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Strict new regulations and increased attention to corporate governance have made being a director tougher than ever, but it can still be a very lucrative gig. Just ask the board members of UrAsia Energy Ltd., who, after serving for less than two years, each stand to pocket $4-million worth of stock if shareholders approve a deal to sell the company to sxr Uranium One Inc.

Vancouver-based UrAsia had six board members until the evening of Feb. 11, when company founder and veteran mining financier Frank Giustra resigned from the board just before the $3.7-billion merger with sxr was announced.

Mr. Giustra is the chairman of Endeavour Financial, which was advising UrAsia on the deal, and he "wished to ensure that the transactions remained free of any perception of bias or of conflict," according to UrAsia's management information circular.

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The circular also shows Endeavour will be paid $12-million for its advisory services to the uranium producer, that is operating and developing properties in Kazakhstan.

The remaining five directors, including chairman Ian Telfer, approved the all-stock transaction that evening, paving the way for the 1.1 million stock options that each had been awarded by the company since they became directors in October and November, 2005, to take effect. Under the terms of the agreement, all of UrAsia's 22.2 million outstanding stock options will vest immediately on the closing of the agreement with sxr.

Awarding stock options has become an increasingly controversial form of compensation for corporate directors. One governance expert said the UrAsia director options appear excessive, considering the amount of time the members had been on the board.

"I think it's just outrageous. Is there any special reason for this? What have they done to justify this compensation? It's extraordinary," said Bill Mackenzie, an independent governance consultant and the former president of shareholder advocacy group ISS Canada Corp.

Mr. Mackenzie is now the director of special projects for the Canadian Coalition for Good Governance (CCGG).

"[This]highlights why directors should not be in the option pool at all and that's the position of the members of the CCGG," he said.

In February of 2006, UrAsia granted 250,000 stock options to each director at an exercise price of $2.90 a share.

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Sxr is offering 0.45 of one of its shares for each UrAsia share, and based on sxr's closing price of $16.11 yesterday on the Toronto Stock Exchange, those 250,000 options are worth more than $1-million to each director.

According to the information circular, bankers representing sxr first approached a UrAsia director about a possible combination of the two companies on Sept. 20, 2006.

On Oct. 25, directors and management from sxr, including chief executive officer Neal Froneman, met in Vancouver with directors of UrAsia, including Mr. Telfer, to discuss the potential merits of a deal. At the end of that meeting, each side agreed to further discussions.

On Nov. 28, five of UrAsia's six directors, including Mr. Telfer and Mr. Giustra, were awarded 850,000 stock options with an exercise price of $3.74 a share. Based on yesterday's closing price of sxr shares, those options would be worth $2.9-million to each UrAsia director.

Between early December and Dec. 22, UrAsia's management and Endeavour engaged in discussions with other potential partners, according to the information circular. The other transactions contemplated would have been for cash and not the stock offer from sxr, according to sources.

On Dec. 22, UrAsia granted sxr exclusive right to negotiate a possible deal, the filing shows. On that day, the company issued a press release saying it was changing its fiscal year-end from July 31 to Dec. 31.

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In addition to his UrAsia options, Mr. Giustra, the 49-year-old former chairman of Yorkton Securities, also owns 6.2 million shares that could soon be converted into sxr shares worth $45-million. Mr. Telfer owns 2.2 million UrAsia common shares worth $15.9-million, in addition to his 1.1 million options.

Phillip Shirvington, UrAsia's president, CEO and also a director, owns more than 1.5 million common shares worth $10.8-million. On Nov. 28, when the other directors were awarded 850,000 options, Mr. Shirvington was awarded 1.8 million options at an exercise price of $3.74 a share, regulatory filings show. Those options could be worth $6.3-million worth of sxr shares if the transaction is approved and the options vest immediately. If the deal closes, Messrs. Giustra, Telfer, and Shirvington have all agreed not to sell or transfer more than 10 per cent of their sxr shares for six months.

The other UrAsia directors include Douglas Holtby, the vice-chairman of Goldcorp Inc., where Mr. Telfer was once CEO and is still chairman. Mr. Holtby was also the chairman of Wheaton River Minerals, the gold company launched by Mr. Giustra and Mr. Telfer that was eventually purchased by Goldcorp.

Mr. Holtby is currently a director of Silver Wheaton, another resource company conceived in part by Messrs. Giustra and Mr. Telfer.

Robert Cross, the chairman of Bankers Petroleum Ltd. and Northern Orion Resources, along with Dr. Massimo Carello, a London resident and former chairman and CEO of Fiat U.K. Ltd., are also members of the UrAsia Board.

In addition to their options, each board member, with the exception of Mr. Shirvington is paid an annual retainer fee of $50,000, according to UrAsia's annual information circular. Mr. Holtby, who chairs the audit committee, is eligible for $75,000 in compensation. "That's a great part-time job," Mr. Mackenzie said.

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Two-thirds of UrAsia shareholders must vote in favour of the transaction at a meeting scheduled for April 5, for it to proceed. Officials from UrAsia and Mr. Telfer did not return phone calls seeking comment. Mr. Giustra was unavailable for comment.

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