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| 1. | Objectives & Content |
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| 2. | General |
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|  | 2.1. | Compensation Policy Purposes: |
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|  | 2.1.1. | Officers' interests are as closely as possible aligned with the interests of Ellomay's shareholders; |
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|  | 2.1.2. | The correlation between pay and performance will be enhanced; |
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|  | 2.1.3. | Ellomay will be able to recruit and retain top level senior managers capable of leading the Company to further business success and facing the challenges ahead; |
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|  | 2.1.4. | Ellomay’s Officers will be motivated to achieve a high level of business performance without taking unreasonable risks; |
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|  | 2.1.5. | An appropriate balance will be established between different compensation elements – fixed vs. variable, short term vs. long term and cash payments vs. equity based compensation. |
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|  | 2.2. | The organs involved in the determination of the Compensation Policy are: |
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|  | 2.2.1. | Compensation Committee – Provides the BOD (as hereinafter defined) with recommendations regarding the appropriate Compensation Policy, the required updates to the Compensation Policy and its renewal and approves Directors' and Officers' service and employment terms and conditions. |
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|  | 2.2.2. | Board of Directors (“BOD”) – Approves the Compensation Policy for Directors and Officers and is responsible for periodical reviews of the Compensation Policy and its updating if necessary. |
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|  | 2.2.3. | The General Meeting of Shareholders – Approves the Compensation Policy for Directors and Officers to the extent that such an approval is required by law. |
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|  | 2.3. | Business environment and its impact on Company Officers' compensation: |
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| 3. | Compensation of Directors and Officers in view of the Company's Values and Strategy |
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|  | 3.1. | The connection between the Company's results and Officers' compensation: |
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|  | 3.2. | The ratio between the compensation of Directors and Officers and the other employees of the Company (including contractors): |
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| 4. | Basic Concepts of the Company's Compensation Policy |
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|  | · | Fixed Base Salary, Director Fees or Management Service Fee – Compensates Directors and Officers for the time they devote to performing their roles in the Company and for the daily performance of their tasks. The fixed base salary correlates to the Officer's skills (such as: experience, position knowledge, expertise, education, professional qualifications, etc.), on the one hand, and to the job requirements as well as the authority and responsibilities the job caries, on the other hand. |
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|  | · | Social and Incidental Benefits –Several of the social benefits are mandatory according to different local legislation (such as: pension and long term savings, severance pay, vacation, sick leave, etc.), others are provided according to market specific conventions and enable the Company to compete in the working environment (such as education funds and company cars in Israel) and the remainder are meant to complement the Fixed Base Salary and compensate the Officers for expenses incurred in connection with their job requirements (such as: travel expenses or allowances). |
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|  | · | Variable, Performance Based Rewards (Annual Bonus, Commissions and Grants) – Reward Directors and Officers for their contributions to the Company’s success and achievement of business goals during a defined timeframe. |
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|  | · | Equity Based Compensation – Designed to strengthen the link between long term shareholders’ returns and the Company’s Directors’ and Officers’ rewards. This type of reward creates a stronger correlation between Directors’ and Officers’ motivation and interest and the interests of the Company’s shareholders. Another significant effect of Equity Based compensation is its contribution to retention, due to its inherent long term characteristics. |
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| 5. | Compensation Elements |
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|  | 5.1. | Fixed Compensation: |
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| Position                 | Total Fixed Compensation monthly maximum  in NIS** and USD*** |
|--------------------------|--------------------------------------------------------------------|
| Chairman*                | Up to 88,000 NIS (23,250 USD)                                      |
| CEO*                     | Up to 110,000 NIS  (29,062 USD)                               |
| Officer Reporting to CEO | Up to 93,500 NIS (24,703 USD)                                      |
| Active Director*         | Up to 66,000 NIS (17,437 USD)                                      |

|  | 5.2. | Fixed Base Salary: |
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|  | 5.2.1. | Determining the Fixed Base Salary of the Company’s Officers |
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|  | · | Relevant peer group benchmark data. |
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|  | · | Job requirements, authority and responsibilities the job caries and prior agreements executed with the Officer. |
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|  | · | Education, skills, expertise, professional experience and achievements of the Officer. |
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|  | · | Internal ratios between positions and between the Officer and the other employees (including contractors) of the Company. |
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|  | · | The Company's financial situation, business challenges and goals. |
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|  | 5.2.1.1. | Market Comparisons (Benchmark): |
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|  | · | Holding companies, preferably in the areas of renewable and clean energy, life science and hi-tech ; |
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|  | · | Publicly traded companies whose shares are traded on the Tel-Aviv Stock Exchange or Israeli companies whose shares are traded on the NASDAQ or NYSE markets and their market cap and/or shareholders' equity are close to that of Ellomay; |
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|  | · | Companies competing with Ellomay for managerial talent and for potential Company Officers in particular; |
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|  | · | Customary Fixed Base Salary range for similar roles (including data distribution); |
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|  | · | Customary range for Annual Bonus (in terms of percentage of annual salary); |
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|  | · | Customary range for Equity Based Compensation economic value on the date of grant (in terms of percentage of annual salary); |
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|  | · | Customary fringe and other benefits. |
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|  | 5.2.1.2. | Internal comparison – gaps between Officers' compensation and between the Officer and the rest of the employees: |
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|  | · | The ratio between the Officer's compensation and the compensation of all other Company Officers at the same level; |
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|  | · | The ratio between the Officer's cost of employment and the cost of employment of all other Company employees (including contractors). |
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|  | 5.2.2. | Annual salary review principles and indexing: |
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|  | 5.2.3 | Directors Cash Compensation: |
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|  | 5.3. | Variable compensation: |
