RARE ELEMENT RESOURCES LTD

The following discussion summarizes our compensation program for our named executive officers for the 2024 fiscal year (amounts stated in whole dollars).

Named Executive Officers

“Named Executive Officer” or “NEO” means (a) all individuals who served as CEO of the Company during the fiscal year ended December 31, 2024; (b) each of the two most highly compensated executive officers, or the two most highly

compensated individuals acting in a similar capacity, other than the CEO, at the end of the fiscal year ended December 31, 2024; and (c) each individual who would be an NEO under clause (b) above but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of that fiscal year.

During the fiscal year ended December 31, 2024, the Company had five NEOs: Kenneth J. Mushinski, President and CEO; Brent D. Berg, Former President and CEO; Kelli C. Kast, Vice President, General Counsel and Chief Administrative Officer and former Interim President and CEO; Wayne E. Rich, Chief Financial Officer; and Jaye T. Pickarts, Chief Operating Officer.

Summary Compensation Table

Set out below is a summary of compensation paid to the Company’s NEOs during the fiscal years ended December 31, 2024 and 2023.

(1) The grant date fair value of option-based awards is determined by using the Black-Scholes option valuation model based on assumptions for the risk-free interest rate, expected dividend yield, expected volatility of the Common Shares, and expected life of the options set forth in Notes 3 and 9 to the consolidated financial statements included in this Annual Report.

Narrative Discussion of Compensation and Plan-Based Awards

Employment Agreements

The Company has historically maintained employment agreements with its executive officers. The material terms of prior employment agreements have included (a) employment for an indefinite term unless employment is terminated as provided in the agreement; (b) severance arrangements, including upon a change in control; (c) a base salary; and (d) participation in the stock option plans of the Company (as described below), the incentive bonus, and the Company’s benefit plans as are from time to time available to executive officers of the Company.

Kenneth J. Mushinski

Mr. Mushinski entered into an employment agreement with the Company effective May 1, 2024 (the “Mushinski Employment Agreement”). Pursuant to the terms of the Mushinski Employment Agreement, (i) Mr. Mushinski’s initial annual base salary was $320,000 and is subject to adjustment at the Company’s discretion; (ii) Mr. Mushinski will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board; and (iii) Mr. Mushinski will be eligible to participate in the employee benefit programs, if offered, by the Company.

Additionally, Mr. Mushinski is entitled to separation benefits in the event that his employment is terminated by the Company without “cause” or by Mr. Mushinski for “good reason” (in each case, as defined in the Mushinski Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material breach of the Mushinski Employment Agreement by the Company, or a failure by the Company to maintain reasonable D&O insurance, in each case which the Company has failed to cure. The severance payment to be received by Mr. Mushinski upon termination under the circumstances described above, provided that Mr. Mushinski executes a general release in favor of the Company and has been with the Company for a minimum of two years from the effective date of the Mushinski Employment Agreement, will be equal to one year of Mr. Mushinski’s base salary in effect on the date of termination and paid to Mr. Mushinski in a lump sum 60 days after the date of such termination. In addition, Mr. Mushinski equity incentive awards will vest automatically upon such termination.

Kelli C. Kast

Ms. Kast entered into an employment agreement with the Company effective July 1, 2024 (the “Kast Employment Agreement”). Pursuant to the terms of the Kast Employment Agreement, (i) Ms. Kast’s initial annual base salary was $310,000 and is subject to adjustment at the Company’s discretion; (ii) Ms. Kast will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board; and (iii) Ms. Kast will be eligible to participate in the employee benefit programs, if offered, by the Company.

Additionally, Ms. Kast is entitled to separation benefits in the event that her employment is terminated by the Company without “cause” or by Ms. Kast for “good reason” (in each case, as defined in the Kast Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material breach of the Kast Employment Agreement by the Company, or a failure by the Company to maintain reasonable D&O insurance, in each case which the Company has failed to cure. The severance payment to be received by Ms. Kast upon termination under the circumstances described above will be equal to one year of Ms. Kast’s base salary in effect on the date of termination and paid to Ms. Kast in a lump sum 60 days after the date of such termination. In addition, Ms. Kast’s equity incentive awards will vest automatically upon such termination.

