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Paz Retail and Energy Ltd. ("the Company")

May 20, 2026

Securities Authority

22 Kanfei Nesharim Street

Jerusalem 95464

(via MAGNA)

The Tel Aviv Stock Exchange Ltd.

2 Ahuzat Bayit

Tel Aviv

(via MAGNA)

Dear Sir/Madam,

Report regarding the convening of a Special General Meeting of the Company's shareholders

Part A - Convening of a General Meeting

1. General

A report is hereby provided in accordance with the provisions of the Companies Law, 5759-1999 (hereinafter: the "Companies Law"), the Securities Law, 5728-1968 (hereinafter: the "Securities Law"), the Companies Regulations (Notice and Announcement of a General Meeting and a Class Meeting in a Public Company and Adding an Item to the Agenda), 5760-2000 (hereinafter: "Notice of Meeting Regulations"), the Companies Regulations (Written Voting and Position Statements), 5765-2005 (hereinafter: "Voting Regulations"), and the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (hereinafter: "Immediate Reports Regulations"), regarding the convening of a Special General Meeting of the Company's shareholders (hereinafter: the "Meeting" and "this Report", respectively).

2. Type of Meeting, Date, and Location

The Meeting will convene on Wednesday, June 24, 2026, at 15:00, at the Company's offices in GREENWORK, Building D, Kibbutz Yakum (hereinafter: the "Company's Offices").

3. Agenda Items and Summary of Proposed Resolutions

3.1. Item No. 1 - To approve the compensation policy for officers of the Company, attached as Appendix B to this Report, in accordance with Section 267A of the Companies Law (hereinafter: the "Compensation Policy" or the "Proposed Compensation Policy").

For further details, see Part B of this Report below.

Proposed Resolution Text: To approve the compensation policy for officers of the Company, attached as Appendix B to the Meeting Convocation Report, in accordance with Section 267A of the Companies Law.

3.2. Item No. 2 - To approve updates to the terms of office and employment of Mr. Harel Locker, Chairman of the Company's Board of Directors, including an annual bonus mechanism and equity compensation.

For further details, see Part C of this Report below.

Proposed Resolution Text: To approve updates to the terms of office and employment of Mr. Harel Locker, Chairman of the Company's Board of Directors, regarding an annual bonus mechanism and equity compensation.

3.3. Item No. 3 - To approve updates to the terms of office and employment of Mr. Nir Stern, the Company's CEO, including an annual bonus mechanism and equity compensation.

For further details, see Part D of this Report below.

Proposed Resolution Text: To approve updates to the terms of office and employment of Mr. Nir Stern, the Company's CEO, regarding an annual bonus mechanism and equity compensation.

4. Required Majority

4.1. The required majority for the approval of the proposed resolutions in Section 3.2 on the agenda is an ordinary majority of all the votes of the shareholders present at the meeting, in person or by proxy, or who have sent the Company a proxy card indicating their vote, who are entitled to vote and have voted therein, without taking into account the votes of those abstaining.

4.2. The required majority for the approval of the proposed resolutions in Sections 3.1 and 3.3 on the agenda is an ordinary majority of all the votes of the shareholders present at the meeting, in person or by proxy, or who have sent the Company a proxy card indicating their vote, who are entitled to vote and have voted therein, without taking into account the votes of those abstaining, provided that one of the following is met:

(1) The majority of votes shall include at least a majority of all the votes of the shareholders who are not controlling shareholders in the Company* or who do not have a personal interest in the resolution, participating in the vote. In counting the total votes of the said shareholders, the votes of those abstaining shall not be taken into account;

(2) The total dissenting votes among the shareholders mentioned in sub-paragraph (1) above did not exceed a rate of two percent of the total voting rights in the Company.

The Company is a company without a controlling core.

5. The Record Date and Eligibility to Vote at the Meeting

5.1. The Record Date regarding the eligibility of a shareholder to participate and vote in the aforementioned General Meeting and in the adjourned meeting, as stated in Section 182(b) and (c) of the Companies Law and in Regulation 3 of the Voting Regulations, is at the end of the trading day on the Tel Aviv Stock Exchange Ltd. which falls on Wednesday, May 27, 2026 (hereinafter: the "Record Date"). If no trading takes place on the Record Date, then the Record Date will be the last trading day preceding this date.

5.2. In accordance with the Companies Regulations (Proof of Ownership of a Share for Voting at a General Meeting), 5760-2000 (hereinafter: "Ownership Proof Regulations"), a shareholder who is not registered in the register of shareholders and whose share is registered in his favor with a member of the Tel Aviv Stock Exchange Ltd. (hereinafter: the "Exchange") and that share

is included among the shares registered in the register in the name of the Nominee Company (hereinafter: "Unregistered Shareholder"), who wishes to vote at the Meeting, shall provide the Company before the Meeting with a confirmation from the Exchange member with whom his right to the share is registered, regarding his ownership of the share on the Record Date, as required under the Ownership Proof Regulations (hereinafter: "Confirmation of Ownership"). According to the Ownership Proof Regulations, a certified electronic message under Section 44J5 of the Securities Law, regarding the data of users in the electronic voting system – shall be considered a Confirmation of Ownership for any shareholder included therein.

5.3 Shareholders of the Company on the Record Date are entitled to vote on the agenda resolutions in person or by proxy, and are also entitled to vote by proxy card (as detailed in Section 6 below). A letter of appointment for a proxy or a power of attorney must be deposited at the Company's offices at GREENWORK, Building D, Kibbutz Yakum, at least two business days before the scheduled date of the Meeting. According to the Company's articles of association, the letter of appointment shall be an original or a copy of the letter of appointment, provided it is certified by a notary or an attorney with an Israeli license.

5.4 An Unregistered Shareholder may also vote via the electronic voting system using an electronic proxy card as defined and detailed in Section 7 below.

6. Voting via Proxy Card and Position Statements

6.1 Shareholders may vote in relation to the resolutions on the agenda detailed above via the proxy card attached as Appendix A to this Report.

6.2 The text of the proxy card and position statements (if any) regarding the agenda resolutions can be found on the Securities Authority's distribution website at: www.magna.isa.gov.il (hereinafter: "Distribution Website") and on the Exchange's website at www.tase.co.il (hereinafter: "Exchange Website"). A shareholder may contact the Company directly and receive from it the text of the proxy card and position statements (if any).

6.3 An Exchange member shall send, free of charge, by email, a link to the text of the proxy card and position statements (if any) on the Distribution Website to every Unregistered Shareholder, unless the Unregistered Shareholder has notified that he is not interested in this, provided that the notice was given regarding a specific securities account and at a date prior to the Record Date. His notice regarding proxy cards shall also apply to the receipt of position statements (if any). Voting shall be done on the second part of the proxy card, as published on the Distribution Website.

6.4 An Unregistered Shareholder is entitled to receive the Confirmation of Ownership from the Exchange member through whom he holds his shares, at the branch of the Exchange member or by mail to his address for delivery fees only, if he requested it, provided that a request for this matter is given in advance for a specific securities account.

6.5 The proxy card (non-electronic) of an Unregistered Shareholder shall be delivered to the Company together with the Confirmation of Ownership, so that the proxy card reaches the registered office of the Company no later than four hours before the time of convening the Meeting (i.e. - no later than Wednesday, June 24, 2026, at 11:00).

A shareholder registered in the register of shareholders shall deliver the proxy card to the Company, accompanied by a photocopy of an ID card or a photocopy of his passport or a photocopy of a certificate of incorporation, so that the proxy card reaches the registered office of the Company up to six hours before the time of convening the General Meeting (i.e. - up to Wednesday, June 24, 2026, at 9:00).

6.7 A shareholder participating in the vote regarding the resolutions on the agenda shall provide the required details as detailed in Section 9 below, insofar as the content of the section is relevant to him.

6.8 A shareholder may contact the registered office of the Company and, after proving his identity, withdraw his proxy card and Confirmation of Ownership / photocopy of his identification card or photocopy of his passport or photocopy of his certificate of incorporation up to 24 hours before the time of convening the Meeting.

7. Voting via the Electronic Voting System

7.1 As stated above, an Unregistered Shareholder may vote in relation to the resolutions on the agenda, also via a proxy card that will be transmitted in the electronic voting system as defined in the Voting Regulations (hereinafter: "Electronic Proxy Card").

7.2 The Electronic Proxy Card is opened for voting at the end of the Record Date. Voting via the electronic voting system will end six hours before the time of convening the Meeting (i.e. - on Wednesday, June 24, 2026, at 9:00), at which time the electronic voting system will be closed.

7.3 The electronic vote shall be subject to change or cancellation until the closing time of the electronic voting system and cannot be changed via the electronic voting system after this time. If a shareholder voted in more than one way, his later vote will be counted. In this regard, a vote by the shareholder himself or by proxy will be considered later than a vote via an Electronic Proxy Card.

7.4 It should be noted that due to actions carried out by the Securities Authority to protect information systems and computer infrastructure on which the electronic voting system is based, temporary difficulties may arise in accessing the electronic voting system from abroad. A shareholder who wishes to vote and encounters difficulties in accessing the electronic voting system is requested to vote using alternative voting methods, i.e., via proxy card or by proxy as detailed in Sections 5 and 6 above, or to contact the system's support center at telephone 077-2238333.

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8. Position Statements and Board Response

8.1. The deadline for providing position statements (under the Voting Regulations) to the Company is up to ten days before the meeting date.

8.2. The deadline for providing the Board of Directors' response to the position statements, if and to the extent that position statements are submitted by shareholders and the Board of Directors chooses to submit its response to said position statements, is no later than five days before the meeting date.

9. Notice of Personal Interest

9.1. According to Section 276 of the Companies Law, a shareholder participating in the vote at the meeting regarding the resolutions detailed in Sections 3.1 and 3.3 above shall notify the Company before the vote at the meeting, and if the voting is via a voting paper - shall mark on the voting paper (a space is allocated for marking in Part B of the voting paper), whether he is considered an interested party, a party with a personal interest in the resolutions on the agenda, a senior officer, or an institutional investor, or not, and a description of the relevant connection. If a shareholder did not provide notice or such marking was not made, his vote will not be counted in the vote count regarding said resolutions.

9.2. Furthermore, in accordance with Regulation 36d(d) of the Immediate Reports Regulations and the Israel Securities Authority's instruction dated November 30, 2011, regarding disclosure of the voting method of interested parties, senior officers, and institutional bodies at meetings (hereinafter: "Instruction"), an interested party, a senior officer, and an institutional investor, as defined in the Voting Regulations and the Instruction, voting at the meeting on the resolutions detailed in Sections 3.1 and 3.3 above, shall provide the Company as part of their vote with the details required in accordance with the Voting Regulations and Section 2(b) of the Instruction, and if they voted via a proxy, the voter or proxy shall also provide details regarding the proxy. Furthermore, details shall be provided regarding any connection (except for a negligible connection) between the voter or the proxy (who does not have a personal interest) and the Company or a senior officer in the Company, including employer-employee relationships, business relationships, etc., and details of their nature.

10. Quorum and Adjourned Meeting

The quorum for opening the discussion at the General Meeting is two shareholders present in person or by proxy or who have sent the Company a voting paper indicating their vote and who together hold twenty-five percent (25%) of the voting rights in the Company. For the purpose of a quorum, a shareholder or his representative, who also serves as a proxy for other shareholders, will be considered as two or more shareholders, according to the number of shareholders he represents. If half an hour has passed from the time set for the meeting and a quorum is not found, the meeting will be adjourned for one week, to the same day, at the same hour and will be held at the same place without further notice. If a quorum is not found at the adjourned meeting as stated, at least one shareholder, present in person or by his representative, shall constitute a quorum.

11. Changes in the Agenda and the Deadline for Submitting a Request to Include a Subject on the Agenda by Shareholders

11.1. After the publication of this summoning report, changes may occur in the agenda of the General Meeting, including the addition of a subject to the agenda, and position statements may be published. In such a case, the updated agenda and position statements, to the extent published, can be reviewed on the Distribution Site and the TASE website.

11.2. A shareholder's request according to Section 66(b) of the Companies Law to include a subject on the agenda of the meeting shall be provided to the Company by the deadline set for this matter in the Notice of Meeting Regulations, up to seven days after the summoning of the meeting. If such a request is submitted, the subject may be added to the agenda and its details will appear on the Distribution Site. In such a case, the Company will publish an amended summoning report no later than seven days after the final deadline for providing a shareholder's request to include a subject on the agenda, as stated above.

12. Review of Documents and Details of Company Representatives

The full text of this report, its appendices, and the text of the proposed resolutions can be reviewed at the Company's offices at GREENWORK, Building D, Kibbutz Yakum, Sunday through Thursday during accepted working hours, until the meeting date and by prior arrangement with the General Counsel and Company Secretary, Adv. Anat Rothschild (Tel: 09-8631103, Fax: 09-89562159). A copy of this report is also published on the Distribution Site, the TASE website, and the Company's website at www.paz.co.il.

Part B - Additional Details Regarding the Approval of the Compensation Policy for Officers

13. The Approval Process for the Compensation Policy for Officers in the Company and the Reasons for Its Approval

13.1. In recent years, the Company implemented a strategic plan that changed the focus of the Company's business, including entry into food retail activity in city centers, electric charging for vehicles, strengthening the customer club, splitting the Ashdod refinery, selling the subsidiary Pazkar, and realizing real estate assets that are not in the core activity.

13.2. After completing these processes, following the Company's business strategy as detailed in Section 8.10 of the Chapter Describing the Corporation's Business in the Company's Periodic report for the year 2024 (Reference No.: 2024-01-023743), on November 26, 2024, the Company's Board of Directors approved a multi-year plan, with the goal of bringing about a significant increase in the Company's profits to a level of ongoing annual net profit (not including revaluation profits and not including capital gains from the sale of assets and activities) in the amount of NIS 500 million within three years (hereinafter: "Plan 500"). For further details, see the Company's immediate report dated November 27, 2024.

