EXHIBIT 4.15 


 





 


Confidential


 


RedHill Biopharma Ltd.


(the “Company”)


 


OPTION PLAN (2010)


 


Originally Adopted by the Board of Directors
on February 4, 2010,


As been amended from time to time, and


As most recently amended by the Board
of Directors on May 2, 2013


 




    	 



    	 



    

  


TABLE OF CONTENTS


 


	1.	Preamble.	3
	 	 	 
	2.	Administration of the Plan.	4
	 	 	 
	3.	[Reserved]	4
	 	 	 
	4.	Option Exercise Prices.	4
	 	 	 
	5.	Exclusivity of the Plan.	5
	 	 	 
	6.	Grant of the Options to the Trustee; Voting of Shares.	5
	 	 	 
	7.	Option or Share Purchase Agreement; Termination of Employment.	6
	 	 	 
	8.	Acceleration of an Option; Liquidation.	8
	 	 	 
	9.	Term of Options; Exercise.	9
	 	 	 
	10.	Taxation.	11
	 	 	 
	11.	Dividends.	12
	 	 	 
	12.	Rights and/or Benefits arising out of the Employee/Employer Relationship and the Absence of an Obligation to Employ.	13
	 	 	 
	13.	Adjustments Upon Changes in Capitalization.	13
	 	 	 
	14.	Term, Termination and Amendment.	14
	 	 	 
	15.	Effectiveness of the Plan; Approvals.	14
	 	 	 
	16.	Release of the Trustee and the Attorney from Liability.	14
	 	 	 
	17.	Governing Laws.	15


 


APPENDICES


 


	Appendix A:	Employee’s Notice to the Trustee as to Exercise of the Option (Section 9.2).
	 	 
	Appendix B:	Notice to the Company of Exercise of the Option by the Trustee (Section 9.2).


 




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		1.	PREAMBLE



 


		1.1	This plan, as amended from time to time, shall be known as the RedHill Biopharma Ltd. Option Plan
(2010)” (the “Plan”). The purpose and intent of the Plan is to provide incentives to employees, directors
and/or service providers including advisors of the Company and/or of subsidiaries and/or affiliated companies of the Company (each
a “Related Company” and collectively, “Related Companies”) by providing them with
the opportunity to purchase ordinary shares and/or American Depositary Shares of the Company, as determined pursuant to the Plan,
and such other securities as may be substituted for such shares pursuant to this plan (any of the foregoing "Shares").



 


		1.2	The Plan is intended to enable the Company to grant options under various and different tax regimes,
including, without limitation: (i) pursuant and subject to Section 102 of the Israeli Income Tax Ordinance (New Version), 1961
(the “Income Tax Ordinance”) or any provision which may amend or replace it and any regulations, rules, orders
or procedures promulgated thereunder (collectively, “Section 102”) and to designate them as either grants made
through a trustee or not through a trustee; (ii) pursuant and subject to Section 3(i) of the Income Tax Ordinance; (iii) as “incentive
stock options” within the meaning of Section 422 of the United States Internal Revenue Code of 1986, as amended (“Incentive
Stock Options” and the “Code”, respectively); (iv) as options to U.S. residents, which would not qualify
as Incentive Stock Options (“Non-Qualified Stock Options”); (v) to grantees in jurisdictions other than Israel
and the United States; and (vi) as restricted shares.



The Company, however, does not
warrant that the Plan will be recognized by the income tax authorities in any jurisdiction or that future changes will not be made
to the provisions of applicable laws, or rules or regulations which are promulgated from time to time thereunder, or that any exemption
or benefit currently available, whether pursuant to Section 102 or otherwise, will not be abolished.


 


		1.3	The Board of Directors of the Company (the "Board") shall have the authority to
make any requisite adjustments in the Plan and determine the relevant terms in any Agreement (as defined in Section 7 below) in
order to comply with the requirements of any relevant tax regime. Furthermore, should any provision of Section 102 be amended,
such amendment shall be deemed included in the Plan with respect to options granted in the context of Section 102. Where a conflict
arises between any section of the Plan, the Agreement or their application, and the provisions of any relevant tax law, rule or
regulation, whether relied upon for tax relief or otherwise, the Board in its sole discretion shall determine the necessary changes
to be made to the Plan and its determination regarding this matter shall be final and binding.



 


		1.4	The Plan contemplates the grant of option awards by the Company both as a private company and as
a company whose securities are publicly-traded. In the event the Company’s securities should be registered for trading on
the Tel Aviv Stock Exchange, the New York Stock Exchange, any other stock exchange or an electronic quotation system, whether in
Israel, the USA or elsewhere, the options allotted in accordance with the Plan may be made conditional to any requirement or instruction
of the stock exchange authorities or of any other relevant authority acting pursuant to applicable law as shall exist from time
to time. In such case, by means of a Board resolution, the Plan and the Agreements prepared pursuant hereto, may be amended as
necessary to meet such requirements. In the event of a contradiction between any such amendment and the Plan’s provisions,
the amendment shall prevail.



