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Exhibit 10.3

PERSONAL EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED PERSONAL EMPLOYMENT AGREEMENT (the “Agreement”) is
made and entered into this 7th day of April, 2017 (the “Effective Date”)  by and
between A.D. Integrity Applications Ltd. (No. of Company 51-315187-8), of 19
Ha’Yahalomim St., P.O. Box 12163, Ashdod 7760049 Israel (the “Company”) and
David Malka (I.D. No 022129928) of 35 Muksay St, Rehovot, Israel (the
“Manager”).

WHEREAS,
the Company and the Manager previously entered into a Personal Employment
Agreement effective as of October 19, 2010 (the “Prior Agreement”); and

 

WHEREAS, the Company and the Manager now wish to amend and restate the Prior
Agreement in its entirety to provide for amended terms and conditions of the
Manager’s employment by the Company, as set forth below.

 
NOW, THEREFORE, in consideration of the mutual premises, covenants and other
agreements contained herein, the parties hereby agree as follows:
 
General

1. Position. The Manager shall serve in the position described in Exhibit A
attached hereto. In such position the Manager shall report regularly and shall
be subject to the direction and control of the Company’s Chief Executive
Officer. The Manager shall have all of the powers, authorities, duties and
responsibilities usually incident to the position of a Vice President of
Operations of a corporation, including responsibility of the entire daily
operations and infrastructures of the Company, maintenance, subcontractors and
manufacturing of the Company. The Manager shall perform his duties diligently,
conscientiously and in furtherance of the Company’s best interests.  In
addition, the Manager will be entitled to attend, discuss and otherwise
participate in all functions of the Company’s Board of Directors (the “Board”)
as an observer, but shall have no voting rights designated, for an initial term
of twelve (12) months, with renewable annual terms thereafter upon approval of
the Board, as long as the Manager remains an employee of the Company.  The
Manager shall receive notice of all meetings of the Board and all written
materials distributed to the members of the Board prior to the meeting to which
they apply.  The Board reserves the right to withhold any information and to
exclude the Manager from access to any meeting or portion thereof if the Board
reasonably believes in good faith upon advice of counsel that such exclusion is
necessary in order to preserve the attorney client privilege or could result in
disclosure of trade secrets or a conflict of interest, or if the Manager is a
competitor of the Company, as determined by a majority of the members of the
Board.

2. Scope of Employment. The Manager agrees to devote the working time and
attention to the business and affairs of the Company, as shall be required to
discharge the responsibilities assigned to the Manager hereunder. The Manager
shall devote the required time and attention to the business of the Company. The
Manager hereby acknowledges that the performance of his employment with the
Company may require working overtime. However, Manager acknowledges that he
holds a senior position in the Company requiring a special degree of trust and
therefore is not entitled to receive, pursuant to the Hours of Work and Rest Law
5711-1951, separate and/or additional payments in respect of additional hours or
for working on weekends or on holidays.
 

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3. Location. The Manager shall perform his duties hereunder at the Company’s
office in Ashdod, Israel or from his home, as shall be decided by the Manager,
and he understands and agrees that his position may involve international
travels. It is clarified that any international travel of the Manager shall be
coordinated between the Manager and the Company.

4. Manager’s Representations and Warranties. The Manager represents and warrants
that the execution and delivery of this Agreement and the fulfillment of its
terms: (i) will not constitute a default under or conflict with any agreement or
other instrument to which he is a party or by which he is bound; and (ii) do not
require the consent of any person or entity.

Term of Employment

5. Term. The Manager’s employment with the Company had commenced on the date set
forth in Exhibit A (the “Commencement Date”), and shall continue until it is
terminated pursuant to the terms set forth herein.

6. Termination at Will. Either party may terminate the employment relationship
hereunder at any time, by giving the other party a prior written notice as set
forth in Exhibit A (the “Notice Period”). Notwithstanding the foregoing, the
Company is entitled to terminate this Agreement with immediate effect or at any
time during the Notice Period (including to waive the work of the Manager during
the Notice Period) upon a written notice to Manager and payment to the Manager a
one-time amount equal to the Salary (as defined below) and the financial value
of all other benefits the Manager would have been entitled to receive in respect
of the portion of the Notice Period which was forfeited, in lieu of such prior
notice period.

