Document:

VBI
Vaccines INC.

 

Incentive
PLAN

 

Effective
May 6, 2016

 

As
amended June 23, 2016

 

    	 	 	 

    	 	 	 

    

 

PART
I – GENERAL PROVISIONS

 

	1.	PREAMBLE
    AND DEFINITIONS

 

	 	1.1	Title.
	 	 	 
	 	 	The
    Plan described in this document shall be called the “VBI Vaccines Inc. Incentive Plan”
	 	 	 
	 	1.2	Purpose
    of the Plan.
	 	 	 
	 	 	The
    purposes of the Plan are:

 

	 	(a)	to
    promote a further alignment of interests between officers, employees and other eligible service providers and the shareholders
    of the Corporation;
	 	 	 
	 	(b)	to
    associate a portion of the compensation payable to officers, employees and other eligible service providers with the returns
    achieved by shareholders of the Corporation; and
	 	 	 
	 	(c)	to
    attract and retain officers, employees and other eligible service providers with the knowledge, experience and expertise required
    by the Corporation.

 

	 	1.3	Definitions.

 

	 	1.3.1	“Affiliate(s)”
    shall mean a Parent or Subsidiary of the Corporation.
	 	 	 
	 	1.3.2	“Applicable
    Law” means any applicable provision of law, domestic or foreign, including, without limitation, applicable securities
    legislation, together with all regulations, rules, policy statements, rulings, notices, orders or other instruments promulgated
    thereunder, and Stock Exchange Rules.
	 	 	 
	 	1.3.3	“Base
    Price” means the base dollar amount used to calculate the amount, if any, payable to a Participant with respect
    to a Share subject to a Stand-Alone SAR upon settlement thereof, which base dollar amount shall be determined in accordance
    with Section 10.6. 
	 	 	 
	 	1.3.4	“Beneficiary”
    means, subject to Applicable Law, an individual who has been designated by a Participant, in such form and manner as the Board
    may determine, to receive benefits payable under the Plan upon the death of the Participant, or, where no such designation
    is validly in effect at the time of death, the Participant’s legal representative.
	 	 	 
	 	1.3.5	“Black-Out
    Period” means a period of time when, pursuant to any policies of the Corporation, any securities of the Corporation
    may not be traded by certain persons as designated by the Corporation, including any holder of a Grant.
	 	 	 
	 	1.3.6	“Board”
    means the Board of Directors of the Corporation.

 

    	 	1	 

    	 	 	 

    

 

	 	1.3.7	“Cause”
    means: 

 

	 	 	(a)	subject
    to (b) below, “just cause” or “cause” for Termination by the Corporation or an Affiliate as determined
    under Applicable Law; 
	 	 	 	 
	 	 	(b)	where
    a Participant has a written employment agreement with the Corporation or an Affiliate, “Cause” as defined
    in such employment agreement, if applicable; or
	 	 	 	 
	 	 	(c)	where
    a Participant provides services as an independent contractor pursuant to a contract for services with the Corporation or an
    Affiliate, any material breach of such contract.

 

	 	1.3.8	“Change
    in Control” means:

 

	 	(a)	a
    successful “take-over bid” (as defined in the Securities Act (British Columbia), as amended, or any successor
    legislation thereto) pursuant to which the “offeror” acquires beneficial ownership of securities of the Corporation
    which, directly or following conversion or exercise thereof, would entitle the holder thereof, together with persons acting
    jointly or in concert with the holder thereof, to cast more than fifty percent (50%) of the votes attaching to all securities
    of the Corporation which may be cast to elect directors of the Corporation, other than the acquisition of beneficial ownership
    of additional securities of the Corporation by any person who, together with persons acting jointly or in concert with such
    person, was entitled prior to such “take-over bid”, directly or following conversion or exercise securities of
    the Corporation, to cast more than fifty percent (50%) of the votes attaching to all securities of the Corporation which may
    be cast to elect directors of the Corporation;
	 	 	 
	 	(b)	the
    issuance to, or acquisition by, any person, or group of persons acting jointly or in concert, directly or indirectly, including
    through an arrangement or other form of reorganization, of beneficial ownership of securities of the Corporation which, directly
    or following conversion or exercise thereof, would entitle the holder thereof to cast more than fifty percent (50%) of the
    votes attaching to all securities of the Corporation which may be cast to elect directors of the Corporation, other than the
    issuance of securities of the Corporation to, or acquisition of securities of the Corporation by, any person who, together
    with persons acting jointly or in concert with such person, was entitled prior to such issuance or acquisition, directly or
    following conversion or exercise securities of the Corporation, to cast more than fifty percent (50%) of the votes attaching
    to all securities of the Corporation which may be cast to elect directors of the Corporation;
	 	 	 
	 	(c)	individuals
    who, as of a Grant Date, constitute the Board (the “Incumbent Board”) cease for any reason (other than
    death or disability) to constitute at least a majority of the Board; provided, however, that any individual becoming a Director
    subsequent to the Grant Date, whose election, or nomination for election by the Corporation’s shareholders, was approved
    by a vote of at least two-thirds of the Directors then comprising the Incumbent Board (either by a specific vote or by approval
    of the proxy statement of the Corporation in which such person is named as a nominee for Director, without objection to such
    nomination) will be considered as though such individual was a member of the Incumbent Board, but excluding for this purpose,
    any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with
    respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on
    behalf of a person other than the Directors then comprising the Board;

 

    	 	2	 

    	 	 	 

    

 

	 	(d)	an
    arrangement, amalgamation, merger or other form of reorganization of the Corporation where the holders of the outstanding
    voting securities or interests of the Corporation immediately prior to the completion of the arrangement, amalgamation, merger
    or reorganization will hold fifty percent (50%) or less of the votes attaching to all outstanding voting securities or interests
    of the continuing entity upon completion of the arrangement, amalgamation, merger or reorganization;
	 	 	 
	 	(e)	the
    sale of all or substantially all of the assets of the Corporation; or
	 	 	 
	 	(f)	the
    liquidation, winding-up or dissolution of the Corporation.

 

	 	1.3.9	“Code”
    or “Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended, and any applicable
    United States Treasury Regulations and other binding regulatory guidance thereunder.
	 	 	 
	 	1.3.10	“Corporation”
    means VBI Vaccines Inc. and includes any successor corporation thereof.
	 	 	 
	 	1.3.11	“Director”
    means a director of the Corporation from time to time.
	 	 	 
	 	1.3.12	“Disability”
    means:

 

	 	(a)	subject
    to (b) below, a Participant’s physical or mental incapacity that prevents him/her from substantially fulfilling his
    or her duties and responsibilities on behalf of the Corporation or, if applicable, an Affiliate, as determined by the Board
    and, in the case of a Participant who is an employee of the Corporation or an Affiliate, in respect of which the Participant
    commences receiving, or is eligible to receive, disability benefits under the Corporation’s or Affiliate’s long-term
    disability plan; or
	 	 	 
	 	(b)	where
    a Participant has a written employment agreement with the Corporation or an Affiliate, “Disability” as
    defined in such employment agreement, if applicable. 

 

	 	1.3.13	“Disability
    Date” means, in relation to a Participant, that date determined by the Board to be the date on which the Participant
    experienced a Disability.
	 	 	 
	 	1.3.14	“Eligible
    Person” means an individual Employed by the Corporation or any Affiliate, including a Service Provider, who, by
    the nature of his or her position or job is, in the opinion of the Board, in a position to contribute to the success of the
    Corporation.

 

    	 	3	 

    	 	 	 

    

 

	 	1.3.15	“Employed”
    means, with respect to a Participant, that:

 

	 	(a)	the
    Participant is rendering services to the Corporation or an Affiliate (including services as a Director) including as a Service
    Provider (referred to in Section 1.3.43 as “active Employment”); or
	 	 	 
	 	(b)	the
    Participant is not actively rendering services to the Corporation or an Affiliate due to an approved leave of absence, maternity
    or parental leave or leave on account of Disability (provided, in the case of a US Taxpayer, that the Participant has not
    incurred a “Separation From Service”, within the meaning of Section 409A of the Code).
	 	 	 
	 	 	For
    greater certainty, a Participant shall not be considered to be Employed on a Vesting Date if, prior to such Vesting Date,
    such Participant received a payment in lieu of notice of termination of employment, whether under a contract of employment,
    as damages or otherwise.

 

	 	 	and
    “Employment’ has the corresponding meaning.
	 	 	 
	 	1.3.16	“Exercise
    Price” means, (i) with respect to an Option, the price payable by a Participant to purchase one Share on exercise
    of such Option, which shall not be less than one hundred percent (100%) of the Market Price on the Grant Date of the Option
    covering such Share, and (ii) with respect to a Tandem SAR, the Exercise Price (as defined in paragraph (i) above) applicable
    to the Option to which the Tandem SAR relates, in each case subject to adjustment pursuant to Section 5. 
	 	 	 
	 	1.3.17	“Grant”
    means a grant or right granted under the Plan consisting of one or more Options, Stock Appreciation Rights, RSUs or PSUs,
    shares of Restricted Stock or such other award as may be permitted hereunder.
	 	 	 
	 	1.3.18	“Grant
    Agreement” means an agreement between the Corporation and a Participant evidencing a Grant and setting out the terms
    under which such Grant is made, together with such schedules, amendments, deletions or changes thereto as are permitted under
    the Plan.
	 	 	 
	 	1.3.19	“Grant
    Date” means the effective date of a Grant.
	 	 	 
	 	1.3.20	“Incentive
    Stock Option” has the meaning ascribed thereto in Section 422(b) of the Code.
	 	 	 
	 	1.3.21	“Insider”
    means an insider of the Corporation as defined in the rules of the Toronto Stock Exchange Company Manual for the purpose of
    security based compensation arrangements.
	 	 	 
	 	1.3.22	“Market
    Price” means, with respect to any particular date:

 

	 	(a)	if
    the Shares are listed on only one Stock Exchange, the volume weighted average trading price per Share on such Stock Exchange
    during the immediately preceding five (5) Trading Days; 
	 	 	 
	 	(b)	if
    the Shares are listed on more than one Stock Exchange, the “Market Price” as determined in accordance with paragraph
    (a) above for the primary Stock Exchange on which the greatest volume of trading of the Shares occurred during the immediately
    preceding twenty (20) Trading Days; and

 

    	 	4	 

    	 	 	 

    

 

	 	(c)	if
    the Shares are not listed for trading on a Stock Exchange, a price which is determined by the Board in good faith to be the
    fair market value of the Shares.

 

	 	1.3.23	“Option”
    means an option to purchase a Share granted by the Board to an Eligible Person in accordance with Section 3 and Section 9.1.
	 	 	 
	 	1.3.24	“Parent”
    means any parent corporation of the Corporation within the meaning of Code Section 424(e), or any successor provision.
	 	 	 
	 	1.3.25	“Participant”
    means an Eligible Person to whom a Grant is made and which Grant or a portion thereof remains outstanding.
	 	 	 
	 	1.3.26	“Performance
    Conditions” means such financial, personal, operational or transaction-based performance criteria as may be determined
    by the Board in respect of a Grant to any Participant or Participants and set out in a Grant Agreement. Performance Conditions
    may apply to the Corporation, an Affiliate, the Corporation and its Affiliates as a whole, a business unit of the Corporation
    or group comprised of the Corporation and some Affiliates or a group of Affiliates, either individually, alternatively or
    in any combination, and measured either in total, incrementally or cumulatively over a specified performance period, on an
    absolute basis or relative to a pre-established target or milestone, to previous years’ results or to a designated comparator
    group, or otherwise, provided that the performance period for measurement or achievement of any such performance criteria
    (or incremental element thereof) shall in all events exceed one year.
	 	 	 
	 	1.3.27	“Performance
    Period” means, with respect to PSUs, the period specified by the Board for achievement of any applicable Performance
    Conditions as a condition to Vesting.
	 	 	 
	 	1.3.28	“Plan”
    means this VBI Vaccines Inc. Incentive Plan, including any schedules or appendices hereto, as may be amended from time to
    time.
	 	 	 
	 	1.3.29	“Performance
    Share Unit” or “PSU” means a right granted to an Eligible Person in accordance with Section 3
    and Section 14.1 to receive a Share or the Market Price, as determined by the Board, that generally becomes Vested, if at
    all, subject to the attainment of certain Performance Conditions and satisfaction of such other conditions to Vesting, if
    any, as may be determined by the Board.
	 	 	 
	 	1.3.30	“Restricted
    Share Unit” or “RSU” means a right granted to an Eligible Person in accordance with Section 3
    and Section 14.1 to receive a Share or the Market Price, as determined by the Board, that generally becomes Vested, if at
    all, following a period of continuous Employment of the Participant.
	 	 	 
	 	1.3.31	“Restricted
    Stock” means Shares granted to a Participant that are subject to a Restriction (as defined in Section 18).

 

    	 	5	 

    	 	 	 

    

 

	 	1.3.32	“Restrictive
    Covenant” means any obligation of a Participant to the Corporation or an Affiliate to (A) maintain the confidentiality
    of information relating to the Corporation or the Affiliate and/or its business, (B) not engage in employment or business
    activities that compete with the business of the Corporation or the Affiliate, (C) not solicit employees or other service
    providers, customers and/or suppliers of the Corporation or the Affiliate, whether during or after employment with the Corporation
    or Affiliate, and whether such obligation is set out in a Grant Agreement issued under the Plan or other agreement between
    the Participant and the Corporation or Affiliate, including, without limitation, an employment agreement, or otherwise, or
    (D) any other restrictive covenant contained in an applicable Grant Agreement, employment agreement or other Agreement between
    a Participant and the Corporation or an Affiliate.
	 	 	 
	 	1.3.33	“Service
    Provider” means a person or company, other than an employee, officer or director of the Corporation or an Affiliate,
    that:

 

	 	(a)	is
    engaged to provide, on a bona fide basis, for an initial, renewable or extended period of twelve (12) months or more,
    services to the Corporation or an Affiliate, other than services provided in relation to a distribution of securities;
	 	 	 
	 	(b)	provides
    the services under a written contract between the Corporation or an Affiliate and the person or company;
	 	 	 
	 	(c)	in
    the reasonable opinion of the Corporation, spends or will spend a significant amount of time and attention on the affairs
    and business of the Corporation or an Affiliate;

 

	 	and
    includes

 

	 	(a)	for
    an individual Service Provider, a corporation of which the individual Service Provider is an employee or shareholder, and
    a partnership of which the individual Service Provider is an employee or partner; and
	 	 	 
	 	(b)	for
    a Service Provider that is not an individual, an employee, executive officer, or director of the Service Provider, provided
    that the individual employee, executive officer, or director spends or will spend a significant amount of time and attention
    on the affairs and business of the Corporation or an Affiliate.

 

	 	1.3.34	“Share”
    means a common share in the capital of the Corporation or, in the event of an adjustment contemplated by Section 5.1 hereof,
    such other security to which a Participant may be entitled upon the exercise or settlement of a Grant as a result of such
    adjustment.
	 	 	 
	 	1.3.35	“Share
    Unit” means either an RSU or a PSU, as the context requires.
	 	 	 
	 	1.3.36	“Stand-Alone
    SAR” means a Stock Appreciation right that is granted without reference to any related Option.

 

    	 	6	 

    	 	 	 

    

 

	 	1.3.37	“Stock
    Appreciation Right” or “SAR” means a right, granted to an Eligible Person, representing the right
    to receive payment, in cash, Shares or any combination thereof, as determined by the Board, equal to the excess of the Market
    Price over the Base Price or Exercise Price, whichever is applicable, on the terms and conditions and calculated in accordance
    with the provisions of Section 10 hereof.
	 	 	 
	 	1.3.38	“Stock
    Exchange” means the Toronto Stock Exchange and such other stock exchange on which the Shares are listed, or if the
    Shares are not listed on any stock exchange, then on the over-the-counter market.
	 	 	 
	 	1.3.39	“Stock
    Exchange Rules” means the applicable rules of any Stock Exchange upon which Shares of the Corporation are listed.
	 	 	 
	 	1.3.40	“Subsidiary”
    means, any subsidiary corporation of the Corporation within the meaning of Code Section 424(f), or any successor provision.
	 	 	 
	 	1.3.41	“Tandem
    SAR” means a Stock Appreciation Right attached to an Option, giving the holder, upon Vesting of the Option and Tandem
    SAR, the right to choose to exercise the Stock Appreciation Right or to exercise the Option.
	 	 	 
