Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement
(the “Agreement”), entered into and effective as of July 14, 2014 (the “Effective Date”),
is by and between InspireMD, Inc., a Delaware corporation (the “Company”), and James J. Barry PhD, an individual
(the “Executive”).


 


PRELIMINARY STATEMENTS


 


A.            The
Company desires to employ the Executive as its Executive Vice President and Chief Operating Officer, and the Executive desires
to be employed by the Company as its Executive Vice President and Chief Operating Officer.


 


B.            The
Company and the Executive desire to set forth in writing the terms and conditions of their agreement and understanding with respect
to the employment of the Executive as its Executive Vice President and Chief Operating Officer.


 


C.            Capitalized
terms used herein and not otherwise defined have the meaning for them set forth on Exhibit A attached hereto and incorporated
herein by reference.


 


The parties, intending
to be legally bound, hereby agree as follows:


 


I.           EMPLOYMENT
AND DUTIES


 


1.1           Duties.
The Company hereby employs the Executive as an employee, and the Executive agrees to be employed by the Company, upon the terms
and conditions set forth herein. While serving as an employee of the Company, the Executive shall serve as Executive Vice President
and Chief Operating Officer of the Company. The Executive shall report to the President and Chief Executive Officer of the Company
and shall have such power and authority and perform such duties, functions and responsibilities as are associated with and incident
to such positions, and as the President and Chief Executive Officer may from time to time require of him; provided, however, that
such authority, duties, functions and responsibilities are commensurate with the power, authority, duties, functions and responsibilities
generally performed by the Executive Vice President and Chief Operating Officer of public companies which are similar in size and
nature to, and the financial position of, the Company, including, but not limited to, management responsibility for the operations
and administration of the Company. The Executive also agrees to serve, if elected, as an officer of any other direct or indirect
subsidiary of the Company or InspireMD Ltd., the wholly-owned subsidiary of the Company (“Subsidiary”), in each
such case at no compensation in addition to that provided for in this Agreement, but the Executive serves in such positions solely
as an accommodation to the Company and such positions shall grant him no rights hereunder. The Company will use reasonable efforts
to cause the Executive to be nominated for election as a member of the Board as long as the Executive continues to serve as its
Executive Vice President and Chief Operating Officer.


 




    	 



    	 



    

 


 


1.2           Services.
During the Term (as defined in Section 1.3), and excluding any periods of vacation, sick leave or Disability, the Executive agrees
to devote his full business time, attention and efforts to the business and affairs of the Company. During the Term, it shall not
be a violation of this Section 1.2 for the Executive to (a) serve on civic or charitable boards or committees, (b) serve on three
(3) for-profit corporate boards (in addition to the Company’s Board of Directors) at any one time (provided that such
activities do not create a conflict with Executive’s employment hereunder as determined by the President and Chief Executive
Officer in his reasonable discretion), (c) deliver lectures or fulfill speaking engagements, or (d) manage personal investments,
so long as such activities do not interfere with the performance of the Executive’s responsibilities in accordance with this
Agreement. The Executive must request the President and Chief Executive Officer’s prior written consent to serve on a corporate
board, which consent shall be at the Chief Executive Officer’s reasonable discretion and only so long as such service does
not interfere with the performance of his responsibilities hereunder.


 


1.3           Term
of Employment. The term of this Agreement shall commence on the Effective Date and shall continue until 11:59 p.m. Eastern
Time on July 14, 2017 (the “Initial Term”) unless sooner terminated or extended as provided hereunder. This
Agreement shall automatically renew for additional one-year periods on July 14, 2017 and on each and every July 14th thereafter
(each such extension, the “Renewal Term”) unless either party gives the other party written notice of its or
his election not to extend such employment at least six months prior to the next July 14th renewal date. Further, if
a Change in Control occurs when less than two full years remain in the Initial Term or during any Renewal Term, this Agreement
shall automatically be extended for two years only from the Change in Control Date and thereafter shall terminate on the second
anniversary of the Change in Control Date in accordance with its terms. The Initial Term, together with any Renewal Term or extension
as a result of a Change in Control, are collectively referred to herein as the “Term.” In the event that the
Executive continues to be employed by the Company after the Term, unless otherwise agreed by the parties in writing, such continued
employment shall be on an at-will, month-to-month basis upon terms agreed upon at such time without regard to the terms and conditions
of this Agreement (except as expressly provided herein) and this Agreement shall be deemed terminated at the end of the Term, regardless
of whether such employment continues at-will, other than Articles VI and VII, plus specified provisions of Articles IV and V to
the extent they relate to termination of employment after expiration of the Term, which shall survive the termination or expiration
of this Agreement for any reason.


 


II.          COMPENSATION


 


2.1           General.
The base salary (as set forth in Section 2.2) and Incentive Compensation (as defined in Section 2.3) payable to the Executive hereunder,
as well as any stock-based compensation, including stock options, stock appreciation rights and restricted stock grants, shall
be determined from time to time by the Board and paid pursuant to the Company’s customary payroll practices or in accordance
with the terms of the applicable stock-based Plans (as defined in Section 2.4). The Company shall pay the Executive in cash, in
accordance with the normal payroll practices of the Company, the base salary and Incentive Compensation set forth below. For the
avoidance of doubt, in providing any compensation payable in stock, the Company may withhold, deduct or collect from the compensation
otherwise payable or issuable to the Executive a portion of such compensation to the extent required to comply with applicable
tax laws to the extent such withholding is not made or otherwise provided for pursuant to the agreement governing such stock-based
compensation.


 




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2.2           Base
Salary. The Executive shall be paid a base salary of no less than $30,416.67 per month ($365,000 on an annualized basis)
while he is employed by the Company during the Term; provided, however, that nothing shall prohibit the Company from
reducing the base salary as part of an overall cost reduction program that affects all senior executives of the Company
Group and does not disproportionately affect the Executive, so long as such reductions do not reduce the base salary to a rate
that is less than 90% of the minimum base salary amount set forth above (or, if the minimum base salary amount has been increased
during the Term, 90% of such increased amount). The base salary shall be reviewed annually by the Chief Executive Officer for increase
(but not decrease, except as permitted above) as part of the Company’s annual compensation review, and any increased amount
shall become the base salary under this Agreement.


 


2.3           Bonus
or other Incentive Compensation. During the Term, the Executive shall be eligible to receive annual bonus compensation in an
amount equal to $225,000 (the “Annual Bonus”) upon the achievement of reasonable target objectives and performance
goals as may be determined by the Board in consultation with the Executive (the “Goals”) (provided that with
respect to the Goals for the fiscal year ending December 31, 2014 (the “2014 Fiscal Year”), the Goals shall
be determined prior to the Effective Date). In the event the Executive’s actual performance exceeds the Goals, the Board
may, in its sole discretion, pay the Executive bonus compensation of more than 100% of the Annual Bonus. In each case, the Annual
Bonus shall be payable in accordance with the Company’s annual bonus plan (the “Bonus Plan”); provided,
however, that any bonus amounts payable with respect to the 2014 Fiscal Year shall be prorated based on the actual days Executive
is employed by the Company during the 2014 Fiscal Year. Amounts payable under the Bonus Plan shall be determined by the Board and
shall be payable following such fiscal year and no later than two and one-half months after the end of such fiscal year. Amounts
paid will be less than the Annual Bonus or nothing if the Goals are not met as set forth under the terms of the Bonus Plan. Any
bonus or incentive compensation under this Section 2.3, the Bonus Plan or otherwise is referred to herein as “Incentive
Compensation.” Stock-based compensation shall not be considered Incentive Compensation under the terms of this Agreement
unless the parties expressly agree otherwise in writing. The payment of any Incentive Compensation shall be subject to all federal,
state and withholding taxes, social security deductions and other general withholding obligations.


