Exhibit 10.1


 


PainReform
Ltd.


 


2019 Option Plan


 


1. Name.
This plan, as adopted by the Board of Directors of PainReform Ltd., (the “Company”) on July 2, 2019, and as amended
from time to time, shall be known as the “PainReform Ltd. 2019 Option Plan” (the “Plan”).


 


2. Purpose
of the Plan. The purposes of this Plan are to attract and retain the best available individuals for positions of substantial
responsibility, and to promote the success of the Company’s and Affiliate’s business by aligning the financial interests
of individuals providing services to the Company and Affiliates with long-term shareholder value.


 


3. Headings
and Definitions


 


3.1. The
section headings are intended solely for the reader’s convenience and in no event shall they constitute a basis for the interpretation
of the Plan.


 


3.2. In
this Plan, the following terms shall have the meanings set forth beside them:


 


	“Affiliate”	
        Corporate entities who are related to the
        Company by way of common ownership or control, either partially or entirely, including but not limited to any “employing company”
        as defined in Section 102(a) of the Ordinance;

         

	“Applicable Law”	
        The legal requirements applicable to the
        administration of option and share award plans, any Stock Exchange rules or regulations and the applicable laws, rules and regulations
        of any country or jurisdiction where Options are granted under the Plan, as such laws, rules, regulations and requirements shall
        be in place from time to time;

         

	“Approved Option”	
        An Option granted under Section 102, in
        accordance with the “capital gain route”, and other rights granted with respect to such Option;

         

	“Board”	
        The Company’s Board of Directors,
        or, subject to applicable law and the Company’s Articles of Association, any committee empowered by the Board for the purpose of
        implementation of this Plan (or any aspect thereof);

         

	“Cause”	
        Any of the following-

         

        (a) A material breach of the employment
or engagement agreement between the Company or an Affiliate and a Participant, including but not limited to, a breach of any confidentiality
duty of a Participant (including in regards to the confidentiality of this Plan and any grant made there-under), inappropriate
use of confidential information of the Company or an Affiliate or an event of breach of trust or breach of any non-competition
obligation of a Participant;

        




 






    


     


    

 


	 	(b)
                           Any act which constitutes a breach of a Participant’s fiduciary duty towards the Company or an
                           Affiliate, including without limitation disclosure of confidential information of the Company or an
                           Affiliate and acceptance or solicitation to receive unauthorized or undisclosed benefits, irrespective
                           of their nature, or funds or promises to receive either, from individuals, Consultants or corporate
                           entities that the Company or an Affiliate does business with;


 


(c)
Any act of fraud by a Participant or embezzlement of funds of the Company or an Affiliate;


 

(d)
Any conduct or omission by, or state of affairs related to, the Participant reasonably determined by the Board to be materially
detrimental to, or against the interests of, the Company or an Affiliate;


 


(e)
Any conviction of any felony involving moral turpitude or affecting the Company or an Affiliate;


 


(f)
Circumstances justifying the revocation and/or reduction of a Participant’s entitlement to severance pay pursuant to Sections
16 or 17 of the Severance Pay Law, 1963; or


(g)
Any other reason which is be defined as Cause in the Participant’s personal employment contract.


	 	 
	“Company”	PainReform
        Ltd., company number 51-405659-7, a company incorporated under the laws of Israel or any Successor Company;

         

	“Consultant”	Shall
        mean any person, except an Employee, engaged by the Company or an Affiliate, in order to render services to such company,
        including as an advisor or officer;  

         

	“Controlling
    Shareholder”	A
        controlling shareholder of the Company as defined in section 32(9) of the Ordinance;

         

	“Employee”	Shall
        mean any person, who is a common law employee of the Company or an Affiliate, and who is on the payroll of such the Company
        or an Affiliate, or , in respect of Approved Options, any officer of such company all in accordance with Section 102;

         

	“Exercise
    Price”	Shall
        mean the consideration required to be paid by a Participant in order to exercise one Option;

         

	“Expiration
    Date”	With
respect to an Option, the earlier of (i) the time such Option is fully exercised, or (ii) ten (10) years from the Grant Date of
such Option, or (ii) the time on which such Option expires in accordance with Sections 9 and 12 below;




