Exhibit 10.1

 

Employment Agreement

 

THIS AGREEMENT is made as of July 1, 2019

 

B E T W E E N:

 

ZION OIL AND GAS INC., a Company incorporated under the laws of Delaware.

 

(the “Company”)

 

and -

 

WILLIAM H. AVERY

 

(the “Employee”)

 

CONTEXT OF THIS AGREEMENT

 

A. The Company explores for oil and gas in Israel.

 

B. The Company wishes to employ the Employee as the President and General
Counsel of Zion Oil and Gas Inc., upon the terms and conditions as set out
herein.

 

FOR VALUE RECEIVED, the sufficiency of which is acknowledged, the parties agree
as follows:

 

PART 1
INTERPRETATION

 

1.1 Definitions. In this Agreement, the following terms shall have the following
meanings:

 

“Agreement” means this agreement and all schedules attached hereto and all
amendments made hereto and thereto in writing by the parties.

 

“Business Day” means a day other than a Saturday, Sunday or statutory holiday in
the U.S.A. and Israel.

 

“Person” includes individuals, companies, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts or other organizations, whether or not legal entities.

 

 

 

1.2 Entire Agreement. This Agreement together with the agreements and other
documents to be delivered pursuant to this Agreement (or other agreements
pertaining to employee benefits, including, without limitation, stock option and
bonus plan agreements), constitute the entire agreement between the parties
pertaining to the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties with respect to the subject matter of this Agreement,
and there are no warranties, representations or other agreements between the
parties in connection with the subject matter of this Agreement except as
specifically set forth in this Agreement and any document delivered pursuant to
this Agreement. No supplement, modification or waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby.

 

1.3 Sections and Headings. The division of this Agreement into parts and
sections and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
“this Agreement”, “hereof”, “hereunder” and similar expressions refer to this
Agreement and not to any particular article, section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto. Unless
something in the subject matter or context is inconsistent therewith, references
herein to parts and sections are to parts and sections of this Agreement.

 

1.4 Number & Gender. Words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall include the
feminine and neuter genders and vice versa.

 

1.5 Applicable Law. This Agreement shall be construed and enforced in accordance
with the laws of the United States of America, and specifically, those of the
State of Texas applicable thereto.

 

1.6 Currency. Unless otherwise specified, all references herein to currency
shall be references to currency of the United States.

 

1.7 Calculation of Time. When calculating the period of time within which or
following which any act is to be done or step taken pursuant to this Agreement,
the date which is the reference date in calculating such period shall be
excluded. If the last day of such period is a non Business Day, the period in
question shall end on the next Business Day.

 

PART 2
APPOINTMENT AND DUTIES

 

2.1 Appointment. The Company agrees to employ the Employee as its President and
General Counsel of the Company, upon the terms and conditions contained herein,
and the Employee accepts such appointment.

 

2.2 Term. The employment of the Employee hereunder shall commence effective July
1, 2019 and shall continue for an initial term until July 1, 2020 (the “Initial
Term”) unless terminated in accordance with the provisions of this Agreement.
This Agreement shall be automatically renewed for successive one (1) year terms
(each a “Renewal Term”) unless the Company or Employee indicates in writing,
more than 30 days prior to the termination of this Initial term or any Renewal
term, that it does not intend to renew this Agreement.

 

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2.3 Duties and Reporting. The Employee will report directly to the Executive
Chairman of the Company and its CEO and shall carry out all duties and
responsibilities which are from time to time assigned to him by the Board of
Directors and/or the Executive Chairman and/or the CEO.

 

PART 3
BENEFITS & EXPENSES

 

3.1 Gross Salary. During the term hereof, and subject to the performance of the
services required to be performed hereunder by Employee, the Company shall pay
to the Employee for all services rendered hereunder, $250,000 as base salary,
payable not less often than once per month and in accordance with the Company’s
normal and reasonable payroll practices, a monthly gross amount equal to $20,833
(the “Gross Salary”); provided, however, Employee shall be paid his current
gross salary of $15,000 until October, 2019, when all deferrals, including
salary and prior Board of Directors fees, shall be paid to Employee.

 

3.2 Other Compensation. The Employee shall be granted a one-time fully vested
option to purchase up to 100,000 shares of common stock of the Company at a per
share exercise price of $0.01.