 




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		2.	ADMINISTRATION OF THE PLAN



 


		2.1	The Plan shall be administered by the Board and/or by any committee of the Board so designated
by the Board. Any subsequent references herein to the Board shall also mean any such committee, if appointed and, unless the powers
of the committee have been specifically limited by law or otherwise, such committee shall have all of the powers of the Board granted
herein. Without derogating from the generality of the foregoing, the Board shall have the authority to designate grants made pursuant
to Section 102 as either grants made through a trustee or not through a trustee and to determine (and from time to time change,
subject to Section 102) the tax route applicable to options granted through a trustee pursuant to Section 102 (e.g., the capital
gains route or the employment income route) and to make any other elections with respect to the Plan pursuant to applicable law.
Subject to Sections 4 and 15, the Board shall have plenary authority to determine the terms and conditions of all options (which
need not be identical), including, without limitation, whether the options will be exercisable into ordinary shares of the Company
or into American Depositary Shares, the purchase price of the Shares covered by each option, the identity of those to whom, and
the time or times at which, options shall be granted, the number of Shares to be subject to each option, whether an option shall
be granted pursuant to Section 102 or otherwise and when an option can be exercised and whether in whole or in installments. Subject
to Section 15, the Board shall have plenary authority to construe and interpret the Plan, to prescribe, amend and rescind the rules
and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the
Plan. All determinations and decisions of the Board pursuant to the provisions of the Plan and all related orders and resolutions
of the Board shall be final, conclusive and binding on all persons, including the Company, its shareholders, grantees and their
estates and beneficiaries.



 


		2.2	Any directive or notice signed by a member of the Board shall constitute conclusive proof and authority
for every act or decision of the Company.



 


		2.3	No director or officer of the Company shall be personally liable or obligated to any grantee as
a result of any decision made and/or action taken with respect to the Plan or its execution.



 


		3.	[Reserved] 



 


		4.	OPTION EXERCISE PRICES



 


The consideration to be paid
by a grantee for each Share purchased by exercising an option (the “Option Exercise Price”) shall be as determined
by the Board on the date of grant, provided that the Option Exercise Price shall not be less than the nominal value of the Shares
subject to the option, and if on the date of grant the Company’s Shares are listed on any established stock exchange or a
national market or quotation system, then except as otherwise determined by the Board, the Option Exercise Price shall not be less
than the closing price on the date of grant on the Tel Aviv Stock Exchange. The Option Exercise Price shall be denominated in the
currency of the primary economic environment of, either the Company or the grantee (that is the functional currency of the Company
or the currency in which the grantee is paid) as determined by the Company.


 


The Board may, in its discretion,
grant to the holder of an outstanding option, in exchange for the surrender and cancellation of such option, a new option having
an Option Exercise Price lower than provided in the option so surrendered and canceled, and containing such other terms and conditions
as the Board may prescribe in accordance with the provisions of this Plan provided that such new Option Exercise Price shall not
be less than the nominal value of the Shares subject to the new option.


 




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		5.	EXCLUSIVITY OF THE PLAN



 


			Unless otherwise determined by the Board in any particular instance as part of the Agreement, each
grantee hereunder will be required to declare and agree that all prior agreements, arrangements and/or understandings with respect
to options to purchase Shares of the Company which have not actually been granted prior to execution of the Agreement shall be
null and void and that only the provisions of the Plan and/or the Agreement shall apply.



 


			Notwithstanding the above, the adoption of this Plan, by itself, shall not be construed as amending,
modifying or rescinding any incentive arrangement previously approved by the Board 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
options otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.



 


		6.	GRANT OF THE OPTIONS TO THE TRUSTEE; VOTING OF SHARES 



 


		6.1	The Board shall appoint a trustee for the purposes of this Plan, which trustee shall be approved,
with respect to grants designated as grants made through a trustee pursuant to Section 102, in accordance with Section 102 (the
“Trustee”). The Trustee shall have all the powers provided by law, Section 102 and the Plan and shall act pursuant
to the provisions thereof, as they shall apply from time to time. The Company shall pay the Trustee a fee as shall be agreed between
the Trustee and the Company.



 


		6.2	Unless otherwise determined by the Board, all option awards shall be issued by the Company in the
name of the Trustee and the Share certificates representing any Shares issued pursuant to options exercised hereunder, and any
and all other or additional rights deriving in connection therewith, if any, such as, but not limited to, bonus Shares (Share dividends)
(“Additional Rights”), shall be issued by the Company in the name of the Trustee in trust for the designated
grantee and shall be deposited with the Trustee, held by him or her and registered in his or her name in the register of members
of the Company for such period as determined by the Board but, in the case of grants designated as grants made through a trustee
pursuant to Section 102, not less than the period required, or approved, with respect thereto pursuant to Section 102, as shall
be in effect from time to time (the “Required Holding Period”).



 


			Furthermore, and without derogating from the aforesaid or any other provision hereof, with respect
to options granted which were designated as made through a trustee pursuant to Section 102: (i) they may not be sold until the
end of the Required Holding Period, unless otherwise allowed or determined by the Israeli tax authorities; and (ii) all Additional
Rights will be subject to the same tax route applicable to the original option.



