Exhibit 10.21

Employment Agreement

This Employment Agreement (this “Agreement”) is entered into in Petach Tikwa on
this 15 day of January 2014, to be effective as of the 11 day of February, 2014
(the “Effective Date”), and is made by and between TEVA PHARMACEUTICAL
INDUSTRIES LTD., an Israeli corporation located at 5 Basel Street, Petach Tikwa,
Israel, Company No. 52-001395-4 (the “Company”), and Mr. Erez Vigodman, ID
No. 056094477, of Sderot HaShoshanim 7, Tel Aviv (“Employee”).

WHEREAS, the Employee is currently a member of the Board of Directors of the
Company (the “Board”); and

WHEREAS, the Company wishes to employ Employee as its President and Chief
Executive Officer (“President and CEO”), and Employee wishes to be so employed;
and

WHEREAS, the parties have agreed on the terms pursuant to which Employee shall
serve as President and CEO, and wish to set forth such terms in this Agreement.

 

NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:

 

1. Term; Positions and Duties; Location

 

  1.1 Employee’s employment with the Company as the Company’s President and CEO
shall commence on the Effective Date and shall continue thereafter until the
Date of Termination, as defined below (the “Term”).

 

  1.2 Employee shall report directly to the Board. All senior officers of the
Company shall report directly to Employee (unless otherwise determined by
Employee, or as required by Law (as defined below) or the principles of good
corporate governance). In addition, Employee shall (a) have all of the duties,
authorities and responsibilities customarily exercised by an individual serving
as the president and chief executive officer of a company the size and nature of
the Company, (b) be assigned no duties that are inconsistent with, or materially
impair his ability to discharge, the foregoing, and (c) have such other duties,
authorities and responsibilities, consistent with the foregoing, as may
reasonably be assigned to him from time to time by the Board.

 

  1.3 During the Term, Employee shall devote substantially all of his business
time, energy, business judgment, knowledge and skill to the performance of his
duties with the Company; provided, that the foregoing shall not prevent Employee
from (a) serving on the Advisory Board to the Israel Economic Council and, with
the prior written approval of the Board, any additional similar organizations,
(b) reasonably participating in charitable, civic, educational, professional,
community or industry affairs, and (c) managing his own personal investments, in
each case, so long as such activities in the aggregate do not interfere or
conflict with Employee’s duties hereunder or create a potential business or
fiduciary conflict.

 

  1.4

Employee shall promptly inform the Company of any issue or matter relating to,
or transaction with, any member of the Company Group (defined as the Company

--------------------------------------------------------------------------------

  and any entity of any type in which the Company holds, directly or indirectly,
at least 25% of the “means of control” (as such term is defined in the
Securities Law, 1968)) in which Employee has a personal interest and/or which
may cause Employee to be in a position of a conflict of interest with the
Company (except with respect to Employee’s private dealings in the equity of
Employee’s former employers held by Employee, or Employee’s investments in any
public-traded corporation as long as such investment does not represent more
than 1% of the outstanding voting securities of such corporation).

 

  1.5 During the Term, Employee may be required to serve as a director, officer
or committee member of another company which is part of the Company Group, and
the fulfillment of such position shall not constitute an employer-employee
relationship between Employee and any such company, and notwithstanding any such
position, Employee shall only be considered to be an employee of the Company and
shall not receive any additional compensation for serving in such additional
position other than those amounts expressly set forth herein, provided that the
Company’s D&O insurance shall cover Employee and the Indemnification Agreement
shall fully cover Employee in all such positions.

 

  1.6 Employee’s principal place of employment during the Term shall be at the
Company’s principal offices. However, Employee acknowledges and agrees that he
will be required to travel abroad extensively on Company business.

 

  1.7 Employee acknowledges and agrees that no collective and/or special
bargaining agreement that might apply to the Company’s employees shall apply to
Employee in his capacity as an employee of the Company.

 

  1.8 This Agreement shall be subject to the Company’s compensation policies
applicable to senior officers as shall be in effect from time to time, including
without limitation, the Company’s Compensation Policy for Executive Officers and
Directors adopted by the shareholders at the 2013 annual general meeting of
shareholders, held on August 27, 2013, as shall be amended from time to time
(collectively, the “Compensation Policy”) and nothing herein shall derogate in
any way from the Company’s rights thereunder.

 

  1.9 The Company represents and the Employee acknowledges that the Human
Resources and Compensation Committee of the Board (the “Compensation Committee”)
and the Board, approved this Agreement, including the compensation terms
included herein, however, the compensation terms in this Agreement are further
subject to the receipt of the Company’s corporate approvals required by Law, and
understands the consequences of the failure to secure such approvals. If, and to
the extent, the terms hereof are approved by the Company’s corporate approvals
required by Law, the Employee shall receive the full compensation specified
herein retroactively as of the Effective Date. For avoidance of doubt it is
clarified that, to the extent applicable pursuant to the Law, the Board shall
not be under any obligation to approve the Employee’s employment terms as
specified herein (or any other employment terms) to the extent that same are not
approved by the Company’s shareholders.

--------------------------------------------------------------------------------

Subject to the receipt of the Company’s corporate approvals required by Law with
respect to the compensation terms in this Agreement, the Employee hereby waives
any and all payments and benefits he is or may be entitled to in his capacity as
a member of the Board during the Term and submits his resignation from all
committees of the Board, all effective as of the Effective Date.

 

2. Base Salary

 

  2.1 During the Term, Employee’s gross annual base salary shall be the amount
in New Israeli Shekels that is equivalent to USD$1,350,000 (One Million Three
Hundred and Fifty Thousand United States Dollars), calculated according to the
last official NIS-US Dollar rate of exchange published by the Bank of Israel
(the “Exchange Rate”) immediately prior to the Effective Date (the “Annual
Salary”). The Annual Salary shall be divided by 12, and each such 1/12 shall
constitute Employee’s monthly salary (the “Monthly Salary”).

The Monthly Salary shall be adjusted according to increases in the Consumer
Price Index (“CPI”) after January 1, 2014 (in such a manner that the original
amount stated in this Section 2.1 above is based on the index for December 2013,
published on January 15, 2014, and every calendar quarter the Monthly Salary
shall be updated, as of such date, according to the increased CPI rate compared
to the aforesaid base index).

 

  2.2 At the end of every calendar year during the Term, the Compensation
Committee shall examine Employee’s accomplishments from the past year, and shall
determine in its discretion whether Employee’s Annual Salary should be updated.
In the event that the Compensation Committee decides to increase Employee’s
Annual Salary, the Monthly Salary shall be updated as of the date and in the
amount so decided, all subject to the receipt of any approvals required by Law.

 

  2.3 Employee hereby acknowledges and agrees that in light of his position and
areas of responsibility, which require a special degree of trust and since he is
part of the Company’s senior management the provisions of the Hours of Work and
Rest Law, 1951, shall not apply to his employment.

 

  2.4 It is hereby agreed that only the Monthly Salary payable to Employee
pursuant to Section 2.1 shall constitute the basis for the calculation of all
social benefits granted to Employee pursuant to this Agreement, including,
without limitation, contributions and deductions to the pension fund, managers
insurance, provident fund and the Study Fund (as defined below), and for any
other purpose for which deductions are calculated based on a percentage of
Employee’s salary.

 

  2.5 The parties hereby confirm that the compensation terms set forth in this
Agreement constitute fair consideration to the Employee, given, inter alia, his
managerial responsibilities.

 

3. Bonus

For each calendar year during the Term, including 2014 (pro-rata), the Employee
shall be entitled to receive, subject to additional terms and conditions that
may be determined by

--------------------------------------------------------------------------------

the Compensation Committee from time to time and notified to Employee, and
subject to the Compensation Policy and the Company’s corporate approvals
required by Law, an annual cash incentive bonus (each, an “Incentive Bonus”),
which shall be calculated in accordance with the following formula: if less than
85% of the Performance Targets (as defined below) are achieved with respect to
the relevant calendar year, Employee shall not be entitled to any Incentive
Bonus for such calendar year. If between 85% and 100% (inclusive) of the
Performance Targets are achieved with respect to the relevant calendar year, the
Incentive Bonus shall be determined linearly according to a straight line
extending from 8.75% to 140% of the Annual Salary (i.e., for each 1% of the
Performance Targets achieved that is over 85%, there shall be an 8.75% increase
in the Incentive Bonus from 8.75% of the Annual Salary). If between 100% and
125% (inclusive) of the Performance Targets are achieved with respect to the
relevant calendar year, the Incentive Bonus shall be determined linearly
according to a straight line extending from 140% to 200% of the Annual Salary
(i.e., for each 1% of the Performance Targets achieved that is over 100%, there
shall be a 4% increase in the Incentive Bonus from 140% of the Annual Salary),
and if 125% or more of the Performance Targets are achieved with respect to the
relevant calendar year, the Incentive Bonus shall be 200% of the Annual Salary.
The Employee acknowledges that notwithstanding anything to the contrary herein,
(i) in any event the Incentive Bonus shall not exceed 200% of the Annual Salary,
and (ii) the Compensation Committee may, at its sole discretion, establish
super-measures and/or a budget that may reduce (including to zero) the amount of
the Incentive Bonus to which Employee is entitled to hereunder. For purposes of
this Agreement, “Performance Targets” in respect of any calendar year means the
qualitative and quantitative goals for the Company Group and such other
performance objectives that are established by the Compensation Committee, after
consultation with Employee, in respect of such calendar year. Following the
completion of each calendar year, the Compensation Committee shall evaluate in
its reasonable, good faith judgment whether, and to what extent, the Performance
Targets have been met, and such judgment shall be binding upon Employee.

