Loop Industries, Inc.

Overview

The following describes each component of our executive compensation program, the rationale for each, and how the compensation amounts and awards were determined for fiscal 2026.

Base Salary

Base salary is the primary fixed component of our executive compensation program. We use base salary to compensate our named executive officers for services rendered during the fiscal year and to ensure that we remain competitive in attracting and retaining executive talent. Generally, we establish the initial base salaries of our executive officers through arm’s-length negotiation at the time we hire the individual executive officer, taking into account his or her position, qualifications, experience, salary expectations, market compensation data and the base salaries of our other executive officers.

Thereafter, the Compensation Committee periodically reviews the base salaries of each named executive officer and makes adjustments as it determines to be reasonable and necessary to reflect our performance, the scope of a named executive officer’s performance, contributions, responsibilities, experience, current salary level, position (in the case of a promotion), and market pay positioning, as appropriate.

In connection with the amendment and restatement of Mr. Solomita’s employment agreement in fiscal 2019, the Compensation Committee reviewed his compensation package, including his base salary. In addition to the market-based study provided by Pay Governance, the Compensation Committee also considered other relevant factors, including, among others, Mr. Solomita’s critical importance to the Company’s success, performance and contributions, and the continued competition for experienced leadership in our industry. Based on this review, in June 2018, the Compensation Committee recommended, and the Board approved, an updated compensation package for Mr. Solomita, including his base salary of $598,905 CAD, effective as of March 1, 2018 (the first day of the Company’s 2019 fiscal year).

Mr. Essaddam’s base salary is set at $250,000 CAD and Mr. Hart’s base salary is set at $200,000. The base salary for each of these named executive officers was approved by the Compensation Committee and the Board and determined based on arm’s-length negotiations between the named executive officer and our Chief Executive Officer.

The base salaries paid to our named executive officers in fiscal 2026 are set forth in the section entitled “Summary Compensation Table” below.

Short-Term Incentive Compensation

We use short-term incentive compensation to motivate our named executive officers to achieve our annual financial and operational objectives, while making progress towards our longer-term strategic and growth goals. Our short-term incentive program allows the Compensation Committee to provide cash incentive awards to the executive officers, which are based upon performance goals established by the Board and the Compensation Committee.

The short-term incentive compensation provided to our named executive officers in fiscal 2026 is described in the immediately following paragraphs and set forth in the section entitled “Summary Compensation Table” below.

Daniel Solomita

The compensation package for Mr. Solomita that the Compensation Committee recommended, and the Board approved, in June 2018 in connection with the amendment and restatement of his employment agreement includes an annual bonus opportunity for fiscal 2026 that provides for a payment equal to 25% of his base salary at threshold performance, 50% of his base salary at target performance, or 100% of his base salary at maximum performance.

The Compensation Committee approved the performance goals for Mr. Solomita’s fiscal 2026 annual bonus listed in the table below. For any scalable performance goal, if actual achievement falls between the specified minimum, target, or maximum performance levels, the amount payable with respect to the performance goal will be determined by straight-line interpolation. For any performance goal that is not scalable, the threshold and target levels must be achieved for the maximum amount to become payable with respect to the performance goal. In either case, if the threshold level for a particular performance goal is not achieved, no amount will be payable with respect to the performance goal.

Performance goals for fiscal 2026 included:

The achievement of these performance goals was determined to be at target (50% of base salary), resulting in an annual bonus for Mr. Solomita for fiscal 2026 of $216,240 ($300,000 CAD). In lieu of a payment in cash for his annual bonus, Mr. Solomita was granted 150,410 stock options that were fully vested and exercisable as of the grant date of April 8, 2026 at an exercise price of $1.44 per share.

We continued to make progress against the Company’s performance goals. In fiscal 2026, we advanced materially toward groundbreaking on the Infinite Loop™ manufacturing facility in Gujarat, India, with our India joint venture with Ester Industries Ltd. reaching an agreement to acquire approximately 93 acres of land and awarding the detailed engineering contract to Toyo Engineering India Private Limited. We also executed a $1.5 million engineering services agreement with the India joint venture to support the detailed engineering phase. We executed a multi-year offtake agreement with Nike, Inc. as an anchor customer for Twist™ polyester from the facility, along with an offtake agreement with Taro Plast S.p.A. for Loop™ DMT. In Europe, our joint venture with Reed – Société Générale Group selected BASF Industriepark Lausitz in Schwarzheide, Germany as the site for the first European Infinite Loop™ facility – the second globally and the first deployed under our licensed technology model. We also made further advancements with regards to customer relationships, feedstock sourcing, and research and development activities to continuously improve and optimize our process.

