DATAWORKS GROUP LIMITED — Remuneration Information 2017

Nov 13, 2017

Terms and Conditions of the Plan Options

For the purposes of these terms and conditions:

Associated Body Corporate has the meaning given to that term in the Plan.

Corporations Act means the Corporations Act 2001 (Cth) , as amended from time to time.

Eligible Participant has the meaning given to that term in the Plan.

Group means the Company and each Associated Body Corporate.

Plan means the IXUP Incentive Option Plan.

Relevant Person has the meaning given to that term in the Plan.

Rule means a rule of the Plan.

Special Circumstances means:

• (a) a Relevant Person ceasing to be an Eligible Participant due to:

  • (i) death or Total or Permanent Disability of a Relevant Person; or

  • (ii) Retirement or Redundancy of a Relevant Person;

• (b) a Relevant Person suffering Severe Financial Hardship;

• (c) any other circumstance stated to constitute “Special Circumstances” in the terms of the relevant Invitation made to and accepted by the Participant; or

• (d) any other circumstances determined by the Board at any time (whether before or after the Invitation) and notified to the relevant Participant which circumstances may relate to the Participant, a class of Participant, including the Participant or particular circumstances or class of circumstances applying to the Participant.

• Entitlement

Each Option entitles the holder to subscribe for one Share upon the exercise of each Option.

1. Exercise price

The exercise price of each Option is $0.25.

1. Expiry Date

The Options will expire on the date that is five years from the date of official quotation of Shares on the ASX ( Expiry Date ), if it has not already otherwise lapsed in accordance with the Plan.

1. Vesting Conditions

One third of the Options will vest on the date of satisfaction of each of the vesting conditions set out below:

Vesting Condition

One year of continuous service as a director or employee Two years of continuous service as a director or employee Three years of continuous service as a director or employee

6. Lapse Date

An Option will lapse on that date ( Lapse Date ) which is the earlier to occur of:

• (a) a Vesting Condition in relation to the Option is not satisfied by the specified due date (if any), or becomes incapable of satisfaction, as determined by the Board in its absolute discretion, unless the Board exercises its discretion to waive the Vesting Condition and vest the Option under item 7 below or item 6(b)(ii) below applies;

• (b) in respect of unvested Options only, a Relevant Person ceases to be an Eligible Participant, unless the Board:

  • (i) exercises its discretion to vest the Option under item 7 below; or

  • (ii) in its absolute discretion, resolves to allow the unvested Options to remain unvested after the Relevant Person ceases to be an Eligible Participant;

• (c) in respect of vested Options only, a Relevant Person ceases to be an Eligible Participant and the Option granted in respect of that Relevant Person is not exercised within one month (or such later date as the Board determines) of the date the Relevant Person ceases to be an Eligible Participant;

• (d) a purported transfer of the Option in contravention of Rule 6.3;

• (e) the Board deems that an Option lapses due to fraud, dishonesty or other improper behaviour of the holder/Eligible Participant under Rule 11.2;

• (f) the Company undergoes a Change of Control or a winding up resolution or order is made, and the Option does not vest in accordance with item 7 below; and

• (g) the Expiry Date referred to in item 4 above.

• Board discretion to waive Vesting Conditions and vesting on a Change of Control

• (a) The Board may in its absolute discretion, by written notice to a Participant, resolve to waive any of the Vesting Conditions applying to Options due to:

  • (i) Special Circumstances arising in relation to a Relevant Person in respect of those Options; or

• (ii) the Company passing a resolution for voluntary winding up, or an order is made for the compulsory winding up of the Company.

• (b) On a Change of Control occurring the Options will automatically vest.

For the purposes of this item 7:

" Change of Control " means:

• (a) a bona fide Takeover Bid (as defined in the Corporations Act) is declared unconditional and the bidder has acquired a Relevant Interest (as defined in the Corporations Act) in at least 50.1% of the Company’s issued Shares;

• (b) a court approves, under Section 411(4)(b) of the Corporations Act, a proposed compromise or arrangement for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies; or

• (c) in any other case, a person obtains Voting Power (as defined in Section 9 of the Corporations Act) in the Company which the Board (which for the avoidance of doubt will comprise those Directors immediately prior to the person acquiring that Voting Power) determines, acting in good faith and in accordance with their fiduciary duties, is sufficient to control the composition of the Board.

" Special Circumstances " means:

• (a) a Relevant Person ceasing to be an Eligible Participant due to:

• (i) death or Total or Permanent Disability of a Relevant Person; or

• (ii) Retirement or Redundancy of a Relevant Person;

• (b) a Relevant Person suffering Severe Financial Hardship; or

• (c) any other circumstances determined by the Board at any time (whether before or after the Invitation) and notified to the relevant Participant which circumstances may relate to the Participant, a class of Participant, including the Participant or particular circumstances or class of circumstances applying to the Participant.

