Exhibit 4.2


 


 


2018 BIONDVAX SHARE OPTION PLAN


(AS AMENDED BY THE BOARD OF DIRECTORS
ON 27 AUGUST 2019)


 


 


 


 


 


Israeli Share Option Plan


 


 


 


 


 


 


Biondvax Pharmaceuticals Ltd.


 


THE 2018 ISRAELI SHARE OPTION PLAN


 




     


     


    

 


This plan, as amended from time
to time, shall be known as Biondvax Pharmaceuticals Ltd. 2018 Israeli Share Option Plan (the “ISOP”).


 


	1.	PURPOSE OF THE ISOP


 


The ISOP is intended to provide
an incentive to retain, in the employ of the Company and its Affiliates (as defined below), persons of training, experience, and
ability, to attract new employees, directors, consultants, service providers and any other entities which the Board shall decide
their services are considered valuable to the Company, to encourage the sense of proprietorship of such persons, and to stimulate
the active interest of such persons in the development and financial success of the Company by providing them with opportunities
to purchase shares in the Company, pursuant to the ISOP.


 


	2.	DEFINITIONS


 


For purposes of the ISOP and related
documents, including the Option Agreement, the following definitions shall apply:


 


	 	2.1	“Affiliate” means any “employing company” within the meaning of Section 102(a) of the Israeli Tax Ordinance (the “Ordinance”).


 


	 	2.2	“Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of a Participant.


 


	 	2.3	“Board” means the Board of Directors of the Company.


 


	 	2.4	“Capital Gain Award(CGACGA)” as defined in Section 5.4 below.


 


	 	2.5	“Cause” means, (i) conviction of any felony involving moral turpitude or adversely affecting the Company; (ii) any refusal to carry out a reasonable directive of the chief executive officer, the Board or the Optionee’s direct supervisor, which involves the business of the Company or its Affiliates and was capable of being lawfully performed; (iii) embezzlement of funds of the Company or its Affiliates; (iv) any breach of the Optionee’s fiduciary duties or duties of care of the Company; including without limitation disclosure of confidential information of the Company; and (v) any conduct (other than conduct in good faith) reasonably determined by the Board to be materially detrimental to the Company.


 


	 	2.6	“Chairman” means the chairman of the Committee.


 


	 	2.7	“Committee” means a share option compensation committee appointed by the Board, which shall consist of no fewer than two members of the Board.


 


	 	2.8	“Company” means Biondvax Pharmaceuticals Ltd., an Israeli public company.


 


	 	2.9	“Companies Law” means the Israeli Companies Law 5759-1999.


 




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	 	2.10	“Controlling Shareholder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.


 


	 	2.11	“Date of Grant” means, the date of grant of an Award, as determined by the Board and set forth in the Participant’s Award Agreement.


 


	 	2.12	“Employee” means a person who is employed by the Company or its Affiliates, including an individual who is serving as a director or an office holder, but excluding Controlling Shareholder.


 


	 	2.13	“Expiration date” means the date upon which an Award shall expire, as set forth in Section 10.2 of the ISOP.


 


	 	2.14	“Fair Market Value” means as of any date, the value of a Share determined as follows:


  


(i) If the Shares are listed on
any established stock exchange or a national market system, including without limitation the NASDAQ Global Select Market, or the
NASDAQ Global Market of the NASDAQ Capital Market, the Fair Market Value shall be the closing sales price for such Shares (or the
closing bid, if no sales were reported), as quoted on such exchange or system for the last market trading day prior to time of
determination, as reported in the Wall Street Journal, or such other source as the Board deems reliable. Without derogating from
the above, solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the Date
of Grant the Company’s shares are listed on any established stock exchange or a national market system or if the Company’s
shares will be registered for trading within ninety (90) days following the Date of Grant, the Fair Market Value of a Share at
the Date of Grant shall be determined in accordance with the average value of the Company’s shares on the thirty (30) trading
days preceding the Date of Grant or on the thirty (30) trading days following the date of registration for trading, as the case
may be;


 


(ii) If the Shares are regularly
quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the
high bid and low asked prices for the Shares on the last market trading day prior to the day of determination, or;


 


(iii) In the absence of an established
market for the Shares, the Fair Market Value thereof shall be determined in good faith by the Board.