 

3.3 Vehicle. The Company shall provide a monthly vehicle allowance in the amount
of $650.00 for reasonable business use of his vehicle.

 

3.4 Cell Phone. Company shall reimburse the Employee for a cell phone and
reasonable use charges.

 

3.5 Benefits. The Employee shall be entitled to fully participate in all of the
Company’s benefit plans generally available to its senior level employees from
time to time, including any profit sharing plan, royalty pool, management
incentive plan or similar plan or arrangement; provided, however, nothing herein
will be construed to limit, condition or otherwise encumber the Company’s right
to amend, discontinue, substitute or maintain any employee benefits plan,
program or perquisite in accordance with applicable law. Notwithstanding any
other provision in this Agreement to the contrary, this Section 3.5 and the
rights conferred on Employee herein shall survive the termination or expiration
of this Agreement.

 

3.6 Expenses. The Employee shall be reimbursed for ordinary, necessary and
reasonable out-of-pocket trade or business expenses incurred in connection with
the performance of Employee’s duties under this Agreement, together with any
applicable sales, services and other applicable taxes as a result thereof, by
the Company within fifteen (15) Business Days after presentation by the Employee
of proper invoices and receipts in keeping with the policies of the Company, as
established from time to time, subject to the reasonable approval of the
Executive Chairman or the Board of Directors. The Company also authorizes
business class travel when flying on overseas flights.

 

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3.7 Options. Subject to the Employee entering into the Company’s standard
Employee Stock Option agreement, for services required to be performed hereunder
by Employee, the Employee shall be entitled to participate in an employee stock
option plan of the Company. Company shall grant to Employee under the Company’s
2011 and any other applicable Stock Option Plan fully vested options to purchase
25,000 shares of Common Stock of the Company during the Initial Term at a per
share exercise price of $0.01 (“Vested Options”) commencing January 5, 2020, and
continuing on fifth (5th) day of January of each applicable successive Renewal
Term. In the event that this Agreement continues after the Initial Term, the
Company annually shall grant to the Employee additional stock options which in
no event shall be less than the per term amount granted herein with such other
terms to be agreed upon by the parties. All Options are subject to the terms of
the written stock option agreement(s) issued by the Company.

 

3.8 Paid Time Off/Paid Holidays. The Employee shall be entitled to paid time off
(“PTO”) at the rate of twenty (20) days for each calendar year, pro-rated as
applicable for any partial calendar year and subject to the terms of the
Company’s vacation policy. PTO is meant to include all vacation, personal and
sick days, and Employee shall be compensated at the usual rate of base
compensation for any PTO. Employee shall not be entitled to any additional PTO.
The Employee shall also be entitled to paid Company Holidays as generally given
by the Company. Vacation days may be accumulated for two (2) years, after which
they must be used or redeemed; provided that accumulation of vacation days in
excess of forty (40) days may be approved by the Board of Directors in its
discretion. Vacation days shall be prorated for any portion of a year to the
date of termination.

 

3.9 Withholding Tax Company shall withhold, or charge Employee with, all taxes
and other compulsory payments as required under applicable law with respect to
all payments, benefits and/or other compensation paid to Employee in connection
with his employment with Company.

 

3.10 Insurance. The Employee shall be entitled to participate in all health,
dental, vision, disability and term insurance programs offered by the Company to
its employees, for which the Company will contribute up to $1,500 per month;
provided, however, until such time as Employee is enrolled under the Company’s
applicable plans, the Company shall reimburse Employee for all premiums paid by
Employee under Employee’s existing coverage.

 

3.11 Professional Fees. The Company shall pay for or reimburse Employee for all
reasonable professional license fees and/or dues incurred by Employee for
membership in the State Bar of Texas.

 

PART 4
EMPLOYEE’S COVENANTS

 

4.1 Service. The Employee shall devote substantially all of his business time,
attention and ability to the business of the Company and shall well and
faithfully serve the Company and use his best efforts to promote the interests
of the Company. The Employee appreciates that the Employee’s duties may involve
significant travel from the Employee’s place of employment, and the Employee
agrees to travel as reasonably required in order to fulfill the Employee’s
duties. The Employee may sit on corporate boards unless there is a reasonable
basis upon which the Company may deny him the right to do so.