	 	1.3.42	“Termination”
    means (i) the termination of a Participant’s active Employment with the Corporation or an Affiliate (other than in connection
    with the Participant’s transfer to Employment with the Corporation or another Affiliate), which shall occur on the earlier
    of the date on which the Participant ceases to render services to the Corporation or Affiliate, as applicable, and the date
    on which the Corporation or an Affiliate, as applicable, delivers notice of the termination of the Participant’s employment
    or contract for services, whether such termination is lawful or otherwise, without giving effect to any period of notice or
    compensation in lieu of notice (except as expressly required by applicable employment standards legislation), but, for greater
    certainty, a Participant’s absence from active work during a period of vacation, temporary illness, authorized leave
    of absence, maternity or parental leave or leave on account of Disability shall not be considered to be a “Termination”,
    and (ii) in the case of a Participant who does not return to active Employment with the Corporation or an Affiliate immediately
    following a period of absence due to vacation, temporary illness, authorized leave of absence, maternity or parental leave
    or leave on account of Disability, such cessation shall be deemed to occur on the last day of such period of absence (provided,
    in each case, that, in the case of a US Taxpayer, the Termination constitutes a “Separation From Service”, within
    the meaning of Section 409A of the Code), and “Terminated” and “Terminates” shall be
    construed accordingly.
	 	 	 
	 	1.3.43	“Time
    Vesting” means any conditions relating to the passage of time or continued service with the Corporation or an Affiliate
    for a period of time in respect of a Grant, as may be determined by the Board.
	 	 	 
	 	1.3.44	“Trading
    Day” means a day on which the Stock Exchange is open for trading and on which the Shares actually traded.

 

    	 	7	 

    	 	 	 

    

 

	 	1.3.45	“US
    Taxpayer” means an individual who is subject to tax under the Code in respect of any amounts payable or Shares deliverable
    under this Plan.
	 	 	 
	 	1.3.46	“Vested”
    means, with respect to any Option, SAR, Share Unit, share of Restricted Stock or other award included in a Grant, that the
    applicable conditions with respect to Time Vesting, achievement of Performance Conditions and/or any other conditions established
    by the Board have been satisfied or, to the extent permitted under the Plan, waived, whether or not the Participant’s
    rights with respect to such Grant may be conditioned upon prior or subsequent compliance with any Restrictive Covenants (and
    any applicable derivative term shall be construed accordingly).
	 	 	 
	 	1.3.47	“Vesting
    Date” means the date on which the applicable Time Vesting, Performance Conditions and/or any other conditions for
    an Option, SAR, Share Unit, share of Restricted Stock or other award included in a Grant becoming Vested are met, deemed to
    have been met or waived as contemplated in Section 3.1.

 

	2.	CONSTRUCTION
    AND INTERPRETATION

 

	 	2.1	Gender,
    Singular, Plural.
	 	 	 
	 	 	In
    the Plan, references to the masculine include the feminine; and references to the singular shall include the plural and vice
    versa, as the context shall require.
	 	 	 
	 	2.2	Severability.
	 	 	 
	 	 	If
    any provision or part of the Plan is determined to be void or unenforceable in whole or in part, such determination shall
    not affect the validity or enforcement of any other provision or part thereof.
	 	 	 
	 	2.3	Headings,
    Sections and Parts.
	 	 	 
	 	 	Headings
    wherever used herein are for reference purposes only and do not limit or extend the meaning of the provisions herein contained.
    A reference to a section or schedule shall, except where expressly stated otherwise, mean a section or schedule of the Plan,
    as applicable. The Plan is divided into four Parts. Part I contains provisions of general application to all Grants; Part
    II applies specifically to Options and SARs; Part III applies specifically to Share Units; and Part IV applies specifically
    to Restricted Stock and other Share-based awards.

 

	3.	ADMINISTRATION

 

	 	3.1	Administration
    by the Board.
	 	 	 
	 	 	The
    Plan shall be administered by the Board in accordance with its terms and subject to Applicable Law. Subject to and consistent
    with the terms of the Plan, in addition to any authority of the Board specified under any other terms of the Plan, the Board
    shall have full and complete discretionary authority to:

 

	 	(a)	interpret
    the Plan and Grant Agreements;

 

    	 	8	 

    	 	 	 

    

 

	 	(b)	prescribe,
    amend and rescind such rules and regulations and make all determinations necessary or desirable for the administration and
    interpretation of the Plan and instruments of grant evidencing Grants;
	 	 	 
	 	(c)	determine
    those Eligible Persons who may receive Grants as Participants, grant one or more Grants to such Participants and approve or
    authorize the applicable form and terms of the related Grant Agreement;
	 	 	 
	 	(d)	determine
    the terms and conditions of Grants granted to any Participant, including, without limitation, as applicable (i) Grant Value
    and the number of Shares subject to a Grant, (ii) the Exercise Price or Base Price for Shares subject to a Grant, (iii) the
    conditions to the Vesting of a Grant or any portion thereof, including, as applicable, the period for achievement of any applicable
    Performance Conditions as a condition to Vesting and conditions pertaining to compliance with Restrictive Covenants, and the
    conditions, if any, upon which Vesting of any Grant or any portion thereof will be waived or accelerated without any further
    action by the Board, (iv) the circumstances upon which a Grant or any portion thereof shall be forfeited, cancelled or expire,
    including in connection with the breach by a Participant of any Restrictive Covenant, (v) the consequences of a Termination
    with respect to a Grant, (vi) the manner of exercise or settlement of the Vested portion of a Grant, (vii) whether, and the
    terms upon which, a Grant may be settled in cash, newly issued Shares or a combination thereof, and (viii) whether, and the
    terms upon which, any Shares delivered upon exercise or settlement of a Grant must be held by a Participant for any specified
    period of time;
	 	 	 
	 	(e)	determine
    whether, and the extent to which, any Performance Conditions or other conditions applicable to the Vesting of a Grant have
    been satisfied or shall be waived or modified; 
	 	 	 
	 	(f)	make
    such rules, regulations and determinations as it deems appropriate under the Plan in respect of any leave of absence or disability
    of any Participant. Without limiting the generality of the foregoing, the Board shall be entitled to determine: 

 

	 	(i)	whether
    or not any such leave of absence shall constitute a Termination within the meaning of the Plan;
	 	 	 
	 	(ii)	the
    impact, if any, of any such leave of absence on Grants issued under the Plan made to any Participant who takes such leave
    of absence (including, without limitation, whether or not such leave of absence shall cause any Grants to expire and the impact
    upon the time or times such Grants shall be exercisable); 
	 	 	 
	 	 	provided
    that, with respect to Options that are intended to be Incentive Stock Options, the treatment of any such leave of absence
    shall comply with Code Section 422 and the regulations issued thereunder;

 

	 	(g)	amend
    the terms of any Grant Agreement or other documents evidencing Grants; and

 

    	 	9	 

    	 	 	 

    

 

	 	(h)	determine
    whether, and the extent to which, adjustments shall be made pursuant to Section 5 and the terms of such adjustments.

 

	 	3.2	All
    determinations, interpretations, rules, regulations, or other acts of the Board respecting the Plan or any Grant shall be
    made in its sole discretion and shall be conclusively binding upon all persons.
	 	 	 
	 	3.3	The
    Board may prescribe terms for Grant Agreements in respect of Eligible Persons who are subject to the laws of a jurisdiction
    other than Canada in connection with their participation in the Plan that are different than the terms of the Grant Agreements
    for Eligible Persons who are subject to the laws of Canada in connection with their participation in the Plan, and/or deviate
    from the terms of the Plan set out herein, for purposes of compliance with Applicable Law in such other jurisdiction or where,
    in the Board’s opinion, such terms or deviations are necessary or desirable to obtain more advantageous treatment for
    the Corporation, an Affiliate or the Eligible Person in respect of the Plan under the Applicable Law of the other jurisdiction.
	 	 	 
	 	 	Notwithstanding
    the foregoing, the terms of any Grant Agreement authorized pursuant to this Section 3.3 shall be consistent with the Plan
    to the extent practicable having regard to the Applicable Law of the jurisdiction in which such Grant Agreement is applicable
    and in no event shall contravene the Applicable Law of Canada.
	 	 	 
	 	3.4	The
    Board may, in its discretion, subject to Applicable Law, delegate its powers, rights and duties under the Plan, in whole or
    in part, to a committee of the Board, a person or persons, as it may determine, from time to time, on terms and conditions
    as it may determine, except that the Board shall not, and shall not be permitted to delegate any such powers, rights or duties
    (i) with respect to the grant, amendment, administration or settlement of any Grant to the extent delegation is not consistent
    with Applicable Law and any such purported delegation or action shall not be given effect, and (ii) provided that the composition
    of the committee of the Board, person or persons, as the case may be, shall comply with Applicable Law. In addition, provided
    it complies with the foregoing, the Board may appoint or engage a trustee, custodian or administrator to administer or implement
    the Plan or any aspect of it.

 

	4.	SHARE
    RESERVE

 

	 	4.1	Subject
    to Section 4.4 and any adjustment pursuant to Section 5.1, the aggregate number of Shares that may be issued pursuant to Grants
    made under the Plan together with any other security-based compensation arrangement of the Corporation, shall not exceed ten
    percent (10%) of the aggregate issued and outstanding Shares from time to time (on a non-diluted basis).
	 	 	 
	 	4.2	The
    aggregate number of Shares reserved for issuance to any one Participant under the Plan, together with all other security based
    compensation arrangements of the Corporation, must not exceed five percent (5%) of the aggregate issued and outstanding Shares
    (on a non-diluted basis).
	 	 	 
	 	4.3	The
    maximum number of Shares of the Corporation 

 

	 	(a)	issued
    to Insiders within any one year period, and 

 

    	 	10	 

    	 	 	 

    

 

	 	(b)	issuable
    to Insiders, at any time, 

 

	 	 	under
    the Plan, or when combined with all of the Corporation’s other security based compensation arrangements, shall not exceed
    ten percent (10%) of the number of the aggregate issued and outstanding Shares.
	 	 	 
	 	4.4	For
    purposes of computing the total number of Shares available for grant under the Plan or any other security based compensation
    arrangement of the Corporation, Shares subject to any Grant (or any portion thereof) that is forfeited, surrendered, cancelled
    or otherwise terminated prior to the issuance of such Shares shall again be available for grant under the Plan.

 

	5.	Alteration
    of Capital And Change In Control

 

	 	5.1	Notwithstanding
    any other provision of the Plan, and subject to Applicable Law, in the event of any change in the Shares by reason of any
    dividend (other than dividends in the ordinary course), split, recapitalization, reclassification, amalgamation, arrangement,
    merger, consolidation, combination or exchange of Shares or distribution of rights to holders of Shares or any other relevant
    changes to the authorized or issued capital of the Corporation, if the Board shall determine that an equitable adjustment
    should be made, such adjustment shall, subject to Applicable Law, be made by the Board to (i) the number of Shares subject
    to the Plan; (ii) the securities into which the Shares are changed or are convertible or exchangeable; (iii) any Options and/or
    Stock Appreciation Rights then outstanding; (iv) the Exercise Price and/or Base Price, as appropriate in respect of such Options
    and/or Stock Appreciation Rights; and/or (v) with respect to the number of Share Units outstanding under the Plan, and any
    such adjustment shall be conclusive and binding for all purposes of the Plan.
	 	 	 
	 	5.2	No
    adjustment provided for pursuant to Section 5.1 shall require the Corporation to issue fractional Shares in satisfaction of
    its obligations under the Plan. Any fractional interest in a Share that would, except for the provisions of this Section 5.2,
    be deliverable upon the exercise of any Grant shall be cancelled and not deliverable by the Corporation. 
	 	 	 
	 	5.3	In
    the event of a Change in Control prior to the Vesting of a Grant, and subject to the terms of a Participant’s written
    employment agreement or contract for services with the Corporation or an Affiliate and the applicable Grant Agreement, the
    Board shall have full authority to determine in its sole discretion the effect, if any, of a Change in Control on the Vesting,
    exercisability, settlement, payment or lapse of restrictions applicable to a Grant, which effect may be specified in the applicable
    Grant Agreement or determined at a subsequent time. Subject to Applicable Law, rules and regulations, the Board shall, at
    any time prior to, coincident with or after the effective time of a Change in Control, take such actions as it may consider
    appropriate, including, without limitation: (i) provide for the acceleration of any Vesting or exercisability of a Grant;
    (ii) provide for the deemed attainment of Performance Conditions relating to a Grant; (iii) provide for the lapse of restrictions
    relating to a Grant; (iv) provide for the assumption, substitution, replacement or continuation of any Grant by a successor
    or surviving corporation (or a parent or subsidiary thereof) with cash, securities, rights or other property to be paid or
    issued, as the case may be, by the successor or surviving corporation (or a parent or subsidiary thereof); (v) provide that
    that a Grant shall terminate or expire unless exercised or settled in full on or before a date fixed by the Board; or (vi)
    terminate or cancel any outstanding Grant in exchange for a cash payment (provided that, if as of the date of the Change in
    Control, the Board determines that no amount would have been realized upon the exercise or settlement of the Grant, then the
    Grant may be cancelled by the Corporation without payment of consideration). 

 

    	 	11	 

    	 	 	 

    

 

	6.	clawback

 

	 	6.1	Clawback.
    

 

It
is a condition of each Grant that if:

 

(i)
the Participant fails to comply with any applicable Restrictive Covenant;

 

(ii)
the Participant is terminated for Cause, or the Board reasonably determines after employment termination that the Participant’s
employment could have been terminated for Cause;

 

(iii)
the Board reasonably determines that the Participant engaged in conduct that causes material financial or reputational harm to
the Corporation or its Affiliates, or engaged in gross negligence, willful misconduct or fraud in respect of the performance of
the Participant’s duties for the Corporation or an Affiliate of the Corporation; or

 

(iv)
the Corporation’s financial statements (the “Original Statements”) are required to be restated (other than solely
as a result of a change in accounting policy by the Corporation or under International Financial Reporting Standards applicable
to the Corporation) and such restated financial statements (the “Restated Statements”) disclose, in the opinion of
the Board acting reasonably, materially worse financial results than those contained in the Original Statements,

 

then
the Board may, in its sole discretion, to the full extent permitted by governing law and to the extent it determines that such
action is in the best interest of the Corporation, and in addition to any other rights that the Corporation or an Affiliate may
have at law or under any agreement, take any or all of the following actions, as applicable:

 

(a)
require the Participant to reimburse the Corporation for any amount paid to the Participant in respect of a Grant in cash in excess
of the amount that should otherwise have been paid in respect of such Grant had the determination of such compensation been based
upon the Restated Statements in the event clause (iv) above is applicable, or that was paid in the twelve (12) months prior to
(x) the date on which the Participant fails to comply with a Restrictive Covenant, (y) the date on which the Participant’s
employment is terminated for Cause, or the Board makes a determination under paragraph (ii) or (iii) above, less, in any event,
the amount of tax withheld pursuant to the Income Tax Act (Canada) or other relevant taxing authority in respect of the
amount paid in cash in the year of payment;

 

(b)
reduce the number or value of, or cancel and terminate, any one or more unvested Grants of Options, Share Units or SARs on or
prior to the applicable maturity or Vesting Dates, or cancel or terminate any outstanding Grants which have Vested in the twelve
(12) months prior to (x) the date on which the Participant fails to comply with a Restrictive Covenant, (y) the date on which
the Participant’s employment is terminated for Cause or the Board makes a determination under paragraph (ii) or (iii) above,
or (z) the date on which the Board determines that the Corporation’s Original Statements are required to be restated, in
the event paragraph (iv) above applies (each such date provided for in clause (x), (y) and (z) of this paragraph (b) being a “Relevant
Equity Recoupment Date”); and/or

 

    	 	12	 

    	 	 	 

    

 

(c)
require payment to the Corporation of the value of any Shares of the Corporation acquired by the Participant pursuant to a Grant
in the twelve (12) months prior to a Relevant Equity Recoupment Date (less any amount paid by the Participant to acquire such
Shares and less the amount of tax withheld pursuant to the Income Tax Act (Canada) or other relevant taxing authority in
respect of such Shares).

 

	7.	MISCELLANEOUS

 

	 	7.1	Compliance
    with Laws and Policies.

 

The
Corporation’s obligation to make any payments or deliver (or cause to be delivered) any Shares hereunder is subject to compliance
with Applicable Law. Each Participant shall acknowledge and agree (and shall be conclusively deemed to have so acknowledged and
agreed by participating in the Plan) that the Participant will, at all times, act in strict compliance with Applicable Law and
all other laws and any policies of the Corporation applicable to the Participant in connection with the Plan including, without
limitation, furnishing to the Corporation all information and undertakings as may be required to permit compliance with Applicable
Law.

