Exhibit 10.3


 


Compensation Policy


 


Polyrizon Ltd.


 


(the “Company”)


 


Compensation Policy for Executive Officers and
Directors


 


Adopted ________________


 






     


     


    

 


		1.	Background



 


Amendment No. 20 to the Israeli Companies
Law (the “Companies Law”) became effective on December 12, 2012. This amendment mandates the adoption of a compensation policy
for Executive Officers and Directors in publicly traded companies, and defines a special procedure for authorizing employment terms for
office holders.


 


The purpose of the Compensation Policy
is to describe Polyrizon’s overall compensation strategy for Executive Officers and Directors and to provide guidelines for setting
compensation of its Executive Officers and Directors.


 


The Compensation Policy is a multi-year
policy which initially shall be in effect for a period of five years from the date that the Company becomes a public company, and thereafter
will need to be approved by the Company’s shareholders every three years.


 


The Compensation Committee and the
Board of Directors shall review the Compensation Policy from time to time, as required by the Companies Law. The Compensation Policy shall
be brought for reconsideration as required by the Companies Law.


 


For purposes of this Policy, “Officers”
shall mean “office holders” as such term is defined in the Companies Law, and “senior office holders” as such
term is defined in the Israeli Securities Law- 1968 (the “Israeli Securities Law”), excluding, unless otherwise expressly
indicated herein, Polyrizon directors that are not otherwise considered to be office holders under the Companies Law or the Israeli Securities
Law.


 


This Policy is not intended to affect
current agreements nor affect obligating customs (if applicable) between the Company and its Executive Officers or Directors as such may
exist prior to the approval of this Compensation Policy.


 


Nothing in this Compensation Policy shall
obligate the Company to grant any particular type or amount of compensation to any Officer, unless expressly stated otherwise, nor shall
it derogate from approval procedures mandated by the Companies Law.


 


Any amendment to this Compensation Policy shall require the
approvals as set forth in the Companies Law.


 


The Compensation Policy shall not apply
to any compensation approved prior to the date that the Company becomes a public company and paid or received at the Company’s initial
public offering or thereafter.


 


		2.	Compensation Objectives



 


Strong and effective leadership is
fundamental to Polyrizon’s continued growth and success. This requires the ability to attract, retain, reward and motivate highly
skilled officers in international, competitive labor markets.


 


The Compensation
Policy is intended to align between the need to incentivize officers to succeed in achieving the Company’s Objectives and their
assigned goals and the need to assure that the compensation structure meets Polyrizon’s interests and its overall strategic and
financial objectives.


 






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In support of this goal, the compensation elements granted
to Polyrizon’s Officers are designed to meet the following objectives:


 


		●	Improve business results and strategy implementation, and support
the Company’s work-plans, from a long-term perspective.



 


		●	Create a clear correlation between Officers’ compensation, overall Company performance and the individual performance.



 


		●	Align Officers’ interests with those of the Company and its stakeholders (customers, employees,
partners, environment, shareholders etc.) and incentivize Officers to create long- term economic value for the Company.



 


		●	Consider the ratio between the Officer’s employment terms and the salary of other Company employees
and contractors, and in particular the ratio between the average salary and the median salary of such employees and the effect of differences
between such on work relations in the Company (for purposes of this section “contractors” and “salary”- as defined
in the Companies Law).



 


		●	Create fair and reasonable incentives, considering the Company’s size, characteristics and type of activity.



 


		●	Create appropriate incentives taking into account; inter alia, the Company’s risk management policy.



 


		●	Create the right balance (a) between fixed and variable compensation components; and (b) between short-term
and long-term results, so as to ensure sustained business performance over time.



 


		3.	Compensation Policy



 


		3.1.	Officers’ Compensation Package Components



 


Officers’ compensation packages will generally (but
not limited to) be comprised of the following elements:


 


		3.1.1.	Fixed Compensation



 


		a.	Base Salary – a fixed monetary compensation paid
on monthly basis or other periodical basis as customary in the place of employment.



 


		b.	Benefits and Perquisites – programs designed to supplement cash compensation, based on market practice for comparable
positions.



 


		3.1.2.	Variable Compensation



 


		a.	Cash Bonus (Short Term Incentive) – variable monetary bonus paid annually, designed to reward Officers based on the Company’s
and/or individually defined results.



 


		b.	Equity based Compensation (Long Term Incentive) – variable equity-based compensation designed to retain Officers, align
Officers’ and shareholders’ interests and incentivize achievement of long term goals.



 


		c.	Termination Payments - retirement and termination of service arrangements.