 


2.4           Stock Compensation.
On the Effective Date, the Company shall grant the Executive an option to purchase 450,000 shares of the Company’s Common
Stock (the “Option”) and 150,000 shares of Restricted Stock (the “RS Grant”). The Option
will have an exercise price equal to the fair market value of the Company’s Common Stock as determined by the Board as of
the date of grant under the Company’s 2013 Long Term Incentive Plan or other stock-based compensation plans as the Company
may establish from time to time (collectively, the “Plans”). Both the Option and the RS Grant will be subject
to a three-year vesting period subject to the Executive’s continued service with the Company (as defined in the Plans), with
one-third (1/3rd) of the Option and RS Grant vesting equally on the first, second, and third anniversary of the Executive’s
continued service. The Option and RS Grant will be governed in full by the terms and conditions of the Plans and the Executive’s
individual Option and RS Grant agreements to be entered into between the Company and the Executive as of the Effective Date. The
Executive will also be eligible to receive additional stock based compensation whether stock options, stock appreciation rights,
restricted stock grants, or otherwise under the Plans. The Executive shall be considered for such grants no less often than annually
as part of the Board’s annual compensation review, but any such grants will be at the sole discretion of the Board.


 




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III.         EMPLOYEE
BENEFITS


 


3.1           General.
Subject only to any post-employment rights under Article V, so long as the Executive is employed by the Company pursuant to
this Agreement, he shall be eligible for the following benefits to the extent generally available to senior executives of the Company
or by virtue of his position, tenure, salary and other qualifications. Any eligibility shall be subject to and in accordance with
the terms and conditions of the Company’s benefits policies and applicable plans (including as to deductibles, premium sharing,
co-payments or other cost-splitting arrangements).


 


3.2           Employee
Benefits.


 


(a)          During
the Term and subject to any contribution therefor generally required of senior executives of the Company, the Executive shall be
entitled to participate in such employee benefit plans and benefit programs as are made available
by the Company to the Company’s senior executives. Such participation shall be subject to the terms of the applicable plan
documents and generally applicable Company policies. The Company may alter, modify, add to or delete its employee benefit plans
at any time, as it, in its sole judgment, determines to be appropriate, without recourse by the Executive.


 


(b)          Notwithstanding
anything to the contrary contained herein, during the Term, in the event that the Company does not have a group health plan on
the Effective Date and the Executive (and his eligible dependents) elect to continue group health plan coverage under the Executive’s
prior employer’s group health plan in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), the Company agrees to pay or reimburse the Executive for 100% of the premiums due with respect to
such COBRA coverage from the Effective Date until the earlier of (i) the date the Executive and his eligible dependents are eligible
for coverage under a group health plan of the Company that is offered to all other senior executives of the Company; or (ii) the
date the Executive’s COBRA coverage terminates for any reason (other than non-payment of premiums).


 


(c)          In
the event that the Executive’s COBRA coverage terminates for any reason (including the Executive’s voluntary election
not to continue with such COBRA coverage) on or after January 1, 2015 and the Company does not have a group health plan at the
time his COBRA coverage terminates, then the Company agrees pay or to reimburse the Executive for 100% of the premiums for the
purchase of an individual health insurance policy to provide coverage to the Executive and his eligible dependents during the Term
until the earlier of (i) the date the Executive and his eligible dependents are eligible for coverage under a group health plan
of the Company that is offered to all other senior executives of the Company or (ii) the date the Executive is no longer covered
under an individual insurance policy.


 




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(d)          In
addition, to the extent any amounts reimbursed or paid under Sections 3.2(b) or 3.2(c) are includable in the Executive’s
taxable income, the Company shall pay the Executive an amount to cover any and all tax liability relating to the amounts reimbursed
or paid, as well as the tax liability on such additional amount paid to the Executive. The intent of the foregoing provision is
to treat the Executive as if there were no United States federal, state, or local income or employment tax liability for such reimbursements,
payments or additional amounts.


 


(e)          Any
obligation of the Company to pay or reimburse the Executive for premiums pursuant to Section 3.2(b) or Section 3.2(c) shall be
subject to and conditioned on the Executive providing the Company with written documentation of the premium amounts due, and in
the case of payment of the premiums, providing the Company with the information necessary to timely pay the premiums.


 


3.3           Vacation.
The Executive shall be entitled to 4 weeks paid vacation per 12-month period.


 


3.4           Expenses.
The Executive shall be entitled to receive prompt reimbursement for all reasonable business-related expenses incurred by the Executive
in performing his duties under this Agreement. Reimbursement of the Executive for such expenses will be made upon presentation
to the Company of expense vouchers that are in sufficient detail to identify the nature of the expense, the amount of the expense,
the date the expense was incurred and to whom payment was made to incur the expense, all in accordance with the expense reimbursement
practices, policies and procedures of the Company.


 


IV.          TERMINATION
OF EMPLOYMENT


 


4.1           Termination
by Mutual Agreement. The Executive’s employment may be terminated at any time during the Term by mutual written agreement
of the Company and the Executive.


 


4.2           Death.
The Executive’s employment hereunder shall terminate upon his death.


 


4.3           Disability.
In the event the Executive incurs a Disability for a continuous period exceeding 90 days or for a total of 180 days during any
period of 12 consecutive months, the Company may, at its election, terminate the Executive’s employment during or after the
Term by delivering a Notice of Termination (as defined in Section 4.8) to the Executive 30 days in advance of the date of termination.


 


4.4           Good
Reason. The Executive may terminate his employment at any time during or after the Term for Good Reason by delivering a Notice
of Termination to the Company 30 days in advance of the date of termination; provided, however, that the Executive
agrees not to terminate his employment for Good Reason until the Executive has given the Company at least 30 days’ in which
to cure the circumstances set forth in the Notice of Termination constituting Good Reason and if such circumstances are not cured
by the 30th day, the Executive’s employment shall terminate on such date. If the circumstances constituting Good Reason are
remedied within the cure period to the reasonable satisfaction of the Executive, such event shall no longer constitute Good Reason
for purposes of this Agreement and the Executive shall thereafter have no further right hereunder to terminate his employment for
Good Reason as a result of such event. Unless the Executive provides written notification of an event described in the definition
of Good Reason within 90 days after the Executive has actual knowledge of the occurrence of any such event, the Executive shall
be deemed to have consented thereto and such event shall no longer constitute Good Reason for purposes of this Agreement.


 




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4.5           Termination
without Cause. The Company may terminate the Executive’s employment at any time during or after the Term without Cause
by delivering to the Executive a Notice of Termination 30 days in advance of the date of termination; provided that as part of
such notice the Company may request that the Executive immediately tender the resignations contemplated by Section 4.9 and otherwise
cease performing his duties hereunder. The Notice of Termination need not state any reason for termination and such termination
can be for any reason or no reason. The date of termination shall be the date set forth in the Notice of Termination.


 


4.6           Cause.
The Company may terminate the Executive’s employment at any time during or after the Term for Cause by delivering a Notice
of Termination to the Executive. The Notice of Termination shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board, at a meeting of the Board called and held for such purpose,
finding that in the good faith opinion of the Board an event constituting Cause has occurred and specifying the particulars thereof.
A Notice of Termination for Cause may not be delivered unless in conjunction with such Board meeting the Executive was given reasonable
notice and the opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board prior to
such vote. If the event constituting Cause for termination is other than as a result of a breach or violation by the Executive
of any provision of Article VI and only if the event constituting Cause is curable, then the Executive shall have 30 days from
the date of the Notice of Termination to cure such event described therein to the reasonable satisfaction of the Board in its sole
discretion and, if such event is cured by the Executive within the cure period, such event shall no longer constitute Cause for
purposes of this Agreement and the Company shall thereafter have no further right to terminate the Executive’s employment
for Cause as a result of such event. The Executive shall have no other rights under this Agreement to cure an event that constitutes
Cause. Unless the Company provides written notification of an event described in the definition of Cause within 90 days after the
Company knows or has reason to know of the occurrence of any such event, the Company may not terminate the Executive for Cause
unless such event is recurring or uncurable. Knowledge shall mean actual knowledge of any
member of the Board or any of the Company’s senior executives.