Adel Essaddam

Mr. Essaddam’s compensation includes an annual bonus award opportunity which in the ordinary course is based on threshold performance earning 25% of base salary, target performance earning 30% of base salary, and maximum performance earning 35% of base salary, based on achievement of Company and individual performance goals. In recognition of the additional responsibilities assumed by Mr. Essaddam during fiscal 2026, the Board of Directors approved a bonus consisting of 200,000 stock options. The options vested immediately upon the April 8, 2026 grant date and carry an exercise price of $1.44 per share.

Spencer Hart

Mr. Hart’s compensation includes an annual incentive award opportunity based on performance goals defined by the CEO, as agreed upon by Mr. Hart, and recommended for approval to the Board of Directors by the Compensation Committee. Up to 25% of those goals could be individual goals and the balance would conform to Company goals. Depending upon the level of performance achieved relative to the specified goals (threshold, target or maximum), Mr. Hart can earn an annual bonus in the amount of 25% of base salary for threshold performance, 50% of base salary for target performance and a maximum of 75% of base salary for achievement of maximum performance. For fiscal 2026, Mr. Hart’s threshold was determined to be 30% and his pro-rated annual bonus was awarded in 6,365 stock options that were fully vested and exercisable as of the grant date of April 8, 2026 at an exercise price of $1.44 per share.

Long-Term Incentive Compensation

We grant long-term equity awards as a component of our executive compensation program in order to align our named executive officers’ long-term interests with our stockholders’ interests. Our long-term incentive program allows the Compensation Committee to provide equity incentive awards to the executive officers, which are based upon performance goals established by the Board and the Compensation Committee. The Company has elected to use equity-based awards in order to provide direct alignment to stockholder value, as reflected by the price of our Common Stock.

In determining the composition of these equity awards, the Compensation Committee decided to offer some new hires performance-based or time-based equity awards, which helped to maximize the value of the executive’s inducement award opportunity.

The size of the equity awards granted to our named executive officers in connection with their hire is determined through arm’s-length negotiation, taking into consideration factors such as the named executive officer’s role and responsibilities, the named executive officer’s compensation provided by the prior employer and new target cash compensation, the equity award’s potential retention and incentive value, market data on the size of new-hire awards provided by similar companies to similarly situated employees, and prevailing market conditions.

The long-term equity awards granted to our named executive officers in fiscal 2026 are described in the immediately following paragraphs and set forth in the section entitled “Summary Compensation Table” below.

Daniel Solomita

Mr. Solomita’s amended and restated employment agreement made no change to the equity incentive arrangement described in his prior employment agreement, which provided for an award of 4,000,000 RSUs that had not yet been granted. In June 2018, the Board approved the grant of these RSUs which became effective with the approval by the Company’s stockholders at the Company’s 2019 annual meeting of an increase in the number of shares available for issuance under the Company’s 2017 Equity Incentive Plan. In April 2020, the Board clarified and updated the milestones consistent with the shift in our business from the production of terephthalate (“PTA”) to the production of dimethyl terephthalate (“DMT”), another proven monomer of PET plastic that is far simpler to purify. One-quarter of the RSUs vest upon the achievement of each of following four performance milestones: (i) the Company’s securities are listed on an exchange or the OTCQX tier of the OTC Markets Group platform; (ii) the Company executes a contract for a minimum quantity of 25,000 metric tons of DMT and Monoethylene Glycol (“MEG”) or PET; (iii) the Company’s first full-scale production facility is in commercial operation; and (iv) the Company’s second full-scale production facility is in commercial operation. For these purposes, “commercial operation” means the full-scale production facility produces 10 metric tons per hour of DMT and MEG combined, for a term of not less than 6 months. Once vested in accordance with the milestones, one-fifth of the RSUs will be settled annually, generally commencing on the first settlement date following the date of vesting. As the first performance milestone has been achieved, 1,000,000 RSUs have vested of which 200,000 RSUs were settled on each of the following dates: October 15, 2019, October 15, 2020 and October 15, 2021. The remaining 400,000 RSUs were to be settled equally on each of the following two anniversaries, unless the Company and Mr. Solomita agreed to defer settlement. In fiscal 2023, 1,000,000 RSUs vested with the achievement of the second performance milestone and were to be settled on October 15 th of each year in 200,000 unit tranches, unless the Company and Mr. Solomita agreed to defer settlement. On October 14, 2022, Mr. Solomita elected to defer by one year the settlement of the 400,000 RSUs that would have otherwise settled on October 15, 2022. On October 12, 2023, Mr. Solomita elected to defer by one year the settlement of the 800,000 RSUs that would have otherwise settled on October 15 2023. On October 9, 2024, Mr. Solomita elected to defer by one year the settlement of the 1,000,000 RSUs that would have otherwise settled on October 15, 2024. On October 14, 2025, Mr. Solomita elected to defer by one year the settlement of the 1,200,000 RSUs that would have otherwise settled on October 15, 2026.

