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Exhibit 10.14
 

NOVAGOLD RESOURCES INC.

 

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2009 NON-EMPLOYEE DIRECTORS DEFERRED
SHARE UNIT PLAN

 

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Effective December 1, 2009, as amended May 29, 2012,
as further amended on February 6, 2014
 
 
 

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NOVAGOLD RESOURCES INC.
 
2009 NON-EMPLOYEE DIRECTORS DEFERRED SHARE UNIT PLAN
 
1.  
PURPOSE OF THE PLAN

 
1.1  
This Plan has been established by the Corporation to promote the interests of
the Corporation by attracting and retaining qualified persons to serve on the
Board and to afford such Participants an opportunity to receive a portion of
their compensation for serving as a director of the Corporation in the form of
securities of the Corporation.

 
2.  
PLAN DEFINITIONS AND INTERPRETATIONS

 
In this Plan, the following terms have the following meanings:
 
(a)  
“Account” means an account maintained for each Participant on the books of the
Corporation which will be credited with Deferred Share Units, in accordance with
the terms of the Plan.

 
(b)  
“Board” means the Board of Directors of the Corporation.

 
(c)  
“Committee” means the Compensation Committee of the Board.

 
(d)  
“Common Shares” means the common shares of the Corporation and “Common Share”
shall mean a common share of the Corporation.

 
(e)  
“Corporation” means NovaGold Resources Inc. and its respective successors and
assigns, and any reference in the Plan to action by the Corporation means action
by or under the authority of the Board or any person or committee that has been
designated for the purpose by the Board including, without limitation, the
Committee.

 
(f)  
“DSU” or “Deferred Share Unit” means a bookkeeping entry equivalent in value to
a Common Share credited to a Participant’s Account.

 
(g)  
“Grant” means any Deferred Share Unit credited to the Account of a Participant.

 
(h)  
“Notice of Redemption” means written notice, on a prescribed form, by the
Participant, or the administrator or liquidator of the estate of the
Participant, to the Corporation of the Participant’s wish to redeem his or her
Deferred Share Units.

 
(i)  
“Participant” means a director of the Corporation who is designated by the
Committee as eligible to participate in the Plan.

 
(j)  
“Plan” means this Deferred Share Unit Plan.

 
(k)  
“Redemption Date” means the date that a Notice of Redemption is received by the
Corporation; provided in the case of a U.S. Eligible Participant, however, the
Redemption Date will be made the earlier of (i) “separation from service” within
the meaning of Section 409A, or (ii) within 90 days of the U.S. Eligible
Participant’s death.

 
(l)  
“Reorganization” means any (i) capital reorganization, (ii) merger, (iii)
amalgamation, or (iv) arrangement or other scheme of reorganization.

 
 
 

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(m)  
“Section 409A” means Section 409A of the U.S. Internal Revenue Code of 1986, as
amended, and the Treasury Regulations promulgated thereunder as in effect from
time to time.

 
(n)  
“Security Based Compensation Arrangement” has the meaning defined in the
provisions of the TSX Company Manual relating to security based compensation
arrangements.

 
(o)  
“Share Price” means the closing price of a Common Share on the Toronto Stock
Exchange averaged over the five (5) consecutive trading days immediately
preceding either (a) in the case of a Grant, the last day of the fiscal quarter
preceding the date of Grant in respect of a director, or (b) in the case of a
redemption, the Redemption Date, as applicable, or in the event such shares are
not traded on the Toronto Stock Exchange, the fair market value of such shares
as determined by the Committee acting in good faith.

 
(p)  
“Termination Date” means the date of a Participant’s death, or retirement from,
or loss of office or employment with the Corporation, within the meaning of
paragraph 6801(d) of the regulations under the Income Tax Act (Canada),
including the Participant’s resignation, retirement, removal from the Board,
death or otherwise.