 


		6.3	Options granted and designated as grants made through a trustee pursuant to Section 102 will be
held by the Trustee and registered in his name in trust for the designated grantee, for not less than the Required Holding Period.



 




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		6.4	Options granted hereunder shall not confer upon the holder thereof any of the rights of a shareholder
of the Company with respect to the Shares subject to such options until such Shares are issued and registered in the name of the
holder upon exercise of the options.



 


		6.5	For as long as any Shares are held by the Trustee or registered in his name or for as long as the
certificates representing any Shares are held by the Trustee, the Trustee alone shall be entitled to receive every notice to which
a shareholder is entitled, or to demand any information, and any financial and/or other report to which a shareholder is entitled
from the Company, and only he or whomever he shall designate pursuant to the Proxy and Power of Attorney referred to and as defined
in Section 10.2 below (the “Attorney”), shall be entitled to exercise every other right of the shareholders
vis-a-vis the Company including the right to participate in and to vote at all shareholders’ meetings. No grantee shall be
entitled to exercise any of these rights as shareholder nor make any demand or request of the Trustee and/or of the Attorney in
this regard.



 


		6.6	Shares registered in the Trustee’s name shall be represented at all meetings of shareholders
of the Company and shall be voted by the Trustee or the Attorney in the same manner, proportionately, as the other shareholders
of the Company voting on such matter.



 


		6.7	Nothing in the foregoing provisions shall derogate from the power of the Board to grant options
to the Trustee otherwise than under the provisions of Section 102 or to grant options to grantees directly otherwise than through
the Trustee or on terms which differ from those specified above or to approve the transfer of Shares from the Trustee to the name
of any grantee(s) upon such conditions as shall be determined by the Board.



 


		7.	OPTION AGREEMENT; TERMINATION OF EMPLOYMENT



 


			Unless otherwise determined by the Board, every grantee shall be required to sign grant letter
or other documents as shall be determined by the Board, in the form approved by the Board (the “Agreement”).



 


			The Agreement shall specify the type of option award granted and whether it constitutes an option
pursuant to Section 102, and if so, under which regime, an option pursuant to Section 3(i) of the Income Tax Ordinance, an Incentive
Stock Option, a Non-Qualified Stock Option or otherwise. The Agreement need not be identical with respect to each grantee. The
following terms, however, shall apply to all options, unless expressly otherwise decided in respect of a particular option:



 


		7.1	The Option Exercise Price shall be paid by the grantee to the Company no later than the date of
exercise of the option unless otherwise determined in the Agreement.



 


		7.2	The grantee shall have no right of first refusal to purchase Shares of the Company which may be
offered for sale by shareholders of the Company, and shall have no pre-emptive rights to purchase Shares which are being allotted
or shall in the future be allotted by the Company, to the extent any such rights otherwise exist.



 




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		7.3	The option and/or the right to the option are personal and except insofar as is specified in this
Plan, and, where applicable, subject to Section 102, may not be transferred, assigned, pledged, withheld, attached or otherwise
charged either voluntarily or pursuant to any law, except by way of transfer pursuant to the laws of inheritance, and no power
of attorney or deed of transfer, whether the same has immediate effect or shall take effect on a future date, shall be given with
respect thereto. During the lifetime of the grantee the option may only be exercised by the designated grantee or, if granted to
the Trustee, by the Trustee on behalf of the designated grantee. A note as to the provisions of this sub-section or a legend may
appear on any document which grants the option and in particular in the Agreement, and also on any Share certificate.



 


		7.4	The right to exercise the option is granted to the Trustee on behalf of the grantee. Unless otherwise
provided in the Agreement, vesting shall be in installments, gradually over a period of four (4) years from the date of grant of
the option or such other period or periods as determined by the Board. Unless otherwise determined, at the conclusion of each period
for the exercise of the option as determined in the Agreement (“Vesting Periods”), the option may, from time
to time, be exercised in relation to part or all the Shares allocated for that period in such manner that at the end of each year
following the granting of the option the Trustee shall, in the absence of a contrary determination in the Agreement, be entitled
to exercise on behalf of the grantee and at his or her request up to one third (1/4) of the Shares subject to the option.



 


			In addition, during each of the Vesting Periods, the option may be exercised in relation to all
or part of the Shares allocated for any previous Vesting Period in which the option was not fully exercised, provided, subject
to the provisions of Section 7.6 hereof, that at the time of the exercise of the option the grantee has continued to be employed
by or to serve as a director of or provide services to, the Company or a Related Company on a continual basis from the date of
the grant thereof until the date of their exercise. After the end of the Vesting Periods and during the balance of the option period,
the option may be exercised, from time to time, in relation to all or part of the Shares which have not at that time been exercised
and which remain subject to the option, subject to the provisions of Section 7.6 hereof and to any condition in the Agreement,
if such exists, which provides a minimum number of Shares with respect to which the option may be exercised and any provision which
determines the number of times that the Trustee may send the Company notice of exercise on behalf of the grantee in respect of
the option. The Board shall be entitled at any time to shorten the vesting schedule or any Vesting Period.