The Company and Manager agree and acknowledge that the Company’s Severance
Contribution to the Pension Scheme (as defined in Section 11) in accordance with
Section 11 below, shall, provided contribution is made in full, be instead of
severance payment to which the Manager (or his beneficiaries) shall be entitled
with respect to the Salary upon which such contributions were made and for the
period in which they were made (the “Exempt Salary”), pursuant to Section 14 of
the Severance Pay Law 5723 – 1963 (the “Severance Law”). The parties hereby
adopt the General Approval of the Minister of Labor and Welfare, which is
attached hereto as Exhibit C. The Company hereby forfeits any right it may have
in the reimbursement of sums paid by Company into the Pension Scheme, except:
(i) in the event that Manager withdraws such sums from the Pension Scheme, other
than in the event of death, disability or retirement at the age of 60 or more;
or (ii) upon the occurrence of any of the events provided for in Sections 16 and
17 of the Severance Law. Nothing in this Agreement shall derogate from the
Manager’s rights to severance payment in accordance with the Severance Law or
agreement or applicable ministerial order in connection with remuneration other
than the Exempt Salary, to the extent such remuneration exists.

7. Termination for Cause. The Company may immediately terminate the employment
relationship for Cause, and such termination shall be effective as of the time
of notice of the same. “Cause” means the good faith and reasonable determination
of the Board that the Manager has (i)  been grossly negligent or engaged in
willful misconduct, fraud, embezzlement, acts of dishonesty or a conflict of
interest (to the extent such conflict of interest materially harms the Company),
in each case, relating to the affairs of the Company; provided, that “Cause”
shall not be deemed to exist under this clause (i) unless the Manager has been
given written notice specifying the act or omission constituting Cause and the
Manager has failed to cure such act or omission within thirty (30) days after
receiving such notice; provided further, that such notice and cure right shall
not be required to be given if the act or omission giving rise to the
determination that Cause exists is not, in the reasonable determination of the 
Board, susceptible of cure; (ii) been convicted of or pleaded nolo contendere to
any felony crime or been involved in the commission of any act (A) involving (1)
misuse or misappropriation of money or other property of Company or (2) repeated
use of illegal substances; or (B) which disparages the business integrity of the
Company, their directors, employees or customers, and materially and adversely
affects the business reputation of Company; or (iii) engaged in a willful
violation of any U.S. federal or state securities laws.
 
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8. Notice Period; End of Relations. During the Notice Period and unless
otherwise determined by the Company in a written notice to the Manager, the
employment relationship hereunder shall remain in full force and effect, the
Manager shall be obligated to continue to discharge and perform all of his
duties and obligations with Company, and the Manager shall cooperate with the
Company and assist the Company with the integration into the Company of the
person who will assume the Manager’s responsibilities.

Covenants

9. Proprietary Information; Assignment of Inventions and Non-Competition. Upon
the execution of this Agreement, the Manager will execute the Company’s
Proprietary Information, Assignment of Inventions and Non-Competition Agreement
attached as Exhibit B hereto.
 
Salary and Additional Compensation; Pension/Insurance Scheme

10. Salary. The Company shall pay to the Manager as compensation for the
employment services an aggregate monthly salary in the amount set forth in
Exhibit A (the “Salary”). Except as specifically set forth herein, the Salary
includes any and all payments to which the Manager is entitled from the Company
hereunder and under any applicable law, regulation or agreement. The Manager’s
Salary and other terms of employment may be reviewed and upgraded by the Board,
from time to time, at the CEO discretion. The Salary is to be paid to the
Manager no later than by the 9th day of each calendar month after the month for
which the Salary is paid, after deduction of applicable taxes and like payments.
 