Wayne E. Rich

Mr. Rich has had an employment agreement with the Company since March 28, 2022 (the “Rich Employment Agreement”). Pursuant to the terms of the Rich Employment Agreement, (i) Mr. Rich’s initial annual base salary was $215,000 and is subject to adjustment at the Company’s discretion; (ii) Mr. Rich will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board; and (iii) Mr. Rich will be eligible to participate in the employee benefit programs, if offered, by the Company.

Additionally, Mr. Rich is entitled to separation benefits in the event that his employment is terminated by the Company without “cause” or by Mr. Rich for “good reason” (in each case, as defined in the Rich Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material geographic relocation, a material breach of the Rich Employment Agreement by the Company, or a failure by the Company to maintain reasonable D&O insurance, in each case which the Company has failed to cure. The severance payment to be received by Mr. Rich upon termination under the circumstances described above will be equal to one year of Mr. Rich’s base salary in effect on the date of termination and paid to Mr. Rich in a lump sum 60 days after the date of such termination. In addition, Mr. Rich’s equity incentive awards will vest automatically upon such termination.

Jaye T. Pickarts

On September 26, 2024, the Company and Mr. Pickarts executed an employment offer letter, which provides that (i) his initial annual base salary is $282,000; (ii) he will be eligible to receive an annual incentive plan cash bonus of up to 20% of his annual base salary; and (iii) he will be eligible to participate in the employee benefit programs of the Company.

Equity Plan

As of March 17, 2025, there were 2,635,000 and 1,020,000 stock options outstanding, respectively, under the 2011 and 2022 Plans, representing approximately 0.7% of the current outstanding Common Shares. The 2011 Plan was terminated effective as of August 23, 2022. Then-existing awards granted under the 2011 Plan will remain outstanding in accordance with their terms, but new equity awards are being granted solely under the 2022 Plan.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the outstanding option awards held by the NEOs of the Company as of December 31, 2024.

Outstanding Equity Awards at Fiscal Year-End

Potential Payments upon Termination

Pursuant to the employment agreements with Mr. Mushinski, Ms. Kast, and Mr. Rich, each NEO is entitled to separation benefits in the event that his or her employment is or was terminated by the Company without “cause” or by such NEO for “good reason” (in each case, as defined in the applicable employment agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material geographic relocation, or a material breach of such employment agreement by the Company, in each case which the Company has failed to cure. The separation benefits to be received by such NEO upon termination under the circumstances described above must equal such NEO’s base salary in effect on the date of termination. The separation benefits are not contingent upon any change in control and are to be paid to such NEO in a lump sum 60 days after the date of such termination. In addition, such NEO’s equity incentive awards vest automatically upon such termination.

The table below sets out the estimated payments due to the applicable NEO employed by the Company as of December 31, 2024 on a qualifying termination without cause, assuming termination took place pursuant to such employment agreement. Mr. Berg did not receive any separation payments or benefits in connection with his resignation.

Director Compensation

Non-employee directors, other than the Board Chair, Audit Committee Chair, Chair of the Nominating, Corporate Governance and Compensation Committee and the Synchron director designees, were entitled to annual compensation of $55,500 during the fiscal year ended December 31, 2024 while the Board Chair, Audit Committee Chair, and Chair of the Nominating, Corporate Governance and Compensation Committee were entitled to annual compensation of $81,500, $67,500 and $67,500, respectively. Each director’s compensation was paid quarterly and on a pro rata basis. The Synchron director designees elected not to receive any director compensation, including stock options.

The following table sets forth information regarding the compensation received by each of the Company’s non-employee directors during the fiscal year ended December 31, 2024:

Director Compensation