  


	 	2.15	“IPO” means the initial public offering of the Company’s shares.


 


	 	2.16	“ISOP” means this 2018 Israeli Share Option Plan.


 


	 	2.17	“ITA” means the Israeli Tax Authorities.


 


	 	2.18	“Law” means the Companies Law of 1999 as now in effect or as hereafter amended, the Ordinance and such other law applicable to the Company or this ISOP.


 


	 	2.19	“Non-Employee” means a consultant, adviser, service provider, Controlling Shareholder or any other person who is not an Employee.


 




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	 	2.20	“Ordinary Income Award(OIAOIA)” as defined in Section 5.5 below.


 


	 	2.21	“Option” means an Award to purchase one or more Shares of the Company pursuant to the ISOP.


 


	 	2.22	“102 Award” means any Award granted to Employees pursuant to Section 102 of the Ordinance.


 


	 	2.23	“3(i) Award” means an Award or Restricted Share Units granted pursuant to Section 3(i) of the Ordinance to any person who is Non- Employee.


 


	 	2.24	“Optionee” means a person who receives or holds an Option under the ISOP.


 


	 	2.25	“Option Agreement” means the share option agreement between the Company and an Optionee that sets out the terms and conditions of an Option.


 


	 	2.26	“Ordinance” means the 1961 Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended.


 


	 	2.27	“Purchase Price” means the price for each Share subject to an Option.


 


	 	2.28	“Section 102” means section 102 of the Ordinance as now in effect or as hereafter amended.


 


	 	2.29	“Share” means the ordinary shares, NIS 0.0000001 par value each, of the Company.


 


	 	2.30	“Successor Company” means any entity the Company is merged to or is acquired by, in which the Company is not the surviving entity.


 


	 	2.31	“Transaction” means (i) merger, acquisition or reorganization of the Company with one or more other entities in which the Company is not the surviving entity, (ii) a sale of all or substantially all of the assets of the Company.


 


	 	2.32	“Trustee” means any individual appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance.


 


	 	2.33	“Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.


 


	 	2.34	“Vested Option” means any Option, which has already been vested according to the Vesting Dates.


 


	 	2.35	
        “Vesting
        Dates” means, as determined by the Board or by the Committee, the date (whether calendar or milestone based) as
        of which the Participant shall be entitled to exercise the Awards or part of the Awards, as set forth in section 11 of the ISOP.

         

	 	2.36	“Restricted Share Units” means an Award entitling Participant to receive Shares under this ISOP that is subject to the terms and conditions of Section ‎23.
	 	 	 
	 	2.37	“Award” means a grant of Options or Restricted Share Units or allotment of Shares or other equity-based awards under the ISOP including any Additional Rights thereunder. All Awards shall be confirmed by an Award Agreement, and subject to the terms and conditions of such Award Agreement.
	 	 	 
	 	2.38	
        “Additional
        Rights” means any distribution of rights, including an issuance of bonus shares and share dividends (but excluding cash
        dividends), in connection with Awards and/or the Shares issued upon exercise or vesting of Awards.

         

	 	2.39	“Participant” means an Optionee and a recipient of an Award hereunder who executes an Award Agreement.
	 	 	 
	 	2.40	“Award Agreement” means a written or electronic instrument setting forth the terms applicable to a particular Award.


 




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	3.	ADMINISTRATION OF THE ISOP


 


	 	3.1	The Board shall have the power to administer the ISOP either directly or upon the recommendation of the Committee, all as provided by applicable law and in the Company’s Articles of Association. Notwithstanding the above, the Board shall automatically have residual authority if no Committee shall be constituted or if such Committee shall cease to operate for any reason.


 


	 	3.2	The Committee shall select one of its members as its Chairman and shall hold its meetings at such times and places as the Chairman shall determine. The Committee shall keep records of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.


