Nano One Materials Corp — Remuneration Information 2021

Jun 29, 2021

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STATEMENT OF EXECUTIVE COMPENSATION

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020

DATED JUNE 29, 2021

The following information of Nano One Materials Corp. (the “Company”) is provided in accordance with Form 51-102F6 – Statement of Executive Compensation (“Form 51-102F6”). Information contained in this Statement of Executive Compensation is as of December 31, 2020, and unless otherwise indicated and all dollar amounts referenced herein are in Canadian Dollars, unless otherwise specified.

STATEMENT OF EXECUTIVE COMPENSATION

GENERAL

The following table provides a summary of compensation paid, directly or indirectly, for each of the three most recently completed fiscal years, to the Directors, and to the following persons (collectively, the “Named Executive Officers” or “NEOs”):

• (a) each individual who, in respect of the Company, during any part of the most recently completed fiscal 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 fiscal 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, each of the three most highly compensated executive Officers other than the individuals identified in paragraphs (a) and (b) at the end of the most recently completed fiscal year whose total compensation was more than $150,000; and

• (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 fiscal year.

Based on the foregoing definitions, the Company's NEO's in respect of the year ended December 31, 2020, were: Dan Blondal, CEO; Dan Martino, CFO and Corporate Secretary (from January 20, 2020, onwards); Stephen Campbell, Chief Technical Officer (“CTO”); John Lando, President (and CFO until January 20, 2020); and Paul Matysek, Executive Chairman.

COMPENSATION GOVERNANCE

The Board of Directors (the “Board”) has established the Compensation Committee, which is responsible for, amongst other things, the compensation of the Company's Directors, NEOs and Officers that the Board (having regard to the recommendations of the Compensation Committee) determines is suitable. The members of the Compensation Committee are Mr. Lyle Brown (independent), Dr. Joseph Guy (Chairman) (not independent), and the committee received compensation analysis and advice from Mr. Gord Kukec (external strategic advisor). The Board has not yet adopted a written mandate for the Compensation Committee. Each of the members of the committee has experience with employment and compensation matters, having served as Officers and Directors of various private and public companies.

With respect to the overall objectives of its compensation practices, and taking into consideration its current stage of development, the Company determines the specific amounts of compensation to be paid to each of the Named Executive Officers based on a number of factors, including: (i) the Company's understanding of the amount of compensation generally paid by similar companies to the Named Executive Officers with similar roles and responsibilities; (ii) the Named Executive Officers' performance during the fiscal year; (iii) the roles and responsibilities of the Company's Named Executive Officers; (iv) the individual experience, the skills of, and expected contributions from each of the Named Executive Officers having regard for the Company's current stage of development and its general perspectives; (v) the amounts of compensation being paid to the other Named Executive Officers; (vi) the Company’s performance and (vii) any other contractual commitments that the Company has made to its Named Executive Officers regarding compensation.

Market comparisons as well as evaluation of similar positions in the same industry and in the same geography are also considered in determining compensation levels. Following a review of such criteria and the recommendations of the Compensation Committee, the Board determines compensation amounts and methods as it sees fit and reasonable.

The objective of the Board in setting compensation levels is to attract, retain, and motivate qualified individuals to serve as Executive Officers of the Company, to motivate their performance in order to achieve the Company's important strategic objectives and to align the interests of Executive Officers with both the short-term and the long-term interests of the Shareholders, while at the same time preserving cash flows. These objectives are designed to ensure that the Company continues to achieve its strategic objectives and pursue cash flow positive and future profitable operations for the Company and its Shareholders.

For the year ended December 31, 2020, the Compensation Committee generally considered three elements of compensation – a base compensation for the current fiscal year, a discretionary cash bonus for the previously completed fiscal year and a grant of long-term incentive stock options.

Base compensation is used to provide the Named Executive Officer with a set amount of money during the year with the expectation that he/she will perform their responsibilities to the best of his/her ability and in the best interests of the Company. The Compensation Committee recommends what the Named Executive Officer’s base compensation for the upcoming year will be based on the overall performance of the Company, the performance of the Named Executive Officer and general trends in the industry.

