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Xenetic Biosciences, Inc.

Ledgemont Research Ctr

Hayden Avenue

Lexington, MA 02421

United States

t 781-778-7722

e info@xeneticbio.com

November 18, 2016 Dr. Edward J. Benz

20 Beacon Street, Unit 4

Boston, MA 02108

 

Re: Board of Directors Appointment Dear Ed:

This Letter Agreement (the “Agreement”) is to confirm the terms of your proposed
appointment on November 18 2016 (the “Effective Date”) as a non-employee
Director of Xenetic Biosciences, Inc. (the “Company”).

 

Overall, in terms of time commitment, we expect your attendance at all the Board
meetings and meetings of such committees of the Board that you will be appointed
to (as applicable). In addition, you will be expected to devote appropriate
preparation time ahead of each meeting. By accepting this appointment, you have
confirmed that you are able to allocate sufficient time to meet the expectations
of this position.

 

1.  Consideration. For and in consideration of the services to be performed by
you, the Company agrees to compensate you as follows:

 

1.1Director Fee. A director fee equal to $50,000 (Fifty Thousand U.S. Dollars)
per annum, payable quarterly in arrears (the “Board Meeting Fee”) will be the
cash compensation for your role as a director, as well as any of our board
committees, as chair or as a member, you may participate.

 

1.2Stock Option. Subject to all approvals required by law, the Company will
grant you, pursuant to an equity incentive plan or such other plan to be adopted
by the Company (the "Plan") and upon such terms and conditions as determined by
the Compensation Committee or the Board (as applicable), an option to purchase
25,000 shares of common stock of the Company at a strike price determined by the
closing price of the common stock on the date of your appointment (the “Initial
Grant”). This option shall be exercisable as provided herein and shall vest
quarterly over twelve months so long as you are a member of our board of
directors. An additional option shall be granted for service each year as
determined by the board of directors upon recommendation of the compensation
committee.

 

If your board service is terminated or ends for any reason, all granted Options
that have not vested - shall be forfeited, and any Options that have vested, but
have not been exercised, may be exercisable by you any time within three (3)
months of the termination of your board position (the “Termination Exercise
Period”). Any Options that are not exercised within the Termination Exercise
Period, shall expire immediately.

   

  

1.2. Term of Options. All Options, if and to the extent vested according to
Section 1.2   above, shall be in effect for a period of 10 years commencing
immediately after the vesting of all Options granted to you under this letter of
appointment, and shall expire immediately thereafter, unless terminated sooner
as provided in Section 1.2. Without derogating from the aforesaid, if the Plan
that shall be approved by the Company shall include additional provisions
related to expiration of Options, such provisions shall also apply with respect
to all Options granted to you under this letter of appointment.

 

1.2.1        Vesting. All Options granted to you shall vest as provided in
Section 1.2.

 

1.2.2        Price. The exercise price of the Options shall be equal to the
Company’s closing stock price on the date of your appointment.

1.2.3       General. All options granted to you shall be in effect subject to
your continuous service as a Director and subject to the terms and conditions of
the Company’s Stock Option Plan (the “Plan”), including such terms related to
vesting and expiration, and subject to such terms and conditions as will be
approved by the Company, at its sole discretion. In case of contradiction
between the provisions of this letter of appointment and the provisions of the
Plan, the provisions of the Plan shall supersede.

 

1.2.4        Certain Representations. You represent and agree that you are
accepting the option to purchase shares of common stock being issued to you
pursuant to this Agreement for your own account and not with a view to or for
sale of distribution thereof. You understand that the securities are restricted
securities and you understand the meaning of the term “restricted securities.”
You further represent that you were not solicited by publication of any
advertisement in connection with the receipt of the shares and that you have
consulted tax counsel as needed regarding the shares.

 

1.3           Company agrees to reimburse you for out-of-pocket expenses
incurred by you in connection with your service (including out-of-pocket
expenses, transportation, and airfare on company business, provided that such
expenses are against original and valid receipts (the “Expenses”).

 

1.4            Payment of the Expenses, as applicable, shall be made against
your itemized invoice following the receipt of the relevant invoice, which
invoice shall be submitted to the Company within seven (7) days of the end of
each calendar month during the term of this letter of appointment.

 

1.5            For the avoidance of any doubt, the Fee and the Options (subject
to their terms) and the aforementioned Expenses constitute the full and final
consideration for your appointment, and you shall not be entitled to any
additional consideration, of any form, for your appointment and service.

 

2.              The term of your appointment as a non-employee, director of the
Company shall be for one year or until the next Meeting of Stockholders and
shall be renewable on a yearly basis by vote of the shareholders or appointment
by the board.

 

3.              You will undertake such travelling as may reasonably be
necessary for the performance of your duties, including travelling for board
meetings and site visits if required.

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4.               You will undertake such duties and powers relating to the
Company and any subsidiaries or associated companies (the “Group”) as the Board
may from time to time reasonably request. The Board as a whole is collectively
responsible for promoting the success of the Company by directing and
supervising the Company’s affairs, inter alia, as follows:

 

4.1             Providing entrepreneurial leadership of the Group within a
framework of prudent and effective controls which enable risk to be assessed and
managed; and

 

4.2             Setting the Group’s strategic aims, ensures that the necessary
financial and human resources are in place for the Group to meet its objectives
and reviews of management performance; and

 

4.3             Setting the Group’s values and standards and ensure that its
obligations to its shareholders and others are understood and met.

 

4.3.1Managing conflicts of interest that may arise in board meetings; and

 

4.3.2Ensuring that all board members are acting in the best interests of all
shareholders.