 

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4.2 Duties and Responsibilities. The Employee shall duly and diligently perform
all the duties assigned to him while in the employment of the Company, and shall
truly and faithfully account for and deliver to the Company all money,
securities and things of value belonging to the Company which the Employee may
from time to time receive for, from or on account of the Company.

 

4.3 Rules and Regulations. The Employee shall be bound by and shall faithfully
observe and abide by all the rules and regulations of the Company from time to
time in force including insider trading policies, blackout periods for the
purchase and sale of the Company’s securities and underwriter lock ups, from
time to time in force.

 

PART 5
CONFIDENTIAL INFORMATION AND DEVELOPMENTS

 

5.1 “Confidential Information” means information, whether or not originated by
the Employee, that relates to the business or affairs of the Company, its
affiliates, clients or suppliers and is confidential or proprietary to, about or
created by the Company, its affiliates, clients, or suppliers. Confidential
Information includes, but is not limited to, the following types of confidential
information and other proprietary information of a similar nature (whether or
not reduced to writing or designated or marked as confidential):

 

(i)work product resulting from or related to work or projects performed for or
to be performed for the Company or its affiliates, including but not limited to,
the interim and final lines of inquiry, hypotheses, research and conclusions
related thereto and the methods, processes, procedures, analysis, techniques and
audits used in connection therewith;

 

(ii)computer software of any type or form and in any stage of actual or
anticipated development, including but not limited to, programs and program
modules, routines and subroutines, procedures, algorithms, design concepts,
design specifications (design notes, annotations, documentation, flowcharts,
coding sheets, and the like), source code, object code and load modules,
programming, program patches and system designs;

 

(iii)information relating to developments (as hereinafter defined) prior to any
public disclosure thereof, including but not limited to, the nature of the
developments, production data, technical and engineering data, test data and
test results, the status and details of research and development of products and
services, and information regarding acquiring, protecting, enforcing and
licensing proprietary rights (including patents, copyrights and trade secrets);

 

(iv)internal Company personnel and financial information, vendor names and other
vendor information, purchasing and internal cost information, internal services
and operational manuals, and the manner and method of conducting the Company’s
business;

 

(v)marketing and development plans, price and cost data, price and fee amounts,
pricing and billing policies, quoting procedures, marketing techniques and
methods of obtaining business, forecasts and forecast assumptions and volumes,
and future plans and potential strategies of the Company that have been or are
being discussed; and

 

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(vi)all information that becomes known to the Employee as a result of employment
that the Employee, acting reasonably, believes is confidential information or
that the Company takes measures to protect.

 

5.2 Confidential Information does not include:

 

(i)the general skills and experience gained during the Employee’s employment or
engagement with the Company that the Employee could reasonably have been
expected to acquire in similar employment or engagements with other companies;

 

(ii)information publicly known without breach of this Agreement or similar
agreements; or

 

(iii)information, the disclosure of which is required to be made by any law,
regulation, governmental authority or court (to the extent of the requirement),
provided that before disclosure is made, notice of the requirement is provided
to the Company, and to the extent of the requirement, (to the extent reasonably
possible in the circumstances) the Company is afforded an opportunity to dispute
the requirement.

 

5.3 “Developments” means all discoveries, inventions, designs, works of
authorship, improvements and ideas (whether or not patentable or copyrightable)
and legally recognized proprietary rights (including, but not limited to,
patents, copyrights, trademarks, topographies, know-how and trade secrets), and
all records and copies of records relating to the foregoing, that relates solely
to the Company’s business and improvements and modifications to it:

 

(i)resulting or derived from the Employee’s employment or from the Employee’s
knowledge or use of Confidential Information;

 

(ii)conceived or made by the Employee (individually or in collaboration with
others) during the term of the Employee’s employment by the Company;

 

(iii)resulting from or derived from the use or application of the resources of
the Company or its affiliates; or

 

(iv)relating to the business operations of or actual or demonstrably anticipated
research and development by the Company or its affiliates.

 

For greater certainty, discoveries, inventions, designs, works of authorship,
improvements and ideas (whether or not patentable or copyrightable) of the
Employee that do not relate to the business of the Company are not the subject
matter of this Agreement.

 

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PART 6
NO CONFLICTING OBLIGATIONS

 

6.1 The Employee warrants to the Company that:

 

(i)the performance of the Employee’s duties as an employee of the Company will
not breach any agreement or other obligation to keep confidential the
proprietary information of any other party; and

 

(ii)the Employee is not bound by any agreement with or obligation to any other
party that conflicts with the Employee’s obligations as an employee of the
Company or that may affect the Company’s interest in the Developments.