 






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	“Fair
        Market Value” 

         
	Shall
        mean, as of any date, the value of an ordinary share of the Company determined as follows:

         

        (i)
        If the ordinary shares are listed on any established Stock Exchange, the Fair Market Value shall be the closing sales price
        for such ordinary shares (or the closing bid, if no sales were reported), as quoted on such Stock Exchange for the last
        market trading day prior to the time of determination;

         

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

         

        (iii)
        In the absence of any of the above, the Fair Market Value thereof shall be determined in good faith by the Board of Directors
        of the Company.

         

        For
        the avoidance of doubt, the above definition of Fair Market Value shall not apply for the purpose of determining the tax
        liability pursuant to Section 102(b)(3) of the Ordinance;

         

	“Grant
    Date”	The
        date on which an Option is granted to a Participant, as set forth in the resolution of the Board granting such Option;

         

	“Holding
    Period”	the
        holding period provided under Section 102 in respect of the “capital gain route” or under a tax ruling by the
        Israeli Tax Authority;

         

	“Ordinance”	The
        Israeli Income Tax Ordinance [New Version], 1961, as amended from time to time;

         

	“Option”	An
        option to purchase one Share, granted to a Participant, subject to the provisions of this Plan and the applicable Option
        Agreement;

         

	“Option
    Agreement”	A
        written agreement between the Company and a Participant setting forth the terms under which Options are granted to a Participant;

         

	“Participant”	Shall
        mean an Employee of or Consultant of the Company or an Affiliate to which an Option was granted;  

         

	“Plan”	Shall
        mean this PainReform Ltd. 2019 Option Plan, including any amendments thereto;  

         

	“Section
    102”	Section
        102 of the Ordinance and the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003, as amended
        from time to time;

         

	“Share”	An
ordinary share of the Company, nominal value NIS 0.01, which is issued or issuable to a Participant upon exercise of an Option; 




 






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	“Stock
        Exchange”

         
	Any
        stock exchange, on which ordinary shares of the Company are listed, or such other market or a national market system,
        on which the Company’s ordinary shares’ prices are regularly quoted;

         

	“Structural
    Change”	Any
        Deemed Liquidation Event, as defined in and determined pursuant to the Company’s Articles of Association in effect from
        time to time.

         

	“Successor
    Company”	Shall
        mean any entity with or into which the Company merged, or to which certain operations or certain assets of the Company
        were transferred, or which purchased substantially all the Company’s assets or ordinary shares, provided that the
        Company is not the surviving entity;

         

	“Tax”	Any
        applicable tax and other compulsory payments such as social security and health tax contributions under any applicable
        law;

         

	“Termination”

         
	For
        an Employee, the termination of employment as an Employee, and for a Consultant, the interruption, expiration, or termination
        of such person’s consulting or advisory relationship with the Company or an Affiliate, or the occurrence of any
        termination event as set forth in such person’s Option Agreement; 

         

        For
        the purpose of this plan, any temporary interruption in such person’s availability to provide services to the Company
        or an Affiliate, which has been authorized in writing by the Board prior to its commencement, shall not be considered
        as Termination;

         

	“Termination
    Date”	With
        regard to any Employ, the first date following the Date of Grant on which there are no longer employment relations between
        such Employee and the Company or an Affiliate, for any reason whatsoever; however for the purpose of Termination for Cause,
        the Termination Date is the date on which a notice regarding such termination was sent by the Company or an Affiliate
        to the Employee;

         

        With
        regard to any Consultant, the earlier of (i) the date of termination of the agreement between the Consultant and the Company
        or an Affiliate; or (ii) the date on which a notice regarding such termination of agreement was sent by the Company or
        an Affiliate, or by the Consultant, to the other party;

         

	“Transfer”	With
respect of any Option or Share – the sale, assignment, transfer, pledge, mortgage or other disposition thereof or the grant
of any right to a third party thereto;




 






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	“Trustee”	Any
        trustee appointed by the Company in accordance with Section 102 and approved by the Israeli Tax Authority;

         

	“Non-Approved
        102 Option”

         
	An
    Option which does not qualify as an Approved Option;
	“Vesting
    Date”	The
date upon which the Option becomes exercisable, as determined in accordance with this Plan and set forth in the Option Agreement.