13.3. In order to create alignment between the objectives of Plan 500 and the compensation of the officers in the Company, the Company formulated a compensation policy for officers that was approved by the General Meeting on January 1, 2025

(hereinafter: "Previous Compensation Policy")¹. The Previous Compensation Policy was intended to strengthen the link between the compensation of officers and the achievement of the objectives of Plan 500.

13.4. On May 19, 2026, the Company's Board of Directors approved a new multi-year growth plan, with the goal of bringing about a further significant increase in the Company's profits to an annual profitability level of NIS 800 million by the end of 2029 inclusive (hereinafter: "Plan 800" or "the Plan"). The stated annual profitability target also factors in capital gains from real estate realizations in an average annual volume during the plan period of NIS 100 million. For further details, see the Company's immediate report dated May 20, 2026.

In order to create alignment between the objectives of Plan 800 and the compensation of the officers in the Company, the Company formulated a new compensation policy for officers brought for the approval of the General Meeting summoned in this report (hereinafter: "the New Compensation Policy"). This policy is intended to strengthen the link between the compensation of officers and the achievement of the objectives of Plan 800 during the period of the New Compensation Policy.

13.5. The compensation policy for officers in the Company, on its various components, was discussed in the Compensation Committee, and after the Compensation Committee's recommendations were given, also in the Board of Directors.

The compensation policy will remain in effect for 3 years starting from the date of approval by the Meeting summoned in this report and with respect to annual grants will apply to the grant years 2026 to 2029 (whereas regarding the year 2026, no change has occurred in the annual grant targets determined in accordance with Section 8.3 of the Previous Compensation Policy).

The proposed New Compensation Policy is presented with changes marked relative to the Previous Compensation Policy in Annex B to this report.

13.6. The members of the Compensation Committee who participated in the committee meeting in which the committee's recommendation to the Board of Directors regarding the compensation policy was approved are: Ami Safran (Chair; ID), Yair Nachman Shelah (ID), and Amir Cohen.

13.7. The members of the Board of Directors who participated in the Board of Directors meeting in which the compensation policy was approved are: Harel Locker (Chair), Ami Safran (ID), Yair Nachman Shelah (ID), Yael Danieli (DBD), Michal Marom Brikman (DBD), Sami (Shmuel) Babkov, and Amir Cohen.

13.8. The compensation policy was unanimously approved by the Compensation Committee and the Board of Directors. The Chairman of the Board did not participate in the discussion in the Board of Directors regarding the provisions of the proposed compensation policy relating to the terms of the Chairman of the Board.

13.9. Within the framework of the aforementioned meetings, data and information were reviewed and examined, including the following:

¹ For details regarding the Company's Previous Compensation Policy, see the Company's Meeting Summons Report, as published on December 26, 2024 (Reference No.: 2026-01-627604).

13.9.1.

The considerations required regarding the formulation of a compensation policy according to the Companies Law, including the criteria detailed in the First Schedule A to the Companies Law, in Part A (matters that must be addressed in the compensation policy) and Part B (provisions that must be set in the compensation policy);

13.9.2. Comparative data from an external consultant, relative to the compensation data of officers in peer companies and the compensation policy in thirty companies (public and private, not from the financial sector), which were selected taking into account the Company's main characteristics including the Company's size, the nature and scope of activity, and the volume of activity.

13.9.3. The terms of office and employment of the officers in the Company;

13.9.4. The employment terms of employees in the Company (including the data required for reference in accordance with Amendment No. 20 to the Companies Law);

13.9.5. The Previous Compensation Policy.

13.10. The considerations that guided the Compensation Committee and the Company's Board of Directors in adopting the compensation policy included the considerations and matters required by the Companies Law, and among others, promoting the Company's long-term goals, the Company's work plan and its policy with a long-term view; the size of the Company and the nature of its activity; creating appropriate incentives for the officers in the Company, considering, among other things, the Company's risk management policy; creating an appropriate balance between fixed components and variable components and between short-term and long-term compensation; increasing the officers' sense of identification with the Company and its activity; recruiting officers with appropriate skills and experience and retaining them over time.

Regarding office and employment terms that include variable components – within the framework of the compensation policy, the contribution of the officers to achieving the Company's goals and increasing its profits were also weighed, all with a long-term view and in accordance with the officer's role.

13.11. As part of the approval of the compensation policy, the Compensation Committee and the Board of Directors noted the goals of the compensation policy:

13.11.1. Providing tools for the recruitment and retention of high-quality and professional officers, who constitute the solid foundation for the Company's management, its continued development, and its success over time.

13.11.2. Creating alignment with the Company's business goals and objectives, balancing appropriate incentives for officers to improve the Company's performance, fixed and variable components, and recruiting officers with skills and retaining them over time.

13.11.3. Determining variable compensation components which are based on the officer's contribution to the Company and link the officer to the Company's long-term goals and its performance, with the aim of maximizing the Company's profit, through prudent risk management, and taking into account the goals of Plan 800.

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13.11.4. Creating a link between the performance of the company's shares and the compensation for officers, by granting equity-based compensation.

13.11.5. Setting compensation components that encourage cooperation between officers in the company and increasing synergy in the company.

13.11.6. Creating a proper balance between different compensation components – fixed components versus variable components, short-term components versus long-term components, and cash compensation versus equity-based compensation.

14. The main changes in the compensation policy brought for approval relative to the previous compensation policy

14.1. Annual Bonus

Setting provisions regarding an annual bonus mechanism which will apply starting from 2027 in relation to an active Chairman of the Board, CEO, and Deputy CEO derived from the consolidated annual net profit of the company (as defined in the proposed compensation policy) in the relevant bonus years (without change in the previous compensation policy provisions regarding the mechanism that will apply in relation to the year 2026).

14.2. Equity Compensation

The new compensation policy allows the company to allocate warrants, with additional benefit value beyond the value of the equity compensation included in the previous compensation policy, whose vesting will not be subject to the regular vesting periods according to Section 9.2 of the compensation policy, but will be contingent on meeting a pre-determined share price target, provided this target is achieved within a target achievement period that will be set, as the terms are defined in Section 9.12 of the compensation policy (hereinafter: "target-contingent warrants").

14.3. Total compensation cap for the CEO

The total annual cost cap for the terms of office and employment of the CEO was updated, so that subject to granting target-contingent warrants to the CEO, the total annual cost cap will stand at NIS 8 million, in accordance with the provisions set for this matter in the compensation policy regarding the method of calculating the total annual cost cap².

14.4. Ratio between fixed compensation and variable compensation

In light of the amendment in the new compensation policy regarding the possibility of granting target-contingent warrants in addition to other equity compensation according to the compensation policy, it was determined that the annual cost of the variable compensation components for an officer shall not exceed 65% of the total annual cost for all their terms of office and employment (in accordance with the provisions set for this matter in the compensation policy regarding the method of calculating the ratio).

² The annual cost cap is linked to the Consumer Price Index published in March 2023.

15. Manner of implementation of the previous compensation policy regarding the Chairman of the Board and the CEO

15.1. Base Compensation - The previous compensation policy determined that the fixed compensation of the Chairman of the Board as approved for him by the general meeting constitutes the company's compensation policy regarding his terms of office. Accordingly, the fixed compensation currently paid in practice to the Chairman of the Board stood at the maximum fixed compensation cap in the previous compensation policy.

The base compensation of the CEO stands at approximately 93% of the CEO's base compensation cap according to the previous compensation policy.

15.2. Terms of termination of office - The Chairman of the Board and the CEO have a notice period of 6 months and an adjustment grant in the amount of 6 times the base compensation.

15.3. Annual Bonus - According to the previous compensation policy, the Chairman of the Board and the CEO were entitled to an annual bonus for the year 2025 in the amount of up to 12 salaries or 15 monthly salaries, accordingly, subject to meeting the targets set for them in the previous compensation policy. For the year 2025, the annual bonuses for the Chairman of the Board and the CEO stood at the bonus cap set for them in the previous compensation policy.

15.4. Equity Compensation - According to the previous compensation policy, and following the approval of the general meeting dated January 1, 2025, warrants were granted to the Chairman of the Board and the CEO vesting over four years, at the fair value as of the date of the board's approval for the said grant in the total amount of 9 monthly salaries per vesting year (in linear spread), which constituted the benefit value cap for equity compensation according to the previous compensation policy.

For details regarding proposed updates to the terms of office and employment of the Chairman of the Board and the CEO of the company in connection with the annual bonus and equity compensation, see parts C and D below.

16. Reference to gaps between the proposed compensation policy and existing terms of office and employment

The terms of office and employment of the officers in the company are in accordance with the proposed compensation policy.

17. Alongside the reasons brought within the framework of the compensation policy, the reasons of the compensation committee and the board of directors for approving the proposed compensation policy are brought below

The company's compensation policy is intended, among other things, to create an appropriate incentive system for the recruitment and retention of high-quality management personnel in senior management positions for the long term, required by the company for its continued business development and success.

17.1. Regarding fixed compensation -

17.1.1. In determining the fixed compensation for each of the officers, their education, skills, expertise, professional experience, achievements, role and areas of responsibility, previous terms of office and employment of the officer (to the extent it is not a new officer) will also be taken into account

as well as the terms of office and employment granted to the previous officer in the position, their expected contribution to achieving the company's short-term and long-term goals, special skills, the company's work plans and its financial position.

17.1.2. Alongside the limitations set in the compensation policy, the fixed compensation will also be determined while comparing to the employment terms of officers in similar positions in companies of a similar size to the company.

17.2. Regarding the variable component for officers -

17.2.1. The company's policy is to give an annual bonus to officers based on the company's results and performance as well as on the officer's achievements.

17.2.2. The variable component is intended to reward the officer for their achievements and for their contribution to achieving the company's goals in the bonus year and also assists in retaining officeholders in the company.

17.2.3. The new compensation policy is intended to support the adjustment of variable compensation targets to the company's targets according to the 800 Plan.

17.2.4. In the opinion of the compensation committee and the board of directors, as a rule, setting the consolidated annual net profit as a threshold condition for payment of bonuses as a percentage of the target in the company's annual budget is appropriate and allows for adjusting the threshold conditions to the company's annual work plans. Furthermore, the scope of the annual bonus for an officer reporting to the CEO may be derived, in accordance with the decision of the compensation committee and the board of directors, from individual metrics in the areas of responsibility for which the officer is responsible and from a discretionary personal assessment component. This mix helps to adjust the scope of the annual bonus to the officer's contribution to achieving the company's goals.

17.2.5. Setting the caps for the variable component helps in creating a balanced incentive structure for officers.

17.2.6. The maximum ratio between the fixed component and the variable component in the employment terms of officers, as expressed in the caps set for the various compensation components, is proportionate and balanced. According to the compensation policy, the annual cost of the variable compensation components for each officer shall not exceed the ratio set for this matter in the compensation policy.

17.2.7. For details regarding the annual bonus mechanism for an active Chairman of the Board and the CEO, see parts C and D of this report.

17.3. Regarding the equity compensation component -

17.3.1. The compensation policy includes the possibility to grant equity compensation in order to increase the alignment of interests between the officers and the shareholders, as well as to strengthen the basing of compensation on a long-term component.

17.3.2. For the types of equity compensation, caps were set at the time of grant, intended to maintain the maximum ratio between the fixed component and the variable component set in the compensation policy.

17.3.3. Eligibility for equity compensation will be spread over a period of not less than 36 months, except in the case of target-contingent warrants whose vesting is conditional on meeting a price target as stated in the compensation policy.

17.3.4. To the extent that the equity compensation is of a type paid in cash, a cap was set for it at the time of exercise.

17.4. Regarding compensation for termination of employment -

17.4.1. The compensation policy sets a cap for the adjustment grant, and besides them, no retirement grant of any kind will be granted.

17.4.2. Within the framework of considerations for granting an adjustment grant, the period of office or employment of the officer, their employment terms during this period, the company's performance during said period, the officer's contribution to achieving the company's goals and maximizing its profits, circumstances of termination of office or employment of the officer, special non-compete undertaking, and other relevant special circumstances may be considered.

17.5. The compensation policy includes provisions regarding insurance, indemnification, and exemption, in accordance with the common practice in public companies.

17.6. The process of preparing the compensation policy included an examination and reference to the gap between the compensation paid to the company's officers and the compensation paid to the company's employees and contractor employees, and the discussion on the subject is reflected in the compensation policy.

17.7. The compensation policy includes the possibility of reducing the variable compensation of officers at the discretion of the compensation committee and the board of directors in circumstances justifying it.

17.8. The terms of the compensation policy are reasonable and acceptable under the circumstances, considering the responsibility imposed on the company's officers, the scope of the company's activities, and the goals of the 800 Plan.

17.9. In light of all the above and in light of the aggregate data that stood before the compensation committee and the board of directors, the compensation policy is appropriate and reasonable under the circumstances.

Names of the directors with a personal interest and the nature of their personal interest

18.1. The Chairman of the Board may have a personal interest arising from the fact that the compensation policy sets provisions regarding the terms of office and employment of the Chairman of the Board.

18.2. All board members may have a personal interest arising from the fact that the compensation policy sets provisions regarding the terms of office and employment of directors in the company.

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Part C - Details regarding the approval of updates to the terms of tenure and employment of the Chairman of the Company's Board of Directors

19. Background

19.1. The Chairman of the Company's Board of Directors, Mr. Harel Locker, has been serving in his position since January 1, 2021. Starting from January 1, 2025, the Chairman of the Board is employed as a salaried employee and employer-employee relations apply between him and the Company. For details regarding the employment terms of the Chairman of the Board starting from January 1, 2025, including an annual bonus mechanism and equity-based compensation, see the company's meeting invitation report, as published on December 26, 2024 (Reference No.: 2024-01-627604).

19.2. On May 19, 2026, after the approval of the compensation committee, the Company's Board of Directors approved the following updates to the terms of tenure and employment of the Chairman of the Board, including an annual bonus mechanism and the allocation of additional equity-based compensation of the performance-based warrants type as defined in Section 9.12 of the new compensation policy, all as detailed below.