 


4.7           Voluntary
Termination by the Executive. The Executive may voluntarily terminate his employment at any time during or after the Term by
delivering to the Company a Notice of Termination 30 days in advance of the date of termination (a “Voluntary Termination”).
For purposes of this Agreement, a Voluntary Termination shall not include a termination of the Executive’s employment by
reason of death or for Good Reason. A Voluntary Termination shall not be considered a breach or other violation of this Agreement.


 




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4.8           Notice
of Termination. Any termination of employment under this Agreement by the Company or the Executive requiring a notice of termination
shall require delivery of a written notice by one party to the other party (a “Notice of Termination”). A Notice
of Termination must indicate the specific termination provision of this Agreement relied upon and the date of termination. It must
also set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination, other than in
the event of a Voluntary Termination or termination without Cause. The date of termination specified in the Notice of Termination
shall comply with the time periods required under this Article IV, and may in no event be earlier than the date such Notice of
Termination is delivered to or received by the party getting the notice. If the Executive fails to include a date of termination
in any Notice of Termination he delivers, the Company may establish such date in its sole discretion. No Notice of Termination
under Section 4.4 or 4.6 shall be effective until the applicable cure period, if any, shall have expired without the Company or
the Executive, respectively, having corrected the event or events subject to cure to the reasonable satisfaction of the other party.
The terms “termination” and “termination of employment,” as used herein are intended to mean a termination
of employment which constitutes a “separation from service” under Section 409A.


 


4.9           Resignations.
Upon ceasing to be an employee of the Company for any reason, or earlier upon request by the Company pursuant to Sections 4.5 or
4.6, the Executive agrees to immediately tender written resignations to the Company with respect to all officer and director positions
he may hold at that time with any member of the Company or Subsidiary.


 


V.          PAYMENTS ON TERMINATION


 


5.1           Death;
Disability; Resignation for Good Reason; Termination without Cause. If at any time during the Term the Executive’s employment
with the Company is terminated pursuant to Section 4.2, 4.3, 4.4 or 4.5, the Executive shall be entitled to the payment and benefits
set forth below only. If at any time after the Term the Executive’s employment with the Company is terminated pursuant to
Section 4.2, 4.3, 4.4 or 4.5, the Executive shall be entitled to the payment and benefits set forth in (a), (b) and the specified
provisions of (c) only.


 


(a)          any
unpaid base salary and accrued unpaid vacation then owing through the date of termination or Incentive Compensation that is as
of such date actually earned or owing under Article II, but not yet paid to the Executive, which amounts shall be paid to the Executive
on the next regularly scheduled Company payroll date following the date of termination or earlier if required by applicable law;
provided, however, that the Executive shall be entitled to receive the pro rata amount of any Bonus Plan Incentive Compensation
for the fiscal year of his termination of employment (based on the number of business days he was actually employed by the Company
during the fiscal year in which the termination of employment occurs and assuming full achievement of all applicable goals under
the Bonus Plan) that he would have received had his employment not been terminated during such year. Nothing in the foregoing sentence
is intended to give the Executive greater rights to such Incentive Compensation than a pro rata portion of what he would ordinarily
be entitled to under the Bonus Plan Incentive Compensation that would have been applicable to him had his employment not been terminated
(assuming full achievement of all applicable goals under the Bonus Plan), it being understood that the Executive’s termination
of employment shall not be used to disqualify the Executive from or make him ineligible for a pro rata portion of the Bonus Plan
Incentive Compensation to which he would otherwise have been entitled (assuming full achievement of all applicable goals under
the Bonus Plan). The pro rata portion of Bonus Plan Incentive Compensation shall, subject to Section 7.16, be paid at the time
such Incentive Compensation is paid to senior executives of the Company (“Severance Bonus Payment Date”) but
in no event later than two and one-half months after the end of such fiscal year.


 




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(b)          a
one-time lump sum severance payment in an amount equal to one hundred fifty (150%) of the Executive’s Base Amount. The lump
sum severance payment shall be paid on the Company’s first payroll date after the Executive’s signing the release described
in Section 5.4 and the expiration of any applicable revocation period, subject, in the case of termination other than as a result
of the Executive’s death, to Section 7.16; provided, however, that in the event that the time period for return of the release
and expiration of the applicable revocation period begins in one taxable year and ends in a second taxable year, such payment shall
not be made until the second taxable year if necessary to comply with Section 409A of the
Code.


 


(c)          fifty
percent (50%) of all unvested stock options, restricted stock shares, restricted stock units, stock appreciation rights or similar
stock based rights granted to the Executive shall vest and, if applicable, be immediately exercisable and any risk of forfeiture
included in such restricted or other stock grants previously made to the Executive shall immediately lapse. In addition, if the
Executive’s employment is terminated pursuant to Section 4.2, 4.3, 4.4 or 4.5 during or after the Term, the Executive shall
have until the earlier of (i) eighteen (18) months from the date of termination, or (ii) the latest date that each stock option
or stock appreciation right would otherwise expire by its original terms had the Executive’s employment not terminated to
exercise any outstanding stock options or stock appreciation rights. The extension of the exercise period set forth in this Section
5.1(c) shall occur notwithstanding any provision in any Plans or related grant documents which provides for a lesser vesting or
shorter period for exercise upon termination by the Company without Cause (which for this purpose will include a termination for
Good Reason), notwithstanding anything to the contrary in any Plans or grant documents; provided, however, and for the avoidance
of doubt, nothing in this Agreement shall be construed as or imply that this Agreement does or can grant greater rights than are
allowed under the terms and conditions of the Plans.


 


(d)          to
the fullest extent permitted by the Company’s then-current benefit plans, continuation of health, dental, vision and life
insurance coverage, (but not pension, retirement, profit-sharing, severance or similar compensatory benefits), for the Executive
and the Executive’s eligible dependents substantially similar to coverage they were receiving or which they were entitled
to immediately prior to the termination of the Executive’s employment for the lesser of 18 months after termination or until
the Executive secures coverage from new employment and the period of COBRA health care continuation coverage provided under Section
4980B of the Code shall run concurrently with the foregoing 18 month period. In order to receive such benefits, the Executive or
his eligible dependents must continue to make any required co-payments, deductibles, premium sharing or other cost-splitting arrangements
the Executive was otherwise paying immediately prior to the date of termination and nothing herein shall require the Company to
be responsible for such items. If the Executive is a “specified employee” under Section 409A, the full cost of the
continuation or provision of employee group welfare benefits (other than medical or dental benefits) shall be paid by the Executive
until the earliest to occur of (i) the Executive’s death or (ii) the first day of the seventh month following the Executive’s
termination of employment, and such cost shall be reimbursed by the Company to, or on behalf of, the Executive in a lump sum cash
payment on the earlier to occur of the Executive’s death or the first day of the seventh month following the Executive’s
termination of employment, except that, as provided above, the Executive shall not receive reimbursement for any required co-payments,
deductibles, premium sharing or other cost-splitting arrangements the Executive was otherwise paying immediately prior to the date
of termination.


 




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(e)          a
cash payment to the Executive in the amount of $25,000 which Executive may use towards the costs and expenses of executive outplacement
services or an education program selected by the Executive. The payment shall be paid on the Company’s first regularly scheduled
payroll date after the Executive’s signing the release described in Section 5.4 and the expiration of any applicable revocation
period, subject, in the case of termination other than as a result of the Executive’s death, to Section 7.16, provided, however,
that in the event that the time period for return of the release and expiration of the applicable revocation period begins in one
taxable year and ends in a second taxable year, such payment shall not be made until the second taxable year if necessary to comply
with Section 409A of the Code.


