, a
director of the Corporation, earned a commission of $59,516 in connection with
the sale by the Corporation of all of its uranium inventories and sales
contracts.
Pursuant to the terms of a services agreement between the Corporation and Namdo
Management Services Ltd., a private corporation owned by Mr. Lukas H. Lundin, a
director of the Corporation, the Corporation pays Namdo the sum of US$7,500 per
month for certain corporate and administrative services. Namdo has approximately
12 employees and provides
9
INTERNATIONAL URANIUM CORPORATION
<PAGE> 12
administrative and financial services to a number of public companies.
Accordingly, there is no basis for allocating the amounts paid by Namdo to Mr.
Lundin in respect of services provided to the Corporation.
No other director was compensated either directly or indirectly by the
Corporation and its subsidiaries during the most recently completed financial
year for services as consultants or experts.
STATEMENT OF CORPORATE GOVERNANCE PRACTICE
The Board implicitly and explicitly acknowledges its responsibility for the
stewardship of the Corporation:
(i) The Board participates in strategic planning as the acceptor and/or
adopter of the strategic plans proposed and developed by management. The
strategic planning process has been the responsibility of management. The
Board will undertake periodic reviews of the strategic planning process.
(ii) The Board has considered and does in its deliberations consider the
principal risks of the Corporation's business and receives periodic
reports from management of the Corporation's assessment and management of
those risks.
(iii) The Board has, from time to time, considered succession issues and takes
responsibility for appointing and monitoring officers of the Corporation.
(iv) The Board has discussed and considered how the Corporation communicates
with its various shareholders and periodically reviews and approves the
Corporation's communications with the public.
(v) The Board, directly and through its Audit Committee, assesses the
integrity of the Corporation's internal control and management information
systems.
The Board has established a Corporate Governance and Nominating Committee whose
terms of reference include the responsibility of developing and monitoring the
Corporation's approach to corporate governance issues. The Corporate Governance
and Nominating Committee is comprised of three directors, each of whom is an
outside, unrelated director.
The Board encourages senior management to participate in appropriate
professional and personal development activities, courses and programs, and
supports management's commitment to the training and development of all
permanent employees.
The Board is currently comprised of seven (7) members, of whom five (5) are
unrelated directors. Mr. Adolf H. Lundin, a former director of the Corporation,
may be considered a "significant shareholder" which, as defined by the Corporate
Governance Guidelines established by The Toronto Stock Exchange, is a
shareholder with the ability to exercise a majority of votes for the election of
directors. Mr. Lundin currently owns or controls approximately 34.3% of the
voting shares of the Corporation.
The Board has considered the relationship of each director. Two (2) current
directors, namely, Ron F. Hochstein and David C. Frydenlund, are related by
virtue of their holding management positions. Mr. Earl E. Hoellen, prior to his
resignation on April 6, 2000 as President and CEO of the Corporation, was
considered related. Mr. Hoellen is now considered to be non-related. John H.
Craig periodically provides legal services to the Corporation. He is, however,
not considered to be related because of the size of his fees for such services
relative to the overall fee income of his practice. Messrs. William A. Rand,
John H. Craig, Christopher J.F. Harrop and Lukas H. Lundin are all unrelated.
Messrs. Hoellen and Harrop do not have interests in or relationships with either
the Corporation or Mr. Adolf H. Lundin, its significant shareholder. As a
result, the interests of Messrs. Hoellen and Harrop, along with the interests of
other directors, can be considered to fairly reflect the investment in the
Corporation by shareholders other than the significant shareholder.
The responsibility for proposing new nominees to the Board and for assessing
directors on an ongoing basis has been mandated to the Corporate Governance and
Nominating Committee. Nominations are the result of recruitment efforts by the
Chairman of the Board and the CEO and discussed informally with several
directors before being brought to the Committee for approval.