 


	 	3.3	The Committee shall have the power to recommend to the Board and the Board shall have the full power and authority to: (i) designate participants; (ii) determine the terms and provisions of the respective Award Agreements, including, but not limited to, the number of Awards to be granted to each Optionee, the number of Shares to be covered by each Option, provisions concerning the time and the extent to which the Awards may be exercised and the nature and duration of restrictions as to the transferability or restrictions constituting substantial risk of forfeiture and to cancel or suspend awards, as necessary; (iii) determine the Fair Market Value of the Shares covered by each Award; (iv) make an election as to the type of Approved 102 Award; and (v) designate the type of Awards. Notwithstanding the above the Board may delegate to the Committee any of its above authorities to the extent possible under, and subject to the provisions of, the Law.


 


The Committee shall have full
power and authority to :(i) alter any restrictions and conditions of any Awards or Shares subject to any Awards (ii) interpret
the provisions and supervise the administration of the ISOP; (iii) accelerate the right of a Participant to exercise in whole or
in part, any previously granted Award; (iv) determine the Purchase Price of an Award; (v) prescribe, amend and rescind rules and
regulations relating to the ISOP; and (vi) make all other determinations deemed necessary or advisable for the administration of
the ISOP, including, without limitation, to adjust the terms of the ISOP or any Award Agreement so as to reflect (a) changes in
applicable laws and (b) the laws of other jurisdictions within which the Company wishes to grant Awards.


  


	 	3.4	The Committee shall have full power and authority, at all times, to adopt sub-plans, Plan addenda and appendices to the Plan as the Committee deems desirable, to accommodate foreign laws, regulations and practice. The provisions of such sub-plans, Plan addenda and appendices to the Plan may take precedence over other provisions of the Plan, but unless otherwise superseded by the terms of such sub-plans, Plan addenda and appendices to the Plan, the provisions of the Plan shall govern their operation.


 




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	 	3.5	The Board shall have the authority to grant, at its discretion, to the holder of an outstanding Award, in exchange for the surrender and cancellation of such Award, a new Award having a purchase price equal to, lower than or higher than the Purchase Price of the original Award so surrendered and canceled and containing such other terms and conditions as the Committee may prescribe in accordance with the provisions of the ISOP.


 


	 	3.6	Subject to the Company’s Articles of Association and the Law, all decisions and selections made by the Board or the Committee pursuant to the provisions of the ISOP shall be made by a majority of its members except that no member of the Board or the Committee shall vote on, or be counted for quorum purposes, with respect to any proposed action of the Board or the Committee relating to any Award to be granted to that member. Any decision reduced to writing shall be executed in accordance with the provisions of the Company’s Articles of Association, as the same may be in effect from time to time.


 


	 	3.7	The interpretation and construction by the Committee of any provision of the ISOP or of any Award Agreement thereunder shall be final and conclusive unless otherwise determined by the Board.


 


	 	3.8	Subject to the Company’s Articles of Association and the Company’s decision, and to all approvals legally required, including, but not limited to the Law, each member of the Board or the Committee shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the ISOP unless arising out of such member’s own fraud or bad faith, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the member may have as a director or otherwise under the Company’s Articles of Association, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise.


 


	4.	DESIGNATION OF PARTICIPANTS


 


	 	4.1	The persons eligible for participation in the ISOP as Participant shall include any Employees and/or Non-Employees of the Company or of any Affiliate; provided, however, that (i) Employees may only be granted 102 Award; (ii) Non-Employees may only be granted 3(i) Awards; and (iii) Controlling Shareholders may only be granted 3(i) Awards.


 


	 	4.2	The grant of an Award hereunder shall neither entitle the Participant to participate nor disqualify the Participant from participating in, any other grant of Awards pursuant to the ISOP or any other Award or share plan of the Company or any of its Affiliates.


 


	 	4.3	Anything in the ISOP to the contrary notwithstanding, all grants of  Awards to directors and office holders shall be authorized and implemented in accordance with the provisions of the Companies Law or any successor act or regulation, as in effect from time to time.


 


	5.	DESIGNATION OF AWARDS PURSUANT TO SECTION 102


 


	 	5.1	The Company may designate Awards granted to Employees pursuant to Section 102 as Unapproved 102 Awards or Approved 102 Awards.


