Contagious Gaming Inc.

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(the “ Company ”)

Form 51-102F6V

Statement of Executive Compensation – Venture Issuers (for financial years ended March 31, 2021 and March 31, 2020)

STATEMENT OF EXECUTIVE COMPENSATION – VENTURE ISSUERS

GENERAL

The following information, dated as of September 27, 2021, is provided as required under Form 51-102F6V for Venture Issuers (the “ Form ”), as such term is defined in National Instrument 51-102.

For the purposes of this Form:

“ compensation securities ” includes stock options, convertible securities, exchangeable securities and similar instruments including stock appreciation rights, deferred share units and restricted stock units granted or issued by the company or one of its subsidiaries for services provided or to be provided, directly or indirectly, to the company or any of its subsidiaries;

“external management company” includes a subsidiary, affiliate or associate of the external management company;

“ NEO ” or “ named executive officer ” means each of the following individuals:

(a) each individual who, in respect of the company, during any part of the most recently completed financial year, served as chief executive officer (“CEO”), including an individual performing functions similar to a CEO;
(b) each individual who, in respect of the company, during any part of the most recently completed financial year, served as chief financial officer (“CFO”), including an individual performing functions similar to a CFO;
(c) in respect of the company and its subsidiaries, the most highly compensated executive officer other than the individuals identified in paragraphs (a) and (b) at the end of the most recently completed financial year whose total compensation was more than $150,000, as determined in accordance with the Form, for that financial year;
(d) each individual who would be a named executive officer under paragraph (c) but for the fact that the individual was not an executive officer of the company, and was not acting in a similar capacity, at the end of that financial year.

DIRECTOR AND NAMED EXECUTIVE COMPENSATION

During financial year ended March 31, 2021, based on the definition above, the NEOs of the Company were: Justin Barragan, Chairman and Director and Craig Loverock, Interim Chief Executive Officer, Chief Financial Officer and Corporate Secretary and former Chief Executive Officer and Director, Peter Glancy. The directors of the Company who were not NEOs during financial year ended March 30, 2021 were Victor Wells, Desmond M. Balakrishnan and Charles Shin.

Justin Barragan was appointed Chairman and Director of the Company on July 17, 2020. Peter Glancy served as Chief Executive Officer of the Company from August 8, 2014 to July 17, 2020. Charles Shin served as a Director of the Company from August 8, 2014 to July 17, 2020.

During financial year ended March 31, 2020 based on the definition above, the NEOs of the Company were: Peter Glancy, former Chief Executive Officer and Craig Loverock, Chief Financial Officer and Corporate Secretary. The directors of the Company who were not NEOs during financial year ended March 31, 2020 were Victor Wells, Desmond M. Balakrishnan and Charles Shin.

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Director and NEO Compensation, Excluding Options and Compensation Securities

The following table of compensation, excluding options and compensation securities, provides a summary of the compensation paid by the Company to NEOs and directors of the Company for the two completed financial years ended March 31, 2021 and March 31, 2020. Options and compensation securities are disclosed under the heading “ Stock Options and Other Compensation Securities ” in this Form.

Table of Compensation Excluding Compensation Securities in Financial Years ended March 31, 2021 and March 31, 2020

		Table of compensation excluding compensation securities	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities	Table of compensation excluding compensation securities
Name and position	Year	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total Compensation ($)
Craig Loverock Interim CEO, CFO and Corporate Secretary (1)	2021 2020	96,000 96,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	96,000 96,000
Victor Wells Director	2021 2020	15,000 15,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	15,000 15,000
Desmond M. Balakrishnan Director(2)	2021 2020	Nil Nil	Nil Nil	Nil Nil	Nil Nil	10,014 4,195	10,014 4,195
Justin Barragan Director(3)	2021 2020	112,552 Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	112,552 Nil
Peter Glancy former CEO and Director	2021 2020	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil
Charles Shin, former Director(4)	2021 2020	31,293 122,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	31,293 122,000