 
(q)  
“U.S. Eligible Participant” refers to a Participant who, at any time during the
period from the date Deferred Share Units are granted to the Participant to the
date such Deferred Share Units are redeemed by the Participant, is subject to
income taxation in the United States on the income received for his or her
services as a director of the Corporation and who is not otherwise exempt from
U.S. income taxation under the relevant provisions of the U.S. Internal Revenue
Code of 1986, as amended,  or the Canada-U.S. Income Tax Convention, as amended
from time to time.

 
3.  
NON-EMPLOYEE DIRECTOR COMPENSATION

 
3.1  
Establishment of Annual Base Compensation

 
An annual compensation amount (the "Annual Base Compensation") payable to
Non-Employee Directors (hereafter "Directors") of the Corporation shall be
established from time-to-time by the Board. The amount of Annual Base
Compensation will be reported annually in the Corporation’s management
information circular.
 
3.2  
Payment of Annual Base Compensation

 
(a)  
The Annual Base Compensation shall be payable in quarterly installments, with
each installment payable as promptly as practicable following the last business
day of the calendar quarter to which it applies. Quarterly payments shall be pro
rated if Board service commences or terminates during a calendar quarter.

 
(b)  
The Annual Base Compensation shall be paid fifty percent (50%) in Deferred Share
Units and fifty percent (50%) in cash. The number of DSUs to be paid and the
terms of the DSUs shall be determined as provided in the following sections of
this Plan.

 
(c)  
Each Director may also elect to receive in DSUs all or part of that portion of
his or her Annual Base Compensation otherwise payable in cash by completing and
delivering a written election to the Corporation on or before November 15th of
the calendar year ending immediately before the calendar year with respect to
which the election is made.  Such election will be effective with respect to
compensation payable for fiscal quarters beginning during the calendar year
following the date of such election. In addition, so long a Director has not
previously participated in a plan that is required to be aggregated with this
Plan for purposes of Section 409A, a Director may elect on or before November
15, 2009 to receive his or her compensation for the fiscal quarter beginning
December 1, 2009 in DSUs.  Further, where an individual becomes a Director for
the first time during a calendar year and such individual has not previously
participated in a plan that is required to be aggregated with this Plan for
purposes of Section 409A, such individual may elect to participate in the Plan
with respect to fiscal quarters of the Corporation commencing after the
Corporation receives such individual’s written election, which election must be
received by the Corporation no later than 30 days after such individual’s
appointment as a Director. For greater certainty, new Directors will not be
entitled to receive DSUs pursuant to an election for the quarter in which they
submit their first election to the Corporation or any previous
quarter.  Elections hereunder shall be irrevocable with respect to compensation
earned during period to which such election relates.

 
 
 

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(d)  
All DSUs granted with respect to Annual Base Compensation will be credited to
the Director's Account when such Annual Base Compensation is payable (the
"Payment Date").

 
(e)  
The Director's Account will be credited with the number of DSUs calculated to
the nearest thousandths of a DSU, determined by dividing the dollar amount of
compensation granted in DSUs on the Payment Date by the Share Price.  Fractional
Shares will not be issued and any fractional entitlements will be rounded down
to the nearest whole number.

 
(f)  
The Corporation may withhold from any amount payable to a Participant, either
under this Plan, or otherwise, such amount as may be necessary so as to ensure
that the Corporation will be able to comply with the applicable provisions of
any federal, provincial, state or local law relating to the withholding of tax
or other required deductions, including on the amount, if any, includable in the
income of a Participant. The Corporation shall also have the right in its
discretion to satisfy any such withholding tax liability by retaining, acquiring
or selling on behalf of a Participant any Common Shares which would otherwise be
issued or provided to a Participant hereunder.

 
4.  
ADMINISTRATION OF DSU ACCOUNTS

 
4.1  
Administration of Plan

 
The Committee shall have the power, where consistent with the general purpose
and intent of the Plan and subject to the specific provisions of the Plan:
 
(a)  
to establish policies and to adopt rules and regulations for carrying out the
purposes, provisions and administration of the Plan and to amend and rescind
such rules and regulations from time to time;

 
(b)  
to interpret and construe the Plan and to determine all questions arising out of
the Plan and any such interpretation, construction or determination made by the
Committee shall be final, binding and conclusive for all purposes;

 
(c)  
to prescribe the form of the instruments used in conjunction with the Plan; and

 
(d)  
to determine which members of the Board are eligible to participate in the Plan.

