Long Term Incentive Plan

23 April 2013 

Hydrodec Group plc

(the "Company")

Long Term Incentive Plan

At a general meeting of the Company held on 21 November 2011 shareholders approved the adoption of a Long Term Incentive Plan ("LTIP") for the purposes of attracting, retaining and motivating key executives and securing greater alignment of shareholders' and management's interests with transparency over performance targets.

The following members of the executive management team have previously received awards under the LTIP. With effect from today these existing awards will be structured as various classes of shares in Hydrodec Holdco Limited ("Holdco"), a subsidiary of Hydrodec Group plc. The participants have paid nominal value of £0.005 per share.

The Holdco articles of association will entitle the individuals to exchange the Holdco shares for shares in the Company, determined by reference to the individual's proportionate interest in a pool of shares, if certain share price hurdles (linked to the Company's average mid-market closing share price on AIM over 90 dealing days) are met before the vesting date. The share price hurdles, vesting date, calculation of the aggregate value of the pool of shares and other key provisions remain unchanged from the LTIP previously announced and as approved by shareholders.

*denotes a director of the Company

**the aggregate value of the pool of shares in the Company will represent 15% of the increase in market capitalisation of the Company between two specific dates being (a) 1 November 2011 and the date the 16p share price hurdle is met; and (b) the date on which the 16p share price hurdle is met and the date on which the 20p share price hurdle is met and; (c) the date on which the 20p share price hurdle is met and the date on which the 25p share price hurdle is met, in each case provided the relevant hurdle is met on or prior to 15 January 2015 and as adjusted to reflect any cash subscribed for the issue of shares by the Company during the relevant period.

If any of the share price hurdles are reached after 15 January 2014, the shares in the Company acquired following exchange will be subject to restrictions on sale and transfer until 12 months after the date on which that hurdle is met.

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