Notes:

During the years ended March 31, 2021 and 2020 the company accrued $96,000 (paid $Nil) in consulting fees to Loverock Consulting Corp. (“LCC”). Craig Loverock is the founder and president of LCC.
During the years ended March 31, 2021 and March 31, 2020, the Company recorded $10,014 (2021), $4,195 (2020) of legal fees to McMillan LLP, a law firm in which Desmond Balakrishnan, a Company director, is a partner.
Justin Barragan was appointed Chairman and Director of the Company on July 17, 2020. During the year ended March 31, 2021 the company accrued $112,500 (paid $Nil) in director and consulting fees to 2444384 Ontario Inc. Justin Barragan is the founder and president of 2444384 Ontario Inc.
During the year ended March 31, 2021 the company accrued $31,293 (paid $Nil) in director and consulting fees to Gulfstream Capital Corp. (“Gulfstream”). During the year ended March 31, 2020 the company accrued $122,000 (paid $Nil) in director and consulting fees to Gulfstream Capital Corp. (“Gulfstream”). Charles Shin is the founder and managing partner of Gulfstream.

Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

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The Company entered into the following transactions with related parties during financial years ended March 31, 2021 and March 31, 2020:

RELATED PARTIES TRANSACTIONS AND BALANCES

a) Amounts Due To Related Parties

a)Amounts Due To Related Parties
		March 31,		March 31,
		2021		2020
Due to related parties:
Due to directors, officers and their companies (i)	$	366,704	$	606,780

(i) Amounts due to directors, officers and their companies are for accrued salaries, fees and travel costs. These amounts are unsecured, non-interest bearing and are due on demand. Included in Accounts Payable is an amount of $345,763 owing to a former director who ceased to be a director during the year.

b) Compensation of Key Management Personnel

Key management personnel are those persons that have authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly. As of March 31, 2021, the Company’s key management personnel consist of the Company’s directors and senior management (Chief Executive Officer, President, Corporate Secretary and Chief Financial Officer). The Company incurred fees and expenses in the normal course of operations in connection with the key management and directors. Details are as follows:

		March 31		March 31
Nature of Transactions		2021		2020
Management fees and salaries	$	170,340	$	98,490
Directors fees		67,371		66,300
Advisoryfees		18,468		73,872
	$	224,886	$	238,662

During the current year, the Company recorded $10,014 (2020 - $4,195) of legal fees to McMillan LLP, a law firm in which one of the Company’s director is a partner.

During the previous year, the Company recorded $72,000 of consulting fees to 2444384 Ontario Inc., the owner of which became a director of the Company during the current year.

Outstanding Compensation Securities

Stock Options and Other Compensation Securities

The Company has a share option plan in place for the granting of stock options to the directors, officers, employees and consultants of the Company. The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating such persons and to closely align the personal interest of such persons to that of the Company’s shareholders, having regard to the fact that currently the Company does not generate cash flows from operations and, as a result, there are limited funds available for the payment of salaries or consulting fees. The allocation of options pursuant to the share option plan is determined by the Board which, in determining such allocations, considers such factors as previous grants to individuals, overall Company performance, share price, the role and performance of the individual in question, the amount of time directed to the Company’s affairs and time expended for serving on the Company’s committees.

The Company’s share option plan (the “Plan”) was approved by shareholders at the Company’s annual general and special meeting held on September 21, 2017. Under the Plan, options totalling a maximum of 10% of the Common Shares outstanding from time to time are available for grant. The Plan is a 10% maximum rolling plan. Options granted under the Plan are not exercisable for a period longer than 10 years and the exercise price must be paid in full upon exercise of the option.