 


		7.5	The Board may determine at its sole discretion, that any grantee shall be entitled to receive the
options, through the Trustee, pursuant to the provisions of this Plan or, subject to the provisions of Section 102 as relevant,
directly in the name of the grantee, immediately upon execution of the Agreement or on such other date or dates as the Company
has undertaken towards such grantee. In the event that a grantee is exempt from the Vesting Periods (pursuant to the provisions
of Section 7.4), the Board shall be entitled, subject to the provisions of Section 102 as relevant, to determine that where the
grantee does not comply with the conditions determined by the Board or ceases to be an employee of the Company or a Related Company,
the Trustee, the Company or a Related Company shall have the right to repurchase the Shares from the grantee for nominal or any
other consideration paid by the grantee or as otherwise determined by the Board at the time of grant. The Board may set additional
conditions to this right of repurchase, including the provision of appropriate arrangements for the monies which shall be available
to the Trustee or a Related Company or others for the purpose of the repurchase and may set conditions with respect to the voting
rights of the grantee, rights of first refusal or pre-emptive rights to purchase Shares in the Company, to the extent such rights
exist, the grantees right to receive reports or information from the Company, and the grantee’s right to a dividend in respect
of Shares which are subject to a right of reacquisition as aforesaid. For as long as the foregoing conditions of the Board (including
a minimum period of employment as a condition for the lapse of the right to reacquisition) have not been complied with, the grantee
shall not be entitled to sell or charge or transfer in any other manner the Shares which are subject to the right of reacquisition.
As security for the compliance with this undertaking the Share certificate will be deposited with the Trustee who will release
the same to the grantee only after the grantee becomes entitled to the Shares and the same are not subject to any other restrictive
condition.



 




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7.6 Termination of Employment


 


		7.6.1	If a grantee ceases to be an employee, director or service provider (or, if relevant, an employee
of a service provider) of the Company or a Related Company, other than: (i) by reason of death, disability (as determined by the
Board in its absolute discretion) or retirement as provided in Section 7.6.3 below; or (ii) for Cause (as defined in Section 8.2
below) (at which time the option shall terminate immediately upon the earlier of such cessation or notice of cessation); the option
shall remain exercisable for a period of ninety (90) days following the earlier of such cessation or notice of cessation (but only
to the extent exercisable at termination of employment and not beyond the scheduled expiration date), unless the Agreement provides
otherwise.



 


		7.6.2	If the employment or the director or service-provider relationship of a grantee is terminated by
reason of death, disability (as determined by the Board in its absolute discretion) or retirement after age 60 with the approval
of the Board, the option shall remain exercisable for a period of twenty four (24) months following such termination (but only
to the extent exercisable at termination of employment and not beyond the scheduled expiration date).



 


		7.6.34	The Board may determine whether any given leave of absence constitutes a termination of employment.
Options awarded under this Plan shall not be affected by any change of employment so long as the grantee continues to be an employee,
director or service-provider, as applicable, of the Company or a Related Company.



 


		7.6.4	Notwithstanding the foregoing, the Board may in its absolute discretion, extend the period of exercise
of the option by a grantee or grantees for such time as it shall determine either with or without conditions.



 


		8.	ACCELERATION OF AN OPTION; LIQUIDATION



 


		8.1	Acceleration in the Event of Sale of Assets, Certain
Mergers. In the event of: (i) a sale of all or substantially all of the assets of the Company; or (ii) a consolidation or
merger of the Company in which the Company is not the continuing or surviving corporation and the continuing or surviving corporation
(or, if such transaction is effected through a subsidiary, the parent of such continuing or surviving corporation), does not assume
the option or substitute it with an appropriate option in the continuing or surviving corporation (or in the parent as aforesaid),
then, notwithstanding any contrary Vesting Periods in any Agreement or in this Plan, and unless in each case: (A) the applicable
Agreement provides otherwise; or (B) the Board determines otherwise, all of the outstanding options held by or for the benefit
of any grantee whose vesting dates fall within the first twelve (12) months thereafter shall be accelerated and become vested
and exercisable immediately prior to the consummation or closing of such proposed action.



 




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		8.2	Acceleration in the Event of a Significant Event. If a “Significant Event”,
as defined below, shall occur, and the employment of a grantee with the Company or a Related Company is terminated by the Company
or a Related Company within twelve (12) months thereafter, other than for “Cause” as defined below; and unless: (i)
the applicable Agreement provides otherwise; or (ii) the Board determines otherwise, all of the outstanding options held by or
for the benefit of any grantee whose vesting dates fall within the first twelve (12) months thereafter shall be accelerated and
become immediately vested and exercisable.



