Zecotek Photonics Inc.

(the “ Company ”) Unit 1120 – 21331 Gordon Way Richmond, BC V6W 1J9

Form 51-102F6V STATEMENT OF EXECUTIVE COMPENSATION

For the purposes of this statement of executive compensation:

“ CEO ” means the Company’s chief executive officer;
“ CFO ” means the Company’s chief financial officer;
“ Named Executive Officer ” or “ NEO ” means:
(a) a CEO;
(b) a CFO;
(c) the most highly compensated executive officer, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was more than $150,000 for that financial year; and
(d) each individual who would be a NEO under paragraph (c) 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 that financial year.

As at July 31, 2020, the end of the most recently completed financial period of the Company, the Company had three

(3) NEOs, whose names and positions held within the Company are set out in the summary compensation table below.

Director and named executive officer compensation

The following table is a summary of compensation awarded to, earned by, paid to, or payable to each director and NEO of the Company for the two most recently completed financial periods ended July 31, 2020 and July 31, 2019.

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	Fiscal period end	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)
Dr. Faouzi Zerrouk(1) Chief Executive Officer, Chairman, President & Director	2020 2019	692,460(2) 692,460	Nil Nil	Nil Nil	Nil Nil	Nil 76,939	692,460(2) 769,399
Jiang Chen(3) Chief Financial Officer	2020 2019	120,000 69,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	120,000 69,000
Azim Dahya Corporate Secretary	2020 2019	164,175 164,700	Nil Nil	Nil Nil	Nil Nil	Nil Nil	164,175 164,700
Erich Sager Director	2020 2019	Nil Nil	Nil Nil	24,000 24,000	Nil Nil	Nil Nil	24,000 24,000

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	Fiscal period end	Salary, consulting fee, retainer or commission ($)	Bonus ($)	Committee or meeting fees ($)	Value of perquisites ($)	Value of all other compensation ($)	Total compensation ($)
Sergei Tsakunov Director	2020 2019	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil
Michael Minder(4) Former CFO	2020 2019	Nil 50,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil 50,000
Zelong He(5) Former Director	2020 2019	Nil 90,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil 90,000
David Toyoda(6) Former Director	2020 2019	Nil Nil	Nil Nil	Nil 15,674	Nil Nil	Nil Nil	Nil 15,674

Notes:

(1) Dr. Zerrouk received compensation in the amount of $Nil for acting as a director of the Company and $694,460 for acting as CEO, Chairman and President of the Company.
(2) These amounts have not been paid in full to Dr. Zerrouk. $528,414 is still outstanding.
(3) Mr. Chen was appointed as the CFO of the Company effective as of November 28, 2018.
(4) Mr. Minder ceased to be the CFO of the Company effective as of October 31, 2018.
(5) Mr. He was appointed as a director of the Company effective as of November 21, 2018 and ceased to be a director of the Company effective as of June 30, 2019.
(6) Mr. Toyoda was appointed as a director of the Company effective as of December 29, 2008 and ceased to be a director of the Company effective as of November 14, 2018.

Stock options and other compensation securities

The following table discloses all compensation securities granted or issued to each director and NEO by the Company in the most recently completed financial year for services provided or to be provided, directly or indirectly, to the Company, and outstanding compensation securities held by each director and NEO.

		Compensation Securities	Compensation Securities	Compensation Securities
Name and position	Type of compens ation security	Number of compensation securities, number of underlying securities and percentage of class	Date of issue or grant	Issue, conversion or exercise price ($)	Closing price of security or underlying security on date of grant ($)(1)	Closing price of security or underlying security at year end ($)	Expiry Date
Dr. Faouzi Zerrouk(1) Chief Executive Officer, Chairman, President & Director	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Jiang Chen(2) Chief Financial Officer	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Azim Dahya(3) Corporate Secretary	Nil	Nil	Nil	Nil	Nil	Nil	Nil

		Compensation Securities	Compensation Securities	Compensation Securities
Name and position	Type of compens ation security	Number of compensation securities, number of underlying securities and percentage of class	Date of issue or grant	Issue, conversion or exercise price ($)	Closing price of security or underlying security on date of grant ($)(1)	Closing price of security or underlying security at year end ($)	Expiry Date
Erich Sager(4) Director	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Sergei Tsakunov(5) Director	Nil	Nil	Nil	Nil	Nil	Nil	Nil

Notes:

(1) Dr. Zerrouk held 3,500,000 stock options with an exercise price of $0.36 expiring on January 5, 2023 as of the last day of the most recently completed financial year.