20. Annual Bonus Mechanism

20.1. It is proposed to approve for the Chairman of the Board an annual bonus mechanism for the years 2027 to 2029 (inclusive) in accordance with the provisions of Section 8 of the compensation policy proposed in this report, as they apply to an active Chairman of the Board, and up to a cap of 12 monthly salaries. Regarding the annual bonus mechanism for the year 2026, no change will apply in relation to the annual bonus mechanism established in Section 8.3 of the previous compensation policy.

20.2. The clawback provisions established in Section 12 of the proposed compensation policy will apply to the annual bonus mechanism.

20.3. The annual bonus will not constitute part of the monthly salary and will not be taken into account for the purpose of calculating severance pay, contributions, social or other provisions, and any other benefit.

20.4. Simulation for the application of the annual bonus mechanism for the years 2024 and 2025:

To the extent that the annual bonus mechanism for the year 2027 onwards had been applied to the years 2024 and 2025, the Chairman of the Board would not have been entitled to an annual bonus in these years.

21. Allocation of warrants to the Chairman of the Board

21.1. On May 19, 2026, the Company's Board of Directors approved an amended outline for the offering of securities of the warrants type to officers and employees in the Company and its subsidiaries (hereinafter: "the Outline"). For details regarding the Outline, see the Company's immediate report dated May 20, 2026, published concurrently with this report.

21.2. As part of the Outline, the Company's Board of Directors approved on May 19, 2026 (after the approval of the compensation committee regarding the officers), the allocation of performance-based warrants (as defined in Section 9.12 of the policy)

compensation) defined in the Outline as Warrants Series 2 (hereinafter: "warrants") to officers and employees in the Company and subsidiaries (including the Chairman of the Company's Board of Directors), where a condition for such allocation is the approval of the proposed compensation policy by the meeting as stated in this report, and with respect to the Chairman of the Board, also the approval of the grant of the warrants by the meeting as stated in this report.

For further details see Sections 1.1.5, 1.2 and 4.2 of the Outline.

21.3. Accordingly, it is proposed that 21,747 warrants be allocated to the Chairman of the Board, exercisable into 21,747 shares of the Company, representing approximately 0.2% of the issued capital and voting rights of the Company (approximately 0.19% on a fully diluted basis).³

It should be emphasized that the above calculation of the percentage that the exercise shares constitute of the Company's share capital and voting rights in the Company is based on a theoretical assumption that each warrant is exercisable into one ordinary share. This is a theoretical calculation only, since according to the terms of the plan, the exercise shares that will actually be allocated as a result of the exercise of the warrants will reflect the value of the financial benefit that will be inherent in the warrants at the time of exercise (net exercise mechanism), subject to the adjustments detailed in Section 2.4 of the Outline.

21.4. As of the date of approval of the allocation by the Board of Directors, the warrants to be allocated to the Chairman of the Board have a total fair value of NIS 3,283,797 (5.9 monthly salaries for each year in the period for achieving the target as defined in Section 22.6 below). The calculation of the quantity of warrants was done as a derivative of the fair value based on an economic opinion according to the Monte Carlo model and in accordance with the assumptions underlying the fair value as detailed in Section 4.2 of the Outline.

21.5. The exercise shares, if and to the extent they are allocated, will be registered for trading on the TASE and will be allocated in the name of the Company for registrations in whose name the Company's securities are registered.

21.6. The warrants will be allocated in accordance with the Company's options plan from 2009 (hereinafter: "the Options Plan" or "the Plan") and in accordance with what is detailed in the Outline regarding said plan.

21.7. The warrants will be allocated to the Chairman of the Board under the options plan in accordance with the provisions of Section 102 of the Income Tax Ordinance (New Version), 1961 (hereinafter: "the Ordinance") in the capital gains tax track with a trustee.

21.8. The allocation date will be set as one trading day after the date of approval by the general meeting of the proposed compensation policy and the allocation of warrants to the Chairman of the Board, provided that all necessary approvals by law have been received, including all the approvals detailed in Section 1.2 of the Outline, including TASE approval for the registration for trading of the exercise shares that will result from the warrants. To the extent that all approvals have not been received before the date

3 The issued and paid-up share capital of the Company is 13,861,499 ordinary shares of the Company. Out of said total shares, 3,098,769 are dormant shares, as defined in the Companies Law, which are held by the Company and therefore do not confer voting rights and the right to receive dividends. It should be clarified that this is a theoretical calculation and the actual holdings are expected to be lower because it is a net exercise mechanism

of the general meeting, the allocation date will be set as one trading day after receiving all said approvals (hereinafter: "the Allocation Date").

For details regarding the grant of the warrants, including in accordance with the Private Offering Regulations, see Section 22 below (including by way of reference to the Outline).

22. Details according to the Private Offering Regulations

22.1. The said allocation of warrants is considered a "material private offering" as defined in Regulation 1 of the Private Offering Regulations.

22.2. Identity of the Offeree

Mr. Harel Locker, Chairman of the Company's Board of Directors. The offeree is not an "interested party" as the term is defined in Section 270 of the Companies Law. The offeree is an interested party in the company by virtue of his position, as defined in the Securities Law.

22.3. Terms of the securities proposed to be issued, their quantity and the percentage they will constitute of the voting rights and of the issued and paid-up capital of the Company after the allocation and on a fully diluted basis

For the terms of the securities, see Chapter 2 of the Outline. For their quantity and percentage, see Section 21.3 above.

22.4. Rights as a shareholder in the Company

See Section 2.12 of the Outline.

22.5. Adjustments

See Section 2.4 of the Outline.

22.6. Vesting dates, exercise period

22.6.1. All of the warrants will vest on the date on which the vesting performance target as defined below (hereinafter: "the Vesting Date") occurs, and provided that the offeree is employed by the Company or a subsidiary or on the condition that he provides services to the Company or a subsidiary on the Vesting Date.

In this regard, "vesting performance target" is the date on which the average closing price of the Company's share on the TASE over a period of 30 consecutive trading days exceeded NIS 1,200⁴ (hereinafter: "the Price Target"), until the end of 48 months from the Allocation Date (hereinafter: "the Period").

4 It will be clarified that the Price Target will also be adjusted for a corporate event (including a cash dividend distribution) for which the record date occurs after the date of the Board's approval for the allocation (May 19, 2026) and before the Allocation Date as defined in Section 21.8 above. For details regarding such adjustments, see Section 2.4 of the Outline.

for achieving the target"). In this regard, the Vesting Date will occur at the end of the 30th trading day, i.e., the last trading day included for the purpose of calculating the average for the purpose of meeting the Price Target.

22.6.2. To the extent that the Price Target is not achieved by the end of the period for achieving the target, the offeree will not be entitled to exercise the warrants allocated to him, and the offeree's rights to them will expire, and the warrants of that portion will be returned to the pool used by the Company, from which the Company will be entitled to grant warrants in accordance with the provisions of the Plan and the Outline, at its sole discretion.

22.6.3. The warrants that vest as stated will be exercisable starting from the later of: (a) their vesting date; or (b) the end of a period of 24 months from the Allocation Date and until the end of a period of 54 months from the Allocation Date (hereinafter: "the Exercise Period"). Warrants that are not exercised by the end of the Exercise Period will be cancelled and returned to the pool used by the Company, from which the Company will be entitled to grant warrants in accordance with the provisions of the Plan and the Outline, at its sole discretion.

Notwithstanding the above, in the event of termination of employment of an offeree who is an officer in the company after an "acceleration event in the company" as defined in Section 2.16.2 of the Outline, warrants that have vested as stated may also be exercised before the end of a period of 24 months from the Allocation Date.

22.7. Price of the proposed securities and prices on the TASE of securities of the same series on the day preceding the date of publication of the immediate report, and the ratio between them in percentages
22.7.1. As detailed in the Outline, the warrants will be allocated to the offeree without consideration.
22.7.2. The closing price of the Company's share on the TASE on May 19, 2026 (the day before the publication of this report) is NIS 809 (hereinafter: "the Closing Price").
22.7.3. The exercise price to be paid to the Company for the exercise of one warrant (subject to adjustments as stated in Section 2.4 of the Outline $^5$ ) is NIS 1,000.
22.7.4. The ratio between the Closing Price and the exercise price is approximately $80.9\%$ .
22.7.5. It should be emphasized that, in accordance with the terms of the warrants, the exercise price will be carried out through a net exercise mechanism ("Cashless"), in which the exercise price will not actually be paid by the offeree, but will be theoretical only for the purpose of calculating the value of the benefit, as detailed in Section 2.3.5.2 of the Outline.

22.8. Method of exercising the warrants

See Sections 2.3.6 and 2.3.7 of the Outline.

5 It will be clarified that the exercise price will also be adjusted for a corporate event (including a cash dividend distribution) for which the record date occurs after the date of the Board's approval of the allocation (May 19, 2026) and before the Allocation Date as defined in Section 21.8 above. For details regarding such adjustments, see Section 2.4 of the Outline.

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22.9. Warrants Period

See section 2.7 of the Prospectus.

22.10. Termination of Employment

See section 2.8 of the Prospectus.

22.11. Trust Arrangement and Offeree Taxation

See sections 2.10 and 2.17 of the Prospectus.

22.12. Fair Value of the Warrants

22.12.1. As of the date of approval of the allocation of warrants to the Chairman of the Board of Directors of the Company by the Board of Directors (May 19, 2026), the total fair value of the warrants is NIS 3,283,797.

22.12.2. The fair value is based on the Monte Carlo model. For the purpose of calculating the quantity of warrants derived from the fair value, the Company relied on an economic opinion prepared by BDO Consulting and Management Ltd. (hereinafter: "BDO"). For details regarding the assumptions for calculating the quantity of warrants, see section 4.2 of the Prospectus.

22.12.3. The value of each warrant is approximately NIS 151.

22.13. Issued and Paid-up Share Capital of the Company

The registered share capital as of the date of this report (in nominal NIS) of the Company is NIS 150,000,000, divided into 30,000,000 ordinary shares of NIS 5.00 par value each. Out of the said registered share capital, 13,861,499 ordinary shares have been issued and paid up (including 3,098,769 treasury shares held by the Company as of the date of this report).

22.14. Rate of Holdings of Interested Parties

Prior to this report, the Chairman of the Board has no holdings in the Company. To the best of the Company's knowledge, the holdings of interested parties in it, the holdings of the Chairman of the Board, the Company's CEO and the other shareholders in the issued capital and voting rights (net of treasury shares) before and after the allocation date are as detailed in Appendix A of the Prospectus.

22.15. Details of the Consideration and the Way the Consideration was Determined

The warrants will be allocated to the Chairman of the Company's Board of Directors without consideration as part of the terms of office and employment. For details regarding the exercise price, see section 22.7 above (the exercise price is subject to adjustments as stated in section 2.4 of the Prospectus).

For details of the manner in which the consideration was determined and the reasons of the Compensation Committee and the Board of Directors, see section 24 below.

22.16. The name of each material shareholder or officer in the Company who has, to the best of the Company's knowledge, a personal interest in the consideration, and the nature of the personal interest of each of them

See section 4.5 of the Prospectus.

22.17. The required approvals or conditions set for the execution of the allocation according to the proposal, whether they have been received or met, and if not, on what date they are expected to be received or met

22.17.1. See the required permits and approvals as stated in section 1.2 of the Prospectus.
22.17.2. Approval of the General Meeting as stated in this report.

22.18. Details of agreements, between the offeree and a shareholder in the Company or between the offerees, all or some of them, between themselves or between them and others

See section 4.6 of the Prospectus.

22.19. Detail of prevention or restriction in performing actions in the offered securities

See sections 2.14 and 2.10 of the Prospectus.

22.20. Date of allocation of the securities

See section 21.8 above.

22.21. Program Management

See section 2.5 of the Prospectus.

22.22. Restrictions

See section 2.5.2 of the Prospectus.

22.23. Transfer of rights upon death

See section 2.9 of the Prospectus.

23. Details of the Terms of Office and Employment

Below is a summary of the compensation expected to be recorded in the Company's financial statements for the year 2026, subject to the approval of the resolution on the agenda regarding the terms of office and employment of the Chairman of the Board, assuming that Mr. Locker will serve as Chairman of the Board for a full year (in terms of cost to the Company, in thousands of NIS):

Details of the Recipient of the Compensation				Compensation for Services in Cost Terms
Name	Position	Scope of Employment (%)	Holding Rate in the Entity's Capital (%)	Salary (1)	Bonus (2)	Share-based Payment (3)	Total
Mr. Harel Locker	Chairman of the Company's Board of Directors	85%	-	2,214	-	1,837	4,051

(1) For details regarding the permanent employment terms of the Chairman of the Board, see section 26 of the Immediate Report dated December 26, 2024, mentioned above.

(2) For details regarding the annual bonus mechanism, see section 8.3 of the Compensation Policy.

(3) In accordance with the fair (accounting) value of the warrants as stated in section 22.12 above that will be attributed to the year 2026, as of the date of approval of the allocation by the Board of Directors and the Meeting, the allocation date would have occurred on June 25, 2026. The fair value to be recorded in the financial statements for the year 2026 is expected to change according to changes in the Company's share price until the allocation date (as defined in section 21.8 above). The expense in the table also includes the accounting expense attributed to the year 2026 in respect of warrants granted to the Chairman of the Board in accordance with the approval of the General Meeting from January 1, 2025.

23.1. The ratio based on the expected data of the Chairman of the Board for the year 2026 between the annual cost of the variable components (assuming an annual bonus in the amount of 12 monthly salaries according to the maximum targets of the consolidated annual net profit under section 8.3.1 of the Compensation Policy) and the annual cost for all the terms of office of the Chairman of the Board for the year 2026 will stand at approximately $59.75\%$⁶.

23.2. The ratio between the projected cost (in annual terms) of the proposed terms of office and employment for the Chairman of the Board for the year 2026 (assuming an annual bonus in the amount of 12 monthly salaries according to the maximum targets of the consolidated annual net profit under section 8.3.1 of the Compensation Policy), and the external and average salary cost of the other employees of the Company, including contractor employees employed by the Company, is 37.9 times and 35.5 times, respectively⁷.

