Document:

CBD Energy
Limited

 

2014 Equity
Plan

 

    	 

    	 

    

 

 

 

TABLE OF
CONTENTS

 

	 	 	Page
	 	 	 
	1.	ESTABLISHMENT, PURPOSE AND TERM OF PLAN	1
	1.1	Establishment	1
	1.2	Purpose	1
	1.3	Term of Plan	1
	2.	DEFINITIONS AND CONSTRUCTION	1
	2.1	Definitions	1
	2.2	Construction	6
	3.	ADMINISTRATION	6
	3.1	Administration by the Committee	6
	3.2	Authority of Officers	6
	3.3	Administration with Respect to Insiders	7
	3.4	Committee Complying with Section 162(m)	7
	3.5	Powers of the Committee	7
	3.6	Indemnification	8
	3.7	Arbitration	8
	3.8	Repricing Prohibited	8
	4.	SHARES SUBJECT TO PLAN	9
	4.1	Maximum Number of Shares Issuable	9
	4.2	Adjustments for Changes in Capital Structure	9
	5.	ELIGIBILITY AND AWARD LIMITATIONS	9
	5.1	Persons Eligible for Awards	9
	5.2	Participation	10
	5.3	Incentive Stock Option Limitations	10
	5.4	Award Limits	10
	6.	TERMS AND CONDITIONS OF OPTIONS	11
	6.1	Exercise Price	11
	6.2	Exercisability and Term of Options	12
	6.3	Payment of Exercise Price	12
	6.4	Effect of Termination of Service	13
	6.5	Transferability of Options	13
	7.	TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS	13
	7.1	Types of SARs Authorized	14
	7.2	Exercise Price	14
	7.3	Exercisability and Term of SARs	14
	7.4	Deemed Exercise of SARs	14
	7.5	Effect of Termination of Service	14
	7.6	Nontransferability of SARs	14
	8.	TERMS AND CONDITIONS OF RESTRICTED SHARE AWARDS	15
	8.1	Types of Restricted Share Awards Authorized	15
	8.2	Purchase Price	15
	8.3	Purchase Period	15
	8.4	Vesting and Restrictions on Transfer	15
	8.5	Voting Rights; Dividends and Distributions	15
	8.6	Effect of Termination of Service	16
	8.7	Nontransferability of Restricted Share Award
    Rights	16
	9.	TERMS AND CONDITIONS OF PERFORMANCE AWARDS	16
	9.1	Types of Performance Awards Authorized	16
	9.2	Initial Value of Performance Shares and Performance
    Units	16
	9.3	Establishment of Performance Period, Performance
    Goals and Performance Award Formula	16

 

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	9.4	Measurement of Performance Goals	17
	9.5	Settlement of Performance Awards	17
	9.6	Voting Rights; Dividend Equivalent Rights and
    Distributions	18
	9.7	Effect of Termination of Service	18
	9.8	Nontransferability of Performance Awards	19
	10.	TERMS AND CONDITIONS OF RESTRICTED SHARE UNIT AWARDS	19
	10.1	Grant of Restricted Share Unit Awards	19
	10.2	Vesting	19
	10.3	Voting Rights, Dividend Equivalent Rights and
    Distributions	20
	10.4	Effect of Termination of Service	20
	10.5	Settlement of Restricted Share Unit Awards	20
	10.6	Nontransferability of Restricted Share Unit Awards	20
	11.	OTHER SHARE-BASED AWARDS.	20
	12.	EFFECT OF CHANGE IN CONTROL ON OPTIONS AND SARS	20
	12.1	Accelerated Vesting	20
	12.2	Assumption or Substitution	21
	12.3	Effect of Change in Control on Restricted Share
    and Other Type of Awards	21
	13.	COMPLIANCE WITH SECURITIES LAW	21
	14.	TAX WITHHOLDING.	22
	14.1	Tax Withholding in General	22
	14.2	Withholding in Shares	22
	15.	AMENDMENT OR TERMINATION OF PLAN	22
	15.1	The Board or the Committee may amend, suspend
    or terminate the Plan at any time	22
	16.	MISCELLANEOUS PROVISIONS	22
	16.1	Provision of Information	22
	16.2	Rights as Employee, Consultant or Director	22
	16.3	Rights as a Shareholder	23
	16.4	Fractional Shares	 23
	16.5	Severability	 23
	16.6	Beneficiary Designation	 23
	16.7	Unfunded Obligation	 23

 

 

 

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CBD
Energy Limited

2014
Equity Plan

 

1.           ESTABLISHMENT,
PURPOSE AND TERM OF PLAN.

 

1.1           Establishment.
The CBD Energy Limited 2014 Equity Plan (the “Plan”) is hereby adopted
May 8, 2014, subject to approval by the shareholders of CBD Energy Limited (“Company”), and the date
of such approval is the “Effective Date”.  

 

1.2           Purpose.
The purpose of the Plan is to advance the interests of the Participating Company Group and its shareholders by providing an
incentive to attract and retain the best qualified personnel to perform services for the Participating Company Group, by motivating
such persons to contribute to the growth and profitability of the Participating Company Group, by aligning their interests with
interests of the Company’s shareholders, and by rewarding such persons for their services by tying a significant portion
of their total compensation package to the success of the Company. The Plan seeks to achieve this purpose by providing for Awards
in the form of Options, Share Appreciation Rights, Restricted Share Awards, Performance Shares, Performance Units, Restricted
Share Units, and other Share-Based Awards as described below.  

 

1.3           Term
of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the
Ordinary Shares available for issuance under the Plan have been issued and all restrictions on such shares under the terms of
the Plan and the agreements evidencing Awards granted under the Plan have lapsed. However, Awards shall not be granted later than
ten (10) years from the Effective Date. The Company intends that the Plan comply with Section 409A of the Code (including any
amendments to or replacements of such section), and the Plan shall be so construed. 

 

2.           DEFINITIONS
AND CONSTRUCTION.

 

2.1           Definitions.
Whenever used herein, the following terms shall have their respective meanings set forth below: 

 

(a)          
“Affiliate” means (i) an entity, other than a Parent Corporation, that directly, or indirectly
through one or more intermediary entities, controls the Company or (ii) an entity, other than a Subsidiary Corporation, that
is controlled by the Company directly, or indirectly through one or more intermediary entities. For this purpose, the term “control”
(including the term “controlled by”) means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the relevant entity, whether through the ownership of voting securities, by contract
or otherwise; or shall have such other meaning assigned such term for the purposes of registration on Form S-8 under the
Securities Act.

 

(b)          
“Award” means any Option, SAR, Restricted Share Award, Performance Share, Performance Unit, Restricted
Share Unit or other Share-Based Award granted under the Plan.

 

(c)          
“Award Agreement” means a written agreement between the Company and a Participant setting forth the
terms, conditions and restrictions of the Award granted to the Participant.

 

(d)          
“Board” means the Board of Directors of the Company.

 

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(e)          “Change
in Control” means, unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s
Award Agreement or by a written contract of employment or service, the occurrence of any of the following:

 

(i)          any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than (1) a trustee
or other fiduciary holding securities of the Company under an employee benefit plan of a Participating Company or (2) a corporation
owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the
share of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of (i) the total Fair
Market Value of the share of the Company or (ii) the total combined voting power of the Company’s then-outstanding
securities entitled to vote generally in the election of directors; or

 

(ii)         an
Ownership Change Event or series of related Ownership Change Events, other than an underwritten public offering in which no single
participant acquires more than 25% of the shares sold in such offering, (collectively, a “Transaction”)
in which the shareholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct
or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting
securities of the Company or, in the case of an Ownership Change Event described in Section 2.1(y)(i), the entity to which
the assets of the Company were transferred (the “Transferee”), as the case may be; or

 

(iii)        a
liquidation or dissolution of the Company.

 

For purposes
of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership
of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the
case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall have
the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change
Events are related, and its determination shall be final, binding and conclusive.

 

(f)          
“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated
thereunder.

 

(g)          
“Committee” means the Remuneration Committee or other committee of the Board duly appointed to administer
the Plan and having such powers as shall be specified by the Board. If no committee of the Board has been appointed to administer
the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its
discretion exercise any or all of such powers. The Committee shall have the exclusive authority to administer the Plan and shall
have all of the powers granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject
to the terms of the Plan and any applicable limitations imposed by law.

 

(h)          
“Company” means CBD Energy Limited, an Australian company, or any Successor.

 

(i)          
“Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee
or a member of the Board) to a Participating Company.

 

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(j)          
“Director” means a member of the Board or of the board of directors of any Participating Company.

 

(k)          
“Disability” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3)
of the Code.

 

(l)          
“Dividend Equivalent” means a credit, made at the discretion of the Committee or as otherwise provided
by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one Ordinary Share for each Ordinary
Share represented by an Award held by such Participant.

 

(m)          
“Employee” means any person treated as an employee (including an Officer or a member of the Board who
is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted
to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a
member of the Board nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan.
The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased
to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be.
For purposes of an individual’s rights, if any, under the Plan as of the time of the Company’s determination, all
such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law
or governmental agency subsequently makes a contrary determination.

 

(n)          
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(o)          
“Fair Market Value” means, as of any date, the value of an Ordinary Share or other property as determined
by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the
Company herein, subject to the following:

 

(i)          Except
as otherwise determined by the Committee, if, on such date, the Ordinary Shares are listed on a national or regional securities
exchange or market system, the Fair Market Value of an Ordinary Share shall be the closing price of an Ordinary Share as quoted
on such national or regional securities exchange or market system constituting the primary market for the Ordinary Shares on the
last trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Company
deems reliable.

 

(ii)         Notwithstanding
the foregoing, the Committee may, in its discretion, determine the Fair Market Value on the basis of the closing, high, low or
average sale price of an Ordinary Share or the actual sale price of an Ordinary Share received by a Participant, on such date,
the preceding trading day, the next succeeding trading day or an average determined over a period of trading days. The Committee
may vary its method of determination of the Fair Market Value as provided in this Section for different purposes under the Plan.

 

(iii)        If,
on such date, the Ordinary Shares are not listed on a national or regional securities exchange or market system, the Fair Market
Value of an Ordinary Share shall be as determined by the Committee in good faith without regard to any restriction other than
a restriction which, by its terms, will never lapse.

 

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(p)          
“Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which
qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.

 

(q)          
“Insider” means an Officer, a Director or any other person whose transactions in Ordinary Shares are
subject to Section 16 of the Exchange Act.

 

(r)          
“Non-Control Affiliate” means any entity in which any Participating Company has an ownership interest
and which the Committee shall designate as a Non-Control Affiliate.

 

(s)          
“Nonemployee Director” means a Director who is not an Employee.

 

(t)          
“Nonstatutory Share Option” means an Option not intended to be (as set forth in the Award Agreement)
an Incentive Stock Option within the meaning of Section 422(b) of the Code.

 

(u)          
“Officer” means any person designated by the Board as an officer of the Company.

 

(v)         
“Option” means the right, subject to applicable vesting requirements, to purchase Ordinary Shares at
a stated price for a specified period of time granted to a Participant pursuant to Section 6 of the Plan. An Option may be
either an Incentive Stock Option or a Nonstatutory Share Option.

 

(w)          
“Option Expiration Date” means the date of expiration of the Option’s term as set forth in the
Award Agreement.

 

(x)          “Ordinary
Shares” means the ordinary shares of the Company, as adjusted from time to time in accordance with Section 4.2
of the Plan.

 

(y)            An
“Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect
to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders
of the Company of more than fifty percent (50%) of the voting shares of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or substantially all, as determined by the Board in its discretion,
of the assets of the Company; or (iv) a liquidation or dissolution of the Company.

 

(z)          
“Parent Corporation” means any present or future “parent corporation” of the Company, as
defined in Section 424(e) of the Code.

 

(aa)         
“Participant” means any eligible person who has been granted one or more Awards.

 

(bb)         
“Participating Company” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.

 

(cc)         
“Participating Company Group” means, at any point in time, all entities collectively which are then
Participating Companies.

 

(dd)         
“Performance Award” means an Award of Performance Shares or Performance Units.

 

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(ee)         
“Performance Award Formula” means, for any Performance Award, a formula or table established by the
Committee pursuant to Section 9.3 of the Plan which provides the basis for computing the value of a Performance Award at
one or more threshold levels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance
Period.

 

(ff)         
“Performance Goal” means a performance goal established by the Committee pursuant to Section 9.3
of the Plan.

 

(gg)         
“Performance Period” means a period established by the Committee pursuant to Section 9.3 of the Plan
at the end of which one or more Performance Goals are to be measured.

 

(hh)         
“Performance Share” means a bookkeeping entry representing a right granted to a Participant pursuant
to Section 9 of the Plan to receive a payment equal to the value of a Performance Share, as determined by the Committee,
based on performance.

 

(ii)         
“Performance Unit” means a bookkeeping entry representing a right granted to a Participant pursuant
to Section 9 of the Plan to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based
upon performance.

 

(jj)          
“Restricted Share Award” means an Award of restricted Shares.

