Document:

Exhibit 10.4 - 03.31.2014 performance units ROE

Exhibit 10.4

CNO FINANCIAL GROUP, INC.

Re:    Grant of Performance Share Award
CNO Financial Group, Inc., a Delaware corporation (the "Company"), is pleased to advise you that pursuant to the Company's Amended and Restated Long-Term Incentive Plan (the "Plan"), the Company has granted you an award of the number of performance share units set forth on the last page of this agreement (the "Performance Shares"), effective as of the date displayed on the last page of this agreement (the "Grant Date"), subject to the terms and conditions of the Plan and the terms and conditions set forth herein.    Any capitalized terms used herein and not defined herein have the meaning set forth in the Plan.
1.Performance Shares.  Each Performance Share represents the right to receive one share of the Company’s Common Stock, par value $.01 per share (“Common Stock”), plus Dividend Equivalents thereon (as described in Section 5(b) below) subject to satisfaction of the service and performance-based vesting criteria described in Section 3 below and Schedule A-1 attached hereto and made a part hereof.  Upon satisfaction of such vesting criteria, the shares of Common Stock that have vested will be issued to you and shall be fully paid and nonassessable.  

2.Transfer Restrictions.  You may not sell, assign, transfer, convey, pledge, exchange or otherwise encumber or dispose of the Performance Shares, except to the Company.  Any purported encumbrance or disposition in violation of the provisions of this Section 2 shall be void ab initio, and the other party to any such purported transaction shall not obtain any rights to or interest in the Performance Shares.  

3.Vesting of Performance Shares.  

(a)The Performance Shares shall vest (in whole or in part) based upon satisfying the vesting criteria set forth on Schedule A-1 attached hereto.  Except as set forth in Section 3(b) below, underlying shares of Common Stock shall be issued to you only if you remain employed by the Company or a Subsidiary through the vesting date of the Performance Shares, which is anticipated to occur no later than March 15, 2017.  Decisions regarding vesting and payment of the Performance Shares shall be final as determined by the Committee in its sole and absolute discretion.

(b)If you elect to terminate your employment with the Company or a Subsidiary and you satisfy the definition of Retirement set forth in the Plan, then a pro rata portion of the Performance Shares shall vest (based on the number of days from January 1, 2014 to and including the date of your Retirement divided by 1,096) and, to the extent the performance criteria are met, such pro rata portion shall be paid at the same time as others receive shares of Common Stock under this award.

(c)Any Performance Shares that do not vest pursuant to Section 3(a) above shall be cancelled.

(d)Except as expressly set forth in any written employment agreement between you and the Company or a Subsidiary (whether entered into prior to or after the date of this letter agreement), if the Company or its successor shall terminate your employment for any reason (other than for “Cause” as defined in Section 7 hereof) within two years following a Change in Control (but not later than December 31, 2016), the Performance Shares shall vest on a pro rata basis based on the number of days from January 1, 2014 to and including the date your employment is terminated, divided by 1,096.

4.Forfeiture of Performance Shares.  Except as set forth in Section 3(b) above or expressly set forth in any written agreement between you and the Company or a Subsidiary (whether entered into prior to or after the date of this letter agreement), if you cease to be an employee of the Company or a Subsidiary for any reason, except as and to the extent the Common Stock underlying the Performance Shares has been issued to you, you shall forfeit the remaining portion of the Performance Shares.

5.Dividend, Voting and Other Rights.  

(a) Until issuance of shares of Common Stock pursuant to Section 1 hereof, you shall have no voting or other rights of a stockholder with respect to the Performance Shares.

(b)Dividend Equivalents. You shall have the right to receive Dividend Equivalents on Performance Shares that become vested hereunder, payable in cash without interest, to the extent that cash dividends are paid on the Common Stock underlying the Performance Shares after the date of this agreement and prior to the issuance of shares of Common Stock underlying the Performance Shares.  Such Dividend Equivalents shall be subject to any required tax withholding, and shall be payable on or about such date or dates as the underlying Common Stock is issued to you in an amount equal to the number of shares of Common Stock delivered in respect of your vested Performance Shares multiplied by the aggregate per share dividends declared and paid after the date of this letter agreement and prior to the issuance of shares of Common Stock underlying the Performance Shares.