 

6.2 The Employee will not, in the performance of the Employee’s duties as an
employee of the Company:

 

(i)improperly bring to the Company or use any trade secrets, confidential
information or other proprietary information of any other party; or

 

(ii)knowingly infringe the intellectual property rights of any other party.

 

PART 7

 

CONFIDENTIAL INFORMATION

 

7.1 Protection of Confidential Information. All Confidential Information,
whether it is developed by the Employee during the Employment Period or by
others employed or engaged by or associated with the Company or its affiliates
or clients, is the exclusive and confidential property of the Company or its
affiliates or clients, as the case may be, and will at all times be regarded,
treated and protected as such, as provided in this Agreement.

 

7.2 Covenants Respecting Confidential Information. As a consequence of the
acquisition of Confidential Information, the Employee will occupy a position of
trust and confidence with respect to the affairs and business of the Company and
its affiliates and clients. In view of the foregoing, it is reasonable and
necessary for the Employee to make the following covenants regarding the
Employee’s conduct during and subsequent to the Employee’s employment by the
Company.

 

7.3 Non-Disclosure. At all times during and subsequent to the Employee’s
employment with the Company, the Employee will not disclose Confidential
Information to any Person (other than as necessary in carrying out the
Employee’s duties on behalf of the Company) without first obtaining the
Company’s consent, and the Employee will take all reasonable precautions to
prevent inadvertent disclosure of any Confidential Information. This prohibition
includes, but is not limited to, disclosing or confirming the fact that any
similarity exists between the Confidential Information and any other
information.

 

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7.4 Non-Competition. During Employee’s employment with the Company and for a
period of one (1) year after the termination thereof, the Employee shall not,
directly or indirectly, individually or in partnership or in conjunction with
any other person or entity:

 

(i)be engaged, directly or indirectly, in any manner whatsoever as an employee,
consultant, adviser, principal, agent, member or proprietor in any business that
engages in oil and gas exploration and production in Israel and/or the
Palestinian territory;

 

(ii)be engaged, directly or indirectly, in any manner whatsoever as an employee,
consultant, adviser, principal, agent, member or proprietor in any business that
engages in oil and gas exploration and production in Israel and/or the
Palestinian territory in a capacity in which the loyal and complete fulfilment
of Employee’s duties to that business would inherently require Employee’s use,
copying or transferring Confidential Information; or

 

(iii)advise, invest in, lend money to, guarantee the debts or obligations of, or
otherwise have any other financial or other interest (including an interest by
way of royalty or other compensation arrangements) in or in respect of any
person or entity which carries on an oil and gas exploration and production
business in Israel and/or the Palestinian territory.

 

7.5 Using, Copying, etc. At all times during and subsequent to the Employee’s
employment with the Company, the Employee will not use, copy, transfer or
destroy any Confidential Information (other than as necessary in carrying out
the Employee’s duties on behalf of the Company) without first obtaining the
Company’s consent, and the Employee will take all reasonable precautions to
prevent inadvertent use, copying, transfer or destruction of any Confidential
Information. This prohibition includes, but is not limited to, licensing or
otherwise exploiting, directly or indirectly, any products or services that
embody or are derived from Confidential Information or exercising judgment or
performing analysis based upon knowledge of Confidential Information.

 

7.6 Return of Confidential Information. Within 2 Business Days after the
termination of the Employee’s employment on any basis and of receipt by the
Employee of the Company’s written request, the Employee will promptly deliver to
the Company all property of or belonging to or administered by Company including
without limitation all Confidential Information that is embodied in any physical
or ephemeral form, whether in hard copy or on magnetic media, and that is within
the Employee’s possession or under the Employee’s control.

 

7.7 Obligations Continue. The Employee’s obligations under this Part 7 are to
remain in effect in perpetuity unless provided otherwise herein.

 

PART 8
INTELLECTUAL PROPERTY

 

8.1 Ownership. All Developments will be the exclusive property of the Company,
and the Company will have sole discretion to deal with Developments. For greater
certainty, all work done during the Employment Period by the Employee for the
Company or its affiliates is a work for hire of which the Company or its
affiliate, as the case may be, is the first author for copyright purposes and in
respect of which all copyright will vest in the Company or the relevant
affiliate, as the case may be.