 

(kk)         “Restricted
Share Unit” or “Share Unit” means a bookkeeping entry representing a right granted to
a Participant pursuant to Section 10 of the Plan, respectively, to receive an Ordinary Share on a date determined in accordance
with the provisions of Section 10, as applicable, and the Participant’s Award Agreement.

 

(ll)         
“Restriction Period” means the period established in accordance with Section 8.4 of the Plan during
which shares subject to a Restricted Share Award are subject to Vesting Conditions.

 

(mm)      
“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor
rule or regulation.

 

(nn)       
“SAR” or “Share Appreciation Right” means a bookkeeping entry representing,
for each Ordinary Share subject to such SAR, a right granted to a Participant pursuant to Section 7 of the Plan to receive
payment in any combination of Ordinary Shares or cash of an amount equal to the excess, if any, of the Fair Market Value of an
Ordinary Share on the date of exercise of the SAR over the exercise price.

 

(oo)       
“Section 162(m)” means Section 162(m) of the Code.

 

(pp)       
“Securities Act” means the Securities Act of 1933, as amended.

 

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(qq)         
“Service” means a Participant’s employment or service with the Participating Company Group, whether
in the capacity of an Employee, a Director or a Consultant. Unless otherwise provided by the Committee, a Participant’s
Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders such
Service or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption
or termination of the Participant’s Service. Furthermore, a Participant’s Service shall not be deemed to have terminated
if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However,
if any such leave taken by a Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement
of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return
to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s
Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service
or upon the entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing,
the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date
of such termination.

 

(rr)         
“Share-Based Awards” means any award that is valued in whole or in part by reference to, or is otherwise
based on, the Ordinary Shares, including dividends on the Ordinary Shares, but not limited to those Awards described in Sections 6
through 10 of the Plan.

 

(ss)         
“Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company,
as defined in Section 424(f) of the Code.

 

(tt)         
“Successor” means a corporation into or with which the Company is merged or consolidated or which acquires
all or substantially all of the assets of the Company and which is designated by the Board as a Successor for purposes of the
Plan.

 

(uu)         
“Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns
shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of a Participating Company
(other than an Affiliate) within the meaning of Section 422(b)(6) of the Code.

 

(vv)         
“Vesting Conditions” means those conditions established in accordance with Section 8.4 or Section 10.2
of the Plan prior to the satisfaction of which shares subject to a Restricted Share Award or Restricted Share Unit Award, respectively,
remain subject to forfeiture Company upon the Participant’s termination of Service.

 

2.2           Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 

 

3.           ADMINISTRATION.

 

3.1           Administration
by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan or of any Award
shall be determined by the Committee, and such determinations shall be final and binding upon all persons having an interest in
the Plan or such Award. 

 

3.2           Authority
of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has
apparent authority as expressly delegated by the Committee with respect to such matter, right, obligation, determination or election.
 

 

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3.3           Administration
with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that any class of equity security
of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with
the requirements, if any, of Rule 16b-3. 

 

3.4           Committee
Complying with Section 162(m). While the Company is a “publicly held corporation” within the meaning of Section 162(m),
the Board may establish a Committee of “outside directors” within the meaning of Section 162(m) to approve the
grant of any Award which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise
exceed the limit on employee remuneration deductible for income tax purposes pursuant to Section 162(m). 

 

3.5           Powers
of the Committee. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan,
the Committee shall have the full and final power and authority, in its discretion: 

 

(a)          to
determine the persons to whom, and the time or times at which, Awards shall be granted and the number of Ordinary Shares or units
to be subject to each Award;

 

(b)          to
determine the type of Award granted and to designate Options as Incentive Stock Options or Nonstatutory Share Options;

 

(c)          to
determine the Fair Market Value of Ordinary Shares or other property;

 

(d)          to
determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired
pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares purchased pursuant to any Award,
(ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax
withholding obligation arising in connection with Award, including by the withholding or delivery of Ordinary Shares, (iv) the
timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the
Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals have been
attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination of Service
on any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired
pursuant thereto not inconsistent with the terms of the Plan;

 

(e)          to
determine whether an Award will be settled in Ordinary Shares, cash, or in any combination thereof;

 

(f)          to
approve one or more forms of Award Agreement;

 

(g)          to
amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares
acquired pursuant thereto, subject, to limitations thereunder;

 

(h)          to
accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including
with respect to the period following a Participant’s termination of Service;

 

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(i)          without
the consent of the affected Participant and notwithstanding the provisions of any Award Agreement to the contrary, to unilaterally
substitute at any time a Share Appreciation Right providing for settlement solely in Ordinary Shares in place of any outstanding
Option, provided that such Share Appreciation Right covers the same number of Ordinary Shares and provides for the same exercise
price (subject in each case to adjustment in accordance with Section 4.2) as the replaced Option and otherwise provides substantially
equivalent terms and conditions as the replaced Option, as determined by the Committee;

 

(j)          to
prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or alternative
versions of, the Plan, including, without limitation, as the Committee deems necessary or desirable to comply with the laws or
regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose citizens may
be granted Awards;

 

(k)          to
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other
determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent
not inconsistent with the provisions of the Plan or applicable law; and

 

(l)          to
delegate to any proper Officer the authority to grant one or more Awards, without further approval of the Committee, to any person
eligible pursuant to Section 5, other than a person who, at the time of such grant, is an Insider; provided, however, that
(i) the exercise price per share of each such Option shall be equal to the Fair Market Value per share of the Ordinary Shares
on the effective date of grant, and (ii) each such Award shall be subject to the terms and conditions of the appropriate
standard form of Award Agreement approved by the Committee and shall conform to the provisions of the Plan and such other guidelines
as shall be established from time to time by the Committee.

 

3.6           Indemnification.
In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or
employees of the Participating Company Group, members of the Board or the Committee and any officers or employees of the Participating
Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company
against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts
paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company)
or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional
misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding,
such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

 

3.7           Arbitration.
Any dispute or claim concerning any Awards granted (or not granted) pursuant to this Plan and any other disputes or claims relating
to or arising out of the Plan shall be fully, finally and exclusively resolved by binding arbitration conducted pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. By accepting an Award, Participants and the Company waive
their respective rights to have any such disputes or claims tried by a judge or jury. 

 

3.8           Repricing
Prohibited. Without the affirmative vote of holders of a majority of the Ordinary Shares cast in person or by proxy at a meeting
of the shareholders of the Company at which a quorum representing a majority of all outstanding Ordinary Shares is present or
represented by proxy, the Committee shall not approve a program providing for either (a) the cancellation of outstanding Options
or SARs and the grant in substitution therefore of new Options or SARs having a lower exercise price or (b) the amendment of outstanding
Options or SARs to reduce the exercise price thereof. This paragraph shall not be construed to apply to the issuance or assumption
of an Award in a transaction to which Code section 424(a) applies, within the meaning of Section 424 of the Code.  

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4.           SHARES
SUBJECT TO PLAN.

 

4.1           Maximum
Number of Ordinary Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of
Ordinary Shares that may be issued under the Plan shall be 400,000 (Four Hundred Thousand) Ordinary Shares. If an outstanding
Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if Ordinary Shares
acquired pursuant to an Award subject to forfeiture are forfeited without cost by the Company, the Ordinary Shares allocable to
the terminated portion of such Award or such forfeited Ordinary Shares shall again be available for issuance under the Plan. Upon
payment in Ordinary Shares pursuant to the exercise of an SAR, the number of shares available for issuance under the Plan shall
be reduced only by the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender
to the Company, or attestation to the ownership, of Ordinary Shares owned by the Participant, or by means of a Net-Exercise, the
number of shares available for issuance under the Plan shall nevertheless be reduced by the number of shares for which the Option
is exercised. 

 

4.2           Adjustments
for Changes in Capital Structure. Subject to any required action by the shareholders of the Company, in the event of
any change in the Ordinary Shares effected without receipt of consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, share dividend, share split, reverse share split, split-up,
split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or
in the event of payment of a dividend or distribution to the shareholders of the Company in a form other than Ordinary Shares
(excepting normal cash dividends) that has a material effect on the Fair Market Value of Ordinary Shares, appropriate adjustments
shall be made in the number and kind of shares subject to the Plan and to any outstanding Awards, in the Award limits set forth
in Section 5.4, and in the exercise or purchase price per share under any outstanding Award in order to prevent dilution
or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of consideration by the Company.” If a majority of
the shares which are of the same class as the shares that are subject to outstanding Awards are exchanged for, converted into,
or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the “New
Shares”), the Committee may unilaterally amend the outstanding Options to provide that such Options are exercisable
for New Shares. In the event of any such amendment, the number of shares subject to, and the exercise price per share of, the
outstanding Awards shall be adjusted in a fair and equitable manner as determined by the Board, in its discretion. Any fractional
share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number. The Committee
in its sole discretion, may also make such adjustments in the terms of any Award to reflect, or related to, such changes in the
capital structure of the Company or distributions as it deems appropriate, including modification of Performance Goals, Performance
Award Formulas and Performance Periods. The adjustments determined by the Committee pursuant to this Section 4.2 shall be
final, binding and conclusive. 

 

5.          ELIGIBILITY
AND AWARD LIMITATIONS.

 

5.1           Persons
Eligible for Awards. Awards may be granted only to Employees, Consultants and Directors. For purposes of the foregoing sentence,
“Employees,” “Consultants” and “Directors” shall include prospective Employees, prospective
Consultants and prospective Directors to whom Awards are offered to be granted in connection with written offers of an employment
or other service relationship with the Participating Company Group; provided, however, that no Ordinary Shares subject to any
such Award shall vest, become exercisable or be issued prior to the date on which such person commences Service. 

 

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5.2           Participation.
Awards other than Nonemployee Director Awards are granted solely at the discretion of the Committee. Eligible persons may be granted
more than one Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award,
or, having been granted an Award, to be granted an additional Award. 

 

5.3           Incentive
Stock Option Limitations.

 

(a)          Persons
Eligible. An Incentive Stock Option may be granted only to a person who, on the effective date of grant, is an
Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation”).
Any person who is not an Employee of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person
may be granted only a Nonstatutory Share Option. An Incentive Stock Option granted to a prospective Employee upon the condition
that such person become an Employee of an ISO-Qualifying Corporation shall be deemed granted effective on the date such person
commences Service with an ISO-Qualifying Corporation, with an exercise price determined as of such date in accordance with Section 6.1.

 

(b)          Fair
Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all share
option plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during
any calendar year for shares having a Fair Market Value greater than US$100,000 (One Hundred Thousand Dollars), the portion of
such options which exceeds such amount shall be treated as Nonstatutory Share Options.  For purposes of this Section, options
designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market
Value of Ordinary Shares shall be determined as of the time the option with respect to such shares is granted. If the Code is
amended to provide for a limitation different from that set forth in this Section, such different limitation shall be deemed incorporated
herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an
Option is treated as an Incentive Stock Option in part and as a Nonstatutory Share Option in part by reason of the limitation
set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising. In the absence
of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first.
Upon exercise, shares issued pursuant to each such portion shall be separately identified.

 

5.4          Award
Limits. 

 

(a)          Maximum
Number of Shares Issuable Pursuant to Incentive Stock Options. Subject to adjustment as provided in Section 4.2,
the maximum aggregate number of Ordinary Shares that may be issued under the Plan pursuant to the exercise of Incentive Stock
Options shall not exceed 100,000 (One Hundred Thousand) Ordinary Shares less the sum of any Full Value Award grants pursuant to
Section 5.4(b) hereof. The maximum aggregate number of Ordinary Shares that may be issued under the Plan pursuant to all Awards
other than Incentive Stock Options shall be the number of shares determined in accordance with Section 4.1, subject to adjustment
as provided in Section 4.2 and further subject to the limitation set forth in Section 5.4(b) below.

 

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(b)          Aggregate
Limit on Full Value Awards. Subject to adjustment as provided in Section 4.2, in no event shall more than 400,000
(Four Hundred Thousand) Ordinary Shares in the aggregate be issued under the Plan pursuant to the exercise or settlement of Restricted
Share Awards, Restricted Share Unit Awards and Performance Awards (“Full Value Awards”). Any Full Value Awards which
vest on the basis of the Participant’s continued Service shall not provide for vesting which is any more rapid than annual
pro rata vesting over a three (3) year period, with no proration of vesting prior to the end of the first year and any Full Value
Awards which vest upon the attainment of Performance Goals shall provide for a Performance Period of at least twelve (12) months.

 

(c)          Section
162(m) Award Limits. The following limits shall apply to the grant of any Award if, at the time of grant, the Company
is a “publicly held corporation” within the meaning of Section 162(m). The vesting requirements set forth in
Section 5.4(b) shall apply.

 

(i)          Options
and SARs. Subject to adjustment as provided in Section 4.2, no Employee shall be granted within any fiscal year of the
Company one or more Options or Freestanding SARs which in the aggregate are for more than 50,000 (Fifty Thousand) Ordinary Shares
reserved for issuance under the Plan less any other Restricted Share, Restricted Share Unit Awards or Performance awards granted
under this Section 5.4(c).