 




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	 	5.2	The grant of Approved 102 Awards shall be made under this ISOP adopted by the Board as described in Section 15 below, and shall be conditioned upon the approval of this ISOP by the ITA.


 


	 	5.3	Approved 102 Award may either be classified as Capital Gain Award (“CGA”) or Ordinary Income Award (“OIA”).


 


	 	5.4	Approved 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) shall be referred to herein as CGA.


 


	 	5.5	Approved 102 Award elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(bXl) shall be referred to herein as OIA.


 


	 	5.6	The Company’s election of the type of Approved 102 Awards as CGA or OIA granted to Employees (the “Election”), shall be appropriately filed with the ITA before the Date of Grant of an Approved 102 Award. Such Election shall become effective beginning the first Date of Grant of an Approved 102 Award under this ISOP and shall remain in effect until the end of the year following the year during which the Company first granted Approved 102 Awards. The Election shall obligate the Company to grant only the type of Approved 102 Award it has elected, and shall apply to all Participants who were granted Approved 102 Awards during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, such Election shall not prevent the Company from granting Unapproved 102 Awards simultaneously.


 


	 	5.7	All Approved 102 Awards must be held in trust by a Trustee, as described in Section 6 below.


 


	 	5.8	For the avoidance of doubt, the designation of Unapproved 102 Awards and Approved 102 Awards shall be subject to the terms and conditions set forth in Section 102 of the Ordinance and the regulations promulgated thereunder.


  


	6.	TRUSTEE


 


	 	6.1	Approved 102 Awards which shall be granted under the ISOP and/or any Shares allocated or issued upon exercise of such Approved 102 Awards and/or other shares received subsequently following any realization of rights, including without limitation bonus shares, shall be allocated or issued to the Trustee and held for the benefit of the Participants for such period of time as required by Section 102 or any regulations, rules or orders or procedures promulgated thereunder (the “Holding Period”). In the event the requirements for Approved 102 Awards are not met, then the Approved 102 Awards may be treated as Unapproved 102 Awards, all in accordance with the provisions of Section 102 and regulations promulgated thereunder.


 




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	 	6.2	Notwithstanding anything to the contrary, the Trustee shall not release any Shares allocated or issued upon exercise of Approved 102 Awards prior to the full payment of the Participant’s tax liabilities arising from Approved 102 Awards which were granted to him and/or any Shares allocated or issued upon exercise of such Awards.


 


	 	6.3	With respect to any Approved 102 Award, subject to the provisions of Section 102 and any rules or regulation or orders or procedures promulgated thereunder, a Participant shall not sell or release from trust any Share received upon the exercise of an Approved 102 Award and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Holding Period required under Section 102 of the Ordinance. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 of the Ordinance and under any rules or regulation or orders or procedures promulgated thereunder shall apply to and shall be borne by such Participant.


 


	 	6.4	Upon receipt of Approved 102 Award, the Participant Will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with the ISOP, or any Approved 102 Award or Share granted to him thereunder.


 


	7.	SHARES RESERVED FOR THE ISOP; RESTRICTION THEREON


 


	 	7.1	The Company has reserved an unlimited amount of the issued and outstanding capital of the Company, authorized but unissued Shares, for the purposes of the ISOP and for the purposes of any other share option plans which may be adopted by the Company in the future, subject to adjustment as set forth in Section 9 below. Any Shares which remain unissued and which are not subject to the outstanding Awards at the termination of the ISOP shall cease to be reserved for the purpose of the ISOP, but until termination of the ISOP the Company shall at all times reserve sufficient number of Shares to meet the requirements of the ISOP. Should any Award for any reason expire or be canceled prior to its exercise or relinquishment in full, the Shares subject to such Award may again be subjected to an Award under the ISOP or under the Company’s other share option plans.


  


	 	7.2	Each Award granted pursuant to the ISOP, shall be evidenced by a written Award Agreement between the Company and the Optionee, in such form as the Board or the Committee shall from time to time approve. Each Award Agreement shall state, among other matters, the number of Shares to which the Award relates, the type of Award granted thereunder (whether a CGA, OIA, Unapproved 102 Award or a 3(i) Award), the Vesting Dates, the Purchase Price per share, the Expiration Date and such other terms and conditions as the Committee or the Board in its discretion may prescribe.