 


The combination of the elements that
will be provided to each Officer will be structured in order to support the Company’s philosophy of compensating Officers for Company
and individual performance and aligning their interests with stakeholders’ interests, while recognizing that the mix may vary from
period to period and from Officer to Officer.


 






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		3.2.	Ratio between Fixed Compensation and Variable Compensation



 


		3.2.1.	This Policy aims to balance
the combination of “Fixed Compensation” (comprised of base salary and benefits)
and “Variable Compensation” (comprised of cash bonuses, equity-based compensation and termination payments) in order to, among
other things, appropriately incentivize Officers to meet Polyrizon’s short
and long-term goals while taking into consideration the Company’s need to manage a variety of business risks.



 


		3.2.2.	The total annual target bonus and equity-based compensation per vesting
annum (based on the fair market value at the time of grant calculated on a linear basis) of each Officer shall not exceed 95% of such
Executive Officer’s total compensation package for such year.



 


		3.3.	Intra-Company Compensation Ratio



 


In the process of composing this policy,
the Committee and the Board examined, among other things, the ratio between overall compensation of Officers and the average and median
compensation of other employees in Israel, as well as the possible ramifications of such ratio on the work environment in Polyrizon, in
order to ensure that levels of Officer compensation will not have a negative impact on the positive work relations in Polyrizon.


 


The possible ramifications of the ratio
in the work environment will continue to be examined from time to time in order to ensure that levels of Officer’s compensation,
as compared to that for the other employees, will not have a negative impact on work relations in Polyrizon.


 


		3.4.	Base Salary



 


Base salary is a fixed compensation
element which provides compensation to an Officer for performance of his or her standard duties and responsibilities and reflects the
Officer’s role, skills, qualifications, experience and market value (the “Base Salary”).


 


The Base Salary for newly hired Officers
will be set taking the following considerations into account:


 


		●	Role and business responsibilities.



 


		●	Professional experience, education, expertise and qualifications.



 


		●	Previous compensation paid to the Officer.



 


		●	Internal comparison: (a) Base Salary and the total compensation
package of comparable Polyrizon Officers; (b) The ratio between the Officer’s compensation package and the salaries of the Company’s
other employees and specifically the median and average salaries and the effect of such ratio on work relations in the Company.



 


		●	The
base salaries paid to Officers in a peer group of other companies operating in technology sectors that are as much as possible similar
in their characteristics to Polyrizon,
while considering, among other things, such companies’ size and characteristics including their revenues, profitability rate, growth
rates, market capitalization, number of employees and area of operations (in Israel or globally).



 


When deciding on increasing an Officer’s
Base Salary, the following considerations, in addition to the abovementioned, shall be applied: Changes to the Officer’s scope of
responsibilities and business challenges, the need to retain the Officer, inflation since the last Base Salary update and updated market
rate.


 


Adjustments to Base Salary may be
periodically reviewed, considered and approved in accordance with the law.


 


In the event that the services of the
Officer are provided via a personal management company and not by the Officer directly as an employee of Polyrizon, the fees paid to such
personal management company (or unincorporated legal person) shall reflect, to the extent determined by Polyrizon in the applicable service
agreement, the Base Salary and the benefits and perquisites (plus possible tax gross up for certain components as approved by the Compensation
Committee from time to time), all in accordance with the guidelines of the Compensation Policy.


 






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		3.5.	Benefits and perquisites



 


The following benefits and perquisites
may be granted to the Officers in order, among other things, to comply with legal requirements:


 


		●	Pension and savings – subject to applicable law and common
practices, Officers can choose between any combinations of executive insurance and a pension fund.



 


		●	Disability insurance – the Company may purchase disability insurance, as allowed by applicable law and/or is common in the applicable
employment place.



 


		●	Provident (Educational) fund – Officers are entitled to a providence fund provision at the expense of the Company at a rate
of 7.5% of the monthly salary (or the maximum amount recognized as tax benefit under applicable law (as the Company may determine).



 


		●	Convalescence pay - Officers are entitled to convalescence pay according to applicable law and/or common practices.



 


		●	Vacation – in accordance with applicable law and market practice.



 


		●	Sick Days – Officers will be entitled to paid sick days (officers’ or their immediate family
members) in accordance with applicable law. However, the Company may cover sick days from the first day up to the officers’ overall
annual sick day balance regardless of whether the sick day is for themselves or their immediate family members.



 


		●	Relocation package - in the event of relocation of an Officer to another geographical territory, the benefits
provided will include customary benefits associated with such relocation (such as reimbursement of travel for officers and their family,
housing and shipping allowances, healthcare and children’s education) all as shall be determined in accordance with Polyrizon’s
policies and procedures or per customary market practice in companies with similar business activities and revenues.