 

(ii)         Restricted
Share and Restricted Share Unit Awards. Subject to adjustment as provided in Section 4.2, no Employee shall be granted
within any fiscal year of the Company one or more Restricted Share Awards or Restricted Share Unit Awards, subject to Vesting
Conditions based on the attainment of Performance Goals, for more than 50,000 (Fifty Thousand) Ordinary Shares reserved for issuance
under the Plan.

 

(iii)        Performance
Awards. Subject to adjustment as provided in Section 4.2, no Employee shall be granted (1) Performance Shares which
could result in such Employee receiving more than 50,000 (Fifty Thousand) Ordinary Shares reserved for issuance under the Plan
for each full fiscal year of the Company contained in the Performance Period for such Award, or (2) Performance Units which
could result in such Employee receiving more than US$500,000 (Five Hundred Thousand Dollars) for each full fiscal year of the
Company contained in the Performance Period for such Award. No Participant may be granted more than one Performance Award for
the same Performance Period, and no such Performance Shares shall be granted and no Performance Units resulting in such Employee
receiving more than US$200,000 (Two Hundred Thousand Dollars) for a full fiscal year of the Company contained in the Performance
Period ending in June 2014 for such Award shall be granted.

 

6.          TERMS
AND CONDITIONS OF OPTIONS.

 

Options
shall be evidenced by Award Agreements specifying the number of Ordinary Shares covered thereby, in such form as the Committee
shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate all or any of the terms of
the Plan by reference and shall comply with and be subject to the following terms and conditions:

 

6.1           Exercise
Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however,
that (a) the exercise price per share shall be not less than the Fair Market Value of an Ordinary Share on the effective date
of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per
share less than one hundred ten percent (110%) of the Fair Market Value of an Ordinary Share on the effective date of grant of
the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Share Option) may be
granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 

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6.2          Exercisability
and Term of Options.  

 

(a)          Option
Vesting and Exercisability. Options shall be exercisable at such time or times, or upon such event or events, and subject
to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the
Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of
ten (10) years after the date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall
be exercisable after the expiration of five (5) years after the date of grant of such Option, (c) no Option shall become fully
vested in a period of less than four (4) years from the date of grant, other than in connection with a termination of Service
or a Change in Control or in the case of an Option granted to a Nonemployee Director, and (d) no Option offered or granted
to a prospective Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such
person commences Service. Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, any
Option granted hereunder shall terminate ten (10) years following the date of grant of the Option, unless earlier terminated in
accordance with its provisions, or the terms of the Plan.

 

(b)          Participant
Responsibility for Exercise of Option. Each Participant is responsible for taking any and all actions as may be required
to exercise any Option in a timely manner, and for properly executing any documents as may be required for the exercise of an
Option in accordance with such rules and procedures as may be established from time to time. By signing an Option Agreement each
Participant acknowledges that information regarding the procedures and requirements for the exercise of any Option is available
upon such Participant’s request. The Company shall have no duty or obligation to notify any Participant of the expiration
date of any Option.

 

6.3          Payment
of Exercise Price. 

 

(a)          Forms
of Consideration Authorized. Except as otherwise provided below, payment of the exercise price for the number of
Ordinary Shares being purchased pursuant to any Option shall be made (i) in cash, by check or in cash equivalent, (ii) by
tender to the Company, or attestation to the ownership, of Ordinary Shares owned by the Participant having a Fair Market Value
not less than the exercise price, (iii) by such other consideration as may be approved by the Committee from time to time
to the extent permitted by applicable law, or (iv) by any combination thereof. The Committee may at any time or from time
to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price
or which otherwise restrict one or more forms of consideration.

 

(b)          Limitations
on Forms of Consideration.

 

(i)          Tender
of Ordinary Shares. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation
to the ownership, of Ordinary Shares to the extent such tender or attestation would constitute a violation of the provisions of
any law, regulation or agreement restricting the redemption of the Company’s Ordinary Shares.

 

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(ii)         Payment
by Promissory Note. No promissory note shall be permitted if the exercise of an Option using a promissory note would be a
violation of any law. Any permitted promissory note shall be on such terms as the Committee shall determine. The Committee shall
have the authority to permit or require the Participant to secure any promissory note used to exercise an Option with the Ordinary
Shares acquired upon the exercise of the Option or with other collateral acceptable to the Company. Unless otherwise provided
by the Committee, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal
Reserve System or any other governmental entity affecting the extension of credit in connection with the Company’s securities,
any promissory note shall comply with such applicable regulations, and the Participant shall pay the unpaid principal and accrued
interest, if any, to the extent necessary to comply with such applicable regulations.

 

6.4          Effect
of Termination of Service. 

 

(a)          Option
Exercisability/Forfeiture. Subject to earlier termination of the Option as otherwise provided herein and unless otherwise
provided by the Committee, an Option that has vested at the time of termination of employment shall be exercisable after a Participant’s
termination of Service only during the applicable time periods provided in the Award Agreement. Unless otherwise provided by the
Committee in the grant of a Restricted Share Award and set forth in the Award Agreement, if a Participant’s Service terminates
for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then the Participant
shall forfeit to the Company any Options acquired by the Participant pursuant to an Option Award which remain subject to Vesting
Conditions as of the date of the Participant’s termination of Service in exchange for the payment of the purchase price,
if any, paid by the Participant.

 

(b)          Extension
if Exercise Prevented by Law. Notwithstanding the foregoing, unless the Committee provides otherwise in the Award Agreement,
if the exercise of an Option within the applicable time periods is prevented by the provisions of Section 13 below, the Option
shall remain exercisable until three (3) months (or such longer period of time as determined by the Committee, in its discretion)
after the date the Participant is notified by the Company that the Option is exercisable, but in any event no later than the Option
Expiration Date.

 

(c)          Extension
if Participant Subject to Section 16(b). Notwithstanding the foregoing, if a sale within the applicable time periods
of shares acquired upon the exercise of the Option would subject the Participant to suit under Section 16(b) of the Exchange
Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which
a sale of such shares by the Participant would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Participant’s termination of Service, or (iii) the Option Expiration Date.

 

6.5          Transferability
of Options. During the lifetime of the Participant, an Option shall be exercisable only by the
Participant or the Participant’s guardian or legal representative. Prior to the issuance of Ordinary Shares upon the exercise
of an Option, the Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by
will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its
discretion, and set forth in the Award Agreement evidencing such Option, a Nonstatutory Share Option shall be assignable or transferable
subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under
the Securities Act. 

 

7.          TERMS
AND CONDITIONS OF SHARE APPRECIATION RIGHTS.

 

Share
Appreciation Rights shall be evidenced by Award Agreements specifying the number of Ordinary Shares subject to the Award, in such
form as the Committee shall from time to time establish. No SAR or purported SAR shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing SARs may incorporate all or any of the
terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

 

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7.1           Types
of SARs Authorized. SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”)
or may be granted independently of any Option (a “Freestanding SAR”). A Tandem SAR may be granted either
concurrently with the grant of the related Option or at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such related Option. 

 

7.2           Exercise
Price. The exercise price for each SAR shall be established in the discretion of the Committee; provided, however, that (a) the
exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the
exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of an Ordinary Share on the
effective date of grant of the SAR. 

 

7.3           Exercisability
and Term of SARs. 

 

 (a)          Tandem
SARs. Tandem SARs shall be exercisable only at the time and to the extent, and only to the extent, that the related
Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to
less than the full number of Ordinary Shares subject to the related Option.

 

 (b)          Freestanding
SARs. Freestanding SARs shall be exercisable at such time or times, or upon such event or events, and subject to
such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award
Agreement evidencing such SAR;

 

 (c)          Limitations.
All SARs shall be subject to the same limitations on vesting and expiration of their exercise period as Options issued
under the Plan.

 

7.4           Deemed
Exercise of SARs. If, on the date on which an SAR would otherwise terminate or expire, the SAR by its terms remains exercisable
immediately prior to such termination or expiration and, if so exercised, would result in a payment to the holder of such SAR,
then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of such
date with respect to such portion. 

 

7.5           Effect
of Termination of Service. Subject to earlier termination of the SAR as otherwise provided herein and unless otherwise provided
by the Committee in the grant of an SAR and set forth in the Award Agreement, an SAR shall be exercisable after a Participant’s
termination of Service only as provided in the Award Agreement. Unless otherwise provided by the Committee in the grant of an
SAR and set forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary
(including the Participant’s death or disability), then the Participant shall forfeit to the Company any rights acquired
by the Participant pursuant to an SAR Award which remain subject to Vesting Conditions as of the date of the Participant’s
termination of Service.  

 

7.6           Nontransferability
of SARs. During the lifetime of the Participant, an SAR shall be exercisable only by the Participant or the Participant’s
guardian or legal representative. Prior to the exercise of an SAR, the SAR shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution. 

 

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8.          TERMS
AND CONDITIONS OF RESTRICTED SHARE AWARDS. 

 

Restricted
Share Awards shall be evidenced by Award Agreements specifying the number of Ordinary Shares subject to the Award, in such form
as the Committee shall from time to time establish. No Restricted Share Award or purported Restricted Share Award shall be a valid
and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Restricted
Share Awards may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following
terms and conditions:

 

8.1           Types
of Restricted Share Awards Authorized. Restricted Share Awards may or may not require the payment of cash compensation for
the Ordinary Shares. Restricted Share Awards may be granted upon such conditions as the Committee shall determine, including,
without limitation, upon the attainment of one or more Performance Goals described in Section 9.4. If either the grant of
a Restricted Share Award or the lapsing of the Restriction Period is to be contingent upon the attainment of one or more Performance
Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 9.3 through 9.5(a). 

 

8.2           Purchase
Price. The purchase price, if any, for Ordinary Shares issuable under each Restricted Share Award and the means of payment
shall be established by the Committee in its discretion.  

 

8.3           Purchase
Period. A Restricted Share Award requiring the payment of cash consideration shall be exercisable within a period established
by the Committee; provided, however, that no Restricted Share Award granted to a prospective Employee, prospective Consultant
or prospective Director may become exercisable prior to the date on which such person commences Service. 

 

8.4           Vesting
and Restrictions on Transfer. Shares issued pursuant to any Restricted Share Award may or may not be made subject to Vesting
Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including,
without limitation, Performance Goals as described in Section 9.4, as shall be established by the Committee and set forth
in the Award Agreement evidencing such Award. During any Restriction Period in which shares acquired pursuant to a Restricted
Share Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise
disposed of other than as provided in the Award Agreement or as provided in Section 8.7. Upon request by the Company, each
Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of Ordinary Shares hereunder. 

 

8.5           Voting
Rights; Dividends and Distributions. Except as provided in this Section, Section 8.4 and any Award Agreement, during
the Restriction Period applicable to shares subject to a Restricted Share Award, the Participant shall have all of the rights
of a shareholder of the Company holding Ordinary Shares, including the right to vote such shares and to receive all dividends
and other distributions paid with respect to such shares. However, in the event of a dividend or distribution paid in Ordinary
Shares or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.2, any
and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant
is entitled by reason of the Participant’s Restricted Share Award shall be immediately subject to the same Vesting Conditions
as the shares subject to the Restricted Share Award with respect to which such dividends or distributions were paid or adjustments
were made. 

 

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8.6           Effect
of Termination of Service. Unless otherwise provided by the Committee in the grant of a Restricted Share Award and set forth
in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including
the Participant’s death or disability), then the Participant shall forfeit to the Company any shares acquired by the Participant
pursuant to a Restricted Share Award which remain subject to Vesting Conditions as of the date of the Participant’s termination
of Service in exchange for the payment of the purchase price, if any, paid by the Participant.  

 

8.7           Nontransferability
of Restricted Share Award Rights. Prior to the issuance of Ordinary Shares pursuant to a Restricted Share Award, rights to
acquire such shares shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or
the laws of descent and distribution. All rights with respect to a Restricted Share Award granted to a Participant hereunder shall
be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative. 

 

9.          TERMS
AND CONDITIONS OF PERFORMANCE AWARDS. 

 

Performance
Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No Performance
Award or purported Performance Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed
Award Agreement. Award Agreements evidencing Performance Awards may incorporate all or any of the terms of the Plan by reference
and shall comply with and be subject to the following terms and conditions:

 

9.1           Types
of Performance Awards Authorized. Performance Awards may be in the form of either Performance Shares or Performance Units.
Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Units subject
thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other
terms, conditions and restrictions of the Award. 

 

9.2           Initial
Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a Performance Award,
each Performance Share shall have an initial value equal to the Fair Market Value of one (1) Ordinary Share, subject to adjustment
as provided in Section 4.2, on the effective date of grant of the Performance Share. Each Performance Unit shall have an
initial value determined by the Committee. The final value payable to the Participant in settlement of a Performance Award determined
on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the
Committee are attained within the applicable Performance Period established by the Committee. 

 

9.3           Establishment
of Performance Period, Performance Goals and Performance Award Formula. In granting each Performance Award, the Committee
shall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals which,
when measured at the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value
of the Performance Award to be paid to the Participant. To the extent compliance with the requirements under Section 162(m)
with respect to “performance-based compensation” is desired, the Committee shall establish the Performance Goal(s)
and Performance Award Formula applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days
after the commencement of the applicable Performance Period or (b) the date on which 25% of the Performance Period has elapsed,
and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once established, the
Performance Goals and Performance Award Formula shall not be changed during the Performance Period. The Company shall notify each
Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and
Performance Award Formula. 