 




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	8.	PURCHASE PRICE


 


	 	8.1	The Purchase Price of each Share subject to an Award shall be determined by the Committee in its sole and absolute discretion in accordance with applicable law, subject to any guidelines as may be determined by the Board from time to time. Each Award Agreement will contain the Purchase Price determined for each Optionee.


 


	 	8.2	The Purchase Price shall be payable upon the exercise of the Award in a form satisfactory to the Committee, including without limitation, by cash or check. The Committee shall have the authority to postpone the date of payment on such terms as it may determine.


 


	 	8.3	The Purchase Price shall be denominated in the currency as determined by the Committee.


 


	9.	ADJUSTMENTS


 


Upon the occurrence of any of
the following described events, Optionee’s rights to purchase  Shares under the ISOP shall be adjusted as hereafter
provided:


 


	 	9.1	In the event of Transaction, the unexercised Awards then outstanding under the ISOP shall be assumed or substituted for an appropriate number of shares of each class of shares or other securities of the Successor Company (or a parent or subsidiary of the Successor Company) as were distributed to the shareholders of the Company in connection and with respect to the Transaction. In the case of such assumption and/or substitution of Awards, appropriate adjustments shall be made to the Purchase Price so as to reflect such action and all other terms and conditions of the Award Agreements shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Committee or the Board, which determination shall be in their sole discretion and final. The Company shall notify the Participant of the Transaction in such form and method as it deems applicable at least ten (10) days prior to the effective date of such Transaction.


 


	 	9.2	Notwithstanding the above and subject to any applicable law, the Board or the Committee shall have full power and authority to determine that in certain Award Agreements there shall be a clause instructing that, if in any such Transaction as described in section 9.1 above, the Successor Company (or parent or subsidiary of the Successor Company) does not agree to assume or substitute for the Awards, the Vesting Dates shall be accelerated so that any unvested Award or any portion thereof shall be immediately vested as of the date which is ten (10) days prior to the effective date of the Transaction.


 


	 	9.3	For the purposes of section 9.1 above, an Award shall be considered assumed or substituted if, following the Transaction, the Award confers the right to purchase or receive, for each Share underlying an Award immediately prior to the Transaction, the consideration (whether shares, Awards, cash, or other securities or property) received in the Transaction by holders of shares held on the effective date of the Transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Transaction is not solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Award to be solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary equal in Fair Market Value to the per Share consideration received by holders of a majority of the outstanding shares in the Transaction; and provided further that the Committee may determine, in its discretion, that in lieu of such assumption or substitution of Awards for awards of the Successor Company or its parent or subsidiary, such Awards will be substituted for any other type of asset or property including cash which is fair under the circumstances.


  




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	 	9.4	If the Company is voluntarily liquidated or dissolved while unexercised Awards remain outstanding under the ISOP, the Company shall immediately notify all unexercised Award holders of such liquidation, and the Award holders shall then have ten (10) days to exercise any unexercised Vested Award held by them at that time, in accordance with the exercise procedure set forth herein. Upon the expiration of such ten-days period, all remaining outstanding Awards will terminate immediately.


 


	 	9.5	If the outstanding shares of the Company shall at any time be changed or exchanged by declaration of a share dividend (bonus shares), share split, combination or exchange of shares, recapitalization, or any other like event by or of the Company, and as often as the same shall occur, then the number, class and kind of the Shares subject to the ISOP or subject to any Awards therefore granted, and the Purchase Prices, shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate Purchase Price, provided however, that no adjustment shall be made by reason of the distribution of subscription rights (rights, offering) on outstanding shares. Upon happening of any of the foregoing, the class and aggregate number of Shares issuable pursuant to the ISOP (as set forth in Section 7 hereof), in respect of which Awards have not yet been exercised, shall be appropriately adjusted, all as will be determined by the Board whose determination shall be final.