 


Each of the following shall be
a “Significant Event”: a consolidation or merger of the Company with or into another corporation in which the
Company is the continuing or surviving corporation or in which, if the Company is not the continuing or surviving corporation,
the continuing or surviving corporation (or, if such transaction is effected through a subsidiary, the parent of such continuing
or surviving corporation) assumes the option or substitutes it with an appropriate option in the surviving corporation (or in the
parent as aforesaid).


 


			The term “Cause” shall mean, for the purposes hereof, conviction (whether following
trial, by plea of guilty or failure to contest prosecution) in a criminal proceeding of (i) a misdemeanor involving fraud, false
statements or misleading omissions, embezzlement, bribery, forgery or extortion; or (ii) a felony; or (iii) an equivalent charge
to those in (i) and (ii) above in jurisdictions which do not use those designations.



 


		8.3	Liquidation; Merger. Unless otherwise determined
by the Board, in the event of: (i) the proposed liquidation or dissolution of the Company; or (ii) a consolidation or merger as
described in Section 8.1 (ii) above; all outstanding options (including, without limitation, any options accelerated pursuant
to Section 8.1 above) will terminate and expire immediately upon to the consummation or closing of such proposed action. Without
derogating from any other right or authority of the Board hereunder, the Board may, in connection with any proposed liquidation
or dissolution, or in connection with any merger or consolidation as aforesaid, determine any other date and time upon which any
outstanding option will terminate and may also provide for the acceleration and vesting of, and right to exercise, any option
which would not otherwise be exercisable.



 








		8.4	Acceleration in the
Event of a Takeover. In the event of a Takeover (as defined below) of the Company, all outstanding options granted by the
Company under the Plan shall be fully accelerated and become vested and exercisable on the date the Takeover becomes effective.
For purpose of this Section 8.4, the term "Takeover" shall mean an event in which any person, entity or group that was
not an Interested Party, as defined in the Israeli Securities Law – 1968 (the "Securities Law"), on the date of
the initial public offering of the Company's securities on the Tel Aviv Stock Exchange, shall become a Controlling Shareholder.
"Controlling Shareholder" for these purposes shall be defined as in the Securities Law.








 


		9.	TERM OF OPTIONS; EXERCISE



 


		9.1	The term of each option shall be for such period as the Board shall determine, but not more than
ten (10) years from the date of grant thereof or such shorter period as is prescribed in Section 7.6 or 8.3 hereof or, with respect
to Incentive Stock Options, as prescribed in Section 4 above.



 




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		9.2	A grantee who desires that the Trustee exercise an option granted to the Trustee on his or her
behalf shall so instruct the Trustee in writing in the form annexed hereto as Appendix A or in such other form as shall
be approved by the Board from time to time. The notice shall be accompanied by, or specify the arrangements for, payment of the
full Option Exercise Price of such Shares as provided in the Agreement. The Company may require as a condition to the exercise
of an option that the grantee pay or otherwise make arrangements to the Company’s satisfaction, for the payment of the tax
and other obligatory payments applicable to him or her (including all sums payable arising out of or in connection with the Company’s
obligation to deduct tax and other obligatory payments at source) pursuant to applicable law and the provisions of the Plan. The
Company may also require that the grantee provide or make such representations and agreements as to grantee’s investment
intent and such other matters as the Company may deem necessary, advisable or appropriate at such time. Upon receipt of all the
requisite documents, approvals and payments from the grantee, including sufficient proof of payment or other arrangement with respect
to the payment of any applicable taxes in form satisfactory to the Company and the Trustee, the Trustee shall deliver a notice
to the Company in the form annexed hereto as Appendix B or in such other form as shall be approved by the Board from time
to time, whereupon the Company shall allot the Shares in the name of the Trustee.



 


		9.3	A grantee who desires to exercise an option granted directly to him or her (and not through the
Trustee) shall so notify the Company in writing in such form as shall be prescribed by the Board from time to time. As a condition
for the exercise of the option, the grantee shall pay or otherwise make arrangements, to the Company’s and Trustee’s
satisfaction, for the payment of the tax and other obligatory payments applicable to him or her (including all sums payable by
the Company arising out of its obligation to deduct tax and other obligatory payments at source) pursuant to applicable law and
the provisions of the Plan. Upon receipt of all the requisite documents, approvals and payments from the grantee, including sufficient
proof of payment or other arrangement with respect to the payment of any applicable taxes in form satisfactory to the Company and
the Trustee, the Company shall allot the Shares in the name of the grantee.



 


		9.4	Without limiting the foregoing, the Board may, with the consent of the grantee, from time to time
cancel all or any portion of any option then subject to exercise, and the Company’s obligation in respect of such option
may be discharged by: (i) payment to the grantee or to the Trustee on behalf of the grantee of an amount in cash equal to the excess,
if any, of the Fair Market Value (as defined below) of the relevant Shares at the date of such cancellation subject to the portion
of the option so canceled over the aggregate Option Exercise Price of such Shares; (ii) the issuance or transfer to the grantee
or to the Trustee on behalf of the grantee of Shares of the Company with a Fair Market Value at the date of such transfer equal
to any such excess; or (iii) a combination of cash and Shares with a combined value equal to any such excess, all as determined
by the Board in its sole discretion.