 

	 	7.2	Withholdings.

 

So
as to ensure that the Corporation or an Affiliate, as applicable, will be able to comply with the applicable obligations under
any federal, provincial, state or local law relating to the withholding of tax or other required deductions, the Corporation or
the Affiliate shall withhold or cause to be withheld from any amount payable to a Participant, either under this Plan, or otherwise,
such amount as may be necessary to permit the Corporation or the Affiliate, as applicable, to so comply. The Corporation and any
Affiliate may also satisfy any liability for any such withholding obligations, on such terms and conditions as the Corporation
may determine in its sole discretion, by (a) selling on such Participant’s behalf, or requiring such Participant to sell,
any Shares, and retaining any amount payable which would otherwise be provided or paid to such Participant in connection with
any such sale, or (b) requiring, as a condition to the delivery of Shares hereunder, that such Participant make such arrangements
as the Corporation may require so that the Corporation and its Affiliates can satisfy such withholding obligations, including
requiring such Participant to remit an amount to the Corporation or an Affiliate in advance, or reimburse the Corporation or any
Affiliate for, any such withholding obligations.

 

	 	7.3	No
Right to Continued Employment.

 

Nothing
in the Plan or in any Grant Agreement entered into pursuant hereto shall confer upon any Participant the right to continue in
the employ or service of the Corporation or any Affiliate, to be entitled to any remuneration or benefits not set forth in the
Plan or a Grant Agreement or to interfere with or limit in any way the right of the Corporation or any Affiliate to terminate
Participant’s employment or service arrangement with the Corporation or any Affiliate.

 

    	 	13	 

    	 	 	 

    

 

	 	7.4	No
Additional Rights.

 

Neither
the designation of an individual as a Participant nor the Grant of any Options, SARs, Share Units, Restricted Stock or other award
to any Participant entitles any person to the Grant, or any additional Grant, as the case may be, of any Options, SARs, Share
Units, Restricted Stock or other award under the Plan. For greater certainty, the Board’s decision to approve a Grant in
any period shall not require the Board to approve a Grant to any Participant in any other period; nor shall the Board’s
decision with respect to the size or terms and conditions of a Grant in any period require it to approve a Grant of the same or
similar size or with the same or similar terms and conditions to any Participant in any other period. The Board shall not be precluded
from approving a Grant to any Participant solely because such Participant may have previously received a Grant under this Plan
or any other similar compensation arrangement of the Corporation or an Affiliate. No Eligible Person has any claim or right to
receive a Grant except as may be provided in a written employment or services agreement between an Eligible Person and the Corporation
or an Affiliate.

 

	 	7.5	Amendment,
    Termination.

 

The
Plan and any Grant made pursuant to the Plan may be amended, modified or terminated by the Board without approval of shareholders,
provided that no amendment to the Plan or Grants made pursuant to the Plan may be made without the consent of a Participant if
it adversely alters or impairs the rights of the Participant in respect of any Grant previously granted to such Participant under
the Plan, except that Participant consent shall not be required where the amendment is required for purposes of compliance with
Applicable Law. For greater certainty, the Plan may not be amended without shareholder approval in accordance with the requirements
of the Stock Exchange to do any of the following:

 

	 	(a)	increase
    in the maximum number of Shares issuable pursuant to the Plan and as set out in Section 4.1;
	 	 	 
	 	(b)	reduce
    the Exercise Price of an outstanding Option or the Base Price of a Stand-Alone SAR, including a cancellation of a Grant of
    an Option and re-grant within six (6) months of an Option in conjunction therewith constituting a reduction of the Exercise
    Price of the Option;
	 	 	 
	 	(c)	extend
    the maximum term of any Grant made under the Plan;
	 	 	 
	 	(d)	amend
    the assignment provisions contained in Section 7.11 or Section 12; 
	 	 	 
	 	(e)	increase
    the number of Shares that may be issued or issuable to Insiders above the restriction or deleting the restriction on the number
    of Shares that may be issued or issuable to Insiders contained in Section 4.3;
	 	 	 
	 	(f)	include
    other types of equity compensation involving the issuance of Shares under the Plan; 
	 	 	 
	 	(g)	cause
    Incentive Stock Options to fail to meet the requirements of Code Section 422; or

 

    	 	14	 

    	 	 	 

    

 

	 	(h)	amend
    this Section 7.5 to amend or delete any of (a) through (h) above or grant additional powers to the Board to amend the Plan
    or entitlements without shareholder approval.

 

For
greater certainty and without limiting the foregoing, shareholder approval shall not be required for the following amendments
and the Board may make the following changes without shareholder approval, subject to any regulatory approvals including, where
required, the approval of any Stock Exchange:

 

	 	(i)	amendments
    of a “housekeeping” nature;
	 	 	 
	 	(j)	a
    change to the Vesting provisions of any Grants;
	 	 	 
	 	(k)	a
    change to the termination provisions of any Grant that does not entail an extension beyond the original term of the Grant;
    or
	 	 	 
	 	(l)	amendments
    to the provisions relating to a Change in Control.

 

	 	7.6	Currency. Except where the context otherwise requires, all references in the Plan to currency
    refer to lawful Canadian currency. Any amounts required to be determined under this Plan that are denominated in a currency
    other than Canadian dollars shall be converted to Canadian dollars at the applicable Bank of Canada noon rate of exchange
    on the date as of which the amount is required to be determined.
	 	 	 
	 	7.7	Administration
Costs.

 

The
Corporation will be responsible for all costs relating to the administration of the Plan.

 

	 	7.8	Designation
    of Beneficiary. 

 

Subject
to the requirements of Applicable Law, a Participant may designate a Beneficiary, in writing, to receive any benefits that are
provided under the Plan upon the death of such Participant. The Participant may, subject to Applicable Law, change such designation
from time to time. Such designation or change shall be in such form as may be prescribed by the Board from time to time. A Beneficiary
designation under this Section 7.8 and any subsequent changes thereto shall be filed with the General Counsel of the Corporation.

 

	 	7.9	Governing
    Law.

 

The
Plan and any Grants pursuant to the Plan shall be governed by and construed in accordance with the laws of the Province of British
Columbia and the federal laws of Canada applicable therein, and with respect to Participants who are US Taxpayers, with the Code
and applicable federal laws of the US. The Board may provide that any dispute to any Grant shall be presented and determined in
such forum as the Board may specify, including through binding arbitration. Any reference in the Plan, in any Grant Agreement
issued pursuant to the Plan or in any other agreement or document relating to the Plan to a provision of law or rule or regulation
shall be deemed to include any successor law, rule or regulation of similar effect or applicability. To the extent applicable,
with respect to Participants who are US Taxpayers, this Plan shall be interpreted in accordance with the requirements of Code
Sections 409A and the regulations, notices, and other guidance of general applicability issued thereunder.

 

    	 	15	 

    	 	 	 

    

 

	 	7.10	Assignment.

 

The
Plan shall inure to the benefit of and be binding upon the Corporation, its successors and assigns.

 

	 	7.11	Transferability.

 

	 	7.11.1	Unless
    otherwise provided in the Plan or in the applicable Grant Agreement in accordance with Section 7.11.2, no Grant, and no rights
    or interests therein, shall or may be assigned, transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated
    or disposed of by a Participant other than by testamentary disposition by the Participant or the laws of intestate succession.
    No such interest shall be subject to execution, attachment or similar legal process including without limitation seizure for
    the payment of the Participant’s debts, judgments, alimony or separate maintenance.
	 	 	 
	 	7.11.2	Notwithstanding
    the foregoing, with respect to Participants who are not US Taxpayers, the Board may provide in the applicable Grant Agreement
    that a Grant is transferable or assignable (a) in the case of a transfer without the payment of any consideration, to the
    Participant’s spouse, former spouse, children, stepchildren, grandchildren, parent, stepparent, grandparent, sibling,
    persons having one of the foregoing types of relationship with a Participant due to adoption and any entity in which these
    persons (or the Participant) own more than fifty percent (50%) of the voting interests and (b) to an entity in which more
    than fifty percent (50%) voting interests are owned by these persons (or the Participant) in exchange for an interest in that
    entity. Following any such transfer or assignment, the Grant shall remain subject to substantially the same terms applicable
    to the Grant while held by the Participant to whom it was granted, as modified as the Board shall determine appropriate, and,
    as a condition to such transfer, the transferee shall execute an agreement agreeing to be bound by such terms. Any purported
    assignment or transfer that does not qualify under this Section 7.11.2 shall be void and unenforceable against the Corporation.

 

	8.	EFFECTIVE
    DATE

 

	 	8.1	The
    Plan is established effective May 6, 2016.

 

    	 	16	 

    	 	 	 

    

 

PART
II – OPTIONS AND SARS

 

	9.	Options

 

	 	9.1	The
    Corporation may, from time to time, make one or more Grants of Options to Eligible Persons on such terms and conditions, consistent
    with the Plan, as the Board shall determine. In granting such Options, subject to the provisions of the Plan, the Corporation
    shall specify,

 

	 	(a)	the
    maximum number of Shares which the Participant may purchase under the Options;
	 	 	 
	 	(b)	the
    Exercise Price at which the Participant may purchase his or her Shares under the Options;
	 	 	 
	 	(c)	the
    term of the Options, to a maximum of ten years from the Grant Date of the Options, the Vesting period or periods within this
    period during which the Options or a portion thereof may be exercised by a Participant and any other Vesting conditions (including
    Performance Conditions); and
	 	 	 
	 	(d)	any
    Tandem SARs that are granted with respect to such Options.

 

	 	9.2	The
    Exercise Price for each Share subject to an Option shall be fixed by the Board but under no circumstances shall any Exercise
    Price be less than one hundred percent (100%) of the Market Price on the Grant Date of such Option.
	 	 	 
	 	9.3	Unless
    otherwise designated by the Board in the applicable Grant Agreement, twenty five percent (25%) of the Options included in
    a Grant shall Vest on each of the first four anniversaries of the Grant Date and, subject to Section 9.5, any such Options
    shall expire on the tenth anniversary of the Grant Date (unless exercised or terminated earlier in accordance with the terms
    of the Plan or the Grant Agreement). 
	 	 	 
	 	9.4	Subject
    to the provisions of the Plan and the terms governing the granting of the Option, and subject to payment or other satisfaction
    of all related withholding obligations in accordance with Section 7.2 hereof, Vested Options or a portion thereof may be exercised
    from time to time by delivery to the Corporation at its registered office of a notice in writing signed by the Participant
    or the Participant’s legal personal representative, as the case may be, and addressed to the Corporation. This notice
    shall state the intention of the Participant or the Participant’s legal personal representative to exercise the said
    Options and the number of Shares in respect of which the Options are then being exercised and must be accompanied by payment
    in full of the Exercise Price under the Options which are the subject of the exercise. On the exercise of an Option, any related
    Tandem SAR shall be cancelled.
	 	 	 
	 	9.5	If
    the normal expiry date of any Option, other than an Incentive Stock Option, falls within any Blackout Period or within ten
    business days (being a day other than a Saturday, Sunday or other than a day when banks in Vancouver, British Columbia are
    not generally open for business) following the end of any Blackout Period, then the expiry date of such Option shall, without
    any further action, be extended to the date that is ten business days following the end of such Blackout Period. The foregoing
    extension applies to all Options whatever the Grant Date (other than Incentive Stock Options and other than an extension beyond
    the original term of the Options in the case of Options held by a US Taxpayer) and shall not be considered an extension of
    the term of the Options as referred to in Section 7.5 hereof.

 

    	 	17	 

    	 	 	 

    

 

	 	9.6	Notwithstanding
    anything in this Plan to the contrary, for Options that are intended to qualify as Incentive Stock Options and granted to
    a US Taxpayer, the following additional provisions will apply:

 

	 	(a)	Except
    as permitted by Code Section 424(a), or any successor provision, the Exercise Price per Share shall not be less than one hundred
    percent (100%) of the per Share Market Price on the Effective Date of the Incentive Stock Option; provided, however, that
    if a Participant owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares
    of the Corporation or of its Parent or any Subsidiary, the Exercise Price per Share of an Incentive Stock Option granted to
    such Participant shall not be less than one hundred ten percent (110%) of the Market Price on the Effective Date of the Incentive
    Stock Option.
	 	 	 
	 	(b)	Except
    as permitted by Code Section 424(a), in no event shall any Incentive Stock Option be exercisable during a term of more than
    ten (10) years after the Effective Date of the Incentive Stock Option; provided, however, that if a Participant owns shares
    possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Corporation or of
    its Parent or any Subsidiary, the Incentive Stock Option granted to such Participant shall be exercisable during a term of
    not more than five (5) years after the Effective Date.
	 	 	 
	 	(c)	The
    Corporation or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all legally
    required amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s
    exercise of an Incentive Stock Option or a “disqualifying disposition” of Shares acquired through the exercise
    of an Incentive Stock Option as defined in Code Section 421(b) or require the Participant to remit an amount sufficient to
    satisfy such withholding requirements, or any combination thereof.
	 	 	 
	 	(d)	Notwithstanding
    any other provision of the Plan, the aggregate fair market value (determined as of the Effective Date of the Incentive Stock
    Option) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during
    any calendar year under the Plan and any other “incentive stock option” plans of the Corporation or any Affiliate,
    shall not exceed US$100,000 (or such other amount as may be prescribed by the Code from time to time); provided, however,
    that if the exercisability or Vesting of an Incentive Stock Option is accelerated as permitted under the provisions of the
    Plan and such acceleration would result in a violation of the limit imposed by this Section 9.6 (d), such acceleration shall
    be of full force and effect but the number of Shares that exceed such limit shall be treated as having been granted pursuant
    to a Nonqualified Stock Option; and provided, further, that the limits imposed by this Section 9.6 (d) shall be applied to
    all outstanding Incentive Stock Options under the Plan and any other “incentive stock option” plans of the Corporation
    or any Affiliate in chronological order according to the dates of grant.

 

    	 	18	 

    	 	 	 

    

 

	 	(e)	The
    Grant Agreement in respect of any Incentive Stock Option shall contain such other limitations and restrictions upon the exercise
    of the Incentive Stock Option as the Board shall deem necessary to ensure that such Incentive Stock Option will be considered
    an “incentive stock option” as defined in Code Section 422 or to conform to any change therein.
	 	 	 
	 	(f)	One
    hundred percent (100%) of the Shares reserved and available under the Plan pursuant to Section 4.1 shall constitute the maximum
    aggregate number of Shares that may be issued through Incentive Stock Options.

 

	10.	Stock
    Appreciation Rights

 

	 	10.1	The
    Board may from time to time make one or more Grants of Stock Appreciation Rights to Eligible Persons on such terms and conditions,
    consistent with the Plan, as the Board shall determine.
	 	 	 
	 	10.2	Tandem
    SARs may be granted at or after the Grant Date of the related Options, and each Tandem SAR shall be subject to the same terms
    and conditions and denominated in the same currency as the Option to which it relates and the additional terms and conditions
    set forth in this Section 10.
	 	 	 
	 	10.3	On
    exercise of a Tandem SAR, the related Option shall be cancelled and the Participant shall be entitled to an amount in settlement
    of such Tandem SAR calculated and in such form as provided in Section 10.8 below.
	 	 	 
	 	10.4	Tandem
    SARs may be exercised only if and to the extent the Options related thereto are then Vested and exercisable and shall be exercised
    in accordance with such procedures as may be established by the Board. For greater certainty, upon the expiry or forfeiture
    of the Option to which a Tandem SAR is attached, including in connection with a Participant’s Termination, as provided
    in Section 11, such Tandem SAR shall also expire or be forfeited, as the case may be.
	 	 	 
	 	10.5	Stand-Alone
    SARs granted under the Plan shall become Vested at such times, in such installments and subject to the terms and conditions
    of this Plan (including satisfaction of Performance Conditions and/or continued employment) as may be determined by the Board
    and set forth in the applicable Grant Agreement. For greater certainty, except as set out in a Grant Agreement in respect
    of the Stand-Along SAR, no Stand-Alone SAR granted to a Participant shall Vest after the Participant’s Termination and
    any Stand-Alone SARs that are outstanding on the Participant’s date of Termination shall be forfeited and cancelled
    as of such date.
	 	 	 