The Plan is subject to the following restrictions:

(a) The Company must not grant an option to any one individual director, officer, employee, management company employee, consultant or company consultant (the “Service Provider”) in any 12 month period

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that exceeds 5% of the outstanding shares, unless the Company has obtained approval to do so by a majority of the votes cast by the shareholders of the Company eligible to vote at a shareholders’ meeting, excluding votes attaching to shares beneficially owned by insiders and their associates (“Disinterested Shareholder Approval”);

(b) The aggregate number of options granted to a Service Provider conducting investor relations activities in any 12 month period must not exceed 2% of the outstanding Common Shares calculated at the date of the grant, without the prior consent of the TSX-V;
(c) The Company must not grant an option to any one individual consultant in any 12 month period that exceeds 2% of the outstanding shares calculated at the date of the grant of the option, without the prior consent of the TSX-V;
(d) The aggregate number of Common Shares reserved for issuance under options granted to insiders must not exceed 10% of the outstanding Common Shares (in the event that the Plan is amended to reserve for issuance more than 10% of the outstanding Common Shares) unless the Company has obtained Disinterested Shareholder Approval to do so;
(e) The aggregate number of Common Shares issued for option to insiders in any 12 month period must not exceed 10% of the outstanding Common Shares (in the event that the Plan is amended to reserve for issuance more than 10% of the outstanding Shares) unless the Company has obtained Disinterested Shareholder Approval to do so;
(f) The issuance to any one Optionee within a 12 month period of a number of Common Shares must not exceed 5% of outstanding Common Shares unless the Company has obtained Disinterested Shareholder Approval to do so;
(g) any one Person engaged in Investor Relations Activities for the Company must vest in stages over a 12 month period with no more than 1/4 of the Options vesting in any three month period; and
(h) The exercise price of an option previously granted to an insider must not be reduced, unless the Company has obtained Disinterested Shareholder Approval to do so.

Material Terms to the Plan

The following is a summary of the material terms of the Plan:

(a) Persons who are Service Providers to the Company or its affiliates, or who are providing services to the Company or its affiliates, are eligible to receive grants of options under the Plan;
(b) options granted under the Plan are non-assignable and non-transferable and are issuable for a period of up to ten (10) years;
(c) for options granted to Service Providers, the Company must ensure that the proposed Optionee is a bona fide Service Provider of the Company or its affiliates;
(d) if there is a takeover bid for all or any of the issued and outstanding Common Shares, then all outstanding Options, whether fully vested and exercisable or remaining subject to vesting provisions or other limitations on exercise, shall become exercisable in full to enable the Optioned Shares to be issued and tendered to such bid, subject to prior written approval of the TSX-V;
(e) an Option granted to any Service Provider will expire 90 days (or such other time, not to exceed one year, as shall be determined by the Board as at the date of grant or agreed to by the Board and the Optionee at any time prior to expiry of the Option), after the date the Optionee ceases to be employed by or provide services to the Company, and only to the extent that such Option was vested at the date the Optionee ceased to be so employed by or to provide services to the Company;
(f) if an Optionee dies, any vested option held by him at the date of death will become exercisable by the Optionee’s lawful personal representatives, heirs or executors until the earlier of one year after the date of death of such Optionee and the date of expiration of the term otherwise applicable to such Option;
(g) in the case of an Optionee being dismissed from employment or service for cause, such Optionee’s options, whether or not vested at the date of dismissal will immediately terminate without right to exercise same;

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(h) the exercise price of each option will be set by the Board at the time such Option is allocated under the Plan, and cannot be less than the Discounted Market Price (as defined in the Plan);
(i) vesting of Options shall be at the discretion of the Board, and will generally be subject to: (i) the Service Provider remaining employed by or continuing to provide services to the Company or any of its affiliates as well as, at the discretion of the Board, achieving certain milestones which may be defined by the Board from time to time or receiving a satisfactory performance review by the Company or any of its affiliates during the vesting period; or (ii) the Service Provider remaining as a Director of the Company or any of its affiliates during the vesting period;
(j) the Plan contains a black-out provision restricting all or any of the Company’s Service Providers to refrain from trading in the Company’s securities until the restriction has been lifted by the Company;
(k) no vesting requirements will apply to options granted under the Plan other than as required by TSX-V policies; however, a four month hold period will apply to all Common Shares from the date of grant for all Options granted to:
(i) insiders of the Company; or
(ii) where Options are granted to any Service Provider, including Insiders, where the exercise price is at a discount to the Market Price; and
(l) the Board reserves the right in its absolute discretion to amend, modify or terminate the Plan with respect to all common shares in respect of options which have not yet been granted under the Plan. Any amendment to any provision of the Plan will be subject to any necessary regulatory approvals unless the effect of such amendment is intended to reduce (but not to increase) the benefits of the Plan to Service Providers.