(2) Mr. Chen held 100,000 stock options with an exercise price of $0.36 expiring on January 5, 2023 as of the last day of the most recently completed financial year.

(3) Mr. Dahya held 600,000 stock options with an exercise price of $0.36 expiring on January 5, 2023 as of the last day of the most recently completed financial year.

(4) Mr. Sager held 1,000,000 stock options with an exercise price of $0.36 expiring on January 5, 2023 as of the last day of the most recently completed financial year

(5) Mr. Tsakunov held nil stock options on the last day of the most recently completed financial year.

No compensation securities were exercised by the directors or NEOs during the most recently completed financial year.

Stock option plans and other incentive plans

The Company’s 2020 Stock Option Plan (the “ Plan ”) was approved by shareholders on February 13, 2020. The number of common shares of the Company (“ Common Shares ”) which may be issued pursuant to options granted under the Plan may not exceed 10% of the issued and outstanding Common Shares from time to time at the date of granting of Options. The purpose of the Plan is to provide an incentive to directors, officers, employees and consultants to acquire a proprietary interest in the Company (“ Options ”), to continue their participation in the affairs of the Company, to increase their efforts on behalf of the Company, and to reward or compensate their contributions towards the long-term goals of the Company.

The following summary of the material terms of the Plan does not purport to be complete and is qualified in its entirety by reference to the Plan.

Eligible Participants. Options may be granted under the Plan to directors or officers of the Company or an affiliate of the Company (collectively, the “ Directors ”), employees of the Company (collectively, the “ Employees ”) consultants of the Company or its affiliate (collectively, the “ Consultants ”) or Management Company Employees (as that term is defined in Policy 4.4 of the TSXV Corporate Finance Manual). The board of directors of the Company (the “ Board ”), in its discretion, determines which of the Directors, Employees, Consultants or Management Company Employees will be awarded Options under the Plan.

Number of Shares Reserved. The number of Common Shares which may be issued pursuant to options granted under the Plan may not exceed 10% of the issued and outstanding Common Shares of the Company from time to time at the date of granting of Options. Options which are cancelled or expire prior to exercise continue to be issuable under the Plan.

Limitations. Under the Plan, the aggregate number of options granted to any one person in a 12 month period must not exceed 5% of the issued and outstanding shares of the Company, calculated on the date the option is granted. The aggregate number of options granted to any one Consultant in a 12 month period must not exceed 2% of the issued and outstanding shares of the Company, calculated at the date the option is granted. The aggregate number of options

granted to all persons retained to provide investor relations services to the Company (including Consultants and Employees or Directors whose role and duties primarily consist of providing investor relations services) must not exceed 2% of the issued and outstanding shares of the Company in any 12 month period, calculated at the date an option is granted to any such person.

Term of Options. Subject to the termination and change of control provisions noted below, the terms of any Option granted under the Plan is determined by the Board and may not exceed ten years from the date of grant.

Exercise Price. The exercise price of Options granted under the Plan is determined by the Board, provided that it is not less than the Discounted Market Price, as that term is defined in the TSXV’s Corporate Finance policy manual or such other minimum price as is permitted by the TSXV in accordance with the policies from time to time, or, if the Common Shares are no longer listed on the TSXV, then such other exchange or quotation system on which the Common Shares are listed or quoted for trading. The exercise price of Options granted to insiders may not be decreased without disinterested shareholder approval at the time of the proposed amendment.

Term of Options. Subject to the termination and change of control provisions noted below, the term of any options granted under the Plan is determined by the Board and may not exceed ten years from the date of grant.

Vesting. All Options granted pursuant to the Plan will be subject to such vesting requirements as may be prescribed by the TSXV, if applicable, or as may be imposed by the Board.

Termination. Any Options granted pursuant to the Plan will terminate upon the earliest of:

(a) such date as the Board has fixed when the Option is granted, provided that the date is no more than one year from the date on which the holder ceases to be eligible (the “ Cessation Date ”) to hold the Option;
(b) the end of the term of the Option;
(c) if the Cessation Date is as a result of dismissal for cause or regulatory sanction, then immediately on the Cessation Date; or
(d) if the Cessation Date is as a result of death or disability, then the date that is one year from the date of such death or disability.