On April 8, 2026, upon recommendation by the Compensation Committee, the Board approved an award to Mr. Solomita of 1,000,000 stock options, subject to stockholder approval to increase the number of shares of common stock authorized under the 2017 Equity Incentive Plan. The stock options have an exercise price of $1.44 per share and a seven-year term, and will vest and become exercisable ratably in equal tranches on April 8, 2027, April 8, 2028, and April 8, 2029. The stock option award is in line with the Company’s approach to ensure market-competitive total compensation for its executive officers based on the review and recommendations of the external compensation consultant. This approach also aims to align executive compensation with shareholder value creation and allow the Company to preserve liquidity as it advances towards the commercialization of its technology.

Adel Essaddam

Mr. Essaddam’s employment agreement was modified on March 6, 2024 to provide for a grant of 200,000 stock options that were issued on April 4, 2025, have an exercise price of $1.16 per share and a seven-year term, and will vest ratably over the following three years on the anniversaries of the issue date in equal annual tranches.

On April 8, 2026, upon recommendation by the Compensation Committee, the Board approved an award to Mr. Essaddam of 400,000 stock options. The stock options have an exercise price of $1.44 per share and a seven-year term, and will vest and become exercisable ratably in equal tranches on April 8, 2027, April 8, 2028, and April 8, 2029.

Spencer Hart

Mr. Hart’s employment agreement provides for a one-time grant of 1,000,000 stock options under the Company’s 2017 Equity Incentive Plan, with an exercise price of $1.02 per share. The options vest as follows: 200,000 options upon grant; 200,000 options on January 5, 2027; 200,000 options on January 5, 2028; 200,000 options on January 5, 2029; and 200,000 options on January 5, 2030. In addition, any unvested options will immediately vest if the Infinite Loop India plant produces 12,500 MT of PET resin meeting customer requirements in one calendar quarter.

Change in Control and Severance Benefits

We have entered into employment agreements with our named executive officers that provide for certain payments and benefits upon the termination of their employment under certain circumstances. We believe that these employment agreements provide retention value by encouraging our named executive officers to continue service with us and increase stockholder value by reducing any potential distractions caused by the possibility of involuntary termination or a potential change in control, allowing our named executive officers to focus on their duties and responsibilities. For a narrative summary of the material terms and conditions of these employment arrangements, see the section below entitled “Potential Payments upon Termination or Change in Control.”

Other Compensation and Benefits

We provide employee benefits to all eligible employees, including our named executive officers. As discussed above, these benefits include medical, dental and vision insurance, life and disability insurance, and other plans and programs.

Stock Trading Practices; Hedging and Pledging Policy

We maintain an Insider Trading Policy that, among other things, prohibits our employees, including our named executive officers, from trading during quarterly and special blackout periods. In addition, we prohibit short sales, hedging and similar transactions designed to decrease the risks associated with holding our securities, as well as pledging the company’s securities as collateral for transactions involving derivative securities relating to our Common Stock. The Insider Trading Policy also does not allow for the Company’s securities to be held in margin accounts by named executive officers. Pledging of Company securities may be permitted in certain circumstances contingent upon obtaining preclearance from the Compliance Officer.

Our Insider Trading Policy requires that all directors and officers, including our named executive officers, preclear with our legal department any proposed open market transactions. Further, we have adopted Rule 10b5-1 trading plan guidelines that permit our directors and employees, including our named executive officers, to adopt Rule 10b5-1 trading plans. Under these guidelines, Rule 10b5-1 trading plans may only be adopted or modified during an open trading window under our Insider Trading Policy and only when such individual does not otherwise possess material nonpublic information about the company. These guidelines also provide for a cooling-off period before the first trade may occur under a Rule 10b5-1 trading plan.