 

8.2 Records. The Employee will keep complete, accurate and authentic notes,
reference materials, data and records of all Developments in the manner and form
requested by the Company. All these materials will be Confidential Information
upon their creation.

 

8.3 Moral Rights. The Employee hereby irrevocably waives all moral rights
arising under statute in any jurisdiction or under common law which the employee
may have now or in the future with respect to the Developments, including,
without limitation, any rights the Employee may have to have the Employee’s name
associated with the Developments or to have the Employee’s name not associated
with the Developments, any rights the Employee may have to prevent the
alteration, translation or destruction of the Developments, and any rights the
Employee may have to control the use of the Developments in association with any
product, service, cause or institution. The Employee agrees that this waiver may
be invoked by the Company, and by any of its authorized agents or assignees, in
respect of any or all of the Developments and that the Company may assign the
benefit of this waiver to any Person.

 

8.4 Further Assurances. The Employee will do all further things that may be
reasonably necessary or desirable in order to give full effect to the foregoing.
If the Employee’s co-operation is required in order for the Company to obtain or
enforce legal protection of the Developments following the termination of the
Employee’s employment, the Employee will provide that co-operation so long as
the Company pays to the Employee reasonable compensation for the Employee’s time
at a rate to be agreed, provided that the rate will not be less than the last
base salary or compensation rate paid to the Employee by the Company during the
Employee’s employment.

 

8.5 Obligations Continue. The Employee’s obligations under this Part 8 are to
remain in effect in perpetuity.

 

PART 9
CONSENT TO ENFORCEMENT

 

The Employee confirms that all restrictions in Part 7 and 8 are reasonable and
valid, and all defenses to the strict enforcement thereof by the Company are
waived by the Employee. Without limiting the generality of the foregoing, the
Employee hereby consents to an injunction being granted by a court of competent
jurisdiction in the event that the Employee is in any breach of any of the
provisions stipulated in Part 7 and 8. The Employee hereby expressly
acknowledges and agrees that injunctive relief is an appropriate and fair remedy
in the event of a breach of any of the said provisions.

  

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PART 10
WARRANTIES, COVENANTS AND REMEDIES

 

10.1 The obligations of the Employee as set forth in Parts 6 through 9 will be
deemed to have commenced as of the date on which the Employee was first employed
by Company. The Employee warrants that the Employee has not, to date, breached
any of the obligations set forth in any of those Sections. Any breach or
threatened breach of those sections by the Employee will constitute Just Cause
for immediate termination of the Employee’s employment or engagement by the
Company.

 

10.2 The Employee understands that the Company has expended significant
financial resources in developing its products and the Confidential Information.
Accordingly, a breach or threatened breach by the Employee of any of Parts 6
through 9 could result in unfair competition with the Company and could result
in the Company and its shareholders suffering irreparable harm that is not
capable of being calculated and that cannot be fully or adequately compensated
by the recovery of damages alone. Accordingly, the Employee agrees that the
Company will be entitled to interim and permanent injunctive relief, specific
performance and other equitable remedies, in addition to any other relief to
which the Company may become entitled.

 

10.3 The Employee’s obligations under each of Parts 6 through 9 are to remain in
effect in accordance with each of their terms and will exist and continue in
full force and effect despite any breach or repudiation of this Agreement or the
Employee’s employment (including, without limitation, the Employee’s wrongful
dismissal) by the Company.

 

PART 11
TERMINATION

 

11.1 Termination by the Employee. The Employee may terminate this Agreement upon
60 Business Days prior written notice given by the Employee to the Company. The
Company, at its sole discretion, may elect to accept the 60 Business Days
written notice or to reduce or eliminate the notice period. In such event, the
Employee’s employment shall terminate on the earlier day elected by the Company.
Such election on the part of the Company will not alter the nature of the
termination as voluntary, and the Company will not be required to pay any
severance or termination payments in respect of a termination by the Employee
under this Section 11.1. Upon the termination of employment by the Employee
under this Section 11.1, the Company shall pay to the Employee all bonuses and
other benefits earned or accrued up to the date of termination, but otherwise
all obligations of the Company under this Agreement shall end.