 
4.2  
Redemption of Deferred Share Units

 
(a)  
Each Participant shall be entitled to redeem his or her Deferred Share Units
during the period commencing on the business day immediately following the
Termination Date and ending on the 90th day following the Termination Date by
providing a written Notice of Redemption to the Corporation.  In the event of
death of a Participant, the Notice of Redemption shall be filed by the
administrator or liquidator of the estate of the Participant.  In the case of a
U.S. Eligible Participant, however, the redemption will be deemed to be made on
the earlier of (i) “separation from service” within the meaning of Section 409A,
or (ii) within 90 days of the U.S. Eligible Participant’s death.

 
 
 

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(b)  
Upon redemption, the Participant shall be entitled to receive, and the
Corporation shall issue or provide:

 
(i)  
subject to the limitations set forth in Section 6.2 below, a number of Common
Shares issued from treasury equal to the number of DSUs in the Participant’s
Account, subject to any applicable deductions and  withholdings;

 
(ii)  
subject to and in accordance with any Applicable Law, a number of Common Shares
purchased by an independent administrator of the Plan in the open market for the
purposes of providing Common Shares to Participants under the Plan equal in
number to the DSUs in the Participant’s Account, subject to any applicable
deductions and withholdings;

 
(iii)  
the payment of a cash amount to a Participant equal to the number of DSUs
multiplied by the Share Price, subject to any applicable deductions and
withholdings; or

 
(iv)  
any combination of the foregoing,

 
as determined by the Corporation, in its sole discretion; provided, however that
any DSUs issued prior to December 31, 2013 shall be settled in Common Shares in
the manner contemplated by Section 4.2(b)(i) or Section 4.2(b)(ii), as
determined by the Corporation in its sole discretion.

4.3  
Payment Notwithstanding

 
Notwithstanding any other provision of this Plan, all amounts payable to, or in
respect of, a Participant hereunder shall be paid on or before December 31 of
the calendar year commencing immediately after the Participant’s Termination
Date.
 
5.  
ALTERATION OF NUMBER OF SHARES SUBJECT TO THE PLAN

 
5.1  
Subdivisions or Consolidations

 
In the event that the Common Shares shall be subdivided or consolidated into a
different number of Common Shares or a distribution shall be declared upon the
Common Shares payable in Common Shares, the number of DSUs then recorded in the
Director’s Account shall be adjusted by replacing such number by a number equal
to the number of Common Shares which would be held by the Director immediately
after the distribution, subdivision or consolidation, should the Director have
held a number of Common Shares equal to the number of DSUs recorded in the
Director’s Account on the record date fixed for such distribution, subdivision
or consolidation.
 
5.2  
Reorganizations

 
In the event there shall be any change, other than as specified in Section 5.1,
in the number or kind of outstanding Common Shares or of any shares or other
securities into which such Common Shares shall have been changed or for which
they shall have been exchanged, pursuant to a Reorganization or otherwise, then
there shall be substituted for each Common Share referred to in the Plan or for
each share into which such Common Share shall have been so changed or exchanged,
the kind of securities into which each outstanding Common Share shall be so
changed or exchanged and an equitable adjustment shall be made, if required, in
the number of DSUs then recorded in the Director’s Account, such adjustment, if
any, to be reasonably determined by the Committee and to be effective and
binding for all purposes.
 
 
 

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5.3  
Adjustments

 
In the case of any such substitution, change or adjustment as provided for in
this Section 5, the variation shall generally require that the number of DSUs
then recorded in the Director’s Account prior to such substitution, change or
adjustment will be proportionately and appropriately varied.
 