 


4. Administration
of the Plan


 


4.1. The
Board shall have the power to administer the Plan.


 


4.2. Subject
to the provisions of the Plan, the Board shall have the authority, at its discretion: (i) to grant Options to Participants; (ii)
to determine the terms and provisions of each Option granted (which need not be identical), including, but not limited to, the
number of Options to be granted to each Participant, provisions concerning the time and the extent to which the Options may be
exercised, the underlying Shares sold and the nature and duration of restrictions as to the Transferability of Options and/or Shares;
(iii) to amend, modify or supplement (with the consent of the applicable Participant, if such amendments adversely affect the terms
of his Options) the terms of each outstanding Option; (iv) to interpret the Plan; (v) to prescribe, amend, and rescind rules and
regulations relating to the Plan, including the form of Option Agreements; (vi) to authorize conversion or substitution under the
Plan of any or all Options or Shares and to cancel or suspend Options, as necessary, provided the interests of the Participants
are not harmed; (vii) to accelerate or defer (with the consent of the Participant) the right of a Participant to exercise in whole
or in part, any previously granted Options; (viii) to authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Board; and (ix) to make all other determinations deemed necessary
or advisable for the administration of the Plan.


 


4.3. This
Plan shall apply to grants of Options made following the adoption of this Plan by the Board.


 


4.4. All
decisions, determinations, and interpretations of the Board shall be final and binding on all Participants unless otherwise determined
by the Board.


 


5. Eligibility.
Options may be granted to Participants and to persons who have signed an employment or consultancy agreement with the Company or
an Affiliate; An Approved Option may only be granted to Israeli Employees of the Company or an Affiliate as stated in Section 102,
who at the time of grant, or as a consequence of the grant are not a Controlling Shareholder of the Company.


 


6. Shares
Reserved for the Plan 


 


6.1. Subject
to Section 12.1 of the Plan, the maximum aggregate number of Shares that may be subject to awards under the Plan and any other
share and option plans which may be adopted by the Company in the future, unless otherwise approved by the Board, and subject to
any adjustment made to the share capital of the Company by way of share split, reverse share split, distribution of share dividend
or similar recapitalization events, at any time hereafter, is 658,369 ordinary shares of the Company, nominal value NIS
0.01 each. The Shares may be authorized but unissued ordinary shares, or reacquired ordinary shares of the Company. If an Option
should expire or become un-exercisable for any reason without having been exercised in full Shares that were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares which are
retained by the Company upon exercise of an Option in order to satisfy the Exercise Price for such Option or any withholding taxes
due with respect to such Exercise shall be treated as not issued and shall continue to be available under the Plan. Shares issued
under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have, shall be available
for future grant under the Plan.


 






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6.2. The
Company during the term of this Plan will at all times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan.


 


6.3. The
Shares constitute part of the ordinary shares of the Company, and they shall have equal rights for all intents and purposes as
the rights attached to the ordinary shares of the Company, subject to the provisions of this Plan and an Option Agreement. Any
change of the Company’s Articles of Association, which may change the rights attached to the Company’s ordinary shares,
shall also apply to the Shares, and the provisions hereof shall apply with the necessary modifications arising from any such change.


 


6.4. The
grant of Options under this Plan shall not restrict the Company in any way regarding future creation of additional and/or other
classes of shares, including classes of shares, which may in any manner be preferred over the currently existing ordinary shares
which are offered to Participants under this Plan. The grant of Options under this Plan shall not entitle any Participant to receive
any compensation (other than adjustments as provided herein) in the event of any change of the Company’s capital.


 


7. Options



 


7.1. Grant


 


7.1.1. The
Board may grant from time to time to Participants, Options on a personal basis. The Options granted pursuant to the Plan, shall
be evidenced by a written Option Agreement between the Company and the Participant, in such form as the Board shall from time to
time approve. Each Option Agreement shall state, among other matters, the number of Options granted, the Vesting Dates, the Exercise
Price, the tax route and such other terms and conditions as the Board at its discretion may prescribe, provided that they are consistent
with this Plan.