 

11.2 Definition of “Just Cause”. “Just Cause” means:

 

(i) Employee’s conviction of, or plea of nolo contendere, to any felony or to a
crime involving moral depravity or fraud; (ii) Employee’s commission of an act
of dishonesty or fraud or breach of fiduciary duty or act that has a material
adverse effect on the name or public image of the Company, as determined by the
Board, provided the Board affords the Employee the opportunity to personally
appear before the Board in order to state his case prior to the Board voting to
so terminate the Employee; (iii) Employee’s commission of an act of willful
misconduct or gross negligence, as determined by the Board provided the Employee
shall have the opportunity to state his case before the Board prior to the Board
taking such decision to so terminate the Employee; (iv) the failure of Employee
to perform his duties under this Agreement; (v) the material breach of any of
Employee’s material obligations under this Agreement; (vi) the failure of
Employee to follow a directive of the Executive Chairman or the Board; or (vii)
excessive absenteeism, chronic alcoholism or any other form of addiction that
prevents Employee from performing the essential functions of his position with
or without a reasonable accommodation; provided, however, that the Company may
terminate Employee’s employment for Just Cause, as to (iv) or (v) above, only
after failure by Employee to correct or cure, or to commence or to continue to
pursue the correction or curing of, such conduct or omission within ten (10)
days after receipt by Employee of written notice by the Company of each specific
claim of any such misconduct or failure.

 

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11.3 Termination by the Company for Just Cause. The Company may terminate this
Agreement at any time for Just Cause without notice and (except as provided in
the immediately following sentence) without payment of any compensation by way
of anticipated earnings, damages, or other relief of any kind whatsoever. Upon
the termination of employment by the Company for Just Cause, the Company shall
pay to the Employee all salaries, bonuses, vacation and other benefits, if any,
earned or accrued up to the date of termination, but otherwise all obligations
of the Company under this Agreement end.

 

11.4 Termination by the Company for Other Than Just Cause. The Company may
terminate this Agreement at any time for other than Just Cause upon the
following terms:

 

(a)if the Company so terminates this Agreement at any time during the Initial
Term of this Agreement, the Company shall pay to the Employee an amount equal to
the base salary then payable, if any, for the longer of (a) the period from the
date of such termination to the end of the Initial Term as if the Agreement had
not been so terminated or (b) twelve months, and in all cases, subject to the
deductions in Section 3.9;

 

(b)if the Company so terminates this Agreement after the Initial Term or during
a Renewal Term, the Company shall pay the Employee an amount equal to the base
salary, if any, then payable to the Employee for a period of twelve months as if
the Agreement had not been so terminated or had been renewed, subject to the
deductions in Section 3.9; and

 

(c)upon any such termination, all bonuses or other benefits earned or accrued up
to the date of termination or expiry shall be paid by the Company, but except
for such payments and the payments to be made pursuant to Sections 11.4(a) or
(b), as applicable, all obligations of the Company under this Agreement shall
end upon such termination or failure to renew. Payments under Sections 11.4(a)
or (b) shall be payable monthly subject to deductions in Section 3.9.

 

11.5 Termination by the Employee for Good Reason. The Employee may terminate
this Agreement at any time upon the occurrence of any of the following events
(each a “Good Reason”), if such occurrence takes place without the express
written consent of the Employee:

 

(i)a change in the Employee’s title or position or a material diminution in the
Employee’s duties or the assignment to the Employee of duties which materially
impairs the Employee’s ability to function in his current capacity for the
Company, or, with respect to an assignment of duties only, is materially
inconsistent with his duties; and

 

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(ii)any material change in the Employee’s direct reporting obligations.

 

In the event that the Employee terminates this Agreement for Good Reason, he
shall be entitled to the same payments and benefits as provided in Section 11.4
of this Agreement as if the Company had terminated this Agreement at the time
that the Employee terminates this Agreement under this Section 11.5.

 

11.6 Full and Final Release. In order to be eligible for the payments as set
forth in this Section 11 the Employee must (i) execute and deliver to the
Company a general release, in a form satisfactory to the Company and Employee,
and (ii) be and remain in full compliance with his obligations under this
Agreement.

 

11.7 Fair and Reasonable. The parties confirm that the provisions contained in
Sections 11.4 and 11.5 are fair and reasonable and that all such payments shall
be in full satisfaction of all claims which the Employee may otherwise have at
law against the Company including, or in equity by virtue of such termination of
employment.