	 	10.6	The
    Base Price for each Stand-Alone SAR shall not be less that one hundred percent of the Market Price on the Grant Date of such
    Stand-Alone SAR.

 

    	 	19	 

    	 	 	 

    

 

	 	10.7	Unless
    the Board determines otherwise, Stand-Alone SARs covered by a Grant shall, when and to the extent Vested, be settled by payment
    in cash of the amount determined in accordance with Section 10.8.
	 	 	 
	 	10.8	Upon
    exercise thereof, or the settlement thereof in accordance with Section 10.7, and subject to payment or other satisfaction
    of all related withholding obligations in accordance with Section 7.2 hereof, Stock Appreciation Rights (and, in the case
    of Tandem SARs, the related Options) shall be settled by payment in cash, of an amount, or the delivery of Shares or a combination
    of cash and Shares, as determined by the Board with an aggregate value equal to the product of:

 

(A)
the excess of the Market Price on the date of exercise over the Exercise Price or Base Price under the applicable Stock Appreciation
Right,

 

multiplied
by

 

(B)
the number of Stock Appreciation Rights exercised or settled.

 

	 	10.9	Any
    cash payment in settlement of a Stand-Alone SAR shall be payable in Canadian dollars. Any cash payment in settlement of a
    Tandem SAR shall be payable in the currency as the option to which it relates. Any portion of a Stock Appreciation Right that
    is to be settled in Shares shall be settled by delivery of the number of Shares having a Market Price on the date of exercise
    equal to the portion of the amount determined in accordance with Section 10.8 being settled, rounded down to the nearest whole
    Share.
	 	 	 
	 	10.10	If
    the normal expiry date of any Stock Appreciation Right falls within any Blackout Period or within ten business days (being
    a day other than a Saturday, Sunday or other than a day when banks in Vancouver, British Columbia are not generally open for
    business) following the end of any Blackout Period, then the expiry date of such Stock Appreciation Right shall, without any
    further action, be extended to the date that is ten business days following the end such Blackout Period. The foregoing extension
    applies to all SARs whatever, other than Tandem SARs attached to Options of a US Taxpayer which shall be governed by the provisions
    of Section 9.5 that apply to the related Options, and shall not be considered an extension of the term of the SARs as referred
    to in Section 7.5 hereof.

 

	11.	Termination
    of Employment and Death of a Participant – Options and Tandem SARs

 

	 	11.1	Outstanding
    Options held by a Participant (or the executors or administrators of such Participant’s estate, any person or persons
    who acquire the right to exercise Options directly from the Participant by bequest or inheritance or any other permitted transferee
    of the Participant under Section 12 hereof) as of the Participant’s date of Termination shall be subject to the provisions
    of this Section 11, as applicable; except that, in all events, the period for exercise of Options shall end no later than
    the last day of the maximum term thereof established under Section 9.1(c), 9.5, 9.6(b) or 11.5, as the case may be. 
	 	 	 
	 	11.2	Subject
    to the applicable Grant Agreement, Section 11.1 and Section 11.6, in the case of a Participant’s Termination due to
    death, or in the case of the Participant’s Disability (i) those of the Participant’s outstanding Options that
    were granted prior to the year that includes the Participant’s date of death or Disability Date, as the case may be,
    that have not become Vested prior to such date of death or Disability Date shall continue to Vest and, upon Vesting, be exercisable
    during the thirty-six (36) month period following such date of death or Disability Date, as the case may be, as if the Participant
    had remained Employed throughout such period and (ii) those of the Participant’s outstanding Options that have become
    Vested prior to the Participant’s date of death or Disability Date shall continue to be exercisable during the thirty-six
    (36) month period following the such date of death or Disability Date, as the case may be.

 

    	 	20	 

    	 	 	 

    

 

The
number of Options granted to a Participant in the year that includes the Participant’s date of death or Disability Date
that remain eligible to Vest following such date of death or Disability Date (the “Special
Pro Rated Options”) shall be determined by the formula A x B/C where:

 

	 	A	equals
    the total number of Options included in the Grant that have not previously Vested,
	 	 	 
	 	B	equals
    the total number of days between January 1 of the year that includes the Grant Date of such Grant and the Participant’s
    date of death or Disability Date, and
	 	 	 
	 	C	365.

 

The
Special Pro Rated Options shall continue to Vest and, upon Vesting, be exercisable during the thirty-six (36) month period following
the Participant’s date of death or Disability Date, as the case may be as if the Participant had remained Employed throughout
such period. The balance of the Options granted to a Participant in the year that includes the Participant’s date of death
or Disability Date that are not Special Pro Rated Options shall be forfeited and cancelled as of the Participant’s date
of death or Disability Date, as the case may be.

 

	 	11.3	Subject
    to the applicable Grant Agreement, Section 11.1 and Section 11.6, in the case of a Participant’s Termination due to
    the termination of the Participant’s employment or termination of the Participant’s contract for services by the
    Corporation or an Affiliate without Cause, (i) those of the Participant’s outstanding Options that have not become Vested
    prior to the Participant’s Termination shall continue to Vest and, upon Vesting, be exercisable during the one hundred
    and twenty (120) day period following the Participant’s Termination as if the Participant had remained Employed throughout
    such period, and (ii) those of the Participant’s outstanding Options that have become Vested prior to the Participant’s
    Termination shall continue to be exercisable during the one hundred and twenty (120) day period following the Participant’s
    Date of Termination.
	 	 	 
	 	11.4	Subject
    to the applicable Grant Agreement and Section 11.6, in the case of a Participant’s Termination due to the Participant’s
    resignation (including the voluntary withdrawal of services by a Participant who is not an employee under Applicable Law),
    (i) those of the Participant’s outstanding Options that have not become Vested prior to the date on which the Participant
    provides notice to the Corporation of his or her resignation shall be forfeited and cancelled as of such date, and (ii) those
    of the Participant’s outstanding Options that have become Vested prior to the date on which the Participant provides
    notice to the Corporation of his or her resignation shall continue to be exercisable during the ninety (90) day period following
    the Participant’s date of Termination.

 

    	 	21	 

    	 	 	 

    

 

	 	11.5	Notwithstanding
    the foregoing, with respect to any Option that is intended to be an Incentive Stock Option, such Option shall not be exercisable
    for a period that is longer than (i) three (3) months from the date of the Participant’s Termination for any reason
    other than death or disability (as defined in Code Section 22(e)), or (ii) twelve (12) months from the Participant’s
    Termination due to disability (as defined in Code Section 22(e)) or death.
	 	 	 
	 	11.6	In
    addition to the Board’s rights under Section 3.1, the Board may, at the time of a Participant’s Termination or
    Disability Date, extend the period for exercise of some or all of the Participant’s Options, but not beyond the original
    expiry date, and/or allow for the continued Vesting of some or all of the Participant’s Options during the period for
    exercise or a portion of it. Options that are not exercised prior to the expiration of the exercise period, including any
    extended exercise period authorized pursuant to this Section 11.6, following a Participant’s date of Termination or
    Disability Date, as the case may be, shall automatically expire on the last day of such period.
	 	 	 
	 	11.7	Notwithstanding
    any other provision hereof or in any Grant Agreement, in the case of a Participant’s termination of employment or termination
    of the Participant’s contract for services for Cause, any and all then outstanding unvested Options granted to the Participant
    shall be immediately forfeited and cancelled, without any consideration therefore, as of the commencement of the day that
    notice of such termination is given.
	 	 	 
	 	11.8	For
    greater certainty, a Participant shall have no right to receive Shares or a cash payment, as compensation, damages or otherwise,
    with respect to any Options that do not become Vested or that are not exercised before the date on which the Options expire.
    

 

	12.	Transferability
    of OPtions – us taxpayer

 

	 	12.1	Notwithstanding
    Section 7.11, with respect to Participants who are US Taxpayers, no Incentive Stock Option shall be transferable by the Participant,
    in whole or in part, other than by will or by the laws of descent and distribution. If the Participant shall attempt any transfer
    of any Incentive Stock Option, such transfer shall be void and the Incentive Stock Option shall terminate.
	 	 	 
	 	12.2	Further,
    with respect to Participants who are US Taxpayers, Options that are not Incentive Stock Options shall be transferable, in
    whole or in part, by the Participant by will or by the laws of descent and distribution. In addition, the Board may, in its
    sole discretion, permit the Participant to transfer any or all such Options to any member of the Participant’s “immediate
    family” as such term is defined in Rule 16a-1(e), or any successor provision, of the Securities Exchange Act of 1934,
    as amended, or to one or more trusts whose beneficiaries are members of such Participant’s “immediate family”
    or partnerships in which such family members are the only partners; provided, however, that the Participant cannot receive
    any consideration for the transfer and such transferred Stock Option shall continue to be subject to the same terms and conditions
    as were applicable to such Option immediately prior to its transfer. 

 

    	 	22	 

    	 	 	 

    

 

PART
III – SHARE UNITS

 

	13.	DEFINITIONS

 

	 	13.1	“Grant
    Value” means the dollar amount allocated to an Eligible Person in respect of a Grant
    of Share Units as contemplated by Section 3.
	 	 	 
	 	13.2	“Share
    Unit Account” has the meaning set out in Section 15.1.
	 	 	 
	 	13.3	“Valuation
    Date” means the date as of which the Market Value is determined for purposes of calculating
    the number of Share Units included in a Grant, which unless otherwise determined by the Board shall be the Grant Date.
	 	 	 
	 	13.4	“Vesting
    Period” means, with respect to a Grant of Share Units, the period specified by the
    Board, commencing on the Grant Date and ending on the last Vesting Date for such Share Units.

 

	14.	Eligibility
    and Grant Determination.

 

	 	14.1	The
    Board may from time to time make one or more Grants of Share Units to Eligible Persons on such terms and conditions, consistent
    with the Plan, as the Board shall determine, provided that, in determining the Eligible Persons to whom Grants are to be made
    and the Grant Value for each Grant, the Board shall take into account the terms of any written employment agreement or contract
    for services between an Eligible Person and the Corporation or any Affiliate and may take into account such other factors
    as it shall determine in its sole and absolute discretion.
	 	 	 
	 	14.2	The
    Board shall determine the Grant Value and the Valuation Date (if not the Grant Date) for each Grant under this Part III. The
    number of Share Units to be covered by each such Grant shall be determined by dividing the Grant Value for such Grant by the
    Market Value of a Share as at the Valuation Date for such Grant, rounded up to the next whole number.
	 	 	 
	 	14.3	Each
    Grant Agreement issued in respect of Share Units shall set forth, at a minimum, the type of Share Units and Grant Date of
    the Grant evidenced thereby, the number of RSUs or PSUs subject to such Grant, the applicable Vesting conditions, the applicable
    Vesting Period(s) and the treatment of the Grant upon Termination and may specify such other terms and conditions consistent
    with the terms of the Plan as the Board shall determine or as shall be required under any other provision of the Plan. The
    Board may include in a Grant Agreement under this Part III terms or conditions pertaining to confidentiality of information
    relating to the Corporation’s operations or businesses which must be complied with by a Participant including as a condition
    of the grant or Vesting of Share Units.

 

	15.	ACCOUNTS
    AND DIVIDEND EQUIVALENTS 

 

	 	15.1	Share
    Unit Account.

 

An
account, called a “Share Unit Account”, shall be maintained by the Corporation, or an Affiliate, as specified
by the Board, for each Participant who has received a Grant of Share Units and will be credited with such Grants of Share Units
as are received by a Participant from time to time pursuant to Section 14 and any dividend equivalent Share Units pursuant to
Section 15.2. Share Units that fail to Vest to a Participant and are forfeited pursuant to Section 16, or that are paid out to
the Participant or his or her Beneficiary, shall be cancelled and shall cease to be recorded in the Participant’s Share
Unit Account as of the date on which such Share Units are forfeited or cancelled under the Plan or are paid out, as the case may
be. For greater certainty, where a Participant is granted both RSUs and PSUs, such RSUs and PSUs shall be recorded separately
in the Participant’s Share Unit Account.

 

    	 	23	 

    	 	 	 

    

 

	 	15.2	Dividend
    Equivalent Share Units.

 

Except
as otherwise provided in the Grant Agreement relating to a Grant of RSUs or PSUs, if and when cash dividends (other than extraordinary
or special dividends) are paid with respect to Shares to shareholders of record as of a record date occurring during the period
from the Grant Date under the Grant Agreement to the date of settlement of the RSUs or PSUs granted thereunder, a number of dividend
equivalent RSUs or PSUs, as the case may be, shall be credited to the Share Unit of Account of the Participant who is a party
to such Grant Agreement. The number of such additional RSUs or PSUs will be calculated by dividing the aggregate dividends or
distributions that would have been paid to such Participant if the RSUs or PSUs in the Participant’s Share Unit Account
had been Shares by the Market Value on the date on which the dividends or distributions were paid on the Shares. The additional
RSUs or PSUs granted to a Participant will be subject to the same terms and conditions, including Vesting and settlement terms,
as the corresponding RSUs or PSUs, as the case may be.

 

	16.	VESTING
    AND SETTLEMENT OF SHARE UNITS

 

	 	16.1	Continued
    Employment.

 

Subject
to this Section 16 and the applicable Grant Agreement, Share Units subject to a Grant and dividend equivalent Share Units credited
to the Participant’s Share Unit Account in respect of such Share Units shall Vest in such proportion(s) and on such Vesting
Date(s) as may be specified in the Grant Agreement governing such Grant provided that the Participant is Employed on the relevant
Vesting Date.

 

	 	16.2	Settlement.

 

A
Participant’s RSUs and PSUs, adjusted in accordance with the applicable multiplier, if any, as set out in the Grant Agreement,
and rounded down to the nearest whole number of RSUs or PSUs, as the case may be, shall be settled, by a distribution as provided
below to the Participant or his or her Beneficiary, upon, or as soon as reasonably practicable following the Vesting thereof in
accordance with Section 16.1 or 16.6, as the case may be, subject to the terms of the applicable Grant Agreement. In all events
RSUs and PSUs will be settled on or before the earlier of the ninetieth (90th) day following the Vesting Date and the
date that is two and one half (21⁄2) months after the end of the year in which Vesting occurred. Settlement shall be made
by the issuance of one Share for each RSU or PSU then being settled, a cash payment equal to the Market Value of the RSUs or PSUs
being settled in cash, or a combination of Shares and cash, all as determined by the Board in its discretion, or as specified
in the applicable Grant Agreement, and subject to payment or other satisfaction of all related withholding obligations in accordance
with Section 7.2.

 

    	 	24	 

    	 	 	 

    

 

	 	16.3	Postponed
    Settlement.

 

If
a Participant’s Share Units would, in the absence of this Section 16.3 be settled within a Blackout Period applicable to
such Participant, such settlement shall be postponed until the earlier of the sixth (6th) Trading Day following the
end of such Blackout Period and the otherwise applicable date for settlement of the Participant’s Share Units as determined
in accordance with Section 16.2.

 

	 	16.4	Failure
    to Vest.

 

For
greater certainty, a Participant shall have no right to receive Shares or a cash payment, as compensation, damages or otherwise,
with respect to any RSUs or PSUs that do not become Vested.

 

	 	16.5	Resignation.
    

 

Subject
to the applicable Grant Agreement and Section 16.8, in the event a Participant’s employment is Terminated as a result of
the Participant`s resignation, no Share Units that have not Vested prior to the date of on which the Participant submits his or
her resignation, including dividend equivalent Share Units in respect of such Share Units, shall Vest and all such Share Units
shall be forfeited immediately.

 

	 	16.6	Death
    or Disability.

 

Subject
to the applicable Grant Agreement, in the case of a Participant`s Termination due to death, or in the case of the Participant`s
Disability, all Share Units granted to the Participant that were granted prior to the year that includes the Participant’s
date of death or Disability Date, as the case may be, that have not Vested prior to the Participant`s date of death or Disability
Date, as the case may be, and related dividend equivalent Share Units credited prior to such date of death or Disability Date,
shall Vest at the end of the Vesting Period relating to such Grant(s) of such Share Units and in the case of a Grant of PSUs,
subject to the achievement of the applicable Performance Conditions and the adjustment of the number of PSUs that Vest to reflect
the extent to which such Performance Conditions were achieved, as if the Participant had remained Employed by the Corporation
or an Affiliate until the end of the Vesting Period applicable to such Share Units.

