Decklar Resources Inc. — Remuneration Information 2023

Jun 30, 2023

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Form 51-102FV6

STATEMENT OF EXECUTIVE COMPENSATION (for the year ended December 31, 2022)

This statement of executive compensation for Decklar Resources Inc. (“ Decklar ” or the “ Company ”), dated as of June 30, 2023, is presented in accordance with National Instrument 51-102 – Continuous Disclosure Obligations and Form 51-102FV6 – Statement of Executive Compensation .

This statement of executive compensation will be included in Decklar’s information circular to be mailed to the holders (“ Shareholders ”) of its common shares (“ Common Shares ”) in connection with the annual and special meeting of Shareholders.

All amounts are presented in Canadian dollars.

Executive Compensation

Pursuant to National Instrument 51-102 – Continuous Disclosure Obligations (“ NI 51-102 ”), the Company is required to disclose the compensation paid to its “named executive officers”. This means the Company’s Chief Executive Officer and Chief Financial Officer (or individuals who served in similar capacities) for any part of the Company’s most recently completed financial year, and the three most highly compensated executives other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 (and each individual who would be a “named executive officer” 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 the financial year) (each a “ Named Executive Officer ” or “ NEO ”).

For the financial year ended December 31, 2022, the only Named Executive Officers were Oluwasanmi Famuyide, the Chief Executive Officer, David Halpin, the Chief Financial Officer and Corporate Secretary, and Duncan Blount, the former Chief Executive Officer. On September 14, 2022, Duncan Blount resigned as Chief Executive Officer of the Company, and Oluwasanmi Famuyide was appointed as Chief Executive Officer.

Director and Named Executive Officer Compensation

The following table (presented in accordance with National Instrument Form 51-102F6V – Statement of Executive Compensation – Venture Issuers ) sets forth all annual and long term compensation for services paid to or earned by each NEO and director for the two most recently completed financial years, being the years ended December 31, 2022 and December 31, 2021, excluding compensation securities.

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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 compen- sation ($)	Total compen- sation ($)
Oluwasanmi Famuyide(1) Chief Executive Officer	2022 2021	312,312 188,025	nil nil	nil nil	nil nil	nil nil	312,312 188,025
David Halpin(2) Chief Financial Officer and Corporate Secretary	2022 2021	258,735 174,072	nil nil	nil nil	nil nil	nil nil	258,735 174,072
Duncan Blount(3) Former Chief Executive Officer	2022 2021	44,508 101,792	nil nil	nil nil	nil nil	nil 150,000	44,508 251,792

Notes:

1. Oluwasanmi Famuyide was appointed Chief Executive Officer of the Company on September 14, 2022.

2. David Halpin was appointed Chief Financial Officer of the Company on June 9, 2021.

3. Duncan Blount was appointed Chief Executive Officer of the Company on March 22, 2017. Duncan Blount resigned as Chief Executive Officer of the Company on September 14, 2022. Duncan Blount was appointed as a Director of the Company on April 20, 2018 and continues in this role.

The Company’s compensation philosophy for its NEOs is designed to attract well qualified individuals in what is essentially an international market by paying competitive base salaries plus short and long term incentive compensation in the form of bonuses and stock options or other suitable long term incentives. In making its determinations regarding the various elements of executive compensation, the board of directors of Decklar (the “ Board ”) has access to and relies on published studies of compensation paid within the petroleum industry. Neither a formal benchmarking determination nor use of external compensation consultants has been utilized for setting base salaries, rather the overall experience of the Board is consulted as part of determining appropriate and competitive compensation levels that also take into account management performance, the competitive landscape for hiring executives and the defined responsibilities of each of the executive officers when setting base salary levels. Other awards, such as cash bonuses, are awarded at the discretion of the Board, where the performance of management has been judged to warrant such an incentive.

With respect to risks associated with the Company’s compensation practices, the Board believes that the nature and stage of the Company’s business, the high levels of regulatory and industry standards pertaining to financial disclosure and the declaration of petroleum reserves, serve to greatly reduce any adverse risks associated with particular compensation practices and as such there are no material adverse risks associated with these practices.

The Company has no formal policy in relation to whether an NEO or director is permitted to purchase financial instruments that are designed to hedge or offset a change in the market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or director.