24. Approval Procedure for Updates to the Terms of Office and Employment of the Chairman of the Board

⁶ Regarding the equity compensation approved for the Chairman of the Board by the General Meeting on January 1, 2025, it is a linear distribution of the fair value of the said equity compensation as of the date of approval of the said grant by the Board of Directors over the vesting years and not the accounting value attributed to the compensation in each of these years. Regarding the performance-contingent warrants proposed to the Chairman of the Board as stated in this report, it is a linear distribution of the fair value of the performance-contingent warrants at the time of the Board's approval of the performance-contingent warrants over the number of years of the period for achieving the goal and not the accounting value attributed to the performance-contingent warrants in each of these years.

⁷ The ratios were calculated while normalizing the positions of the Company's employees, including contractor employees to a 100% scope of employment. Employee data does not include officers in the Company. Employee data are data for the year 2025, for employees who worked a full year (including the cost in the books in 2025 of equity compensation). Regarding the equity compensation approved for the Chairman of the Board by the General Meeting on January 1, 2025, it is a linear distribution of the fair value of the said equity compensation as of the date of approval of the said grant by the Board of Directors over the vesting years and not the accounting value attributed to the compensation in each of these years. Regarding the performance-contingent warrants proposed to the Chairman of the Board as stated in this report, it is a linear distribution of the fair value of the performance-contingent warrants at the time of the Board's approval of the performance-contingent warrants over the number of years of the period for achieving the goal and not the accounting value attributed to the performance-contingent warrants in each of these years.

24.1. Within the framework of the meetings of the Compensation Committee and the Board of Directors, the following data and information were reviewed and examined, among others:

24.1.1. The current terms of office of the Chairman of the Board;

24.1.2. The employment terms of employees in the Company (including the data required for reference in accordance with Amendment No. 20 to the Companies Law);

24.1.3. The Company's proposed compensation policy;

24.1.4. A comparative study by an external consultant, regarding the compensation data of chairmen of boards of directors in peer companies.

24.2.

The members of the Compensation Committee who participated in the committee meeting in which the updates to the terms of office and employment of the Chairman of the Board were approved are: Ami Shafran (External Director; Chairman), Yair Nachman Shalhab (External Director), and Amir Cohen.

24.3. The members of the Board of Directors who participated in the Board meeting in which the updates to the terms of office and employment of the Chairman of the Board were approved: Ami Shafran (External Director), Yair Nachman Shalhab (External Director), Yael Danieli (Independent Director), Michal Marom-Brikman (Independent Director), Sami (Shmuel) Babkov, and Amir Cohen.

24.4. The updates to the terms of office and employment of the Chairman of the Board were unanimously approved by the Compensation Committee and the Board of Directors.

24.5. The following are the reasons of the Compensation Committee and the Board of Directors for approving the updates to the terms of office and employment of the Chairman of the Board:

24.5.1. The Chairman of the Board was elected to his position as an active Chairman of the Board in November 2020 and has served in his position since January 2021, and led the strategic changes in the Company in recent years which focused it on the areas of activity in which it has competitive advantages, i.e., convenience retail, food and energy for transportation (including electric charging), alongside development and realization of real estate assets that are not used in the core activity of the Company and separation from activity that is not at the core of the new strategy.

24.5.2. The focus on strategy was made possible, among other things, thanks to the process of splitting the Ashdod refinery from Paz and the sale of the industrial company Pazkar, which led to a clear managerial focus and an orderly strategy that can be implemented and managed optimally.

24.5.3. These moves created the basis on which the 500 plan was built, followed by the 800 plan recently approved by the Board of Directors.

24.5.4. These moves were made during a challenging period in the global and Israeli economy, and specifically in the Company's sectors of activity, due to the COVID-19 pandemic, the war in Ukraine and the Iron Swords War. The Company also approved a new dividend policy and returned to distributing a dividend on a quarterly basis both from current operations and from the realization of real assets. From the date of the refinery split and adoption

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The new dividend policy shortly thereafter (September 2023), the company distributed and/or declared a dividend to shareholders in an aggregate amount of approximately NIS 2.6 billion.

24.5.5. In the last five years and in light of the implementation of the strategic processes carried out in the company, the company presented a significant excess return over the leading stock indices (TA-35 Index and TA-125 Index).

24.5.6. The proposed compensation conditions for the Chairman of the Board are in line with the contribution to the company of the Chairman of the Board of the company, the complexity of his position and the scope of his responsibility, and his expected continued contribution and in light of the desire to provide the Chairman of the Board with appropriate incentives to achieve the company's long-term strategic goals, lead to its growth and maximize its profits and value for its shareholders. This is, among other things, in light of the success of the 500 program and in line with the targets of the 800 program that was recently approved.

24.5.7. The allocation of performance-based warrants to the Chairman of the Board is part of a general plan in the company for granting performance-based warrants in the company, and in line with the potential contribution to the company of the Chairman of the Board of the company, the complexity of his position, his expected contribution and the scope of responsibility of the Chairman of the Board as well as in light of the desire to provide the Chairman of the Board with appropriate incentives to achieve the company's long-term strategic goals, lead to its growth and maximize its profits and value for its shareholders while fully successfully implementing the 800 program. The vesting of the performance-based warrants is subject to meeting a performance target regarding a share price which, if achieved, is intended to create alignment between the equity compensation for the Chairman of the Board and the maximization of value for the company's shareholders.

24.5.8. The allocation of performance-based warrants to the Chairman of the Board, which constitutes part of the compensation conditions for the Chairman of the Board, was determined, among other things, in light of the size and complexity of the company, the nature of its activity and the challenges it faces. The value of the allocation is appropriate for the scope and complexity of his position, which includes many areas of responsibility considering the company's activities.

24.5.9. The equity compensation conditions are reasonable under the circumstances and are in the company's favor, including considering the performance target and the exercise price that were set. Given the nature of the equity compensation, it was not found appropriate to set a cap on its value at the time of exercise.

24.5.10. The tenure conditions of the Chairman of the Board brought for approval are in line with the company's proposed compensation policy, which is now brought for the approval of the company's competent organs.

24.5.11. The ratio between the tenure conditions of the company's Chairman of the Board and the average and median salary of the company's employees is reasonable and is not expected to affect labor relations in the company.

24.5.12. The compensation conditions are in line with comparative data regarding the compensation of chairmen of the board in public companies similar to the company, in their activity characteristics and size, based on comparative data conducted by an external consultant.

24.5.13. The Compensation Committee and the Board of Directors believed it to be in the company's favor that the Chairman of the Board's tenure conditions would include variable components in the form of an annual bonus and equity compensation in order to help lead to its growth and maximize its profits and value for its shareholders.

24.5.14. In light of the entirety of the reasons as stated above, the compensation conditions for the Chairman of the Board brought for approval are appropriate, reasonable and in the company's favor.

25. Names of directors with a personal interest and the nature of their personal interest

The Chairman of the Board has a personal interest arising from the fact that the approval of this resolution relates to the tenure and employment conditions of the Chairman of the Board.

Part D - Details regarding the approval of updates to the tenure and employment conditions of the company's CEO

26. Background

26.1. The company's CEO, Mr. Nir Stern, has been in office since January 22, 2020. The tenure and employment conditions of the company's CEO were first approved at a general meeting of the company on April 1, 2020, and recently at a general meeting on January 1, 2025.

26.2. For details regarding the main existing tenure and employment conditions, see the company's immediate report dated March 19, 2020 (Reference No.: 2020-01-027201) and dated December 26, 2024, including an annual bonus mechanism and equity compensation (Reference No.: 2024-01-627604).

26.3. On May 19, 2026, after approval by the Compensation Committee, the company's Board of Directors approved updates to the tenure and employment conditions of the company's CEO, which include an annual bonus mechanism and additional equity compensation in the form of performance-based warrants as defined in section 9.12 of the new compensation policy, all as detailed below.

27. Annual bonus mechanism

27.1. It is proposed to approve for the company's CEO an annual bonus mechanism for the years 2027 to 2029 (inclusive) in accordance with the provisions of section 8 of the compensation policy brought for approval in this report, as they apply to the company's CEO, and up to a cap of 15 monthly salaries. Regarding the annual bonus mechanism for the year 2026, there will be no change relative to the annual bonus mechanism determined in section 8.3 of the previous compensation policy.

27.2. The clawback provisions set forth in section 12 of the proposed compensation policy will apply to the annual bonus mechanism.

27.3. The annual bonus will not constitute part of the monthly salary and will not be taken into account for the purpose of calculating severance pay, contributions, social or other provisions and any other benefit.

27.4. Simulation of the implementation of the annual bonus mechanism for the years 2024 and 2025:

Had the annual bonus mechanism for the year 2027 onwards been applied to the years 2024 and 2025, the CEO would not have been entitled to an annual bonus in these years.

28. Allocation of warrants to the company's CEO

28.1. On May 26, 2026, the company's Board of Directors approved an updated outline for the offering of securities in the form of warrants to officers and employees in the company and its subsidiaries. For details about the outline, see the company's immediate report dated May 20, 2026, published concurrently with this report.

28.2. Within the framework of the outline, on May 19, 2026 (following the approval of the Compensation Committee regarding the company's officers), the company's Board of Directors approved an allocation of performance-based warrants (as defined in section 9.12 of the compensation policy) defined in the outline as Series 2 Warrants (hereinafter: "warrants") to officers and employees in the company and subsidiaries (including the company's CEO), where a condition for such allocation is the approval of the compensation policy brought for approval by the general meeting as stated in this report, and regarding the CEO, also the approval of the granting of the warrants by the general meeting as stated in this report.

For additional details, see sections 1.1.5, 1.2 and 4.2 of the outline.

28.3. Accordingly, it is proposed that 27,798 warrants be allocated to the company's CEO, exercisable for 27,798 shares of the company, representing approximately 0.26% of the issued capital and voting rights of the company (approximately 0.24% on a fully diluted basis).⁹

It should be emphasized that the above calculation of the percentage that the exercise shares constitute of the company's share capital and voting rights in the company is based on a theoretical assumption that each warrant is exercisable for one ordinary share. This is a theoretical calculation only, because according to the terms of the plan, the exercise shares that will actually be allocated as a result of the exercise of the warrants will reflect the value of the financial benefit that will be inherent in the warrants at the time of exercise (net exercise mechanism), subject to the adjustments detailed in section 2.4 of the outline.

28.4. As of the date of approval of the allocation by the Board of Directors, the warrants to be allocated to the CEO have a total fair value of NIS 4,197,498 (5.9 monthly salaries per vesting year). The calculation of the quantity of warrants was made as a derivative of the fair value based on an economic opinion according to the Monte Carlo model and in accordance with the assumptions underlying the fair value as detailed in section 4.2 of the outline.

28.5. The exercise shares, if and to the extent allocated, will be registered for trading on the Stock Exchange and will be allocated in the name of the Nominee Company in whose name the company's securities are registered.

⁹ The issued and paid-up share capital of the company is 13,861,499 ordinary shares of the company. Of this total amount of shares, 3,098,769 are dormant shares, as this term is defined in the Companies Law, which are held by the company and therefore do not confer voting rights and rights to receive dividends. It will be clarified that this is a theoretical calculation and the actual holdings are expected to be lower because it is a net exercise mechanism.

28.6. The warrants will be allocated in accordance with the options plan and in accordance with what is detailed in the outline regarding said plan.

28.7. The warrants will be allocated to the CEO according to the options plan in accordance with the provisions of Section 102 of the Ordinance in the capital gains tax track with a trustee.

28.8.

The allocation date will be set as one trading day after the date of approval by the general meeting of the proposed compensation policy and the allocation of warrants to the CEO and company, provided that all required approvals by law have been received, including all approvals detailed in section 1.2 of the outline including the approval of the Stock Exchange for the listing for trading of the exercise shares resulting from the warrants. If all approvals are not received before the general meeting date, the allocation date will be set as one trading day after receiving all such approvals (hereinafter: "Allocation Date").

For details regarding the granting of the warrants, including in accordance with the Private Offering Regulations, see section 29 below (including by way of reference to the outline).

29. Details according to Private Offering Regulations

29.1. The said allocation of warrants is considered a "material private offering" as defined in Regulation 1 of the Private Offering Regulations.

29.2. Identity of the Offeree

Mr. Nir Stern, the company's CEO. The offeree is not an "interested party" as the term is defined in Section 270 of the Companies Law. The offeree is an interested party in the company by virtue of his position, as this term is defined in the Securities Law.

29.3. Terms of the securities proposed to be issued, their quantity and the percentage they will constitute of the voting rights and of the issued and paid-up capital of the company after the allocation as well as on a fully diluted basis

For the terms of the securities, see Chapter 2 of the outline. For their quantity and percentage, see section 28.3 above.

29.4. Rights as a shareholder in the company

See section 2.12 of the outline.

29.5. Adjustments

See section 2.4 of the outline.

29.6. Vesting dates, exercise period

See section 22.6 above.

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29.7. Price of the offered securities and their price on the Stock Exchange of securities of the same series on the day preceding the publication of the immediate report, and the ratio between them in percentages

See section 22.7 above.

29.8. Manner of exercise of the warrants

See sections 2.3.6 and 2.3.7 of the prospectus.

29.9. Warrants period

See section 2.7 of the prospectus.

29.10. Termination of employment

See section 2.8 of the prospectus.

29.11. Trust arrangement and taxation of the offeree

See sections 2.10 and 2.17 of the prospectus.

29.12. The fair value of the warrants

29.12.1. As of the date of approval of the allocation of warrants to the CEO of the Company by the Board of Directors (May 19, 2026), the total fair value of the warrants is NIS 4,197,498.

29.12.2. The fair value is according to the Monte Carlo model. For the purpose of calculating the quantity of warrants derived from the fair value, the Company relied on an economic opinion prepared by BDO. For details regarding the assumptions for calculating the quantity of warrants, see section 4.2 of the prospectus.

29.12.3. The value of each warrant is approximately NIS 151.

29.13. Issued and paid-up share capital of the Company

See section 22.13 above.

