Turnium Technology Group Inc. — Remuneration Information 2023

Jul 31, 2023

TURNIUM TECHNOLOGY GROUP INC. (the “Company”) 3355 Grandview Hwy, Unit 2 Vancouver, British Columbia, V5M 1Z5

STATEMENT OF EXECUTIVE COMPENSATION

The following information is presented by the management of the Company in accordance with Form 51-102F6V – Statement of Executive Compensation – Venture Issuers , and sets forth compensation for the year ended September 30, 2022.

GENERAL

For the purpose of this Statement of Executive Compensation:

“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 ended September 30, 2022, whose total compensation was more than $150,000 for that financial year; 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 financial year;

“ plan ” includes any plan, contract, authorization, or arrangement, whether or not set out in any formal document, where cash, compensation securities or any other property may be received, whether for one or more persons;

“ underlying securities ” means any securities issuable on conversion, exchange or exercise of compensation securities.

Based on the foregoing definitions, during the most recently completed financial year ended September 30, 2022, the Company had six (6) NEOs, namely Derek Spratt, Chief Executive Officer and Interim Chief Financial Officer, Aaron Patton, President of Tenacious Networks, Inc., a wholly-owned subsidiary of the Company, Johan Arnet, former Chief Executive Officer, Robin Bruce Hutchison, former Chief Executive Officer, Judi Dalling, former Chief Financial Officer and Juliet Jones, former Chief Financial Officer.

DIRECTOR AND NEO COMPENSATION

Director and NEO compensation, excluding options and compensation securities

The following table sets forth all compensation paid, payable, awarded, granted, given, or otherwise provided,

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directly or indirectly, by the Company or its subsidiary, to each NEO and director 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 or a director of the Company for services provided and for services to be provided, directly or indirectly, to the Company or its subsidiary.

	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	Table of compensation excluding compensation securities
Name and position	Year Ended(1)	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)
Ralph Garcea(2) Chairman, Director	2022 2021	20,000 NA	NA NA	NA NA	NA NA	NA NA	20,000 NA
Jim Lovie(3) Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Johan Arnet(4) Director Former CEO	2022 2021	275,000 300,000	NA NA	NA NA	NA NA	NA NA	275,000 300,000
Erin Campbell(5) Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Peter Smyrniotis(6) Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Derek Spratt(7) CEO, Interim CFO, Director	2022 2021	202,000 232,375	NA NA	NA NA	NA Nil	NA NA	202,000 232,375
Peter Green(8) Director	2022 2021	30,000 NA	NA NA	NA NA	NA NA	NA NA	30,000 NA
Evelyn Bailey(9) Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Aaron Patton(10) President, Tenacious _Networks, Inc. _	2022 2021	150,000 150,000	125,650 58,370	NA NA	NA NA	NA NA	275,650 208,370
John Michael Hutchison(11) Former Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Vassilios (Bill) Mitoulas(12) Former Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Robin Bruce Hutchison(13) Former CEO, Former Director	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA
Judi Dalling(14) Former CFO	2022 2021	NA NA	NA NA	NA NA	NA NA	NA NA	NA NA

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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	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 Ended(1)	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)
Juliet Jones(15) Former CFO	2022 2021	198,000 NA	NA NA	NA NA	NA NA	NA NA	198,000 NA

NOTES:

(1) Year End is September 30

• (2) Mr. Garcea appointed as director on November 19, 2021, and Chair effective March 6, 2023.

• (3) Mr. Lovie was appointed as director on June 16, 2022.

• (4) Mr. Arnet was appointed as director on June 16, 2022. Mr. Arnet acted as CEO from June 16, 2022 to August 29, 2022.

• (5) Ms. Campbell was appointed as director on November 16, 2022.

• (6) Mr. Smyrniotis was appointed as director on November 16, 2022.

• (7) Mr. Spratt was appointed as director on June 16, 2022, and has acted as CEO on August 29, 2022 and as Interim CFO since January 16, 2023.

• (8) Mr. Green was appointed as director on June 16, 2022.

• (9) Ms. Bailey was appointed as director on June 16, 2022

• (10) Mr. Patton has acted as President of Tenacious Networks, Inc., a wholly-owned subsidiary of the Company, since June 28, 2020.

• (11) Mr. Hutchison was appointed as director on October 17, 2017 and ceased to be a director on June 17, 2022.

