Sailfish Royalty Corp. — Remuneration Information 2021

Jun 9, 2021

SAILFISH ROYALTY CORP. (the “Company”)

FORM 51-102F6V STATEMENT OF EXECUTIVE COMPENSATION FOR THE YEAR ENDED DECEMBER 31, 2020

Introduction

The following information, dated as of June 9, 2021 is provided pursuant to Form 51-102F6V – Statement of Executive Compensation for Venture Issuers . Venture Issuer has the meaning as defined in National Instrument 51-102 – Continuous Disclosure Obligations .

For the purpose of this Form, a "Named Executive Officer" or "NEO" means (i) each individual who, during any part of the financial year ended December 31, 2020, served as the Company's Chief Executive Officer (" CEO ") or Chief Financial Officer (" CFO "), (ii) the Company’s most highly compensated executive officer (other than the CEO and the CFO), as at December 31, 2020 whose total compensation was, individually, more than CAD$150,000 for that financial year; and (iii) each individual who would have satisfied the criteria in (ii) but for the fact that such individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of such financial year.

For the financial year ending December 31, 2020, the Company had the following Named Executive Officers: Akiba Leisman – Executive Chairman, Cesar Gonzalez – CEO and Bryan McKenzie – CFO.

Director and Named Executive Officer Compensation, Excluding Compensation Securities

The following table of compensation, excluding options and compensation securities, provides a summary of the compensation paid by the Company to each NEO and director of the Company, current or former, for the completed financial years ended December 31, 2020 and 2019, stated in United States dollars.

Name and Position	Year	Salary, Consulting Fee, Retainer or Commissio n	Bonus	Committee or Meeting Fees	Value of Prerequisites	Value of All Other Compensation	Total Compensation
Akiba Leisman(1) Executive Chairman	2020 2019	Nil Nil	$330,200(7) Nil	Nil Nil	Nil Nil	Nil Nil	$330,200 Nil
Cesar Gonzalez(2) CEO and Director	2020 2019	Nil Nil	$153,700(7) Nil	Nil Nil	Nil Nil	Nil Nil	$153,700 Nil
Bryan McKenzie(3) CFO	2020	$15,460	Nil	Nil	Nil	Nil	$15,460
Peter Van Zoost(4)(5) Controller (Former CFO)	2020 2019	$68,500 $68,500	$6,500 Nil	Nil Nil	Nil Nil	Nil Nil	$75,000 $68,500
Walter Reich(4) Director	2020 2019	$15,000 $15,000	$3,300 Nil	Nil Nil	Nil Nil	Nil Nil	$18,300 $15,000
Alessandro Palladino(4) Director	2020 2019	$9,000 $9,000	$3,300 Nil	Nil Nil	Nil Nil	Nil Nil	$12,300 $9,000
Michael Starogiannis Director	2020 2019	$15,000 $15,000	$3,300 Nil	Nil Nil	Nil Nil	Nil Nil	$18,300 $15,000
Todd Hilditch(6) (Former Director)	2020 2019	$16,966 $5,534	$51,000 Nil	Nil Nil	Nil Nil	Nil Nil	$67,966 $5,534

Notes:

(1) Akiba Leisman resigned as CEO and was appointed at Executive Chairman of the Board on October 28, 2020.

(2) Cesar Gonzalez resigned as Vice President of Corporate Development and was appointed as CEO on October 28, 2020.

(3) Bryan McKenzie was appointed as CFO on October 28, 2020. Previously, Mr. McKenzie was the CFO of Terraco Gold Corp. (“Terraco”) which was acquired by the Company in 2019. Prior to his appointment, he managed the Terraco group of entities and aided with other day-to-day activities. Consulting fees were paid to Sandstone Consulting Ltd., which is 100% owned by Bryan McKenzie. All payments were made in Canadian dollars and have been converted into United States dollars at a rate of 0.773 for presentation purposes.

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• (4) The salary, consulting and/or director compensation, in its entirety, is paid by the Company to a limited liability company owned or managed by Peter Van Zoost, Walter Reich and Alessandro Palladino.

• (5) Peter Van Zoost resigned as CFO and became the Company’s Controller based in the British Virgin Islands on October 28, 2020.

• (6) Todd Hilditch ceased acting as a director on October 28, 2020.

• (7) 100% of the proceeds were used to exercise stock options.

External Management Companies

Other than as described below, none of the NEOs or directors of the Company have been retained or employed by an external management company which has entered into an understanding, arrangement or agreement with the Company to provide executive management services to the Company, directly or indirectly.