It is hereby clarified that in the event that Employee’s employment is
terminated for any reason other than by the Company with Cause, during the
course of any calendar year (“Incomplete Year”), Employee’s entitlement to an
Incentive Bonus in respect of such Incomplete Year shall be calculated on a
pro-rata basis, in accordance with the actual number of days under the Term that
fall during such Incomplete Year, and shall be evaluated following the
completion of such Incomplete Year based on the results for the full calendar
year.

 

4. Equity Grant

For Employee’s service in respect of the year 2014, as soon as reasonably
practicable after the receipt of the Company’s corporate approvals required by
Law, Employee shall be granted an option to purchase 280,702 Company shares and
15,660 restricted share units, pursuant to the Company’s “2010 Long-Term
Equity-Based Incentive Plan” (the “2014 Equity Awards” and the “2010 Plan”,
respectively). The 2014 Equity Awards shall vest, subject to Employee’s
continued employment with the Company, in three equal installments, on the
second, third and fourth anniversaries of the Effective Date, respectively, and,
with respect to the options to purchase Company shares, shall have an exercise
price equal to the closing price reported on the New York Stock Exchange on

--------------------------------------------------------------------------------

January 8, 2014. Commencing with calendar year 2015 and each calendar year
thereafter, Employee shall be entitled to participate in and receive, on an
annual basis, grants of additional equity under the 2010 Plan and/or any other
long-term incentive plan(s) that the Company may adopt in the future, as shall
be determined by the Compensation Committee, and subject to the receipt of the
Company’s corporate approvals required by Law.

 

5. Employee Benefits

During the Term, Employee (and, to the extent eligible, his dependents and
Beneficiaries (as defined below)) shall be entitled to participate in any and
all health, medical, dental, group insurance (including, without limitation,
life insurance), welfare, pension, fringe benefits, perquisites and other
employee benefit plans, programs and arrangements that are generally available
from time to time to senior executives of the Company and their dependents and
Beneficiaries (the “Employee Benefits”), such participation in each case to be
on terms and conditions that are commensurate with Employee’s position and
responsibilities at the Company and that are no less favorable to Employee than
those that apply to other senior executives of the Company generally.

 

6. Reimbursement for Certain Costs and Expenses

 

  6.1 The Company shall pay or reimburse Employee for all out-of-pocket business
expenses incurred by Employee during the Term in performing his duties under
this Agreement, promptly upon presentation of appropriate supporting
documentation and in accordance with the expense reimbursement policy of the
Company.

 

  6.2 The Company shall provide, and pay or reimburse Employee for all expenses
incurred in connection with acquiring, maintaining and using, a land-line
telephone in his residence, a laptop, a cellular telephone or other similar
hand-held device, and a car suitable for the chief executive officer of a
company of the size and nature of the Company, promptly upon presentation of
appropriate supporting documentation and in accordance with the expense
reimbursement policy of the Company. The Company shall bear the taxes associated
with the use of car and cellular telephone or similar hand-held device.

 

7. Vacation; Sick Leave; Recreation Pay

 

  7.1 Employee shall be entitled to 26 paid vacation working days per calendar
year during the Term, which shall accrue in accordance with Company policy.
Employee shall be required to utilize such five consecutive days every calendar
year, and may accumulate the remaining vacation days in accordance with the
Company’s policy. The dates of Employee’s annual vacation shall be coordinated
in advance with the Chairman of the Board. The Employee shall be entitled to
redeem the aforesaid accumulated vacation days upon termination of Employee’s
employment.

 

  7.2

Employee shall be entitled to 30 paid sick working days per calendar year during
the Term, which may accumulate during the Term up to a maximum of one years’
paid sick leave. The sick pay shall include the Monthly Salary and all other

--------------------------------------------------------------------------------

  amounts and benefits to which Employee is entitled under this Agreement, as if
Employee worked at the Company during the period of his illness (in respect of
period for which he is entitled to receive payment as aforesaid), less any
amount that Employee is entitled to receive with respect to the aforementioned
period of his illness, including from any pension fund and/or provident fund
and/or managers insurance, and all provided that Employee provides the Company
with medical confirmation of his illness. The parties hereto hereby acknowledge
and agree that the payments to Employee set forth in this Section 7.2 and
Employee’s insurance in the pension fund and/or managers insurance are meant to
also cover the Company’s obligations under the Sick Pay Law, 1976.

 

  7.3 Employee shall be entitled to 15 paid recreation days per calendar year
during the Term. The amount of recreation pay per recreation day, the payment
conditions and any other conditions governing recreation pay shall be in
accordance with the Law and the Company’s policy in effect at the applicable
time with respect to its employees generally.

 

8. Pension Fund, Managers Insurance, Provident Fund

 

  8.1 It is hereby declared and agreed that the rights of the Employee to
pension allowance (kitzba), severance payment and remuneration will be insured
according to Employee’s choice, as set forth herein below.

 

  8.2 The Employee’s Monthly Salary will be insured in a pension fund, managers
insurance, provident fund and/or any combination of the foregoing, according to
the Employee’s choice and as detailed below.

The Employee will specify, in a notice to the Company, which portion of the
Monthly Salary shall be insured in each of the programs specified below (the
“Insurance Arrangement”). To the extent the Employee does not notify the Company
of his choice, the Employee’s Monthly Salary shall be insured in accordance with
the Company’s policy. For the avoidance of doubt, it is hereby clarified that
the accumulated contributions according to the Insurance Arrangement shall not
be made, in any event, from an amount exceeding the Monthly Salary.

The rate of allocations to the pension fund and/or managers insurance and/or
provident fund, subject to the Insurance Arrangement, shall be as follows:

 

  8.2.1 Should the Employee elect that the contributions be made to a pension
fund, the following percentages shall be contributed:

The Company shall contribute towards the pension fund an amount equal to 19.83%
of the part of the Monthly Salary according to the Insurance Arrangement, out of
which 14.33% shall constitute payment by the Company (of which: 6% shall
constitute payment for remuneration and 8.33% shall constitute the payment for
severance payment) and 5.5% shall constitute the payment by the Employee.

--------------------------------------------------------------------------------

If the Employee is a member of an old deficit pension fund, and he elects to
continue to contribute to such fund, then the Company shall contribute to the
old deficit pension fund an amount equal to 20.5% of the part of the Monthly
Salary according to the Insurance Arrangement, out of which 13.5% shall
constitute payment by the Company (of which 7.5% shall constitute payment for
remuneration and 6% shall constitute the payment for severance payment) and 7%
shall constitute the payment by the Employee. In addition, the Company shall
contribute to a personal provident fund for severance an amount equal to 2.33%
of the part of the Monthly Salary according to the Insurance Arrangement, and
this amount constitutes a completion of the Company’s severance payment
obligation.

 

  8.2.2 Should the Employee elect that contributions be made to a managers
insurance, the following percentages shall be contributed:

The Company shall contribute an amount equal to 20.83% of the part of the
Monthly Salary according to the Insurance Arrangement, out of which 15.83% shall
constitute the payment by the Company (of which 7.5% shall constitute payment
for remuneration and 8.33% shall constitute the payment for severance payment),
and 5% shall constitute the payment by the Employee.

In the event that according to the terms of the managers insurance, the loss of
ability to work insurance component is not contributed from the remuneration,
then the Company shall contribute 5% for remuneration contributions and up to
2.5% for loss of ability to work insurance.

 

  8.2.3 Should the Employee elect contributions be made to provident funds, the
following percentages shall be contributed:

The Company shall contribute to the provident funds an amount equal to 20.83% of
the part of the Monthly Salary according to the Insurance Arrangement, out of
which 15.83% shall constitute payment by the Company (of which: 7.5% shall
constitute the payment for remuneration and 8.33% shall constitute payment for
severance payment) and 5% shall constitute the payment by the Employee.

 

  8.3 In the event of an increase in the Employee’s Monthly Salary, the Employee
shall be entitled to choose (in accordance with the provident funds’ and/or
pension funds’ Articles of Association and the Law) the Insurance Arrangement
which will apply to the increase in the Monthly Salary. The Employee shall
notify the Company with respect to such choice in accordance with the Company’s
policies regarding this matter. The provisions of Section 8.2 above shall apply
to the Insurance Arrangement, which the Employee chose for the increase in the
Monthly Salary.