11. Insurance and Social Benefits. The Company shall, on a monthly basis, pay to
a pension scheme for the benefit of the Manager and shall deduct from the
Manager’s Salary a respective payment towards such pension scheme (the “Pension
Scheme”). The contributions to the Pension Scheme will be as follows:
 

(i)
The Company will pay an amount equal to 8 1/3% (eight percent and one third of a
percent) of the Salary as a severance pay component;

 

(ii)
In case of a Pension Scheme of a managers insurance type (and not a pension
fund), the Company shall pay for a disability insurance in an amount of 2.5% of
the Salary or a lower amount as required to insure 75% of the Salary (the
"Disability Insurance Component");

 

(iii)
The Company will pay towards a savings component (A) an amount equal to 6.5% of
the Salary in case the Pension Scheme is through a pension fund or (B) an amount
equal to 6.5% of the Salary less the Disability Insurance Component, but in no
event less than 5%, in case of a managers insurance type Pension Scheme; and

 

(iv)
The Company shall deduct from the net Salary an amount equal to 6% which amount
shall be allocated to a savings component.

 
The above contributions and deductions are subject to applicable law and
therefore may be adjusted accordingly.
 
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Additionally, the Company, together with the Manager will maintain an advanced
study fund (“Keren Hishtalmut”) and the Manager and the Company shall contribute
to such fund an amount equal to 2.5% of the Salary (payable by the Manager) and
7.5% of the Salary (payable by the Company), respectively.

The contributions set out above shall be made with respect to the total amount
of the Salary notwithstanding the maximum amounts exempt from tax payment under
applicable laws, provided that the Manager shall bear all tax liability
associated therewith.

Additional Benefits

12. Bonus.  The Manager shall be eligible to earn an annual performance bonus
having a threshold bonus opportunity equal to 420% of his current Salary, a
target bonus opportunity equal to 720% of his current Salary, and a maximum
bonus equal to 864% of his current Salary, in each case based on satisfaction of
performance criteria to be established by the Board within the first ninety (90)
days of each fiscal year that begins during the period in which the Manager is
employed with the Company pursuant to the terms of this Agreement (the
“Performance Bonus”).  Payment of any Performance Bonus shall be made based on
the Board’s determination regarding the Manager’s satisfaction of the criteria
applicable to such Performance Bonus opportunity.  Any payment in respect of a
Performance Bonus shall be subject to tax and other standard payroll
withholdings and shall be paid within thirty (30) days following the final
determination of the amount of the Performance Bonus to be paid and during the
immediately following calendar year to which the Performance Bonus related and
provided that Manager is employed with the Company pursuant to the terms of this
Agreement through and on such payment date.

In addition, the Manager shall be eligible to earn a retention bonus equal to
60% of his aggregate Salary earned through the one-year anniversary of the
Effective Date, payable within thirty (30) days following the one-year
anniversary of the Effective Date, provided that the Manager remains employed
with the Company through and on the one-year anniversary of the Effective Date.

13. Vacation. The Manager shall be entitled to the number of vacation days per
year as set forth in Exhibit A, to be taken at times subject to the reasonable
approval of the Company. In the event that the demands of the Manager’s
activities shall preclude or limit the Manager’s ability to actually use such
vacation days in any specific year, the Manager shall be entitled to the balance
of the unused vacation days in the next succeeding three years (and any unused
days of vacation above the days mandatory pursuant to applicable law during such
period shall be redeemed to the Manager by the Company).
 
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14. Sick Leave; Convalescence Pay. The Manager shall be entitled to that number
of paid sick leave per year as set forth in Exhibit A (with unused days to be
accumulated without limitation), and also to Convalescence Pay (“Dmei Havra’a”)
as set forth in Exhibit A.