29.14. Holding rate of interested parties

See section 22.14 above.

29.15. Details of the consideration and the manner in which the consideration was determined

The warrants will be allocated to the CEO of the Company without consideration as part of the terms of office and employment. For details regarding the exercise price, see section 22.7 above (the exercise price is subject to adjustments as stated in section 2.4 of the prospectus).

For details of the manner in which the consideration was determined and the reasons of the Remuneration Committee and the Board of Directors, see section 31 below.

29.16. The name of each material shareholder or officer in the company who has, to the best of the company's knowledge, a personal interest in the consideration, and the nature of each person's personal interest

See section 4.5 of the prospectus.

29.17. Required approvals or conditions set for the execution of the allocation according to the offer, whether they were received or met, and if not, at what date they are expected to be received or met

29.17.1. See the required permits and approvals as stated in section 1.2 of the prospectus.

29.17.2. Approval of the General Meeting as stated in this report.

29.18. Details of agreements between the offeree and a shareholder of the Company or between the offerees, all or some of them, between themselves or between them and others

See section 4.6 of the prospectus.

29.19. Details of prevention or restriction on performing actions in the offered securities

See sections 2.14 and 2.10 of the prospectus.

29.20. Date of allocation of the securities

See section 28.8 above.

29.21. Management of the program

See section 2.5 of the prospectus.

29.22. Restrictions

See section 2.5.2 of the prospectus.

29.23. Transfer of rights upon death

See section 2.9 of the prospectus.

30. Details of the terms of office and employment

Below is a summary of the remuneration expected to be recorded in the Company's financial statements for the year 2026, subject to the approval of the resolution on the agenda regarding the terms of office and employment of the Company's CEO, assuming Mr. Stern serves as the Company's CEO for a full year (in terms of cost to the Company, in thousands of NIS):

Details of the Remuneration Recipient				Remunerations for services in terms of cost
Name	Role	Scope of position (%)	Holding rate in the corporation's capital (%)	Salary (1)	Bonus (2)	Share-based payment (3)	Total
Mr. Nir Stern	Company CEO	100%	-	2,923	-	2,343	5,266

(1) For details regarding the fixed employment terms of the CEO, see sections 13.1 to 13.3 of the Company's immediate report dated March 19, 2020 mentioned above.
(2) For details regarding the annual bonus mechanism, see section 8.3 of the new remuneration policy.
(3) In accordance with the fair value (accounting) of the warrants as stated in section 29.12 above that will be attributed to the year 2026, as of the date of approval of the allocation by the Board of Directors and assuming that the allocation date would have occurred on June 25, 2026. The fair value that will be recorded in the financial statements for 2026 is expected to change according to changes in the Company's share price until the allocation date (as defined in section 28.8 above). The expenditure in the table also includes the accounting expenditure attributed to the year 2026 for warrants granted to the CEO in accordance with the General Meeting's approval dated January 1, 2025.

30.1. The ratio according to the expected data of the CEO for 2026 between the annual cost of the variable components (assuming an annual bonus in the amount of 15 monthly salaries in accordance with the maximum targets of the consolidated annual net profit under section 8.3.1 of the remuneration policy) and the annual cost for all terms of office of the CEO for 2026 will be approximately $61.8\%$ .

30.2. The ratio between the projected cost (in annual terms) of the proposed terms of office and employment for the CEO for 2026 (assuming an annual bonus in the amount of 15 monthly salaries in accordance with the maximum targets of the consolidated annual net profit under section 8.3.1 of the remuneration policy), and the average external salary cost of the rest of the company's employees, including the contractor employees employed in the company, is approximately 52.8 times and approximately 49.4 times, respectively $^{11}$ .

Approval process for updates to the terms of office and employment of the Company's CEO

31.1. As part of the meetings of the Remuneration Committee and the Board of Directors, the following data and information were reviewed and examined, among others:

31.1.1. Current terms of office of the CEO;
31.1.2. Terms of employment of employees in the company (including the data required for reference according to Amendment No. 20 of the Companies Law);
31.1.3. The proposed remuneration policy of the Company;
31.1.4. Comparative research conducted by an external consultant, relative to the remuneration data of CEOs in comparison companies.

31.2. The members of the Remuneration Committee who participated in the committee meeting where the updates to the CEO's terms of office and employment were approved are: Ami Shafran (Chairman; External Director), Yair Nachman Shalhab (External Director), and Amir Cohen.
31.3. The members of the Board of Directors who participated in the board meeting where the updates to the CEO's terms of office and employment were approved are: Ami Shafran (External Director), Yair Nachman Shalhab (External Director), Yael Danieli (Independent Director), Michal Marom Brikman (Independent Director), Sami (Shmuel) Babkov, and Amir Cohen.
31.4. The updates to the CEO's terms of office and employment were approved unanimously by the Remuneration Committee and the Board of Directors.

31.5. Below are the reasons of the Remuneration Committee and the Board of Directors for approving the updates to the CEO's terms of office and employment:

31.5.1. The CEO has served in the Company since January 2020, and led the strategic changes in the Company in recent years, which focused it on the areas of activity in which it has competitive advantages, i.e., convenience retail, food and energy for transportation (including electric charging), alongside the development and realization of real estate assets that are not used in the Company's core activity and the separation of activity that is not at the core of the new strategy.
31.5.2. The focus on the strategy was made possible, among other things, thanks to the split of the Ashdod refinery from Paz and the sale of the industrial company Pazkar, which brought clear managerial focus and an orderly strategy that can be optimally implemented and managed.

Regarding the equity remuneration approved for the CEO by the General Meeting of January 1, 2025, this is a linear distribution of the fair value of the said equity remuneration as of the date of approval of the said grant by the Board of Directors over the vesting years and not the accounting value attributed to the equity remuneration in each of these years. Regarding the performance-contingent warrants proposed for the CEO, it is a linear distribution of the fair value of the performance-contingent warrants at the date of Board approval of the performance-contingent warrants over the number of years of the period to achieve the target and not the accounting value attributed to the performance-contingent warrants in each of these years.

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31.5.3. These moves created the basis upon which the 500 plan was built, followed by the 800 plan recently approved by the board of directors.

31.5.4. These moves were made during a challenging period in the global and Israeli economy, particularly in the company's sectors of activity, due to the COVID-19 pandemic, the war in Ukraine, and the Iron Swords war. The company also approved a new dividend policy and returned to distributing dividends on a quarterly basis from both current operations and the realization of real assets. Near the time of the refinery's split and the adoption of the new dividend policy shortly thereafter (September 2023), the company distributed and/or declared a dividend to shareholders in an aggregate scope of approximately NIS 2.6 billion.

31.5.5. In the last five years and in light of the implementation of strategic processes carried out in the company, the company presented a significant excess return over the leading stock indices (TA-35 Index and TA-125 Index).

31.5.6. The proposed compensation terms for the CEO are in alignment with the contribution to the company by the company's CEO, the complexity of his role and scope of his responsibility, and his expected continued contribution, and in light of the desire to give the company's CEO appropriate incentives to achieve the company's long-term strategic goals, lead its growth, and maximize its profits and value for its shareholders. This is, among other things, in light of the success of the 500 plan and in alignment with the goals of the recently approved 800 plan.

31.5.7. The allocation of target-based warrants to the CEO is part of a general company plan for granting target-based warrants in the company, and in alignment with the potential contribution to the company by the company's CEO, the complexity of his role, his expected contribution, and the scope of the CEO's responsibility. Furthermore, in light of the desire to retain the CEO's tenure over time and to give him appropriate incentives to achieve the company's long-term strategic goals, lead its growth, and maximize its profits and value for its shareholders while fully implementing the 800 plan successfully. The vesting of the target-based warrants is subject to meeting a performance target regarding a share price which, if achieved, creates an alignment between the equity compensation for the CEO and the maximization of value for the company's shareholders.

31.5.8. The allocation of target-based warrants to the CEO, which constitutes part of the compensation terms for the company's CEO, was determined, among other things, in light of the company's size and complexity, the nature of its activity, and the challenges facing it. The value of the allocation is appropriate for the scope and complexity of his role, which includes many areas of responsibility considering the company's activity.

31.5.9. The equity compensation terms are reasonable under the circumstances and are in favor of the company, including with attention to the performance target and exercise price determined. Given the nature of equity compensation, it was not found appropriate to set a cap on its value at the time of exercise.

31.5.10.

The conditions of tenure of the company's CEO brought for approval are in alignment with the company's proposed compensation policy, which is currently brought for approval by the company's authorized organs.¹²

31.5.11. The ratio between the conditions of tenure of the company's CEO and the average and median salary of the company's employees is reasonable and does not affect labor relations in the company.

31.5.12. The compensation terms are in alignment with comparative data about CEO compensation in public companies similar to the company in their activity characteristics and size, based on comparative data conducted by an external consultant.

31.5.13. In light of the overall reasons stated above, the compensation terms for the CEO brought for approval are appropriate, reasonable, and for the benefit of the company.

32. Names of directors with a personal interest and the essence of their personal interest

32.1. None of the board members have a personal interest in this decision.

32.2. For caution's sake, the Chairman of the board did not participate in the meeting to approve the updates in the conditions of tenure and employment of the CEO due to the similarity in the annual bonus mechanism brought for the meeting's approval regarding them.

Sincerely,

Paz Retail and Energy Ltd.

Names of signers:

Nir Stern, CEO

Anat Rothschild, VP, General Counsel and Company Secretary

Appendices:

Appendix A – Voting Ballot

Appendix B – New Proposed Compensation Policy

¹² It will be noted that insofar as the proposed compensation policy is not approved, the conditions of tenure of the CEO brought for approval will be seen as a deviation from the compensation policy according to section 272(c1)(2) of the Companies Law.

Paz Retail and Energy Ltd.

Compensation Policy for Officers

As approved by the General Meeting of the Company on ___ in 2026

1. Definitions

In this document, the following terms shall have the meanings appearing beside them:

"The Company" - Paz Retail and Energy Ltd.

"Companies Law" - The Companies Law, 5759-1999, as will be amended from time to time.

"Officer" - As defined in the Companies Law, as well as a manager who will be defined as an officer regarding this compensation policy by the company's board of directors.

"Base Compensation" regarding an officer serving as a salaried employee — monthly gross salary for social contribution purposes without bonuses; regarding an officer providing services as a service provider - according to section 6.1.2 below.

"Conditions of Tenure and Employment" as defined in the Companies Law.

"Relief Regulations" - Companies Regulations (Relief in Transactions with Interested Parties), 5760-2000.

2. Introduction

2.1 This document constitutes the company's policy regarding the compensation of its officers.

2.2 The compensation policy, on its various components, was discussed by the compensation committee and the company's board of directors (after the compensation committee's recommendations were given). The compensation committee and the board of directors were also assisted by external advice. Within the framework of the meetings as stated, data and information were reviewed and examined, among others, as follows: conditions of tenure and employment of officers in the company; data required regarding employment conditions of employees in the company, according to the Companies Law; various comparative works on compensation matters; and more.

2.3 The purpose of this document is to establish guidelines regarding the manner of compensation for officers in the company.

2.4 The formulation of the compensation policy and its publication are intended to increase the level of transparency of the company's activity in everything related to the compensation of its officers towards the shareholders, and to improve the ability of shareholders to express their opinion and influence the company's compensation policy.

2.5 The compensation components to which an officer will be entitled will be those specifically approved for him/her by the authorized organs in the company, subject to the provisions of any law. The compensation policy does not grant the company's officers and/or any other third party any right.

2.6 The compensation committee and the board of directors are entitled to examine, from time to time, the compensation policy and the need for its adaptation, and they have the authority to interpret its provisions in any case of doubt regarding the manner of its implementation.

2.7 The compensation policy is formulated in the masculine gender for convenience purposes only and is intended for both women and men alike.

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2.8

The considerations that guided the Compensation Committee and the Company's Board of Directors in adopting the compensation policy included the considerations and matters required under Section 267b of the Companies Law, including, among others, promoting the Company's long-term goals; the Company's work plan and policy from a long-term perspective; the Company's size and the nature of its activities; creating appropriate incentives for the Company's officers, considering, among other things, the Company's risk management policy; creating a proper balance between fixed and variable components in the officers' compensation and between short-term and long-term compensation; increasing the officers' sense of identification with the Company and its activities; recruiting officers with appropriate skills and experience and retaining them over time.

Regarding terms of office and employment that include variable components - within the framework of the compensation policy, the officer's contribution to achieving the Company's goals and increasing its profits was also considered, all from a long-term perspective in accordance with the officer's role.

3. Applicability and Validity

3.1

The compensation policy will require approval from time to time by the Company's relevant organs, at the frequency required by law.

3.2

The compensation policy shall apply to compensation approved by the relevant Company organs starting from the date of the adoption of the compensation policy by the Company's General Meeting onwards. It should be noted that the compensation policy does not prejudice the Company's existing engagements with officers or terms of office and employment for a Company officer that were approved prior to the date of the adoption of the compensation policy.

4. Objectives of the Compensation Policy

4.1

Below are detailed, in summary, the objectives of the compensation policy:

4.1.1

Providing tools for recruiting and retaining high-quality and professional officers, who constitute the solid foundation for the Company's management, its continued development, and success over time.

4.1.2

Creating alignment with the Company's business goals and objectives, balancing appropriate incentives for officers to improve Company performance, fixed and variable components, and recruiting officers with skills and retaining them over time.

4.1.3

Establishing variable compensation components based on the officer's contribution to the Company and linking the officer to the Company's long-term goals and performance, with the aim of maximizing Company profits while practicing prudent risk management.

4.1.4

Creating a link between the performance of the Company's stock and the compensation of the officers, through the granting of equity-based compensation.

4.1.5

Establishing compensation components that encourage cooperation between the Company's officers and increase synergy within the Company.

4.1.6 Creating a proper balance between different compensation components - fixed components vs. variable components, short-term components vs. long-term components, and cash compensation vs. equity compensation.