 

The
number of Share Units granted to a Participant in the year that includes the Participant’s date of death or Disability Date
that remain eligible to Vest following such date of death or Disability Date (the “Special
Pro Rated Share Units”) shall be determined by the formula A x B/C where:

 

	 	A	equals
    the total number of Share Units relating to such Grant that have not previously Vested,
	 	 	 
	 	B	equals
    the total number of days between January 1 of the year that includes the Grant Date of such Grant and the Participant’s
    date of death or Disability Date, and
	 	 	 
	 	C	365.

 

    	 	25	 

    	 	 	 

    

 

The
Special Pro Rated Share Units, together with any dividend equivalent Share Units attributable thereto, shall Vest at the end of
the Vesting Period relating to such Grant(s) of such Share Units and in the case of a Grant of PSUs that are subject to Performance
Conditions, subject to the achievement of the applicable Performance Conditions and the adjustment of the number of Special Pro
Rated PSUs and related dividend equivalent PSUs that Vest to reflect the extent to which such Performance Conditions were achieved,
as if the Participant had remained Employed by the Corporation or an Affiliate until the end of the Vesting Period applicable
to such Share Units. The balance of the Share Units included in a Grant made in the year that includes the Participant’s
date of death or Disability Date that are not Special Pro Rated Share Units shall be forfeited and cancelled as of the Participant’s
date of death or Disability Date, as the case may be.

 

	 	16.7	Termination
    of Employment without Cause. 

 

Subject
to the applicable Grant Agreement and Section 16.8, in the event a Participant’s employment or contract for services is
terminated by the Corporation, or an Affiliate, as applicable, without Cause, prior to the end of a Vesting Period relating to
a Grant:

 

	 	(a)	the
    number of RSUs determined by the formula A x B/C, where

 

	 	A	equals
    the total number of RSUs relating to such Grant that have not previously Vested and dividend equivalent RSUs in respect of
    such RSUs,
	 	 	 
	 	B	equals
    the total number of days between the first day of the Vesting Period relating to such Grant and the Participant’s date
    of Termination, and
	 	 	 
	 	C	equals
    total number of days in the Vesting Period relating to such Grant,
	 	 	 
	 	 	shall
    become Vested RSUs at the end of the Vesting Period relating to such Grant; and

 

	 	(b)	the
    number of PSUs (if any) determined by the formula A x B/C, where

 

	 	A	equals
    the total number of PSUs relating to such Grant that have not previously Vested and dividend equivalent PSUs in respect of
    such PSUs that would have Vested had the Participant remained Employed until the end of the applicable Vesting Period having
    regard to the extent to which the applicable Performance Conditions were satisfied,
	 	 	 
	 	B	equals
    the total number of days between the first day of the Performance Period relating to such Grant and the Participant’s
    date of Termination, and
	 	 	 
	 	C	equals
    total number of days in the Performance Period relating to such Grant,
	 	 	 
	 	 	shall
    become Vested PSUs at the end of Vesting Period relating to such Grant.

 

    	 	26	 

    	 	 	 

    

 

	 	16.8	Extension
    of Vesting. 

 

The
Board may, at the time of Termination or a Disability Date, extend the period for Vesting of Share Units, but not beyond the original
end of the applicable Vesting Period.

 

	 	16.9	Termination
    of Employment for Cause. 

 

In
the event a Participant’s employment is Terminated for Cause by the Corporation, no Share Units, that have not Vested prior
to the date of the Participant’s Termination for Cause including dividend equivalent Share Units in respect of such Share
Units, shall Vest and all such Share Units shall be forfeited immediately.

 

	17.	SHAREHOLDER
    RIGHTS

 

	 	17.1	No
    Rights to Shares. 

 

Share
Units are not Shares and a Grant of Share Units will not entitle a Participant to any shareholder rights, including, without limitation,
voting rights, dividend entitlement or rights on liquidation.

 

PART
IV – RESTRICTED STOCK AND OTHER AWARDS

 

	18.	DEFINITIONS

 

	 	18.1	“Restriction”
    means any restriction on a Participant’s free enjoyment of the Shares granted as Restricted Stock. Restrictions may
    be based on the passage of time or the satisfaction of Performance Conditions or the occurrence of one or more events or conditions,
    and shall lapse separately or in combination upon satisfaction of such conditions and at such time or times, in instalments
    or otherwise, as the Board shall specify.

 

	19.	Restricted
    Stock

 

	 	19.1	Dividends;
    Voting.

 

While
any Restriction applies to any Participant’s Restricted Stock, (i) unless the Board provides otherwise, the Participant
shall receive the dividends paid on the Restricted Stock and shall not be required to return those dividends to the Corporation
in the event of the forfeiture of the Restricted Stock, (ii) the Participant shall receive the proceeds of the Restricted Stock
in the event of any change in the Shares in respect of which the Board has determined that an equitable adjustment should be made
pursuant to Section 5.1, which proceeds shall automatically and without need for any other action become Restricted Stock and
be subject to all Restrictions then existing as to the Participant’s Restricted Stock, and (iii) the Participant shall be
entitled to vote the Restricted Stock during the Restriction period.

 

    	 	27	 

    	 	 	 

    

 

	 	19.2	Transfer
    Restrictions. 

 

The
Participant shall not have the right to sell, transfer, assign, convey, pledge, hypothecate, grant any security interest in or
mortgage on, or otherwise dispose of or encumber any shares of Restricted Stock or any interest therein while the Restrictions
remain in effect. The Board may require, as a condition of a Grant of Restricted Stock, that the Participant deposit the shares
of Restricted Stock into an escrow account.

 

	 	19.3	Forfeiture.
    

 

Grants
of Restricted Stock shall be forfeited if the applicable Restriction does not lapse prior to such date or the occurrence of such
event or the satisfaction of such other criteria as is specified in the Grant Agreement. Further, unless expressly provided for
in the Grant Agreement, or as otherwise determined by the Board, any Restricted Stock held by the Participant at the time of the
Participant’s Termination shall be forfeited by the Participant to the Corporation.

 

	 	19.4	Evidence
    of Share Ownership. 

 

Restricted
Stock will be book-entry Shares only unless the Board decides to issue certificates to evidence shares of the Restricted Stock.

 

	20.	OTHER
    AWARDS

 

The
Board shall have the authority to grant other equity-based awards, which may be based on one or more criteria determined by the
Board, under the Plan that are consistent with the purpose of the Plan and the interests of the Corporation, including, without
limitation, bonuses or similar compensation payable in the form of Shares, subject to compliance with Applicable Law.

 

    	 	28	 

    	 	 	 

    

 

Exhibit
“A”

 

to

 

VBI
Vaccines Inc. Incentive Plan

 

Special
Provisions Applicable to US Taxpayer

 

This
Exhibit sets forth special provisions of the VBI Vaccines Inc. Incentive Plan (the “Plan”) that apply to Participants
who are US Taxpayers. This Exhibit shall apply to such Participants notwithstanding any other provisions of the Plan. Terms defined
elsewhere in the Plan and used herein shall have the meanings set forth in the Plan, as may be amended from time to time.

 

Definitions

 

“Disability”
means, solely with respect to an award that constitutes deferred compensation subject to Section 409A of the Code, a “disability”
as defined under Section 409A of the Code.

 

“Eligible
Person” means, solely with respect to Options and SARs, an individual Employed by the Corporation or any of its subsidiaries
who, by the nature of his or her position or job is, in the opinion of the Board, in a position to contribute to the success of
the Corporation; provided, however, that only officers and employees shall be eligible to receive Incentive Stock Options.

 

“Market
Price” means, solely with respect to the terms “Exercise Price” and “Base Price”, (a) if the
Shares are listed on the Stock Exchange, the closing price per Share on the Stock Exchange on the Effective Date of the Grant;
(b) if the Shares are listed on more than on Stock Exchange, the fair market value as determined in accordance with paragraph
(a) above for the primary Stock Exchange on which the Shares are listed, as determined by the Board; and (c) if the Shares not
listed for trading on a Stock Exchange, a price which is determined by the Board in good faith to be the fair market value of
the Shares in compliance with the Code Section 409A.

 

“Separation
From Service” means such employment or service with the Corporation and any entity that is to be treated as a single
employer with the Corporation for purposes of United States Treasury Regulation Section 1.409A-1(h) terminates such that it is
reasonably anticipated that no further services will be performed.

 

“Specified
Employee” means a US Taxpayer who meets the definition of “specified employee,” as defined in Section 409A(a)(2)(B)(i)
of the Code.

 

Change
in Control Treatment

 

Notwithstanding
anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the
Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if
the Corporation determines any award under the Plan constitutes deferred compensation subject to Section 409A of the Code, then
as determined in the sole discretion of the Board, the vesting of such award may be accelerated as of the effective date of the
Change in Control, but the Corporation shall pay such award on its original payment date, but in no event more than 90 days following
the original payment date.

 

    	 	29	 

    	 	 	 

    

 

Compliance
with Section 409A

 

The
intent of the parties is that payments and benefits under this Plan comply with Section 409A of the Code, to the extent subject
thereto, and accordingly, to the maximum extent permitted, this Plan shall be interpreted and administered to be in compliance
therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation
and/or tax penalties under Section 409A of the Code, a Participant shall not be considered to have terminated employment with
the Company for purposes of this Plan unless the Participant would be considered to have incurred a Separation from Service from
the Company. Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment
for purposes of Section 409A of the Code, and any payments described in this Plan that are due within the “short term deferral
period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires
otherwise. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required
in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable
and benefits that would otherwise be provided pursuant to this Plan (or any other plan or agreement of the Corporation) during
the six-month period immediately following the Specified Employee’s Separation from Service shall instead be paid on the
first business day after the date that is six months following the Specified Employee’s Separation from Service (or death,
if earlier). The Plan and any award agreements issued thereunder may be amended in any respect deemed by the Board to be necessary
in order to preserve compliance with Section 409A of the Code. The Corporation makes no representation that any or all of the
payments described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude
Section 409A of the Code from applying to any such payment. Each Participant shall be solely responsible for the payment of any
taxes and penalties incurred under Section 409A of the Code.

 

    	 	30	 

    	 	 	 

    

 

Exhibit
“B”

 

to

 

VBI
Vaccines Inc. Incentive Plan

 

Addendum
Applicable to Israeli Taxpayer

 

	1.	Purpose
    of the Addendum: This Israeli Addendum (the “Addendum”) shall form an integral part of the VBI Vaccines
    Inc. Incentive Plan (the “Plan”), and it shall apply only to Participants who are deemed residents of the
    State of Israel for the purpose of Israeli tax laws and are employed or engaged by the Corporation’s Israeli resident
    subsidiary (“Israeli Participants”).

 

This
Addendum supplements the Plan so that it shall comply with the requirements of the Israeli Tax Ordinance (as defined below).

 

The
Plan and this Israeli Addendum are complimentary to each other and shall be read and deemed as one. Any requirements provided
in this Addendum shall be in addition to the requirements provided in the Plan and in the Grant Agreement. In the event of conflict,
whether explicit or implied, between the provisions of the Plan and this Addendum, the latter shall govern and prevail with respect
to Grants to Israeli Participants.

 

	2.	Definitions:

 

Unless
otherwise defined herein, the terms defined in this Addendum shall have the same meaning as set out in the Plan.

 

For
the purposes of this Addendum, the following terms shall have the meaning set forth below:

 

	 	(a)	“Additional
    Rights” means any distribution of rights, including an issuance of bonus shares granted in accordance with the terms
    of the Plan, in connection with Section 102 Trustee Grants (as defined below) and/or with the Shares issued thereunder. 
	 	 	 
	 	(b)	“Affiliate(s)”
    Without derogating from the definition of Affiliate(s) in the Plan and solely with respect to to Section 102 Trustee Grants
    (as defined below), “Affiliate(s)” means an “employing company” within the meaning of Section 102(a)
    of the Tax Ordinance.
	 	 	 
	 	(c)	“Controlling
    Shareholder” shall have the same meaning ascribed to it in Section 32(9) of the Tax Ordinance.
	 	 	 
	 	(d)	“Employee”
    shall mean, solely with respect to to Section 102 Trustee Grants and Section 102 Non-Trustee Grants (as defined below), any
    Eligble Person who is an Israeli Participant, and office holders of the Company’s Israeli resident subsidiary (“Nosei
    Misra” as such term is defined in the Israeli Companies Law), but exclude any person who is a Controlling Shareholder
    of the Corporation prior to or after the Grants.

 

    	 	31	 

    	 	 	 

    

 

	 	(e)	“Fair
    Market Value” means, for the purpose of determining the tax liability with respect to the grant of Capital Gain
    Grant Through a Trustee pursuant to Section 102(b)(3), if applicable; (i) if at the date of grant the Corporation’s
    stock is listed on any established stock exchange or a national market system or if the Corporation’s stock will be
    registered for trading within ninety (90) days following the date of grant, the Fair Market Value of a Share at the date of
    grant shall be determined in accordance with the average value of the Shares on the thirty (30) trading days preceding the
    date of grant or on the thirty (30) trading days following the date of registration for trading, as the case may be; (ii)
    if the stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
    shall be the mean between the high bid and low asked prices for the Shares on the last market trading day prior to the day
    of determination. 
	 	 	 
	 	(f)	“ITA”
    means the Israeli Income Tax Authorities.
	 	 	 
	 	(g)	“Lock-up
    Period” means the period during which the Section 102 Trustee Grants made to an Israeli Participant or, the Shares
    underlying the Section 102 Trustee Grants, as well as any Additional Rights issued or distributed in connection therewith
    are to be held by the Trustee (as defined below) on behalf of the Israeli Participant, in accordance with Section 102 pursuant
    to the tax route which the Corporation elects.
	 	 	 
	 	(h)	“Section
    102” means Section 102 of the Israeli Income Tax Ordinance, and any regulations, rules, orders or procedures promulgated
    thereunder, all as amended, and the Rules.
	 	 	 
	 	(i)	“Non-Employee”
    means any Israeli Participant who is not an Employee.
	 	 	 
	 	(j)	“Rules”
    means the Income Tax Rules (Tax Relief upon the Allotment of Shares to Employees), 2003, and any regulations, rules, orders
    or procedures promulgated thereunder, all as amended.
	 	 	 
	 	(k)	“Section
    3(i)” means Section 3(i) of the Tax Ordinance, and any regulations, rules, orders or procedures promulgated thereunder,
    all as amended.
	 	 	 
	 	(l)	“Section
    3(i) Grant” means a Grant made to Israeli Participant pursuant to Section 3(i).
	 	 	 
	 	(m)	“Section
    102 Trustee Grant” means a Grant of Options and/or RSU made to Israeli Participant that by its terms qualifies and
    is intended to qualify under the provisions of Section 102(b) of the Tax Ordinance (including the Section 102(b) Route Election
    (as defined below)), as either:

 

	 	1)	“Ordinary
    Income Grant Through a Trustee” for the special tax treatment under Section 102(b)(1) and the “Ordinary Income
    Route”, or 
	 	 	 
	 	2)	“Capital
    Gain Grant Through a Trustee” for the special tax treatment under Section 102(b)(2) or Section 102(b)(3) and the
    “Capital Route”.

 

	 	(n)	“Section
    102(b) Route Election” means the right of the Corporation to choose either the “Capital Route” (as set
    under Section 102(b)(2)), or the “Ordinary Income Route” (as set under Section 102(b)(1)), subject to the provisions
    of Section 102(g) of the Tax Ordinance. 
	 	 	 
	 	(o)	“Section
    102 Non-Trustee Grant” means a Grant made not through a trustee under the terms of Section 102(c) of the Tax Ordinance.

 

    	 	32	 

    	 	 	 

    

 

	 	(p)	“Tax
    Ordinance” means the Israeli Income Tax Ordinance, 1961.
	 	 	 
	 	(q)	“Tax
    Ruling” shall mean any ruling or authorization which the Corporation or the Corporation’s Israeli resident
    subsidiary, at its sole and absolute discretion, may obtain from the ITA in connection with the Plan or the Grants made thereunder,
    including any terms and conditions and restrictions set forth therein.
	 	 	 
	 	(r)	“Trustee”
    means a person or an entity, appointed by the Board and approved in accordance with the provisions of Section 102, to hold
    in trust on behalf of the Employees the Section 102 Trustee Grants, or the Shares issued thereunder, as well as all Additional
    Rights granted in connection therewith, in accordance with the provisions of Section 102. 
	 	 	 