• (12) Mr. Mitoulas was appointed as director on November 19, 2021 and ceased to be a director on June 17, 2022

• (13) Mr. Hutchison was appointed as director and acted as CEO and President on October 17, 2017 and ceased to be director, CEO and President on June 17, 2022

• (14) Ms. Dalling acted as CFO from October 17, 2017 to June 16, 2022.

• (15) Ms. Jones acted as CFO from November 1, 2021 to November 28, 2022.

Compensation and Corporate Governance Committee

The Compensation and Corporate Governance Committee is responsible for ensuring an appropriate plan for executive compensation is in place and for making recommendations to the Board with respect to the compensation of the Company’s executive officers. The Board will ensure that the total compensation paid to all Named Executive Officers is fair and reasonable and is consistent with the Company’s compensation philosophy. This compensation philosophy is intended to ensure that executive compensation is reflective of prevailing market rates and is designed to create incentives to executive performance to achieve the strategic objectives and increase the value to shareholders.

The Compensation and Corporate Governance Committee periodically reviews the compensation paid to the directors and executive officers and ensures that the total compensation paid to all of the Named Executive Officers is fair, reasonable and competitive with the industry and is consistent with the Company’s compensation philosophy and is aligned with the overall business objectives and with shareholders’ interests.

The Compensation and Corporate Governance Committee is responsible for the review and assessment of compensation arrangements for the Company’s executive officers and is authorized to approve terms of employment, salaries, bonuses, option grants and other incentive arrangements for the executive officers, and, where appropriate, any severance arrangements. The Compensation and Corporate Governance Committee reviews and assesses the performance of executive officers in accordance with the Company’s compensation policies and practices. In addition to informal industry comparables from publicly available information, the Compensation and Corporate Governance Committee considers a variety of factors when determining both compensation policies and programs, and individual compensation levels. These factors include the long-range interests of the Company and its shareholders, overall financial and operating performance and the Compensation and Corporate Governance Committee’s assessment of each executive’s individual performance and contribution toward meeting corporate objectives. The Compensation and Corporate Governance Committee and Board of Directors considers annually the risks associated with the compensation policies and practices including such risks as the retention of qualified executive staff during an economic downturn in the market. The CEO together with the Compensation and Corporate Governance Committee, reviews and discusses on an annual base the risks and provide oversight of the compensation policies and

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practices, and discusses with the Compensation and Corporate Governance Committee any additional practices that the Company may use to identify and mitigate compensation policies and practices that could encourage an NEO or individual at a principle business unit or division to take inappropriate or excessive risks. The Company also has each NEO and employee annually review and sign off on the Company’s corporate policies and procedures, including anti-bribery and anti-corruption policies and procedures. As part of this annual review, the CEO will discuss with the Compensation and Corporate Governance Committee any risks arising from the Company’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

The members of the Compensation and Corporate Governance Committee are Ralph Garcea and Jim Lovie. The Compensation and Corporate Governance Committee have direct experience in their past executive and board positions that are relevant to their responsibilities as members of the Compensation and Corporate Governance Committee.

External Management Companies

Aaron Patton, President of Tenacious Networks, Inc., a wholly-owned subsidiary of the Company (“ Tenacious ”), is not an employee of the Company. Mr. Patton provides his services to Tenacious as an independent contractor through Tenacious Services Inc. (the “ Contractor ”). Tenacious is party to an independent contractor agreement dated December 1, 2022 with the Contractor (the “ Independent Contractor Agreement ”). Pursuant to the Independent Contractor Agreement, Tenacious has engaged the Contractor as President of Tenacious (such services as President referred to as the “ Services ”) and will pay the Contractor at the rate of CAD$12,500 per month plus applicable GST for the Services. Under the Independent Contractor Agreement, Tenacious has agreed to pay to the Contractor a commission based on the gross revenue received to Tenacious on an annual basis during the term of the Independent Contractor Agreement as follows: (i) for the gross revenue received by Tenacious up to $2,000,000 during the fiscal year, the Contractor will be paid 5% (i.e., $100,000 if Tenacious’ gross revenue is $2,000,000); and (ii) for the gross revenue received by Tenacious above two million and one dollars ($2,000,001) during a fiscal year, the Contractor will be paid 7%. The Contractor understands and has agreed that it will bear sole responsibility and liability for any costs or expenses incurred while performing the Services.

Stock Options and Other Compensation Securities

The following table sets out all compensation securities granted or issued to each director and NEO by the Company or by any subsidiary thereof in the year ended September 30, 2022, for services provided, or to be provided, directly or indirectly, to the Company or any subsidiary thereof.