 


Polyrizon may offer additional benefits
and perquisites to the Officers, which will be comparable to customary market practices, such as, but not limited to: company car benefits
(including coverage or related tax gross -ups); company cellular phone (including coverage or related tax gross - ups); complementary
health insurance; medical check-ups; meals; etc.; provided however, that such additional benefits and perquisites shall be determined
in accordance with Polyrizon’s policies and procedures and reviewed by the Compensation Committee from time to time.


 


Non-Israeli Officers may receive similar,
comparable or customary benefits and perquisites as applicable in the jurisdiction in which they are employed.


 


The compensation derived from the benefits
and perquisites set forth in this Section 3.5 shall not be deemed part of the Maximum Monthly Base Salary and shall be added thereto.


 


		3.6.	Cash Bonus



 


Polyrizon’s short term incentive
scheme will be based on a variable monetary bonus paid annually, designed to reward Officers based on the Company and/or their individually
defined results (the “Bonus”).


 


During the first calendar quarter of
each calendar year, the Compensation Committee and the Board will determine the following for each Officer as well as the formula for
calculating the bonus payment at the end of the year:


 


Maximum Bonus
(cap): The maximum bonus is the maximum amount an Officer will be entitled to receive upon over achievement. The maximum bonus
of each Officer shall not exceed the amount of 4 monthly Base Salaries, or with respect to the Chief Executive Officer, 6 monthly Base
Salaries.


 


Objectives: The Company
Objectives and Individual Objectives will be determined based on pre-defined measurable and quantified considerations.


 






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The Bonus may include (but is not
limited to) any one or more of the following criteria:


 


		●	Financial objectives such as: Revenue, EBITDA, Cash balance, Net profit or outperforming budget objectives



 


		●	Business development objectives such as: new corporate partnerships, project and product acquisitions, licensing agreements, achievement
of milestones with partners / licensees, receipt of funds from partners / licensees.



 


		●	Funding objectives such as: private fund raising, public fund raising, receipt of research / development grants, achieving of certain
target valuations.



 


		●	Regulatory objectives such as: receipt of clinical study approvals, receipt of product marketing approvals, approval of reimbursement
schemes, successful patient recruitment to studies etc.



 


		●	Marketing objectives such as: set up of a sales force, achieving certain sales targets.



 


		●	Intellectual property objectives such as: submission / grant of new patents.



 


		●	R&D objectives such as: attainment of certain prototypes, scientific breakthroughs, succeeding in technology evaluations with
partners etc.



 


		●	Operational objectives such as: attainment of operational excellence criteria in purchasing, manufacturing, quality, yields, on-time
delivery, ramp-ups and ramp- downs etc.



 


Both Company Objectives and Individual
Objectives may combine quantitative and qualitative goals, provided that, there is a clear and measurable index for each goal.


 


The Board may set targets for a period
of more than one year, in which case either: (a) the Officer will be entitled to the bonus (per each year included in such multi-year
period) only upon achieving such targets at the end of such period; or (b) the Officer shall be entitled to a relative portion/milestone
of such bonus, according to the estimated progress to date, in each case, as determined in advance.


 


Discretionary
Component: The Bonus may include a discretionary component of up to 20% of the Officer’s annual cash target Bonus and with
respect to the CEO up to 30% of the CEO’s annual cash target Bonus but not more than 3 monthly salaries, based on the evaluation
of such Officer’s supervisors, or the Board of Directors in the case of the CEO.


 


Thresholds:
Subject to the last paragraph below, the Compensation Committee and the Board may, with respect to any period or Officer, determine
one or more thresholds for the payment of the annual cash bonus or any components thereof, in such manner that if the threshold is not
achieved, the annual cash bonus or the particular component thereof, with respect to which the threshold was not achieved, will not be
paid.


 


The Company may
determine that with respect to any specific year, all or any particular Officer or Officers shall not be entitled to a Bonus. The Board
may determine to pay the Bonus by equity.


 


Compensation Recovery: The
Company shall insert a claw back provision, allowing the recovery of money paid based on incorrect financial statements, which was later
corrected in the Company’s financial reports (restatement). A claw back limit will be applied such that the said claw-back provisions
shall apply only in respect to restatements, up to three years from the applicable Bonus payment, and will not exceed the net amount received
by the Officers. Notwithstanding the aforesaid, the compensation recovery will not be triggered in the event of a financial restatement
required due to changes in the applicable financial reporting standards. The Officer shall repay to the Company the balance between the
original Bonus and the Bonus due according to the restated financial statements, pursuant to terms that shall be determined by the Board
of Directors.


