Exhibit
10.1.(3)


 


EMPLOYMENT
AGREEMENT


 


THIS
AGREEMENT is made as of June 16, 2015


 


BETWEEN:


 


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


 


(the
“Company”) 


 


and


 


VICTOR
G. CARRILLO 


 


(the
“Employee”)


 


CONTEXT
OF THIS AGREEMENT


 


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


 


B.     Employee
has been serving as President and Chief Operating Officer since March 19, 2012.


 


C.     The
Company wishes to employ the Employee as the Chief Executive Officer (“CEO”) 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.


 




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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 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 the CEO upon the terms and conditions contained
herein, and the Employee accepts such appointments.


 


2.2     Term.
The employment of the Employee hereunder shall commence effective June 16, 2015 and shall continue for an initial term until
December 31, 2016 (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 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.


 


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”). The Board of Directors will review the Gross
Salary annually and, in its sole discretion, consider any increases it deems warranted at that time.


 


3.2     Other
Compensation. The Employee shall be granted a one-time fully vested option to purchase up to 50,000 shares of common stock
of the Company at a per share exercise price of $0.01. In addition, upon signature hereof Employee shall be entitled to a signing
bonus of $50,000, which shall be payable by the Company to Employee after January 1, 2016, but before April 1, 2016.


 


3.3     Vehicle.
Company shall provide Employee with use of a vehicle, and the Company shall pay for registration, reasonable gas expenses,
maintenance and insurance.


 


3.4     Cell
Phone. Company shall provide the Employee with a cell phone and pay the service provider
directly for its maintenance 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, 2016, and continuing on the 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 $1,600 per month. In addition, the Company will contribute
up to $1,100 per month toward term life insurance for Employee.


 


3.11    Executive
Assistant. The Company agrees that the role of CEO may require a dedicated executive assistant and upon request, will provide
such person, whether full-time or part-time.


 


3.12    Professional
Fees. The Company shall pay for or reimburse Employee for all professional license fees and taxes paid to the State Bar of
Texas, the Texas Board of Professional Geoscientists, and the American Association of Petroleum Geologists, etc.


 


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 shall 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. In addition, the Company
acknowledges and permits Employee’s existing position on the Board of Directors of Magnum Hunter Resources Corporation and
the Texas-Israel Chamber of Commerce.


 




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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 which are brought to his notice including insider trading
policies and underwriter lock ups, from time to time in force which are brought to his notice.


 


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);



 




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		(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



 


		(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



 




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		(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.


 


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 two (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.


 




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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.



 




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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



 


		(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.


 




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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.


 


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: victor.carrillo@zionoil.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.


 




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IN
WITNESS WHEREOF the parties have duly executed this Agreement.


 





	 	 	ZION OIL & GAS, INC.
	 	 	 	 
	 	 	By	/s/ JOHN BROWN
	 	 	 	JOHN BROWN,
	 	 	 	EXECUTIVE CHAIRMAN
	 	 	 	 
	 	 	 	/s/ VICTOR G. CARRILLO
	 	 	 	VICTOR G. CARRILLO
	 	 	 	 
	Legal Review By:	 	 	 
	 	 	 	 
	/s/ WILLIAM H. AVERY	 	 	 
	WILLIAM H. AVERY,	 	 	 
	 GENERAL COUNSEL	 	 	 



 


 





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