15. Company Car. During the term of this Agreement the Company will provide the
Manager with a car of make and model equal to group 3 (as defined by the tax
authorities for “Shovi Shimush Berechev”) pursuant to Company’s discretion (the
“Car”). The Car shall belong to or be leased by the Company for use by the
Manager during the period of his employment with the Company, including the
Notice Period. The Car will be returned to the Company by the Manager
immediately after termination of the Manager’s employment by the Company (i.e.
at the end of the Notice Period). The Company shall bear all the fixed and
variable costs of the Car, including licenses, insurance, gasoline, regular
maintenance and repairs and toll road fees. The Company shall not, at any time,
bear the costs of any tickets, traffic offense or fines of any kind. The Company
shall bear all the personal tax consequences of the allocation of a company car
to the benefit (“Gilum Male”). Any expenses, payments or other benefits that are
made in connection with the Car shall not be regarded as part of the Salary, for
any purpose or matter, and no social benefits or other payments shall be paid on
its account.

16. Mobile Phone. During the term of this Agreement the Company shall provide
the Manager a mobile phone, for use in connection with Manager’s duties
hereunder. The Company shall bear all expenses relating to the Manager’s use and
maintenance of the phone attributed to the Manager under this subsection. The
Company shall bear all the personal tax consequences of the allocation of the
mobile phone to his benefit.

17.  Equity.

Effective as of the Effective Date, INTEGRITY APPLICATIONS, INC. (“Integrity”),
a Delaware corporation and parent of the Company, shall accelerate the vesting
of all outstanding unvested options to purchase common stock of Integrity at an
exercise price per share equal to US$6.25 held by the Manager as of the
Effective Date.

Provided that on or before the one-year anniversary of the Effective Date, the
Company receives full payment for the revenue order having a value equal to or
greater than US$1,700,000, which the Manager has advised the Company is pending
as of the Effective Date, Integrity shall grant the Manager an option to
purchase up to 25,000 shares of common stock of Integrity having an exercise
price per share equal to US$4.50, which shall vest monthly over a three-year
period following the grant date and shall be subject to the terms and conditions
set forth in the stock option agreement to be provided to the Manager and
pursuant to Integrity's 2010 Incentive Compensation Plan and the provisions of
Section 102(b)(3) of the Israeli Tax Ordinance as a grant according to Capital
Gain Tax Track with a Trusty, as soon as possible after the Company receives
full payment for such revenue order described in this paragraph.

As soon as possible after the execution of the Agreement, Integrity shall grant
the Manager an option to purchase 361,875 shares of common stock of Integrity at
an exercise price per share equal to US$4.50, on a fully diluted basis, which
shall vest over a three-year period following the grant date and shall be
subject to the terms and conditions set forth in the stock option agreement to
be provided to the Manager and pursuant to Integrity's 2010 Incentive
Compensation Plan and the provisions of Section 102(b)(3) of the Israeli Tax
Ordinance as a grant according to Capital Gain Tax Track with a Trustee.
 
Integrity shall grant the Manager an option to purchase 266,617 shares of common
stock of Integrity at an exercise price per share equal to US$7.75, which shall
vest 50% upon CFDA approval and 50% upon FDA approval and shall be subject to
the terms and conditions set forth in the stock option agreement to be provided
to the Manager and pursuant to Integrity's 2010 Incentive Compensation Plan, and
the provisions of Section 102(b)(3) of the Israeli Tax Ordinance as a grant
according to Capital Gain Tax Track with a Trustee.   The Company and the
Manager  may modify or refine these milestones within the first 90 days after
the execution and delivery of this Agreement, based on the recommendation of the
CEO of the Company and subsequent approval by the Compensation Committee or
Board.
 
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18. Adjustment Period. In the event the Manager’s employment with the Company is
terminated for any reason, other than by the Company for Cause, the Manager
shall be entitled to 3 Salaries, including all the benefits mentioned above,
payable over the three month period immediately following the termination of
this Agreement.  The 3 Salaries shall be paid in equal installments over the
three month period immediately following the termination of this Agreement.  The
payments and benefits provided under this Paragraph 18 are conditioned upon (i)
the Manager not working and/or providing services to any entity directly
competing with the Company, (ii) the Manager complying with the terms and
conditions of the Company’s Proprietary Information, Assignment of Inventions
and Non-Competition Agreement, and (iii) the Manager’s execution of a general
release of claims in a form the Company may reasonably request that becomes
irrevocable within 60 days following the date on which this Agreement is
terminated.    Payment of any amounts subject to the Manager’s release shall be
delayed until the 61st day following the date on which this Agreement is
terminated and any payments that are so delayed shall be paid on such date.