6.Certain Definitions.  For the purposes of this letter agreement, the following terms have the meanings set forth below:

“Board” means the Board of Directors of the Company.
“Cause” means the occurrence of one or more of the following events, as determined by the Committee:
(i)    commission of (x) a felony or (y) any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; or
(ii)    conduct that has caused demonstrable and serious injury to the Company or a Subsidiary, monetary or otherwise; or
(iii)willful refusal to perform or substantial disregard of duties properly assigned; or

2

(iv)breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or dishonesty with respect to the Company or a Subsidiary.

 “Change in Control” means the occurrence of any of the following events:
(i)    the acquisition (other than an acquisition in connection with a "Non-Control Transaction" (as defined below)) by any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) of "beneficial ownership" (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company or its Ultimate Parent representing 51% or more of the combined voting power of the then outstanding securities of the Company or its Ultimate Parent entitled to vote generally with respect to the election of the board of directors of the Company or its Ultimate Parent; or 
(ii)    as a result of or in connection with a tender or exchange offer or contest for election of directors, individual board members of the Company (identified as of the date of commencement of such tender or exchange offer, or the commencement of such election contest, as the case may be) cease to constitute at least a majority of the board of directors of the Company; or 
(iii)    the consummation of a merger, consolidation or reorganization with or into the Company unless (x) the stockholders of the Company immediately before such transaction beneficially own, directly or indirectly, immediately following such transaction securities representing 51% or more of the combined voting power of the then outstanding securities entitled to vote generally with respect to the election of the board of directors of the Company (or its successor) or, if applicable, the Ultimate Parent and (y) individual board members of the Company (identified as of the date that a binding agreement providing for such transaction is signed) constitute at least a majority of the board of directors of the Company (or its successor) or, if applicable, the Ultimate Parent (a transaction to which clauses (x) and (y) apply, a "Non-Control Transaction").
 “Subsidiary” means a subsidiary corporation, as defined in Section 424(f) of the Code (or any successor section thereto).
“Ultimate Parent” means the parent corporation (or if there is more than one parent corporation, the ultimate parent corporation) that, following a transaction, directly or indirectly beneficially owns a majority of the voting power of the outstanding securities entitled to vote with respect to the election of the board of directors of the Company (or its successor).
7.Withholding Taxes.  If the Company or any Subsidiary shall be required to withhold any federal, state, local or foreign tax in connection with any issuance or vesting of Performance Shares or other securities pursuant to this agreement, and the amounts available to the Company or such Subsidiary for such withholding are insufficient, you shall pay the tax or make provisions that are satisfactory to the Company or such Subsidiary for the payment thereof.  If permitted at such time by the Company, you may elect to satisfy all or any part of any such withholding obligation by surrendering to the Company or such Subsidiary a portion of the Performance Shares that become nonforfeitable hereunder, and the Performance Shares so

3

surrendered by you shall be credited against any such withholding obligation at the Fair Market Value of the Common Stock underlying such Performance Shares on the date of such surrender. 
 
8.No Special Right to Employment.  Nothing in this agreement shall interfere with or limit in any way the right of the Company to terminate your employment or other performance of services at any time, nor confer upon you any right to continue in the employ or as a director or officer of, or in the performance of other services for, the Company or a Subsidiary for any period of time, or to continue your present (or any other) rate of compensation or level of responsibility.  Nothing in this agreement shall confer upon you any right to be selected again as a Plan participant, and nothing in the Plan or this agreement shall provide for any adjustment to the number of Performance Shares upon the occurrence of subsequent events except as provided in the Plan.  

9.Relation to Other Benefits.  Any economic or other benefit to you under this agreement or the Plan shall not be taken into account in determining any benefits to which you may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.

10.Amendments to Plan.  Any amendment to the Plan shall be deemed to be an amendment to this agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the your rights under this agreement without your consent.  