5. Criteria for Examination when Determining Terms of Office and Employment for an Officer

For the purpose of determining the terms of office and employment for a serving officer or a candidate for office as an officer, the following criteria (but not necessarily only these) will be examined, as relevant to the circumstances and as required:

5.1 The officer's education, skills, expertise, professional experience, and achievements.

5.2 The officer's role, areas of responsibility, period of employment in the Company, the officer's previous terms of office and employment (if not a new officer), and the terms of office and employment granted to the previous officer in the role.

5.3 The officer's expected contribution to achieving the Company's short-term and long-term goals.

5.4 Special skills, unique expertise, and/or unique knowledge possessed by the officer.

5.5 The ratio between the fixed compensation components and the variable compensation components to be granted to the officer.

5.6 Comparison of the reasonableness of the terms of office and employment to be granted to the officer relative to the terms of office and employment among officers serving in similar roles in similar companies in the Company's sample group, whose securities are traded on the Tel Aviv Stock Exchange Ltd.

5.7 The Company's work plans.

5.8 The Company's financial condition.

6. Fixed Compensation Components for Officers¹

6.1 General

6.1.1 The fixed compensation is intended to compensate the officer for the time they invest in performing their duties and for performing their daily job tasks. The fixed compensation includes two components: (1) base compensation; and (2) ancillary terms.

6.1.2 The base compensation caps specified in sections 6.2.2-6.2.3 below refer to a salaried employee employed in a full-time position. In the event that an officer is not a salaried employee and/or is not employed in a full-time position, the necessary adjustments will be made. Thus, in the case of an officer who is not employed in a full-time position, an adjustment of the base compensation cap (as detailed in sections 6.2.2-6.2.3 below) will be made according to the actual position scope. Similarly, in the event that an officer is employed as a service provider (i.e., payment to the service provider is made against an invoice), the cost of the officer's employment to the Company (before VAT), as a service provider,

1 In sections 6-12 of this document, "officers" - officers, excluding directors, but including an active Chairman of the Board.

shall not exceed the cost of the officer's employment had they been a salaried employee (to remove doubt, including the cost of social benefits and ancillary terms). It is clarified that where the compensation policy uses caps in terms of base compensation (such as in relation to an annual bonus or equity compensation value cap), then with respect to such a service provider, the base compensation for the purpose of these caps will be calculated as the gross monthly salary that the officer would have received had they been employed as an employee and not as a service provider, based on the Company's assessment and according to existing employment terms or employment terms that would have been approved had they been employed as an employee.

6.1.3 The Company may, at its discretion, decide that the engagement with the officer, in whole or in part, shall be through a management services agreement as a service provider instead of an engagement in an employment contract as an employee, and that no employer-employee relationship shall exist between the Company and that officer with whom it enters into such a management services agreement. The compensation policy shall also apply to an engagement in such a management services agreement, with the necessary changes.

6.2 Base Compensation Cap (Monthly Compensation)

6.2.1 Active Chairman of the Board²: The base compensation cap for an active Chairman of the Board, for an 85% position, shall not exceed the base compensation cap of the Chairman of the Board serving at the time of the adoption of this compensation policy, as detailed in the resolution of the Special General Meeting dated January 1, 2025.³

6.2.2 CEO: The base compensation cap of the CEO shall not exceed a gross amount of 175,000 NIS (for a 100% position).

6.2.3 Officers other than the Chairman of the Board or the CEO: The base compensation cap of these officers, for a 100% position, shall not exceed a gross amount of 120,000 NIS.

6.2.4 Indexation:

6.2.4.1 The base compensation caps specified in sections 6.2.1-6.2.3 above will be updated (only upwards) in accordance with changes in the Consumer Price Index ("the Index") compared to the Index published on March 15, 2023.

6.2.4.2 The Company shall be entitled to determine that the base compensation granted to an officer shall be indexed, in whole or in part, to the Index. Additionally, the Company shall be entitled to determine an indexation mechanism whereby in the case of a decrease in the Index, the base compensation will not change until an increase in the Index offsets the decrease.

² Meaning a Chairman of the Board who dedicates time to the role at a scope of a 50% position or more. As of this date, the Chairman of the Board serves at a scope of an 85% position.

³ For details, see the Company's Assembly Convocation Report, as published on December 26, 2024 (Reference No.: 2024-01-627604).

6.3 Ancillary Terms

6.3.1 In addition to the base compensation, the Company shall be entitled to pay or grant (as applicable) to the Company's officers: (a) rights required by law (or, at the Company's discretion, on terms better than those established by law), such as social benefits, vacation days (including accumulation of vacation days and the right to their redemption), convalescence pay and the like; and (b) ancillary terms common and accepted in the labor market, such as study fund, car, car maintenance expenses $^4$ , mobile phone, mobile phone maintenance expenses, medical examinations, newspapers, studies and professional training, professional literature, insurance, membership fees in a professional organization and the like.
6.3.2 The Company shall be entitled to gross up the tax imposed on a Company officer regarding a component or components of their terms of office and employment.

6.4 Expense Reimbursement

The Company shall be entitled to reimburse Company officers for reasonable expenses actually incurred in the performance of their duties, such as travel expenses abroad, per diem and hosting, against the presentation of receipts and in accordance with Company procedures.

7. Termination Terms

7.1 Employment Period: Notice Period

7.1.1 As a rule, the engagement with the Company's officers shall be for an indefinite period, where each party shall be entitled to terminate the engagement at any time, subject to the notice period established in the agreement.
7.1.2 Notice Period: The Company shall be entitled to determine a notice period (in advance or at the termination of employment/office) for officers that shall not exceed 6 months.
7.1.3 As a rule, an officer shall undertake in their agreement with the Company that during the notice period they will continue to perform their role in practice. The Company shall be entitled to waive the officer's employment in the Company and terminate the employer-employee relationship during the notice period, while paying the base compensation, including the ancillary terms paid to the officer, for the remainder of the notice period, in lieu of the notice period.

7.2 Retirement/Adaptation Grant

7.2.1 The Company shall be entitled to grant an officer a retirement/adaptation grant (in addition to the payment during the notice period and their rights to severance pay) in a total amount not exceeding the officer's base compensation multiplied by $6^{5}$ . The Company's decision to grant

An officer may be entitled to cash payment in lieu of receiving a company car or car maintenance expenses.

It is clarified that a retirement/adaptation grant for an officer may be granted including the cost of ancillary terms and social benefits.

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Retirement/adjustment grant for an officer can be provided at the beginning of the officer's term, during the term, or at the end of the term.

7.2.2 As part of the decision to grant a retirement/adjustment grant to an officer, the following criteria may be considered, as far as possible and as relevant in the circumstances, among others: the term of office or employment of the officer, the terms of office and employment of the officer, the company's performance during said period, the officer's contribution to achieving the company's goals and maximizing its profits, circumstances of termination of office or employment, a special non-compete undertaking by the officer, and other relevant special circumstances.

7.3 Severance Pay

7.3.1 As a rule, payment of severance pay to officers in the company will be made in accordance with the provisions of Section 14 of the Severance Pay Law, 5723-1963⁶ ("Severance Pay Law"). Employment agreements with new officers in the company will include provisions according to Section 14 of the Severance Pay Law.

7.3.2 In the event of termination of the employer-employee relationship, the officer shall be entitled to severance pay, except in circumstances where the right to severance pay can be denied to the officer, fully or partially, according to a court ruling and/or in circumstances to be determined, if determined, by the Compensation Committee and the Board of Directors (such as in the case of breach of fiduciary duty by the officer).

8. Annual Bonus (Variable Compensation Component)

8.1 General

8.1.1 Variable compensation components in general, and a goals-based annual bonus in particular, are intended to achieve several objectives: (1) to reward the officer for their contribution to achieving the company's goals and maximizing its profits, with a long-term view; (2) to maximize value for the company's shareholders and create a common interest for the company's officers and shareholders; and (3) to retain the company's officers in their roles over time.

8.1.2 Officers reporting to the CEO will be entitled to an annual bonus according to an annual or multi-year bonus plan which will be brought for approval by the Compensation Committee and the Board of Directors ("Bonus Plan"). The Bonus Plan will be in accordance with the principles detailed in Section 8 below.

6 As of the date of adoption of the compensation policy, an officer is serving in the company for whom, for part of his term of office, he is not signed on Section 14 of the Severance Pay Law, and has a right to severance pay according to Section 12 of the Severance Pay Law for that period.

8.1.3 The amount of the bonuses will be determined as a derivative of the base compensation.⁷ No social rights shall be granted for bonuses granted to officers, and they shall not be considered part of the base compensation for the purpose of calculating severance pay.

8.2 Threshold Conditions

8.2.1 The threshold condition for paying the annual bonus to the company's officers will be - meeting 80% of the company's annual net profit target as determined in the company's annual budget and calculated in relation to the net profit in its consolidated and audited annual reports for the calendar year for which the bonus is paid ("Profit Target" and "Grant Year", respectively).

8.2.2 For the purpose of calculating the rate of meeting the profit target regarding the threshold condition and for calculating the consolidated net profit for the purpose of determining the annual bonus amount including regarding sections 8.3 and 8.4 below, the following items will be neutralized from the company's consolidated annual net profit according to the company's consolidated and audited financial statements (for the purpose of this section 8: "Consolidated Annual Net Profit"):

(a) Revaluation profits/losses of investment real estate and fixed assets;

(b) Effect of fuel inventory losses/profits (after tax) as presented in the company's Board of Directors report;

(c) One-time or exceptional profits or losses resulting from changes during the grant year in accounting standards or changes during the grant year in tax laws applicable to the company, as decided by the Compensation Committee;

(d) In the case of selling an activity or asset, fully or partially, the contribution of the sold activity to the company's current net profit (as defined below) will be proportionally reduced from the profit target for the threshold condition and from the consolidated annual net profit tiers for sections 8.3 and 8.4 below, for the period in which, according to the accounting standards applicable to the company, the profit originating from the sold activity is no longer included in the net profit in the company's consolidated financial statements (fully or partially, and as long as it is not fully included, the proportional reduction will be made according to the rate of decrease in the company's holding in the sold activity) (hereinafter: "Adjustment Date") and will also be fully reduced from the consolidated annual net profit tiers in the following grant years during the compensation policy period.

"The contribution of the sold activity to the company's current net profit" - The contribution of the sold activity to the company's consolidated net profit in the last eight quarters ending before the Adjustment Date, according to the company's consolidated financial statements prepared during the said period, divided by two.

⁷ It is clarified that the annual bonus cap will be calculated according to the officer's base compensation as of December 31 of the grant year.

(e) Notwithstanding the above, and without derogating from what is stated therein, the Compensation Committee and the Board of Directors may neutralize additional one-time and/or exceptional events (including, in the case of a capital gain from the sale of an asset or activity as well as in the case of exceptional effects of financing expenses which significantly affected the net profit) whose inclusion would lead to a result that does not serve the objectives underlying the compensation policy and the annual bonus.

8.2.3

In the event that the threshold condition was not met with respect to a grant year, then - the company's officers shall not be entitled to an annual bonus under the provisions of sections 8.3 - 8.6 below, for that grant year.

8.3 Annual bonus for Active Chairman of the Board, CEO, and Deputy CEO

8.3.1

The annual bonus for an active Chairman of the Board, CEO, and Deputy $\mathsf{CEO}^8$ will be determined according to the consolidated annual net profit of the company for the relevant grant years, according to the following tiers, subject to an annual bonus cap of 15 times the base compensation, and regarding an active Chairman of the Board, 12 times the base compensation (hereinafter in this section 8.3: "Annual Bonus Cap") $^9$ :

	Bonus amount in terms of base compensation multiple
Consolidated Annual Net Profit	Year 2027	Year 2028
Profit over NIS 560 million and up to NIS 600 million (inclusive)	Profit of NIS 560 million - 0 Profit of NIS 600 million - 9. Any profit between NIS 560 million and NIS 600 million will be credited with a bonus that will be calculated linearly.	0
Profit over NIS 600 million and up to NIS 660 million (inclusive)	12	Profit of NIS 600 million - 0 Profit of NIS 660 million - 9. Any profit between NIS 600 million and NIS 660 million

For the purpose of this compensation policy, at any time, no more than one Deputy CEO reporting to the CEO shall serve in the company.
9 It should be noted that with respect to the year 2026, the goals and annual bonus caps set forth in Section 8.3 of the previous compensation policy as approved by the general meeting on January 1, 2025 shall apply, including by way of updating the terms of office and employment of the Chairman of the Board and the CEO. See also the company's meeting summons report, as published on December 26, 2024 (reference no.: 2024-01-627604).

	Bonus amount in terms of base compensation multiple
Consolidated Annual Net Profit	Year 2027	Year 2028
		will be credited with a bonus that will be calculated linearly.
Profit over NIS 660 million and up to NIS 700 million (inclusive)	15 Regarding an active Chairman - 12	12
Profit over NIS 700 million	15 Regarding an active Chairman - 12	15 Regarding an active Chairman - 12

8.3.2

With respect to the year 2029, the Compensation Committee and the Board of Directors will determine near the beginning of that year the consolidated annual net profit targets that will entitle the officer to the annual bonus up to the annual bonus cap as stated in section 8.3.1 above, taking into account the company's work plan for the year 2029, and subject to the required approvals (to the extent required) by law, provided they are not less than the goals that actually applied in the year 2028.

8.3.3 The Compensation Committee and the Board of Directors shall be entitled to approve a discretionary annual bonus for an active Chairman of the Board, the CEO, and a Deputy CEO, not based on measurable criteria, which shall not exceed three times the base compensation of each of them, and subject to the annual bonus cap and the required approvals (to the extent required) by law, including the requirement for general meeting approval regarding a discretionary annual bonus for an active Chairman of the Board.

8.4 Annual bonus for officers reporting to the CEO

8.4.1 The annual bonus cap for officers reporting to the CEO¹⁰ (in this section 8.4: "Officers") shall be 10 times the base compensation of the relevant officer.