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9.4          Measurement
of Performance Goals. Performance Goals shall be established by the Committee on the basis of targets to be attained (“Performance
Targets”) with respect to one or more measures of business or financial performance (each, a “Performance
Measure”), subject to the following: 

 

(a)          Performance
Measures. Performance Measures shall have the same meanings as used in the Company’s financial statements,
or, if such terms are not used in the Company’s financial statements, they shall have the meaning applied pursuant to generally
accepted accounting principles, or as used generally in the Company’s industry. Performance Measures shall be calculated
with respect to the Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes or such division
or other business unit as may be selected by the Committee. For purposes of the Plan, the Performance Measures applicable to a
Performance Award shall be calculated in accordance with generally accepted accounting principles, but prior to the accrual or
payment of any Performance Award for the same Performance Period and excluding the effect (whether positive or negative) of any
change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after
the establishment of the Performance Goals applicable to the Performance Award. Each such adjustment, if any, shall be made solely
for the purpose of providing a consistent basis from period to period for the calculation of Performance Measures in order to
prevent the dilution or enlargement of the Participant’s rights with respect to a Performance Award. Performance Measures
may be one or more of the following, as determined by the Committee: (i) sales revenue; (ii) gross margin; (iii) operating
margin; (iv) operating income; (v) pre-tax profit; (vi) earnings before share-based compensation expense, interest,
taxes and depreciation and amortization; (vii) earnings before interest, taxes and depreciation and amortization; (viii) earnings
before interest and taxes; (ix) net income; (x) expenses; (xi) the market price of the Ordinary Shares; (xii) share
price; (xiii) earnings per share; (xiv) return on shareholder equity; (xv) return on capital; (xvi) return
on net assets; (xvii) economic value added; (xviii) market share; (xix) customer service; (xx) customer satisfaction;
(xxi) safety; (xxii) total shareholder return; (xxiii) free cash flow; (xxiv) net operating income; (xxv) operating
cash flow; (xxvi) return on investment; (xxvii) employee satisfaction; (xxviii) employee retention; (xxix) balance of cash, cash
equivalents and marketable securities; (xxx) product development; (xxxi) research and development expenses; (xxxii) completion
of an identified special project; (xxxiii) completion of a joint venture or other corporate transaction; or (xxxiv) such
other measures as determined by the Committee consistent with this Section 9.4(a).

 

(b)          Performance
Targets. Performance Targets may include a minimum, maximum, target level and intermediate levels of performance,
with the final value of a Performance Award determined under the applicable Performance Award Formula by the level attained during
the applicable Performance Period. A Performance Target may be stated as an absolute value or as a value determined relative to
a standard selected by the Committee.

 

9.5          Settlement
of Performance Awards. 

 

(a)          Determination
of Final Value. As soon as practicable following the completion of the Performance Period applicable to a Performance
Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been attained and the
resulting final value of the Award earned by the Participant and to be paid upon its settlement in accordance with the applicable
Performance Award Formula.

 

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(b)          Discretionary
Adjustment of Award Formula. In its discretion, the Committee may, either at the time it grants a Performance Award
or at any time thereafter, provide for the positive or negative adjustment of the Performance Award Formula applicable to a Performance
Award that is not intended to constitute “qualified performance based compensation” to a “covered employee”
within the meaning of Section 162(m) (a “Covered Employee”) to reflect such Participant’s
individual performance in his or her position with the Company or such other factors as the Committee may determine. With respect
to a Performance Award intended to constitute qualified performance-based compensation to a Covered Employee, the Committee shall
have the discretion to reduce some or all of the value of the Performance Award that would otherwise be paid to the Covered Employee
upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value of the Performance Award determined
in accordance with the Performance Award Formula.

 

(c)          Payment
in Settlement of Performance Awards. As soon as practicable following the Committee’s determination and certification
in accordance with Sections 9.5(a) and (b), payment shall be made to each eligible Participant (or such Participant’s
legal representative or other person who acquired the right to receive such payment by reason of the Participant’s death)
of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash in a lump sum or
in installments, Ordinary Shares (either fully vested or subject to vesting), or a combination thereof, as determined by the Committee.

 

9.6           Voting
Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights
with respect to Ordinary Shares represented by Performance Share Awards until the date of the issuance of such shares, if any
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However,
the Committee, in its discretion, may provide in the Award Agreement evidencing any Performance Share Award that the Participant
shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Ordinary Shares having a record
date prior to the date on which the Performance Shares are settled or forfeited. Such Dividend Equivalents, if any, shall be credited
to the Participant in the form of additional whole Performance Shares as of the date of payment of such cash dividends on Ordinary
Shares. The number of additional Performance Shares (rounded to the nearest whole number) to be so credited shall be determined
by dividing (a) the amount of cash dividends paid on such date with respect to the number of Ordinary Shares represented
by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per Ordinary Share on such
date. Dividend Equivalents may be paid currently or may be accumulated and paid to the extent that Performance Shares become nonforfeitable,
as determined by the Committee. Settlement of Dividend Equivalents may be made in cash, Ordinary Shares, or a combination thereof
as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in
Section 9.5. Dividend Equivalents shall not be paid with respect to Performance Units. In the event of a dividend or distribution
paid in Ordinary Shares or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.2,
appropriate adjustments shall be made in the Participant’s Performance Share Award so that it represents the right to receive
upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to
which the Participant would entitled by reason of the Ordinary Shares issuable upon settlement of the Performance Share Award,
and all such new, substituted or additional securities or other property shall be immediately subject to the same Performance
Goals as are applicable to the Award.

 

9.7           Effect
of Termination of Service. Unless otherwise provided by the Committee in the grant of a Performance Award and set forth in
the Award Agreement, the effect of a Participant’s termination of Service on the Performance Award shall be as follows: 

    	18

    	 

    

 

(a)          Death
or Disability. If the Participant’s Service terminates because of the death or Disability of the Participant
before the completion of the Performance Period applicable to the Performance Award, the final value of the Participant’s
Performance Award shall be determined by the extent to which the applicable Performance Goals have been attained with respect
to the entire Performance Period and shall be prorated based on the number of months of the Participant’s Service during
the Performance Period. Payment shall be made following the end of the Performance Period in any manner permitted by Section 9.5.

 

(b)          Other
Termination of Service. If the Participant’s Service terminates for any reason except death or Disability
before the completion of the Performance Period applicable to the Performance Award, such Award shall be forfeited in its entirety;
provided, however, that in the event of an involuntary termination of the Participant’s Service, the Committee, in its sole
discretion, may waive the automatic forfeiture of all or any portion of any such Award.

 

9.8           Nontransferability
of Performance Awards. Prior to settlement in accordance with the provisions of the Plan, no
Performance Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance,
or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws
of descent and distribution. All rights with respect to a Performance Award granted to a Participant hereunder shall be exercisable
during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

 

10.         TERMS
AND CONDITIONS OF RESTRICTED SHARE UNIT AWARDS.

 

Restricted
Share Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Share Units subject to the Award,
in such form as the Committee shall from time to time establish. No Restricted Share Unit Award or purported Restricted Share
Unit Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award
Agreements evidencing Restricted Share Units may incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

 

10.1         Grant
of Restricted Share Unit Awards. Restricted Share Unit Awards may be granted upon such conditions as the Committee shall determine,
including, without limitation, upon the attainment of one or more Performance Goals described in Section 9.4. If either the
grant of a Restricted Share Unit Award or the Vesting Conditions with respect to such Award is to be contingent upon the attainment
of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 9.3
through 9.5(a). 

 

10.2         Vesting.
Restricted Share Units may or may not be made subject to Vesting Conditions based upon the satisfaction of such Service requirements,
conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 9.4,
as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. 

 

    	19

    	 

    

 

10.3         Voting
Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to Ordinary Shares
represented by Restricted Share Units until the date of the issuance of such shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may
provide in the Award Agreement evidencing any Restricted Share Unit Award that the Participant shall be entitled to receive Dividend
Equivalents with respect to the payment of cash dividends on Ordinary Shares having a record date prior to the date on which Restricted
Share Units held by such Participant are settled. Such Dividend Equivalents, if any, shall be paid by crediting the Participant
with additional whole Restricted Share Units as of the date of payment of such cash dividends on Ordinary Shares. The number of
additional Restricted Share Units (rounded to the nearest whole number) to be so credited shall be determined by dividing (a)
the amount of cash dividends paid on such date with respect to the number of Ordinary Shares represented by the Restricted Share
Units previously credited to the Participant by (b) the Fair Market Value per Ordinary Share on such date. Such additional Restricted
Share Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time (or
as soon thereafter as practicable) as the Restricted Share Units originally subject to the Restricted Share Unit Award. In the
event of a dividend or distribution paid in Ordinary Shares or any other adjustment made upon a change in the capital structure
of the Company as described in Section 4.2, appropriate adjustments shall be made in the Participant’s Restricted Share
Unit Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or
other property (other than normal cash dividends) to which the Participant would entitled by reason of the Ordinary Shares issuable
upon settlement of the Award, and all such new, substituted or additional securities or other property shall be immediately subject
to the same Vesting Conditions as are applicable to the Award. 

 

10.4         Effect
of Termination of Service. Unless otherwise provided by the Committee in the grant of a Restricted Share Unit Award and set
forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including
the Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Share Units pursuant
to the Award which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service. 

 

10.5         Settlement
of Restricted Share Unit Awards. The Company shall issue to a Participant on the date on which Restricted Share Units subject
to the Participant’s Restricted Share Unit Award vest or on such other date determined by the Committee, in its discretion,
and set forth in the Award Agreement one (1) Ordinary Share (and/or any other new, substituted or additional securities or other
property pursuant to an adjustment described in Section 10.3) for each Restricted Share Unit then becoming vested or otherwise
to be settled on such date, subject to the withholding of applicable taxes.  

 

10.6         Nontransferability
of Restricted Share Unit Awards. Prior to the issuance of Ordinary Shares in settlement of a Restricted Share Unit Award,
the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance,
or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws
of descent and distribution. All rights with respect to a Restricted Share Unit Award granted to a Participant hereunder shall
be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative. 

 

11.         OTHER
SHARE-BASED AWARDS.

 

In
addition to the Awards set forth in Sections 6 through 10 above, the Committee, in its sole discretion, may carry out the purpose
of this Plan by awarding Share-Based Awards as it determines to be in the best interests of the Company and subject to such other
terms and conditions as it deems necessary and appropriate.

 

12.         EFFECT
OF CHANGE IN CONTROL ON OPTIONS AND SARS.

 

12.1         Accelerated
Vesting. The Committee, in its sole discretion, may provide in any Award Agreement or, in the event of a Change in Control,
may take such actions as it deems appropriate to provide for the acceleration of the exercisability and vesting in connection
with such Change in Control of any or all outstanding Options and SARs and shares acquired upon the exercise of such Options and
SARs upon such conditions and to such extent as the Committee shall determine. The previous sentence notwithstanding such acceleration
shall not occur to the extent an Option or SAR is assumed or substituted with a substantially similar Award in connection with
a Change in Control. 

 

    	20

    	 

    

 

12.2         Assumption
or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other
business entity or parent thereof, as the case may be (the “Acquiring Corporation”), may, without the
consent of the Participant, either assume the Company’s rights and obligations under outstanding Options and SARs or substitute
for outstanding Options and SARs substantially equivalent options or share appreciation rights for the Acquiring Corporation’s
Ordinary Shares. Any Options or SARs which are neither assumed or substituted for by the Acquiring Corporation in connection with
the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective
as of the date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option or SAR prior
to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue
to be subject to all applicable provisions of the Award Agreement evidencing such Award except as otherwise provided in such Award
Agreement. Furthermore, notwithstanding the foregoing, if the corporation the shares of which is subject to the outstanding Options
or SARs immediately prior to an Ownership Change Event described in Section 2.1(y)(i) constituting a Change in Control is
the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the
total combined voting power of its voting shares is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b)
of the Code, the outstanding Options and SARs shall not terminate unless the Board otherwise provides in its discretion. 

 

12.3         Effect
of Change in Control on Restricted Share and Other Type of Awards. The Committee may, in its discretion, provide in any Award
Agreement evidencing a Restricted Share or Other Type of Award that, in the event of a Change in Control, the lapsing of any applicable
Vesting Condition, Restriction Period or Performance Goal applicable to the shares subject to such Award held by a Participant
whose Service has not terminated prior to the Change in Control shall be accelerated and/or waived effective immediately prior
to the consummation of the Change in Control to such extent as specified in such Award Agreement; provided, however, that such
acceleration or waiver shall not occur to the extent an Award is assumed or substituted with a substantially equivalent Award
in connection with the Change in Control. Any acceleration, waiver or the lapsing of any restriction that was permissible solely
by reason of this Section 12.3 and the provisions of such Award Agreement shall be conditioned upon the consummation of the
Change in Control.  