The granting of incentive stock options provides a link between management compensation and the Company’s share price. It also rewards management for achieving results that improve Company performance and thereby increase shareholder value. In making a determination as to whether a grant of long-term incentive stock options is appropriate, and if so, the number of options that should be granted, the Board will consider: the number and terms of outstanding incentive stock options held by the Named Executive Officer; the value in securities of the Company that the Board intends to award as compensation; the potential dilution to shareholders and the cost to the Company; general industry standards; and the limits imposed by the terms of the Option Plan and the Exchange. The Company considers the granting of incentive stock options to be a particularly important element of compensation as it allows the Company to reward the Named Executive Officer’s efforts to increase value for shareholders without requiring the Company to use cash from its treasury. The terms and conditions of the Company’s stock option grants, including vesting provisions and exercise prices, are governed by the terms of the Plan, Option which are described under “ Stock Option Plan” below.

Finally, the Compensation Committee will consider whether it is appropriate and in the best interests of the Company to award a discretionary cash bonus to the Named Executive Officer for the most recently completed fiscal year and if so, in what amount. A cash bonus may be awarded to reward extraordinary performance that has led to increased value for shareholders through divestitures, the formation of new strategic or joint venture relationships and/or capital raising efforts. Demonstrations of extraordinary personal commitment to the Company’s interests, the community and the industry may also be rewarded through a cash bonus.

ELEMENTS OF COMPENSATION

Base Salary

Base compensation is used to provide the Named Executive Officer with a set salary level during the year with the expectation that he/she will perform his/her responsibilities to the best of his/her ability and in the best interests of the Company. Benchmarking the executive salary was determined based on the stage of the development of the Company, which was particularly challenging as the Company is at a pre-revenue stage. As such, the Company’s compensation philosophy was to target between the 25[th] and 50[th] percentile of the market. Additionally, the Company’s compensation philosophy focuses on the contribution of the Named Executive officers while also aligning compensation with value created for shareholders.

Benchmark market data was sourced using the Aon plc Radford Salary Survey (“Radford”) and Western Compensation and Benefits Group (“WSBC”). The Compensation Committee made their recommendations based on the results driven from the benchmarking in these two surveys. Both

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surveys looked into the technology field within adequate sample sizes in the provincial and national region that reflect the company size, revenue, stage of business & industry. WSBC was used as the primary source of data and Radford was used as secondary.

The base salary of each Named Executive Officer is reviewed annually. The base salary assessment and annual revisions, if any, to each Named Executive Officer's base salary are made in accordance with the compensation structure and stage of development of the Company. Base salary and annual revisions are approved by the Board after reviewing the recommendations of the Compensation Committee.

Annual Savings Program

The Company has established an annual savings program. The intention of this program is to provide a cash dollar amount in lieu of Registered Retirement Saving Plan (RRSP). Under their respective employment terms or the Company's compensation structure, certain Named Executive Officers are eligible to receive a discretionary annual cash incentive based on 5% of their annual base salary as part of the Company’s Annual Savings Program. The Annual Savings Program and amounts awarded may be revised from time to time by the Company at the discretion of the Compensation Committee.

Variable Compensation – Short-Term Incentive

Due to the stage of our business, we emphasized on linking a significant portion of the executive total pay to corporate and individual performance. The Company provides short-term variable compensation as an incentive for performance. Each executive has a specified short-term incentive (“STI”) target bonus as a percentage of the base salary, and will be measured against certain corporate performance metrics measured on an annual basis at the outset of each calendar year. Additional cash bonus above the targeted percentage may be awarded to reward extraordinary performance that has led to increased value for shareholders through divestitures, the formation of new strategic or joint venture relationships and/or capital raising efforts. The STI percentages for 2020 are demonstrated below. No amounts were paid or accrued during the fiscal year ended December 31, 2020. STI bonuses based on these STI percentages for 2020 were awarded subsequent to December 31, 2020.

Position	STI Target
CEO	60%
COO	50%
President	50%
CTO	25%

Performance Graph

The following graph compares the cumulative total return on a $100 investment in Common Shares of the Company made on December 31, 2015, to the cumulative total return on the S&P/TSX Composite Index until December 31, 2020 (as of December 31 in each of the five (5) previously completed fiscal yearends).

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$2,000
$1,800
$1,740
$1,600
$1,400
$1,200
$1,000 NNO.V
$800 $331 S&P/TSX
$600
$320 $354
$400
$100 $151
$200 $111 $98 $117 $119
$- $100 $104
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
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There is no direct correlation between the trend of the Company's share performance evidenced by the table above and the Company's compensation to Executive Officers over the period of reference. The stock prices of companies within the Company's industry can be volatile and subject to various market conditions. Rather than being based on the performance of the Company's share price, the trend of the Company's compensation to Executive Officers has evolved positively to reflect the achievement of important developments and milestones to the Company and the Company's overall financial and operational performance. It should also be noted that the Company's Common Shares started to trade on the Toronto Stock Exchange on June 8, 2021 (subsequent to the periods reflected above).