 


(f)          Any
payments by the Company under Section 5.1(b) above pursuant to a termination under Section 4.2 or 4.3 shall be reduced by any payments
received by the Executive pursuant to any of the Company’s employee welfare benefit plans providing for payments in the event
of death or Disability to the extent such reduction is permitted by, and does not trigger an impermissible change in time or form
of payment under, Section 409A of the Code.


 


5.2           Termination
for Cause; Voluntary Termination. If at any time during or after the Term the Executive’s employment with the Company
is terminated for Cause under Section 4.6 or upon a Voluntary Termination under Section 4.7, the Executive shall be entitled to
only the following:


 


(a)          any
unpaid base salary and accrued unpaid vacation then owing through the date of termination or Incentive Compensation that is as
of such date actually earned or owing under Article II, but not yet paid to the Executive, which amounts shall be paid to the Executive
within 30 days of the date of termination. Nothing in this provision is intended to imply that the Executive is entitled to any
partial or pro rata payment of Incentive Compensation on termination unless the Bonus Plan expressly provides as much under its
specific terms.


 


(b)          whatever
rights, if any, that are available to the Executive upon such a termination pursuant to the Plans or any award documents related
to any stock-based compensation such as stock options, stock appreciation rights or restricted stock grants. This Agreement does
not grant any greater rights with respect to such items than provided for in the Plans or the award documents in the event of any
termination for Cause or a Voluntary Termination.


 




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5.3           Termination
following a Change in Control. The Executive shall have no specific right to terminate this Agreement or right to any severance
payments or other benefits solely as a result of a Change in Control. However, if during a Change in Control Period during or after
the Term, (a) the Executive terminates his employment with the Company due to a termination for Good Reason pursuant to Section
4.4, or (b) the Company terminates the Executive’s employment pursuant to Section 4.5, the lump sum severance payment under
Section 5.1 shall be increased from one hundred fifty percent (150%) of the Base Amount to two hundred fifty percent (250%) of
the Base Amount, and for a termination of employment described in (a) and (b) all stock options, restricted stock shares, restricted
stock units, stock appreciation rights or similar stock-based rights granted to the Executive shall vest in full and be immediately
exercisable and any risk of forfeiture included in restricted or other stock grants previously made to the Executive shall immediately
lapse. The terms and rights with respect to such payments shall otherwise be governed by Section 5.1. No other rights result from
termination during a Change in Control Period; provided, however, that nothing in this Section 5.3 is intended to
limit or impair the rights of the Executive under the Plans or any documents evidencing any stock-based compensation awards in
the event of a Change in Control if such Plans or award documents grant greater rights than are set forth herein.


 


5.4           Release.
The Company’s obligation to pay or provide any benefits to the Executive following termination (other than in the event of
death pursuant to Section 4.2) is expressly subject to the requirement that he execute and not breach or rescind a release relating
to employment matters and the circumstances surrounding his termination in favor of the members of the Company Group and their
officers, directors and related parties and agents, in a form reasonably acceptable to the Company at the time of Executive’s
termination of employment. The Company shall deliver such release to the Executive within three business days following his termination
of employment and the Executive shall be obligated to sign and return the release to the Company within 45 days of receipt of such
release to receive any benefits or payments following termination.


 


5.5           Other
Benefits. Except as expressly provided otherwise in this Article V, the provisions of this Agreement shall not affect
the Executive’s participation in, or terminating distributions and vested rights under, any pension, profit-sharing, insurance
or other employee benefit plan of the Company Group to which the Executive is entitled pursuant to the terms of such plans, or
expense reimbursements he is otherwise entitled to under Section 3.4.


 


5.6           No
Mitigation. It will be difficult, and may be impossible, for the Executive to find reasonably comparable employment following
the termination of the Executive’s employment, and the protective provisions under Article VI contained herein will further
limit the employment opportunities for the Executive. In addition, the Company’s severance pay policy applicable in general
to its salaried employees does not provide for mitigation, offset or reduction of any severance payment received thereunder. Accordingly,
the parties hereto expressly agree that the payment of severance compensation in accordance with the terms of this Agreement will
be liquidated damages, and that the Executive shall not be required to seek other employment, or otherwise, to mitigate any payment
provided for hereunder.


 




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5.7           Limitation;
No Other Rights. Any amounts due or payable under this Article V are in the nature of severance payments or liquidated
damages, or both, and the Executive agrees that such amounts shall fully compensate the Executive, his dependents, heirs and beneficiaries
and the estate of the Executive for any and all direct damages and consequential damages that they do or may suffer as a result
of the termination of the Executive’s employment, or both, and are not in the nature of a penalty. Notwithstanding the above,
no member of the Company Group shall be liable to the Executive under any circumstances for any consequential, incidental, punitive
or similar damages. The Executive expressly acknowledges that the payments and other rights under this Article V shall be
the sole monies or other rights to which the Executive shall be entitled to and such payments and rights will be in lieu of any
other rights or remedies he might have or otherwise be entitled to. In the event of any termination under this Article V,
the Executive hereby expressly waives any rights to any other amounts, benefits or other rights, including without limitation whether
arising under current or future compensation or severance or similar plans, agreements or arrangements of any member of the Company
Group (including as a result of changes in (or of) control or similar Change in Control events), unless the Executive’s entitlement
to participate or receive benefits thereunder has been expressly approved by the Board. Similarly, no one in the Company Group
shall have any further liability or obligation to the Executive following the date of termination, except as expressly provided
in this Agreement.


 


5.8           No
Right to Set Off. The Company shall not be entitled to set off against amounts payable to the Executive hereunder any amounts
earned by the Executive in other employment, or otherwise, after termination of his employment with the Company, or any amounts
which might have been earned by the Executive in other employment had he sought such other employment.


 


5.9           Adjustments
Due to Excise Tax.


 


(a)          If
it is determined that any amount or benefit to be paid or payable to the Executive under this Agreement or otherwise in conjunction
with his employment (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise
in conjunction with his employment) would give rise to liability of the Executive for the excise tax imposed by Section 4999 of
the Code, as amended from time to time, or any successor provision (the “Excise Tax”), then the amount or benefits
payable to the Executive (the total value of such amounts or benefits, the “Payments”) shall be reduced by the
Company to the extent necessary so that no portion of the Payments to the Executive is subject to the Excise Tax. Such reduction
shall only be made if the net amount of the Payments, as so reduced (and after deduction of applicable federal, state, and local
income and payroll taxes on such reduced Payments other than the Excise Tax (collectively, the “Deductions”))
is greater than the excess of (1) the net amount of the Payments, without reduction (but after making the Deductions) over (2)
the amount of Excise Tax to which the Executive would be subject in respect of such Payments.


 


(b)          In
the event it is determined that the Excise Tax may be imposed on the Executive prior to the possibility of any reductions being
made pursuant to Section 5.9(a), the Company and the Executive agree to take such actions as they may mutually agree in writing
to take to avoid any such reductions being made or, if such reduction is not otherwise required by Section 5.9(a), to reduce the
amount of Excise Tax imposed.


 




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(c)          The
independent public accounting firm serving as the Company’s auditing firm, or such other accounting firm, law firm or professional
consulting services provider of national reputation and experience reasonably acceptable to the Company and Executive (the “Accountants”)
shall make in writing in good faith all calculations and determinations under this Section 5.9, including the assumptions to be
used in arriving at any calculations. For purposes of making the calculations and determinations under this Section 5.9, the Accountants
and each other party may make reasonable assumptions and approximations concerning the application of Section 280G and Section
4999. The Company and Executive shall furnish to the Accountants and each other such information and documents as the Accountants
and each other may reasonably request to make the calculations and determinations under this Section 5.9. The Company shall bear
all costs the Accountants incur in connection with any calculations contemplated hereby.