 

13.         COMPLIANCE
WITH SECURITIES LAW.

 

The
grant of Awards and the issuance of Ordinary Shares pursuant to any Award shall be subject to compliance with all applicable requirements
of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system
upon which the Ordinary Shares may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award
unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect
with respect to the shares issuable pursuant to the Award or (b) in the opinion of legal counsel to the Company, the shares
issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements
of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall
not have been obtained. As a condition to issuance of any Ordinary Shares, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make
any representation or warranty with respect thereto as may be requested by the Company.

 

    	21

    	 

    

 

14.         TAX
WITHHOLDING.

 

14.1         Tax
Withholding in General. The Company shall have the right to deduct from any and all payments made under the Plan, or to require
the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise or Net Exercise
of an Option, to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be withheld
by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no
obligation to deliver Ordinary Shares, to release Ordinary Shares from an escrow established pursuant to an Award Agreement, or
to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been
satisfied by the Participant. 

 

14.2         Withholding
in Shares. The Company shall have the right, but not the obligation, to deduct from the Ordinary Shares issuable to a Participant
upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole Ordinary Shares
having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the Participating
Company Group. The Fair Market Value of any Ordinary Shares withheld or tendered to satisfy any such tax withholding obligations
shall not exceed the amount determined by the applicable minimum statutory withholding rates. 

 

15.         AMENDMENT
OR TERMINATION OF PLAN.

 

15.1         The
Board or the Committee may amend, suspend or terminate the Plan at any time. However without the approval of the Company’s
shareholders, there shall be (a) no increase in the maximum aggregate number of Ordinary Shares that may be issued under
the Plan (except by operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive
Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders
under any applicable law, regulation or rule. No amendment, suspension or termination of the Plan shall affect any then outstanding
Award unless expressly provided by the Board or the Committee or the termination of the Plan in accordance with Section 16.2 hereof.
In any event, no amendment, suspension or termination of the Plan may adversely affect any then outstanding Award without the
consent of the Participant unless necessary to comply with any applicable law, regulation or rule. 

 

16.         MISCELLANEOUS
PROVISIONS.

 

16.1         Each
Participant shall be given access to information concerning the Company equivalent to that information generally made available
to the Company’s common shareholders.

 

16.2         No
person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or, having been so
selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall confer on any Participant
a right to remain an Employee, Consultant or Director or interfere with or limit in any way any right of a Participating Company
to terminate the Participant’s Service at any time. To the extent that an Employee of a Participating Company other than
the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that the Company
is the Employee’s employer or that the Employee has an employment relationship with the Company.

 

    	22

    	 

    

 

16.3         A
Participant shall have no rights as a Shareholder with respect to any shares covered by an Award until the date of the issuance
of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date
such shares are issued, except as provided in Section 4.2 or another provision of the Plan.

 

16.4         The
Company shall not be required to issue fractional shares upon the exercise or settlement of any Award.

 

16.5         If
any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect,
such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability
of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.

 

16.6         Subject
to local laws and procedures, each Participant may file with the Company a written designation of a beneficiary who is to receive
any benefit under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she
receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in
a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during
the Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s spouse,
the effectiveness of such designation may be subject to the consent of the Participant’s spouse. If a Participant dies without
an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any
remaining unpaid benefits to the Participant’s legal representative.

 

16.7         Participants
shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan
shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement
Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to
create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial
ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder.
Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust
or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested
or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company. The
Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested
or reinvested by the Company with respect to the Plan. Each Participating Company shall be responsible for making benefit payments
pursuant to the Plan on behalf of its Participants or for reimbursing the Company for the cost of such payments, as determined
by the Company in its sole discretion. In the event the respective Participating Company fails to make such payment or reimbursement,
a Participant’s (or other individual’s) sole recourse shall be against the respective Participating Company, and not
against the Company. A Participant’s acceptance of an Award pursuant to the Plan shall constitute agreement with this provision.

 

    	23

    	 

    

  

CBD
ENERGY LIMITED

NOTICE
OF GRANT OF RESTRICTED SHARE UNITS

 

The Participant has been granted the number
of Restricted Share Units set forth below (the “RSUs”) pursuant to the CBD Energy Limited 2014 Equity
Plan (the “Plan”), as follows:

 

	Participant:	_____________________
	Date of Grant:	_____________________
	Number of Restricted Share Units:	_____________________
	Vested Shares:	Subject to your continued status as a Service provider through each of the applicable vesting dates, the RSUs shall become vested, in whole or in part, in accordance with the terms of the Plan, the Award Agreement, this Notice of Grant and the following schedule:
	 	First Anniversary of Vesting Commencement Date        1/4 of the Number of RSUs
	 	Second Anniversary of Vesting Commencement Date   1/4 of the Number of RSUs
	 	Third Anniversary of Vesting Commencement Date       1/4
    of the Number of RSUs
	 	Fourth Anniversary of Vesting Commencement Date     1/4
    of the Number of RSUs

 

Capitalized terms not defined herein shall
have the meaning as set forth in the Plan.

 

[OPTIONAL –To Be Determined
At Time of Grant - Notwithstanding the vesting schedule described above, nor any terms of the Award Agreement and/or Plan,
in the event a Change in Control occurs, and within 18 months of the Change in Control your Service is terminated by the Company
without Cause, or if the Company takes action that results in a material diminution in your position, duties, responsibilities
or compensation without your consent except in connection with the possible termination of your Service for Cause, 100% of the
unvested portion of this Restricted Share Unit shall become immediately vested.

 

Except as provided in the immediately preceding
paragraph,] if the vesting conditions described in the Vested Shares section above are not achieved by the date indicated, the
Restricted Share Unit Award will terminate and Participant’s right to the shares will be forfeited.

 

For the purposes of the Award, “Cause”
means any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for
personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material
failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies
relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation,
destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without
limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information);
(iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation
or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written
notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material
breach by the Participant of any employment or service agreement between the Participant and a Participating Company, which breach
is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty
or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs
the Participant’s ability to perform his or her duties with a Participating Company.

 

By signing below, the Participant agrees
that the Company, its directors, officers and shareholders shall not be held liable for any tax, penalty, interest or cost incurred
by the Participant as a result of such determination by the IRS. The Participant is urged to consult with his or her own tax advisor
regarding the tax consequences of the RSUs, including the application of Section 409A.

 

    	 

    	 

    

By their signatures below, the Company
and the Participant agree that the RSUs are governed by this Grant Notice and by the provisions of the Plan and the Award Agreement,
both of which are attached to and made a part of this document. The Participant acknowledges receipt of copies of the Plan and
the Award Agreement, represents that the Participant has read and is familiar with their provisions, and hereby accepts the RSUs
subject to all of their terms and conditions.

 

	CBD ENERGY LIMITED 	 	PARTICIPANT
	 	 	 
	By:	 	 	 
	 	 	 	Signature
	Its: 	 	 	 
	 	 	Date
	Address:	 	 
	 	 	Address
	 	 	 

 

ATTACHMENTS:   CBD
Energy Limited 2014 Equity Plan, as amended to the Date of Grant; Award Agreement

 

    	 

    	 

    

 

CBD ENERGY
LIMITED

RESTRICTED
SHARE UNIT AGREEMENT

 

CBD Energy Limited
has granted to the Participant named in the Notice of Grant of Restricted Share Units (the “Grant Notice”)
to which this Award Agreement is attached a number of Restricted Share Units (the “RSUs”) pursuant to
the terms and conditions set forth in the Grant Notice and this Award Agreement. The RSUs have been granted pursuant to and shall
in all respects be subject to the terms and conditions of the CBD Energy Limited Equity Plan, as amended to the Date of Grant,
the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt
of, and represents that the Participant has read and is familiar with the terms and conditions of, the Grant Notice, this Award
Agreement and the Plan, (b) accepts the RSUs subject to all of the terms and conditions of the Grant Notice, this Award Agreement
and the Plan, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Grant Notice, this Award Agreement or the Plan.

 

1.            Definitions
and Construction.

 

1.1           Definitions.
Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

 

1.2           Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of this Award Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

2.            Administration.

 

All questions of interpretation
concerning the Grant Notice, this Award Agreement, the Plan or any other form of agreement or other document employed by the Company
in the administration of the Plan or the RSUs shall be determined by the Board. All such determinations by the Board shall be final,
binding and conclusive upon all persons having an interest in the RSUs, unless fraudulent or made in bad faith. Any and all actions,
decisions and determinations taken or made by the Board in the exercise of its discretion pursuant to the Plan or the RSUs or other
agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding
and conclusive upon all persons having an interest in the RSUs. Any Officer shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company
herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election.

 

3.            Vesting.

 

Subject to the limitations
contained herein, the RSUs shall vest as provided in the Grant Notice, provided that vesting shall cease upon the termination of
the Participant’s Service. Any RSUs that have not vested shall be forfeited upon termination of Service.

 

    	 

    	 

    

 

4.            Dividends.

 

The Participant shall
not receive any payment or other adjustment in the number of RSUs for dividends or other distributions that may be made in respect
of the Ordinary Shares to which the RSUs relate.

 

5.            Distribution
of Ordinary Shares. 

 

The Company will deliver
to the Participant a number of Ordinary Shares equal to the number of vested Ordinary Shares subject to the RSUs on the vesting
date or dates provided in the Grant Notice; provided, however, that the Ordinary Shares subject to the RSUs that vest on
or prior to the execution of the Grant Notice shall be delivered as soon as practicable following the date of execution of the
Grant Notice; and provided further, however, that in the event that the Company determines that the Participant is
subject to its policy regarding insider trading of the Company’s Ordinary Shares and any Ordinary Shares subject to the RSUs
are scheduled to be delivered on a day (the “Original Distribution Date”) that does not occur during
an applicable “window period,” as determined by the Company in accordance with such policy, then such shares shall
not be delivered on such Original Distribution Date and shall instead be delivered as soon as practicable within the next applicable
“window period” pursuant to such policy.

 

6.            Number
of Shares.

 

The number of RSUs
may be adjusted from time to time for capitalization adjustments, as provided in Subsection 4.2 of the Plan.

 

7.            Securities
Law Compliance. 

 

The Participant may
not be issued any Ordinary Shares pursuant to the RSUs unless the Ordinary Shares are either (i) then registered under the Securities
Act or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities
Act. The RSUs must also comply with other applicable laws and regulations governing the RSUs, and the Participant shall not receive
such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.

 

8.            Execution
of Documents. 

 

The Participant hereby
acknowledges and agrees that the manner selected by the Company to indicate the Participant’s consent to the Grant Notice
is also deemed to be execution of the Grant Notice and of this Award Agreement. The Participant further agree that such manner
of indicating consent may be relied upon as the Participant’s signature for establishing execution of any documents to be
executed in the future in connection with the RSUs. This Award Agreement shall be deemed to be signed by the Company and the Participant
upon the respective signing by the Company and the Participant of the Grant Notice to which it is attached.

 

    	 

    	 

    

 

9.            RSUs
not a Service Contract. 

 

The RSUs are not an
employment or service contract, and nothing in the RSUs shall be deemed to create in any way whatsoever any obligation on the Participant
to continue in the Service of the Company or Participating Company, or on the part of the Company or Participating Company to continue
such Service. In addition, nothing in the RSUs shall obligate the Company or Participating Companies, their respective shareholders,
boards of directors, Officers or Employees to continue any relationship that the Participant might have as an employee, director
or consultant for the Company or Participating Company.

 

10.          Unsecured
Obligation. 

 

The RSUs are unfunded,
and as a holder of vested number of RSUs, the Participant shall be considered an unsecured creditor of the Company with respect
to the Company’s obligation, if any, to issue Ordinary Shares pursuant to Section 5 of this Award Agreement.

 

11.          Tax
Withholding. 

 

11.1         In
General. At the time this Award Agreement is executed, or at any time thereafter as requested by the Company, the Participant
hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate
provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company, if
any, which arise in connection with the grant or vesting of the RSUs or the issuance of Ordinary Shares in settlement thereof.
The Company shall have no obligation to deliver Ordinary Shares until the tax obligations of the Company have been satisfied by
the Participant.

 

11.2         Withholding
in Securities. The Company may, in its discretion, permit or require the Participant to satisfy all or any portion of the
tax obligations by deducting from the Ordinary Shares otherwise deliverable to the Participant in settlement of the RSUs a number
of Ordinary Shares having a fair market value, as determined by the Company as of the date on which the tax obligations arise,
not in excess of the amount of such tax obligations determined by the applicable withholding rates. In the event that the Company
determines that the tax obligations will not be satisfied by the method described above, the Participant authorizes the designated
plan administrator or any successor plan administrator, to sell a number of Ordinary Shares otherwise deliverable to the Participant
in settlement of the RSUs, which the Company determines is sufficient to generate an amount that meets the tax obligations plus
additional Ordinary Shares, as necessary to account for rounding and market fluctuation, and to pay such tax withholding amounts
to the Company. The Ordinary Shares may be sold as part of a block trade with other Participants of the Plan in which all Participants
receive an average price. Any adverse consequences to the Participant resulting from the procedure permitted under this Section
11.2, including, without limitation, tax consequences, shall be the sole responsibility of the Participant.