"Total or Permanent Disability " means that the Relevant Person has, in the opinion of the Board, after considering such medical and other evidence as it sees fit, become incapacitated to such an extent as to render the Relevant Person unlikely ever to engage in any occupation with the Company or its Associated Bodies Corporate for which he or she is reasonably qualified by education, training or experience.

"Redundancy" means termination of the employment, office or engagement of a Relevant Person due to economic, technological, structural or other organisational change:

• (d) the Group no longer requires the duties and responsibilities carried out by the Relevant Person to be carried out by anyone; or

• (e) the Group no longer requires the position held by the Relevant Person to be held by anyone.

"Retirement" means where a Relevant Person intends to permanently cease all gainful employment in circumstances where the Relevant Person provides, in good faith, a written statutory declaration to the Board to that effect.

" Severe Financial Hardship " means the Relevant Person is unable to provide themselves, their family or other dependents with basic necessities such as food, accommodation and clothing, including as a result of family tragedy, financial misfortune, serious illness, impacts of natural disaster and other serious or difficult circumstances.

8.

Plan

The Options are granted in accordance with, and subject to, the Plan.

9.

Exercise period

The Options are exercisable at any time after the date that the Board notifies that the relevant Vesting Condition in item 5 above has been satisfied or waived, or the Options have otherwise vested in accordance with the Plan, and on or prior to the Lapse Date.

10. Notice of exercise

The Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and either payment of the Exercise Price for each Option being exercised, or an election to use the Cashless Exercise Facility (as defined below) in respect of each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

11. Cashless Exercise Facility

• (a) If the Shares of the Company are quoted on the ASX at the time of exercise of the Options, the holder of Options may, subject to item 11(c) below, elect to pay the Exercise Price for a Option by setting off the exercise price against the number of Shares which they are entitled to receive upon exercise ( Cashless Exercise Facility ). By using the Cashless Exercise Facility, the holder will receive Shares to the value of the surplus after the Exercise Price has been set off.

• (b) If the holder elects to use the Cashless Exercise Facility, the holder will only be issued that number of Shares (rounded down to the nearest whole number) as are equal in value to the difference between the total Exercise Price otherwise payable for the Options on the Options being exercised and the then market value of the Shares at the time of exercise (determined as the volume weighted average of the prices at which Shares were traded on the ASX during the one week period immediately preceding the exercise date) calculated in accordance with the following formula:

S = O x (MSP – EP) MSP

Where:

S = Number of Shares to be issued on exercise of the Options.

O = Number of Options.

MSP = Market value of the Shares (calculated using the volume weighted average prices at which Shares were traded on the ASX over the one week period immediately preceding the exercise date).

EP = Option exercise price.

• (c) If the difference between the total Exercise Price otherwise payable for the Options on the Options being exercised and the then market value of the Shares at the time of exercise (calculated in accordance with item 11(b)) is zero or negative, then the holder will not be entitled to use the Cashless Exercise Facility.

12. Shares issued on exercise

Shares issued on exercise of the Options will rank equally with the then issued Shares of the Company.

13. Options not quoted

If application is made by the Company to ASX for official quotation of its Shares, the Company will not apply to ASX for quotation of the Options.

14. Quotation of Shares on exercise

If the Shares of the Company are quoted on the ASX at the time of exercise of the Options, application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options.

15. Timing of issue of Shares

After an Option is validly exercised, the Company must, within 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option issue the Shares and do all such acts, matters and things to obtain the grant of official quotation of the Shares on ASX no later than 5 Business Days after issuing the Shares.

16. Participation in new issues

There are no participation rights or entitlements inherent in the Options and the holder will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options. However, the Company will give the holders of Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

17.

Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

• (a) the number of securities which must be issued on the exercise of an Option will be increased by the number of securities which the Option holder would have received if the Option holder had exercised the Option before the record date for the bonus issue; and

• (b) no change will be made to the Exercise Price.

• Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing the Company shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of a Option will be reduced according to the following formula:

New exercise price = O – E [P-(S+D)]

N+1

• O = the old Exercise Price of the Option.

E = the number of underlying Shares into which one Option is exercisable.

P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

S = the subscription price of a Share under the pro rata issue.

D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.

19. Adjustments for reorganisation

If there is any reorganisation of the issued share capital of the Company, the rights of the Option holder will be varied to comply with the Listing Rules which apply to the reorganisation at the time of the reorganisation.

20. Options transferable

The Options are only transferable once vested, with the prior written approval of the Board of directors of the Company and subject to compliance with the Corporations Act.

21. Lodgment instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for Shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry.

22. Deferred Taxation

Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Options.