Board members are presently not compensated other than by stock options;
expenses are reimbursed at cost. The Corporation has developed position
descriptions for the Board and the CEO. Generally, operations in the ordinary
course or that are not in the ordinary course and do not exceed material levels
of expenditures or commitment on the part of the Corporation have been
10
INTERNATIONAL URANIUM CORPORATION
<PAGE> 13
delegated to management. Decisions relating to matters that are not in the
ordinary course and that involve material expenditures or commitments on the
part of the Corporation generally require prior approval of the Board. As the
Board has plenary power, any responsibility which is not delegated to management
or a Board committee remains with the Board.
The Board has functioned, and is of the view that it can continue to function,
independently of management, as required. The Board has appointed a chair of the
Board who is other than the CEO. It is common practice for the Chairman and CEO
to delegate the chair to a non-related director during Board meetings.
The Board has not met without management present. If the Board believed it was
appropriate and meaningful it would formalize the process by which the Board
would meet without management and for handling the Board's overall relationship
with management.
Each of the Audit Committee, the Compensation Committee and the Corporate
Governance and Nominating Committee is composed of three (3) non-management,
non-related directors.
Due to the size and nature of the Corporation, the roles and responsibilities of
the Audit Committee have been specifically defined and include oversight
responsibility for management reporting on internal control. The Audit Committee
has direct communication channels with the external auditors. Due to its size,
the Corporation has no formal internal audit process.
The Board has considered its size with a view to the impact of size upon its
effectiveness and has concluded that the number of directors, as presently
constituted, is appropriate for a corporation of the size and complexity of the
Corporation. The Board, as presently constituted, brings together a mix of
skills, backgrounds, ages and attitudes that the Board considers appropriate to
the stewardship of the Corporation. The periodic review of this issue has been
mandated to the Corporate Governance and Nominating Committee.
The Corporate Governance and Nominating Committee has been charged with the
responsibility of assessing and monitoring the effectiveness of the Board as a
whole, the committees of the Board and the contribution of individual directors.
The Board has put structures in place to ensure effective communication between
the Corporation, its shareholders and the public. The Corporation has
established an investor relations and corporate development procedure where
every shareholder inquiry receives a prompt response. One of the objectives of
corporate development is to ensure a strong, cohesive, sustained and positive
image of the Corporation for its shareholders, governments and the public.
The Corporation does not currently have a formal process of orientation and
education for new members of the Board. However, the Corporate Governance and
Nominating Committee has been charged with the responsibility of developing an
orientation and education program for new recruits to the Board, where required.
The Board has adopted a system which would enable an individual director to
engage an outside advisor at the expense of the Corporation in appropriate
circumstances. If such an engagement were appropriate it would be subject to the
approval of the Chairman, with the right of the director to appeal the decision
of the Chairman to the Corporate Governance and Nominating Committee.
The mining and milling industry, by its very nature, can have a significant
impact on the natural environment. As a result, environmental planning and
compliance must play an ever-increasing part in the operations of any company
engaged in these activities. The Corporation takes these issues very seriously
and has established an Environment, Health and Safety Committee to oversee the
Corporation's efforts to act in a responsible and concerned manner with respect
to matters affecting the environment, health and safety.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
None of the directors, executive officers or senior officers of the Corporation,
proposed nominees for directors, or associates or affiliates of said persons,
have been indebted to the Corporation at any time since the beginning of the
last completed financial year of the Corporation, apart from those separately
disclosed herein.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
During the financial year ended September 30, 2000, except as otherwise
disclosed in this circular, none of the insiders of the Corporation nor any
proposed nominee for election as director, nor any associate or affiliate of
said persons, has had any
11
INTERNATIONAL URANIUM CORPORATION
<PAGE> 14
material interest, direct or indirect, in any transaction, which has materially
affected or would materially affect the Corporation or any of its subsidiaries.
MANAGEMENT CONTRACTS
Management functions of the Corporation are performed by directors, executive
officers or senior officers of the Corporation and not, to any substantial
degree, by any other person with whom the Corporation has contracted.
CERTIFICATE
The contents and the distribution of this management proxy circular have been
approved by the Board.
DATED at Denver, Colorado, this 9th day of January, 2001.
BY ORDER OF THE BOARD
(Signed) David C. Frydenlund,
Vice President, General Counsel
and Corporate Secretary
12
INTERNATIONAL URANIUM CORPORATION