 

11.3         Consultation.
The Participant hereby acknowledges that he or she understands that the Participant may suffer adverse tax consequences as a result
of participation in the Plan. The Participant hereby represents that the Participant has consulted with tax consultants in connection
with the Award and that the Participant is not relying on the Company for any tax advice.

 

    	 

    	 

    

 

11.4         Beneficial
Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to
deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the
Company has notice any or all shares acquired by the Participant pursuant to the settlement of the RSUs. Except as provided by
the preceding sentence, a certificate for the shares pursuant to the RSUs shall be registered in the name of the Participant, or,
if applicable, in the names of the heirs of the Participant.

 

12.          Nontransferability
of the RSUs.

 

The RSUs and the rights
and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise)
in any manner otherwise than by will or by the laws of descent or distribution, shall not be subject to sale under execution, attachment,
levy or similar process and may be exercised during the lifetime of the Participant only by the Participant. The terms of the Plan
and the Award Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Participant.

 

13.          Rights
as a Shareholder.

 

The Participant shall
have no rights as a shareholder with respect to any shares related to the RSUs until the date of issuance of the shares pursuant
to the RSUs (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

 

14.          Miscellaneous
Provisions.

 

14.1         Termination
or Amendment.  The Board may terminate or amend the Plan or the RSUs at any time.

 

14.2         Compliance
with Section 409A. The Company intends that income realized by the Participant pursuant to the Plan and this Award
Agreement will not be subject to taxation under Section 409A of the Code. The provisions of the Plan and this Award Agreement shall
be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of the Code. The Company, in its
reasonable discretion, may amend (including retroactively) the Plan and this Award Agreement in order to conform to the applicable
requirements of Section 409A of the Code, including amendments to facilitate the Participant’s ability to avoid taxation
under Section 409A of the Code. However, the preceding provisions shall not be construed as a guarantee by the Company of any particular
tax result for income realized by the Participant pursuant to the Plan or this Award Agreement. In any event, and except for the
responsibilities of the Company set forth in Section 11, no Participating Company shall be responsible for the payment of any applicable
taxes on income realized by the Participant pursuant to the Plan or this Award Agreement.

 

14.3         Fractional
Shares. The Company shall not be required to issue fractional shares upon the settlement of the RSUs.

 

    	 

    	 

    

 

14.4         Further
Instruments. The parties hereto agree to execute such further instruments and to take such further action as may
reasonably be necessary to carry out the intent of this Award Agreement.

 

14.5         Binding
Effect. Subject to the restrictions on transfer set forth herein, this Award Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.

 

14.6         Delivery
of Documents and Notices. Any document relating to participation in the Plan, or any notice required or permitted
hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Award Agreement provides
for effectiveness only upon actual receipt of such notice) upon personal delivery electronic delivery at the e-mail address, if
any, provided for the Participant by the Participating Company, or, upon deposit in the U.S. Post Office or foreign postal service,
by registered or certified mail, or with a nationally recognized overnight courier service with postage and fees prepaid, addressed
to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate
in writing from time to time to the other party.

 

(a)          Description
of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant
Notice, this Award Agreement, and any reports of the Company provided generally to the Company’s shareholders, may be delivered
to the Participant electronically. In addition, if permitted by the Company, the Participant may deliver electronically the Grant
Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.
Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the
internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means
of electronic delivery specified by the Company.

 

(b)          Consent
to Electronic Delivery. The Participant acknowledges that the Participant has read Section 14.6(a) of this Award
Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant
Notice, as described in Section 14.6(a). The Participant acknowledges that he or she may receive from the Company a paper copy
of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic
delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated
third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The
Participant may revoke his or her consent to the electronic delivery of documents described in Section 14.6(a) or may change the
electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at
any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic
mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described
in Section 14.6(a).

 

    	 

    	 

    

 

14.7         Integrated
Agreement. The Grant Notice, this Award Agreement and the Plan, together with any employment, service or other agreement
with the Participant and a Participating Company referring to the RSUs, shall constitute the entire understanding and agreement
of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede
any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating
Company Group with respect to such subject matter. To the extent contemplated herein or therein, the provisions of the Grant Notice,
this Award Agreement and the Plan shall survive any vesting of the RSUs and shall remain in full force and effect.

 

14.8         Applicable
Law. This Award Agreement shall be governed by the laws of the _________ as such laws are applied to agreements
between ___________ residents entered into and to be performed entirely within ____________.

 

14.9         Counterparts.
The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

    	 

    	 

    

  

CBD
ENERGY LIMITED

NOTICE
OF GRANT OF SHARE OPTION

 

The Participant has been granted an option
(the “Option”) to purchase certain shares of CBD Energy Limited (the “Company”)
Ordinary Shares pursuant to the CBD Energy Limited Equity Plan (the “Plan”), as follows:

 

	Participant:	________________________
	Date of Grant:	________________________
	Number of Option Shares:	________________________
	Exercise Price:	$_______________________
	Initial Vesting Date:	The date one (1) year after [vesting commencement date]
	Option Expiration Date:	The date ten (10) years after the Date of Grant
	Tax Status of Option:	________________ Share Option.  (Enter “Incentive” or “Nonstatutory.”  If blank, this Option will be a Nonstatutory Share Option.)
	Vested Shares:	Except as provided in the Award Agreement, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined by multiplying the Number of Option Shares by the “Vested Ratio” determined as of such date as follows:

 

	 	 	 	Vested Ratio	 
	 	On Initial Vesting Date, provided the Participant’s Service has not terminated prior to such date	 	[1/4]	 
	 	 	 	 	 
	 	Plus	 	 	 
	 	 	 	 	 
	 	For each additional full month of the Participant’s continuous Service from Initial Vesting Date until the Vested Ratio equals 1/1, an additional	 	[1/48]	 

 

Capitalized terms not defined herein shall
have the meaning as set forth in the 2014 Equity Plan.

 

[OPTIONAL - To Be Determined
At Time Of Grant - Notwithstanding the vesting schedule described above, nor any terms of the Award Agreement and/or Plan,
in the event a Change in Control occurs, and within 18 months of the Change in Control your Service is terminated by the Company
without Cause, or if the Company takes action that results in a material diminution in your position, duties, responsibilities
or compensation without your consent except in connection with the possible termination of your Service for Cause, 100% of the
unvested portion of this Option shall become immediately vested and exercisable.

 

Except as provided in the immediately preceding
paragraph,] upon any other termination of your Service, any portion of the Option that is not vested and exercisable as of such
date of termination shall automatically expire in accordance with Section 7 of the Award Agreement.

 

For the purposes of the Award Award, “Cause”
means any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for
personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material
failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies
relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation,
destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without
limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information);
(iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation
or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written
notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material
breach by the Participant of any employment or service agreement between the Participant and a Participating Company, which breach
is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty
or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs
the Participant’s ability to perform his or her duties with a Participating Company.

 

The Exercise Price represents an amount
the Company believes to be no less than the fair market value of a Ordinary Share as of the Date of Grant, determined in good faith
in compliance with the requirements of Section 409A of the Code. However, there is no guarantee that the Internal Revenue Service
will agree with the Company’s determination. A subsequent IRS determination that the Exercise Price is less than such fair
market value could result in adverse tax consequences to the Participant. By signing below, the Participant agrees that the Company,
its Directors, Officers and shareholders shall not be held liable for any tax, penalty, interest or cost incurred by the Participant
as a result of such determination by the IRS. The Participant is urged to consult with his or her own tax advisor regarding the
tax consequences of the Option, including the application of Section 409A.

 

    	 

    	 

    

 

 

By their signatures below, the Company
and the Participant agree that the Option is governed by this Grant Notice and by the provisions of the Plan and the Award Agreement,
both of which are attached to and made a part of this document. The Participant acknowledges receipt of copies of the Plan and
the Award Agreement, represents that the Participant has read and is familiar with their provisions, and hereby accepts the Option
subject to all of their terms and conditions.

 

	CBD Energy Limited	PARTICIPANT
	 	 
	By: __________________________________________	__________________________________________
	 	Signature
	Its: __________________________________________	__________________________________________
	 	Date
	Address:	 	__________________________________________
	 	 	Address
	 	 	__________________________________________

 

ATTACHMENTS: CBD
Energy Limited 2014 Equity Plan, as amended to the Date of Grant; Award Agreement and Exercise Notice

 

    	 

    	 

    

 

CBD
Energy Limited

AWARD
AGREEMENT

 

CBD Energy Limited has granted to the Participant
named in the Notice of Grant of Share Option (the “Grant Notice”) to which this Award Agreement
is attached the “Option to purchase certain Ordinary Shares upon the terms and conditions set forth in the Grant Notice and
this Award Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions
of the CBD Energy Limited Equity Plan, as amended to the Date of Grant, the provisions of which are incorporated herein by reference.
By signing the Grant Notice, the Participant: (a) acknowledges receipt of, and represents that the Participant has read and is
familiar with the terms and conditions of, the Grant Notice, this Award Agreement and the Plan, (b) accepts the Option subject
to all of the terms and conditions of the Grant Notice, this Award Agreement and the Plan, and (c) agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any questions arising under the Grant Notice, this Award
Agreement or the Plan.

 

		1.	Definitions
and Construction.

 

1.1.        Definitions.
Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

 

1.2.        Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of this Award Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

		2.	Tax Consequences.

 

2.1.        Tax Status
of Option. This Option is intended to have the tax status designated in the Grant Notice.

 

a.        Incentive
Stock Option. If the Grant Notice so designates, this Option is intended to be an Incentive Stock Option within the meaning
of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Participant
should consult with the Participant’s own tax advisor regarding the tax effects of this Option and the requirements necessary
to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.
(NOTE TO PARTICIPANT: If the Option is exercised more than three (3) months after the date on which you cease to be an Employee
(other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will
be treated as a Nonstatutory Share Option and not as an Incentive Stock Option to the extent required by Section 422 of the Code.)

 

b.        Nonstatutory
Share Option. If the Grant Notice so designates, this Option is intended to be a Nonstatutory Share Option and shall not
be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.

 

    	1

    	 

    

  

2.2        ISO Fair
Market Value Limitation. If the Grant Notice designates this Option as an Incentive Stock Option, then to the extent that
the Option (together with all Incentive Stock Options granted to the Participant under all stock option plans of the Participating
Company Group, including the Plan) becomes exercisable for the first time during any calendar year for Ordinary Shares having a
Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such Options which exceeds such amount will
be treated as Nonstatutory Share Options. For purposes of this Subsection 2.2, options designated as Incentive Stock Options are
taken into account in the order in which they were granted, and the Fair Market Value of Ordinary Shares is determined as of the
time the option with respect to such share is granted. If the Code is amended to provide for a different limitation from that set
forth in this Subsection 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or
permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Share
Option in part by reason of the limitation set forth in this Subsection 2.2, the Participant may designate which portion of such
Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the
Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the
exercise of the Option. (NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that is, the Exercise Price multiplied
by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted
pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than $100,000, you should contact
the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.)

 

		3.	Administration.

 

All questions of interpretation concerning
the Grant Notice, this Award Agreement, the Plan or any other form of agreement or other document employed by the Company in the
administration of the Plan or the Option shall be determined by the Board. All such determinations by the Board shall be final,
binding and conclusive upon all persons having an interest in the Option, unless fraudulent or made in bad faith. Any and all actions,
decisions and determinations taken or made by the Board in the exercise of its discretion pursuant to the Plan or the Option or
other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final,
binding and conclusive upon all persons having an interest in the Option. Any Officer shall have the authority to act on behalf
of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated
to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election.

 

		4.	Exercise
of the Option.

 

4.1        Right
to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date
and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less
the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more Ordinary
Shares than the Number of Options, adjusted pursuant to Section 9.

 

 

    	2

    	 

    

 

 

4.2        Method
of Exercise. Exercise of the Option shall be by means of electronic or written notice (the “Exercise Notice”)
in a form authorized by the Company. An electronic Exercise Notice must be digitally signed or authenticated by the Participant
in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including
a third-party administrator designated by the Company). In the event that the Participant is not authorized or is unable to provide
an electronic Exercise Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which shall
be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile
transmission, or by such other means as the Company may permit, to the Company, or an authorized representative of the Company
(including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state
the Participant’s election to exercise the Option, the number of Ordinary Shares for which the Option is being exercised
and such other representations and agreements as to the Participant’s investment intent with respect to such Ordinary Shares
as may be required pursuant to the provisions of this Award Agreement. Further, each Exercise Notice must be received by the Company
prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise
Price for the number of Ordinary Shares being purchased. The Option shall be deemed to be exercised upon receipt by the Company
of such electronic or written Exercise Notice and the aggregate Exercise Price.