19. Renegotiation of Terms. Following 12 months from the execution date of this
Agreement, the Company and the Manager shall discuss the possibility to upgrade
the Manger’s remuneration terms.

Miscellaneous

20. The laws of the State of Israel shall apply to this Agreement and the sole
and exclusive place of jurisdiction in any matter arising out of or in
connection with this Agreement shall be the Tel-Aviv-Yafo Regional Labor Court.

21. The provisions of this Agreement are in lieu of the provisions of any
collective bargaining agreement, and therefore, no collective bargaining
agreement shall apply with respect to the relationship between the parties
hereto (subject to the applicable provisions of law).

22. No failure, delay or forbearance of either party in exercising any power or
right hereunder shall in any way restrict or diminish such party’s rights and
powers under this Agreement, or operate as a waiver of any breach or
nonperformance by either party of any terms or conditions hereof.

23. In the event it shall be determined under any applicable law that a certain
provision set forth in this Agreement is invalid or unenforceable, such
determination shall not affect the remaining provisions of this Agreement unless
the business purpose of this Agreement is substantially frustrated thereby.
 
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24. The preface and exhibits to this Agreement constitute an integral and
indivisible part hereof.

25. This Agreement constitutes the entire understanding and agreement between
the parties hereto, supersedes any and all prior discussions, agreements and
correspondence with regard to the subject matter hereof (including, without
limitation the Prior Agreement), and may not be amended, modified or
supplemented in any respect, except by a subsequent writing executed by both
parties hereto.

26. The Manager acknowledges and confirms that all terms of the Manager’s
employment are personal and confidential, and undertake to keep such terms in
confidence and refrain from disclosing such terms to any third party.

27. All references to applicable laws are deemed to include all applicable and
relevant laws and ordinances and all regulations and orders promulgated there
under, unless the context otherwise requires. The parties agree that this
Agreement constitutes, among others, notification in accordance with the Notice
to Employees (Employment Terms) Law, 2002. Nothing in this agreement shall
derogate from the Manager’s rights according to applicable laws.

28. The Company will be bound by this Agreement subject to its authorization by
all necessary corporate actions.

29. This Agreement may be assigned by the Company (whether by operation of law
or otherwise) to Integrity, without the prior written consent of the Manager;
provided, however, that the Company may assign its rights and delegate its
duties hereunder without derogating from the Manager’s rights or influencing
them in any manner.

IN WITNESS WHEREOF the parties have signed this Agreement as of the date first
hereinabove set forth.
 

______________________________
A.D. Integrity Applications Ltd.         
______________________________
David Malka

 
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Exhibit A

To the Personal Employment Agreement by and between
The Company and the Manager

          Name & I.D. No: Name of Manager:
David Malka, I.D. No 022129928
1. Position: Position in the Company:
Vice President of Operations
2. Under Direction of:
Chief Executive Officer
3. Commencement Date: Commencement Date:
March 1, 2003
4. Notice Period: Notice Period:
90 days
5. Rest Days:
Saturday
6. Salary: Salary:
NIS 20,000 for each month until the month in which the Company receives a
deposit of an amount equal to or greater than US$350,000 for the revenue order
having a value equal to or greater than US$1,700,000, which the Manager has
advised the Company is pending as of March 20, 2017.  Effective for the month in
which the Company receives the aforementioned deposit of an amount equal to or
greater than US$350,000, and each subsequent month, the Manager’s Salary shall
increase to NIS 35,000 per month.
7. Bonus:
as set forth in section 12 above
8. Annual Vacation: Vacation Days Per Year:
24 days
9. Sick Days: Sick Leave Days Per Year:
Pursuant to applicable law, however paid in full from first day
10. Convalescence Pay:
10 days per year. Worth of every day pursuant to applicable extension order.