6.  
MAXIMUM NUMBER OF SHARES TO BE ISSUED

 
6.1  
Maximum Number of Shares

 
Subject to adjustment in accordance with Section 5, the maximum number of Common
Shares which the Corporation may issue from treasury in connection with Deferred
Share Units granted under the Plan shall be 150,000 Common Shares, or such
greater number as may be approved from time to time by the Corporation’s
shareholders.
 
6.2  
Maximum Number of Shares to Insiders

 
The maximum number of Common Shares issuable to Insiders (as defined in the TSX
Company Manual) pursuant to Section 4.2(b)(i) of the Plan, together with any
Common Shares issuable pursuant to any other Security Based Compensation
Arrangement, at any time, shall not exceed 10% of the total number of
outstanding Common Shares.  The maximum number of Common Shares issued to
Insiders pursuant to Section 4.2(b)(i) of the Plan, together with any Common
Shares issued pursuant to any other Security Based Compensation Arrangement,
within any one year period, shall not exceed 10% of the total number of
outstanding Common Shares.
 
7.  
AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

 
7.1  
Amendment to the Plan

 
The Board may at any time, and from time to time, and without shareholder
approval, amend any provision of the Plan, subject to any regulatory or stock
exchange requirement at the time of such amendment, including, without
limitation:
 
(a)  
for the purposes of making formal minor or technical modifications to any of the
provisions of the Plan including amendments of a “clerical” or “housekeeping”
nature;

 
(b)  
to correct any ambiguity, defective provision, error or omission in the
provisions of the Plan;

 
(c)  
amendments to the termination provisions of Section 7.2;

 
(d)  
amendments necessary or advisable because of any change in applicable securities
laws;

 
(e)  
amendments to the transferability of Deferred Share Units provided for in
Section 8.9;

 
(f)  
amendments to Section 4.1 relating to the administration of the Plan;

 
(g)  
any other amendment, fundamental or otherwise, not requiring shareholder
approval under applicable laws or the rules of the Toronto Stock Exchange;

 
provided, however, that:
 
 
 

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(h)  
no such amendment of the Plan may be made without the consent of each affected
Participant in the Plan if such amendment would adversely affect the rights of
such affected Participant(s) under the Plan; and

 
(i)  
shareholder approval shall be obtained in accordance with the requirements of
the Toronto Stock Exchange for any amendment:

 
(i)  
to Section 6.1 in order to increase the maximum number of Deferred Share Units
which may be issued under this Plan (other than pursuant to Section 5);

 
(ii)  
to Section 7.1 in any manner; or

 
(iii)  
to the definition of “Participant”.

 
7.2  
Plan Termination

 
The Committee may decide to discontinue granting awards under the Plan at any
time in which case no further Deferred Share Units shall be awarded or credited
under the Plan.  Any Deferred Share Units which remain outstanding in a
Participant’s Account at that time shall continue to be dealt with according to
the terms of the Plan.  The Plan shall terminate when all payments owing
pursuant to Section 4.2 of the Plan have been made and all Deferred Share Units
have been cancelled in all Participants’ Accounts
 
8.  
GENERAL PROVISIONS

 
8.1  
Assignability

 
No right to receive payment of deferred compensation or retirement awards, DSUs
and other benefits under the Plan shall be transferable or assignable by a
Participant except by will or laws of descent and distribution.
 
8.2  
Unfunded Plan

 
Unless otherwise determined by the Committee, the Plan shall be unfunded.  To
the extent any Participant or his or her estate holds any rights by virtue of a
grant of Deferred Share Units under the Plan, such rights (unless otherwise
determined by the Committee) shall be no greater than the rights of an unsecured
creditor of the Corporation.
 
8.3  
Final Determination

 
Any determination or decision by or opinion of the Committee made or held
pursuant to the terms of the Plan shall be final, conclusive and binding on all
parties concerned. All rights, entitlements and obligations of Participants
under the Plan are set forth in the terms of the Plan and cannot be modified by
any other documents, statements or communications, except by Plan amendments
referred to in Section 7.1 of the Plan.
 