 


	 	9.6	Anything herein to the contrary notwithstanding and subject to Company’s Articles of Association and the Law, if all or substantially all of the shares of the Company are to be sold, or in case of a Transaction, all or substantially all of the shares of the Company are to be exchanged for securities of another Company, then each Participant shall be obliged to sell or exchange, as the case may be, any Shares such Participant purchased under the ISOP, in accordance with the instructions issued by the Board in connection with the Transaction, whose determination shall be final.


  


	 	9.7	The Participant acknowledges that in the event that the Company’s shares shall be registered for trading in any public market, Optionee’s rights to sell the Shares may be subject to certain limitations (including a lock-up period), as will be requested by the Company or its underwriters, and the Participant unconditionally agrees and accepts any such limitations.


  




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	10.	TERM AND EXERCISE OF OPTIONS


 


	 	10.1	Options shall be exercised by the Optionee by giving written notice to the Company and/or to any third party designated by the Company (the “Representative”), in such form and method as may be determined by the Company and when applicable, by the Trustee in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice by the Company and/or the Representative and the payment of the Purchase Price at the Company’s or the Representative’s principal office. The notice shall specify the number of Shares with respect to which the Option is being exercised.


 


	 	10.2	Options, to the extent not previously exercised, shall terminate forthwith upon the earlier of: (i) the date set forth in the Option Agreement; and (ii) the expiration of any extended period in any of the events set forth in section 10.5 below.


 


	 	10.3	The Options may be exercised by the Optionee in whole at any time or in part from time to time, to the extent that the Options become vested and exercisable, prior to the Expiration Date, and provided that, subject to the provisions of section 10.5 below, the Optionee is employed by or providing services to the Company or any of its Affiliates, at all times during the period beginning with the granting of the Option and ending upon the date of exercise.


 


	 	10.4	Subject to the provisions of section 10.5 below, in the event of termination of Optionee’s employment or services, with the Company or any of its Affiliates, all Options granted to such Optionee will immediately expire. A notice of termination of employment or service shall be deemed to constitute termination of employment or service. For the avoidance of doubt, in case of such termination of employment or service, the unvested portion of the Optionee’s Option shall not vest and shall not become exercisable.


 


	 	10.5	Notwithstanding anything to the contrary hereinabove and unless otherwise determined in the Optionee’s Option Agreement, an Option may be exercised after the date of termination of Optionee’s employment or service with the Company or any Affiliates during an additional period of time beyond the date of such termination, but only with respect to the number of Vested Options at the time of such termination according to the Vesting Dates, if:


 


	 	(i)	termination is without Cause, in which event any Vested Option still in force and unexpired may be exercised within a period of ninety (90) days after the date of such termination; or-


 


	 	(ii)	termination is the result of death or disability of the Optionee, in which event any Vested Option still in force and unexpired may be exercised within a period of twelve (12) months after the date of such termination; or -


 


	 	(iii)	prior to the date of such termination, the Committee shall authorize an extension of the terms of all or part of the Vested Options beyond the date of such termination for a period not to exceed the period during which the Options by their terms would otherwise have been exercisable.


 


For avoidance of any doubt, if
termination of employment or service is for Cause, any outstanding unexercised Award (whether vested or non-vested), will immediately
expire and terminate, and the Participant shall not have any right in connection to such outstanding Awards.


 




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	 	10.6	To avoid doubt, the Optionees shall not have any of the rights or privileges of shareholders of the Company in respect of any Shares purchasable upon the exercise of any Option, nor shall they be deemed to be a class of shareholders or creditors of the Company for purpose of the operation of sections 350 and 351 of the Companies Law or any successor to such section, until registration of the Optionee as holder of such Shares in the Company’s register of shareholders upon exercise of the Option in accordance with the provisions of the ISOP, but in case of Options and Shares held by the Trustee, subject to the provisions of Section 6 of the ISOP.


 


	 	10.7	Any form of Award Agreement authorized by the ISOP may contain such other provisions as the Committee may, from time to time, deem advisable.


 


	 	10.8	With respect to Unapproved 102 Awards, if the Participant ceases to be employed by the Company or any Affiliate, the Participant shall extend to the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the rules, regulation or orders promulgated thereunder.