Pursuant to an independent contractor agreement between Sandstone Consulting Ltd. (" Sandstone ") and the Company, effective January 1, 2021, the Company engaged Sandstone, and through Sandstone, Bryan McKenzie to provide various services in connection with performing the function of Chief Financial Officer.

Pursuant to a director services agreement between Medeci Services Ltd. (" MSL ") and the Company, effective July 25, 2017, the Company engaged the services of Walter Reich and Alessandro Palladino.

Pursuant to an service agreement between MSL and the Company, effective November 1, 2020, the Company engaged MSL, and through MSL, Peter Van Zoost to provide various services in connection with performing the function of Controller.

Stock Options and Other Compensation Securities and Instruments

The following table of compensation securities provides a summary of all compensation securities granted or issued by the Company to each NEO and director of the Company, current and former, for the financial year ended December 31, 2020, for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries:

		Compensation Securities	Compensation Securities	Compensation Securities
Name and Position	Type of Compensation Security(1)(2)	Number of compensation securities, number of underlying securities, and percentage of class(3)	Date of issue or grant	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(4)
Akiba Leisman Executive Chairman	Option Option Option	500,000 900,000 1,191,098	Oct 28, 2020 April 24, 2018 Dec 24, 2018	C$1.25 C$0.75 C$1.00	C$1.16 C$1.72 C$0.91	C$1.17 C$1.17 C$1.17	Oct 28, 2025 April 24, 2023 Dec 23, 2023
Cesar Gonzalez CEO and Director	Option Option Option	500,000 300,000 673,029	Oct 28, 2020 April 24, 2018 Dec 24, 2018	C$1.25 C$0.75 C$1.00	C$1.16 C$1.72 C$0.91	C$1.17 C$1.17 C$1.17	Oct 28, 2025 April 24, 2023 Dec 23, 2023
Bryan McKenzie CFO	Option Option Option	500,000 66,000 80,880	Oct 28, 2020 Aug 19, 2019 Aug 19, 2019	C$1.25 C$1.00 C$1.33	C$1.16 C$1.26 $C1.26	C$1.17 C$1.17 C$1.17	Oct 28, 2025 Dec 23, 2023 Dec 23, 2023
Peter Van Zoost Controller (Former CFO)	Option Option	100,000 50,000	Oct 28, 2020 Dec 24, 2018	C$1.25 C$1.00	C$1.16 C$0.91	C$1.17 C$1.17	Oct 28, 2025 Dec 23, 2023
Walter Reich Director	Option Option	50,000 25,000	Oct 28, 2020 Dec 24, 2018	C$1.25 C$1.00	C$1.16 C$0.91	C$1.17 C$1.17	Oct 28, 2025 Dec 23, 2023
Alessandro Palladino Director	Option Option	50,000 25,000	Oct 28, 2020 Dec 24, 2018	C$1.25 C$1.00	C$1.16 C$0.91	C$1.17 C$1.17	Oct 28, 2025 Dec 23, 2023

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		Compensation Securities	Compensation Securities	Compensation Securities
Name and Position	Type of Compensation Security(1)(2)	Number of compensation securities, number of underlying securities, and percentage of class(3)	Date of issue or grant	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(4)
Michael Starogiannis Director	Option Option	50,000 25,000	Oct 28, 2020 Dec 24, 2018	C$1.25 C$1.00	C$1.16 C$0.91	C$1.17 C$1.17	Oct 28, 2025 Dec 23, 2023
Todd Hilditch (Former Director)	Option Option Option	120,000 120,000 150,120	Aug 19, 2019 Aug 19, 2019 Aug 19, 2019	C$0.58 C$1.00 C$1.33	C$1.26 C$1.26 C$1.26	C$1.17 C$1.17 C$1.17	Oct. 30, 2023 Dec 23, 2023 Dec 23, 2023

Notes:

• (1) There are no vesting requirements unless the Eligible Person is a consultant providing investor relations services to the Company, in which case the options must vest over at least 12 months with no more than one-quarter vesting in any threemonth period. However, the Board may impose additional vesting requirements and, subject to obtaining any required approval from the TSXV, may authorize all unvested options to vest immediately. If there is a ‘change of control’ of the Company (due to a take-over bid being made for the Company or similar events), all unvested options, subject to obtaining any required approval from the TSXV, shall vest immediately.

• (2) There are no restrictions or conditions for converting the compensation securities.

• (3) The total compensation securities held by each NEO on December 31, 2020 is the same as disclosed in the table above.

• (4) The Company extended the expiry date for options granted April 24, 2018 to April 24, 2023 and options granted on August 19, 2019 to December 23, 2020. The exercise price was not amended.