 


7.1.2. Options
which are Approved Options, as determined in the Option Agreement, and any Shares issued in respect of such Approved Option shall
be subject to the Trustee’s trusteeship, as provided in Section 11 below. Any grant of an Approved Option shall be subject
to compliance with the conditions of Section 102 including and shall be granted only after the submission of the Plan for approval
by the Israeli Tax Authority.


 


7.2. Vesting.
The Board shall set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine
the number of Options that will vest and become exercisable. The Board may set vesting criteria based upon the achievement of Company-wide,
business unit, or individual goals (including, but not limited to, continued employment), or any other basis determined by the
Board in its discretion. The vesting conditions and schedule shall be set in the applicable Option Agreement. No Option shall be
exercised after the Expiration Date. The vesting provisions of individual Options may vary.


 






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7.3. An
Option may be subject to such other terms and conditions, not inconsistent with the Plan, on the time or times when it may be exercised
as the Board may deem appropriate.


 


7.4. Exercise
of Options


 


7.4.1. An
Option shall be exercised by submission to the Company of a notice of exercise, in a form set by the Company. The exercise of an
Option shall occur on such time on which a notice of exercise has been received by the Company accompanied by payment in full of
the Exercise Price payable therefor, and as soon as practicable thereafter the Company will issue the Share(s) underlying such
exercised Option, provided that the Shares so issued shall not be delivered to the Participant or any third party (other than the
Trustee, if applicable) unless and until all applicable Tax was paid to the Trustee’s (if applicable) and the Company’s
full satisfaction and subject to compliance with Applicable Law.


 


7.4.2. Except
as otherwise provided in the Plan or in an Option Agreement, an Option may be exercised in full or in part, provided it is not
exercised for a fraction of a Share.


 


7.4.3. Notices
of exercise of Options, which are submitted after the Expiration Date, or which relate to Options that have not yet vested, or
which do not contain all of the details required by the exercise form, shall not be accepted and shall have no force whatsoever.


 


7.4.4. The
Participant shall sign any document required under any Applicable Law or by the Company or the Trustee for the purposes of issuance
of the Shares.


 


7.5. Consideration.
The Exercise Price shall be paid in cash or check at the time the Option is exercised. Should the Company’s ordinary shares be
listed for trade on a Stock Exchange the Board may consider allowing a cashless exercise, subject to the provisions of Applicable
Law. If, as of the date of exercise of an Option the Company is then permitting cashless exercises, the Participants will be able
to engage in a “same-day sale” cashless brokered exercise program, involving one or more brokers, through such a program
that complies with the Applicable Laws and that ensures prompt delivery to the Company of the amount required to pay the Exercise
Price and any Tax.


 


7.6. The
Exercise Price shall be denominated in the currency of the primary economic environment of, at the Company’s discretion,
either the Company or the Participant (that is the functional currency of the Company or the currency in which the Participant
is paid).


 


8. Terms
and Conditions of the Options. Options granted under the Plan shall be evidenced by the related Option Agreement and shall
be subject to the following terms and conditions and to such other terms and conditions included in the Option Agreement not inconsistent
therewith, as the Board shall determine:


 


8.1. Non
Transferability of Option. Unless otherwise determined by the Board, an Option shall not be Transferable by the Participant
other than by will or by the laws of descent. Options or rights arising therefrom shall not be subject to mortgage, attachment
or other willful encumbrance, and no power of attorney shall be issued in respect thereof, whether such enter into force immediately
or at a future date.


 


8.2. One
Time Benefit. The Options and underlying Shares are extraordinary, one-time benefits granted to the Participants, and are not
and shall not be deemed a salary component for any purpose whatsoever, including in connection with calculating severance compensation
under any Applicable Law.