	 	(s)	“Trust
    Agreement” means a written agreement between the Corporation or any Affiliate and the Trustee, which sets forth
    the terms and conditions of the trust and is in accordance with the provisions of Section 102.

 

	3.	Administration:
    Further to the authorities of the Board, as detailed in the Plan, with regard to this Addendum, the Board shall have full
    power and authority to: (i) designate Grants made under this Addendum as either a Section 102 Trustee Grant, Section 102 Non-Trustee
    Grant or Section 3(i) Grant; (ii) make a Section 102(b) Route Election; (iii) adapt the forms of Grant Agreements to include
    provisions regarding Grants in accordance with this Addendum and any applicable law; and (iii) determine any other matter
    and execute any document which are necessary or desirable for, or incidental to, the administration of the Addendum and the
    Grants made hereunder and the issuance and delivery of any underlying Shares, including without limitation the appointment
    of a Trustee, the execution of a Trust Agreement and any other document necessary for submission of the Plan and this Addendum
    to the ITA, including, if so decided by the Corporation at its sole discretion, the filing of a Tax Ruling. 
	 	 
	4.	Eligibility:

 

4.1
Subject to the terms and conditions of the Plan, Section 102 Trustee Grants and Section 102 Non-Trustee Grants may only be made
to Employees. Section 3(i) Grants may be made only to Non-Employees.

 

4.2
Subject to the terms and conditions of the Plan, Grants made under this Addendum to Israeli Participants may only consist of Options
and/or RSU.

 

4.3
Grants made under this Addendum to Israeli Participants who are Employees are intended to qualify as Section 102 Trustee Grants.

 

	5.	Section
    102(b) Route Election: No Section 102 Trustee Grant may be made under this Addendum, unless and until, the Corporation’s
    election of the type of Section 102 Trustee Grants, either as “Ordinary Income Grant Through a Trustee” or as
    “Capital Gain Grant Through a Trustee”, is appropriately filed with the Income Tax Authorities before the first
    date of grant of Section 102 Trustee Grant. The Section 102(b) Route Election shall obligate the Corporation in accordance
    with the provisions of Section 102(g) of the Tax Ordinance. For avoidance of doubt, it is clarified that the Corporation does
    not obligate itself to file a Section 102(b) Route Election, and in any case, such Section 102(b) Route Election shall be
    at the sole discretion of the Corporation. It is further clarified that such Section 102(b) Route Election shall not prevent
    the Corporation from granting Section 102 Non-Trustee Grants simultaneously.
	 	 
	6.	Trustee:

 

6.1
Section 102 Trustee Grant, which shall be made under the Addendum and any Shares issued upon exercise or vesting thereof shall
be issued to and in the name of the Trustee who shall hold the same in trust for the benefit of the Employees at least for the
applicable Lock-up Period. Upon the expiration of the Lock-up Period and subject to any further period included in the Plan and/or
in the Grant Agreement, the Trustee may release Section 102 Trustee Grant or Shares issued upon exercise or vesting thereof only
after the Employee’s full payment of his or her tax liability in connection therewith due pursuant to the Tax Ordinance
and the Rules and any applicable Tax Ruling.

 

    	 	33	 

    	 	 	 

    

 

6.2
Notwithstanding the above, in the event that an Employee shall elect to release Section 102 Trustee Grants or the Shares issued
thereunder prior to the expiration of the Lock-up Period, the sanctions under Section 102 shall apply to and shall be borne solely
by the Employee.

 

6.2
Any Additional Rights distributed to Employees shall be deposited with and/or issued to the Trustee for the benefit of the Employees,
and shall be held by the Trustee for the applicable Lock-up Period in accordance with the provisions of Section 102 and the Rules
and any applicable Tax Ruling.

 

6.3
As a condition to any Grant of Section 102 Trustee Grant, the Israeli Participants shall provide the Corporation and the Trustee
with a written undertaking and confirmation under which each Israeli Participant confirms that he/she is aware of the provisions
of Section 102 and the applicable Section 102(b) Route Election and agrees to the provisions of the Trust Agreement (including
the ancillary trust note thereto) between the Corporation and the Trustee and agrees to comply with the Tax Ordinance, the Rules
and the provisions of the Trust Agreement and any applicable Tax Ruling, and undertakes not to release, by sale or transfer, the
Section 102 Trustee Grant, and the Shares issued thereunder, and all rights attached thereto (including Additional Rights) prior
to the lapse of the applicable Lock-up Period. The Israeli Participants shall not be entitled to sell or release from trust the
Section 102 Trustee Grant, nor the Shares issued thereunder, nor any right attached thereto (including Additional Rights), nor
to request the transfer or sale of any of the same to any third party, before the lapse of the Lock-up Period. The Israeli Participants
shall further agree to exempt the Trustee from any liability in respect of any action or decision duly taken and bona fide
executed in relation with the Plan, the Addendum and any Grant, Shares or other rights received in connection therewith.

 

6.4
For as long as the Trustee holds Shares in trust for the benefit of the Employees, the Trustee shall not use the voting rights
vested in such Shares, and shall not exercise such rights in any way whatsoever. In the event the right to vote such Shares is
held by the Trustee pursuant to Section 102, then upon the exercise of any Option the Trustee shall execute a voting proxy in
such form as may be prescribed by the Board, subject to the provisions of Section 102.

 

	7.	The
    Corporation may make Section 102 Trustee Grants only after the passage of thirty (30) days’ following the delivery,
    to the appropriate Israeli Income Tax Authorities, of a request for approval of the Plan and the Addendum as well as the Trustee
    according to Section 102, or after a shorter period, if approved by the Israeli Income Tax Authorities. Notwithstanding the
    above, if within ninety (90) days’ following the delivery of such request, the tax officer notifies the Corporation
    of its decision not to approve the Plan and/or the Addendum, the Grants, which were intended to be made as Section 102 Trustee
    Grants, shall be deemed to be Section 102 Non-Trustee Grants, unless otherwise was approved by the tax officer.
	 	 
	8.	Tax
    Consequences: Any tax consequences arising from the grant or exercise of a Grant, from the issuance or sale of Shares
    covered thereby or from any other event or act (of the Israeli Participant, the Corporation, its Affiliate or the Trustee)
    hereunder, shall be borne solely by the Israeli Participant. The Corporation and/or its Affiliates and/or the Trustee shall
    withhold all applicable taxes according to the requirements under the Tax Ordinance, the Rules, any applicable Tax Ruling
    and any other applicable laws, rules, and regulations, including withholding taxes at source. The Corporation and/or the Trustee
    shall not be required to release any Grants or issue or transfer any underlying Shares until all required payments have been
    fully made.

 

    	 	34	 

    	 	 	 

    

 

8.1
The Corporation may require, as a condition to any Grants or the issuance or delivery of underlying Shares, that an Israeli Participant
provide a security or guarantee to the satisfaction of the Corporation, to secure payment of all taxes which may become due upon
the future transfer of his/her Shares to be issued under any Section 3(i) Grants.

 

8.2
Furthermore, the Employee shall agree to indemnify the Corporation and/or its Affiliates and/or the Trustee and hold them harmless
against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities
relating to the necessity to withhold, or to have withheld, any such tax from any Grants or underlying Shares issued to the Israeli
Participant thereunder.

 

8.3
In the event that an Employee shall cease to be employed by the Corporation or its Affiliate for any reason, the Employee shall
be obligated, upon the Corporation’s, the Affiliate’s or the Trustee’s first demand to provide the Corporation,
its Affiliate and the Trustee with a security or guarantee, in the degree and manner satisfactory to them, to cover any future
tax obligation resulting from the disposition of the Grants and/or the Shares acquired thereunder.

 

8.4
To the extent that Section 102 and/or the tax officer’s approval and/or any Tax Ruling require the Plan and/or this Addendum
and/ or the Grant Agreement to contain specified provisions in order to qualify the Grants for the tax treatment under Section
102, such provisions shall be deemed to be stated herein and/or in the Grant Agreement, as applicable, and to be binding upon
the Corporation, any Affiliate and the Israeli Participant.

 

8.5
The provisions in the Plan (i) relating to Preformance Conditions; and (ii) in Section 6.1(a) and 6.1(c) of the Plan, shall not
apply to Grants made under this Addendum.

 

	9.	Currency
    Exchange Rates: Except as otherwise determined by the Board, all monetary values with respect to Grants granted pursuant
    to this Addendum, including without limitation the Fair Market Value and the Exercise Price of any Option, shall be stated
    in Canadian Dollars. In the event that the exercise price is in fact to be paid in New Israeli Shekels, at the sole discretion
    of the Board, the conversion rate shall be the last known representative rate of the Canadian Dollar to the New Israeli Shekels
    on the date of payment.
	 	 
	10.	Subordination
    to the Ordinance: The Grants, the Plan, this Addendum and any applicable Grant Agreements are subject to the applicable
    provisions of the Ordinance, which shall be deemed an integral part of each, and which shall prevail over any term that is
    inconsistent therewith.
	 	 
	11.	Additional
    Documents: Israeli Participants may be required to execute, in addition to the Grant Agreement, any and all other documents
    required by the Corporation or any Affiliate, (including without limitation any customary documents and undertakings towards
    the Trustee, if applicable, and/or any tax authorities). Notwithstanding anything to the contrary in the Plan or in this Addendum,
    no Grant shall be deemed made unless all documents required by the Corporation or any Affiliate to be signed by the Israeli
    Participant prior to or upon such Grant, shall have been duly signed and delivered to the Corporation or such Affiliate.
	 	 
	12.	Non-Transferability:
    Notwithstanding anything in the Plan to the contrary, with regard to Section 102 Trustee Grants and the Shares issued thereunder,
    as long as such Grants and/or Shares are held by the Trustee on behalf of the Employee, all rights of the Employee with respect
    thereto are personal and cannot be transferred, assigned, pledged or mortgaged, other than by will or by the laws of descent
    and distribution. 
	 	 
	13.	Governing
    Law: Solely for tax purposes, this Addendum and all instruments issued thereunder or in connection therewith shall be
    governed by and construed and enforced in accordance with the applicable laws of the state of Israel, without giving effect
    to the principles of conflict of laws.

 

    	 	35[DATE]

 

VBI
VACCINES INC.

INCENTIVE
STOCK OPTION AGREEMENT UNDER

THE
INCENTIVE PLAN

 

This
INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”) is made between VBI VACCINES INC. (the “Company”),
a British Columbia corporation, and [NAME] (the “Optionee”), pursuant to the Company’s Incentive
Plan, as amended from time to time (the “Plan”). Capitalized terms used in this Agreement but not otherwise
defined herein shall have the meanings ascribed to such terms in the Plan.

 

The
Company and the Optionee agree as follows:

 

1.       Option
Grant. The Company hereby grants to the Optionee, on the terms and conditions of this Agreement and the Plan, the right and
the option (the “Option”) to purchase all or any of [TOTAL NO. OF SHARES GRANTED] Company Common Shares
(the “Grant Shares”) at a purchase price of [EXERCISE PRICE] per share, which is not less than the Market
Price of the Company’s Common Shares on the Grant Date (as defined below) of such Option or, for an Option that is intended
to qualify as an Incentive Stock Option granted to a US Taxpayer that owns more than 10% of the total combined voting power of
all classes of the Company’s stock (a “10% Holder”), the exercise price is 110% of the Market Price of
the Company’s Common Shares. The terms and conditions applicable to grants of options of the Company’s Common Shares,
as set forth in the Plan, are hereby incorporated into and made part of this Agreement, including, without restriction, Section
7.2 of the Plan.

 

2.       Time
of Exercise of Option. The date of this Option is [DATE GRANTED] (the “Grant Date”). Subject to
the terms and conditions set forth herein and until the Option expires or is terminated as provided in the Plan, the Option may
be exercised from time to time to purchase Grant Shares as follows: [VESTING SCHEDULE]

 

3.       Expiration.
The Option shall continue in effect until the earlier of [DATE equal to the Grant Date plus 10 years] (which date, for
an Option that is intended to qualify as an Incentive Stock Option granted to a US Taxpayer, shall not be more than 10 years from
the Grant Date or, in the case of a 10% Holder, the date shall be not more than five (5) years from the Grant Date), or, unless
earlier terminated as provided in the Plan:

 

	 	(a)	if
    the Optionee’s Employment is terminated without Cause, the date that is 120 days after the Optionee’s date of
    Termination;
	 	 	 
	 	(b)	if
    the Optionee’s Employment is terminated with Cause, immediately;
	 	 	 
	 	(c)	if
    the Optionee resigns or, in the case of an Optionee that is a Service Provider, terminates the Optionee’s contract of
    service, the date that is 90 days after the Optionee’s date of the resignation or termination; or

 

    	 		 

     

    

 

	 	(d)	if
    the Optionee’s Employment terminates is by reason of death or Disability, the date that is 36 months after the Optionee’s
    date of death or Disability Date, as the case may be;

 

provided,
that any Option that is intended to be an Incentive Stock Option shall expire not more than three (3) months from the date of
the Optionee’s termination for any reason other than death or disability (as defined in Section 22(e) of the United States
Internal Revenue Code of 1986, as amended, and any applicable United States Treasury Regulations and other binding regulatory
guidance thereunder (the “Code”)) or 12 months from the Optionee’s termination due to death or disability
(as defined in the Code).

 

4.       Options
Granted to Service Providers. If the Optionee is a Service Provider and is not a director of the Company or an Affiliate
of the Company, then:

 

	 	(a)	the
    Company and the Optionee acknowledge and confirm their mutual intention and understanding that the Options are hereby granted
    to the Optionee (including without restriction an Optionee who is deemed to be a Service Provider pursuant the second subparagraph
    (b) of the definition of Service Provider in paragraph 1.3.33 of the Plan) in respect of the written contract between the
    Company and the relevant Service Provider referred to in the first subparagraph (b) of paragraph 1.3.33 of the Plan, and not
    in respect of, in the course of, or by virtue of employment of any such Service Provider by the Company or an Affiliate of
    the Company, and consequently:

 

	 	i.	the
    Company is not required by any provision of the Income Tax Act (Canada) or any similar legislation of any province or territory
    of Canada, to withhold any amount in respect of this grant of Options, and the Optionee’s subsequent exercise thereof,
    or remit any such amount to the Canada Revenue Agency or similar authority of a province or territory of Canada for the account
    of the Optionee; and
	 	 	 
	 	ii.	the
    Optionee is not entitled to, and will not, claim a deduction in respect of the Options pursuant to §110(1)(d) of the
    Income Tax Act (Canada) or any successor provision or any similar provision in that statute or any similar legislation of
    any province or territory of Canada; and

 

    	 		 

     

    

 

 

	 	(b)	the
    Optionee, and, if the Optionee is an individual, any company that is also a Service Provider because of such company’s
    relationship with the Optionee, will jointly and severally promptly indemnify and save the Company harmless from all liabilities
    and costs of every kind and description whatsoever for tax, interest, or penalties assessed against the Company as a consequence
    of the Company’s failure to withhold or remit any such amount, and all professional costs incurred by the Company to
    deal with any such assessment, including without restriction any objection to or appeal of any such assessment.

 

5.       Transferability.
This Option may be transferred only in accordance with Sections 7.11, 12.1 and 12.2 of the Plan.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	 		 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	VBI VACCINES INC.
	 	 	 
	 	By:	          
	 	Name:
	
	 	Title:	
	 	 	 
	 	OPTIONEE:
	 	 	 
	 	[NAME]
	 	 
	 	 
	 	(Signature of Optionee)

 

    	 		 

     

    

 

__________
__, 2017

 

VBI
VACCINES INC.

NON-QUALIFIED
STOCK OPTION AGREEMENT UNDER

THE
INCENTIVE PLAN

 

This
NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made between VBI VACCINES INC. (the
“Company”), a British Columbia corporation, and [NAME] (the “Optionee”), pursuant
to the Company’s Incentive Plan, as amended from time to time (the “Plan”). Capitalized terms used in
this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.

 

The
Company and the Optionee agree as follows:

 

1.       Option
Grant. The Company hereby grants to the Optionee, on the terms and conditions of this Agreement and the Plan, the right and
the option (the “Option”) to purchase all or any of [TOTAL NO. OF SHARES GRANTED] Company Common Shares
(the “Grant Shares”) at a purchase price of [EXERCISE PRICE] per share, which is not less than the Market
Price of the Company’s Common Shares on the Grant Date (as defined below) of such Option. The terms and conditions applicable
to grants of options of the Company’s Common Shares, as set forth in the Plan, are hereby incorporated into and made part
of this Agreement, including, without restriction, Section 7.2 of the Plan.