8.4.2 The annual bonus will consist of one or more of the following components, in accordance with the mix and weightings as determined by the Compensation Committee and the Board of Directors with respect to each such officer for each grant year (where the weight of each component can range between 0% and 100%):

A. Company-wide target-based component -

(1) Meeting the company's consolidated annual or multi-year net profit targets in that year, for all company officers.

¹⁰ Except for a Deputy CEO to whom the bonus provisions set forth in Section 8.3 above shall apply.

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(2) The consolidated annual net profit targets shall be determined by the Compensation Committee and the Board of Directors within the framework of the approval of the bonus plan near the beginning of the bonus year.

B. Component based on personal targets -

(1) Meeting a personal target or a number of personal targets (measurable as far as possible) in the area of responsibility for which the officer is responsible in the bonus year in accordance with their role and area of responsibility.

(2) The personal targets for each officer will be recommended by the CEO within the framework of the approval of the bonus plan by the Compensation Committee and the Board of Directors near the beginning of the bonus year.

C. Discretionary bonus component -

Shall be determined according to the discretion of the relevant manager (CEO and/or Chairman of the Board) regarding the performance of the officer in the bonus year, and subject to receiving approval from the Compensation Committee and the Board of Directors.

The total actual annual bonus for each of the officers for a bonus year shall be determined according to the degree of the officer's fulfillment of the target or targets set in the bonus plan regarding the bonus year. The total annual bonus that will be paid to officers, not based on measurable considerations, shall not exceed 4.5 times the base compensation of each of them.

8.4.3

Method of calculating the annual bonus upon termination of employment relations

8.5

If the date of termination of the employer-employee relations with an officer in the company occurs before the bonus year has ended, the company shall be entitled to approve for the officer an annual bonus for the period in which they worked in said year, provided that the amount of the bonus does not exceed the pro-rata portion of the annual bonus for that year to which the officer would have been entitled, based on the officer's actual work period out of the total bonus year, unless the Compensation Committee and the Board of Directors decide otherwise.

Calculation of the bonus for an officer who started working during a bonus year

8.6

Regarding an officer in the company who started working during a bonus year and actually worked 6 months or more, the company shall be entitled to pay them a bonus for that year according to the principles of the compensation policy, multiplied by the rate of their actual work period out of the total bonus year. Near their entry into the position, the measurable targets for that year will be defined for the officer, in accordance with the measurable targets detailed in Section 8.4.2 above. An officer in the company who actually worked less than 6 months during a bonus year shall not be entitled to a bonus for it, unless the Compensation Committee and the Board of Directors decide otherwise.

Authority of the Board of Directors to reduce the annual bonus

8.7

The Compensation Committee and the Board of Directors shall be entitled, at their discretion, to reduce or cancel the annual bonus for the officers in the company (all or part of them), even if the relevant officer met the targets set for them in the annual bonus plan. In exercising discretion, various considerations regarding the company's activities will be taken into account, including, among others, the company's financial results, the company's financial results relative to other companies active in the same field, extreme and/or special circumstances affecting the field of activity, a material adverse change in the company's situation or the macroeconomic situation, and meeting compliance targets for laws, regulations, and regulatory provisions.

Forfeiture of bonuses

8.8

If the tenure of any of the officers comes to an end in circumstances where they would not be entitled to severance pay and/or in other circumstances as determined by the Compensation Committee and the Board of Directors (as far as determined), their entitlement to an annual bonus and to all parts of a bonus which have not yet been paid to them shall be revoked.

Special bonus

8.9

In addition to the annual bonus and the provisions set forth in Section 8 above regarding it, 8.9.1 whether or not the threshold condition as stated in Section 8.2.1 above is met in the bonus year, the Compensation Committee and the Board of Directors shall be entitled to grant a special bonus to the officers (subject to required approvals by law, if required), if they found that there are reasons justifying it (even if not predetermined), such as, fulfillment by the officer of the personal metrics and/or the unit targets (as determined for the officer in the bonus plan), performance of a special project of significant importance to the company's success, performance of a significant project that was not included in the annual work plan, completion of a significant project earlier than the schedule set for its execution, entering into a strategic and/or material agreement for the company, handling a significant transaction, performance of strategic commercial collaborations and leading a move with a significant contribution to the company's success. It is clarified that regarding an active Chairman of the Board, approval of the General Meeting will be required for a special bonus under this Section 8.9.

The amount of the special bonus paid to officers shall not exceed 6 times the base 8.9.2 compensation of each of them, and together with the amount of the annual bonus for the year in which the special bonus was given - shall not exceed the annual bonus cap as detailed in Sections 8.3 and 8.4 above. It is clarified that in any case, the total bonuses paid to the CEO with the approval of the Compensation Committee and the Board of Directors only, not based on measurable considerations, shall not exceed cumulatively 3 times the base compensation of the CEO.

9. Equity compensation (variable compensation component)

In view of the advantages inherent in equity compensation as a tool for motivating and 9.1 retaining managers, the company shall be entitled to offer, from time to time, to the officers in the company to participate in an equity compensation plan $^{11}$ , where the scope

11 Including warrants to purchase the company's shares, restricted shares, restricted share units and equity compensation settled in cash (for example, a grant linked to the company's share price ("phantoms")).

The equity compensation granted to each officer will be determined, among other things, taking into account their role, achievements and contribution to the company.

9.2 Vesting period: The vesting period of the full equity compensation will be spread over a period of no less than 36 months, where the first installment will vest within a period of no less than 12 months from the date of grant. The vesting conditions may include provisions regarding the acceleration of vesting periods in the event of - death/disability/medical reasons/change of control$^{12}$ in the company as a result of which trading in the company's shares on the stock exchange will cease. Furthermore, in the case of a change of control in the company as a result of which trading in the company's shares does not cease - acceleration of the next upcoming installment of the equity compensation that has not yet vested (only) will be possible. Without prejudice to the generality of the foregoing, acceleration of vesting of warrants granted before March 30, 2023 in accordance with Section 2.16 of the shelf offering report for employees as published on March 22, 2021 (Ref. No.: 2021-01-041772), will be seen as conforming to the compensation policy regarding all officers.

9.3 The vesting of the equity compensation will be contingent on the continued employment of the officer in the company or in a related company as defined in the Companies Law (except in cases where provisions regarding acceleration as stated in Section 9.2 above were determined). The grant of restricted shares (and restricted units or a grant linked to the share price (phantom)), will be possible on the condition that they are contingent on threshold targets relevant to the nature of the company's activity, except for a rate of 25% of the equity plan or up to three months of salary cost.

9.4 Equity compensation value cap: The benefit value of the equity compensation$^{13}$ (according to an accepted economic model that will be chosen by the company), for each of the vesting years of the equity compensation (on average), shall not exceed 9 times the officer's base compensation.

9.5 Exercise price: In the case of allocation of warrants to purchase the company's shares, the exercise price of each warrant shall not be less than the average of the closing prices of the company's share on the Tel-Aviv Stock Exchange Ltd. ("the Exchange") in the 30 trading days preceding the date of approval of the grant of the warrants by the Board of Directors. In the case of equity compensation given in shares (including in the case of a grant linked to the share price), the company's share price, for the purpose of calculating the value of the compensation at the time of exercise/grant, will be determined as the average of the company's share prices on the exchange in the 30 trading days preceding the date of grant/exercise, as the case may be.

9.6 Warrant period (or the relevant equity component): Each installment of the equity compensation shall be exercisable within a period of up to 72 months from the date of its grant to the officer.

As of the date of this report, the company is a company without a control core as the term "control" is defined in the Securities Law. In this context, "change of control" is a change or the existence of control in the company. Without prejudice to the generality of the foregoing, each of the following events will be considered a "change of control": (1) a holder of holdings in the company (directly or indirectly and including together with others) has started to hold twenty-five percent or more of a certain type of means of control in the company; (2) a merger and/or other structural change (including an arrangement) following which the company is not the surviving company; (3) a merger and/or other structural change (including an arrangement) following which the shareholders of the other entity hold, cumulatively, fifty percent or more of the issued and paid-up share capital of the company following the event as stated. It is clarified that in the case of a change of control as a result of which trading in the company's shares on the exchange ceases – acceleration of all the warrants that have not yet vested will be possible; and in the case of a change of control as a result of which trading in the company's shares does not cease – acceleration of the next upcoming installment of the equity compensation that has not yet vested only will be possible.

It is clarified, that this is a linear distribution of the fair value of the equity compensation at the time of the Board of Directors' approval of the equity compensation over the number of vesting years according to an accepted economic model and not the accounting value attributed to the equity compensation in each of these years.

9.7 Equity compensation may be granted, as relevant according to the type of equity compensation, in accordance with the provisions of Section 102 of the Income Tax Ordinance, in the capital gains tax track, or may be in accordance with the optimal tax track for the officers in the company, as determined from time to time.

9.8 Equity compensation may be subject to standard adjustments, which include adjustments for dividends, bonus shares, changes in the share capital (such as consolidation and split), rights offering and structural change of the company (such as split and merger) and the like.

9.9 To the extent that the equity compensation is of the type settled in cash, the maximum value of the compensation actually paid at the time of exercise shall not exceed 2 times the share price at the time the compensation was granted to the officer¹⁴. In the case of equity compensation that is not settled in cash, the company shall be entitled to determine, at the time of the decision on the grant of the compensation, a cap for the exercise value of the equity compensation.

9.10 The principles detailed in this Section 9 reflect the main terms of the equity compensation for officers in the company. Other provisions relating to equity compensation will be determined within the framework of its grant to an officer in the company and/or within the framework of an equity compensation plan in the company, including (but not limited to), the determination of provisions regarding the exercise of warrants via a net exercise mechanism in shares.

9.11 If the tenure of an officer in the company comes to an end in circumstances where they would not be entitled to severance pay and/or in other circumstances as determined by the Compensation Committee and the Board of Directors (as far as determined), the entitlement of the officer to equity compensation that has vested and has not yet been exercised or has not yet vested shall be revoked.

9.12 Target-based warrants -

9.12.1 In addition to the equity compensation in accordance with this Section 9, the company shall be entitled to allocate warrants whose vesting shall not be subject to a vesting period as stated in Section 9.2 above, but instead shall be contingent on the average price of the company's share on the exchange (dividend adjusted), in a period of no less than 30 consecutive trading days, exceeding a certain price (hereinafter: "the Price Target"), within a period of time not exceeding 48 months from the date of allocation, all as determined in advance at the time of approval of the grant of the warrants by the Board of Directors (hereinafter: "the Period for Achieving the Target").

9.12.2 The Price Target that will be determined as stated in Section 9.12.1 above shall be a target that will be approved in advance by the General Meeting, including within the framework of approving allocation terms for the CEO and/or the Chairman of the Board and will also apply to the other officers in the company to whom target-based warrants will be allocated.

9.12.3 The benefit value of the target-based warrants$^{15}$ (according to an accepted economic model that will be chosen by the company), for each of the years of the Period for Achieving the Target (on average), shall not exceed 6 times the officer's base compensation, in addition to the benefit value of other equity compensation that will be granted under Section 9.4 above. If the grant of target-based warrants was approved during the compensation policy period, any additional allocation of warrants during the Period for Achieving the Target

14 It is clarified, that the said cap refers to the payment in relation to one share, while the actual payment will be in relation to more than one share.

15 It is clarified, that this is a linear distribution of the fair value of the target-based warrants at the time of the Board of Directors' approval of the target-based warrants over the number of years of the Period for Achieving the Target according to an accepted economic model and not the accounting value attributed to the target-based warrants in each of these years.

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The original series determined in the grant terms (and even if the target was reached before the end of the target achievement period) will count towards the limit of the benefit value cap as stated for the relevant years.

10. The Ratio between Fixed Compensation Components and Variable Compensation Components

10.1 The mix of compensation components is intended, among other things, to create a balance and a proper ratio between fixed compensation and variable compensation in order to create performance-based compensation that promotes the company's goals on the one hand, and matches the company's risk policy on the other.

10.2 Therefore, the annual cost of the variable compensation components¹⁶ for an officer shall not exceed 65% of the total annual cost for all of their tenure and employment terms.

10.3 In any case, the total annual cost of all employment and tenure terms for the company's CEO shall not exceed NIS 6.5 million¹⁷. Notwithstanding the above in this section, in any grant year in which the consolidated annual net profit of the company, as defined in section 8 above, reaches NIS 500 million or more, the total annual cost of the employment and tenure terms for the company's CEO (in the grant year or in the year following the grant year, depending on the date of recording the accounting expense for the grant paid for the grant year in which the consolidated net profit of the company reached said threshold) shall not exceed NIS 7 million and shall not exceed NIS 8 million if performance-based warrants are granted to the CEO according to this compensation policy during the target achievement period years as determined at the time of granting the performance-based warrants by the board of directors¹⁸.

11. The Ratio between the Employment Terms of Officers and the Employment Terms of Other Company Employees

11.1 Within this framework, the ratio between the employment cost of the officer whose employment terms are brought for approval and the average and median salary cost of the rest of the company's employees, and the effect of said ratios on labor relations in the company, will be examined. It should be noted that the company sees importance in proper compensation for all company employees and in maintaining reasonable ratios, considering the circumstances of the case, between the compensation for officers and that of the rest of the company's employees.

11.2 After examining the ratio between the cost of the tenure and employment terms of the Chairman of the Board and the CEO and the average and median salary of the rest of the company's employees and the contractor employees employed at the company, as well as the ratio between the cost of the tenure and employment terms of the officers reporting to the CEO and the average and median salary of the rest of the company's employees and contractor employees as aforesaid¹⁹, the Compensation Committee and the Board of Directors believe,

¹⁶ Regarding this matter, "variable compensation components" – annual bonus, special bonus, and equity compensation (in a linear distribution of the fair value of the equity compensation at the time of board approval for the grant over the number of vesting years or the number of years of the target achievement period if performance-based warrants are concerned, as applicable) (for the avoidance of doubt, except for adjustment fees or the cost of the adjustment period).

¹⁷ The annual cost amount will be linked to the Consumer Price Index published on March 15, 2023. Equity compensation for a calendar year will be calculated according to the total economic value of this compensation at the time of its approval by the Board of Directors, divided linearly over its vesting period or the number of years of the target achievement period in the case of performance-based warrants, as applicable, and not according to the accounting cost attributed to a specific year.

The amounts are linked to the Consumer Price Index published on March 15, 2023. Regarding the calculation of equity compensation, it is a linear distribution of the fair value of the equity compensation at the time of board approval of the equity compensation over the number of vesting years or the number of years of the target achievement period in the case of performance-based warrants, as applicable, according to an accepted economic model and not the accounting value attributed to the equity compensation in each of these years.

19 As of the date of approval of the compensation policy by the Board of Directors, the ratio between the cost of the tenure and employment terms of the company's officers, including the Chairman of the Board and the company's CEO, to the average salary cost of the rest of the company's employees and contractor employees

that these ratios are reasonable considering the nature of the company's activity, its size, the mix of human resources employed by it, and the nature of its business, and they do not adversely affect labor relations in the company.

12. Clawback / Completion of Amounts Granted to Officers

12.1 Without detracting from any remedy available to the company under law, if it turns out that a payment was made to any of the officers in connection with their tenure and employment terms, based on data that turned out to be erroneous and was restated in the company's financial statements within 12 quarters from the date of payment to the officer, and in light of the restatement of the data, an amount lower than that actually paid should have been paid to the officer, the officer shall return to the company, upon its demand, any such payment (net, excluding taxes deducted).

12.2 If it turns out that a component of the tenure and employment terms was not paid, in full or in part, to any of the officers, based on data that turned out to be erroneous and was restated in the company's financial statements within 12 quarters from the date on which such component should have been paid, and in light of the restatement of the data, an amount higher than that actually paid should have been paid, the company will credit the officer with the missing part of the payment and grant them any right they would have had if the tenure and employment terms had been calculated from the beginning based on the data as restated.

12.3 The return / completion of the amounts will be done with index linkage, and the Compensation Committee and the Board of Directors shall be entitled to determine the dates of return so that they are carried out within a reasonable period considering the size of the amount the officer is required to return to the company.

13. Board of Directors Compensation

13.1 Subject to section 13.2 below, compensation for directors in the company, except for an active Chairman of the Board (if other compensation has been determined for them), will be based on an annual fee and a per-meeting fee (in this section 13, "the Compensation") (including in the case of a written resolution or a telephone call). Lawful VAT will be added to the annual fee and the per-meeting fee.

13.2 The compensation for directors and external directors shall be in accordance with the Companies Regulations (Rules Regarding Compensation and Expenses for External Directors), 5760-2000 ("Compensation Regulations") taking into account the nature and size of the company and the director's roles, duties, and expertise in the company and the relevant market conditions. The board of directors shall be entitled to reimbursement of expenses in accordance with the Compensation Regulations.

employed by the company (excluding officers) is 22.53 and to the external salary cost of the rest of the company's employees and contractor employees employed at the company (excluding officers) is 24.17. Also, as of the said date, the ratio between the cost of the tenure and employment terms of the Chairman of the Board and the average salary cost of the rest of the company's employees and contractor employees employed at the company (excluding officers) is 33.26 and to the external salary cost of the rest of the company's employees and contractor employees employed at the company (excluding officers) is 35.68. Also, as of the said date, the ratio between the cost of the tenure and employment terms of the CEO and the average salary cost of the rest of the company's employees and contractor employees employed at the company (excluding officers) is 49.20 and to the external salary cost of the rest of the company's employees and contractor employees employed at the company (excluding officers) is 52.77. The said ratios were calculated as follows (based on 2025 data): regarding fixed components, the existing fixed components of the company's officers were taken into account; regarding equity compensation - regarding officers, it is a linear distribution of the fair value of the equity compensation as of the date of approval of said orant by the Board of Directors over the vesting years and not the accounting value attributed to the equity compensation in each of these years, and regarding employees, the book cost in 2025 was taken into account; regarding the annual bonus, the bonuses actually paid to the officers in 2026 for the year 2025 were taken into account.

14. Exemption, Insurance and Indemnification

14.1 Directors and Officers Liability Insurance - The company shall be entitled to purchase a directors and officers liability insurance policy (including Run-Off insurance or insurance in connection with a relevant event or activity) which will apply to directors and officers in the company and/or its subsidiaries, as they may be from time to time, which will insure their liability subject to the limitations and approvals set by law. The scope of the insurance coverage will be determined from time to time according to the scope of the company's activities and the risks involved in the company's activities, the company's equity, and its status as a public company.

14.2 Without detracting from the generality of section 14.1 above, the company's engagement in insurance policies in connection with the liability insurance of directors and officers may be approved by the Compensation Committee only according to Regulation 1B1 of the Relief Regulations or any provision that replaces it, provided that all the following conditions are met:

14.2.1 The insurance coverage for each policy shall be with a liability limit not exceeding USD 250 million, per occurrence and in the aggregate, plus reasonable legal defense expenses above the liability limit.

14.2.2 The annual premium amount and the deductible amount for the company for claims against officers will be in accordance with market conditions at the time the policy is issued and their cost will not be material to the company. It will be clarified that the company's officers will not bear a deductible.

14.2.3 The engagement is on market terms and is not likely to materially affect the company's profitability, assets, or liabilities.

For the avoidance of doubt, it is clarified that the company's engagements in insurance policies in accordance with this section 14.2 shall not be brought for further approval by the general meeting of the company.

14.3

Advance Indemnification: The company shall be entitled to provide an undertaking for advance indemnification to any officer of the company, by virtue of their position as an officer in the company or their position in other companies where they were appointed on behalf or at the request of the company, subject to the limitations and approvals set by law. The total indemnification amount that the company will undertake toward an officer and toward all officers, for a financial liability as stated in section 260(a)(1) of the Companies Law, shall be limited, with respect to one series of events, to a sum not exceeding 25% of the company's total equity, according to the company's last annual or quarterly financial statement published before the date on which the company is actually required to indemnify the officer. Nothing in the above shall detract from an undertaking for indemnification if and to the extent it was approved and/or previously given by the company to officers and which is in effect.

14.4 Retrospective Indemnification: The company shall be entitled to indemnify any officer retrospectively in the broadest possible manner according to the Companies Law.

14.5 Exemption from Duty of Care: Subject to the provisions of any law and the company's articles of association, the company shall be entitled to grant an officer an exemption from liability for any damage caused to it due to a breach of the officer's duty of care toward it in their actions by virtue of their position as an officer. For the avoidance of doubt, also subsidiaries

of the company, as they may be from time to time, shall be entitled to grant such an exemption to an officer in the company who also serves as an officer in a subsidiary.

Notwithstanding the above, the company shall not be entitled to exempt an officer from their liability due to a breach of the duty of care toward it in approving a transaction in which that officer has a personal interest. It is clarified that nothing in the compensation policy shall detract from the validity of previous decisions made in the company in accordance with the law, regarding providing an undertaking for advance indemnification to officers and regarding providing an advance exemption to officers from liability for damage due to breach of duty of care.

Non-material Change in Tenure and Employment Terms

15.1

In accordance with section 272(d) of the Companies Law and Regulation 1B3 of the Relief Regulations, the Compensation Committee (regarding the CEO) or the CEO (regarding officers reporting to the CEO), as applicable, shall be entitled to approve, from time to time, a non-material change in the tenure and employment terms of an officer in the company, provided that the updated tenure and employment terms of the officer are consistent with the compensation policy. In this regard, "non-material change" - a change that does not exceed 10% of the annual cost of all fixed compensation components at the time of approval of the compensation policy for the officer by the Compensation Committee and the Board of Directors (for an officer other than the CEO) and the general meeting (for the CEO). It is clarified that the materiality of the change will be examined cumulatively, so that changes in tenure and employment terms that are approved from time to time for a particular officer shall not exceed, cumulatively, 10% of the annual cost of all fixed compensation components at the time of approval of the compensation policy²⁰. Insofar as the change does not refer to a quantitative value, the materiality of the change will be examined according to the nature and type of the matter in relation to the officer's total compensation package. The rate of the non-material change.

15.2

Insofar as the CEO has approved a non-material change in the tenure and employment terms of an officer reporting to them, the CEO will report this to the Compensation Committee at its meeting held shortly after such approval was given.

It should be noted that the bonus cap for officers in the company, in terms of the absolute amount in NIS, is derived from the level of the relevant officer's base compensation. Accordingly, an increase in an officer's base compensation will also affect the absolute amount in NIS of the bonus cap for that officer. For the avoidance of doubt, it is clarified that said effect on the bonus cap will not be taken into account regarding the examination of the materiality of the change in tenure and employment terms of an officer in the company.

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16. Miscellaneous

16.1 Changes may occur in the identity of the officers and in the types of roles or positions whose holders are considered officers, and individuals who served as officers in a specific year and whose terms of tenure and employment were subject to this compensation policy will not necessarily continue their tenure as officers in the coming years and their terms of tenure and employment will not be subject to this policy, and vice versa. Additionally, the Company may change the terms of tenure and employment of any officer at any time, and no obligation shall arise to apply the same terms of tenure and employment to the officer that applied in previous years.

16.2 In the event that an officer receives compensation that is less than the compensation according to this policy, this shall not be considered a deviation or an exception from this compensation policy, and his terms of employment as stated shall not require, for this reason, the General Meeting approval required in the case of approval of terms of tenure and employment in deviation from the compensation policy.

16.3 It is clarified that there is no restriction on officers in the company also serving as officers in companies controlled by the company and receiving compensation for their tenure as stated, subject to the provisions of the law and obtaining the required approvals in the relevant companies and in the company.

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AI assistant

Paz Oil Company Ltd. — Proxy Solicitation & Information Statement 2026

6977_rns_2026-05-20_de5dc4d2-5d80-4610-b9b6-89995b1dc60a.pdf

Paz Retail and Energy Ltd. ("the Company")

Report regarding the convening of a Special General Meeting of the Company's shareholders

Part A - Convening of a General Meeting

1. General

2. Type of Meeting, Date, and Location

3. Agenda Items and Summary of Proposed Resolutions

3.1. Item No. 1 - To approve the compensation policy for officers of the Company, attached as Appendix B to this Report, in accordance with Section 267A of the Companies Law (hereinafter: the "Compensation Policy" or the "Proposed Compensation Policy").

3.2. Item No. 2 - To approve updates to the terms of office and employment of Mr. Harel Locker, Chairman of the Company's Board of Directors, including an annual bonus mechanism and equity compensation.

3.3. Item No. 3 - To approve updates to the terms of office and employment of Mr. Nir Stern, the Company's CEO, including an annual bonus mechanism and equity compensation.

4. Required Majority

5. The Record Date and Eligibility to Vote at the Meeting

6. Voting via Proxy Card and Position Statements

7. Voting via the Electronic Voting System

8. Position Statements and Board Response

9. Notice of Personal Interest

10. Quorum and Adjourned Meeting

11. Changes in the Agenda and the Deadline for Submitting a Request to Include a Subject on the Agenda by Shareholders

12. Review of Documents and Details of Company Representatives

Part B - Additional Details Regarding the Approval of the Compensation Policy for Officers

13. The Approval Process for the Compensation Policy for Officers in the Company and the Reasons for Its Approval

14. The main changes in the compensation policy brought for approval relative to the previous compensation policy

14.1. Annual Bonus

14.2. Equity Compensation

14.3. Total compensation cap for the CEO

14.4. Ratio between fixed compensation and variable compensation

15. Manner of implementation of the previous compensation policy regarding the Chairman of the Board and the CEO

16. Reference to gaps between the proposed compensation policy and existing terms of office and employment

17. Alongside the reasons brought within the framework of the compensation policy, the reasons of the compensation committee and the board of directors for approving the proposed compensation policy are brought below

17.2. Regarding the variable component for officers -

17.3. Regarding the equity compensation component -

Part C - Details regarding the approval of updates to the terms of tenure and employment of the Chairman of the Company's Board of Directors

19. Background

20. Annual Bonus Mechanism

21. Allocation of warrants to the Chairman of the Board

22. Details according to the Private Offering Regulations

22.2. Identity of the Offeree

22.3. Terms of the securities proposed to be issued, their quantity and the percentage they will constitute of the voting rights and of the issued and paid-up capital of the Company after the allocation and on a fully diluted basis

22.4. Rights as a shareholder in the Company

22.5. Adjustments

22.6. Vesting dates, exercise period

22.8. Method of exercising the warrants

22.9. Warrants Period

22.10. Termination of Employment

22.11. Trust Arrangement and Offeree Taxation

22.12. Fair Value of the Warrants

22.13. Issued and Paid-up Share Capital of the Company

22.14. Rate of Holdings of Interested Parties

22.15. Details of the Consideration and the Way the Consideration was Determined

23. Details of the Terms of Office and Employment

24. Approval Procedure for Updates to the Terms of Office and Employment of the Chairman of the Board

25. Names of directors with a personal interest and the nature of their personal interest

Part D - Details regarding the approval of updates to the tenure and employment conditions of the company's CEO

26. Background

27. Annual bonus mechanism

28. Allocation of warrants to the company's CEO

29. Details according to Private Offering Regulations

29.2. Identity of the Offeree

30. Details of the terms of office and employment

31.5. Below are the reasons of the Remuneration Committee and the Board of Directors for approving the updates to the CEO's terms of office and employment:

32. Names of directors with a personal interest and the essence of their personal interest

Names of signers:

Appendices:

Paz Retail and Energy Ltd.

Compensation Policy for Officers

1. Definitions

2. Introduction

3. Applicability and Validity

4. Objectives of the Compensation Policy

5. Criteria for Examination when Determining Terms of Office and Employment for an Officer

6. Fixed Compensation Components for Officers¹

6.1 General

6.2 Base Compensation Cap (Monthly Compensation)

6.2.4 Indexation:

6.3 Ancillary Terms

6.4 Expense Reimbursement

7. Termination Terms

7.1 Employment Period: Notice Period

Paz Oil Company Ltd. Proxy Solicitation & Information Statement 2026