 






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8.3. Fractions.
An Option may not be converted into a fraction of a Share. In lieu of issuing fractional Shares, on the vesting of a fraction of
an Option, the Company shall convert any such fraction of an Option, which represents a right to receive 0.5 or more of a Share,
to one Share and shall extinguish any such fraction of an Option, which represents a right to receive less than 0.5 of a Share
without issuing any Shares.


 


8.4. Term.
No full or partial exercise of an Option shall be carried out following the Expiration Date of such Option.


 


9. Termination
of Employment or Engagement. 


 


9.1. Unvested
Options. Unless otherwise determined by the Board, in the case of Termination, any Option or portion thereof that was not vested
as of the Termination Date shall immediately expire on the Termination Date.


 


9.2. Vested
Options


 


9.2.1. Termination
other than for Cause. 


 


9.2.1.1. Unless
otherwise determined by the Board, in the case of Termination other than for Cause, any Option or portion thereof that is vested
as of the Termination Date may be exercised but only within such period of time ending on the earlier of (i) ninety (90) days following
the Termination Date, or (ii) the Expiration Date, but only to the extent to which such Option was exercisable at the time of the
Termination Date. If, after the Termination Date, the Participant does not exercise his or her Option within the time specified
above or in the Option Agreement, the Option shall expire.


 


9.2.1.2. In
the event of (i) Termination as a result of the Participant’s death or disability or (ii) the Participant dies within the
period (if any) specified in the Option Agreement after the Termination Date, then the Option may be exercised (to the extent exercisable
as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest
or inheritance or by a person designated to exercise the Option upon the Participant’s death, but only within the period
ending on the earlier of (1) the date twelve (12) months following the date of death or the Termination Date due to disability
(as the case may be) (or such longer or shorter period specified in the Option Agreement) or (2) the Expiration Date. If, after
death or termination due to disability (as the case may be), the Option is not exercised within the time specified herein, the
Option shall expire.


 


9.2.1.3. If
the exercise of an Option following the Termination Date would be prohibited at any time solely because the issuance of Shares
would violate requirements of any Applicable Law, then the Option shall expire at the end of a period of ninety (90) days after
the Termination Date, or twelve (12) months after the date of death, as applicable, during which the exercise of the Option would
not be in violation of such requirements.


 


9.2.1.4. It
is clarified that during such periods following the Termination Date the Participant’s entitlement to Options shall not continue
to vest.


 


9.2.1.5. The
Board shall have the sole authority to extend the exercise periods detailed in sections 9.2.1.1 – 9.2.1.3 above at its sole
discretion.


 






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9.2.2. Termination
for Cause. If a Participant’s employment or engagement with the Company is terminated for Cause, any Option or portion
thereof that has not been exercised as of the Termination Date shall immediately expire on the Termination Date.


 


9.3. No
Participant shall be entitled to claim against the Company that he or she was prevented from continuing to vest Options as of the
Termination Date. Such Participant shall not be entitled to any compensation in respect of the Options which would have vested
in his favor had such Participant’s employment or engagement with the Company not been terminated.


 


10. No
Right to Employment, Service or Shares. The grant of an Option or a Share under the Plan shall impose no obligation on the
Company or an Affiliate to continue the employment of any Employee or the engagement with any Consultant and shall not lessen or
affect the Company’s or an Affiliate’s right to terminate the employment or service relationship of such Participant at any time
and/or for any or no reason with or without Cause. No Participant or other person shall have any claim to be granted any Options,
and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Options. The terms and conditions
of Options and the Board’s determinations and interpretations with respect thereto need not be the same with respect to each Participant
(whether or not such Participants are similarly situated).


 


Nothing contained
in the Plan shall prevent the Company from adopting, adjusting or continuing in effect compensation arrangements, which may, but
need not, provide for the grant of Options or Shares.


 


11. Trust


 


11.1. Unless
provided otherwise by the Board, Approved Options and any Shares issued in connection with such Approved Options, shall be held
by the Trustee for the benefit of the Participant, in accordance with the provisions of Section 102 in the “capital gain route”.
Any exercise of an Option or sale of a Share shall be notified to the Trustee.


 


11.2. The
validity of any order given to the Trustee by a Participant shall be subject to approval of such order by the Company. The Company
does not undertake to approve orders given by any Participant to the Trustee within any period of time.