--------------------------------------------------------------------------------

It is hereby declared and agreed that in the event of an increase in the
Employee’s Monthly Salary, the Company shall not have an obligation to
contribute to the pension fund and/or managers insurance and/or the provident
funds its indebtedness for severance payment, which derives (if at all) from the
aforementioned increase, with respect to the term of employment prior to the
salary increase.

 

  8.4 Pursuant to Employee’s request to limit the part of his Monthly Salary
from which the Company’s and the Employee’s contributions for remuneration are
made to the pension fund and/or managers insurance and/or the provident funds in
accordance with section 8.2, to the maximum amount set forth in Section 3(e3) of
the Income Tax Ordinance [New Version], 1961 (the “Tax Ordinance”) as shall be
in effect from time to time, the Company has agreed to pay the Employee on a
monthly basis, the difference between the contribution rates for remuneration
set forth in section 8.2 above and the contribution rates of the maximum amount
according to section 3(e3) of the Tax Ordinance, as a special supplement to the
salary (hereinafter “Supplement in lieu of Providence”).

It is hereby acknowledged and agreed that the Supplement in lieu of Providence
shall not be deemed part of the Employee’s Monthly Salary for any purpose,
including without derogating from the foregoing, for the purpose of payment of
severance pay and any other entitlement calculated as a percentage of Employee’s
Monthly Salary, and this Section 8.4 shall not impose on the Company any
additional current or future cost or expense, directly or indirectly.

The Employee hereby represents that (i) Employee has considered the above,
received pension advice, and is aware of the consequences of his request with
respect to the diminution of the scope of the pension insurance coverage to
which he shall be entitled to, and (ii) since the Company’s and the Employee’s
contributions as aforementioned are being done pursuant to his request, and for
his benefit, he does not and shall not have a cause of action with respect to
the scope of the pension insurance coverage to which he shall be entitled to.

Without derogating from the foregoing, the Employee hereby explicitly waives any
and all claim and/or demand and/or lawsuit of any kind with respect to the scope
of the pension insurance coverage. The Employee undertakes to indemnify the
Company for any damage and/or cost and/or expense incurred by the Company as a
result of any demand and/or lawsuit filed by him and/or on his behalf in
connection with the foregoing.

For the avoidance of doubt it is hereby clarified that the Company’s
contributions for severance pay to the pension fund and/or managers insurance
and/or the provident funds shall be made from the Employee’s full Monthly
Salary.

The Employee shall be entitled to cancel the arrangement specified in this
Section 8.4 and the Company shall accept such request.

 

  8.5 By signing this Agreement, the Employee allows the Company to deduct from
his Monthly Salary the aforementioned deductions from the Monthly Salary, and to
transfer such amounts to any of the pension fund and/or managers insurance
and/or the provident funds included in the Insurance Arrangement, which he
chose, all as set forth in Section 8.2 and 8.3 above.

--------------------------------------------------------------------------------

9. Study Fund

For every month that Employee is employed by the Company, the Company shall make
contributions on Employee’s behalf to an advanced study fund (Keren Hishtalmut)
(the “Study Fund”), in an amount equal to 7.5% of the Monthly Salary, and shall
deduct Employee’s contribution of 2.5% of the Monthly Salary from the Monthly
Salary, and transfer this sum to the Study Fund. By signing this Agreement, the
Employee allows the Company to deduct from his Monthly Salary the aforementioned
deductions from the Monthly Salary, and to transfer such amounts to the Study
Fund.

 

10. Termination of Employment

 

  10.1 General. Employee’s employment with the Company shall terminate upon the
earliest to occur of (a) Employee’s death, (b) a termination by reason of a
Disability, (c) a termination by the Company with or without Cause, and (d) a
termination by Employee with or without Good Reason (including, for the
avoidance of doubt, due to aged retirement). The date on which employee-employer
relations cease to exist between the parties (including as a result of
acceleration of such cessation due to a waiver on the part of the Company of
Employee’s services during the Notice Period and payment to Employee of the
entire amounts the Employee is entitled to in respect of the Notice Period)
shall be referred to in this Agreement as the “Date of Termination”. Upon any
termination of Employee’s employment for any reason, (i) except as may otherwise
be requested by the Company in writing and agreed upon in writing by Employee,
Employee shall be deemed to have resigned, effective immediately, from any and
all directorships, committee memberships, and any other positions Employee holds
with any member of the Company Group, and (ii) the Company shall provide
Employee with letters addressed to the pension fund, managers insurance,
provident fund and Study Fund that will enable Employee to receive the
Broad-Based Retirement Plan Benefits (or, in the event that Employee’s
employment was terminated by the Company for Cause, only (A) the retirement
savings component thereof, and (B) Employee’s contributions to the Study Fund)
promptly following the Date of Termination.

 

  10.2 Termination Due to Death or Disability. Employee’s employment shall
terminate automatically upon his death. The Company may terminate Employee’s
employment immediately upon the occurrence of a Disability, such termination to
be effective upon Employee’s receipt of written notice of such termination. Upon
Employee’s death or in the event that Employee’s employment is terminated due to
his Disability, Employee or his estate or his Beneficiaries, as the case may be,
shall be entitled to:

 

  10.2.1 The Accrued Obligations; and

 

  10.2.2 The Severance Payment, which shall be paid in a lump sum on the next
regular payroll date immediately following the seventy fifth (75th) day after
the Date of Termination (subject to Section 10.7), other than those components
of the Severance Payment required by Law to be paid earlier, which components
shall be paid in accordance with the requirements of the Law (which payment
shall not be subject to Section 10.7).

--------------------------------------------------------------------------------

Notwithstanding the foregoing provisions of this Section 10.2, the payments and
benefits described in this Section 10.2 (other than the components of the
Accrued Obligations and the Severance Payment required to be paid pursuant to
the Law) shall immediately terminate, and the Company shall have no further
obligations to Employee with respect thereto, in the event that Employee
breaches any provision of Sections 12, 13, 14 or 15 hereof. Following Employee’s
death or a termination of Employee’s employment by reason of a Disability,
except as set forth in this Section 10.2, Employee shall have no further rights
to any compensation or any benefits under this Agreement.

 

  10.3 Termination by the Company with Cause.

 

  10.3.1 The Company may terminate Employee’s employment at any time with Cause,
effective upon Employee’s receipt of written notice of such termination. In the
event that the Company terminates Employee’s employment with Cause, he shall be
entitled only to those components of the Accrued Obligations required to be paid
by Law, and subject to the Law. Following such termination of Employee’s
employment by the Company with Cause, except as set forth in this Section 10.3,
Employee shall have no further rights to any compensation or any benefits under
this Agreement.

 

  10.3.2 No termination of Employee’s employment for Cause shall be effective
unless the Company shall first have complied with the provisions of this
Section 10.3.2 and the Law. Employee shall be given written notice by the
Company (the “Cause Notice”) of its intention to terminate Employee’s employment
for Cause. The Cause Notice shall state in detail the particular circumstances
that constitute the grounds on which the proposed termination for Cause is based
and all relevant documentation and summon to a hearing before the Board. The
hearing shall be held 30 days following Employee’s receipt of the original Cause
Notice. If, within 20 business days following such hearing, the Board gives
written notice to Employee confirming that Cause for terminating Employee’s
employment on the basis set forth in the original Cause Notice exists, then
Employee’s employment shall thereupon be terminated for Cause. A failure by
Employee to attend the hearing as aforesaid shall be deemed to be a waiver by
Employee of his right to such hearing.

 

  10.4

Termination by the Company without Cause. The Company may terminate Employee’s
employment at any time without Cause, effective nine (9) months following the
date of Employee’s receipt of written notice of such termination (in this
Section, the “Notice Period”). In the event that such notice is given by the
Company, any intervening termination for any reason (other than a termination of
Employee’s employment by the Company for Cause) including death or Disability
shall not alter the Company’s obligations under this Section 10.4. The

--------------------------------------------------------------------------------

  Company may, in its sole and absolute discretion and by written notice, waive
the services of Employee during the Notice Period or in respect of any part of
such period, and thus accelerate termination of employee-employer relationship
(such accelerated date shall constitute the Date of Termination), all on
condition that the Company pay Employee the Monthly Salary and all additional
compensation and benefits to which Employee is entitled in respect of the Notice
Period without regard to any such Company waiver (which shall be paid in one
lump sum on the next regular payment date immediately following the Date of
Termination (subject to Section 10.7), other than the Monthly Salary required to
be paid pursuant to the Law, which shall be paid in accordance with the
requirements of the Law (which payment shall not be subject to Section 10.7)).