8.4  
No Right to Employment

 
Participation in the Plan shall not be construed to give any Participant a right
to be retained as a Director.
 
8.5  
No Other Benefit

 
 
 

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No amount will be paid to, or in respect of, a Participant under the Plan to
compensate for a downward fluctuation in the price of Common Shares nor will any
other form of benefit be conferred upon, or in respect of, a Participant for
such purpose.
 
8.6  
No Shareholder Rights

 
Under no circumstances shall Deferred Share Units be considered Common Shares
nor shall they entitle any Participant to exercise voting rights or any other
rights attaching to the ownership of Common Shares nor shall any Participant be
considered the owner of Common Shares by virtue of the award of Deferred Share
Units.
 
8.7  
Reorganization of the Corporation

 
The existence of any Deferred Share Units shall not affect in any way the right
or power of the Corporation or its shareholders to make or authorize any
adjustment, recapitalization, reorganization or other change in the
Corporation’s capital structure or its business, or any amalgamation,
combination, merger or consolidation involving the Corporation or to create or
issue any bonds, debentures, shares or other securities of the Corporation or
the rights and conditions attaching thereto or to affect the dissolution or
liquidation of the Corporation or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar nature or otherwise.
 
8.8  
Successors and Assigns

 
The Plan shall be binding on all successors and assigns of the Corporation.
 
8.9  
General Restrictions and Assignment

 
Except as required by law, the rights of a Participant under the Plan are not
capable of being anticipated, assigned, transferred, alienated, sold,
encumbered, pledged, mortgaged or charged and are not capable of being subject
to attachment or legal process for the payment of any debts or obligations of
the Participant.
 
8.10  
Section 409A

 
It is intended that the provisions of this Plan comply with Section 409A, and
all provisions of this Plan shall be construed and interpreted in a manner
consistent with the requirements for avoiding taxes or penalties under Section
409A.  Notwithstanding anything in the Plan to the contrary, the following will
apply with respect to the rights and benefits of U.S. Eligible Participants
under the Plan:
 
 
(a)
Except as permitted under Section 409A, any deferred compensation (within the
meaning of Section 409A) payable to or for the benefit of a U.S. Eligible
Participant may not be reduced by, or offset against, any amount owing by the
U.S. Eligible Participant to the Corporation or any of its affiliates.

 
 
(b)
If a U.S. Eligible Participant becomes entitled to receive payment in respect of
any Deferred Share Units as a result of his or her “separation from service”
(within the meaning of Section 409A), and the U.S Eligible Participant is a
“specified employee” (within the meaning of Section 409A) at the time of his or
her separation from service, and the Committee makes a good faith determination
that (i) all or a portion of the Deferred Share Units constitute “deferred
compensation” (within the meaning of Section 409A) and (ii) any such deferred
compensation that would otherwise be payable during the six-month period
following such separation from service is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A in order to avoid taxes or
penalties under Section 409A, then payment of such “deferred compensation” shall
not be made to the U.S Eligible Participant before the date which is six months
after the date of his or her separation from service (and shall be paid in a
single lump sum on the first day of the seventh month following the date of such
separation from service) or, if earlier, the U.S Eligible Participant’s date of
death.

 
 
 

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(c)
A U.S. Eligible Participant’s status as a specified employee shall be determined
by the Corporation as required by Section 409A on a basis consistent with the
regulations under Section 409A and such basis for determination will be
consistently applied to all plans, programs, contracts, agreements, etc.
maintained by the Corporation that are subject to Section 409A.

 
 
(d)
Each U.S Eligible Participant, any beneficiary or the U.S Eligible Participant’s
estate, as the case may be, is solely responsible and liable for the
satisfaction of all taxes and penalties that may be imposed on or for the
account of such U.S Eligible Participant in connection with this Plan (including
any taxes and penalties under Section 409A), and neither the Corporation nor any
affiliate shall have any obligation to indemnify or otherwise hold such U.S
Eligible Participant or beneficiary or the U.S Eligible Participant’s estate
harmless from any or all of such taxes or penalties.