The Board has determined that, in order to reasonably protect the rights of participants, as a matter of administration, it is necessary to clarify when amendments to the Plan may be made by the Board without further shareholder approval.

Accordingly, the Plan also provides that the Board may, without shareholder approval:

(i) amend the Plan to correct typographical, grammatical or clerical errors;
(ii) change the vesting provisions of an option granted under the Plan, subject to prior written approval of the TSX-V, if applicable;
(iii) change the termination provision of an Option granted under the Plan if it does not entail an extension beyond the original expiry date of such Option;
(iv) make such amendments to the Plan as are necessary or desirable to reflect changes in securities laws applicable to the Company;
(v) if the Company becomes listed or quoted on a stock exchange or stock market senior to the TSX-V, it may make such amendments as may be required by the policies of such senior stock exchange or stock market; and
(vi) amend the Plan to reduce, and not to increase, the benefits of this Plan to Service Providers.

Outstanding Compensation Securities

Stock Options and Other Compensation Securities

Incentive Stock Options during financial year ended March 31, 2021

During the Company’s financial year ended March 31, 2021 there were no securities granted or issued to the Directors or NEOs by the Company or one of its subsidiaries.

Incentive Stock Options during financial year ended March 31, 2020

During the Company’s financial year ended March 31, 2020 there were no securities granted or issued to the Directors or NEOs by the Company or one of its subsidiaries.

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Exercise of Compensation Securities by Directors and NEOs

Financial Year Ended March 31, 2021

There were no stock options exercised by a director or a NEO of the Company during the financial year ended March 31, 2021.

Financial Year Ended March 31, 2020

There were no stock options exercised by a director or a NEO of the Company during the financial year ended March 31, 2020.

Employment, consulting and management agreements

There are no compensatory plans or arrangements, with respect to any Director or NEO resulting from the resignation, retirement or any other termination of employment of an officer or director or from a change of a director’s or a NEO’s responsibilities following a change in control.

Oversight and Description of Director and NEO Compensation

The Compensation Committee is tasked with the responsibility of, among other things, recommending to the Board compensation policies and guidelines for the Company and for implementing and overseeing compensation policies approved by the Board.

The Compensation Committee reviews on an annual basis the cash compensation, performance and overall compensation package of each executive office, including the Named Executive Officers. It then submits to the Board recommendations with respect to basic salary, bonus and participation in share compensation arrangements for each executive officer. In considering executive officers other than the Chief Executive Officer, the Compensation Committee shall take into account the recommendation of the Chief Executive Officer.

The Company does not have a formal compensation program with set benchmarks, however, the Company does have a compensation program which seeks to reward an executive officer's current and future expected performance. Individual performance in connection with the achievement of corporate milestones and objectives is also reviewed for all executive officers.and the Board monitors the Company’s compensation policy.

Base Salary or Consulting Fees

Base salary ranges for the executive officers were initially determined upon a review of companies within the Company’s industry, which were of the same size as the Company, at the same stage of development as the Company and considered comparable to the Company.

In determining the base salary of an executive officer, the Board considers the following factors:

(a) the particular responsibilities related to the position;
(b) salaries paid by other companies in the Company’s industry which were similar in size as the Company;
(c) the experience level of the executive officer;
(d) the amount of time and commitment which the executive officer devotes to the Company; and
(e) the executive officer’s overall performance and performance in relation to the achievement of corporate milestones and objectives.