In the event that Employee’s employment is terminated by the Company without
Cause (other than due to death or Disability), Employee shall be entitled to:

 

  10.4.1 The Accrued Obligations;

 

  10.4.2 The Severance Payment, which shall be paid in a lump sum on the next
regular payroll date immediately following the seventy fifth (75th) day after
the Date of Termination (subject to Section 10.7), other than those components
of the Severance Payment required by Law to be paid earlier, which components
shall be paid in accordance with the requirements of the Law (which payment
shall not be subject to Section 10.7);

 

  10.4.3 The Equity Benefits (subject to Section 10.7); and

 

  10.4.4 If the Employee’s employment is terminated by the Company without Cause
(or by Employee with Good Reason), one year or less following a merger of the
Company with another entity pursuant to which merger the Company is not the
surviving entity, and as a result of such merger, Employee shall be entitled to
the Change of Control Amount, which shall be paid in a lump sum on the next
regular payroll date immediately following the seventy fifth (75th) day after
the Date of Termination (subject to Section 10.7).

Notwithstanding the foregoing, the payments and benefits described in this
Section 10.4 (other than the components of the Accrued Obligations and the
Severance Payment required to be paid pursuant to the Law) shall immediately
terminate, and the Company shall have no further obligations to Employee with
respect thereto, in the event that Employee breaches any provision of Sections
12, 13, 14 or 15 hereof. Following such termination of Employee’s employment by
the Company without Cause, except as set forth in this Section 10.4, Employee
shall have no further rights to any compensation or any benefits under this
Agreement. For the avoidance of doubt, Employee’s sole and exclusive remedy upon
a termination of employment by the Company without Cause shall be receipt of the
payments and benefits specified in Sections 10.4.1 through 10.4.3, or Sections
10.4.1 through 10.4.4, as applicable.

 

  10.5

Termination by Employee with Good Reason. Employee may terminate his employment
with Good Reason and Employee shall be entitled to the same

--------------------------------------------------------------------------------

payments and benefits as provided in Section 10.4 for a termination by the
Company without Cause, subject to the same conditions on payment and benefits as
described in Section 10.4. Following such termination of Employee’s employment
by Employee with Good Reason, except as set forth in this Section 10.5, Employee
shall have no further rights to any compensation or any benefits under this
Agreement. For the avoidance of doubt, Employee’s sole and exclusive remedy upon
a termination of employment with Good Reason shall be receipt of the payments
and benefits specified in this Section 10.5.

 

  10.6 Termination by Employee without Good Reason or Due to Aged Retirement.
Employee may terminate his employment without Good Reason or due to aged
retirement, by providing the Company nine (9) months’ written notice of such
termination (in this Section, the “Notice Period”). In the event that such
notice is given by Employee, any intervening termination for any reason (other
than a termination of Employee’s employment by the Company for Cause) including
death or Disability shall not alter the Company’s obligations under this
Section 10.6. The Company may, in its sole and absolute discretion and by
written notice, waive the services of Employee during the Notice Period or in
respect of any part of such period, and thus accelerate such termination of
employee-employer relationship (such accelerated date shall constitute the Date
of Termination), all on condition that the Company pay Employee the Monthly
Salary and all additional compensation and benefits to which Employee is
entitled in respect of the Notice Period without regard to any such Company
waiver (which shall be paid in one lump sum on the next regular payment date
immediately following the Date of Termination (subject to Section 10.7), other
than the Monthly Salary required to be paid pursuant to the Law, which shall be
paid in accordance with the requirements of the Law (which payment shall not be
subject to Section 10.7)).

In the event of a termination of employment by Employee under this Section 10.6,
Employee shall be entitled to:

 

  10.6.1 The Accrued Obligations;

 

  10.6.2 The Severance Payment, which shall be paid in a lump sum on the next
regular payroll date immediately following the seventy fifth (75th) day after
the Date of Termination (subject to Section 10.7), other than those components
of the Severance Payment required by Law to be paid earlier, which components
shall be paid in accordance with the requirements of the Law (which payment
shall not be subject to Section 10.7); and

 

  10.6.3 The Equity Benefits (subject to Section 10.7);

Notwithstanding the foregoing, the payments and benefits described in this
Section 10.6 (other than the components of the Accrued Obligations and the
Severance Payment required to be paid pursuant to the Law) shall immediately
terminate, and the Company shall have no further obligations to Employee with
respect thereto, in the event that Employee breaches any provision of Sections
12, 13, 14 or 15. Following such termination of Employee’s employment by
Employee without Good Reason, except as set forth in this Section 10.6, Employee
shall have no further rights to any compensation or any benefits under this
Agreement.

--------------------------------------------------------------------------------

  10.7 Release. Notwithstanding any provision in this Agreement to the contrary,
the payment of any amount or provision of any benefit pursuant to subsections
10.2 through 10.6 (other than the components of the Accrued Obligations and
those components of the Severance Payment required to be paid pursuant to the
Law) (collectively, the “Severance Benefits”) shall be conditioned upon
Employee’s execution, delivery to the Company, and non-revocation of the Release
of Claims within sixty (60) days following the Date of Termination. If Employee
fails to execute the Release of Claims in such a timely manner or revokes the
Release of Claims, Employee shall not be entitled to any of the Severance
Benefits. For the avoidance of doubt, in the event of a termination due to
Employee’s death or Disability, Employee’s obligations herein to execute and not
revoke the Release of Claims may be satisfied on his behalf by his estate or a
person having legal power of attorney over his affairs.

 

  10.8 Definitions. For purposes of this Agreement, the following terms have the
following meanings:

 

  10.8.1 “Accrued Obligations” means (a) any unpaid Monthly Salary earned
through the Date of Termination, any earned and unpaid Incentive Bonus for the
calendar year immediately preceding the Date of Termination (subject to
Section 10.7), and any unused vacation days and recreation days accrued through
the Date of Termination, which amounts (other than the Incentive Bonus) shall be
paid on the next regular payroll date immediately following the Date of
Termination, and (b) any other payment to which Employee is entitled under the
applicable terms of any applicable plan, program, agreement, corporate
governance document or arrangement of the Company or its affiliates, including
without limitation, Company reimbursement of any unreimbursed business expenses,
and rights to any Company indemnification and Company-provided officers’
liability insurance as set forth in Section 11.

 

  10.8.2 “Applicable Percentage” means (a) following termination of Employee’s
employment by Employee without Good Reason or due to aged retirement, one
hundred and fifty percent (150%), or (b) following any other termination of
Employee’s employment (other than by the Company for Cause), two hundred percent
(200%).

 

  10.8.3 “Beneficiaries” means, subject to Law, those beneficiaries whom
Employee identifies in writing to the pension fund, managers insurance and
provident fund or, if such identification was not made, the executors of
Employee’s estate or Employee’s legal heirs.

 

  10.8.4 “Broad-Based Retirement Plan Benefits” means the amounts and benefits
that Employee is entitled to receive from the pension fund, managers insurance,
provident fund and Study Fund, following any termination of Employee’s
employment, other than by the Company for Cause (including all retirement
savings and severance amounts accumulated in such funds).

--------------------------------------------------------------------------------

  10.8.5 “Cause” means (a) the willful and continued failure by Employee to
substantially perform his duties with the Company (other than any such failure
resulting from Employee’s incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a notice of termination
for Good Reason by Employee) for a period of at least 30 consecutive days after
a written demand for substantial performance is delivered to Employee by the
Board, which demand specifically identifies the manner in which the Board
believes that Employee has not substantially performed his duties,
(b) Employee’s breach of trust or other material breach of this Agreement by the
Employee, (c) Employee is convicted of, or has entered a plea of nolo contendere
to, a felony, or (d) a breach by Employee of the provisions of Sections 12, 13,
14 or 15 hereof. For purposes of clauses (a) and (b) of this definition, no act,
or failure to act, on Employee’s part shall be deemed “willful” unless done, or
omitted to be done, by Employee not in good faith and without reasonable belief
that his act, or failure to act, was in the best interest of the Company.

Notwithstanding the foregoing, in the event that the Board reasonably believes
that Employee may have engaged in conduct that constitutes Cause, the Board may,
subject to a due hearing process, suspend Employee from performing his duties
hereunder for a period of up to sixty (60) days, and in no event shall any such
suspension constitute an event pursuant to which Employee may terminate
employment with Good Reason; provided, that no such suspension shall alter the
Company’s obligations under this Agreement (including, without limitation, its
obligations to provide Employee compensation and benefits) during such period of
suspension, unless it is later discovered that Employee’s conduct indeed
constituted Cause.

 

  10.8.6 “Change of Control Amount” means an amount equal to twelve (12) times
the Monthly Salary in effect immediately prior to the Date of Termination
(without taking into account any reduction in Monthly Salary that gives rise to,
or could have given rise to, a claim for Good Reason).

 

  10.8.7 “Disability” means that Employee, due to a physical or mental
disability, has been substantially unable to perform his duties under this
Agreement for a continuous period of 90 days or longer.