11.Severability.  Whenever possible, each provision of this agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this agreement.  

12.Conformity with Plan.  This agreement and the Performance Shares granted pursuant hereto are intended to conform in all respects with, and are subject to all applicable provisions of, the Plan (which is incorporated herein by reference).  Inconsistencies between this agreement and the Plan shall be resolved in accordance with the terms of the Plan.  By accepting this grant of Performance Shares on the Company’s equity administration website, you acknowledge your receipt of this agreement and the Plan and agree to be bound by all of the terms of this agreement and the Plan.

13.Successors and Assigns.  Except as otherwise expressly provided herein, all covenants and agreements contained in this agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not.  

14.Notices.  All notices, demands or other communications to be given or delivered under or by reason of the provisions of this agreement shall be in writing and shall be deemed to have been given when (i) delivered personally, (ii) mailed by certified or registered mail, return 

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receipt requested and postage prepaid or (iii) sent by reputable overnight courier, to the recipient.  Such notices, demands and other communications shall be sent to you at the address on file with the Company and to the Company at 11825 N. Pennsylvania Street, P.O. Box 1911 (46082), Carmel, Indiana 46032, Attn: General Counsel, or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

15.Governing Law.  THE VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION AND EFFECT OF THE PLAN, AND OF ITS RULES AND REGULATIONS, AND RIGHTS RELATING TO THE PLAN AND TO THIS AGREEMENT, SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS, AND APPLICABLE PROVISIONS OF FEDERAL LAW. 
 
16.Descriptive Headings.  The descriptive headings of this agreement are inserted for convenience only and do not constitute a part of this agreement.  

17.Entire Agreement.  This agreement, any written agreement between you and the Company or a Subsidiary to the extent contemplated by Section 4 hereof, and the terms of the Plan constitute the entire understanding between you and the Company, and supersede all other agreements, whether written or oral, with respect to your acquisition of the Performance Shares.
  
18.Section 409A.  The Performance Shares awarded hereunder are intended to comply with Section 409A of the Code, as provided under the Plan.  In accordance therewith, to the extent that Section 409A(a)(2)(B)(i) (regarding certain payments to “key employees” in connection with a separation from service) requires the Company to delay payment and /or delivery of shares of Common Stock in respect of your vesting Performance Shares beyond the date(s) otherwise specified in this agreement, the Company shall pay such amounts to you upon the earliest date permitted under 409A(a)(2)(B)(i) of the Code with incurring excise tax.

Details of the Award are set forth below.
To execute this agreement and confirm your understanding and acceptance of the agreements contained you must click the Accept button and enter your assigned PIN as your digital signature.
Very truly yours,
CNO FINANCIAL GROUP, INC.
	
		
	 
	By:       /s/ Sue Menzel

	 
	Name:  Susan L. Menzel

	 
	Title:    Executive Vice President,

	 
	             Human Resources

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Schedule A-1
to
Performance Share Award Agreement

PERFORMANCE SHARE TARGETS

	
		
	2014 - 2016
	Performance Share

	Average Operating Return on Equity1
	Payout (Vesting)2

	≥%  (maximum)
	150%

	  % (target)
	100%

	  % (threshold)
	25%

	<%
	0%

______________________________
1 For purposes of this agreement, “operating return on equity” for each year is calculated by dividing (x) “operating earnings” for the year by (y) the average of the ending balances of shareholders’ equity, excluding accumulated other comprehensive income and the value of net operating loss carryforwards, for each of the calendar quarters in the year.  “Operating earnings” are defined as net income applicable to common stock before: (i) loss on extinguishment of debt, net of income taxes; (ii) net realized investment gains or losses, net of related amortization and income taxes; (iii) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to fixed index annuities, net of related amortization and income taxes; (iv) equity in earnings of certain non-strategic investments, earnings attributable to non-controlling interests and earnings from discontinued operations, in each case net of income taxes; (v) changes to the valuation allowance for deferred tax assets; (vi) the cumulative effect of change in accounting principles, net of income taxes; and (vii) unusual income or expense items, net of income taxes, that are unlikely to recur.  The average Operating Return on Equity for the three-year period shall be calculated as the arithmetic average of the Operating Return on Equity for each of the three years.  Performance between the percentages set forth above shall be interpolated on a straight line basis.  For example if the Average Operating Return on Equity for the three year period is ___%, then 110% of the Performance Shares will vest.