The Company did not enter into any formal employment or consulting agreements with the Company’s executive officers. As at the year ended March 31, 2021, the Company paid base compensation to NEOs as follows: (i) $96,000 per year to Craig Loverock, Interim CEO and CFO. As at the year ended March 31, 2020, the Company paid base compensation to NEOs as follows: (i) Nil per year to Peter Glancy, CEO, and (ii) $96,000 per year to Craig Loverock, CFO.

Philosophy and Objectives

The compensation program for the senior management of the Company is designed to ensure that the level and form of compensation achieves certain objectives, including:

(a) attracting and retaining talented, qualified and effective executives;
(b) motivating the short and long-term performance of these executives; and
(c) better aligning their interests with those of the Company’s shareholders.

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In compensating its senior management, the Company has employed a combination of base salary and equity participation through its share option plan.

Bonus Incentive Compensation

The Company’s objective is to achieve certain strategic objectives and milestones. The Board will consider executive bonus compensation dependent upon the Company meeting those strategic objectives and milestones and sufficient cash resources being available for the granting of bonuses. The Board approves executive bonus compensation dependent upon compensation levels based on recommendations of the CEO. Such recommendations are generally based on information provided by issuers that are similar in size and scope to the Company’s operations.

Equity Participation

The Company believes that encouraging its executives and employees to become shareholders is the best way of aligning their interests with those of its shareholders. Equity participation is accomplished through the Company’s share option plan. Stock options are granted to executives and employees taking into account a number of factors, including the amount and term of options previously granted, base salary and bonuses and competitive factors. The amounts and terms of options granted are determined by the Board.

The Board continues to review and redesign the overall compensation plan for senior management so as to continue to address the objectives identified above.

Compensation Review Process

Risks Associated with the Company’s Compensation Practices

The Board has not proceeded to a formal evaluation of the implications of risks associated with the Company’s compensation policies and practices. The Board reviews the risks at least once annually, if any, associated with the Company’s compensation policies and practices at such time.

Executive compensation is comprised of short-term compensation in the form of a base salary and long-term ownership through the Company’s share option plan. This structure ensures that a significant portion of executive compensation (stock options) is both long-term and “at risk” and, accordingly, is directly linked to the achievement of business results and the creation of long-term shareholder value. As the benefits of such compensation, if any, are not realized by officers until a significant period of time has passed, the ability of officers to take inappropriate or excessive risks that are beneficial to their compensation at the expense of the Company and the shareholders is extremely limited. Furthermore, the short-term component of the executive compensation (base salary) represents a relatively small part of the total compensation. As a result, it is unlikely that an officer would take inappropriate or excessive risks at the expense of the Company or the shareholders that would be beneficial to their short-term compensation when their long-term compensation might be put at risk from their actions.

Due to the small size of the Company and the current level of the Company’s activity, the Board is able to closely monitor and consider any risks which may be associated with the Company’s compensation policies and practices. Risks, if any, may be identified and mitigated through regular meetings of the Board during which financial and other information of the Company are reviewed. No risks have been identified arising from the Company’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

The Company has not adopted a policy restricting its executive officers or directors from purchasing financial instruments that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by its executive officers or directors. To the knowledge of the Company, none of the executive officers or directors has purchased such financial instruments. As of the date of this Form, entitlement to grants of incentive stock options under the Company’s share option plan is the only equity security element awarded by the Company to its executive officers and directors.

Benefits and Perquisites

The Company does not, as of the date of this Form, offer any benefits or perquisites to its NEOs other than potential grants of incentive stock options as otherwise disclosed and discussed herein.

Pension disclosure

The Company does not have any pension, defined benefit, defined contribution or deferred compensation plans in place.

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Contagious Gaming Inc. Remuneration Information 2021

43123_rns_2021-09-27_1d65ae30-59a2-4fe5-92fd-2e53aa5353be.pdf