 


			For purposes hereof, the “Fair Market Value” of the Ordinary Shares shall mean,
as of any date, the last reported sale price, on that date, of the Ordinary Shares of the Company on the principal securities exchange
on which such Shares are then traded, or, in the event that no sales of such Shares took place on such date, the last reported
sale price of such Shares on such principal securities exchange on the most recent prior date on which a sale of Shares took place;
provided, however, that if such Shares are not publicly traded on the date as of which Fair Market Value is to be determined, “Fair
Market Value” of the Ordinary Shares shall mean the value as determined in good faith by the Board.



 




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Without derogating from the
above, solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Income Tax Ordinance, if at
the date of grant the Company’s Shares are listed on any established stock exchange or a national market or quotation system,
the Fair Market Value of an Ordinary Share at the date of grant shall be determined in accordance with the average value of the
Company’s Shares during the thirty (30) trading days preceding the Date of Grant, or in the thirty (30) trading days following
the date of registration for trading, as the case may be.


 


		9.5	Exercise of options will not be permitted on the effective date for distribution of bonus Shares,
rights offering, distribution of a dividend, capital consolidation, capital split or capital reduction (all of the above will be:
"Effective Date" and "Company Event", respectively).



 


			If the Ex Date of a Company Event precedes the Effective Date of a Company Event, the exercise
of options will not be permitted on the Ex Date as mentioned.



 


			Ex Date - the first trading day, in which the securities are traded without the right to
any payment under a Company Events.



 


		10.	TAXATION



 


		10.1	General



 


			The grantee shall be liable for all taxes, duties, fines and other payments which may be imposed
by the tax authorities (whether in Israel or abroad) and for every obligatory payment of whatever source (including, but not limited
to, social security, health tax, etc., as may be applicable) in respect of the options (including, without limitation, upon the
grant of the options, the exercise of the options, or the registration of the Shares in the grantee’s name) or dividends
or any other benefit in respect thereof and/or for all charges which shall accrue to the grantee, the Company, any Related Company
and/or to the Trustee in connection with the Plan, the options, or any act or omission by the grantee or the Company in connection
therewith or pursuant to any determination by the applicable tax or other authorities, including, without limitation, any such
payments required to be made by the Company as the result of any sale by the grantee of Shares which were designated as made through
a trustee pursuant to Section 102 prior to the end of the Required Holding Period. Notwithstanding the foregoing, if the Company
elects the “employment income” route for options granted through a trustee pursuant to Section 102, the Company or
the Related Company, as applicable, shall pay, at its expense, any social security payments payable by the employer with respect
to options so granted to the extent required as a result of such choice.



 


		10.2	Deduction at Source



 


			The Company (including any Related Company) and/or the Trustee shall have the right to withhold
or to require the grantee to pay an amount in cash or to retain or sell without notice Ordinary Shares in value sufficient to cover
any tax or obligatory payment required by any governmental or administrative authority to be withheld or otherwise deducted and
paid with respect to the options or the Ordinary Shares subject thereto (including, without limitation, upon their grant, exercise,
issuance or sale or the registration of the Ordinary Shares in the grantee’s name) or with respect to dividends or any other
benefits in respect thereof (“Withholding Tax”), and to make payment (or to reimburse itself or himself for
payment made) to the appropriate tax or other authority of an amount in cash equal to the amount of such Withholding Tax. Notwithstanding
the foregoing, the grantee shall be entitled to satisfy the obligation to pay any Withholding Tax, in whole or in part, by providing
the Company and/or the Trustee with funds sufficient to enable the Company and/or the Trustee to pay such Withholding Tax.



 




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		10.3	Certificate of Authorization of Assessing Officer



 


			The Company (including any Related Company) or the Trustee shall at any time be entitled to apply
to the Assessing Officer, and in the case of a grantee abroad, to any foreign tax authority, and to any other governmental or administrative
authority for receipt of their certificate of authorization as to the amount of tax or other obligatory payments which the Company
or any Related Company or the grantee or the Trustee is to pay to the tax or other authorities resulting from granting the options,
or regarding any other question with respect to the application of the Plan.



 


		10.4	Security for Payment of Taxes



 


			Without derogating from the above, the Company (including any Related Company) and/or the Trustee
shall have the right to require that any grantee provide guarantees or other security to the Company’s satisfaction to guarantee
the payment of any taxes or other obligatory payments which may be payable as a result of or in connection with the grant of an
option, the exercise thereof, the registration of any options in the grantee’s name (including any sum payable arising out
of or in connection with the Company’s obligations to deduct tax and other obligatory payments at source); and, with respect
to options granted pursuant to Section 102 which were not designated as made through a trustee, if the grantee’s employment
with the Company or any Related Company is terminated for any reason, the grantee will be obligated to provide the Company with
a guarantee or other security to its satisfaction and at its discretion, to cover any tax obligations which may arise thereafter
in connection with the disposition of the Shares.