2Payouts of any Performance Shares that have been earned shall be made as promptly as practicable after certification by the Committee that the performance targets have been achieved, which shall occur no later than March 15, 2017, absent special circumstances.

6Mark
Leuchtenberger (the "Chairman" and "You")

20
Old Farm Road

Newton,
MA 02459

 

RE:Chairmanship
Agreement

 

Dear
Mark:

 

This
is to confirm the terms of Your proposed appointment on May 1, 2014 (the "Effective Date") as a non-employee Non-Executive
Chairman of Xenetic Biosciences, Inc. (the "Company"), which appointment is contingent upon the Board of Directors of
the Company (the "Board") appointing You as Chairman of the Board, which is anticipated to occur shortly after the completion
and signing of this Letter Agreement (the "Agreement").

 

Overall,
in terms of time commitment, we expect Your attendance at all the Board meetings and meetings of such committees of the Board
that You will be appointed to (as applicable). In addition, You will be expected to devote appropriate preparation time ahead
of each meeting. You will also, when time allows, present on behalf of the Company at Boston based conferences and assist on investor
roadshows and presentations and provide assistance to the Chief Executive Officer as requested. The Company acknowledges Your
executive role as CEO of Acusphere Inc and investor roadshows beyond the Boston area will be contingent upon Your availability
relative to Your Acusphere duties.

 

By
accepting this appointment, You have confirmed that You are able to allocate sufficient time to meet the expectations of this
position.

 

For
and in consideration of the services to be performed by You , Company agrees to pay You as follows:

 

1.1
Fee. A fee equal to $50,000 (Fifty Thousand U.S. Dollars) per annum, payable quarterly (the "Board Meeting Fee") will
be the cash compensation for the Chairman role and any appropriate committee chair or membership.

 

1.1.1Stock
Options. Subject to all approvals required by law, the Company will grant You, pursuant to an equity incentive plan or such
other plan to be adopted by the Company (the "Plan") and upon such terms and conditions as determined by the Compensation
Committee or the Board (as applicable) which are not inconsistent with the terms set forth herein , stock options (the "Options").
Upon approval by the Board, You shall be awarded an Option of sixty thousand (60,000) shares of common stock that shall vest immediately
upon the grant (the "Initial Grant"). The price of these shares shall be the Company's closing stock price listed on
the OTC Pink Sheets on the date immediately preceding the date of grant.

 

For
a period of two calendar years from the date of Your appointment You shall be awarded an additional forty thousand (40,000) share
options of common stock on each 12 month anniversary of the Effective Date. The exercise price of these options will be the price
of the shares on the OTC Pink Sheets or Nasdaq, whichever is applicable, the day before each successive grant of options and such
options shall be fully vested on the date of grant. Any subsequent annual award will be capped at thirty thousand shares per award
and also will be fully vested on grant.

 

As
a one-time transaction bonus , You shall be awarded an Option for sixty thousand (60,000) shares of common stock. These options
will be granted to You upon the successful listing of the Company on Nasdaq and will be fully vested on grant. The exercise price
of these transaction bonus options will be price of the shares on the OTC Pink Sheets or Nasdaq, whichever is applicable, the
day before the date of grant.

 

Except
as provided in the last sentence of this paragraph, at such time that You are no longer engaged with the Company in any capacity,
all granted Options that have not been exercised, shall terminate unless exercised within three (3) months of Your termination
date (the "Termination Exercise Period"); provided that no such three (3) month limitation shall apply if Your engagement
is terminated by the Company without Cause or by You for Good Reason. If You quit Your position as Chairman of the Company without
Good Reason within twelve (12) months from the Effective Date, the right, title and interest in the Initial Grant of sixty thousand
(60,000) options that You received upon entry into this Agreement shall terminate immediately, with the result that You will have
forfeited Your right, title and interest in all of these options .