Executive Compensation-Related Fees

For the fiscal year ended December 31, 2020, Miles Employment Group Ltd. was remunerated $61,234 (2019 - $nil) for the services of the HR contractor for all general human resources functions and services. Services provided by the HR contractor are not subject to Board pre-approval. Additionally, Gord Kukec does not receive compensation other than in the form of long-term incentives which include stock options granted on a discretionary basis.

The following table sets out the annual fees paid to WSBC and Radford:

Compensation Fee: WSBC	$2,500
Compensation Fee: Radford	$3,000

SUMMARY COMPENSATION TABLE

The following table sets forth all direct and indirect compensation paid, payable, awarded, granted, given or otherwise provided, directly or indirectly, by the Company, or a subsidiary of the Company to each NEO of the Company, in any capacity, including, for greater certainty, all plan and non-plan compensation, direct and indirect pay, remuneration, economic or financial award, reward, benefit, gift or perquisite paid, payable, awarded, granted, given or otherwise provided to the NEO for services provided and for services to be provided, directly or indirectly, to the Company, for each of the Company's three (3) most recently completed fiscal years:

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Name and principal position	Year	Salary, management fee, or professional fee ($)	Share- based awards ($)	Option- based awards(5) ($)	Non-equity incentive plan compensation ($)	Non-equity incentive plan compensation ($)	Pension	All other	Total compensation ($)
					Annual incentive plans	Long- term incentive plans	value	compensation
							($)	($)
Dan Blondal, CEO and Director(1)	2020 2019 2018	200,000 125,000 125,000	Nil Nil Nil	352,393 Nil 522,340	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	162,500(6) Nil Nil	714,893 125,000 647,340
Dan Martino, CFO and Corporate Secretary(2)	2020 2019 2018	91,500 Nil Nil	Nil Nil Nil	140,957 Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	232,457 Nil Nil
Stephen Campbell, CTO	2020 2019 2018	180,000 123,600 123,600	Nil Nil Nil	281,915 Nil 149,240	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	461,915 123,600 272,840
Paul Matysek, Executive Chairman and Director(3)	2020 2019 2018	96,000 60,000 60,000	Nil Nil Nil	211,436 Nil 391,755	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	162,500(6) Nil Nil	469,936 60,000 451,755
John Lando, President and Director(4)	2020 2019 2018	125,000 75,000 75,000	Nil Nil Nil	211,436 Nil 298,480	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	162,500(6) Nil Nil	498,936 75,000 373,480

(1) Mr. Blondal receives no compensation for his services as Director.

(2) CFO compensation is paid to a firm in which Mr. Martino is a principal. Mr. Martino served as CFO from January 20, 2020 onwards.

(3) Includes amounts paid or accrued to a private corporation controlled by Mr. Matysek for consulting services rendered. Mr. Matysek receives no compensation for his services as Director.

(4) Mr. Lando was appointed interim CFO effective October 1, 2018 through to January 20, 2020. Mr. Lando receives no compensation for his services as Director.

(5) The value of stock options was estimated using the Black-Scholes option pricing model for establishing the fair value of stock options based on the following weighted average assumptions:

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December 31, December 31, December 31,
2020 2019 2018
Risk-free interest rate 0.3% Nil 2.4%
Expected life of stock options (years) 3.0 Nil 5.0
Historical volatility 71.4% Nil 71.3%
Dividend rate 0% Nil 0%
Weighted average fair value per stock option granted $ 1.17 Nil $ 1.01
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(6) Represents a one-time discretionary bonus in recognition of fiscal 2019 contributions prior to the establishment of the existing Variable Compensation – Short-Term Incentive program.

External Management Companies

The NEOs who provide executive management services to the Company through external management companies are Mr. Martino who provides CFO services through Donaldson Brohman Martin, CPA Inc. (a private public practice firm in which Mr. Martino is a principal), and Mr. Matysek who provides Executive Chairman services through Bedrock Capital Corp. (a private corporation that is controlled by Mr. Matysek).