 

  10.8.8 “Equity Benefits” means (a) the right to continue to vest in any and
all outstanding options and restricted share units, during the period commencing
on the Date of Termination and ending on the Outside Date, subject to Employee’s
continued compliance with Sections 12, 13, 14 and 15 through the applicable
vesting dates, and (B) an extension of the period during which Employee may
exercise his vested and outstanding options until the Final Date, subject to
Employee’s continued compliance with Sections 12, 13, 14 and 15 through the
applicable exercise dates.

--------------------------------------------------------------------------------

  10.8.9 “Final Date” means (a) if the termination of Employee’s employment is
effected by the Company without Cause or by Employee for Good Reason, the day
that is 90 days following the Outside Date; (b) if the termination of Employee’s
employment is effected by the Employee without Good Reason or by the Employee
due to his retirement, the day that is 60 days following the Outside Date.

 

  10.8.10 “Good Reason” means a termination by Employee if (a) any of the
following events occurs without Employee’s express prior written consent,
(b) Employee notifies the Company in writing that such event has occurred,
describing such event in reasonable detail and demanding cure, within 90 days
after Employee learns of the occurrence of such event, (c) such event is not
substantially cured within 30 days after Employee so notifies the Company, and
(d) the Date of Termination occurs within 90 days after the failure of the
Company to so cure: (i) any failure to continue Employee as the President and
CEO after the Effective Date (other than by reason of a termination of
Employee’s employment by the Company with or without Cause, or Disability, or
retirement of Employee); (ii) a material diminution in Employee’s duties,
responsibilities or authorities; (iii) any diminution of Employee’s Annual
Salary, or compensation according to the Agreement or other material diminution
of Employee’s compensation terms as a direct result of a change in the
Compensation Policy; (iv) any change in the reporting structure so that Employee
is required to report to anyone other than the Board; or (v) any material breach
by the Company or any of its affiliates of any obligation under this Agreement,
including, without limitation, by failing to provide Employee with
indemnification protections at least as favorable as the indemnification
protections as may be approved by the Company’s shareholders from time to time.

 

  10.8.11 “Law” means any applicable Israeli law, rule or regulation, and the
regulations of any securities exchange on which the Company’s securities are
listed, or any applicable judgment, order, writ, decree, permit or license of
any governmental authority.

 

  10.8.12 “Outside Date” means (a) if the termination of Employee’s employment
is effected by the Company without Cause or by Employee for Good Reason, the day
that is 12 months following the Date of Termination; (b) if the termination of
Employee’s employment is effected by the Employee without Good Reason or by the
Employee due to his retirement, the day that is 9 months following the Date of
Termination.

 

  10.8.13 “Release of Claims” means the release of claims in favor of the
Company and its affiliates substantially in the form attached hereto as Annex A.

 

  10.8.14

“Severance Payment” means an amount equal to the positive difference, if any,
between (a) the product of (x) the Applicable Percentage, (y) the

--------------------------------------------------------------------------------

  Monthly Salary in effect immediately prior to the Date of Termination (without
taking into account any reduction in Monthly Salary that gives rise to, or could
have given rise to, a claim for Good Reason), and (z) the number of full and
partial years (treating a partial year as a fraction whose numerator is the
number of months in the partial year in which Employee worked, and whose
denominator is 12) of the Term, and (b) the severance components of the
Broad-Based Retirement Plan Benefits.

 

11. Indemnification

 

  11.1 In accordance with and subject to the provisions of the Law and the
applicable provisions of the Company’s Articles of Association and the
Compensation Policy then in effect, Employee shall be indemnified and released
by the Company in accordance with the provisions of the Indemnification and
Release Agreement attached hereto as Annex B, the terms of which shall be
incorporated by reference herein. The Company hereby represents that (i) the
grant of the above indemnification and release has been approved by its
shareholders with the adoption of the Compensation Policy for Executive Officers
and Directors at the 2013 annual general meeting of shareholders, held on
August 27, 2013, (ii) Notwithstanding Sec. 1.9 above, the grant of the above
indemnification and release shall apply and cover the Employee in full in his
capacity as the Company’s CEO and President as of the Effective Date, and
(iii) it is aware that the Employee is willing to assume his responsibilities as
of the Effective Date based on the representations set forth in this
Section 11.1.

 

  11.2 An officers’ liability insurance policy (or policies) shall be kept in
place, during the Term and thereafter until the seventh anniversary of the Date
of Termination, providing coverage to Employee that is no less favorable to
Employee in any respect than the coverage then being provided to any other
present or former senior executive of the Company.

 

12. Confidentiality and Disclosure of Information

Employee hereby undertakes to execute the Confidentiality, Disclosure of
Information and Assignment of Inventions undertaking attached hereto as Annex C
concurrently with the execution of this Agreement.

 

13. Non-Competition

Employee hereby agrees that, during the Term and for a period of 12 months
following the Date of Termination for any reason, not to engage, directly or
indirectly, anywhere in the world, in any activity, business or any other
engagement which competes with the business of any member of the Company Group,
including as a consultant, except with the Company’s prior written approval.
Notwithstanding anything to the contrary contained in this Section 13, the
foregoing shall not prevent Employee from acquiring for his own personal
investment not more than 1% of the outstanding voting securities of any
publicly-traded corporation.

It is hereby agreed and clarified that, when determining the above
non-competition undertaking, the parties took into account the payment to which
Employee is entitled pursuant to Section 16, which is being made in
consideration, inter alia, for such undertaking.

--------------------------------------------------------------------------------

14. Non-Solicitation.

Employee hereby agrees that, during the Term and for a period of 12 months
following the Date of Termination for any reason, not to entice, solicit or
encourage any employee, consultant, customer, vendor, supplier or prospective
employee, consultant, customer, vendor or supplier of Company Group and/or its
affiliates to cease doing business with the Company Group and/or its affiliates,
reduce its relationship with the Company Group and/or its affiliates or refrain
from establishing or expanding a relationship with the Company Group and/or its
affiliates or in any other way interfere with the Company Group’s and/or its
affiliates’ relationships with its employees, consultants, customers, vendors or
suppliers. Employee further agrees and undertakes that during the Term and for a
period of 12 months following the Date of Termination for any reason, Employee
will not, directly or indirectly, including personally or in any business in
which he is an officer, director or shareholder, for any purpose or in any
place, hire or engage with any key-employee employed by the Company Group and/or
its affiliates on the date of such termination or during the preceding twelve
months.

It is hereby agreed and clarified that, when determining the above
non-solicitation undertaking, the parties took into account the payment to which
Employee is entitled pursuant to Section 16, which is being made in
consideration, inter alia, for such undertaking.

 

15. No Disparagement.

Neither the Company Group nor the Employee shall make disparaging or otherwise
detrimental comments to any person or entity concerning the other, or the
circumstances surrounding Employee’s engagement and/or separation of engagement
from the Company, unless such party can demonstrate that the comments were made
in private circumstances and that it or he intended the comments will not be
published. In addition, the Employee shall not make disparaging or otherwise
detrimental comments to any person or entity concerning the Company Group’s
officers, directors or employees; the products, services or programs provided or
to be provided by the Company Group; the business affairs, operation, management
or the financial condition of the Company Group, unless the Employee can
demonstrate that the comments were made in private circumstances and that he
intended the comments will not be published. The obligations set forth in this
Section 15 shall apply both during and 10 years after the Term.

It is hereby agreed and clarified that, when determining the above
non-disparagement undertaking, the parties took into account the payment to
which Employee is entitled pursuant to Section 16, which is being made in
consideration, inter alia, for such undertaking.

 

16. Non-Competition/Non-Solicitation/Non-Disparagement Payment

In consideration for the Employee’s undertaking set forth in Sections 12, 13, 14
and 15 and any other non-compete obligations undertaken by the Employee, and
subject to compliance therewith, following the Date of Termination (except
pursuant to the Employee’s death) the Employee shall receive an amount equal to
eighteen (18) times the Employee’s then current Monthly Salary, to be paid in
eighteen (18) equal monthly installments (the “Non-Compete Payment”).

--------------------------------------------------------------------------------

Notwithstanding the foregoing, in the event that the Employee’s employment is
terminated by the Company for Cause in accordance with the provisions of
Section 10.3, the Company shall have sole discretion to determine whether or not
the Employee shall receive the Non-Compete Payment.

Notwithstanding the foregoing, in the event that the Employee materially
breaches any provision of Sections 12, 13, 14 or 15 hereof, the Non-Compete
Payment shall immediately cease, and the Company shall be entitled to reclaim
any amounts of the Non-Compete Payment already paid in accordance herewith, and
the Company shall have no further obligations to the Employee with respect to
the Non-Compete Payment, without derogating from any other rights or remedies
available to the Company pursuant to the Agreement or Law in respect of such
breach.