The following table provides a summary of each exercise of compensation securities by each NEO and director of the Company, current and former, for the financial year ended December 31, 2020:

		Exercise of Compensation Securities	Exercise of Compensation Securities	Exercise of Compensation Securities	Exercise of Compensation Securities
						Difference
						between
						Exercise
					Closing Price	Price and
		Number of	Exercise		Per Security	Closing Price	Total Value
	Type of	Underlying	Price Per		on Date of	on Date of	on Exercise
	Compensatio	Securities	Security	Date of	Exercise	Exercise	Date
Name	n Security	Exercised	($)	Exercise	($)	($)	($)
Akiba Leisman Executive Chairman	Options	433,902	C$1.00	Sept 4, 2020	C$1.39	C$0.39	C$603,124
Cesar Gonzalez Director and CEO	Options	201,971	C$1.00	Sept 4, 2020	C$1.39	C$0.39	C$280,740
Peter Van Zoost Controller (Former CFO)	Options	Nil	Nil	Nil	Nil	Nil	Nil
Bryan McKenzie CFO	Options	Nil	Nil	Nil	Nil	Nil	Nil
Walter Reich Director	Options	Nil	Nil	Nil	Nil	Nil	Nil
Alessandro Palladino Director	Options	Nil	Nil	Nil	Nil	Nil	Nil
Michael Starogiannis Director	Options	Nil	Nil	Nil	Nil	Nil	Nil
Todd Hilditch (Former Director)	Options	Nil	Nil	Nil	Nil	Nil	Nil

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Stock Options

The Company has adopted a 10% rolling incentive stock option plan (the " Option Plan "), which was previously approved by the shareholders of the Company at the Company's annual general and special meeting held on September 21, 2018 and must be re-approved at the Company's next annual general meeting. The Option Plan provides that the board of directors of the Company (the " Board ") may from time to time, in its discretion, grant to directors, senior officers, employees, management company employees and consultants of the Company and its subsidiaries (collectively the “ Eligible Persons ”). The Option Plan was previously The purpose of the Option Plan is to give to Eligible Persons, as additional compensation, the opportunity to participate in the success of the Company by granting to such individuals options, exercisable over periods of up to five years as determined by the Board, to buy shares of the Company at a price not less than the market price prevailing on the date the option is granted less applicable discount, if any, permitted by the policies of the TSX Venture Exchange (the " TSXV ") and approved by the Board.

Pursuant to the Option Plan, the Board may grant options to Eligible Persons in consideration of them providing their services to the Company or a subsidiary. The number of shares subject to each option is determined by the Board within the guidelines established by the Option Plan. The options enable the Eligible Persons to purchase shares of the Company at a price fixed pursuant to such guidelines. The options are exercisable by the Eligible Persons giving the Company notice and payment of the exercise price for the number of shares to be acquired.

The Option Plan authorizes the Board to grant stock options to the Eligible Persons on the following main terms:

1. The number of shares subject to issuance pursuant to any outstanding equity compensation plans, in the aggregate, cannot exceed 10% of the Company’s issued shares on a non-diluted basis.

2. Any share subject to an option granted under the Option Plan that was subsequently cancelled or terminated without having been exercised in accordance with the terms of the Option Plan, will again be available for issuance pursuant to the exercise of options granted under the Option Plan.

3. The number of shares reserved for issuance under the Option Plan and all of the Company’s other previously established or proposed share compensation arrangements in any 12-month period:

4. (a) to any one Eligible Person, shall not exceed 5% of the total number of issued and outstanding shares on the grant date on a non-diluted basis unless the Company has obtained disinterested shareholder approval to exceed such limit;

5. (b) to insiders as a group and to any one Insider in any one-year period shall not exceed 10% of the total number of issued and outstanding shares on the grant date on a non-diluted basis unless the Company has obtained disinterested shareholder approval to exceed such limit;

6. (c) to any one consultant shall not exceed 2% in the aggregate of the total number of issued and outstanding shares on the grant date on a non-diluted basis; and

7. (d) all Eligible Persons who undertake investor relations activities shall not exceed 2% in the aggregate of the total number of issued and outstanding shares on the grant date on a non-diluted basis.

8. The exercise price of the options cannot be set at less than the closing trading price of the Company’s shares less the applicable discount market price, if any, on the grant date for grants to any Eligible Person other than Eligible Persons from the U.S. where the exercise price payable per share shall be no less than the fair market value on the grant date.