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INCENTIVE PLAN AWARDS TABLE

Stock Options and Other Compensation Securities

The following table sets forth all compensation securities granted or issued, and outstanding to NEOs and/or Directors as at and during the most recently completed fiscal year ended December 31, 2020 for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries.

	Option-based Awards	Option-based Awards	Option-based Awards			Share-based Awards	Share-based Awards	Share-based Awards
							Market
							or	Market or
						Number	payout	payout
						of	value of	value of
						shares	share-	vested
		Number of			Value of	or units	based	share-
		securities			unexercised	of	awards	based
		underlying	Option	Option	in-the-	shares	that	awards not
		unexercised	exercise	expiry	money	that	have not	paid out or
Name	Date of issue	Options	price ($)	date	options ($)(2)	have not	vested	distributed
		(1)				vested	($)	($)
Dan Blondal, CEO and Director(3)	Nov. 12, 2018 Jul. 20, 2020	700,000 300,000	1.28 2.52	Nov. 12, 2023 Jul. 20, 2023	3,367,000 1,071,000	Nil	Nil	Nil
Dan Martino, CFO and Corporate Secretary(3)	Jul. 20, 2020	120,000	2.52	Jul. 20, 2023	428,400	Nil	Nil	Nil
Stephen Campbell, CTO(3)	Mar. 10, 2017 Jul. 12, 2018 Nov. 12, 2018 Jul. 20, 2020	15,000 34,950 200,000 240,000	0.70 1.57 1.28 2.52	Mar. 10, 2022 Jul. 12, 2023 Nov. 12, 2023 Jul. 20, 2023	80,850 157,974 962,000 856,800	Nil	Nil	Nil
Paul Matysek, Chairman and Director(3)	Nov. 12, 2018 Jul. 20, 2020	525,000 180,000	1.28 2.52	Nov. 12, 2023 Jul. 20, 2023	2,525,250 642,600	Nil	Nil	Nil
John Lando, President and Director(3)	Nov. 12, 2018 Jul. 20, 2020	400,000 180,000	1.28 2.52	Nov. 12, 2023 Jul. 20, 2023	1,924,000 642,600	Nil	Nil	Nil

(1) All stock options are fully vested. One common share is issuable on the exercise of each stock option.

(2)

The closing price of the Company’s Common Shares on December 31, 2020 was $6.09.

(3) On February 1, 2021, the Company granted 1,540,000 stock options to NEOs and Directors exercisable at $5.10 each, for three years until February 1, 2024, as follows: 300,000 to Mr. Blondal, 120,000 to Mr. Martino, 240,000 to Mr. Campbell, 180,000 to Mr. Matysek, 180,000 to Mr. Lando, 60,000 to Mr. Brown, and 60,000 to Dr. Guy.

During the year ended December 31, 2020, NEOs and Directors exercised 2,050,000 stock options at $0.25 per share for proceeds to the Company of $512,500.

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The following table sets forth, for each Named Executive Officer, the value of all awards vested and earned during the fiscal year ended December 31, 2020.

	Option-based	Share-based awards	Non-equity incentive plan
	awards – Value	– Value vested	compensation – Value
	vested during the	during the	earned
	year	year	during the year
Name	($)(1)	($)	($)
Dan Blondal, CEO and Director	352,393	N/A	N/A
Dan Martino, CFO and Corporate Secretary	140,957	N/A	N/A
Stephen Campbell, CTO	281,915	N/A	N/A
Paul Matysek, Chairman and Director	211,436	N/A	N/A
John Lando, President and Director	211,436	N/A	N/A

Notes:

• (1) All stock options vested immediately on the date of grant and were issued with exercise prices equal to the closing market price on the date preceding the grants. Accordingly, the values expressed in the table above represent the value of all options granted (and immediately vested) as at and during the fiscal year ended December 31, 2020. The closing price of the Company’s Common Shares on December 31, 2020 was $6.09.

PENSION PLAN BENEFITS

The Company does not have a pension plan that provides for payments or benefits to a Director or Named Executive Officer. In lieu of a pension plan, the Company has established the Annual Savings Program, see “Compensation and Analysis” above.

TERMINATION AND CHANGE OF CONTROL BENEFITS

The figures within the employment and consulting agreements discussed below are as of the date of this Statement of Executive Compensation.