 

2.       Time
of Exercise of Option. The date of this Option is [DATE GRANTED] (the “Grant Date”). Subject to
the terms and conditions set forth herein and until the Option expires or is terminated as provided in the Plan, the Option may
be exercised from time to time to purchase Grant Shares as follows: [VESTING SCHEDULE]

 

3.       Expiration.
The Option shall continue in effect until the earlier of [DATE equal to the Grant Date plus 10 years], or, unless earlier
terminated as provided in the Plan:

 

	 	(a)	if
    the Optionee’s Employment is terminated without Cause, the date that is 120 days after the Optionee’s date of
    Termination;
	 	 	 
	 	(b)	if
    the Optionee’s Employment is terminated with Cause, immediately;
	 	 	 
	 	(c)	if
    the Optionee resigns or, in the case of an Optionee that is a Service Provider, terminates the Optionee’s contract of
    service, the date that is 90 days after the Optionee’s date of the resignation or termination; or
	 	 	 
	 	(d)	if
    the Optionee’s Employment terminates is by reason of death or Disability, the date that is 36 months after the Optionee’s
    date of death or Disability Date, as the case may be.

 

    	 		 

     

    

 

4.       Options
Granted to Service Providers. If the Optionee is a Service Provider and is not a director of the Company or an
Affiliate of the Company, then:

 

	 	(a)	the
    Company and the Optionee acknowledge and confirm their mutual intention and understanding that the Options are hereby granted
    to the Optionee (including without restriction an Optionee who is deemed to be a Service Provider pursuant the second subparagraph
    (b) of the definition of Service Provider in paragraph 1.3.33 of the Plan) in respect of the written contract between the
    Company and the relevant Service Provider referred to in the first subparagraph (b) of paragraph 1.3.33 of the Plan, and not
    in respect of, in the course of, or by virtue of employment of any such Service Provider by the Company or an Affiliate of
    the Company, and consequently:

 

	 	i.	the
    Company is not required by any provision of the Income Tax Act (Canada) or any similar legislation of any province or territory
    of Canada, to withhold any amount in respect of this grant of Options, and the Optionee’s subsequent exercise thereof,
    or remit any such amount to the Canada Revenue Agency or similar authority of a province or territory of Canada for the account
    of the Optionee; and
	 	 	 
	 	ii.	the
    Optionee is not entitled to, and will not, claim a deduction in respect of the Options pursuant to §110(1)(d) of the
    Income Tax Act (Canada) or any successor provision or any similar provision in that statute or any similar legislation of
    any province or territory of Canada; and

 

	 	(b)	the
    Optionee, and, if the Optionee is an individual, any company that is also a Service Provider because of such company’s
    relationship with the Optionee, will jointly and severally promptly indemnify and save the Company harmless from all liabilities
    and costs of every kind and description whatsoever for tax, interest, or penalties assessed against the Company as a consequence
    of the Company’s failure to withhold or remit any such amount, and all professional costs incurred by the Company to
    deal with any such assessment, including without restriction any objection to or appeal of any such assessment.

 

5.       Transferability.
This Option may be transferred only in accordance with Sections 7.11, 12.1 and 12.2 of the Plan.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	 		 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	VBI VACCINES INC.
	 	 
	 	By:	             
	 	Name:	
	 	Title:	
	 	 	 
	 	OPTIONEE:
	 	 	 
	 	[NAME]
	 	 
	 	 
	 	(Signature of Optionee)

 

    	 		 

     

    

 

SCIVAC
THERAPEUTICS INC.

INCENTIVE
PLAN

 

Restricted
share unit AGREEMENT

FOR

________________________

 

1.       Award
of Restricted Stock Units. VBI Vaccines Inc. (the “Corporation”)
hereby grants, as of __________, 2016 (the “Grant
Date”), to ________________ (the “Recipient”),
the right to receive, at the times specified in Section 2 hereof, __________________ shares of the common stock of the capital
of the Corporation (collectively the “RSUs”).
The RSUs shall be subject to the terms, provisions and restrictions set forth in this Agreement and the SciVac Therapeutics Inc.
Incentive Plan, as may be amended from time to time (the “Plan”),
which is incorporated herein for all purposes. As a condition to entering into this Agreement, and to the issuance of any Shares
(or any other securities of the Corporation pursuant thereto), the Recipient agrees to be bound by all of the terms and conditions
herein and in the Plan. Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein
shall have the meanings attributable thereto in the Plan.

 

2.       Vesting
of RSUs.

 

(a)         General
Vesting. Except as provided in Sections 2(b) and 3 of this Agreement, the RSUs shall vest in the following amounts and
the following times (the “Vesting Date”), provided that the Employment of the Recipient continues through
and each such Vesting Date: 

 

	Percentage
    of RSUs	 	Vesting
    Date
	 	 	 
	25%	 	On
    the first business day after the date on which the Corporation shall have filed with the U.S. Securities and Exchange Commission
    a Registration Statement on Form S-8 with respect to the Corporation’s common shares deliverable upon vesting of the
    RSUs.
	 	 	 
	25%	 	First
    anniversary of the Grant Date
	 	 	 
	25%	 	Second
    anniversary of the Grant Date
	 	 	 
	25%	 	Third
    anniversary of the Grant Date

 

There
shall be no proportionate or partial vesting of the RSUs in or during the months, days or periods prior to each Vesting Date,
and except as otherwise provided in Sections 2(b) hereof, all vesting shall occur only on the applicable Vesting Date provided
the conditions set forth in this Section 2 are satisfied. Any portion of the RSUs subject to this Agreement that have become vested
pursuant to this Section 2 shall be referred to hereinafter as the “Vested RSUs”, and any portion that
have not vested hereunder shall be referred to as the “Non-Vested RSUs.”

 

(b)        Acceleration
of Vesting Upon Change in Control. In the event that a Change in Control of the Corporation occurs during the Recipient’s
Employment or if the Recipient’s employment is terminated by the Corporation without “Cause” (as defined in
Recipient’s employment agreement) within one (1) year of the date of closing of such transaction, the Shares subject to
the RSUs subject to this Agreement shall become immediately vested as of the date of the Change in Control (the “Change
in Control Vesting Date”), unless either (i) the Corporation is the surviving entity in the Change in Control and
the RSUs continue to be outstanding after the Change in Control on substantially the same terms and conditions as were applicable
immediately prior to the Change in Control or (ii) the successor company or its parent company assumes or substitutes for the
RSUs, as determined in accordance with Section 5.3 of the Plan.

 

    	 		 

     

    

 

3.       Treatment
of RSUs Upon Termination of Employment. If the Recipient’s Employment is terminated for any reason prior to the
earlier of (a) Vesting Date or (b) Change in Control Vesting Date, the Non-Vested RSUs granted hereunder shall be treated in accordance
with the terms and provisions set forth in Section 16 of the Plan. The Board shall have the power and authority to enforce on
behalf of the Corporation any rights of the Corporation may have with respect to the RSUs under this Agreement in the event of
the termination of the Recipient’s Employment.

 

4.       Settlement
of the RSUs. The Corporation shall deliver to the Recipient the number of Shares corresponding to the Vested RSUs
as soon as practicable on or after the Vesting Date or Change in Control Vesting Date, whichever applicable, but in no event later
than the 15th day of the third month following the last day of the calendar year in which the Vesting Date or Change
in Control Vesting Date, whichever applicable, occurs.

 

5.       Rights
with Respect to RSUs.

 

(a)       No
Rights as Shareholder Until Delivery. Except as otherwise provided in this Section 5, the Recipient shall not have any
rights, benefits or entitlements with respect to the Shares corresponding to the RSUs unless and until those Shares are delivered
to the Recipient except as may otherwise be provided in the Plan. On or after delivery, the Recipient shall have, with respect
to the Shares delivered, all of the rights of a holder of Shares granted pursuant to the articles of incorporation and other governing
instruments of the Corporation, or as otherwise available at law.

 

(b)       Adjustments
to Shares. If at any time while this Agreement is in effect and before any Shares have been delivered with respect to
any RSUs, there shall be any increase or decrease in the number of issued and outstanding Shares of the Corporation through the
declaration of a stock dividend or through any recapitalization resulting in a stock split-up, combination or exchange of such
Shares, then and in that event, the Board shall make any adjustments it deems fair and appropriate, in view of such change, in
the number of Shares subject to the RSUs then subject to this Agreement. If any such adjustment shall result in a fractional Share,
such fraction shall be disregarded.

 

(c)       No
Restriction on Certain Transactions. Notwithstanding any term or provision of this Agreement to the contrary, the existence
of this Agreement, or of any outstanding RSUs awarded hereunder, shall not affect in any manner the right, power or authority
of the Corporation to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes
in the Corporation’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the
Corporation; (iii) any offer, issue or sale by the Corporation of any capital stock of the Corporation, including any equity or
debt securities, or preferred or preference stock that would rank prior to or on parity with the Shares represented by the RSUs
and/or that would include, have or possess other rights, benefits and/or preferences superior to those that such Shares includes,
has or possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation
of the Corporation; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Corporation;
or (vi) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).

 

    	 		 

     

    

 

6.       Transferability.
The RSUs are not transferable unless and until the Shares have been delivered to the Recipient in settlement of the RSUs
in accordance with this Agreement, otherwise than by will or under the applicable laws of descent and distribution. The terms
of this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Recipient. Except
as otherwise permitted pursuant to the first sentence of this Section, any attempt to effect a Transfer of any RSUs prior to the
date on which the Shares have been delivered to the Recipient in settlement of the RSUs shall be void ab initio. For purposes
of this Agreement, “Transfer” shall mean any sale, transfer, encumbrance, gift, donation, assignment, pledge, hypothecation,
or other disposition, whether similar or dissimilar to those previously enumerated, whether voluntary or involuntary, and including,
but not limited to, any disposition by operation of law, by court order, by judicial process, or by foreclosure, levy or attachment.

 

7.       Tax
Matters.

 

(a)       Withholding.
As a condition to the Corporation’s obligations with respect to the RSUs (including, without limitation, any obligation
to deliver any Shares) hereunder, if applicable, the Recipient shall make arrangements satisfactory to the Corporation to pay
to the Corporation any federal, state or local taxes of any kind required to be withheld with respect to the delivery of Shares
corresponding to such RSUs. If the Recipient shall fail to make the tax payments as are required, the Corporation shall, to the
extent permitted by law, have the right to deduct from any payment of any kind (including the withholding of any Shares that otherwise
would be delivered to Recipient under this Agreement) otherwise due to the Recipient any federal, state or local taxes of any
kind required by law to be withheld with respect to such Shares.

 

(b)       Satisfaction
of Withholding Requirements. If applicable, the Recipient may satisfy the withholding requirements with respect to the
RSUs pursuant to the procedures and methods set forth in Section 7.2 of the Plan.

 

(c)       Recipient’s
Responsibilities for Tax Consequences. The tax consequences to the Recipient (including without limitation federal, state,
local and foreign income tax consequences) with respect to the RSUs (including without limitation the grant, vesting and/or delivery
thereof) are the sole responsibility of the Recipient. The Recipient shall consult with his or her own personal accountant(s)
and/or tax advisor(s) regarding these matters and the Recipient’s filing, withholding and payment (or tax liability) obligations.

 

8.       Amendment,
Modification & Assignment. This
Agreement may only be modified or amended in a writing signed by the parties hereto. No promises, assurances, commitments, agreements,
undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, with respect
to the subject matter hereof, have been made by either party which are not set forth expressly in this Agreement. Unless otherwise
consented to in writing by the Corporation, in its sole discretion, this Agreement (and Recipient’s rights hereunder) may
not be assigned, and the obligations of Recipient hereunder may not be delegated, in whole or in part. The rights and obligations
created hereunder shall be binding on the Recipient and his heirs and legal representatives and on the successors and assigns
of the Corporation.

 

9.       Complete
Agreement. This Agreement (together with those agreements and documents
expressly referred to herein, for the purposes referred to herein) embody the complete and entire agreement and understanding
between the parties with respect to the subject matter hereof, and supersede any and all prior promises, assurances, commitments,
agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, which
may relate to the subject matter hereof in any way.

 

    	 		 

     

    

 

10.       Miscellaneous.

 

(a)       No
Right to (Continued) Employment or Service. This Agreement and the grant of RSUs hereunder shall not confer, or be construed
to confer, upon the Recipient any right to employment or service, or continued employment or service, with the Corporation or
any Affiliate.

 

(b)       No
Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall preclude the Corporation or
any Affiliate from adopting or continuing in effect other or additional compensation plans, agreements or arrangements, and any
such plans, agreements and arrangements may be either generally applicable or applicable only in specific cases or to specific
persons.

 

(c)       Severability.
If any term or provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or under any applicable law, rule or regulation, then such provision shall be construed or deemed amended to conform to applicable
law (or if such provision cannot be so construed or deemed amended without materially altering the purpose or intent of this Agreement
and the grant of RSUs hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement
and the award hereunder shall remain in full force and effect).

 

(d)       
No Trust or Fund Created. Neither this Agreement nor the grant of RSUs hereunder shall create or be construed
to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation or any Affiliate and the Recipient
or any other person. To the extent that the Recipient or any other person acquires a right to receive payments from the Corporation
or any Affiliate pursuant to this Agreement, such right shall be no greater than the right of any unsecured general creditor of
the Corporation.

 

(e)       Law
Governing. This Agreement and the Plan shall be governed by and construed and enforced in accordance with the internal
laws of the Province of British Columbia, although with respect to US Taxpayers, the tax treatment of the RSUs will be governed
by the United Stated federal laws (and any applicable state and local tax laws).

 

(f)       Interpretation. The Recipient accepts this award of RSUs subject to all of the terms, provisions and restrictions
of this Agreement and the Plan. The undersigned Recipient hereby accepts as binding, conclusive and final all decisions or interpretations
of the Board upon any questions arising under this Agreement or the Plan. 

 

(g)       Headings.
Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such
headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this
Agreement or any term or provision hereof.

 

(h)       Notices.
Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally
or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Corporation, to the
Corporation’s Secretary at 222 Third Street, Suite 2241, Cambridge, MA 02142, or if the Corporation should move its principal
office, to such principal office, and, in the case of the Recipient, to the Recipient’s last permanent address as shown
on the Corporation’s records, subject to the right of either party to designate some other address at any time hereafter
in a notice satisfying the requirements of this Section.

 

(i)       Compliance
with Section 409A

 

(i)
General. It is the intention of both the Corporation and the Recipient that the benefits and rights to which the
Recipient could be entitled pursuant to this Agreement either comply with or fall within an exception to Section 409A of the Code
and the Treasury Regulations and other guidance promulgated or issued thereunder (“Section 409A”), to
the extent that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed
in a manner consistent with that intention. 

 

    	 		 

     

    

 

(ii)
No Representations as to Section 409A Compliance. Notwithstanding the foregoing, the Corporation does not make any
representation to the Recipient that the shares of RSUs awarded pursuant to this Agreement are exempt from, or satisfy, the requirements
of Section 409A, and the Corporation shall have no liability or other obligation to indemnify or hold harmless the Recipient or
any Beneficiary for any tax, additional tax, interest or penalties that the Recipient or any Beneficiary may incur in the event
that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto
is deemed to violate any of the requirements of Section 409A.

     

(iii)
No Acceleration of Payments. Neither the Corporation nor the Recipient, individually or in combination, may
accelerate any payment or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions of
this Agreement, and no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid
without violating Section 409A.

 

(j)         Non-Waiver
of Breach. The waiver by any party hereto of the other party’s
prompt and complete performance, or breach or violation, of any term or provision of this Agreement shall be effected solely in
a writing signed by such party, and shall not operate nor be construed as a waiver of any subsequent breach or violation, and
the waiver by any party hereto to exercise any right or remedy which he or it may possess shall not operate nor be construed as
the waiver of such right or remedy by such party, or as a bar to the exercise of such right or remedy by such party, upon the
occurrence of any subsequent breach or violation. 

 

(k)         Counterparts.
This Agreement may be executed in two or more separate counterparts, each of which
shall be an original, and all of which together shall constitute one and the same agreement.