 


11.3. Subject
to the provisions of this Plan, the Approved Options and any Shares issued in connection with such Approved Options shall not be
released from the control of the Trustee nor shall they be Transferred unless the Company and the Trustee are satisfied that the
full amounts of Tax due by the applicable Participant have been paid or will be paid.


 


11.4. Subject
to the provisions of Section 102, a Participant shall not Transfer or release from the control of the Trustee any Approved Option
or any Share issued in connection with such Approved Options, until the lapse of the Holding Period. Notwithstanding the above,
if any such sale, release or Transfer occurs during the Holding Period, the sanctions under Section 102 shall apply to and shall
be borne by such Participant.


 


11.5. As
long as the Approved Options and any Shares issued in connection with such Approved Options are held by the Trustee for the benefit
of the Participant, all rights of the Participant over the Approved Options and Shares cannot be Transferred other than by will
or laws of descent and distribution.


 






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11.6. Without
derogating from the aforementioned, the Board shall have the authority to determine the specific procedures and conditions of the
trusteeship with the Trustee in a separate agreement between the Company and the Trustee, all subject to Section 102.


 


11.7. Should
the Approved Options or any Shares issued in connection with such Approved Options be transferred by power of a last will or under
laws of decent, the provisions of Section 102 shall apply to the heirs or transferees of the deceased Participant.


 


11.8. Approved
Options that do not comply with the requirements of Section 102 shall be considered Non-Approved 102 Options.


 


12. Adjustments
to the Shares subject to the Plan


 


12.1. Adjustment
Due to Change in Capital. If the ordinary shares of the Company shall at any time be changed or exchanged by declaration of
a share dividend (bonus shares), share split, combination or exchange of shares, recapitalization, or any other like event by or
of the Company, and as often as the same shall occur, then the number and class of the Shares underlying the Options subject to
the Plan and the Exercise Price of the Options shall be appropriately and equitably adjusted so as to maintain the proportionate
equity portion represented by the Option, provided, however, that no adjustment shall be made by reason of the distribution
of subscription rights (rights offering) on outstanding ordinary shares or other issuance of shares by the Company. Upon happening
of any of the foregoing, the class and aggregate number of Shares underlying the Options, issuable pursuant to the Plan under section
6 above, shall be appropriately adjusted by the Board, whose determination in that respect shall be final, binding, and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares underlying an Option.
Any adjustment according to this section shall be subject to the receipt of a tax ruling or approval from the tax authorities,
as necessary.


 


12.2. Structural
Change. Without derogating from the Board’s general power under the Plan, in the event of any Structural Change,
the Board shall be entitled (but not obliged), at its sole discretion, to determine any of the following: (i) provide for an assumption
or exchange of Options and/or Shares for options and/or shares and/or other securities or rights of the Successor Company; and/or
(ii) provide for an exchange of Options or Shares for a monetary compensation; and/or (iii) determine that all unvested Options
and un-exercised vested Options shall expire on the date of such Structural Change. In the case of assumption and/or substitution
of Options, appropriate adjustments shall be made so as to reflect such action and all other terms and conditions of the Option
Agreements shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Board,
which determination shall be at its sole discretion and final. The grant of any substitutes for the Options and/or Shares to Participants
further to a Structural Change, as provided in sub-clauses (i) and (ii), shall be considered as full compliance with the terms
of this Plan. The value of the exchanged Options and/or Shares pursuant to this section 12.2 shall be determined in good faith
solely by the Board, based on the Fair Market Value, and its decision shall be final and binding on all the Participants.


 


Unless determined
otherwise by the Board of Directors, any Options not assumed or exchanged for options and/or shares and/or other securities or
rights of the Successor Company shall expire immediately prior to the consummation of the Structural Change.