Employment: The Company has an executive employment agreement Dan Blondal, CEO and Director for a base salary of $22,325 per month ($267,900 annually). Pursuant to this employment agreement, in the case of termination by the Company without cause, Dan Blondal is entitled to six (6) weeks’ base pay (or notice) for every year of service to a maximum of twenty-four (24) months. He would not be entitled to further bonus payments after termination. In the case of resignation after a Change of Control and for Good Reason, Mr. Blondal is entitled to twenty-four (24) months’ base salary.

The Company also has an executive employment agreement with John Lando, President and Director for a base salary of $19,583 per month ($235,000 annually). Upon termination of the executive employment agreement by the Company without cause, John Lando is entitled to six (6) weeks’ notice or base pay in lieu for every year of service to a maximum of 18 months’ base salary. He would not be entitled to further bonus payments after termination. In the case of resignation after a Change of Control and for Good Reason, Mr. Lando is entitled to eighteen (18) months’ base salary.

For both Dan Blondal and John Lando, the employment agreements stipulate “Change of Control” as:

• A merger, a consolidation, a reorganization, or an arrangement that results in a transfer of more than fifty percent (50%) of the total voting power of the Company’s outstanding securities to a person or a group of persons different from a person or a group of persons holding those securities immediately prior to such transaction;

• A direct or indirect sale or other transfer of beneficial ownership of securities of the Company possessing more than 50 percent (50%) of the total combined voting power of the Company’s

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• outstanding securities to a person or a group of persons different from a person or a group of persons holding those securities immediately prior to such transaction;

• A direct or indirect sale or other transfer of all or substantially all of the assets of the Company to a person or a group of persons different from a person or a group of persons holding those assets immediately prior to such transaction; or

• A complete liquidation, dissolution or winding-up of the Company.

The employment agreements also stipulate “Good Reason” as one or more of the following events happening without the Executive’s consent:

• Any material adverse change to the Executive’s status, position, authority or responsibilities in effect under the Agreement;

• Any material reduction in incentives, health benefits, bonuses or other compensation plans, practices, policies, or programs provided to the Executive in the aggregate under the Agreement;

• An assignment to the Executive of any duties inconsistent with his/her status as an executive of the Company;

• Any action or inaction by the Company that constitutes constructive dismissal at common law; and

• Any failure to secure the agreement of any successor to fully assume the Company’s obligations under the contract.

Consulting: The Company has an arrangement with Paul Matysek, Chairman and Director for a consulting fee of $12,500 per month ($150,000 annually), payable to Bedrock Capital Corporation (the “Consultant”), a company controlled by Paul Matysek. In the event of a change of control in the Company, and if within six months of the change of control there is a material change in the Consultant’s position as Chairman and Director of the Company, without the Consultant’s express consent, the Consultant has the election to terminate the Consulting Agreement within one month following the material change, and the Company shall within 30 days of the election date, make a payment of $30,000 to the Consultant. Either party may terminate the Consulting Agreement by giving the other party six months advance written notice of their intention to terminate the Consulting Agreement.

Except as noted above, management functions of the Company are substantially performed by Directors or Executive Officers of the Company and not, to any substantial degree, by any other person with whom the Company has contracted.

DIRECTOR COMPENSATION

For the fiscal year ended December 31, 2020, the Board (after considering the recommendations of the Compensation Committee) had the responsibility of establishing the compensation to be paid to the Directors of the Company. The Board, directly or through one of its committees, reviews the compensation payable to the Directors at least once a year, considering the Company's financial situation.

Two of the Company’s Directors (Mr. Lyle Brown, and Dr. Joseph Guy) are compensated by the Company for their services in their capacity as Directors for fees of $1,500 per month ($18,000 annually), plus $750 per month ($9,000 annually) for holding positions as Audit Committee chair, and Compensation Committee chair, respectively. Additionally, Directors are granted from time-to-time incentive stock options in accordance with the Option Plan and the Exchange. The granting of incentive stock options provides a link between Director compensation and the Company’s share price. It also rewards Directors for achieving results that improve Company performance and thereby increase shareholder value. In making a determination as to whether a grant of long-term incentive stock options is appropriate, and if so, the number of options that should be granted, the Board will consider: the number and terms of outstanding incentive stock options held by each Director; the value in securities of the Company that the Board intends to award as compensation; the potential dilution to shareholders and the cost to the Company; general industry standards; and the limits imposed by the terms of the Option Plan and the

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Exchange. The terms and conditions of the Company’s stock option grants, including vesting provisions and exercise prices, are governed by the terms of the Option Plan, which are described under “ Stock Option Plan ” above. The Directors may be reimbursed for actual expenses reasonably incurred in connection with the performance of their duties as Directors.