Option Based Awards

Option based awards are made at such times and in such amounts as the Board determines to be appropriate having regard to the stated purposes of the Company’s stock option plan, (the “ Stock Option Plan ”) to

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incentivize employees and others to help the Company achieve its business objectives, to encourage them to remain with the Company, and to attract new employees who are typically employed by corporations with similar plans. The exercise price is typically the market price at the date of the grant while vesting may be immediate or delayed or subject to the achievement of milestones depending on circumstance.

Stock Options and Other Compensation Securities

The following table sets forth all compensation securities granted or issued to each NEO and director by the Company in the financial year ended December 31, 2022 for services provided or to be provided, directly or indirectly, to the Company:

Name and Position	Type of compen- sation security (1)(2)(3)	Number of compen- sation securities, number of underlying securities, and percentage of class	Date of issue, grant or modification	Issue, conversion or exercise price	Closing price of security or underlying security on date of grant	Closing price of security or underlying security at year end	Expiry Date (mm/dd/yy)
		(#)		($)	($)	($)
Oluwasanmi Famuyide(4) Chief Executive Officer	Stock Options	350,000 (10.53%)	Dec. 21, 2022	$0.30	$0.20	$0.20	Dec. 22, 2027
David Halpin Chief Financial Officer and Corporate Secretary	Stock Options	350,000 (10.53%)	Dec. 21, 2022	$0.30	$0.20	$0.20	Dec. 22, 2027
Duncan Blount Director	Stock Options	300,000 (9.02%)	Dec. 21, 2022	$0.30	$0.20	$0.20	Dec. 22, 2027
Chris Castle Director	Stock Options	100,000 (3.01%)	Dec. 21, 2022	$0.30	$0.20	$0.20	Dec. 22, 2027
Denis Poelzer Director	Stock Options	250,000 (7.52%)	Dec. 21, 2022	$0.30	$0.20	$0.20	Dec. 22, 2027
Bill Foose Director	Stock Options	250,000 (7.52%)	Dec. 21, 2022	$0.30	$0.20	$0.20	Dec. 22, 2027

Notes:

1. The total number of stock options held by each director or NEO as at December 31, 2022 was as follows:

2. Oluwasanmi Famuyide – 1,100,000 stock options;

3. David Halpin – 1,100,000 stock options;

4. Duncan Blount – 875,000 stock options;

5. Chris Castle – 400,000 stock options;

6. Denis Poelzer – 700,000 stock options;

7. Bill Foose – 500,000 stock options;

8. No compensation securities were re-priced, cancelled and replaced, had its term extended, or otherwise materially modified, in the most recently completed financial year.

9. The compensation securities issued in 2022 vest one-third upon issuance, one-third on June 21, 2023, and one-third on December 21, 2023.

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11. Oluwasanmi Famuyide was appointed as Chief Executive Officer of the Company on September 14, 2022.

Exercise of Compensation Securities by Directors and NEOs

The following table discloses each exercise by a director or NEO of compensation securities during the financial year ended December 31, 2022:

Name and Position	Type of compen- sation security	Number of underlying securities exercised	Exercise price per security	Date of Exercise	Closing price per security on date of exercise	Difference between exercise price and closing price on date of exercise	Total value on exercise date
		(#)	($)		($)	($)	($)
Oluwasanmi Famuyide(1) Chief Executive Officer	Stock Options	nil	N/A	N/A	N/A	N/A	N/A
David Halpin Chief Financial Officer and Corporate Secretary	Stock Options	nil	N/A	N/A	N/A	N/A	N/A
Duncan Blount Director	Stock Options	nil	N/A	N/A	N/A	N/A	N/A
Chris Castle Director	Stock Options	nil	N/A	N/A	N/A	N/A	N/A
Denis Poelzer Director	Stock Options	nil	N/A	N/A	N/A	N/A	N/A
Bill Foose Director	Stock Options	nil	N/A	N/A	N/A	N/A	N/A

Note:

1. Oluwasanmi Famuyide was appointed as Chief Executive Officer of the Company on September 14, 2022.

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Incentive Plan Awards

Outstanding Share-Based Awards and Option-Based Awards

The following table summarizes all awards outstanding as at December 31, 2022 for the Company’s NEOs, including awards granted prior to the most recently completed financial year.