 

4.3        Payment
of Exercise Price.

 

a.        Forms of
Consideration Authorized. Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise
price for the number of Ordinary Shares being purchased pursuant to any Option shall be made (i) in cash, by check or in cash equivalent,
(ii) by tender to the Company, or attestation to the ownership, of Ordinary Shares owned by the Participant having a Fair Market
Value not less than the exercise price, (iii) by delivery of a properly executed notice of exercise together with irrevocable instructions
to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares
being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions
of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a “Cashless
Exercise”), or (iv) by such other consideration as may be approved by the Board from time to time to the extent permitted
by applicable law, or (v) by any combination thereof. The Board may at any time or from time to time grant Options which do not
permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one
or more forms of consideration.

 

4.4        Tax Withholding.

 

(a)        In General.
At the time the Award Agreement is executed, or at any time thereafter as requested by the Company, the Participant
hereby authorizes withholding from payroll and any other amounts payable to the Participant,
and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company, if any, which arise in connection with the grant, vesting or exercise of the Option or the issuance
of Ordinary Shares in settlement thereof. The Company shall have no obligation to deliver Ordinary Shares until the tax obligations
of the Company have been satisfied by the Participant.

 

    	3

    	 

    

 

 

(b)        Withholding
in Securities. The Company may, in its discretion, permit or require the Participant to satisfy all or any portion of the
tax obligations by deducting from the Ordinary Shares otherwise deliverable to the Participant in settlement of the Option a number
of Ordinary Shares having a fair market value, as determined by the Company as of the date on which the tax obligations arise,
not in excess of the amount of such tax obligations determined by the applicable withholding rates. In the event that the Company
determines that the tax obligations will not be satisfied by the method described above, Participant authorizes the designated
plan administrator or any successor plan administrator, to sell a number of Ordinary Shares that are purchased under the Option,
which the Company determines is sufficient to generate an amount that meets the tax obligations plus additional Ordinary Shares,
as necessary. To account for rounding and market fluctuation, and to pay such tax withholding amounts to the Company. The Ordinary
Shares may be sold as part of a block trade with other Participants of the Plan in which all Participants receive an average price.
Any adverse consequences to the Participant resulting from the procedure permitted under this Subsection 4.4, including, without
limitation, tax consequences, shall be the sole responsibility of the Participant.

 

(c)        Consultation.
The Participant hereby acknowledges that he or she understands that the Participant may suffer adverse tax consequences as a result
of the Participant’s exercise of the Option or disposition of the Ordinary Shares. The Participant hereby represents that
the Participant has consulted with any tax consultants the Participant deems advisable in connection with the exercise of the
Option or disposition of the Ordinary Shares and that the Participant is not relying on the Company for any tax advice.

 

4.5        Beneficial
Ownership of Ordinary Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion,
to deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the
Company has notice any or all Ordinary Shares acquired by the Participant pursuant to the exercise of the Option. Except as provided
by the preceding sentence, a certificate for the Ordinary Shares as to which the Option is exercised shall be registered in the
name of the Participant, or, if applicable, in the names of the heirs of the Participant.

 

4.6        Restrictions
on Grant of the Option and Issuance of Ordinary Shares. The grant of the Option and the issuance of Ordinary Shares upon
exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect
to such securities. The Option may not be exercised if the issuance of Ordinary Shares upon exercise would constitute a violation
of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange
or market system upon which the Ordinary Shares may then be listed. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance
and sale of any Ordinary Shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue
or sell such Ordinary Shares as to which such requisite authority shall not have been obtained. As a condition to the exercise
of the Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested
by the Company.

    	4

    	 

    

  

4.7        Fractional
Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option.

 

5.           Nontransferability
of the Option.

 

During the lifetime of the Participant,
the Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. The Option
shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment
by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.
Following the death of the Participant, the Option, to the extent provided in Section 7, may be exercised by the Participant’s
legal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable
laws of descent and distribution.

 

6.          Termination
of the Option.

 

The Option shall terminate and may no longer
be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on
the last date for exercising the Option following termination of the Participant’s Service as described in Section 7, or
(c) a Change in Control to the extent provided in Section 8.

 

7.          Effect
of Termination of Service.

 

7.1        Option
Exercisability. The Option shall terminate immediately upon the Participant’s termination of Service to the extent
that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then
vested only during the applicable time period as determined below and thereafter shall terminate.

 

a.        Disability.
If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised
and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant
(or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the
date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

 

b.        Death.
If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s
legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at
any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but
in any event no later than the Option Expiration Date. The Participant’s Service shall be deemed to have terminated on account
of death if the Participant dies within three (3) months after the Participant’s termination of Service.

 

    	5

    	 

    

 

 

c.        Termination
for Cause. Notwithstanding any other provision of this Award Agreement, if the Participant’s Service is terminated
for Cause, the Option shall terminate and cease to be exercisable immediately upon such termination of Service.

 

d.        Other Termination
of Service. If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option,
to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participant’s Service
terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which
the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

 

7.2        Extension
if Exercise Prevented by Law. Notwithstanding the foregoing other than termination of Service for Cause, if the exercise
of the Option within the applicable time periods set forth in Subsection 7.1 is prevented by the provisions of Subsection 4.6,
the Option shall remain exercisable until the later of (a) thirty (30) days after the date such exercise first would no longer
be prevented by such provisions or (b) the end of the applicable time period under Subsection 7.1, but in any event no later than
the Option Expiration Date.

 

8.          Effect
of Change in Control.

 

In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the
“Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect
the Company’s rights and obligations under all or any portion of the Option or substitute for all or any portion of the Option
a substantially equivalent option for the Acquiror’s stock. For purposes of this Section 8, the Option or any portion thereof
shall be deemed assumed if, following the Change in Control, the Option confers the right to receive, subject to the terms and
conditions of the Plan and this Award Agreement, for each Ordinary Share subject to such portion of the Option immediately prior
to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which
a holder of an Ordinary Share on the effective date of the Change in Control was entitled; provided, however, that if such consideration
is not solely common stock of the Acquiror, the Board may, with the consent of the Acquiror, provide for the consideration to be
received upon the exercise of the Option for each Share to consist solely of common stock of the Acquiror equal in Fair Market
Value to the per share consideration received by holders of Ordinary Shares pursuant to the Change in Control. If any portion of
such consideration may be received by holders of Ordinary Shares pursuant to the Change in Control on a contingent or delayed basis,
the Board may, in its discretion, determine such Fair Market Value per share as of the time of the Change in Control on the basis
of the Board’s good faith estimate of the present value of the probable future payment of such consideration. The Option
shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that
the Option is neither assumed or continued by the Acquiror in connection with the Change in Control nor exercised as of the date
of the Change in Control. Notwithstanding the foregoing, Ordinary Shares acquired upon exercise of the Option prior to the Change
in Control and any consideration received pursuant to the Change in Control with respect to such Ordinary Shares shall continue
to be subject to all applicable provisions of this Award Agreement except as otherwise provided herein.

    	6

    	 

    

 

 

9.          Rights
as a Shareholder, Director, Employee or Consultant.

 

The Participant shall have no rights as
a shareholder with respect to any Ordinary Shares covered by the Option until the date of the issuance of the Ordinary Shares for
which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date
is prior to the date the Ordinary Shares are issued, except as provided in the Plan. If the Participant is an Employee, the Participant
understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating
Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing
in this Award Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere
in any way with any right of the Participating Company Group to terminate the Participant’s Service as a Director, an Employee
or Consultant, as the case may be, at any time.

 

10.          Notice
of Sales Upon Disqualifying Disposition.

 

The Participant shall dispose of the Ordinary
Shares acquired pursuant to the Option only in accordance with the provisions of this Award Agreement. In addition, if the Grant
Notice designates this Option as an Incentive Stock Option, the Participant shall (a) promptly notify the plan administrator
for the Company if the Participant disposes of any of the Ordinary Shares acquired pursuant to the Option within one (1) year after
the date the Participant exercises all or part of the Option or within two (2) years after the Date of Grant and (b) provide the
Company with a description of the circumstances of such disposition. Until such time as the Participant disposes of such Ordinary
Shares in a manner consistent with the provisions of this Award Agreement, unless otherwise expressly authorized by the Company,
the Participant shall hold all Ordinary Shares acquired pursuant to the Option in the Participant’s name (and not in the
name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after
Date of Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate
representing Ordinary Shares acquired pursuant to the Option requesting the transfer agent for the Company’s Ordinary Shares
to notify the Company of any such transfers. The obligation of the Participant to notify the Company of any such transfer shall
continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.

 

11.          Miscellaneous
Provisions.

 

11.1        Termination
or Amendment. The Board may terminate or amend the Plan or the Option at any time; provided, however, that except as provided
in Section 8 in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any unexercised
portion hereof without the consent of the Participant unless such termination or amendment is necessary to comply with any applicable
law or government regulation, including, but not limited to Section 409A of the Code. No amendment or addition to this Award Agreement
shall be effective unless in writing.

 

    	7

    	 

    

  

11.2        Compliance
with Section 409A. The Company intends that income realized by the Participant pursuant to the Plan and this Award Agreement
will not be subject to taxation under Section 409A of the Code. The provisions of the Plan and this Award Agreement shall be interpreted
and construed in favor of satisfying any applicable requirements of Section 409A of the Code. The Company, in its reasonable discretion,
may amend (including retroactively) the Plan and this Agreement in order to conform to the applicable requirements of Section 409A
of the Code, including amendments to facilitate the Participant’s ability to avoid taxation under Section 409A of the Code.
However, the preceding provisions shall not be construed as a guarantee by the Company of any particular tax result for income
realized by the Participant pursuant to the Plan or this Award Agreement. In any event, and except for the responsibilities of
the Company set forth in Subsection 4.4., no Participating Company shall be responsible for the payment of any applicable taxes
on income realized by the Participant pursuant to the Plan or this Award Agreement.

 

11.3        Further
Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably
be necessary to carry out the intent of this Award Agreement.

 

11.4        Binding
Effect. Subject to the restrictions on transfer set forth herein, this Award Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.

 

11.5        Delivery
of Documents and Notices. Any document relating to participation in the Plan, or any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given (except to the extent that this Award Agreement provides for effectiveness
only upon actual receipt of such notice) upon personal delivery electronic delivery at the e-mail address, if any, provided for
the Participant by the Participating Company, or, upon deposit in the U.S. Post Office or foreign postal service, by registered
or certified mail, or with a nationally recognized overnight courier service with postage and fees prepaid, addressed to the other
party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing
from time to time to the other party.

 

a.        Description
of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice,
this Award Agreement, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to
the Participant electronically. In addition, if permitted by the Company, the Participant may deliver electronically the Grant
Notice and Exercise Notice called for by Section 4.2 to the Company or to such third party involved in administering the Plan as
the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery
of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document
via e-mail or such other means of electronic delivery specified by the Company.

 

    	8

    	 

    

 

 

b.        Consent to
Electronic Delivery. The Participant acknowledges that the Participant has read Subsection 11.5(a) of this Award Agreement
and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice
and Exercise Notice, as described in Subsection 11.5(a). The Participant acknowledges that he or she may receive from the Company
a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or
in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the
attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide
the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery
of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Subsection
11.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic
mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service
or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents
described in Subsection 11.5(a).

 

11.6        Integrated
Agreement. The Grant Notice, this Award Agreement and the Plan, together with any employment, service or other agreement
with the Participant and a Participating Company referring to the Option, shall constitute the entire understanding and agreement
of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede
any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating
Company Group with respect to such subject matter. To the extent contemplated herein or therein, the provisions of the Grant Notice,
the Award Agreement and the Plan shall survive any exercise of the Option and shall remain in full force and effect.

 

11.7        Applicable
Law. This Award Agreement shall be governed by the laws of the State of ________ as such laws are applied to agreements
between ________ residents entered into and to be performed entirely within_______.

 

11.8        Counterparts.
The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

  

    	9

    	 

    

 

	__Incentive Stock Option	Participant:	_____________________________
	__Nonstatutory Share Option	 	 

 

Date: _____________________________

 

ORDINARY SHARES OPTION EXERCISE NOTICE

CBD Energy Limited

Attention: ________________

 

Ladies and Gentlemen:

 

1.        Option.
I was granted an option (the “Option”) to purchase shares of the Ordinary Shares of CBD Energy Limited
(the “Company”) pursuant to the Company’s Equity Plan (the “Plan”), my
Notice of Grant of Share Option (the “Grant Notice”) and my Award Agreement (the “Award Agreement”)
as follows:

	 	Date of Grant:	_____________________
	 	Number of Option Shares:	_____________________
	 	Exercise Price per Share:	$____________________

 

2.        Exercise
of Option. I hereby elect to exercise the Option to purchase the following number of Ordinary Shares, all of which are
Vested Shares, in accordance with the Grant Notice and the Award Agreement:

	 	Total Shares Purchased:	_____________________
	 	Total Exercise Price (Total Shares  X  Price per Share)	$____________________

 

3.        Payments.
I enclose payment in full of the total exercise price for the Ordinary Shares in the following form(s), as authorized by my Award
Agreement:

	 	 __  Cashless Exercise	 
	 	 __  Cash / Check:	$_____________________
	 	 __  Tender of Company Ordinary Shares:	Contact Plan Administrator

 

4.        Tax Withholding.
I authorize payroll withholding, net-share withholding and otherwise will make adequate provision for the federal, state, local
and foreign tax withholding obligations of the Company, if any, in connection with the Option.