 


		11.	DIVIDENDS



 


			The Ordinary Shares issued as a result of the exercise of the options shall participate equally
with the Company’s other Ordinary Shares in every cash dividend that shall be declared and distributed subject to the following
provisions:



 


		11.1	A cash dividend shall be distributed only to persons registered in the register of members as shareholders
on the record date fixed for the distribution of the dividend.



 


		11.2	A dividend with regard to Shares that are registered in the name of the Trustee shall be paid to
the Trustee, subject to any lawful deduction of tax, whether such rate is at the usual rate applicable to a dividend or at a higher
rate. The Trustee shall transfer the dividend to the grantees in accordance with instructions that he shall receive from the Company.
Alternatively, the Company shall be entitled to pay the dividend directly to the grantee subject to the deduction of the applicable
tax.



 


		11.3	Without derogating from the provisions of Sections 10.2 and 11.2 hereof, the Company or the Trustee
shall be entitled to set off and deduct at source from any dividend any sum that the grantee owes to the Company (including any
Related Company) or the Trustee, whether under the Plan or otherwise, and/or any sum that the grantee owes to the tax or other
authorities.



 




    	12



    	 



    

  


		12.	RIGHTS AND/OR BENEFITS ARISING OUT OF THE EMPLOYEE/ EMPLOYER RELATIONSHIP AND THE ABSENCE
OF AN OBLIGATION TO EMPLOY



 


		12.1	No income or gain which shall be credited to or which purports to be credited to the grantee as
a result of the Plan, shall in any manner be taken into account in the calculation of the basis of the grantee’s entitlements
from the Company or any Related Company or in the calculation of any social welfare right or other rights or benefits arising out
of the employee/employer relationship. If, pursuant to any law, the Company or any Related Company, shall be obliged for the purposes
of calculation of the said items to take into account income or gain actually or theoretically credited to the grantee, the grantee
shall indemnify the Company or any Related Company, against any expense caused to it in this regard.



 


		12.2	Nothing in the Plan shall be interpreted as obliging the Company or any Related Company to employ
the grantee and nothing in the Plan or any option granted pursuant thereto shall confer upon any grantee any right to continue
in the employment of the Company or any Related Company or restrict the right of the Company or any Related Company to terminate
such employment at any time. The grantee shall have no claim whatsoever against the Company or any Related Company as a result
of the termination of his or her employment, including, without limitation, any claim that such termination causes any options
to expire and/or prevents the grantee from exercising the options and/or from receiving or retaining any Shares pursuant to any
agreement between him or her and the Company, or results in any loss due to an imposition, or earlier than anticipated imposition,
of tax or other liability pursuant to applicable law.



 


		13.	ADJUSTMENTS



 


			Upon the occurrence of any of the following described events, a Grantee’s rights to purchase
Shares under the Plan shall be adjusted as hereinafter provided:



 


		13.1	In the event that the Company distributes a cash dividend, the effective date for
the distribution thereof, will take place after the date of the allocation of the Options to the Trustee for a Grantee, but before
the exercise or expiry of the Options, the exercise price shall be decreased in respect of each Option by the amount of the dividend
per Share. For the avoidance of doubt, under no circumstances will the exercise price be decreased to a price which is less then
the nominal value of an ordinary share of the Company.



 


		13.2	In the event that the Company distributes bonus Shares, the effective date for the
distribution of which takes place after the date of the allocation of the Options to the Trustee for the Grantee, but before the
exercise or expiry of the Options, the number of Shares to which the Grantee is entitled upon the exercise of the Options shall
increase by the number of the Shares that the Grantee would have been entitled to as bonus Shares, had he exercised the Options
prior to the effective date for the distribution of the bonus Shares.
The exercise price of each Option shall not vary as a result of the increase in the number of Shares to which the Grantee
is entitled in the wake of the distribution of bonus Shares.



 


		13.3	If rights to acquire any securities whatsoever are offered to Company shareholders by way of rights,
the Company shall act with a view that the number of Shares that each Grantee is entitled to upon the exercise of the Options will
be adjusted multiplying it by the Benefit Ratio.



 




    	13



    	 



    

  


			Benefit Ratio - the closing price of the stock exchange on the Last trading day before the
Ex Date divided by the base price of the ex-rights stock.



 


		13.4	In any event of division or consolidation of the Company’s share capital, or
any other corporate capitalization event of a significantly similar nature, the Company shall effect such changes or adjustments
as are required to prevent dilution or increase in a Grantee’s rights, pursuant to the Plan with respect to the number and
class of the Shares in relation to the Options not yet exercised by the Grantee and/or the exercise price of each Option.



 


		13.5	In any event of a merger, spin-off and/or any other structural change, Options which
have been granted under this Plan, shall be replaced by, or converted to, an alternative option in the Company after such structural
change, all at the absolute discretion of the Company’s Board.