		Option-based awards	Option-based awards		Share-based awards	Share-based awards	Share-based awards
Name	Number of securities underlying unexercised options (#)	Option exercise price ($)	Option expiration date	Value of unexercised in-the- money options ($)	Number of Common Shares or units of Common Shares that have not vested (#)	Market or payout value of Share- based awards that have not vested ($)	Market or payout value of vested Share-based awards that have not been paid out or distributed ($)
Oluwasanmi Famuyide(1) Chief Executive Officer	450,000 300,000 350,000	$0.28 $1.00 $0.30	Sept. 4, 2025 Aug. 13, 2026 Dec. 22, 2027	nil nil nil	nil nil 233,334	nil nil nil	nil nil nil
David Halpin(2) Chief Financial Officer and Corporate Secretary	450,000 300,000 350,000	$0.28 $1.00 $0.30	Sept. 4, 2025 Aug. 13, 2026 Dec. 22, 2027	nil nil nil	nil nil 233,334	nil nil nil	nil nil nil
Duncan Blount(3) Former Chief Executive Officer	275,000 300,000 300,000	$0.28 $1.00 $0.30	Sept. 4, 2025 Aug. 13, 2026 Dec. 22, 2027	nil nil nil	nil nil 200,000	nil nil nil	nil nil nil

Notes:

1. Oluwasanmi Famuyide was appointed Chief Executive Officer of the Company on September 14, 2022.

2. David Halpin was appointed Chief Financial Officer of the Company on June 9, 2021.

3. Duncan Blount was appointed Chief Executive Officer of the Company on March 22, 2017. Duncan Blount resigned as Chief Executive Officer of the Company on September 14, 2022. Duncan Blount was appointed as a Director of the Company on April 20, 2018 and continues in this role.

As at December 31, 2022, a total of 9,623,332 stock options were outstanding and 575,882 stock options were available for issuance under the Stock Option Plan.

Option grants to executive officers are made as long term incentive compensation taking into account the performance of the Company and management, industry trends and the value of such option awards as calculated using Black-Scholes valuation methods. Vesting is tailored to incentivizing the grantee to remain in the Company’s employment and to achieving individual and corporate goals. Typically, initial awards are made at the commencement of employment with subsequent awards being made as appropriate, taking into consideration the number of options previously granted.

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Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth information concerning the value of the option and share-based awards vested during the financial year ended December 31, 2022 for each Named Executive Officer.

Name	Option-based awards – value vested during the year ($)	Share-based awards – value vested during the year ($)	Non-equity incentive plan compensation – value earned during the year ($)
Oluwasanmi Famuyide(1) Chief Executive Officer	$40,106	nil	nil
David Halpin(2) Chief Financial Officer and Corporate Secretary	$40,106	nil	nil
Duncan Blount(3) Former Chief Executive Officer	$38,947	nil	nil

Notes:

1. Oluwasanmi Famuyide was appointed Chief Executive Officer of the Company on September 14, 2022.

2. David Halpin was appointed Chief Financial Officer of the Company on June 9, 2021.

3. Duncan Blount was appointed Chief Executive Officer of the Company on March 22, 2017. Duncan Blount resigned as Chief Executive Officer of the Company on September 14, 2022. Duncan Blount was appointed as a Director of the Company on April 20, 2018 and continues in this role.

Termination, Change of Control Benefits and Employment Contracts

Oluwasanmi Famuyide currently has a one-year renewable employment contract with the Company. Mr. Famuyide’s contract contains standard employment terms and no provisions or related incremental payments related to change of control, severance, termination or constructive dismissal.

David Halpin currently has a one-year renewable employment contract with the Company. Mr. Halpin’s contract contains standard employment terms and no provisions or related incremental payments related to change of control, severance, termination or constructive dismissal.

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information regarding the number of Common Shares to be issued upon the exercise of outstanding options and the weighted-average exercise price of the outstanding options in connection with the Stock Option Plan as at December 31, 2022:

Plan Category	Number of Common Shares to be issued upon exercise of outstanding options #	Weighted-average exercise price of outstanding options $	Number of Common Shares remaining available for future issuance under equity compensation plans(1)
Equity compensation plans approved by security holders	9,623,332	$0.55	575,882
Equity compensation plans not approved by security holders	Nil	nil	nil
Total	9,623,332	$0.55	575,882

Note:

1. Based on the total number of Common Shares authorized for issuance under the Company’s Stock Option Plan, less the number of stock options outstanding, as at December 31, 2022.

Under the Stock Option Plan, the Board may grant options to employees, officers, consultants and Directors of the Company and its subsidiaries. The Stock Option Plan allows the Board to grant a maximum number of options equal to 10% of the Company’s issued and outstanding Common Shares at any given time.