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Exhibit B

Proprietary Information, Assignment of Inventions and Non-Competition Agreement
 
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Exhibit C

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS
TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
UNDER THE SEVERANCE PAY LAW, 5723-1963
 
By virtue of my power under Section 14 of the Severance Pay Law, 5723-1963
(hereinafter: the “Law”), I certify that payments made by an employer commencing
from the date of the publication of this approval for the sake of his employee
to a comprehensive pension provident fund that is not an insurance fund within
the meaning set forth in the Income Tax Regulations (Rules for the Approval and
Conduct of Provident Funds), 5724-1964 (hereinafter: the “Pension Fund”) or to
managers’ insurance which includes the possibility to receive annuity payments
under an insurance fund as aforesaid, (hereinafter: the “Insurance Fund”),
including payments made by the employer by a combination of payments to a
Pension Fund and an Insurance Fund (hereinafter: “Employer’s Payments”), shall
be made in lieu of severance pay due to said employee with respect to the salary
from which said payments were made and for the period they were paid
(hereinafter: the “Exempt Salary”), provided that all the following conditions
are fulfilled:
 
(1)
The Employer’s Payments –

 
 
(a)
to the Pension Fund are not less than 14 1/3% of the Exempt Salary or 12% of the
Exempt Salary if the employer pays, for the sake of his employee, in addition
thereto, payments to supplement severance pay to a severance pay provident fund
or to an Insurance Fund in the employee’s name, in the amount of 2 1/3 % of the
Exempt Salary. In the event that the employer has not paid the above mentioned 2
1/3% in addition to said 12%, his payments shall come in lieu of only 72% of the
employee’s severance pay;

 
 
(b)
to the Insurance Fund are not less than one of the following:

 
 
(i)
13 1/3% of the Exempt Salary, provided that, in addition thereto, the employer
pays, for the sake of his employee, payments to secure monthly income in the
event of disability, in a plan approved by the Commissioner of the Capital
Market, Insurance and Savings Department of the Ministry of Finance, in an
amount equivalent to the lower of either an amount required to secure at least
75% of the Exempt Salary or in an amount of 2 1/2% of the Exempt Salary
(hereinafter: “Disability Insurance Payment”);

 
 
(ii)
11% of the Exempt Salary, if the employer paid, in addition, the Disability
Insurance Parent; and in such case, the Employer’s Payments shall come in lieu
of only 72% of the employee’s severance pay. In the event that the employer has
made payments in the employee’s name, in addition to the foregoing payments, to
a severance pay provident fund or to an Insurance Fund in the employee’s name,
to supplement severance pay in an amount of 2 1/3% of the Exempt Salary, the
Employer’s Payments shall come in lieu of 100% of the employee’s severance pay.

(2)
No later than three months from the commencement of the Employer’s Payment, a
written agreement was executed between the employer and the employee, which
includes:

 
 
(a)
the employee’s consent to an arrangement pursuant to this approval, in an
agreement specifying the Employer’s Payments, the Pension Fund and the Insurance
Fund, as the case may be; said agreement shall also incorporate the text of this
approval;

 
 
(b)
an advance waiver by the employer of any right which he may have to a refund of
monies from his payments, except in cases in which the employee’s right to
severance pay was denied by a final judgment pursuant to Sections 16 or 17 of
the Law, and in such a case or in cases in which the employee withdrew monies
from the Pension Fund or Insurance Fund, other than by reason of an entitling
event; for these purposes an “Entitling Event” means death, disability or
retirement at or after the age of 60.

 
(3)
This approval shall not derogate from the employee’s right to severance pay
pursuant to any law, collective agreement, extension order or employment
agreement with respect to compensation in excess of the Exempt Salary.

 
15th Sivan 5758 (June 9th, 1998).
 
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