 


VI.          PROTECTIVE
PROVISIONS


 


Since the Executive
will be serving as Executive Vice President and Chief Operating Officer and will have access to Confidential Information of the
Company Group, the Executive agrees to the following restrictive covenants.


 


6.1           Noncompetition.
Without the prior written consent of the Board (which may be withheld in the Board’s sole discretion), so long as the Executive
is an employee of the Company or any other member of the Company Group and for a one-year period thereafter (the “Restricted
Period”), the Executive agrees that he shall not anywhere in the Prohibited Area, for his own account or the benefit
of any other, engage or participate in or assist or otherwise be connected with a Competing Business. For the avoidance of doubt,
the Executive understands that this Section 6.1 prohibits the Executive from acting for himself or as an officer, employee, manager,
operator, principal, owner, partner, shareholder, advisor, consultant of, or lender to, any individual or other Person that is
engaged or participates in or carries out a Competing Business or is actively planning or preparing to enter into a Competing Business.
The parties agree that such prohibition shall not apply to the Executive’s passive ownership of not more than 5% of a publicly-traded
company.


 


6.2           No
Solicitation or Interference. During the Restricted Period (other than while an employee acting solely for the express benefit
of the Company Group), the Executive shall not, whether for his own account or for the account or benefit of any other Person,
throughout the Prohibited Area:


 


(a)          request,
induce or attempt to influence (i) any customer of any member of the Company Group who was a customer of any member of the Company
Group at any time during the two-year period prior to the Executive’s date of termination, to limit, curtail, cancel or terminate
any business it transacts with, or products or services it receives from or sells to, or (ii) any Person employed by (or otherwise
engaged in providing services for or on behalf of) any member of the Company Group to limit, curtail, cancel or terminate any employment,
consulting or other service arrangement, with any member of the Company Group. Such prohibition shall expressly extend to any hiring
or enticing away (or any attempt to hire or entice away) any employee of the Company Group;


 




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(b)          solicit
from or sell to any customer any products or services that any member of the Company Group provides or is planning to provide to
such customer and that are the same as or substantially similar to the products or services that any member of the Company Group,
sold or provided while the Executive was employed with, or providing services to, any member of the Company Group;


 


(c)          contact
or solicit any customer for the purpose of discussing (i) services or products that are competitive with and the same or closely
similar to those offered by any member of the Company Group during the two-year period prior
to the Executive’s date of termination, or (ii) any past or present business of any member of the Company Group;


 


(d)          request,
induce or attempt to influence any supplier, distributor or other Person with which any member of the Company Group has a business
relationship or to limit, curtail, cancel or terminate any business it transacts with any member of the Company Group; or


 


(e)          otherwise
interfere with the relationship of any member of the Company Group with any Person which is, or within one-year prior to the Executive’s
date of termination was, doing business with, employed by or otherwise engaged in performing services for, any member of the Company
Group.


 


6.3           Confidential
Information. During the period of the Executive’s employment with the Company or any member of the Company Group and
at all times thereafter, the Executive shall hold in secrecy for the Company all Confidential Information that may come to his
knowledge, may have come to his attention or may have come into his possession or control while employed by the Company (or otherwise
performing services for any member of the Company Group). Notwithstanding the preceding sentence, the Executive shall not be required
to maintain the confidentiality of any Confidential Information which (a) is or becomes available to the public or others in the
industry generally (other than as a result of inappropriate disclosure or use by the Executive in violation of this Section 6.3)
or (b) the Executive is compelled to disclose under any applicable laws, regulations or directives of any government agency, tribunal
or authority having jurisdiction in the matter or under subpoena. Except as expressly required in the performance of his duties
to the Company under this Agreement, the Executive shall not use for his own benefit or disclose (or permit or cause the disclosure
of) to any Person, directly or indirectly, any Confidential Information unless such use or disclosure has been specifically authorized
in writing by the Company in advance. During the Executive’s employment and as necessary to perform his duties under Section
1.1, the Company will provide and grant the Executive access to the Confidential Information. The Executive recognizes that any
Confidential Information is of a highly competitive value, will include Confidential Information not previously provided the Executive
and that the Confidential Information could be used to the competitive and financial detriment of any member of the Company Group
if misused or disclosed by the Executive. The Company promises to provide access to the Confidential Information only in exchange
for the Executive’s promises contained herein, expressly including the covenants in Sections 6.1, 6.2 and 6.4.


 




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6.4         Inventions.


 


(a)          The
Executive shall promptly and fully disclose to the Company any and all ideas, improvements, discoveries and inventions, whether
or not they are believed to be patentable (“Inventions”), that the Executive conceives of or first actually
reduces to practice, either solely or jointly with others, during the Executive’s employment with the Company or any other
member of the Company Group, and that relate to the business now or thereafter carried on or contemplated by any member of the
Company Group or that result from any work performed by the Executive for any member of the Company Group.


 


(b)          The
Executive acknowledges and agrees that all Inventions shall be the sole and exclusive property of the Company (or member of the
Company Group) and are hereby assigned to the Company (or applicable member of the Company Group). During the term of the Executive’s
employment with the Company (or any other member of the Company Group) and thereafter, whenever requested to do so by the Company,
the Executive shall take such action as may be requested to execute and assign any and all applications, assignments and other
instruments that the Company shall deem necessary or appropriate in order to apply for and obtain Letters Patent of the United
States and/or of any foreign countries for such Inventions and in order to assign and convey to the Company (or any other member
of the Company Group) or their nominees the sole and exclusive right, title and interest in and to such Inventions.


 


(c)          The
Company acknowledges and agrees that the provisions of this Section 6.4 do not apply to an Invention: (i) for which no equipment,
supplies, or facility of any member of the Company Group or Confidential Information was used; (ii) that was developed entirely
on the Executive’s own time and does not involve the use of Confidential Information; (iii) that does not relate directly
to the business of any member of the Company Group or to the actual or demonstrably anticipated research or development of any
member of the Company Group; and (iv) that does not result from any work performed by the Executive for any member of the Company
Group.


 


6.5         Return
of Documents and Property. Upon termination of the Executive’s employment for any reason, the Executive (or his heirs
or personal representatives) shall immediately deliver to the Company (a) all documents and materials containing Confidential Information
(including without limitation any “soft” copies or computerized or electronic versions thereof) or otherwise containing
information relating to the business and affairs of any member of the Company Group (whether or not confidential), and (b) all
other documents, materials and other property belonging to any member of the Company Group that are in the possession or under
the control of the Executive.


 


6.6         Reasonableness;
Remedies. The Executive acknowledges that each of the restrictions set forth in this Article VI are reasonable and necessary
for the protection of the Company’s business and opportunities (and those of the Company Group) and that a breach of any
of the covenants contained in this Article VI would result in material irreparable injury to the Company and the other members
of the Company Group for which there is no adequate remedy at law and that it will not be possible to measure damages for such
injuries precisely. Accordingly, the Company and any member of the Company Group shall be entitled to the remedies of injunction
and specific performance, or either of such remedies, as well as all other remedies to which any member of the Company Group may
be entitled, at law, in equity or otherwise, without the need for the posting of a bond or by the posting of the minimum bond that
may otherwise be required by law or court order.