		Compensation Securities
Name and position	Type of compensation security	Number of compensation securities, number of underlying securities, and percentage of class	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 Ended September 30, 2022 ($)	Expiry Date
Derek Spratt CEO, Director	Stock Options	1,467,391 options 1,467,391 common shares	Aug.5, 2021	0.10	NA	0.22	Aug. 4 2026
Ralph Garcea Chair, Director	Stock Options	350,000 options 350,000 common shares	July 16, 2022	0.56	0.35	0.22	June 16, 2027
Jim Lovie Director	Stock Options	300,000 options 300,000 common	Aug. 5 2021	0.15	NA	0.22	Aug. 4 2026

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Compensation Securities

Compensation Securities	Compensation Securities	Compensation Securities	Compensation Securities	Compensation Securities	Compensation Securities	Compensation Securities	Compensation Securities
Name and position	Type of compensation security	Number of compensation securities, number of underlying securities, and percentage of class	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 Ended September 30, 2022 ($)	Expiry Date
		shares
Johan Arnet Director	Stock Options	300,000 options 300,000 common shares	Nov. 17 2021	0.48	NA	0.22	Nov. 26 2026
Erin Campbell Director	Stock Options	150,000 options 150,000 common shares	Nov. 17 2021	0.48	NA	0.22	Nov. 26 2026
Peter Smyrniotis Director	Stock Options	300,000 options 300,000 common	Aug. 5 2021	0.15	NA	0.22	Nov. 26 2026
Peter Green Director	Stock Options	300,000 options 300,000 common	July 25 2022	0.28	0.35	0.22	July 26 2027
Evelyn Bailey Director	Stock Options	300,000 options 300,000 common	July 25 2022	0.28	0.35	0.22	July 26 2027
Aaron Patton President, Tenacious Networks, Inc.	Stock Options	600,000 options 600,000 common shares	Nov. 17 2021	0.48	NA	0.22	Nov. 26 2026
John Michael Hutchison Former Director	Stock Options	NA	NA	NA	NA	NA	NA
Vassilios (Bill) Mitoulas Former Director	Stock Options	68,000 options 68,000 common shares	June 16 2022	0.56	0.56	0.22	June 16 2027
Robin Bruce Hutchison Former CEO, Former Director	Stock Options	NA	NA	NA	NA	NA	NA
Judi Dalling Former CFO	Stock Options	NA	NA	NA	NA	NA	NA
Juliet Jones Former CFO	Stock Options	2,000,000 options	Nov. 17 2021	0.48	NA	0.22	Nov. 26 2026

Exercise of Compensation Securities by Directors and NEOs

There were no compensation securities exercised by a director or NEO during the financial year ended September 30, 2022.

Stock Option Plans and Other Incentive Plans

On June 16, 2022, the Board of Directors adopted a 20% Fixed stock option plan (the “ Option Plan ”) under

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which Options may be granted to the Company’s directors, officers, employees and consultants. The full text of the Option Plan is attached hereto as Schedule “B”.

The Option Plan provides that the board of directors may, from time to time, in its discretion, and in accordance with TSX-V requirements, grant to directors, officers, employees and consultants to the Company, nontransferable options to purchase Common Shares, provided that the number of Common Shares reserved for issuance will not exceed that number of Common Shares which is equal to 20% of the issued and outstanding Common Shares.

Options will be exercisable for a period of up to ten years from the date of grant. The number of Common Shares reserved for issuance to:

(a) any individual, will not exceed 5% of the issued and outstanding Common Shares; and

(b) all consultants, will not exceed 2% of the issued and outstanding Common Shares. In addition, the Option Plan will provide that no more than 5% of the issued Common Shares will be granted to any individual in any 12-month period, unless disinterested shareholder approval is obtained; no more than 2% of the issued Common Shares will be granted to any one consultant in any 12-month period; and no more than an aggregate of 2% of the issued Common Shares will be granted to all Persons conducting investor relations activities in any 12 month period.

Subject to TSX-V requirements, vesting is at the discretion of the Board of Directors at the time of grant. Options may be exercised for a period of 90 days following cessation of the optionee’s position with the Company, provided that if the cessation of office, employment, directorship, or consulting arrangement was by reason of death, the option may be exercised within a maximum period of one year after such death, subject to the expiry date of such option. The exercise price of each Option will be determined by the Board of Directors at the time any option is granted. In no event shall such exercise price be lower than the exercise price permitted by the TSX-V.