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|  | · | Linking part of the Company’s Officers' compensation to the achievement of business goals and targets which will, in the long term, maximize shareholders’ return and create a joint interest between Company Officers and shareholders; |
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|  | · | Increasing Company Officers' motivation to achieve long term Company goals; and |
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|  | · | Correlating part of the Company's pay expenses with its business performance and increasing financial and operational flexibility. |
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|  | 5.3.1. | Ratio between elements of the compensation package |
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| Position                            | Annual Variable Compensation in Cash                    | Annual Equity Based Compensation *                                           |
|-------------------------------------|---------------------------------------------------------|------------------------------------------------------------------------------|
| Chairman                            | Up to 6 monthly base salaries or the equivalent thereof | --                                                                           |
| CEO                                 | Up to 6 monthly base salaries or the equivalent thereof | Up to 6 monthly base salaries or the equivalent thereof                      |
| Officer Reporting to CEO            | Up to 6 monthly base salaries                           | Up to 6 monthly base salaries                                                |
| Non-Employee and External Directors | --                                                      | Fixed grant pursuant to the Company's Option Plan for Non-Employee Directors |
| Active Director                     | Up to 6 monthly base salaries or the equivalent thereof | --                                                                           |

|  | 5.3.2. | Annual Bonus Principles |
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|  | · | The duration of the bonus plan; |
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|  | · | The financial measure for calculating the bonus for a Director or Officer shall be chosen from between the Market Cap, Operating Income or Equity; |
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|  | · | The percentage from the selected measure that will be paid to each Director or Officer as a bonus; |
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|  | · | The threshold condition for the payment of the bonus will be the existence of operating profit during the plan period; |
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|  | · | Target Bonus definition – the Target Bonus is the bonus paid when goals are met at precisely 100%. |
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|  | · | Maximum Bonus – the maximum bonus for a Director or Officer per annum will not exceed 6 monthly base salaries and, to the extent the Company does not have profits for such year, the maximum bonus for a Director or Officer for such year will not exceed 2 monthly base salaries. |
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|  | · | The measures and their weights used to assess the Directors' or Officers' success and calculate the bonus. |
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|  | · | Payment terms – to the extent the bonus exceeds 3 monthly base salaries, any such excess will be paid to the Officer or Director only following the approval of the results of the subsequent year and subject to there being no decrease during such subsequent year in the financial measure used to calculate the bonus. |
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|  | 5.3.2.1. | Defining the Bonus Plan Measures and Targets |
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|  | · | Company Measures – Financial measures for Company performance such as: Market Cap, Operating Income, Equity, etc. These measures will be the same for all Company Officers and Directors and will have a weight of between 80%-100% of the total bonus. |
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|  | · | Managerial Appraisal – An evaluation of the performance of each Officer in non-quantitative aspects of their contribution to the Company’s long term success. The managerial appraisal score will have a weight of up to 20% of the total bonus. |
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|  | 5.3.2.2. | Setting the Bonus budget; reviewing and reducing bonuses |
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|  | · | The recipient’s contribution to the development of Company's business beyond the recipient’s direct responsibility; |
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|  | · | The Quality and speed of the recipient’s reaction to crises and other unexpected events; |
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|  | · | The overall managerial performance of the recipient’s, motivating employees and leadership. |
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|  | 5.3.2.3. | Grant payment and refunding mechanism |
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|  | 5.3.3. | Equity Based Compensation |
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|  | 5.3.3.1. | Tools of Equity Compensation |
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|  | · | The maximum number of options to be granted. |
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|  | · | The value of the equity based compensation (at the time of grant) per year, for each Officer, shall not exceed the amounts set forth in Section 5.3.1. |
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|  | · | The per-share exercise price of the options will not be lower than the known closing price in the market at the date of grant. |
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|  | · | The allocation of options between the various Directors and Officers and the existence of reserves for grants to Directors and Officers who may join the Company during the period of the plan. |
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|  | · | Options granted to Directors under the current option plan of the Company (i.e., an annual option grant of options to acquire 1,000 ordinary shares) will vest in one installment on the first anniversary of the grant date. Options granted to Officers will commence vesting on the first anniversary of the grant date and will vest over a period of not less than three years from the date of grant. |
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|  | · | The possibility of defining the maximum value for exercising of an option. |
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|  | · | The possibility of conditioning the vesting of part or all of the options of some of the Officers upon the achievement of predetermined performance goals. |
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|  | · | The expiration date of the options shall not be shorter than a year from the vesting date of each portion and shall not be longer than ten years after the grant date; |
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|  | · | Terms in connection with the option holder leaving the Company (due to dismissal, resignation, and death or disability) and changes in Company ownership. |
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|  | 5.3.3.2. | Option Grants |
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|  | 5.3.3.3. | Options Exercise |
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|  | 5.4. | Additional terms and fringe benefits |
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|  | 5.4.1. | Pension, disability and life insurance |
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|  | 5.4.2. | Education Fund |
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|  | 5.4.3. | Company Car / Transportation Allowance |
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|  | 5.4.4. | Expenses and incidentals |
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|  | 5.4.5. | Annual Vacation and Sick Leave |
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|  | 5.4.6. | Others |
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| 6. | Termination Terms |
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| 7. | Non-Competition |
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| 8. | Indemnification, Exemption and Insurance of Directors and Officers |
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| 9. | Policy maintenance – Authority and Responsibility |
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|  | 9.1. | Keeping the Policy current |
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|  | 9.2. | Approval of changes to the Compensation Policy |
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