 
 
(e)
In the event that the Committee determines that any amounts payable hereunder
will be taxable to a Participant under Section 409A prior to payment to such
Participant of such amount, the Corporation may (i) adopt such amendments to the
Plan and Deferred Share Units and appropriate policies and procedures, including
amendments and policies with retroactive effect, that the Committee determines
necessary or appropriate to preserve the intended tax treatment of the benefits
provided by the Plan and Deferred Share Units hereunder and/or (ii) take such
other actions as the Committee determines necessary or appropriate to avoid or
limit the imposition of an additional tax under Section 409A.

 
 
(f)
In the event the Corporation terminates the Plan in accordance with Section 7,
the time and manner of payment of amounts that are subject to Section 409A will
be made in accordance with the rules under Section 409A.  The Plan will not be
terminated except as permitted under Section 409A.

 
8.11  
Forfeiture Provision

 
If a Participant is subject to tax under the Income Tax Act (Canada) and also is
a U.S. Eligible Participant with respect to DSUs, the following special rules
regarding forfeiture of such Deferred Share Units will apply if the
Participant’s DSUs are subject to Section 409A.  For greater clarity, these
forfeiture provisions are intended to avoid adverse tax consequences under
Section 409A and/or under paragraph 6801(d) of the regulations under the Income
Tax Act (Canada), that may result because of the different requirements as to
the time of settlement of Deferred Share Units with respect to a Participant’s
“separation from service” (within the meaning of Section 409A) (“Separation From
Service”) and his retirement or loss of office (under tax laws of Canada).   If
a Participant otherwise would be entitled to payment of DSUs in any of the
following circumstances, such DSUs shall instead be immediately and irrevocably
forfeited (for greater certainty, without any compensation therefore):
 
 
(a)
a Participant experiences a Separation From Service as a result of a permanent
decrease in the level of services provided to less than 20% of his past service
in circumstances that do not constitute a retirement from, or loss of office or
employment with, the Corporation or an affiliate thereof, within the meaning of
paragraph 6801(d) of the regulations under the Income Tax Act (Canada); or

 
 
(b)
a Participant experiences a Separation From Service upon ceasing to be a
director while continuing to provide services as an employee in circumstances
that do not constitute a retirement from, or loss of office or employment with,
the Corporation or an affiliate thereof, within the meaning of paragraph 6801(d)
of the regulations under the Income Tax Act (Canada); or

 
 
 

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(c)
a Participant experiences a serious disability that continues for more than 29
months in circumstances that constitute a Separation From Service and do not
constitute a retirement from, or loss of office or employment with, the
Corporation or an affiliate thereof, within the meaning of paragraph 6801(d) of
the regulations under the Income Tax Act (Canada); or

 
 
(d)
a Participant experiences a retirement from, or loss of office or employment
with, the Corporation or an affiliate thereof, within the meaning of paragraph
6801(d) of the regulations under the Income Tax Act (Canada) by virtue of
ceasing employment as both an employee and as a director, but he continues to
provide services as an independent contractor such that he has not experienced a
Separation From Service.

 
8.12  
Interpretation

 
In this text, words importing the singular meaning shall include the plural and
vice versa, and words importing the masculine shall include the feminine and
neuter genders.
 
8.13  
Governing Law

 
The validity, construction and effect of the Plan and any actions taken or
relating to the Plan shall be governed by the laws of the Province of British
Columbia and the federal laws of Canada applicable therein.
 
8.14  
Severability

 
The invalidity or unenforceability of any provision of the Plan shall not affect
the validity or enforceability of any other provision and any invalid or
unenforceable provision shall be severed from the Plan.
 
8.15  
Effective Date

 
 
The effective date of this Plan shall be December 1, 2009, as amended May 29,
2012, as further amended February 6, 2014.
 

 

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