Employment, consulting and management agreements

Except as disclosed herein, the Company does not have any agreement or arrangement under which compensation was provided during the most recently completed financial period ended July 31, 2020 or is payable in respect of services provided to the Company that were performed by a director or a NEO, or performed by any other party but are services typically provided by a director or a NEO.

Dr. Faouzi Zerrouk, Chairman, President and CEO of the Company, entered into an employment agreement with the Company on May 1, 2006, and amended on March 14, 2007 (the “ Zerrouk Employment Agreement ”). Pursuant to the Zerrouk Employment Agreement, compensation in the amount of $164,046.02 was paid to Dr. Zerrouk, covering the last quarter of the calendar year 2019 as part of the completed financial year of July 31[st] , 2020. Compensation in the same financial year, in the amount of $528,413.98 remains outstanding. The Zerrouk Employment Agreement contains the customary confidentiality covenants. In the event of termination of Dr. Zerrouk’s employment by the Company, the Company will give Dr. Zerrouk not less than 12 months’ notice and remunerate him for the equivalent of 24 months’ salary without the loss of his stock options.

Oversight and description of director and named executive officer compensation

Compensation of the NEOs of the Company is reviewed periodically by the compensation committee (the “ Compensation Committee ”) and is subsequently approved by the Board based on the recommendation of the Compensation Committee. During the most recently completed financial year, the members of the Compensation

Committee were Erich Sager (Chairman) and Sergei Tsakunov. All members are considered to be independent directors.

The Board established the Company’s executive compensation policies based on the recommendations of the Compensation Committee. The Board also considers compensation matters on the recommendation of the Compensation Committee from time to time during each fiscal year if it is determined necessary or desirable to do so. The Board and the Compensation Committee’s objective in setting compensation levels is that the aggregate compensation received by NEOs be generally competitive with the compensation received by persons living in the jurisdictions where the NEO resides, who have similar qualifications and responsibilities and who are employed by other companies of corresponding size and stage of development. In setting such levels, the Board and the Compensation Committee rely primarily on their own experience and knowledge and can retain outside compensation consultants as required. It also refers to compensation paid to NEOs of other medical device and technology companies such as Verisante Technology, Inc. (TSXV: VRS) and Cardiocomm Solutions Inc. (TSXV: EKG).

Compensation provided to NEOs generally consists of two principal components: (i) base salary; and (iii) options granted pursuant to the Company’s Plan. In addition, the Compensation Committee will consider additional perquisites on a case-by-case basis taking into consideration the residency of the NEO and the cost of living in such jurisdictions.

Pursuant to the Company’s Plan, the Board, at its discretion, determines all grants of stock options to NEOs. Such grants are considered incentives intended to align the NEOs’ and shareholders’ interests in the long term. The Company emphasizes stock options in executive compensation as they allow the NEOs to share in corporate results in a manner that is relatively cost-effective despite the effects of treating stock options as a compensation expense. The Compensation Committee provides recommendations to the Board with respect to option grants to NEOs.

The Compensation Committee reviews each NEO appointment and recommends a level of option-based award commensurate with the role and duties in building the overall value of the Company. These recommendations and grants of option-based awards at the initial time of appointment are reviewed by the Board. The Compensation Committee reviews the level of option-based awards periodically to determine if the overall level held by each NEO continues to represent a reasonable incentive that ties the performance of the NEO to measures and targets that reflect an enhancement to shareholders.

The Company has no compensatory plan or arrangement with any Named Executive Officer that will result in payments to any Named Executive Officer resulting from the resignation, retirement or any other termination of employment of the officer’s employment with the Company and its subsidiaries or from a change of control of the Company or any subsidiary of the Company or a change of the Named Executive Officer’s responsibilities following a change-in-control, except as disclosed in the preceding paragraph.

The directors of the Company receive cash and stock compensation for services rendered in their capacity as directors of the Company. The Company compensated the independent directors $6,000 per quarter and additional $1,500 per quarter for the chairman of the Compensation and Audit Committees. The directors who also act as officers get cash compensation as part of their remuneration in their capacity as officers.

The Company has initiated a review of its compensation policies throughout the company and intends to retain outside consultants to assist in this process.

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Zecotek Photonics Inc. Remuneration Information 2021

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