 

    	 

    	 

    

 

1.2.Term
of Options. All Options, if and to the extent granted according to Section 1.1 above, shall be in effect for a period of 10 years
from grant, and shall expire immediately thereafter. Without derogating from the aforesaid, if the Plan that shall be approved
by the Company shall include additional provisions related to expiration of Options, such provisions shall, to the extent not
inconsistent with the terms hereof, also apply with respect to all Options granted to You under this letter of appointment.

 

1.2.2         
Vesting. All Options granted to You shall vest automatically upon
grant.

 

1.2.3         
Price. The exercise price of the Options shall be equal to the fair
market value of the Company's shares on the day before the date of grant.

1.2.4         
General. The successive 40,000 option grants and the one-time transaction
bonus grant of 60,000 options to You shall be subject to Your continuous service as Chairman and subject to the term s and conditions
of the Company's Stock Option Plan (the "Plan"), including such terms related to vesting and expiration, and subject
to such terms and conditions as will be approved by the Company, at its sole discretion; provided that You shall not be bound
to any of such terms which are not consistent with the terms promised to You hereund er.

 

1.2.5         
Certain Representations. You represent and agree that You are accepting
the shares of common stock that may be issued to You upon exercise of the options granted pursuant to this Agreement for Your
own account and not with a view to or for sale of distribution thereof. You understand that the securities are restricted securities
and You understand the meaning of the term "restricted securities." You further represent that You were not solicited
by publication of any advertisement in connection with the receipt of the shares and that You have consulted tax counsel as needed
regarding the shares

 

1.3              
Presentations and Roadshows. For so long as You are the Chairman
of the Company, You shall provide such services that are required of You to assist the Company. These services are to include
presenting or attending on behalf of the Company at Boston based conferences and assisting in investor roadshows and/or presentations.
The Company acknowledges Your executive role as CEO of Acusphere Inc and investor roadshows beyond the Boston area will be contingent
upon Your availability relative to Your Acusphere duties. By mutual agreement the services are provided by way of the annual retainer
and Options that You are to receive.

 

1.4            Company
agrees to reimburse You for out-of-pocket expenses incurred by You in connection with Your service (including out-of-pocket expenses
and transportation expenses, provided that such expenses are against original and valid receipt s (the "Expenses").

 

1.5              
Payment of the Expenses, as applicable, shall be made against Your
itemized invoice following the receipt of the relevant invoice, which invoice shall be submitted to the Company within seven (7)
days of the end of each calendar month during the term of this letter of appointment.

 

1.6              
For the avoidance of any doubt, the Fee and the Options (subject
to their terms) and the aforementioned Expenses constitute the full and final consideration for Your appointment, and You shall
not be entitled to any additional consideration , of any form, for Your appointment and service.

 

2.                  
The term of Your appointment as a non-employee, non-executive Chairman
of the Company shall be for one year. The contract and appointment shall automatically continue for one year periods unless either
party gives written notice to the other of its non-renewal at least sixty (60) days prior to its expiration. .

 

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

 

4.                  
You will undertake such duties and powers relating to the Company
and any subsidiaries or associated companies of the Company (the "Group") as the Board may from time to time reasonably
request. The Chairman has the same general legal responsibilities to the Company as any other director. The Board as a whole is
collectively responsible for promoting the success of the Company by directing and supervising the Company's affairs, inter alia,
as follows:

 

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

 

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

 

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

 

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

 

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

 

    	2

    	 

    

 

5.                 
Confidential Information

 

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

 

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

 

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

 

6.                 
Term and Termination

 

6.1              
This appointment shall terminate immediate ly on the occurrence
of any of the following events:

 

6.1.1         
if You resign as Chairman of the Company for any reason other than
a Good Reason ; and/or

 

6.1.2         
if You resign for Good Reason; and/or

 

6.1.3         
if You are removed or not re-appointed as Chairman of the Board
of the Company at a General Meeting of the Company in accordance with the requirements of the Business Corporation Law of the
State of Nevada and/or any other applicable law or regulation (the "Law") and/or the Company's Articles of Incorporation;
and/or

 

6.1.4         
if You have been declared bankrupt or made an arrangement or composition
with or for the benefit of Your creditors; and/or

 

6.1.5         
if You have been disqualified from acting as Chairman (including,
but not limited to, an event in which You are declared insane or become of unsound mi nd or become physically incapable of performing
Your functions as director for a period of at least 60 days); and/or

 

6.1
..6if an order of a court having jurisdiction over the Company requires You to resign; and/or

 

6.1.7You
are terminated for Cause.