 

17. Return of Car, Equipment and Documents

Upon termination of Employee’s employment, Employee shall promptly return to the
Company the car, cell phone (or other hand-held device), laptop, credit card(s)
and any other company equipment, if any, provided to Employee, and any other
confidential or proprietary information of the Company that remains in
Employee’s possession; provided, however, that nothing in this Agreement or
elsewhere shall prevent Employee from retaining and utilizing documents relating
to his personal benefits, entitlements and obligations; documents relating to
his personal tax obligations; his desk calendar, personal contact list, and the
like; and such other records and documents as may reasonably be approved by the
Board (such approval not to be unreasonably withheld or delayed). Employee shall
confirm such return in writing to the Company promptly upon Company’s written
request, together with confirmation that the Employee no longer has any Company
property or confidential or proprietary information of the Company in his
possession or control.

 

18. No Other Post-Employment Restrictions

There shall be no contractual, or similar, restrictions on Employee’s right to
terminate his employment with the Company, or on his post-employment activities,
other than as expressly set forth in this Agreement.

 

19. Assignability; Binding Nature

This Agreement shall inure to the benefit of, and be binding on, the parties and
each of their respective successors, heirs (in Employee’s case) and assigns. No
rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company except that such rights and obligations may be
assigned or transferred pursuant to a merger or consolidation, or the sale or
liquidation of all or substantially all of the business and assets of the
Company, provided that the assignee or transferee is the successor to all or
substantially all of the business and assets of the Company and such assignee or
transferee contractually assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement.

--------------------------------------------------------------------------------

20. Tax Payments; Clawback

 

  20.1 Tax Payments. Employee hereby acknowledges and agrees that the payments
and benefits granted to him under this Agreement shall be subject to income tax
deductions and other mandatory tax deductions which the Company is required to
deduct by Law, and further represents that, except as specifically set forth in
this Agreement, nothing in this Agreement shall be construed as imposing on the
Company the obligation to pay taxes or any other obligatory payment imposed on
Employee due to any payment or benefit, other than the Company’s undertaking to
pay for the taxes related to the use of a car and phone as set forth in
Section 6.2 above.

 

  20.2 Clawback. Notwithstanding anything to the contrary herein, in the event
of a restatement of the Company’s financial statements as a result of erroneous
statements, the Employee will reimburse payments that have already been paid to
him on the basis of such erroneous financial results that were followed by a
restatement, all in accordance with the Compensation Policy and subject to Law.
By signing this Employment Agreement, Employee grants the Company a power of
attorney to deduct from the Monthly Salary and/or any payments due to the
Employee by the Company, any amounts owed by him under this section, in
accordance with Law.

Notwithstanding anything to the contrary herein, in the event that it is
discovered that the Employee engaged in conduct that resulted in a material
inaccuracy in the Company’s financial statements or caused severe financial or
reputational damage to the Company, or in the event that it is discovered that
the Employee breached his confidentiality and/or non-compete obligations to the
Company, the Company may, without limitation and in its sole discretion, (i)
terminate Employee’s employment and/or (ii) request that the Employee reimburse
any performance-based or incentive compensation paid or awarded to the Employee
and Employee hereby undertakes to reimburse the Company promptly upon its
request.

 

21. Representations

Each party represents and warrants (a) that such party is not subject to any
contract, arrangement, agreement, policy or understanding, or to any statute,
governmental rule or regulation, that in any way limits such party’s ability to
enter into and fully perform such party’s obligations under this Agreement;
provided that the Employee acknowledges and confirms that he is aware that the
terms hereof require certain corporate approvals pursuant to Law and understands
the consequences of the failure to secure such approvals; (b) that such party is
not otherwise unable to enter into and fully perform such party’s obligations
under this Agreement; and (c) that, upon the execution and delivery of this
Agreement by both parties, this Agreement shall be such party’s valid and
binding obligation, enforceable against such party in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally. The Company represents and warrants that it is fully
authorized to enter into this Agreement (including, without limitation, the
agreements attached hereto as Annexes) and to perform its obligations under it.

--------------------------------------------------------------------------------

22. Dispute Resolution

Subject to the Law, any Claim arising out of or relating to this Agreement, any
other agreement between the Company and Employee, or any termination thereof
shall be resolved by binding confidential arbitration, to be held in Israel. The
arbitration shall be conducted before a mutually appointed arbitrator and, if
necessary, an appeal-arbitrator, and if the parties in dispute shall fail to
agree upon the identity of the arbitrator(s) within 15 days of written demand,
the identity of the arbitrator(s) shall be determined by the chairman of the Bar
Association. The arbitrator’s ruling shall be subject to an appeal to an
appeal-arbitrator, in accordance with Section 21A to the Arbitration Law, 1968.
The arbitrator and the appeal-arbitrator shall not be bound by the rules of
procedure, but shall be bound by rules of the applicable substantive law and be
required to give written grounds for his decision. This Agreement shall be
deemed to be a valid Arbitration Agreement for the purpose of the Arbitration
Law, 1968. Judgment upon the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof.

 

23. Notices

Any notice or other communication required or permitted to be delivered under
this Agreement shall be (a) in writing; (b) delivered personally, by facsimile,
by courier service or by certified or registered mail, first class postage
prepaid and return receipt requested; (c) deemed to have been received on the
date of delivery or, if so mailed, on the third business day after the mailing
thereof; and (d) addressed as follows (or to such other address as the party
entitled to notice shall hereafter designate in accordance with the terms
hereof):

If to the Company: to the Company’s headquarters, Attn: Chairman of the Board;

With a copy (which shall not constitute notice) to:

Tulchinsky, Stern, Marciano, Cohen, Levitski & Co. Law Offices

4 Berkowitz Street

Tel Aviv 64238

Facsimile: +972 (3) 6075050

Attn: Menachem Tulchinsky, Adv.

If to Employee: to the last address on file with the Company; and

With a copy (which shall not constitute notice) to:

 

24. Miscellaneous

 

  24.1 Entire Agreement. As of the Effective Date, this Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof, and this Agreement (including, without limitation, the agreements
attached hereto as Annexes) shall supersede all prior representations,
agreements and understandings (including any prior course of dealings), both
written and oral, between the parties with respect to the subject matter hereof.

--------------------------------------------------------------------------------

  24.2 Amendment or Waiver. No provision in this Agreement may be amended unless
such amendment is set forth in a writing that expressly refers to the provision
of this Agreement that is being amended and that is signed by Employee and by an
authorized officer of the Company. No waiver by either party of any breach of
any condition or provision contained in this Agreement shall be deemed a waiver
of any similar or dissimilar condition or provision at the same or any prior or
subsequent time. To be effective, any waiver must be set forth in a writing
signed by the waiving party and must specifically refer to the condition(s) or
provision(s) of this Agreement being waived.

 

  24.3 Inconsistencies. Subject to the Law and Section 1.8, In the event of any
inconsistency between any provision of this Agreement and any provision of any
applicable plan, program, agreement, corporate governance document or
arrangement of the Company or its affiliates, the provisions of this Agreement
shall control unless Employee and the Company otherwise agree in a writing that
expressly refers to the provision of this Agreement whose control they are
waiving.

 

  24.4 Headings. The headings of the sections and sub-sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

 

  24.5 Survivorship. The provisions of this Agreement that are intended to
survive the termination of this Agreement shall survive such termination in
accordance with their applicable terms.

 

  24.6 Governing Law; Severability. This Agreement will be governed by the laws
of the State of Israel, without regard to its conflict of laws rules. Whenever
possible, each provision or portion of any provision of this Agreement will be
interpreted in such manner as to be effective and valid under Law but the
invalidity or unenforceability of any provision or portion of any provision of
this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision or
portion of any provision, in any other jurisdiction. In addition, should a court
or arbitrator determine that any provision or portion of any provision of this
Agreement, is not reasonable or valid, either in period of time, geographical
area, or otherwise, the parties agree that such provision should be interpreted
and enforced to the maximum extent which such court or arbitrator deems
reasonable or valid.

 

  24.7 No Mitigation/No Offset. Employee shall be under no obligation to seek
other employment or to otherwise mitigate the obligations of the Company under
this Agreement, and there shall be no offset against amounts or benefits due to
Employee under this Agreement or otherwise on account of any claim (other than
any preexisting debts then due in accordance with their terms) the Company or
its affiliates may have against him or any remuneration or other benefit earned
or received by Employee after such termination.

--------------------------------------------------------------------------------

  24.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument. Signatures
delivered by facsimile shall be effective for all purposes.

 

  24.9 Board Approvals. Any reference made in this Agreement to an approval
required of the Board or a committee of the Board shall also include any
approval of the Board or any committee of the Board as may be required by Law,
the Compensation Policy or the Company’s corporate documents.

– Signature page follows –

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement in one or more
counterparts as of the Effective Date.