 

11.8 Return of Property. Upon the termination of the Employee’s employment for
any reason whatsoever, the Employee shall at once deliver or cause to be
delivered to the Company all books, documents, effects, money, computer
equipment, computer storage media, securities or other property belonging to the
Company or for which the Company is liable to others, which are in the
possession, charge, control or custody of the Employee.

 

11.9 Provisions Which Operate Following Termination. Notwithstanding any
termination of this Agreement for any reason whatsoever, provisions of this
Agreement necessary to give efficacy thereto shall continue in full force and
effect.

 

11.10 Board. Notwithstanding the foregoing, the termination of Employee’s
employment hereunder for any reason shall automatically be deemed as Employee’s
resignation from the Board of Directors of the Company and any affiliates
without any further action, except when the Board shall, in writing, request a
continuation of duty as a Director in its sole discretion.

 

PART 12
GENERAL

 

12.1 Benefit & Binding. This Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties
hereto.

 

12.2 Amendments & Waivers. No amendment to this Agreement shall be valid or
binding unless set forth in writing and duly executed by all of the parties
hereto. No waiver of any breach of any provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided in the written waiver, shall be
limited to the specific breach waived.

 

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12.3 Time. Time shall be of the essence of this Agreement.

 

12.4 Assignment. Neither this Agreement nor the rights and obligations hereunder
shall be assignable by either party without the consent of the other.

 

12.5 Severability. If any provision of this Agreement is determined to be
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall attach only to such provision and all other provisions
hereof shall continue in full force and effect.

 

12.6 Attornment. For the purposes of all legal proceedings this Agreement shall
be deemed to have been performed in the State of Texas and the courts of Dallas
County shall have jurisdiction to entertain any action arising under this
Agreement.

 

PART 13
ACKNOWLEDGEMENT

 

The Employee acknowledges that:

 

(i)the Employee has received a copy of this Agreement;

 

(ii)the Employee has had sufficient time to review and consider this Agreement
thoroughly;

 

(iii)the Employee has read and understands the terms of this Agreement and his
obligations under this Agreement;

 

(iv)the restrictions placed upon the Employee by this Agreement are reasonably
necessary to protect the Company’s proprietary interests in the Confidential
Information and the Developments and will not preclude the Employee from being
gainfully employed in a suitable capacity following the termination of the
Employee’s employment, given the Employee’s knowledge and experience;

 

(v)the Employee has been given an opportunity to obtain independent legal
advice, or such other advice as the Employee may desire, concerning the
interpretation and effect of this Agreement and by signing this Agreement the
Employee has either obtained advice or voluntarily waived the Employee’s
opportunity to receive the same; and

 

(vi)this Agreement is entered into voluntarily by the Employee.

 

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PART 14
NOTICES

 

Any demand, notice or other communication (the “Notice”) to be given in
connection with this Agreement shall be given in writing on a Business Day and
may be given by personal delivery or by transmittal by facsimile addressed to
the recipient as follows:

 

To the Company:

Attention: Executive Chairman

 

Email: john.brown@zionoil.com

 

To the Employee: Email: whaverypc@aol.com

 

or such other address or facsimile number as may be designated by notice by any
party to the other. Any Notice given by personal delivery will be deemed to have
been given on the day of actual delivery and if transmitted by facsimile before
3:00 pm on a Business Day, will be deemed to have been given on that Business
Day and if transmitted by facsimile after 3:00 pm on a Business Day, will be
deemed to have been given on the next Business Day after the date of
transmission.

 

PART 15
FURTHER ASSURANCES

 

The parties shall from time to time execute and deliver all such further
documents and do all acts and things as the other party may reasonably require
to effectively carry out or better evidence or perfect the full intent and
meaning of this Agreement.

 

PART 16
FAX SIGNATURES

 

This Agreement may be signed either by original signature or by facsimile
signature.

 

PART 17
COUNTERPARTS

 

This Agreement may be executed by the parties in one or more counterparts, each
of which when so executed and delivered shall be an original and such
counterparts shall together constitute one and the same instrument.

 

IN WITNESS WHEREOF the parties have duly executed this Agreement.

 

  ZION OIL & GAS, INC.         By       JOHN BROWN,     CHIEF EXECUTIVE OFFICER
                WILLIAM H. AVERY     PRESIDENT & GENERAL COUNSEL

 

 

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