Director Compensation Table

During the fiscal year ended December 31, 2020, the aggregate amount paid to the Directors who were not also NEOs, as compensation for their services as Directors and members of Committees of the Board amounted to $79,000 in cash payments or $219,958 in total compensation (after including the fair value of stock options granted and vesting during the fiscal year then ended using the Black-Scholes option pricing model).

The following table details the compensation paid to the Company’s Directors (other than NEOs) for their service as Directors for the fiscal year ended December 31, 2020.

				Non-equity
	Fees	Share-	Option-	incentive plan
		based	based	compensation	Pension	All other
Name	earned	awards	awards(1)	($)	value	compensation(2)	Total ($)
	($)	($)	($)		($)	($)
Lyle Brown, Director	27,000	Nil	70,479	Nil	N/A	12,500	109,979
Dr. Joseph Guy, Director(3)	218,635	Nil	70,479	Nil	N/A	12,500	301,614

Notes:

(1) The value of stock options was estimated using the Black-Scholes option pricing model for establishing the fair value of stock options based on the following weighted average assumptions:

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December 31,
2020
Risk-free interest rate 0.3%
Expected life of stock options (years) 3.0
Historical volatility 71.4%
Dividend rate 0%
Weighted average fair value per stock option granted $ 1.17
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(2) Represents a one-time bonus.

(3) Includes $191,635 paid to a private corporation controlled by Dr. Guy for services relating to patent filings, maintenance, and applications, and $27,000 for services as a Director.

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The following table summarizes out all outstanding compensation securities granted or issued to Directors (who are not also NEOs) that remained outstanding as at the end of the fiscal year ended December 31, 2020.

Option-based Awards	Option-based Awards	Option-based Awards	Option-based Awards	Option-based Awards	Option-based Awards	Share-based Awards	Share-based Awards	Share-based Awards
							Market
							or	Market or
						Number	payout	payout
						of	value of	value of
						shares	share-	vested
		Number of			Value of	or units	based	share-
		securities			unexercised	of	awards	based
		underlying	Option	Option	in-the-	shares	that	awards not
		unexercised	exercise	expiry	money	that	have not	paid out or
Name	Date of issue	Options	price ($)	date	options ($)(2)	have not	vested	distributed
		(1)				vested	($)	($)
Lyle Brown, Director(3)	Nov. 12, 2018 Jul. 20, 2020	150,000 60,000	1.28 2.52	Nov. 12, 2023 Jul. 20, 2023	721,500 214,200	Nil	Nil	Nil
Dr. Joseph Guy, Director(3)	Nov. 12, 2018 Jul. 20, 2020	150,000 60,000	1.28 2.52	Nov. 12, 2023 Jul. 20, 2023	721,500 214,200	Nil	Nil	Nil

Notes:

(1) All stock options are fully vested. One common share is issuable on the exercise of each stock option.

(2) The closing price of the Company’s Common Shares on December 31, 2020 was $6.09.

The following table sets forth, for each Director (who is not also an NEO), the value of all awards vested and earned during the fiscal year ended December 31, 2020.

	Option-based	Share-based awards	Non-equity incentive plan
	awards – Value	– Value vested	compensation – Value
	vested during the	during the	earned
	year	year	during the year
Name	($)(1)	($)	($)
Lyle Brown, Director	70,479	N/A	N/A
Dr. Joseph Guy, Director	70,479	N/A	N/A

Notes:

(1) All stock options vested immediately on the date of grant and were issued with exercise prices equal to the closing market price on the date preceding the grants. Accordingly, the values expressed in the table above represent the value of all options granted (and immediately vested) as at and during the fiscal year ended December 31, 2020. The closing price of the Company’s Common Shares on December 31, 2020 was $6.09.

STOCK OPTION PLAN

The Company’s stock option plan (“Option Plan”) was most recently approved by the Shareholders on July 23, 2020. The purpose of the Option Plan is to attract and motivate directors, officers, employees and consultants of the Company and to advance the interest of the Company by affording such persons the opportunity to acquire an equity interest in the Company through rights granted under the Option Plan. A summary of the Option Plan is set forth below.

The Option Plan is a “rolling” plan which provides that a maximum aggregate number of shares reserved for issuance under it, and all of the Company’s other previously established and outstanding incentive stock option plans or grants, is equivalent to 10% of the number of the Company’s issued common shares at the time of the grant of a stock option.