 

TEVA PHARMACEUTICAL INDUSTRIES LTD

/s/ Dr. Phil Frost

By:   Dr. Phil Frost Title:     Chairman of the Board

/s/ Amir Elstein

By:   Amir Elstein Title:   Vice-Chairman of the Board

EMPLOYEE

/s/ Erez Vigodman

Name: Erez Vigodman

--------------------------------------------------------------------------------

Annex A

Form of Release Agreement

This Release Agreement (this “Release Agreement”) is dated as of
[                    ] and is entered into by [                    ]
(“Employee”, “Me” or “I”) and TEVA PHARMACEUTICAL INDUSTRIES LTD. (the
“Company”) in connection with the termination of Employee’s employment with the
Company.

 

1. General Release.

(a)    In consideration for the receipt of those payments that are in excess of
the amounts required to be paid to Me by Law (as detailed in the settlement of
account attached hereto), I, on behalf of myself and my family, agents,
representatives, heirs, executors, trustees, administrators, attorneys,
successors and assigns (the “Releasors”), hereby irrevocably and unconditionally
(i) represent and warrant that I have received in a timely manner full and
complete payment of all amounts due to Me under my employment agreement with the
Company or under any applicable law and/or in connection with the termination of
my employment, both at law and pursuant to the terms of the employment
agreement, and (ii) release, settle, cancel, acquit, discharge and acknowledge
to be fully satisfied, and covenant not to sue the Company and each of its
respective past and/or present subsidiaries, affiliates, successors and assigns,
and each of their respective predecessors, and past and/or present stockholders,
partners, members, directors, managers, officers, employees, agents or other
representatives, and employee benefit plans of the Company or its affiliates,
including, but not limited to, trustees and administrators of these plans, in
each case, in their individual and/or representative capacities (collectively,
the “Releasees”) from any and all claims, contractual or otherwise, demands,
costs, rights, causes of action, charges, debts, liens, promises, obligations,
complaints, losses, damages and all liability of whatever kind and nature,
whether known or unknown, and hereby waive any and all rights that I, he, she or
it may have, from the beginning of time up to and including the time of signing
this Release Agreement, or that otherwise may exist or may arise in respect of
my employment or separation from employment with the Company, or is in any way
connected with or related to any applicable compensatory or benefit plan,
program, policy or arrangement, including, but not limited to, any claims
relating to salaries, benefits, bonuses, compensation, fringe benefits, social
benefits according to any law or agreement, amounts of managers insurance,
pension fund, provident fund and education fund, overtime, severance pay, sick
pay, recreation payments, vacation payments, prior notice payments, options or
other securities, reimbursement of expenses and/or any other payments or
benefits due to Me by any of the Releasees, as well as any claims arising under
any applicable laws of Israel, or claims under any policy, agreement,
understanding or promise, written or oral, formal or informal, between the
Company and any of its affiliates and myself, now or hereafter recognized,
including claims for wrongful discharge, slander and defamation, as well as all
claims for counsel fees and costs; provided, that such released claims shall not
include any claims to enforce my rights under, or with respect to, any
post-termination obligations of the Company expressly undertaken by the Company
under my employment agreement with the Company.

(b)    The Releasors agree not to bring any action, suit or proceeding
whatsoever (including the initiation of governmental proceedings or
investigations of any type) against any of the Releasees hereto for any matter
or circumstance concerning which the Releasors have released the Releasees under
this Release Agreement. Further, the Releasors agree not to

--------------------------------------------------------------------------------

encourage any other person or suggest to any other person that he, she or it
institute any legal action against the Releasees, and I hereby declare, confirm
and undertake that, if the Releasors or anyone else in their name should deliver
a claim as mentioned above I shall reimburse the Releasees and anyone else on
their behalf to the full extent of the sum of the legal expenses and legal fees
incurred by them as a result of any such claim; and in the event that Releasors
prevail in such legal action, then the Releasees shall reimburse such sum to Me
or the Releasors. The Releasors hereby agree to waive the right to any relief
(monetary or otherwise) in any action, suit or proceeding I may bring in
violation of this Release Agreement.

(c)     This Release Agreement shall constitute a dismissal and compromise
notice for the purposes of Section 29 of the Severance Pay Law 5713-1963.

2.    Legal Advice, Reliance. I represent and acknowledge that (a) I have been
given adequate time to consider this Release Agreement and have been advised to
discuss all aspects of this Release Agreement with my private attorney, (b) I
have carefully read and fully understand all the provisions of this Release
Agreement, (c) I have voluntarily entered into this Release Agreement, without
duress or coercion, and (d) I have not heretofore assigned or transferred or
purported to assign or transfer, to any person or entity, any of the claims
described in Section 1(a), any portion thereof or any interest therein. I
understand that if I request additional time to review the terms of this Release
Agreement, a reasonable extension of time will be granted.

 

3. Miscellaneous.

(a)    No Violation of Law. I agree and acknowledge that this Release Agreement
is not and shall not be construed to be an admission by the Company of any
violation of any applicable laws of Israel, or of any duty owed by the Company
to Me.

(b)    Governing Law; Severability. This Release Agreement will be governed by
the laws of the State of Israel, without regard to its conflict of laws rules.
In the event that any one or more of the provisions of this Release Agreement is
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.

(c)    Revocation. I may revoke this Release Agreement within seven (7) days
after the date on which I sign this Release Agreement. I understand that this
Release Agreement is not binding or enforceable until such seven (7) day period
has expired. Any such revocation must be made in a signed letter executed by Me
and received by the Company at its headquarters no later than 5:00 p.m., Tel
Aviv time, on the seventh day after I have executed this Release Agreement. I
understand that if you revoke this Release Agreement, I will not be entitled to
any severance benefits under my employment agreement with the Company.

(d)    Counterparts. This Release Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

*        *        *         *        *

Very truly yours,

--------------------------------------------------------------------------------

EMPLOYEE

 

Name:  

 

Dated:  

 

ACCEPTED AND AGREED: TEVA PHARMACEUTICAL INDUSTRIES LTD

 

By:   Title:  

 

By:   Title:  

--------------------------------------------------------------------------------

Annex B

Indemnification Agreement

[Attached hereto]

--------------------------------------------------------------------------------

Annex C

Confidentiality, Disclosure of Information and

Assignment of Inventions Agreement

To: Teva Pharmaceutical Industries Ltd. (the “Company”)

Re: Proprietary Information, Non-Disclosure and Assignment of Inventions
Agreement

The undersigned (“Employee”) hereby acknowledges that he will have access to,
certain proprietary information, inventions, commercial secrets and other
confidential information of the Company and may participate in the development,
planning or marketing of the Company’s products, in connection with Employee’s
employment under the Employment Agreement entered into between the Company and
Employee dated January 15, 2014 (hereinafter, the “Employment Agreement”). In
relation to such confidential information Employee hereby undertakes as follows,
in full knowledge that the force of this undertaking is in no way dependent upon
the force of the Employment Agreement, is entirely independent from said
agreement, does not in any way constitute a concurrent obligation with the
obligations defined in the Employment Agreement and has been a material part of
the consideration of his engagement by the Company:

 

1. Proprietary Information and Non-Disclosure

 

  1.1. Employee acknowledges and agrees that he will have access to or be
involved in the planning, making or development of, confidential and proprietary
information concerning the business and financial activities of the Company or
its property, business, dealings, clients, suppliers, people or entities that
come into contact with them, their operational methods, research or
manufacturing process, plans and strategies, business plans, research projects,
employees, marketing plans, supplier lists, customers, data, trade secrets, test
results, formulas, processes, data and know-how, improvements, inventions,
patents, application for patents, copyrights, trademarks, engineering
specifications, product designs, technical information discoveries, studies,
techniques, specifications, computer programs (in source and object code),
databases, products (actual or planned) and information contained in computers,
preservation of information methods, disks, diskettes, drawings, plans,
communications, prospectuses, reports, prices, calculations, fees, work
conditions in the Company or other agreement conditions which relate to the
Company and documents of the Company. All such information, whether in
documentary, written, oral or digital format, and whether received by Employee
as a result of his employment with the Company or brought to his attention in
any other manner, shall be deemed to be and referred to as “Proprietary
Information”. For purposes of this Confidentiality, Disclosure of Information
and Assignment of Inventions Agreement the term “Company” shall include all
entities within the Company Group (as defined in the Employment Agreement).

“Proprietary Information” shall be deemed to include any and all proprietary
information disclosed by or on behalf of the Company irrespective of form, but
excluding information that (i) was known to Employee prior to his association
with the Company and can be so proven by Employee by documentary evidence;

--------------------------------------------------------------------------------

(ii) shall have appeared in any printed publication or patent of a third party
or shall have become a part of the public knowledge except as a result of a
breach of this Agreement by Employee; or (iii) shall have been received by
Employee from a third party having no obligation to the Company.

In addition, the term “Proprietary Information” shall include information
regarding salaries, bonuses and benefits paid or granted to Employee by the
Company under the Agreement to which this Annex C is attached.