 


Nothing in this section ‎shall
derogate from any other claw back or similar provisions regarding disgorging of profits imposed on Officers by virtue of applicable securities
laws or a separate contractual obligation.


 






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Reduction of Bonus:
The Board of Directors according to its professional experience and the circumstances may reduce the Bonus, at its sole discretion prior
to the Bonus payment.


 


Special Bonus:
In addition to the Bonus, the Compensation Committee and the Board of Directors may elect upon the recommendation of the Chief Executive
Officer (or the Chairperson in the case of a bonus payable to the Chief Executive Officer) to pay certain Officers a special bonus in
recognition for their special contribution to key transactions and events in the company’s lifecycle, such as (but not limited to)
M&A, public financing, achievement of major corporate goal in R&D, sales, strategic alliances, operations etc.


 


Such special bonus shall not exceed
the amount of three (3) monthly salaries of each applicable Officer.


 


Annual Bonus for Vice Presidents
(VPs)


 


Notwithstanding the aforesaid in this
Section 3.6, if the Company has so determined in the framework of an annual bonus plan, the Company may grant its VPs an annual bonus
that is not based, in whole or in part, upon measurable criteria. Such annual bonus (or part thereof) shall be determined according to
this Section 3.6, except that the performance level of each such VP may not be determined pursuant to qualitative measurements but rather
on non-measurable evaluation of such VPs performance.


 


		3.7.	A lump sum sign up bonus



 


All Officers, excluding Non-Employee
Directors, may be incentivized through lump sum sign up cash bonuses, designed to attract skilled and experienced executives in a competitive
industry environment. The lump sum sign-up bonus shall not exceed NIS 100,000 for Israeli based officers and US$50,000 for non-Israel
based officers and shall not be calculated as part of the Base salary and/or Cash Bonus compensation.


 


		3.8.	Equity based compensation



 


Polyrizon’s long term incentive
is variable equity-based compensation, designed to retain Officers, align Officers and shareholders’ interests and incentivize achievement
of long-term goals.


 


The Company
shall be entitled to grant to Officers (including Employee and Non-Employee Directors) Stock Options, Restricted Stocks, Restricted Stock
Units or any other equity-based compensation.


 


General guidelines
for the grant of Stock Options (“Options”):


 


		●	The Options shall be granted from time to time and be individually
determined and awarded according to the performance, skills, qualifications, experience, role and the personal responsibilities of the
Officer.



 


		●	Vesting schedule - the Options will vest and become fully exercisable over a period of at least
2 years. Vesting schedule may be monthly, quarterly, annually, bi-annually, or any other schedule as will appear in the specific grant
documentation signed by the Company and the optionee.



 


		●	Exercise price – the exercise price shall be the closing price of the shares on the day before
the grant date or the average closing price of the shares in the 30 trading days prior to the grant date, as will be determined by the
Compensation Committee and the Board of Directors.



 


		●	Expiry date – this period shall not exceed 10 years from the date of the issuance.



 


		●	Cap on the annual value of the Options - the fair market value (according to acceptable valuation
practices at the time of grant) of options so granted, as at grant date, shall not exceed the amount of 350% of the total annual fixed
compensation as specified in section 3.1.1., for each Officer per year of vesting, on a linear basis. For the purpose of this section,
“grant date” shall mean the date in which the Company’s Board approved the grant.



 


		●	Acceleration and other terms – The Company shall have the discretion to provide, generally
or for specific Officers, for the accelerated vesting of equity-based awards. The Company shall provide acceleration terms upon a change
of control of the Company or upon termination of service or employment of the Officer, and may extend the exercise period of equity-based
awards beyond those generally applicable pursuant to the relevant plan, provided such extension does not extend beyond ten years from
the date of grant.



 


Any other terms of the equity-based
compensation will be determined by the Compensation Committee and the Board of Directors, in accordance with the Company’s equity
compensation policies and programs in place from time to time, subject to any applicable law.


 






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		3.9.	Retirement and termination of service arrangements



 


Advance notice


 


Pursuant to the Officer’s employment agreement, he
or she shall be entitled to an advance notice prior to termination for a period of up to six (6) months (the “Notice Period”).


 


During the Notice Period, the Officer is required to keep
performing his or her duties pursuant to his or her agreement with the Company, unless the compensation committee has released the Officer
from such obligation.


 


During the Notice Period, Officers will be entitled to
full payment of compensation. 