 


	11.	VESTING OF AWARDS


 


	 	11.1	Subject to the provisions of the ISOP, each Award shall vest following the Vesting Dates and for the number of Shares as shall be provided in the Award Agreement. However, no Award shall be exercisable after the Expiration Date.


 


	 	11.2	An Award may be subject to such other terms and conditions on the time or times when it may be exercised, as the Committee may deem appropriate. The vesting provisions of individual Awards may vary.


 


	12.	SHARES SUBJECT TO RIGHT OF FIRST REFUSAL


 


	 	12.1	Notwithstanding anything to the contrary in the Articles of Association of the Company, none of the Participants shall have a right of first refusal in relation with any sale of Shares in the Company received by it pursuant to the exercise of an Award granted pursuant to this ISOP.


 


	13.	DIVIDENDS


 


With respect to all Shares (but
excluding, for avoidance of any doubt, any unexercised Awards) allocated or issued upon the exercise of Awards purchased by the
Participant and held by the Participant or by the Trustee, as the case may be, the Participant shall be entitled to receive dividends
in accordance with the quantity of such Shares, subject to the provisions of the Company’s Articles of Association (and all
amendments thereto) and subject to any applicable taxation on distribution of dividends, and when applicable subject to the provisions
of Section 102 and the rules, regulations or orders promulgated thereunder.


 




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	14.	RESTRICTIONS ON ASSIGNABILITY AND SALE OF AWARDS


 


	 	14.1	No Award or any right with respect thereto, purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect to it given to any third party whatsoever, except as specifically allowed under the ISOP, and during the lifetime of the Participant each and all of such Participant’s rights to purchase Shares hereunder shall be exercisable only by the Participant.


 


Any such action made directly or indirectly, for an
immediate validation or for a future one, shall be void.


 


	 	14.2	As long as the Shares are held by the Trustee on behalf of the Participant, all rights of the Participant over the Shares are personal, can not be transferred, assigned, pledged or mortgaged, other than by will or pursuant to the laws of descent and distribution.


  


	15.	EFFECTIVE DATE AND DURATION OF THE ISOP


 


The ISOP shall be effective as
of the day it was adopted by the Board and shall terminate at the end of ten (10) years from such day of adaption.


 


The Company shall obtain the approval
of the Company’s shareholders for the adoption of this ISOP or for any amendment to this ISOP, if shareholders’ approval
is necessary or desirable to comply with any applicable law including without limitation the US securities law or the securities
laws of other jurisdiction applicable to Awards granted to Optionees under this ISOP, or if shareholders’ approval is required
by any authority or by any governmental agencies or national securities exchanges including without limitation the US Securities
and Exchange Commission.


 


	16.	AMENDMENTS OR TERMINATION


 


The Board may at any time, but
when applicable, after consultation with the Trustee, amend, alter, suspend or terminate the ISOP. No amendment, alteration, suspension
or termination of the ISOP shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant
and the Company, which agreement must be in writing and signed by the Participant and the Company. Termination of the ISOP shall
not affect the Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the
ISOP prior to the date of such termination.


 


	17.	GOVERNMENT REGULATIONS


 


The ISOP, and the granting and
exercise of Awards hereunder, and the obligation of the Company to sell and deliver Shares under such Awards, shall be subject
to all applicable laws, rules, and regulations, whether of the State of Israel or of the United States or any other State having
jurisdiction over the Company and the Optionee, including the registration of the Shares under the United States Securities Act
of 1933, and the Ordinance and to such approvals by any governmental agencies or national securities exchanges as may be required.
Nothing herein shall be deemed to require the Company to register the Shares under the securities laws of any jurisdiction.


  


	18.	CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES


 


Neither the ISOP nor the Award
Agreement with the Participant shall impose any obligation on the Company or an Affiliate thereof, to continue any Participant
in its employ or service, and nothing in the ISOP or in any Award granted pursuant thereto shall confer upon any Participant any
right to continue in the employ or service of the Company or an Affiliate thereof or restrict the right of the Company or an Affiliate
thereof to terminate such employment or service at any time.