9. The options may be exercisable for up to five years.

10. There are no vesting requirements unless the Eligible Person is a consultant providing investor relations services to the Company, in which case the options must vest over at least 12 months with no more than one-quarter vesting in any three-month period. However, the Board may impose additional vesting requirements and, subject to obtaining any required approval from the TSXV, may authorize all unvested options to vest immediately. If there is a ‘change of control’ of the Company (due to a take-over bid being made for the Company or similar events), all unvested options, subject to obtaining any required approval from the TSXV, shall vest immediately.

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1. The options may only be exercised by the Eligible Person (to the extent they have already vested) for so long as the Eligible Person is a director, officer or employee of, or consultant to, the Company or any subsidiary or is an employee of the Company’s management corporation and within a period thereafter not exceeding the earlier of:

2. (a) the original expiry date;

3. (b) 90 days after ceasing to be a director, officer or employee of, or consultant to, the Company due to early retirement, to termination by the Company other than for cause, or to voluntary resignation; and

4. (c) if the Eligible Person dies or becomes disabled, within the earlier of 365 days from the Eligible Person’s death or disability and the expiry date.

If the Eligible Person is terminated ‘for cause’ the options will terminate concurrently.

1. The options are not assignable except to a wholly-owned holding company.

2. Disinterested shareholder approval must be obtained prior to the reduction of the exercise price of options granted to insiders of the Company.

3. the Company may take such steps as are considered necessary or appropriate for the withholding and/or remittance of any taxes which the Company is required by any law or regulation of any governmental authority whatsoever to withhold and/or remit (at the highest marginal income tax rate unless a lower marginal income tax rate is demonstrated by the Eligible Person to the satisfaction of the Company) in connection with any option or option exercise.

Any amendments to the Option Plan or outstanding stock options by the Board are subject to the approval of the TSXV and, if required by the TSXV, of the shareholders of the Company, possibly with only disinterested shareholders’ being entitled to vote. An amendment to an outstanding stock option will also require the consent of the Eligible Person.

Employment, Consulting and Management Agreements

Executive Chairman Agreement

Effective October 28, 2020, the Company appointed Akiba Leisman to act Executive Chairman of the Company, pursuant to which Mr. Leisman was granted stock options under the Option Plan. There are no salary, termination or severance payments associated with his appointment.

CEO Agreement

Effective October 28, 2020, the Company appointed Cesar Gonzalez to act as Chief Executive Officer of the Company, pursuant to which Mr. Gonzalez was granted stock options under the Option Plan. There are no salary, termination or severance payments associated with his appointment.

CFO Consulting Agreement

Effective January 1, 2021, the Company entered into a independent contractor agreement (“ Sandstone Agreement ”) with Sandstone Consulting Ltd. (“ Sandstone ”), a company controlled by Bryan McKenzie. Pursuant to the Sandstone Agreement, the Company shall pay certain fees to Sandstone for an indefinite term. In the event that there is an occurrence of a change of control, the Company will pay Sandstone an additional lump sum amount equivalent to six (6) months of fees. Effective October 28, 2020, the Company appointed Bryan McKenzie to act as Chief Financial Officer of the Company.

Director Service Agreements and Former CFO Agreement

Effective July 25, 2017, the Company entered into the following agreements, each with Medeci Service Ltd. (“ MSL ”): (i) a Director Service Agreement for the services of Walter Reich and Alessandro Palladino; and (ii) a Chief Financial Officer Agreement for the services of Peter Van Zoost. Each of these agreements have the following provisions with respect to change of control, severance, termination or constructive dismissal:

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1. MSL may terminate the agreement at any time by giving not less than three month’s notice in writing to the Company provided that MSL may terminate the agreement without notice if the Company is in breach of the agreement and such breach is not capable of remedy or the Company has failed to remedy the breach within 14 days of being asked to do so in writing;

2. the Company may terminate the agreement at any time by giving not less than three months’ notice in writing to MSL provided that the Company may terminate the agreement without notice if MSL is in breach of the agreement and such breach is not capable of remedy or MSL has failed to remedy the breach within 14 days of being asked to do so in writing;

3. the agreement will terminate automatically on the liquidation or striking-off of the Company; and

4. on termination of the agreement

5. (a) the Company shall pay certain fees due to MSL under the agreement;

6. (b) the Company shall reimburse MSL any outstanding fees, charges, taxes duties or expenses to which MSL is entitled under the agreement;

7. (c) the Directors shall be deemed to have served notice of his/her resignation on the Company in accordance with the Memorandum and Articles of Association;

8. (d) MSL shall, at the expense of the Company, deliver or procure the delivery to the Company’s order, all books of account, records, registers, correspondence and documents relating to the affairs of or belonging to the Company and in the possession of or under the control of MSL; and

9. (e) the Directors and MSL shall refrain from making any written or oral statement or communication whether private or public which disparages, demeans or which may have the effect of disparaging or demeaning the Company, its business reputation, affiliates, shareholders, former, present and/or future directors of the Company and shall cause its employees, officers, directors, agents, affiliates and advisors to be similarly bound.