 

  1.2. Employee agrees and declares that all Proprietary Information and rights
in connection therewith are, and shall be the sole property of the Company and
its assignees. At all times, both during the term of his engagement with the
Company and thereafter Employee will keep in strict confidence and trust all
Proprietary Information, and Employee will not copy, transmit, reproduce,
summarize, quote, publish and/or make any commercial or other use or disclose
directly or indirectly any Proprietary Information or anything relating to it
without the prior written consent of the Company, except as may be necessary in
the ordinary course of performing Employee’s duties in his engagement with the
Company and in the best interests of the Company, and except as otherwise
expressly permitted by Section 12 of the Employment Agreement.

 

  1.3. Employee recognizes that the Company received and will receive
confidential or proprietary information from third parties subject to a duty on
the Company’s part to maintain the confidentiality of such information and to
use it only for certain limited purposes. At all times, both during the term of
his engagement with the Company and thereafter, Employee undertakes to hold and
maintain all such information in strict confidence, and not to use or disclose
any of such information without the prior written consent of the Company, except
as may be necessary to perform his duties as an Employee of the Company and
consistent with the Company’s agreement with such third party.

 

2. Assignment of Inventions

 

  2.1. Employee understands that the Company is engaged, involved or associated
in a continuous program of investment, research, development, production or
marketing in connection with its business and that, as an essential part of his
engagement with the Company, he may make new contributions to and create
know-how of value for the Company.

 

  2.2. During the term of his engagement, Employee undertakes and covenants that
he will promptly disclose in confidence to the Company all inventions,
improvements, ideas, themes, designs, original works of authorship, formulas,
concepts, techniques, forecasts, test results and documentation, discoveries,
models, drawings, tooling, schematics and other diagrams, instructional
material, notes, records, algorithms, operating procedures methods, systems,
processes, compositions of matter, computer software programs, databases, mask
works, and trade secrets, whether or not patentable, copyrightable or
protectable as trade secrets or under any other intellectual property right,
that are made or conceived or first reduced to practice or created by him,
either alone or jointly with others, in the course of his engagement with the
Company and due to his engagement with the Company (“Inventions”).

--------------------------------------------------------------------------------

  2.3. Employee agrees and represents, that all Inventions will be the sole and
exclusive property of the Company and/or its assignees and undertakes to act
with respect to such Inventions in accordance with the Company’s applicable
corporate policy.

 

  2.4. Employee agrees to keep and maintain adequate and current written records
of all Inventions made by him (solely or jointly with others) during the term of
his engagement. The records will be in the form of notes, sketches, drawings,
and any other format that may be specified by the Company. The records will be
available to and remain the sole property of the Company at all times and will
be returned to the Company upon the termination of Employee’s employment or
earlier at the request of the Company.

 

  2.5. Employee hereby irrevocably transfers and assigns to the Company and/or
its assignees and shall in the future take all reasonable steps (including by
way of illustration only, signing all appropriate documents) to assign to
Company and/or its assignees without additional consideration to the Employee
(other than the Employee’s salary and other benefits to which he is entitled to
as an employee of the Company (including without limitation, without any
compensation or royalties in accordance with Sections 132 or 134 of the Patent
and Design Act of 1967 (the “Patent Law”)): (a) all worldwide patents, patent
applications, copyrights, mask works, trade secrets and other intellectual
property rights, titles and interests, in any Invention, including, without
limitation, service inventions under Section 134 of the Patent Law, and hereby
further acknowledges and shall in the future acknowledge Company’s full and
exclusive ownership in all such Inventions; and (b) any and all Moral Rights (as
defined below) that he may have in or with respect to any Invention. Employee
also hereby forever waives and agrees never to assert any and all Moral Rights
he may have in or with respect to any Invention, even after termination of his
engagement with the Company. “Moral Rights” mean any rights of paternity or
integrity, any right to claim authorship of an invention, to object to any
distortion, mutilation or other modification of, or other derogatory action in
relation to, any Invention, whether or not such would be prejudicial to his
honor or reputation, and any similar right, existing under judicial or statutory
law of any jurisdiction whatsoever, or under any treaty, regardless of whether
or not such right is denominated or generally referred to as a “moral right”.

 

  2.6. Employee expressly waives all economic rights in the Inventions including
without limitation any rights to royalties from any intellectual property right
(specifically including patent rights under Section 134 of the Patent Law) and
any right to receive any payment or other consideration whatsoever.

 

  2.7.

Employee agrees to assist the Company in every reasonable way to obtain and
enforce, for the benefit of the Company and/or its assignees exclusive and
absolute title, right, interest, patents, copyrights, mask work rights, and
other legal protections for the Inventions in any and all countries. Employee
will execute any documents that may be reasonably requested of him for use in
obtaining or enforcing such patents, copyrights, mask work rights, trade secrets
and other legal protections. Employee’s obligations under this Section 2.7 will
survive the termination of his engagement with the Company; provided that the
Company will compensate him at a reasonable rate after such termination for time
or expenses actually spent by him at the Company’s request on such assistance.

--------------------------------------------------------------------------------

  After the termination of Employee’s engagement with the Company, any
assistance requested by the Company or any of its assignees pursuant to this
Section 2.7 shall take into account Employee’s obligations towards third
parties. Employee hereby irrevocably appoints the Company and/or its duly
authorized officers and agents (including, without limitation, the chairman of
the Board) as his attorney-in-fact to execute documents on his behalf for this
purpose and agrees that, if the Company is unable because of Employee’s
unavailability, mental or physical incapacity, or for any other reason, to
secure Employee’s signature for the purpose of applying for or pursuing any
application for any Israeli or foreign patents or mask work or copyright
registrations covering the Inventions assigned to the Company in this Section 2,
to act for and on Employee’s behalf to execute and file any such applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of patents, copyright and mask work registrations with the same legal
force and effect as if executed by Employee.

 

  2.8. The Employee hereby acknowledge and agrees that the salary and other
benefits provided to him under his Employment Agreement constitute appropriate,
full and fair consideration in connection with his employment with the Company,
including, without limitation, with respect to this Agreement and including with
respect to Employee’s undertakings under this Section 2, and with respect to any
Inventions created, conceived or reduced to practice or that may be created,
conceived or reduced to practice by the Employee, either alone or jointly with
others, in the course of his employment with the Company, all of which are
assigned to the Company in accordance with this Agreement, and the Employee
hereby unconditionally and irrevocably waives any right that he may have to
receive any additional payment or other consideration whatsoever to which the
Employee may be entitled with respect to any Invention pursuant to any
applicable law, in any jurisdiction, including (but not limited to) pursuant to
Section 134 of the Patent Law, or any provision that may supersede it. In the
event that for any reason such right cannot be waived, the Employee hereby
assigns and transfers to the Company any such right the Employee may have to
receive any additional payment or other consideration whatsoever with respect to
any Invention pursuant to any applicable law, including the Patent Law, in any
jurisdiction.

 

  2.9. The provisions of this Section 2 shall survive termination or expiration
of the Employment Agreement and shall be and remain in full force and effect at
all times thereafter.

 

  2.10. Employee acknowledges that the Company has entered into the Employment
Agreement in reliance on his undertaking set forth in this Section, and that
given his access to information regarding the Company, the provisions of this
Section 2 are reasonable and necessary to protect the Company’s business and
rights.

 

  2.11. If any one or more of the terms contained in this Proprietary
Information, Assignment Of Inventions And Non-Disclosure Agreement shall for any
reason be held to be excessively broad with regard to time, geographic scope or
activity, the term shall be construed in a manner to enable it to be enforced to
the extent compatible with applicable law.

--------------------------------------------------------------------------------

3. Miscellaneous

 

  3.1. Governing Law. This Agreement shall be governed by and construed
according to the laws of the State of Israel. Any dispute arising under or
relating to this Agreement or any transactions contemplated herein shall be
resolved by the competent courts of Tel Aviv-Jaffa, and each of the parties
hereby irrevocably agree to the jurisdiction of such venue

 

  3.2. Injunctive Relief. Any breach of this Agreement may cause irreparable
harm to the Company, for which damages would not be an adequate remedy, and
therefore, the Company will be entitled to injunctive relief from any court of
competent jurisdiction as such court so determines, restraining any violation or
further violation of this Agreement by Employee. The Company’s right to
injunctive relief shall be cumulative and in addition to any other remedies
provided by law or equity and without any requirement to post bond.

IN WITNESS WHEREOF, Employee has signed this Proprietary Information,
Non-Disclosure and Assignment of Inventions Agreement as of the      day of
January 2014.

 

EMPLOYEE

/s/ Erez Vigodman

ACCEPTED AND AGREED: TEVA PHARMACEUTICAL INDUSTRIES LTD

/s/ Dr. Phil Frost

Name:   Dr. Phil Frost Title:   Chairman of the Board

/s/ Amir Elstein

Name:   Amir Elstein Title:   Vice Chairman of the Board