 




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	19.	GOVERNING LAW & JURISDICTION


 


The ISOP shall be governed by
and construed and enforced in accordance with the laws of the State of Israel applicable to contracts made and to be performed
therein, without giving effect to the principles of conflict of laws. The competent courts of Tel-Aviv, Israel shall have sole
jurisdiction in any matters pertaining to the ISOP.


 


	20.	TAX CONSEQUENCES


 


	 	20.1	Any tax consequences arising from the grant or exercise of any Option, from the payment for Shares covered thereby or from any other event or act (of the Company and/or its Affiliates, the Trustee or the Optionee or Participant), hereunder, shall be borne solely by the Optionee or Participant. The Company and/or its Affiliates and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Optionee or Participant shall indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee or Participant.


 


	 	20.2	The Company and/or, when applicable, the Trustee shall not be required to release any Share certificate to an Optionee or Participant until all required payments have been fully made.


 


	21.	NON-EXCLUSIVITY OF THE ISOP


 


The adoption of the ISOP by the
Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or as creating
any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of Awards otherwise than under the ISOP, and such arrangements may be either applicable generally or only
in specific cases.


 


For the avoidance of doubt, prior
grant of awards to Participants of the Company under their employment agreements, and not in the framework of any previous award
plan, shall not be deemed an approved incentive arrangement for the purpose of this Section.


 


	22.	MULTIPLE AGREEMENTS


 


The terms of each Award may differ
from other Awards granted under the ISOP at the same time, or at any other time. The Board may also grant more than one Award to
a given Participant during the term of the ISOP, either in addition to, or in substitution for, one or more Awards previously granted
to that Optionee.


 


	23.	RESTRICTED SHARE UNITS AND OTHER EQUITY-BASED AWARDS.



 


		23.1	Eligibility. Restricted Share Units may be granted to all Participants at any time and from time
to time as determined by the Committee, either alone or in addition to other Awards granted under the ISOP. The Committee shall
determine the eligible Participants to whom, and the time or times at which, grants of Restricted Share Units will be made, the
number of Restricted Share Units to be awarded, the number of Shares subject to the Restricted Share Units, the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the Awards as shall be set forth in the Award Agreement.
The Committee may condition the grant or vesting of Restricted Share Units upon the attainment of specified performance targets
or such other factors as the Committee may determine, in its sole discretion.



 






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		23.2	Vesting of Restricted Share Units. Shares shall be issued to or for the benefit of Participant
promptly following each vesting date determined by the Committee, provided that Participant is an Employee on the applicable vesting
date. After each such vesting date, and subject to Section ‎20, the Company shall promptly cause to be issued for the benefit
of Participant Shares with respect to Restricted Share Units that became vested on such vesting date. It is clarified that no Shares
shall be issued pursuant to the Restricted Share Units to Participant until the vesting criteria determined by the Committee is
met.



 


		23.3	Terms. Prior to the actual issuance of any Shares, each Restricted Share Unit will represent an
unfunded and unsecured obligation of the Company, payable only from the general assets of the Company.



 


		23.4	Rights as Shareholder. A Participant holding Restricted Share Units shall not be, nor have any
of the rights or privileges of, a shareholder of the Company in respect of any Shares issuable upon the vesting of any part of
the Restricted Share Units unless and until such Shares shall have been issued by the Company to such Participant (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) but in case of Awards
and Shares held by the Trustee, subject to the provisions of Section 6 of the ISOP. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are issued, unless otherwise provided herein.



 


		23.5	Custody. The Committee may require that any Restricted Share Unit and/or Additional Rights thereunder
be held in custody by the Company or any third party determined by the Company until the lapse of the vesting period thereof and
the issuance of Shares.



 


		23.6	Other Equity-Based Awards. Other equity-based awards (including, without limitation, performance
share awards) may be granted either alone or in addition to or other Awards granted under the ISOP to all eligible Participants
pursuant to such terms and conditions as the Committee may determine, including without limitation, in one or more appendices adopted
by the Committee and appended to this ISOP.



 


*****


 


 


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