The Option Plan provides that stock options may be granted to directors, officers, employees and consultants. The Option Plan provides that it is solely within the discretion of the Board to determine

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who should receive stock options and in what amounts. The Board may issue a majority of the options to insiders of the Company, however, in no case shall:

• (a) the number of options awarded in a one-year period to any one consultant exceed 2% of the issued shares of the Company (calculated at the time of award);

• (b) the number of options awarded in a one-year period to any one individual exceed 5% of the outstanding shares of the Company (calculated at the time of award), unless disinterested shareholder approval has been obtained;

• (c) the aggregate number of options awarded in a one-year period to employees undertaking investor relations activities exceed 2% of the issued shares of the Company (calculated at the time of award); or

• (d) the aggregate number of options awarded to insiders under the Option Plan and any previously established and outstanding stock option plans or grants in a one-year period exceed 10% of the issued shares of the Company (calculated at the time of award), unless disinterested shareholder approval has been obtained.

The Option Plan may be terminated by the Board at any time, but such termination will not alter the terms or conditions of any option awarded prior to the date of such termination. Any stock option outstanding when the Option Plan is terminated will remain in effect until it is exercised or expires or is otherwise terminated in accordance with the provisions of the Option Plan.

The Option Plan provides that other terms and conditions may be attached to a particular stock option, such terms and conditions to be referred to in a schedule attached to the option certificate. The Board, subject to the policies of the Exchange, may determine and impose terms upon which options will become vested and exercisable. Unless otherwise specified by the Board at the time of granting options, and subject to such other limits as may be imposed by Exchange policies from time to time, all options granted under the Option Plan will vest and become exercisable in full upon grant.

Options granted under the Option Plan will be for a term not to exceed ten years from the date of their grant. In the event an option holder ceases to be a consultant or employee of the Company (other than by reason of death), vested options will expire on the earlier of the expiry date stated in the option certificate (the “Fixed Expiry Date”) and the last day of such reasonable period of time (the “Expiry Period”) following the date of termination that is determined by the Board at the time the Options are awarded. In the event an option holder ceases to be a director or officer of the Company (other than by reason of death), vested options will expire on the earlier of the Fixed Expiry Date and the last day of the Expiry Period (up to a period of one year) following the date the option holder ceases to be a director or officer of the Company. Notwithstanding the foregoing, vested options will expire immediately in the event an option holder ceases to be a director or officer of the Company as a result of ceasing to meet the qualifications under the Business Corporations Act, a resolution being passed by the shareholders or otherwise in accordance with the Company’s Articles, or an order being made by a regulatory authority. Vested options will also expire immediately in the event an option holder ceases to be an employee or consultant as a result of termination for cause or as a result of an order made by a regulatory authority. In the event of the death of an option holder, vested options will expire one year after the date of death or on the Fixed Expiry Date, whichever is earlier.

The price at which an option holder may purchase a common share upon the exercise of a stock option will be as set forth in the option certificate issued in respect of such option and in any event will not be less than the discounted market price of the Company’s common shares as of the date of the grant of the stock option (the “Award Date”). The market price of the Company’s common shares for a particular Award Date would typically be the closing trading price of the Company’s common shares on the last trading day immediately preceding the Award Date, or otherwise in accordance with the terms of the Option Plan.

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In no case will a stock option be exercisable at a price less than the minimum prescribed by each of the organized trading facilities or the applicable regulatory authorities that would apply to the award of the stock option in question.

Stock options will be non-assignable except that they will be exercisable by the personal representative of the option holder in the event of the option holder’s death or incapacity.

Common shares will not be issued pursuant to stock options granted under the Option Plan until they have been fully paid for. The Company will not provide financial assistance to option holders to assist them in exercising their stock options.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets out information as of the end of the Company’s most recently completed fiscal year with respect to compensation plans under which equity securities of the Company are authorized for issuance.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by securityholders	4,604,075	$1.66	4,219,679
Equity compensation plans not approved by securityholders	Nil	Nil	Nil
Total	4,604,075	$1.66	4,219,679

ADDITIONAL INFORMATION

Additional information relating to the Company is available on the SEDAR website located at www.sedar.com under “Company Profiles - Nano One Materials Corp”.

Financial information concerning the Company is provided in the Company’s comparative financial statements and Management’s Discussion and Analysis (“MD&A”) for its most recently completed fiscal year.

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