 




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6.7         Extension;
Survival. The Executive and the Company agree that the time periods identified in this Article VI, including, without limitation,
the Restricted Period, will be stayed, and the Company’s obligation to make any payments or provide any benefits under Article V
shall be suspended, during the period of any breach or violation by the Executive of the covenants contained herein. The parties
further agree that this Article VI shall survive the termination or expiration of this Agreement for any reason. The Executive
acknowledges that his agreement to each of the provisions of this Article VI is fundamental to the Company’s willingness
to enter into this Agreement and for it to provide for the severance and other benefits described in Article V, none of which
the Company was required to do prior to the date hereof. Further, it is the express intent and desire of the parties for each provision
of this Article VI to be enforced to the fullest extent permitted by law. If any part of this Article VI, or any provision hereof,
is deemed illegal, void, unenforceable or overly broad (including as to time, scope and geography), the parties express desire
is that such provision be reformed to the fullest extent possible to ensure its enforceability or if such reformation is deemed
impossible then such provision shall be severed from this Agreement, but the remainder of this Agreement (expressly including the
other provisions of this Article VI) shall remain in full force and effect.


 


VII.         MISCELLANEOUS


 


7.1         Notices.
Any notice required or permitted under this Agreement shall be given in writing and shall be deemed to have been effectively made
or given if personally delivered, or if sent via U.S. mail or recognized overnight delivery service or sent via confirmed e-mail
or facsimile to the other party at its address set forth below in this Section 7.1, or at such other address as such party may
designate by written notice to the other party hereto. Any effective notice hereunder shall be deemed given on the date personally
delivered, three business days after mailed via U.S. mail or one business day after it is sent via overnight delivery service or
via confirmed e-mail or facsimile, as the case may be, to the following address:


 


If to the Company:


 


InspireMD, Inc.


800 Boylston Street, Suite 16041


Boston, MA 02199


Attn: President and Chief Executive
Officer


Telephone:


Facsimile:


 


With a copy which shall not constitute
notice to:


 




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Haynes and Boone, LLP


30 Rockefeller Plaza, 26th
Floor


New York, NY 10112-0015


Attn: Rick A. Werner, Esq.


Telephone No.: (212) 659-4974


Facsimile No.: (212) 884-8234


Email: rick.werner@haynesboone.com


 


If to the Executive, at the most
recent address on file with the Company.


 


7.2         Legal
Fees. (a)          The Company shall pay all reasonable legal fees and expenses
of the Executive’s counsel in connection with the preparation and negotiation of this Agreement, up to $10,000.


 


(b)         It
is the intent of the Company that the Executive not be required to bear the legal fees and related expenses associated with the
enforcement or defense of the Executive’s rights under this Agreement by litigation, arbitration or other legal action because
having to do so would substantially detract from the benefits intended to be extended to the Executive hereunder. Accordingly,
the parties hereto agree that any dispute or controversy arising under or in connection with this Agreement shall be resolved exclusively
and finally by binding arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The Company shall be
responsible for its own fees, costs and expenses and shall pay to the Executive an amount equal to all reasonable attorneys’
and related fees, costs and expenses incurred by the Executive in connection with such arbitration unless the arbitrator determines
that the Executive (a) did not commence or engage in the arbitration with a reasonable, good faith belief that his claims were
meritorious or (b) the Executive’s claims had no merit and a reasonable person under similar circumstances would not have
brought such claims. If there is any dispute between the Company and the Executive as to the payment of such fees and expenses,
the arbitrator shall resolve such dispute, which resolution shall also be final and binding on the parties, and as to such dispute
only the burden of proof shall be on the Company.


 


7.3         Severability.
If an arbitrator or a court of competent jurisdiction determines that any term or provision hereof is void, invalid or otherwise
unenforceable, (a) the remaining terms and provisions hereof shall be unimpaired and (b) such arbitrator or court shall replace
such void, invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest
to expressing the intention of the void, invalid or unenforceable term or provision. For the avoidance of doubt, the parties expressly
intend that this provision extend to Article VI of this Agreement.


 


7.4         Entire
Agreement. This Agreement represents the entire agreement of the parties with respect to the subject matter hereof and shall
supersede any and all previous contracts, arrangements or understandings between the Company, the Subsidiary and the Executive
relating to the Executive’s employment by the Company. Nothing in this Agreement shall modify or alter the Indemnity Agreement
or alter or impair any of the Executive’s rights under the Plans or related award agreements. In the event of any conflict
between this Agreement and any other agreement between the Executive and the Company (or any other member of the Company Group),
this Agreement shall control.


 




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7.5         Amendment;
Modification. Except for increases in base salary, and adjustments with respect to Incentive Compensation, made as provided
in Article II, or changes that are expressly required by applicable law, this Agreement may be amended at any time only by mutual
written agreement of the Executive and the Company; provided, however, that, notwithstanding any other provision
of this Agreement or the Plans (or any award documents under the Plans), or Indemnity Agreement, the Company may reform this Agreement,
the Plans (or any award documents under the Plans), or any provision thereof (including, without limitation, an amendment instituting
a six-month waiting period before a distribution) or otherwise as contemplated by Section 7.16 below.


 


7.6         Withholding.
The Company shall be entitled to withhold, deduct or collect or cause to be withheld, deducted or collected from payment any amount
of withholding taxes required by law, statutory deductions or collections with respect to payments made to the Executive in connection
with his employment, termination (including Article V) or his rights hereunder, including as it relates to stock-based compensation.


 


7.7         Representations.


 


(a)          The
Executive hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by the
Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Executive is a party or by which he is bound, and (ii) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance
with its terms. The Executive hereby acknowledges and represents that he has consulted with legal counsel regarding his rights
and obligations under this Agreement and that he fully understands the terms and conditions contained herein.


 


(b)          The
Company hereby represents and warrants to the Executive that (i) the execution, delivery and performance of this Agreement by the
Company do not and shall not conflict with, breach, violate or cause a default under any material contract, agreement, instrument,
order, judgment or decree to which the Company is a party or by which it is bound and (ii) upon the execution and delivery of this
Agreement by the Executive, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance
with its terms.


 


7.8          Governing
Law; Jurisdiction. This Agreement shall be construed, interpreted, and governed in accordance with the laws of the Commonwealth
of Massachusetts without regard to any provision of that State’s rules on the conflicts of law that might make applicable
the law of a jurisdiction other than that of the Commonwealth of Massachusetts. Except as otherwise provided in Section 7.2, all
actions or proceedings arising out of this Agreement shall exclusively be heard and determined in state or federal courts in the
Commonwealth of Massachusetts having appropriate jurisdiction. The parties expressly consent to the exclusive jurisdiction of such
courts in any such action or proceeding and waive any objection to venue laid therein or any claim for forum nonconveniens.


 




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7.9           Successors.
This Agreement shall be binding upon and inure to the benefit of, and shall be enforceable by the Executive, the Company, and their
respective heirs, executors, administrators, legal representatives, successors, and assigns. In the event of a Change in Control,
the provisions of this Agreement shall be binding upon and inure to the benefit of the Company or entity resulting from such Change
in Control or to which the assets shall be sold or transferred, which entity from and after the date of such Change in Control
shall be deemed to be the Company for purposes of this Agreement. In the event of any other assignment of this Agreement by the
Company, the Company shall remain primarily liable for its obligations hereunder. ; provided, however, that if the
Company is financially unable to meet its obligations hereunder, the Subsidiary shall assume responsibility for the Company’s
obligations hereunder pursuant to the guaranty provision following the signature page hereof. The Executive expressly acknowledges
that the Subsidiary and other members of the Company Group (and their successors and assigns) are third party beneficiaries of
this Agreement and may enforce this Agreement on behalf of themselves or the Company. Both parties agree that there are no third
party beneficiaries to this Agreement other than as expressly set forth in this Section 7.9.


 


7.10         Nonassignability.
Neither this Agreement nor any right or interest hereunder shall be assignable by the Executive, his beneficiaries, dependents
or legal representatives without the Company’s prior written consent; provided, however, that nothing in this
Section 7.10 shall preclude (a) the Executive from designating a beneficiary to receive any benefit payable hereunder upon his
death or (b) the executors, administrators or other legal representatives of the Executive or his estate from assigning any rights
hereunder to the Person(s) entitled thereto.