 

5.Confidential Information.

 

5.1              You undertake to the Company that you shall maintain in strict
confidentiality all trade, business, technical or other information regarding
the Company, the Group, its affiliated entities and their business affairs
including, without limitation, all marketing, sales, technical and business
know-how, intellectual property, trade secrets, identity and requirements of
customers and prospective customers, the Company’s methods of doing business and
any and all other information relating to the operation of the Company
(collectively, the “Confidential Information”). You shall at no time disclose
any Confidential Information to any person, firm, or entity, for any purpose
unless such disclosure is required in order to fulfil your responsibilities as
director. You further undertake that you shall not use such Confidential
Information for personal gain.

 

“Confidential Information” shall not include information that (i) is or becomes
part of the public domain other than as a result of disclosure by You, (ii)
becomes available to you on a non-confidential basis from a source other than
the Company, provided that the source is not bound with respect to that
information by a confidentiality agreement with the Group or is otherwise
prohibited from transmitting that information by a contractual legal or other
obligation, or (iii) can be proven by you to have been in your possession prior
to disclosure of the information by the Company. In the event that you are
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or other process)
to disclose any Confidential Information, it is agreed that you, to the extent
practicable under the circumstances, will provide the Company with prompt notice
of any such request or requirement so that the Company may seek an appropriate
protective order or waive compliance with this paragraph 5. If a protective
order or the receipt of a waiver hereunder has not been obtained, you may
disclose only that portion of the Confidential Information which you are legally
compelled to disclose.

5.2              Blackout Period. You understand that we have, or intend to
have, a policy pursuant to which no officer, director or key executive may not
engage in transactions in our stock during the period commencing the end of a
fiscal quarter and ending the day after the financial information for the
quarter and year have been publicly released. If you become a member of the
audit committee and you have information concerning our financial results at any
time, you may not engage in transactions in our securities until the information
is publicly disclosed.

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6.            Term and Termination

 

6.1           Subject to paragraph Error! Reference source not found. hereunder,
this appointment shall terminate immediately and without claim for compensation
on the occurrence of any of the following events:

 

6.1.1       If you resign as a Director of the Company for any reason; and/or

 

6.1.2       If you are removed or not re-appointed as a Director of the Board of
the Company at a General Meeting of shareholders of the Company in accordance
with the requirements of the Business Corporation Law of the State of Nevada
and/or any other applicable law or regulation (the "Law") and/or the Company's
Articles of Incorporation; and/or

 

6.1.3       If you have been declared bankrupt or made an arrangement or
composition with or for the benefit of your creditors; and/or

 

6.1.4       If you have been disqualified from acting as a Director (including,
but not limited to, an event in which you are declared insane or become of
unsound mind or become physically incapable of performing your functions as
director for a period of at least sixty

(60) days; and/or

 

6.1.5If an order of a court having jurisdiction over the Company requires you to
resign.

6.2           Any termination of this letter of appointment shall be without
payment of damages or compensation (except that you shall be entitled to any
accrued Fees or Expenses properly incurred under the terms of this letter of
appointment prior to the date of such termination).

 

7.              The Company will put directors’ and officers’ liability
insurance in place within sixty

(60) days of this Agreement, if not already in place, and will use commercial
reasonable efforts to maintain such insurance coverage for the full term of your
appointment.

 

8.               On termination of this appointment, you shall return all
property belonging to the Group, together with all documents, papers, disks and
information, howsoever stored, relating to the Group and used by you in
connection with your position with the Company.

 

9.               Subject to the proper performance of your obligations to the
Company under this letter of appointment and any applicable law, the Company
agrees that you will be free to accept other appointments, directorships and
chairmanships provided that:

 

9.1            They do not in any way conflict with the interests of the Company
or any member of the Group; and

 

9.2            They do not restrict you from devoting the necessary time and
attention properly to services to be performed under this letter of appointment;
and

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9.3            In the event that you become aware of any potential conflicts of
interest, these must be disclosed to the Chairman and/or the Chief Executive
Officer (the "CEO") of the Company as soon as they become apparent.

 

10.          The performance of individual Directors, the Chairman and the Board
and its committees is evaluated annually. If, in the interim, there are any
matters which cause you concern about your position, you should discuss them
with the Chairman and/or the CEO as soon as is appropriate.

 

11.           In addition to any right pursuant to applicable law, occasions may
arise when you consider that you need professional advice in the furtherance of
your duties as a director. Circumstances may occur when it will be appropriate
for you to seek such advice from independent advisors at the Company’s expense,
to the extent provided under applicable law and subject to the prior written
approval of the CEO and/or the Board.

 

12.            This letter refers to your appointment as a Director of the
Company and your future membership on the committees of the Board.

 

13.            You shall ensure that you comply at all times with the Company’s
inside trading policies as in effect from time to time.

 

14.            You shall discharge your general duties as a Director pursuant to
the Company's Articles of Incorporation and applicable law.

 

15.            This letter of appointment shall be governed by and construed in
accordance with the law of the State of Massachusetts.

 

Please sign the attached copy of this letter and return it to Xenetic to signify
your acceptance of the terms set out above.

 

Sincerely yours,

 

XENETIC BIOSCIENCES INC.

 

 

/s/ M. Scott Maguire 

Name: M. Scott Maguire 

Title: Chief Executive Officer

 

AGREED AND ACKNOWLEDGED BY:

 

 

/s/ Edward J. Benz

Name of Director: Edward J. Benz, MD

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