 

5.        Participant
Information.

 

	 	My address is:	 
	 	 	 
	 	My Social Security Number is:	            _____________________________________________

 

6.        Notice
of Disqualifying Disposition. If the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief
Financial Officer of the Company if I transfer any of the Ordinary Shares within one (1) year from the date I exercise all or part
of the Option or within two (2) years of the Date of Grant.

 

7.        Tax Consultation.
I hereby acknowledge that I understand that I may suffer adverse tax consequences as a result ofmy purchase or disposition of the
Ordinary Shares. I hereby represent that I am not relying on the Company for any tax advice.

 

8.        Binding
Effect. I understand that I am purchasing the Shares pursuant to the terms of the Plan, the Grant Notice and my Award Agreement,
copies of which I have received and carefully read and understand. This Agreement shall inure to the benefit of and be binding
upon my heirs, executors, administrators, successors and assigns.

 

	 	Very truly yours,
	 	 
	 	____________________________________
	 	(Signature)

 

Receipt of the above is hereby acknowledged.

CBD Energy Limited

 

	By: 	 	 
	Title: 	 	 
	Dated:MEMORANDUM OF UNDERSTANDING

 

This binding Memorandum
of Understanding (“MOU”) dated March 19, 2014 between Protea Biosciences Group, Inc., a Delaware corporation
with offices at 955 Hartman Run Road, Morgantown, West Virginia (the “Parent”), Protea Biosciences, Inc., a
Delaware corporation (“Protea Sub”), and ProteaBio Europe SAS, organized under the laws of France with offices
at 290 chemin de Saint Dionisy-Jardin des Entreprises, 30980 Langlade, France (the “Subsidiary” and, together
with the Parent and Protea Sub, the “Seller”), on the one hand, and BioPharma d’Azur, Inc., a Delaware
corporation with offices at 1410 Broadway, 23rd Fl., New York, NY 10018 (the “Buyer” or “BioPharma”,
together with the Parent and the Subsidiary, the “Parties”), on the other hand, sets forth certain understandings,
rights and obligations of the Seller and the Buyer with respect to the proposed sale of substantially all of the assets of the
Subsidiary (the “Assets”) to the Buyer (the “Acquisition”).

 

1.The
Option

 

(a)Within
45 days from the date of this MOU (the “MOU Termination Date”), the Parties will enter into an exclusive option
agreement in substantially the form attached hereto as Appendix A, with such changes and modifications as the parties may
agree to (the “Option Agreement”) pursuant to which the Seller will grant the Buyer a 90-day option to acquire
the Assets on the terms set forth in this MOU in exchange for the payment by the Buyer to the Seller of a non-refundable amount
equal to U.S. $300,000 (the “Option Fee”).

 

(b)Upon
the execution of the Option Agreement and the payment of the Option Fee to the Seller, the Parties shall agree to prepare definitive
documents, including an asset purchase agreement (the “APA”), to effect the transfer of the Assets to the Buyer.

 

(c)The
exercise of the Option and the consummation of the Acquisition in accordance with the terms of the definitive APA will be conditioned
upon the Buyer providing evidence to the Seller that it has raised gross proceeds from an equity financing of not less than $300,000
(the “First Funding Amount”), excluding the Option Fee. Upon the consummation of the Acquisition pursuant to
the definitive APA, the Buyer shall deliver to the Parent payment equal to the First Funding Amount.

 

(d)In
the event the Option Agreement is terminated or expires in accordance with the terms of the Option Agreement, as a result of Buyer’s
determination not to exercise the Option, or otherwise, the Parent agrees that it will issue to the Buyer, or its designees, such
number of shares of the Parent’s common stock that is equal to the Option Fee divided by the greater of (i) $0.55 and (ii)
the twenty (20) day volume weighted average price of the Parent’s shares of common stock as reported by Bloomberg L.P., if
applicable (the “Conversion Price”). The Conversion Price shall be subject to appropriate and proportionate
adjustment for adjustment for stock dividends payable in shares of, forward or reverse stock splits
and other subdivisions and combinations of, and recapitalizations and like occurrences with respect to the common stock.

 

2.Terms
of the Acquisition 

 

(a)The Assets will
consist of all of the product rights, intellectual property, know how, materials, data, facilities and personnel relating to the
pharmaceutical research and development projects and activities conducted by or through the Subsidiary which shall be specifically
set forth on a schedule to the APA and will include an assignment of the Seller’s rights, title and interest in and to the
Amended and Restated Joint Research Agreement, by and among the Parent, the Subsidiary and Laboratories Mayoly Spindler SAS, dated
March 22, 2010, as amended (the “Mayoly Agreement”). The Buyer will acquire the Assets in exchange for the issuance
to the Parent of shares of convertible preferred stock of the Buyer (the “Preferred Shares”). The Preferred
Shares will automatically convert at a ratio (the “Conversion Ratio”) that shall result in the Parent owning
no less than thirty-three percent (33%) of the issued and outstanding shares of common stock of the Buyer on a fully diluted basis
(assuming conversion of the Preferred Shares and subject to any adjustment as provided below) (the “Conversion Shares”)
upon the consummation of a transaction that results in BioPharma becoming either a public reporting company that files (voluntarily
or otherwise) reports with the Securities and Exchange Commission pursuant to the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (whether by means of an initial public offering, reverse merger, self-registration or otherwise)
or a public trading company that is quoted or listed on any U.S. securities exchange or quotation service (“Public Event”);
provided, that prior to the Public Event the Buyer shall have raised in an equity financing (“Subsequent Financing”)
no less than an aggregate of $6,000,000 (“Subsequent Financing Amount”) at a pre-money valuation greater than
$12,000,000. For a period beginning upon the closing of the Acquisition until the closing of the Subsequent Financing, in the event
that BioPharma issues or sells any shares of common stock, or other securities of BioPharma that are convertible, exercisable or
otherwise exchangeable for shares of BioPharma common stock at a price per share that is determined by a pre-money valuation of
less than $12,000,000, the Conversion Ratio of the Preferred Shares shall be adjusted on a full ratchet basis. Following the Subsequent
Financing, upon any subsequent issuance of BioPharma common stock the number of shares of common stock into which the Preferred
Shares shall be converted, will be adjusted on a pro-rata basis together with all other holders of BioPharma common stock.

 

    	 

    	 

    

 

(b)In
the event the Buyer has not provided evidence to the Seller that it has raised gross proceeds from an equity financing of at least
$2,000,000 (the “Funding Threshold Amount”) on or before the six month anniversary of the closing of the Acquisition,
the Assets, together with any funds the Buyer has raised in such equity financing and any subsequent financing, will revert to
the Seller and the Preferred Shares will be forfeited by the Parent to the Buyer (the “Forfeiture Date”). In
such event, the Parent will issue to the Buyer shares of its common stock at the Conversion Price for the total dollar amount raised
through the Forfeiture Date, including the Option Fee and First Funding Amount. Upon satisfaction of the Funding Threshold Amount,
all rights of the Seller to the Assets will terminate.

 

(c)Prior
to conversion or forfeiture, the Preferred Shares will vote together with the Buyer’s common stock on all matters to be voted
on by shareholders and will represent thirty-three percent (33%) of the outstanding voting stock of BioPharma, except as may be
adjusted as set forth in Section 2(b) herein. The Preferred Shares will have no other preferences over the common stock.

 

(d)Upon
the sale or transfer of the Assets by the Buyer, whether in connection with a sale of assets, merger, or other business combination,
at any time following the consummation of the Acquisition, the Parent will be entitled to ten percent (10%) of the aggregate net
proceeds received by the Buyer in connection with such sale.

 

(e)Upon
the closing of the Acquisition, the Parent will be entitled to the following royalty and milestone payments from the Buyer:

 

(i)$2,000,000 payable upon receipt
of the first FDA approval;

(ii)2.5% of annual net sales up to $100,000,000; and

(iii)1.5% of annual net sales in excess of $100,000,000.

 

(f)So
long as the Parent owns at least twenty percent (20%) of the outstanding shares of common stock of the Buyer (assuming conversion
of the Preferred Shares), the Parent will have a right to designate one member of the Buyer’s board of directors.

 

(g)The
Seller will be granted customary piggy-back registration rights covering the shares of common stock issuable upon conversion of
the Preferred Shares exercisable by the Seller any time following the Public Event, subject to standard underwriter and SEC cutbacks.

 

    	2

    	 

    

 

3.Representations
and Other Matters

 

(a)Following
execution of this MOU, the Seller will allow the Buyer to conduct such due diligence relating to the Assets as the Buyer deems
necessary or desirable in order to effectuate the transactions contemplated hereby.

 

(b)The
Seller represents that the Mayoly Agreement is in full force and effect and that the Seller is not in breach or violation of the
terms of agreement, other than those which have been waived.

 

(c)On
or prior to the closing of the Acquisition in accordance with the APA, BioPharma shall have entered into an employment agreement
with a person mutually agreed to by the parties to serve as the Buyer’s Chief Executive Officer.

 

(d)The
Buyer will adopt a stock incentive plan covering 10% of its outstanding equity and will provide for option grants to members of
management in amounts to be mutually agreed upon by the Parties.

 

(e)The
Buyer agrees to use its best commercial efforts to raise $3,000,000 of gross proceeds in excess of the Funding Threshold Amount
on or prior to the first anniversary of the exercise of the Option. The Parent will use commercially reasonable efforts to assist
in such capital raising efforts if requested by the Buyer.

 

(f)The
Parent will provide accounting and administrative support as reasonably requested by the Buyer until the earlier of the (A) the
one year anniversary of the closing of the Acquisition pursuant to the APA or (B) the Forfeiture Date.

 

(g)Upon
the closing of the Acquisition, the Parties shall have received all board and shareholder approvals and other consents necessary
to consummate the Acquisition, including the assignment of the Mayoly Agreement.

 

4.General Provisions

 

(a)This MOU
shall terminate and the parties shall have no further rights or obligations hereunder upon the first to occur of any of the following
events: (i) Buyer shall provide the Seller with written notice of its election to terminate this Agreement; (ii) at the election
of either party, if the other party has (A) breached any of its representations, warranties or covenants contained herein or (B)
failed to perform any of its material obligations hereunder and has not cured such breach or failure within twenty (20) days after
written notice by the other party thereof; (iii) the MOU Termination Date or the (iv) the execution of the Option Agreement.

 

(b)This MOU may be
executed in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one
and the same agreement. Delivery by fax or electronic image of an executed counterpart of a signature page to the MOU shall be
effective as delivery of an original executed counterpart of this MOU.

 

(c)In the event that
any one or more of the provisions of this MOU shall be held invalid, illegal or unenforceable in any respect, or the validity,
legality and enforceability of any one or more of the provisions contained herein shall be held to be excessively broad as to duration,
activity or subject, such provision shall be construed by limiting and reducing such provision so as to be enforceable to the maximum
extent compatible with applicable law.

 

(d)This
MOU and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto: (i) constitute
the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter hereof; (ii) are not intended to confer upon any other
person any rights or remedies hereunder, except as specifically provided in this MOU; and (iii) shall not be assigned by operation
of law or otherwise except as otherwise specifically provided. No representations, warranties, inducements, promises or agreements,
oral or written, by or among the parties not contained herein shall be of any force of effect. The MOU and its rights and obligations
hereunder may not be assigned without the explicit prior written consent of the other Party, which may be withheld for any reason
or no reason.

 

    	3

    	 

    

 

(e)This MOU shall
be governed by and construed in accordance with the laws of the State of New York, without regard to the laws that might otherwise
govern under applicable principles of conflicts of law. Each of the parties hereto irrevocably consents to the exclusive jurisdiction
of the federal court for the Southern District of New York and the New York State Supreme Court located in New York County, New
York, in connection with any matter based upon or arising out of this MOU or the matters contemplated herein, and also agrees that
process may be served upon them in any manner authorized by the laws of the State of New York for such persons and waives and covenants
not to assert or plead any objection which they might otherwise have to such jurisdiction and such process.

 

 

[signature page follows]

 

    	4

    	 

    

 

The parties have executed
this MOU as of the date first above written.

 

	 	PROTEA BIOSCIENCES GROUP, INC.
	 	 	 
	 	By:	/s/ Stephen Turner
	 	 	Stephen Turner, Chief Executive Officer
	 	 	 
	 	 	 
	 	PROTEA BIOSCIENCES, INC.
	 	 	 
	 	By:	/s/ Stephen Turner
	 	 	Stephen Turner, Chief Executive Officer
	 	 	 
	 	 	 
	 	PROTEABIO EUROPE SAS
	 	 	 
	 	By:	/s/ Daniel Dupret
	 	 	Daniel Dupret, President
	 	 	 
	 	 	 
	 	BIOPHARMA D’AZUR, INC.
	 	 	 
	 	By: 	/s/ Matthew Balk
	 	 	Matthew Balk, President

  

    	5

    	 

    

 

Appendix A

 

Form of Option Agreement

 

    	6

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