 


7.11         No
Attachment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation in favor of any third party, or to execution,
attachment, levy or similar process or assignment by operation of law in favor of any third party, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no effect.


 


7.12         Waiver.
No term or condition of this Agreement shall be deemed to have been waived, nor there be any estoppel against the enforcement of
any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written
waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other
than that specifically waived.


 


7.13         Construction.
The headings of articles or sections herein are included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement. References to days found herein shall be actual calendar days and
not business days unless expressly provided otherwise.


 




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7.14        Counterparts.
This Agreement may be executed by any of the parties hereto in counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.


 


7.15        Effectiveness.
This Agreement shall be effective as of the Effective Date when signed by the Executive and the Company.


 


7.16        Section
409A of the Code.


 


(a)          It
is the intent of the parties that payments and benefits under this Agreement are exempt from the provisions of Section 409A of
the Code and, to the extent not so exempt, comply with Section 409A of the Code and, accordingly, to interpret, to the maximum
extent permitted, this Agreement to be in compliance therewith. If the Executive notifies the Company in writing (with specificity
as to the reason therefore) that the Executive believes that any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A
of the Code and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently
makes such determination, the parties shall, in good faith, reform such provision to try to comply with Section 409A of the Code
through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A of the Code. To the
extent that any provision hereof is modified by the parties to try to comply with Section 409A of the Code, such modification shall
be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent of the applicable provision
without violating the provisions of Section 409A of the Code. Notwithstanding the foregoing, the Company shall not be required
to assume any economic burden in connection therewith.


 


(b)          If
the Executive is deemed on the date of “separation from service” to be a “specified employee” within the
meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is specified
as subject to this Section, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration
of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the
date of the Executive’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments
and benefits delayed pursuant to this Section 7.16 (whether they would have otherwise been payable in a single sum or in installments
in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits
due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. If a
payment is to be made promptly after a date, it shall be made within sixty (60) days thereafter.


 




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(c)          Any
expense reimbursement under this Agreement shall be made promptly upon Executive’s presentation to the Company of evidence
of the fees and expenses incurred by the Executive and in all events on or before the last day of the taxable year following the
taxable year in which such expense was incurred by the Executive, and no such reimbursement or the amount of expenses eligible
for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year,
except for (i) the limit on the amount of outplacement costs and expenses reimbursable pursuant to Section 5.1(e) and (ii) any
limit on the amount of expenses that may be reimbursed under an arrangement described in Section 105(b) of the Code. If necessary
to comply with Section 409A of the Code, the Executive will not be deemed to terminate employment unless such termination of employment
also qualifies as a “separation from service” under Treasury Regulation Section 1.409A-1(h). Each payment of severance
of other benefits that is subject to Section 409A of the Code is considered a separate payment under Treasury Regulation Section
1.409A-2(b).


 


7.17         Survival.
As provided in Section 1.3 with respect to expiration of the Term, Articles VI and VII and specified parts of Articles IV and V,
including parts relating to the Company’s obligations to provide payments or benefits to the Executive upon termination of
employment or expiration of the Term, shall survive the termination or expiration of this Agreement for any reason.


 


[Signature Page Follows]


 




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IN WITNESS WHEREOF,
the parties have executed this Agreement as of the Effective Date.


 


	INSPIREMD, INC.	 	EXECUTIVE
	 	 	 	 
	/s/ Alan Milinazzo	 	/s/ James J. Barry PhD
	Name:	Alan Milinazzo	 	James J. Barry PhD, an individual
	Title:	President and Chief Executive Officer	 	 


 


Guaranty by Subsidiary


 


Subsidiary (InspireMD, Ltd.) is not a party
to this Agreement, but joins in this Agreement for the sole purpose of guaranteeing the obligations of the Company to pay, provide,
or reimburse the Executive for all cash or other benefits provided for in this Agreement, including the provision of all benefits
in the form of, or related to, securities of Subsidiary and to elect or appoint the Executive to the positions with Subsidiary
and provide the Executive with the authority relating thereto as contemplated by Section 1.1 of this Agreement, and to ensure the
Board will take the actions required of it hereby.


INSPIREMD, LTD.


 


	/s/ Alan Milinazzo	 
	 	 	 
	Name: 	Alan Milinazzo	 
	 	 	 
	Title: 	President and Chief Executive Officer	 


 




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EXHIBIT A


 


Definitions


 


For purposes of this
Agreement, the following capitalized terms have the meanings set forth below:


 


“Base Amount”
shall mean an amount equal to the sum of:


 


(i)          the
Executive’s annual base salary at the highest annual rate in effect at any time during the Term; and


 


(ii)         the
greater of (i) the Executive’s target bonus under Section 2.3 in effect during the fiscal year in which termination of employment
occurs, or (ii) the average of the Incentive Compensation (as defined in Section 2.3) actually earned by the Executive (A) with
respect to the two consecutive annual Incentive Compensation periods ending immediately prior to the year in which termination
of the Executive’s employment with the Company occurs or, (B) if greater, with respect to the two consecutive annual Incentive
Compensation periods ending immediately prior to the Change in Control Date; provided, however, that if the Executive
was not eligible for Incentive Compensation for such two consecutive Incentive Compensation periods, the amount included pursuant
to this clause (ii) shall be the Incentive Compensation paid to the Executive for the most recent annual Incentive Compensation
period. In the event the Incentive Compensation paid to the Executive for any such prior Incentive Compensation period represented
a prorated full-year amount because the Executive was not employed by the Company for the entire Incentive Compensation period,
the Incentive Compensation paid to the Executive for such period for purposes of this clause (ii) shall be an amount equal to such
pro rated full-year amount.


 


“Board”
shall mean the Board of Directors of the Company. Any obligation of the Board other than termination for Cause under this Agreement
may be delegated to an appropriate committee of the Board, including its compensation committee, and references to the Board herein
shall be references to any such committee, as appropriate.


 


“Cause”
shall mean termination of the Executive’s employment because of the Executive’s: (i) commission of fraud, misappropriation
or embezzlement related to the business or property of the Company; (ii) conviction for, or guilty plea to, or plea of nolo contendere
to, a felony or crime of similar gravity in the jurisdiction in which such conviction or guilty plea occurs; (iii) a material breach
by the Executive of this Agreement, and the duties described therein, or any other agreement to which the Executive and the Company
or a member of the Company Group are parties, including, without limitation, wrongful disclosure of Confidential Information or
violation of Article VI of this Agreement; (iv) commission by the Executive of acts that are dishonest and demonstrably injurious
to a member of the Company Group, monetarily or otherwise; (v) any violation by the Executive of any fiduciary duties owed by him
to the Company or a member of the Company Group that causes injury to the Company, other than breaches of fiduciary duty also committed
by other officers and members of the Board of Directors based on actions taken after consultation with, and the advice of, legal
counsel; and (vii) willful or material violation of, or willful or material noncompliance with, any securities law, rule or regulation
or stock exchange listing rule adversely affecting the Company Group.


 




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“Change
in Control” means the first to occur of the following events:


 


(i)          A
change in ownership of the Company. On the date any “Person” (as defined in subparagraph (iv) below) acquires ownership
of stock of the Company that, together with stock held by such Person, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company; provided, however, that there shall be no Change in Control and
this subparagraph (i) shall not apply if such acquiring Person is a corporation and 2/3’s of the Board of Directors of the
acquiring Person immediately after the transaction consists of individuals who constituted a majority of the Board immediately
prior to the acquisition of such fifty percent (50%) or more total fair market value or total voting power; and provided, further,
that if any Person is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the
stock of the Company, the acquisition of additional stock by the same Person is not considered to be a Change in Control; or


 


(ii)         A
change in the effective control of the Company. On the date that either: (a) any Person acquires (or has acquired during the
twelve (12)-month period ending on the date of the most recent acquisition by such Person) ownership of stock of the Company possessing
thirty-five percent (35%) or more of the total voting power of the stock of the Company; or on the date a majority of members of
the Board is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority
of the Board before the date of the appointment or election; provided, however, that any such director shall not be considered
to be endorsed by the Board if his or her initial assumption of office occurs as a result of an actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board.