The agreements have no incremental payments that are triggered by, or result from, change of control, severance, termination or constructive dismissal. Effective October 28, 2020, Peter Van Zoost resigned as CFO and was engaged as the Controller via Medeci Services Limited, under the exact same terms, conditions and compensation as under the previous Chief Financial Officer Agreement.

Oversight and Description of Director and NEO Compensation

The objective of the Company’s compensation strategy is to provide adequate levels of base compensation for its NEOs as well as discretionary bonuses to act as incentive mechanisms for achieving corporate goals and objectives and ensure compensation is competitive so as to enable the Company to continue to attract talented individuals. Each NEO receives a base salary in recognition of the position’s day-to-day duties and responsibilities, which constitutes the largest share of the NEO’s compensation package.

The Compensation Committee, a committee of the Board, is responsible for establishing management compensation. The Board, and the Compensation Committee thereof, do not have a pre-determined, performance-based compensation plan, but rather review the performance of management at the end of each fiscal year. The Compensation Committee, as at December 31, 2020, was comprised of the following directors: Alessandro Palladino, Walter Reich and Cesar Gonzalez. Alessandro Palladino, Walter Reich are independent of the management of the Company.

The Board reviews each NEO’s base salary on an annual basis, and may also consider an NEO’s qualifications, experience, length of service and past contributions in determining an NEO’s base salary.

The Company’s executive compensation policy consists of an annual base salary and long-term incentives in the form of stock options granted under the Company’s Option Plan (as defined above).

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For the year ended December 31, 2020, compensation for the Named Executive Officers consisted of two primary elements: base salary/consulting fees and long-term equity incentives. The following provides an overview of the elements of compensation:

Compensation Element	Type of Compensation	Name of Plan	Performance Period	Form of Payment
Base Salary/ Consulting Fees	Annual – Fixed Pay	Salary Program	1 year	Cash
Long-Term Equity Incentives	Long Term – Variable Pay	Stock Option Plan	Up to 5 years	Shares or Options

Base Salary/Consulting Fees . The base salary component is intended to provide a fixed level of competitive pay that reflects each NEO’s primary duties and responsibilities. It also provides a foundation upon which performance based incentive compensation elements are assessed and established. When the Company has diversified sources of cash flow from its royalty portfolio, it intends to pay base salaries to its NEOs, including the CEO, that are in the range of those for similar positions within the industry peer group. The Company does not benchmark its executive compensation program. Salaries of the NEOs, including that of the CEO are reviewed annually.

Long-Term Incentive Programs . NEOs, along with all of the Company’s officers, Directors, employees, contractors and other service providers, are eligible to participate in the Option Plan. The Option Plan and the common shares of the Company reserved thereunder have been approved by the Company’s shareholders on an annual basis. The Option Plan promotes an ownership perspective among executives, encourages the retention of key executives and provides an incentive to enhance shareholder value by furthering the Company’s success. As with most companies in the Company’s peer group, options form an integral component of the total compensation package provided to the Company’s NEOs. Participation in the Option Plan rewards overall corporate performance, as measured through the price of the Company’s common shares. In addition, the Option Plan enables executives to develop and maintain a significant ownership position in the Company. Option grants may be made periodically, typically annually, to ensure that the number of Options granted to any particular individual is commensurate with the individual’s level of ongoing responsibility within the Company. In considering option grants, the Compensation Committee evaluate the number of Options an individual has been granted, the exercise price and value of the Options and the term remaining on those Options.

Compensation Policies and Risk Management

The Board considers the implications of the risks associated with the Company’s compensation policies and practices when determining rewards for its officers. Commenced in 2018, the Board intends to review at least once annually the risks, 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 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- t e r m 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 executive compensation (base salary) represents a relatively small part of the total compensation. As a result, it is unlikely 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 Board meetings during which financial and other information of the Company is 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.

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Hedging of Economic Risks in the Company’s Securities

The Company has not adopted a policy prohibiting Directors or officers from purchasing financial instruments that are designed to hedge or offset a decrease in market value of the Company’s securities granted as compensation or held, directly or indirectly, by Directors or officers. However, the Company is not aware of any Directors or officers having entered into this type of transaction.

Pension Plan Benefits

The Company does not have a pension plan that provides for payments or benefits to the Named Executive Officers at, following, or in connection with retirement.