 

(l)         Clawback
of Benefits. The Corporation may (i) cause the cancellation of the
RSUs, (ii) require reimbursement of any benefit conferred under the RSUs to the Recipient or Beneficiary, and (iii) effect any
other right of recoupment of equity or other compensation provided under the Plan or otherwise in accordance with any Corporation
policies that currently exist or that may from time to time be adopted or modified in the future by the Corporation and/or applicable
law (each, a “Clawback Policy”).
In addition, the Recipient may be required to repay to the Corporation certain previously paid compensation, whether provided
under the Plan or an Award Agreement or otherwise, in accordance with any Clawback Policy. By accepting this Award, the Recipient
agrees to be bound by any existing or future Clawback Policy adopted by the Corporation, or any amendments that may from time
to time be made to the Clawback Policy in the future by the Corporation in its discretion (including without limitation any Clawback
Policy adopted or amended to comply with applicable laws or stock exchange requirements) and further agrees that all of the Recipient’s
Award Agreements (and/or awards issued under the Prior Plan) may be unilaterally amended by the Corporation, without the Recipient’s
consent, to the extent that the Corporation in its discretion determines to be necessary or appropriate to comply with any Clawback
Policy.

 

    	 		 

     

    

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the _______ day of __________, 201_.

 

	 	COMPANY:
	 	VBI VACCINES INC.
	 	 	 
	 	By:	           
	 	Name:	
	 	Title:	

 

The
Recipient acknowledges receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and
this Agreement in their entirety, is familiar with and understands their terms and provisions, and hereby accepts this RSU award
subject to all of the terms and provisions of the Plan and the Agreement. The Recipient further represents that he or she has
had an opportunity to obtain the advice of counsel prior to executing this Agreement.

 

	Dated:	 	 	RECIPIENT:
	 	 	 
	 	 	 

 

    	 		 

     

    

 

ISRAELI
ADDENDUM 

 

VBI
VACCINES INC.

 

Restricted
share unit AGREEMENT UNDER

THE
INCENTIVE PLAN

 

	1.	Purpose
    of the Addendum. This Israeli Addendum (“Israeli Addendum”) to the Restricted Share Unit Agreement
    (the “Agreement”) shall form an integral part of the Agreement, and shall apply only to Israeli Participants
    of the VBI VACCINES INC. Amended Incentive Plan who are granted RSUs pursuant to the Israeli Addendum thereto. The VBI VACCINES
    INC. Amended Incentive Plan and the Israeli Addendum thereto shall be jointly referred hereunder as the “Plan”.
    
	 	 
	 	This
    Israeli Addendum modifies the Agreement so that it shall comply with the requirements of Section 102 and the Rules.
	 	 
	 	The
    Agreement and this Israeli Addendum are complimentary to each other and shall be read and deemed as one. Any requirements
    provided in this Israeli Addendum shall be in addition to the requirements provided in the Agreement and the Plan. In the
    event of a conflict, whether explicit or implied, between the provisions of the Plan or the Agreement and this Israeli Addendum,
    the latter shall govern and prevail.
	 	 
	2.	Definitions.
                                         Unless otherwise defined herein, the terms defined in the Plan shall have the same defined
                                         meaning in this Israeli Addendum.
	 	 
	3.	Grant
                                         of RSUs.

 

	 	3.1.	Subject
    to the terms and conditions set forth herein, in the Plan and in the Agreement, and further subject to and conditioned upon
    the submission for approval and qualification of the Plan and the Trustee pursuant to Section 102, the Corporation shall issue
    to the Trustee (as defined below), for the benefit of the Recipient named in the Agreement, the RSUs qualified as “Capital
    Gain Grant Through a Trustee”, for the number of Shares set forth in the Agreement (the “Shares”)
    and under the terms therein. 
	 	 	 
	 	3.2.	The
    Plan, as approved by the Company for use by the Company, is intended to qualify as an Employee Option Plan within the meaning
    of Section 102. The grant of the RSUs is made pursuant and subject to: (a) Section 102 and any tax officer’s approval
    issued pursuant thereto; and (b) the Trust Agreement (as defined below). 
	 	 	 
	 	3.3.	In
    the event of a conflict between the Plan, the Agreement or this Israeli Addendum and any provision of Section 102, any tax
    officer’s approval issued in connection therewith, the Trust Agreement or any applicable law, the latter shall govern
    and prevail.
	 	 	 
	 	3.4.	The
    provisions in the Plan and the Agreement relating specifically to the tax status of RSUs granted in the U.S shall not apply
    to RSUs granted under this Israeli Addendum. 

 

	4.	Issuance
                                         to Trustee and Lock-up Period.

 

	 	4.1.	Issuance
    to Trustee. The Corporation appointed a trustee, in accordance with the provisions of Section 102 (the “Trustee”)
    and has entered into a written agreement, which sets forth the terms and conditions of the trust in accordance with the provisions
    of Section 102 (the “Trust Agreement”) with the Trustee. Under the conditions of Section 102, the RSUs
    and any Shares to be delivered under the RSUs shall be issued to the Trustee and held in trust for the benefit of Recipient
    for the Lock-up Period, or, if applicable, a shorter period as approved by the tax authorities. 

 

    	 		 

     

    

 

	 	4.2.	Undertaking
    and Release. Recipient’s execution of this Israeli Addendum shall be deemed as the Recipient’s undertaking
    to exempt the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in
    relation with the Plan and any RSU, Share, Additional Right or other rights received by the Recipient in connection therewith.
	 	 	 
	 	4.3.	Lock-up
    Period. In order for the tax benefits of Section 102 to apply, during the Lock-up Period, neither the RSU nor the Shares
    delivered thereunder, as the case may be, may be sold or transferred (other than through a transfer by will or by operation
    of law), nor may they be the subject of an attachment or security interest, and no power of attorney or transfer deed shall
    be given in respect thereof prior to the payment of the tax liability. 
	 	 	 
	 	 	The
    Corporation shall provide the Trustee with a share certificate, representing the Shares, in the name of the Trustee, for the
    benefit of Recipient, and the Trustee will hold it until no sooner than the end of the Lock-up Period.
	 		 
	 	 	Notwithstanding
    the above, in the event the Recipient shall elect to release the RSUs and/or the Shares, as the case may be, prior to the
    expiration of the Lock-up Period, the sanctions under Section 102 shall apply to and shall be borne solely by the Recipient
	 	 	 
	 	4.4.	End
    of Lock-up Period. Upon conclusion of the Lock-up Period and subject to the provisions of the Plan, the Agreement and
    this Israeli Addendum, the Trustee may release the RSUs and/or the Shares delivered thereunder to Recipient only after (i)
    the receipt by the Trustee of an acknowledgment from the Income Tax Authority that Recipient has paid any applicable tax due
    pursuant to Section 102 and the Tax Ordinance, or (ii) the Company or the Trustee withholds any applicable tax due pursuant
    to Section 102 and the Tax Ordinance. 
	 	 	 
	 	4.5.	Additional
    Rights. In the event of a distribution of rights, including an issuance of bonus shares, in connection with the RSUs and/or
    Shares delivered thereunder (the “Additional Rights”), all such Additional Rights shall be deposited with
    and/or issued to the Trustee for the benefit of the Recipient, and shall be held by the Trustee and treated in accordance
    with the provisions of Section 102.
	 	 	 
	 	4.6.	Notification
    to Trustee. The Company will notify the Trustee of any delivery of Shares. If such notification is delivered during the
    Lock-up Period, the Shares shall be issued directly to the Trustee on behalf of the Recipient, and shall be held by the Trustee
    in trust on behalf of the Recipient, unless the Recipient elects to receive the Shares directly to his possession, pursuant
    to which the sanctions under Section 102 shall apply and shall be borne solely by the Recipient. In the event such notification
    is delivered after the conclusion of the Lock-up Period, the Shares shall be transferred either to the Trustee or to Recipient
    directly, at the election of Recipient; provided, however, that in the event the Recipient elects to receive the Shares
    directly to his possession, the transfer thereof shall be subject to the payment of the tax liability by the Recipient. 
	 	 	 
	 	4.7.	Voting
    of Shares. Subject to the provisions of Section 102, so long as the Trustee holds the Shares in trust for the benefit
    of the Recipient, the Trustee shall not use the voting rights vested in such Shares, and shall not exercise such rights in
    any way whatsoever. In the event the right to vote such Shares is held by the Trustee pursuant to Section 102, then upon the
    delivery of any Share the Trustee shall execute a voting proxy in such form as may be prescribed by the Board, subject to
    the provisions of Section 102. 

 

    	 		 

     

    

 

	5.	Tax
                                         Consequences.

 

	 	5.1.	By
    accepting the grant of the RSUs, the Recipient acknowledges and agrees that any and all taxes, fees and other liabilities
    (as may apply from time to time) in connection with the grant and/or delivery and/or release of the RSUs and the delivery
    and/or sale and/or release of Shares issued thereunder and/or any other event or act of the Recipient, the Corporation, its
    Affiliates, the Corporation’s Israeli resident subsidiary that engages the Recipient (if applicable) or the Trustee,
    shall be borne solely by the Recipient, and Recipient will be solely liable for all such taxes, fees and other liabilities.
    The Corporation or its Israeli resident subsidiary that engages the Recipient (if applicable) and/or the Trustee shall withhold
    taxes according to the requirements under Section 102 and any applicable laws, rules, and regulations, including withholding
    taxes at source. Furthermore, by executing this Agreement the Recipient hereby agrees to indemnify the Corporation, its Israeli
    resident subsidiary that engages the Recipient (if applicable) and the Trustee and hold them harmless against and from any
    and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the
    necessity to withhold, or to have withheld, any such tax from any payment made to the Recipient.
	 	 	 
	 	 	Except
    as otherwise required by law, the Corporation shall not be obligated to honor any RSU and/or the sale of any Shares by or
    on behalf of an Recipient and may refuse to deliver Shares, until all tax consequences (if any) arising therefrom are resolved
    in a manner reasonably acceptable to the Corporation.
	 	 	 
	 	5.2.	Legal
    and Tax Consultation. The Recipient acknowledges that the Corporation has advised the Recipient to consult an independent
    tax advisor with respect to legal and tax consequences of the RSUs, and the Recipient has consulted with any legal or tax
    advisors that the Recipient deems necessary. Recipient acknowledges that he is not relying on the Corporation, any Affiliate
    thereof or the Trustee for any legal or tax advice, and that the Corporation any Affiliate thereof and the Trustee shall not
    be deemed to have provided any legal or tax advice to Recipient with respect to the RSUs.

 

	6.	Recipient’s
                                         Representations Under Section 102; Indemnification. By accepting the grant of
                                         the RSUs, the Recipient represents and confirms that: (i) Recipient is familiar with
                                         the terms and provisions of Section 102, and in particular 102 (b)(3)- capital gain
                                         route and hereby accepts the RSUs granted hereunder subject to all of the terms and
                                         provisions of Section 102 and the Trust Agreement and any tax ruling which may be obtained
                                         by the Corporation, applying the provisions of Section 102(b) of the Tax Ordinance to
                                         the Plan; (ii) Recipient wishes that all issuances of RSUs and/or Shares under the Plan
                                         be deposited with the Trustee and designate such deposit with the Trustee selected by
                                         the Corporation, who shall hold such RSUs and/or Shares in accordance with the provisions
                                         of Section 102 of the Tax Ordinance; (iii) in the event any Additional Rights shall be
                                         distributed with respect to the RSUs and/or the Shares, such Additional Rights shall
                                         be deposited with the Trustee who shall be responsible for the withholding of the applicable
                                         tax thereon and delivery of the same to the tax authorities, and shall also be subject
                                         to the provisions of Section 102, including the Lock-up Period; (iv) Recipient shall
                                         not sell nor transfer from the Trustee the RSUs, Shares or any Additional Right distributed
                                         to him in connection therewith, until the end of the Lock-up Period, except that if Recipient
                                         chooses to sell or transfer from the Trustee the RSUs and/or Shares prior to the end
                                         of the Lock-Up Period, Recipient shall reimburse the Corporation or any of its Affiliates
                                         upon its first demand for any tax or any other, levy or expense that the Corporation
                                         or, if applicable, its Affiliate, shall bear as a result of such sale or withdrawal,
                                         including but not limited to, the employer portion of payment to social security (“Bituach
                                         Leumi”) plus linkage and interest in accordance with the law, and any such amount
                                         shall be deemed a debt of the Recipient to the Corporation (or its Affiliate), which
                                         may be deducted or set off from any amounts payable to the Recipient, and the RSUs and/or
                                         Shares will not be released until such time as all taxes have been paid; (v) Recipient
                                         will notify the Trustee in writing in the event that it wishes to remove the RSUs and/or
                                         Shares from the possession of the Trustee. Prior to receiving the RSUs and/or Shares
                                         from the Trustee, the Trustee will deduct tax at a rate applicable in accordance with
                                         the Ordinance; (vi) the Trustee shall not be liable for any action or omission taken
                                         on its part in connection with the Plan, this Agreement and the Trust Agreement, provided
                                         that the Trustee acted reasonably and in good faith; and (vii) Recipient shall be liable
                                         to indemnify the Trustee with respect to any loss, damage or expense caused to the Trustee
                                         as a result of or in consequence of performance of its duties as a Trustee, unless arising
                                         out of the Trustee’s own fraud or bad faith.

 

    	 		 

     

    

 

	7.	Recipient
                                         hereby further acknowledges and agrees that: (i) the Plan and the grant of the RSUs under
                                         the Plan is discretionary in nature and occasional, and does not create any contractual
                                         or other right to receive future grants of RSUs and/or Shares, or benefits in lieu of
                                         the RSUs even if RSUs and/or Shares have been granted repeatedly in the past; (ii) Recipient’s
                                         participation in the Plan is voluntary; (iii) the value of the RSUs and/or Shares is
                                         an extraordinary item of compensation, which is outside the scope of Recipient’s
                                         employment agreement, if any. The RSUs and/or Shares are not part of normal or expected
                                         compensation or salary for any purpose, including, but not limited to, calculating any
                                         social benefits, severance, end of service payments, bonuses, long-service awards, pension
                                         or similar payments; (iv) the future value of the RSUs and/or Shares granted under the
                                         Plan is unknown and cannot be predicted with certainty, and the Corporation makes no
                                         express or implied promise about the financial gain or loss to be achieved through participation
                                         in the Plan; (v) Recipient’s engagement with the Corporation or any Affiliate of
                                         the Corporation may be terminated at any time, with or without cause, by the Corporation
                                         or any Affiliate of the Corporation and neither the Plan nor the grant of RSUs and/or
                                         Shares shall obligate the Corporation or any Affiliate thereof to engage Recipient for
                                         any particular length of time nor confer any right with respect to continuing the Recipient’s
                                         status as an Employee.

 

	8.	Data
                                         Privacy

 

The
Corporation will collect, process, use and deliver personal data of Recipient for the purpose of executing and managing the Plan
and the exercise of your rights thereunder, as well as for any other aspect required in connection with your employment with the
Company.

 

By
accepting the grant of RSUs and participating in the Plan, Recipient hereby expressly: (i) authorizes the Corporation, any Affiliate
thereof, the Trustee and any agent of the Corporation administering the Plan or providing Plan recordkeeping services, to disclose
to the Corporation, to any Affiliate thereof, to the Trustee or to any such agent such information and data as shall be requested
in order to facilitate the grant of RSUs and/or Shares and the administration of the Plan; (ii) waives any data privacy rights
he may have with respect to such information; and (iii) authorizes the Corporation, any Affiliate thereof, the Trustee and any
such agent to store and transmit such information in electronic form; and (iv) approves and consents, in any case, for the transfer
of information, its storage and usage outside of Israel and this for the purposes listed above.

 

Please
note that providing such data is not required under law and it is subjected to your sole consideration. You are free to decide
whether you want to grant or deny your consent. If you decide to deny your consent then no further action is required. Please
understand, in this case the Corporation would not be able to comply with the legal requirements associated with the participation
in the Plan, and as a consequence you will not be able to participate in the Plan.

 

Recipient
acknowledges receipt of a copy of the VBI VACCINES INC. Amended Incentive Plan and the Israeli Addendum thereto, the Restricted
share unit Agreement and the Trust Agreement and represents that he is familiar with the terms and provisions thereof, and hereby
accepts this grant of RSUs subject to all of the terms and provisions thereof. Recipient has reviewed the Plan the Agreement and
this Israeli Addendum in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Israeli
Addendum and fully understands all provisions of the RSUs. 

 

	Recipient:	 	VBI
    VACCINES INC.
	 	 	 
		 	
	Signature	 	By
	 	 	 
		 	
	Print
    Name	 	Title
	 	 	 
	 	 	 
	Residence
    Address

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