 


Adjustment period 


 


Officers may receive an additional transition
period during which the Officer will be entitled to up to an additional eight (8) months of continued Base Salary, benefits and perquisites
beyond the Advance Notice period described above.


 


When determining such payments, the Compensation
Committee and the Board will generally consider, inter alia, the term of service or employment, Company performance during such
term, the contribution of the Officer to the achievement of the Company’s goals, the circumstances of termination and the Officer’s
compensation during the term of service or employment.


 


Officers may receive an adjustment period
only if they work in the Company for at least two (2) years.


 


Adjustment period may be materialized
by continued employee-employer relations or by a payment of lump sum equal to the economic value of base salary, benefits and perquisites
for the number of adjustment months approved for the specific officer.


 


		3.10.	Non-Employee Directors’ Compensation



 


		(a)	The following table indicates the directors maximum annual cash
compensation:



 


	Position	 	Board	 	Audit Committee	 	Compensation, Nominating and Corporate Governance Committee
	Chairperson	 	US$ 200,000	 	US$ N/A	 	US$ N/A
	Director/Member	 	US$ 40,000	 	US$ N/A	 	US$ N/A


 


		(b)	Each non-employee director
of Polyrizon’s Board may be granted equity-based compensation. The total fair market value of a “welcome” or an annual
equity-based compensation at the time of grant shall not exceed the higher of (i) $____60,000 or (ii) _0.3_% of the Company’s fair
market value at the time of approval of the grant by the Board; and in the case of the chairperson of the Board - the higher of (i) _200%
of his or her annual base salary or (ii) _1.2_% of the Company’s
fair market value at the time of approval of the grant by the Board.



 


		(c)	All other terms of the equity awards shall be in accordance with Polyrizon’s incentive plans and other related practices and
policies. Accordingly, the Board may, following approval by the Compensation Committee, make modifications to such awards consistent with
the terms of such incentive plans, subject to any additional approval as may be required by the Companies Law.



 


		(d)	In addition, directors of Polyrizon’s Board may be entitled to reimbursement of expenses in connection with the performance
of their duties.



 


		(e)	The compensation (and limitations) stated under Section 3.1 will not
apply to directors who serve as Executive Officers.



 






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		3.11.	Insurance, Indemnification and Release



 


The Company will release all current
and future directors and executive Officers from liability and provide them with indemnification to  the fullest extent permitted
by law and its Articles of Association.


 


In addition, until otherwise determined,
the Company will purchase and periodically renew, at the Company’s expense, insurance coverage in respect of the liability of its
current and future directors and executive Officers to the maximum extent permitted by law and its Articles  of Association.


 


Office holders shall be covered by
directors’ and Officers’ liability insurance which the Company shall acquire, from time to time, subject to the approval of
the Company’s board of directors and shareholders, to the extent required by law.


 


The Company awards, and shall continue
to award, indemnification undertakings to directors and Officers, subject to the approvals required in accordance with the provisions
of the Companies Law.


 


The Chief Executive Officer, as shall
be in office from time to time, and/or any other person designated by him or her, shall have the authority to obtain, renew and keep in
force and affect such insurance within the above parameters


 


Miscellaneous


 


		3.12.	Nothing
in this Policy shall be deemed to grant to any of Polyrizon’s Officers,
employees, directors, or any third party any right or privilege in connection with their employment by or service to the Company, nor
deemed to require Polyrizon to provide any compensation
or benefits to any person. Such rights and privileges shall be governed by applicable personal employment agreements or other separate
compensation arrangements entered into between Polyrizon and
the recipient of such compensation or benefits. The Board may determine that none or only part of the payments, benefits and perquisites
detailed in this Policy shall be granted, and is authorized to cancel or suspend a compensation package or any part of it.



 


		3.13.	An immaterial change in the terms of employment of an Officer other
than the CEO may be approved by the CEO, provided that the amended terms of employment are in accordance with this Policy. An “Immaterial
Change in the Terms of Employment” means a change in the terms of employment of an Officer with an annual total cost to the Company
not exceeding an amount equal to two (2) monthly Base Salaries of such employee. 



 


		3.14.	In the event that new regulations or law amendment in connection with
Officers’ and directors’ compensation will be enacted following the adoption of this Policy, Polyrizon may follow such new
regulations or law amendments, even if such new regulations are in contradiction to the compensation terms set forth herein.



 


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This
Policy is designed solely for the benefit of Polyrizon and none of the
provisions thereof are intended to provide any rights or remedies to any person other than Polyrizon.


 


 


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