 

6.2              
In the event of termination under paragraph 6.1 or otherwise, You
shall be entitled to payment of any unpaid portion of Your fee (see paragraph 1.1), prorated to reflect the amount of Your service
prior to termination, and payment of all Expenses (see paragraph 1.4 and 1.5). Your rights as to all stock options shall be treated
as set forth in paragraphs 1.1 and 1.2.

6.3              
"Good Reason" shall mean if You cease to be engaged by
the Company by reason of: (i) injury, ill-health , death or disability (as evidenced to the satisfaction of the Board of Directors)
; (ii) dismissal by reason of redundancy, (iii) retirement on reaching the age at which You are bound to retire in accordance
with the terms of Your contract of employment , (iv) the Company ceases to exist (for instance, due to bankruptcy and dissolution
of the Company), (v) a material diminution in Your responsibilities, (vi) a material diminution in Your compensation , or (vii)
a material breach of the Agreement by the Company.

 

6.4              
"Cause" shall mean the Company terminated Your engagement
because You: (i) willfully failed to follow lawful, written directions communicated by the Board of Directors ; (ii) willfully
engaged in conduct materially injurious to the Company, monetarily or otherwise ; (iii) acted with material dishonesty or materially
breached any fiduciary duty owed to the Company; (iv) were convicted of, plead guilty to, or confessed to an act of fraud, misappropriation,
or embezzlement or to any felony; (v) used illegal substances at an time while serving the Company in any capacity; or (vi) materially
breached this Agreement of any other agreement which You executed with the Company, provided that the Company first notified You
in writing of the acts or omissions constituting Cause under (i), (ii), (iii), or (vi) and You failed to cure such acts or omissions,
if possible, within 30 days of receiving the Company's notice.

 

    	3

    	 

    

 

7                    
The Company will put directors' and officers' liability insurance
in place within 60 days of this Agreement if not already in place and will use commercial reasonable effort to maintain such cover
for the full term of Your appointment. The Company will otherwise defend and indemnify You against any claim or suit arising from,
involving, or relating to Your service as Chairman to the full extent consistent with the Company's charter, articles of incorporation,
by-laws, or other corporate documents.

 

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

 

9                    
Subject to the proper performance of Your obligations to the Company
under this Jetter of appointment and any applicable Jaw, the Company agrees that You will be free to accept other appointments,
directorships and chairmanships provided that:

 

9.2              
They do not in any way conflict with the interests of the Company
or any member of the Group; and

 

9.3              
They do not restrict You from devoting the necessary time and attention
properly to services to be performed under this Jetter of appointment; and

 

9.4              
In the event that You become aware of any potential conflicts of
interest, these must be disclosed to the Board and/or the Chief Executive Officer (the "CEO") of the Company
as soon as they become apparent.

 

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

 

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

 

12                
This letter refers to Your appointment as Chairman of the Company
and Your (possible) membership of the audit, nomination, compensation and other committees of the Board.

 

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

 

14                 
You shall discharge Your general duties as Chairman pursuant to
the Company's Articles of Incorporation of the Company and applicable Jaw.

 

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

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

 

Sincerely
yours,

 

XENETIC
BIOSCIENCES INC.

 

 

/s/ M.
Scott Maguire

Name: M.
Scott Maguire

Title: Chief
Executive Officer

 

AGREED AND
ACKNOWLEDGED BY:

 

 

/s/
Mark Leuchtenberger

Name
of Chairman: Mark Leuchtenberger

Address:

    	4

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