			



 





		14.	TERM, TERMINATION AND AMENDMENT





 


			Unless the Plan shall theretofore have been terminated as hereinafter provided, the Plan shall
terminate on, and no option shall be granted after, the tenth anniversary of the date the Plan is adopted by the Board. The Board
may at any time terminate, modify or amend the Plan in such respects as it shall deem advisable. Options granted prior to termination
of the Plan may, subject to the terms of the Plan and any Agreement, be exercised thereafter. No amendment or modification of the
Plan may, without the consent of the grantee to whom any option shall theretofore have been granted, adversely affect the rights
of such grantee under such option.



 


		15.	EFFECTIVENESS OF THE PLAN; APPROVALS



 


			The Plan shall become effective as of the date determined by the Board. Notwithstanding the foregoing
and Sections 3 and 15 above, in the event that approval of the Plan or any modification or amendment thereto by the shareholders
of the Company is required under applicable law or pursuant to applicable stock exchange rules or regulations, such approval shall,
to the extent possible, be obtained within the time required under the applicable law, rule or regulation. If such shareholder
approval is required in connection with the application of specified tax treatments, the Company shall make reasonable efforts
to obtain such approval within the required time.



 


		16.	RELEASE OF THE TRUSTEE AND THE ATTORNEY FROM LIABILITY



 


			In no event shall the Trustee or the Attorney be liable to any grantee under the Plan, or to a
purchaser of Shares from any grantee with respect to any act which has been or will be carried out in relation to the Plan, its
execution and any matter connected thereto or arising therefrom. The grantee will be required to covenant upon signing the Agreement
that he or she will not make any claim against the Trustee or the Attorney in any manner whatsoever and on any ground whatsoever
and that he or she will expressly agree that if the Trustee or the Attorney are sued by them, then the Trustee or the Attorney
shall be entitled by virtue of this Section alone to apply to the court for dismissal of the action against them with costs.



			



 




    	14



    	 



    

  


		17.	GOVERNING LAWS



 


			The Plan and all instruments issued thereunder shall be governed by and construed in accordance
with the laws of the State of Israel, subject to the provisions of the Code with respect to Incentive Stock Options and, in the
event of any ambiguity or conflict, the provisions hereof shall be so construed and applied as to give effect to the intention
that any Incentive Stock Option granted will qualify as such under Section 422 of the Code.



 


*                 *                   *


 




    	15



    	 



    

  


RedHill Biopharma Ltd.


 


Appendix A


to


RedHill Biopharma Ltd.’s Option
Plan (2010), as amended


(Section 9.2)


 


NOTICE OF EXERCISE


 


Date: ______________


 


To: ESOP Management and Trust Services Ltd. , By Fax: 972-3-7602636


 


To: RedHill Biopharma Ltd., Fax: 972-3-5413144 or Email: uri@redhillbio.com


 


Dear Sir/Madam:


 


Re: Notice of Exercise


 


I hereby wish to inform you that it is
my desire to exercise ____________ options (“Options”) out of the ____________________ options which were granted
on my name on ______________________ [Date] under the RedHill Biopharma Ltd. Option Plan (2010), as amended (“Plan”),
and tenders herewith payment of the purchase price for such shares in full.


 


The exercise price of said Options is USD
___________ per share, all in accordance with the Plan and the Israeli Securities Law of 1968 or any state securities laws.


 


The total amount for the exercise of the
Options of USD _________________ was paid to RedHill Biopharma by me on the date of ______________________. I am aware that the
exercise of the Options will be done only after RedHill will transfer to you written confirmation that the exercise amount was
paid in full.


 


I am aware that all the shares will be
allotted to you, registered in your name and that you will hold all the share certificates representing such shares. Likewise,
I am aware of and agree to all the other provisions of the Plan and applicable laws.


 


	 	Yours sincerely,
	 	 	 
	 	Signature: 	 
	 	 	 
	 	Name:	 


  


The Receipt of this form by ESOP must be verified by phone
(No. 1700-70-ESOP or 972-3-7536823).


 




    	 



    	 



    




 


RedHill Biopharma Ltd.


 


Appendix B


 


to RedHill Biopharma Ltd.’s Employee
Option Plan (2010) , as amended


 


(Section 9.2)


 


NOTICE OF EXERCISE


 


Date: ______________


 


RedHill Biopharma Ltd.


 


Dear Sirs:


 


Re: Notice of Exercise


 


Please be advised that on the date of ________________
we received instruction from ______________________________ (“the Grantee”) to exercise ____________ options (“Options”)
out of the ____________________ options which were granted in his/her name on ______________________ [Date] under the RedHill Biopharma
Ltd. Option Plan (2010), as amended ( “Plan”).


 


The exercise price of said Options is USD
___________ per share, all in accordance with the Plan and the Israeli Securities Law of 1968 or any state securities laws.


 


The total amount for the exercise of the
Options of USD _________________ should have been paid to you in full by the Grantee. Upon reception of a written confirmation
from you that you received this amount in full, we will exercise the Options for shares and register these shares under the ESOP's
name.


 


Attached to this Notice is the exercise
notice sent to us by the Grantee.


 


	 	Yours sincerely,
	 	 
	 	ESOP Management and Trust Services Ltd.
	 	 	 
	 	Signature:	 
	 	 	 
	 	Name: