ZOOZ Power Ltd.

Compensation

In consideration for his services, the Company will pay Mr. Fried $1.00 per year and will grant him, subject to shareholder approval at this Meeting and in connection with the Subsequent Closing, equity-based compensation in the form of performance-based restricted stock units constituting 5% of all outstanding shares of the Company (on a fully-diluted basis) as of the date of grant (which shall be the date of the Subsequent Closing), and of the Subsequent Shares (the “CEO RSUs”), which as of the date of this Proxy Statement (without taking into account the Subsequent Shares and for illustration purposes only) are equal to 1,675,926 CEO RSUs with respect to 1,675,926 Ordinary Shares, having an aggregate value of approximately $3,184,260.

The CEO RSUs shall vest ratably over a 4 year period commencing on the date of grant, subject to Mr. Fried remaining in service as of each applicable vesting date: 25% upon the 12 month anniversary of the date of grant, and at a rate of 1/48 of the number of CEO RSUs for each full calendar month thereafter (such that 100% of the CEO RSUs shall be vested as of the fourth anniversary of the date of grant). Notwithstanding the foregoing, 25% of the then-remaining unvested CEO RSUs next scheduled to vest, to the extent any CEO RSUs remain unvested (or, if less than 25% of the CEO RSUs remain unvested, all of the then-remaining unvested CEO RSUs), shall accelerate and immediately vest upon the attainment of each of the following share price thresholds (“Share Price Thresholds”), subject to Mr. Fried remaining in service as of the date of achievement of the applicable Share Price Threshold: (i) $10.00, (ii) $15.00, (iii) $20.00, and (iv) $25.00. A Share Price Threshold shall be deemed achieved in accordance with the foregoing if the volume-weighted average price of the Ordinary Shares on Nasdaq during a period of 30 consecutive calendar days equals or exceeds the applicable Share Price Threshold.

The CEO RSUs shall be granted under the Company’s 2015 Incentive Compensation Plan (the “Plan”).

Considerations taken by the Compensation Committee and the Board of Directors (each as in effect prior to the Initial Closing) when approving Mr. Fried’s Terms of Office and Service and Employment as the Company’s New CEO

Our Compensation Committee and the Board of Directors believe that Mr. Fried’s proposed terms of office and service and employment as the Company’s new CEO, as detailed above, are in the Company’s best interests, although exceeding the caps included in the Compensation Policy. With respect to the CEO RSUs, our Compensation Committee and the Board of Directors considered, among other things, the importance of motivating and incentivizing Mr. Fried through the grant of equity, a compensation element which includes vesting over a total of 4 years, thus having a long term incentive value, while taking into account the interests of the Company’s shareholders and the effect of such equity grant on the dilution level of the shareholders.

Further, the Compensation Committee and the Board of Directors believe that the grant of the CEO RSUs is more beneficial to the Company, in light of, among other things, market practice for international companies to grant equity awards in the form of RSUs, which are less sensitive to market fluctuations and maintain an interest in the Company’s success also when the company’s market price declines. In addition, the Compensation Committee and the Board of Directors determined that the proposed CEO RSUs suitably links pay to performance, especially in light of the inclusion of mandatory performance targets thereunder, aligns Mr. Fried’s interests with those of the Company and its shareholders over the long term and encourages balanced risk management.

It is also noted that, as mentioned above, the Compensation Policy was adopted by the Company in 2021, when the Company was listed for trading only on the TASE, and was not updated following the Company’s dual-listing on the Nasdaq to better tailor it for a Nasdaq-listed company. Therefore, the Compensation Committee and the Board of Directors do not view the Compensation Policy and caps included therein as suitable for a company undergoing a substantial transition in its business strategy, which requires specific expertise and talent in a rapidly evolving market with high competition over such talent, like the Company.

In addition, when considering the proposed compensation terms as detailed above, the Compensation Committee and the Board of Directors analyzed all factors and considerations required under the Compensation Policy and the Companies Law, including, inter alia: (i) the responsibilities and duties of the CEO, considering the size of the Company and the scope, complexity and nature of its operations and information regarding its strategic business transition process; (ii) Mr. Fried’s education, qualifications, expertise and extensive experience in the cryptocurrency industry; (iii) benchmark data of other Nasdaq-listed companies that have undergone similar business transitions, for consideration paid to the CEO; (iv) market compensation trends, including in situations where companies have undergone strategic business transitions; (v) the appropriate balance between the fixed components and the variable components comprising the proposed compensation, and the fact that the variable components are limited to maximums that are consistent with the requirement for a close link between payments to the CEO and the Company’s performance, while protecting the interests of the Company and its shareholders; (vi) the compensation of the rest of the Company’s employees and, particularly, the ratio to the average compensation and the median compensation of such employees and the impact of the gaps between them on the labor relations in the Company, and determination that the said ratio is reasonable and will not adversely affect labor relations in the Company, and (vii) the importance of providing competitive compensation to Mr. Fried in his position as the Company’s CEO in order to retain talented and essential executives such as Mr. Fried, the estimation of Mr. Fried’s expected contribution and the importance of Mr. Fried to the Company’s strategic turnaround and future fundraising.

After evaluating the considerations above, the Compensation Committee and the Board of Directors determined that the proposed terms of office and service of Mr. Fried in his position as the Company’s CEO, as detailed above, are reasonable, appropriate and for the benefit of the Company.