 


(iii)        A
change in the ownership of a substantial portion of the Company's assets. On the date any Person acquires (or has acquired
during the twelve (12)-month period ending on the date of the most recent acquisition by such Person) assets from the Company that
have a total gross fair market value equal to or more than eighty percent (80%) of the total gross fair market value of all of
the assets of the Company immediately before such acquisition or acquisitions. For this purpose, gross fair market value means
the value of the assets of the Company or the value of the assets being disposed of, determined without regard to any liabilities
associated with such assets. However, there is no Change in Control when there is such a sale or transfer to (i) a shareholder
of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s then outstanding
stock; (ii) an entity, at least fifty percent (50%) of the total value or voting power of the stock of which is owned, directly
or indirectly, by the Company; (iii) a Person that owns directly or indirectly, at least fifty percent (50%) of the total value
or voting power of the outstanding stock of the Company; or (iv) an entity, at least fifty percent (50%) of the total value or
voting power of the stock of which is owned, directly or indirectly, by a Person that owns, directly or indirectly, at least fifty
percent (50%) of the total value or voting power of the outstanding stock of the Company.


 




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(iv)        For
purposes of subparagraphs (i), (ii) and (iii) above, “Person” shall have the meaning given in Code Section 7701(a)(1).
Person shall include more than one Person acting as a group as defined by the final Treasury Regulations issued under Section 409A
of the Code.


 


“Change
in Control Date” shall mean the date on which a Change in Control occurs.


 


“Change
in Control Period” shall mean the 24 month period commencing on the Change in Control Date; provided, however,
if the Company terminates the Executive’s employment with the Company prior to the Change in Control Date, and it is reasonably
demonstrated that the Executive’s (i) employment was terminated at the request of an unaffiliated third party who has taken
steps reasonably calculated to effect a Change in Control or (ii) termination of employment otherwise arose in connection with
or in anticipation of the Change in Control, then the “Change in Control Period” shall mean the 24 month period
beginning on the date immediately prior to the date of the Executive’s termination of employment with the Company.


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


“Company
Group” shall mean the Company, together with its subsidiaries including the Subsidiary.


 


“Competing
Business” means any business or activity that (i) competes with any member of the Company Group for which the Executive
performed services or the Executive was involved in for purposes of making strategic or other material business decisions and (ii)
involves (A) the same or substantially similar types of products or services (individually or collectively) manufactured, marketed
or sold by any member of the Company Group during Term or (B) products or services so similar in nature to that of any member of
the Company Group during Term (or that any member of the Company Group will soon thereafter offer) that they would be reasonably
likely to displace substantial business opportunities or customers of the Company Group. Competing Business shall include, but
not be limited to, any entity or person engaged in the business of manufacturing and selling medical devices for the intravascular
or intra coronary treatment of vascular diseases, including stents and mesh technologies, and any other business the Company Group
is engaged in during Executive’s employment or that was seriously considered by the Company Group within the two years preceding
the termination of this Agreement.


 


“Confidential
Information” shall include Trade Secrets and confidential and proprietary information acquired by the Executive in
the course and scope of his activities under this Agreement, including information acquired from third parties, that (i) is not
generally known or disseminated outside the Company Group (such as non-public information), (ii) is designated or marked by any
member of the Company Group as “confidential” or reasonably should be considered confidential or proprietary, or (iii)
any member of the Company Group indicates through its policies, procedures, or other instructions should not be disclosed to anyone
outside the Company Group. Without limiting the foregoing definitions, some examples of Confidential Information under this Agreement
include (a) matters of a technical nature, such as scientific, trade or engineering secrets, “know-how”, formulae,
secret processes, inventions, and research and development plans or projects regarding existing and prospective customers and products
or services, (b) information about costs, profits, markets, sales, customer lists, customer needs, customer preferences and customer
purchasing histories, supplier lists, internal financial data, personnel evaluations, non-public information about medical devices
or products of any member of the Company Group (including future plans about them), information and material provided by third
parties in confidence and/or with nondisclosure restrictions, computer access passwords, and internal market studies or surveys
and (c) and any other information or matters of a similar nature.


 




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“Disability”
as used in this Agreement shall have the meaning given that term by any disability insurance the Company carries at the time of
termination that would apply to the Executive. Otherwise, the term “Disability” shall mean the inability of
the Executive to perform his duties and responsibilities under this Agreement as a result of a physical or mental illness, disease
or personal injury he has incurred. Any dispute as to whether or not the Executive has a “Disability” for purposes
of this Agreement shall be resolved by a physician reasonably satisfactory to the Chief Executive Officer and the Executive (or
his legal representative, if applicable). If the Chief Executive Officer and the Executive (or his legal representative, if applicable)
are unable to agree on a physician, then each shall select one physician and those two physicians shall pick a third physician
and the determination of such third physician shall be binding on the parties.


 


“Good
Reason” shall mean the occurrence of any of the following without the written consent of the Executive: (i) any
duties, functions or responsibilities are assigned to the Executive that are materially inconsistent with the Executive’s
duties, functions or responsibilities with the Company or the Subsidiary as contemplated or permitted by Section 1.1; (ii) material
diminution in Executive’s duties; (iii) the base salary of the
Executive is materially reduced, unless a reduction in accordance with Section 2.2; (iv) there is a material adverse change or
termination of the Executive’s right to participate, on a basis substantially consistent with practices applicable to senior
executives of the Company generally, in any bonus, incentive, profit-sharing, stock option, stock purchase, stock appreciation,
restricted stock, discretionary pay or similar policy, plan, program or arrangement of the Company, or any material adverse failure
to provide the compensation and benefits contemplated by Sections 2.3, 2.4 and Article III, except where necessary to avoid the
imposition of any additional tax under Section 409A of the Code; (v) there is a material termination or denial of the Executive’s
right, on a basis substantially consistent with practices applicable generally to senior executives of the Company, to participate
in and receive service credit for benefits as provided under, all life, accident, medical payment, health and disability insurance,
retirement, pension, salary continuation, expense reimbursement and other employee and perquisite policies, plans, programs and
arrangements that generally are made available to senior executives of the Company, except for any arrangements that the Board
adopts for select senior executives to compensate them for special or extenuating circumstances or as needed to comply with applicable
law or as necessary to avoid the imposition of any additional tax under Section 409A;
(vi) any material breach by the Company of its representations
under Section 7.7(b), or the guaranty by Subsidiary on the signature page of the Agreement; or (vii) relocation of the Executive’s
principal place of employment to a place that increases his one-way commute by more than fifty (50) miles as compared to the Executive’s
then-current principal place of employment immediately prior to such relocation.


 




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“Indemnity
Agreement” means that certain Indemnity Agreement dated January 30, 2012 by and between the Company and the Executive,
the terms of which shall not be superseded by this Agreement.


 


“Person”
shall include individuals or entities such as corporations, partnerships, companies, firms, business organizations or enterprises,
and governmental or quasi-governmental bodies.


 


“Prohibited
Area” means North America, South America and the European Union, which Prohibited Area the parties have agreed to
as a result of the fact that those are the geographic areas in which the members of the Company Group conduct a preponderance of
their business and in which the Executive provides substantive services to the benefit of the Company Group.


 


“Section
409A” shall mean Section 409A of the Code and regulations promulgated thereunder (and any similar or successor federal
or state statute or regulations).


 


“Trade
Secrets” are information of special value, not generally known to the public that any member of the Company Group
has taken steps to maintain as secret from Persons other than those selected by any member of the Company Group.


 




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