Employment, consulting and management agreements

In addition to the Independent Contractor Agreement disclosed above under “External Management Companies”, the Company is party to an employment agreement with Derek Spratt (the “ Executive ”) dated effective September 1, 2022 (the “ CEO Employment Agreement ”). Pursuant to the CEO Employment Agreement, the Company has engaged the Executive as Chief Executive Officer of the Company and will be paid an annual base salary (the “ Base Salary ”) of CAD$300,000, subject to increases at the Board’s discretion, with any salary or bonuses above CAD$10,000 per month being accrued until at least $1 million in net new debt or equity financing is secured by the Company or completes a change of control transaction. The Executive was granted 50,000 stock options under the terms of the Company’s stock option plan. The Executive is eligible for a CAD$100,000 discretionary bonus during the 2023 fiscal year and each subsequent fiscal year upon achieving certain key performance indicators including revenue and EBITDA targets, financing transaction targets and M&A transaction targets. The Company shall promptly reimburse the Executive for all reasonable business expenses incurred by Executive in performing services under the CEO Employment Agreement, including all expenses of travel, and living expenses while away from home on business or at the request of and in the service of the Company and its affiliates. In connection with a termination of the Executive upon death, by the Company for cause, by the Executive without good reason or an involuntary termination, the Company shall pay to the Executive all vested entitlements under applicable groups benefit plans an amount equal to the sum of: (i) the Executive’s Base Salary owes for services provided through to the date of termination; (ii) accrued and unused vacation pay; and (iii) any incurred but unreimbursed expenses for which the Executive is entitled under the CEO Employment Agreement.

Termination and Change of Control Benefits

The Company does not have any plan or arrangement with respect to compensation to its executive officers which would result from the resignation, retirement or any other termination of employment of the executive officers' employment with the Company or from a change of control of the Company or a change in the executive officers' responsibilities following a change in control.

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Oversight and description of director and named executive officer compensation

Compensation of Directors

The Company does not have a compensation program other than paying consulting fees and incentive bonuses. The compensation of the executive officers is determined by the Board, based in part on recommendations from the Chief Executive Officer. The Board recognizes the need to provide a compensation package that will attract and retain qualified and experienced executives, as well as align the compensation level of each executive to that executive’s level of responsibility. The objectives of the Company’s compensation policies and practices are:

• to reward individual contributions in light of the Company’s performance;

• to be competitive with the companies with whom the Company competes for talent;

• to align the interests of the executives with the interests of the shareholders; and

• to attract and retain executives who could help the Company achieve its objectives.

The objectives of management fees are to recognize market pay and acknowledge the competencies and skills of individuals. The rate established for each executive officer is intended to reflect each individual’s responsibilities, experience, prior performance and other discretionary factors deemed relevant by any compensation committee that may be formed in future. In deciding on the management fee portion of the compensation of the executive officers, major consideration is given to the fact that the Company is an early stage exploration company and does not generate any material revenue and must rely exclusively on funds raised from equity financings. In the future, the objectives of incentive bonuses in the form of cash payments will be designed to add a variable component of compensation, based on corporate and individual performances for executive officers and employees. The objectives of the stock option will be to reward achievement of long-term financial and operating performance and focus on key activities and achievements critical to the ongoing success of the Company. The Company has no other forms of compensation, other than payments made from time to time to individuals or companies they control for the provision of consulting services. Such consulting services are paid for by the Company, to the best of its ability, at competitive industry rates for work of a similar nature by reputable arm’s length service providers. Actual compensation will vary based on the performance of the executives relative to the achievement of goals and the price of the Company’s securities, as well as the financial condition of the Company.

The Board evaluates individual executive performance with the goal of setting compensation at levels that it believes is comparable with executives in other companies of similar size and stage of development operating in the same industry. In connection with setting appropriate levels of compensation, members of the Board base their decisions on their general business and industry knowledge and experience and publicly available information of comparable companies while also taking into account the Company’s relative performance and strategic goals.

In the course of its deliberations, the Board considered the implications of the risks associated with adopting the compensation practices currently in place. The Board does not believe that its current compensation practices create a material risk that the NEOs or any employee would be encouraged to take inappropriate or excessive risks, and no such risks have been detected to date. The Board will continue to include this consideration in its deliberations and believes that it would detect actions of management and employees of the Company that constitute or would lead to inappropriate or excessive risks.

Pension disclosure

The Company does not have any pension, defined benefit, defined contribution or deferred compensation plans currently in place or proposed at this time.

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