 






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For the purposes
of this section 12.2, Options shall be considered assumed or substituted if, following the Structural Change, the Options confer
the right to purchase or receive, for each underlying Share immediately prior to the Structural Change, the consideration (whether
shares, options, cash, or other securities or property) received in the Structural Change by holders of ordinary shares held on
the effective date of the Structural Change (and if such holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding ordinary shares); provided, however, that if such consideration received
in the Structural Change is not solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary,
the Board may, with the consent of the Successor Company, provide for the consideration received in the Structural Change, for
each underlying Share immediately prior to the Structural Change, to be solely ordinary shares (or their equivalent) of the Successor
Company or its parent or subsidiary equal in value to the per Share consideration received by holders of a majority of the outstanding
ordinary shares in the Structural Change; and provided further that the Board may determine, at its discretion, that in
lieu of such assumption or substitution of Options for options of the Successor Company or its parent or subsidiary, such Options
will be substituted for any other type of asset or property including cash which is fair under the circumstances.


 


Without derogating
from the above, in the event of a Structural Change the Board shall be entitled, at its sole discretion, to require the Participants
to exercise all vested Options within a set time period and sell all of their Shares on the same terms and conditions as applicable
to the other shareholders selling their Company’s ordinary shares as part of the Structural Change. Each Participant acknowledges
and agrees that the Board shall be entitled to authorize any one of its members to sign share transfer deeds in customary form
in respect of the Shares held by such Participant and that such share transfer deed shall bind the Participant.


 


12.3. Liquidation.
In the event of the proposed dissolution or liquidation of the Company, all Options will expire immediately prior to the consummation
of such proposed action, unless otherwise provided by the Board. 


 


13. Taxes
and Withholding Tax


 


13.1.
Approved Options and Non-Approved 102 Options shall be taxed in accordance with Section 102. For the avoidance of doubt it is clarified
that any Option granted to a Consultant or a Controlling Shareholder or any Option granted to a Participant who is not an Israeli
tax resident, shall not be subject to the provisions of Section 102 and shall be taxed in accordance with Applicable Law.


 


13.2. Any
Tax imposed in respect of the Options and/or Shares, including, but not limited to, in respect of the grant of Options, and/or
the exercise of Options into Shares, and/or the Transfer, waiver, or expiration of Options and/or Shares, and/or the sale of Shares,
shall be borne solely by the Participants, and in the event of death by their heirs or transferees. The Company, the Affiliates,
the Trustee (if applicable) or anyone on their behalf shall not be required to bear the aforementioned Taxes, directly or indirectly,
nor shall they be required to gross up such Tax in the Participants’ salaries or remuneration. The applicable Tax shall be
deducted from the proceeds of sale of Shares or shall be paid to the Company, an Affiliate or the Trustee (if applicable) by the
Participants, including, for the avoidance of doubt, in the event of a cashless exercise. Without derogating from the aforementioned,
the Company, an Affiliate and the Trustee (if applicable) shall be entitled to withhold Taxes according to the requirements of
any Applicable Laws, rules, and regulations, including withholding taxes at source.


 


13.3. The
Company’s or Trustee’s (if applicable) obligation to deliver Shares upon exercise of an Option or to sell or transfer Shares is
subject to payment (or provision for payment satisfactory to the Board and the Trustee (if applicable)) by the Participant of all
Taxes due by him under any Applicable Law.


 






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13.4. The
Participants shall indemnify the Company and/or the applicable Affiliate and/or the Trustee (if applicable), immediately upon request,
for any Tax (including interest and/or fines of any type and/or linkage differentials in respect of Tax and/or withheld Tax) for
which the Participant is liable under any Applicable Law or under the Plan, and which was paid by the Company, the Affiliate or
the Trustee (if applicable), or which the Company, the Affiliate or the Trustee (if applicable) are required to pay. The Company,
the Affiliate and the Trustee (if applicable) may exercise such indemnification by deducting the amount subject to indemnification
from the Participants’ salaries or remunerations.


 


13.5. In
respect to Non-Approved 102 Options, if there occurs a Termination of the Participant’s service to or employment with the Company,
the Participant shall extend to the Company or the applicable Affiliate a security or guarantee for the payment of Tax due in respect
of such Option as required under Section 102.


 


14. Registration
of the Shares on a Stock Exchange 


 


14.1. Should
reorganization or certain other arrangements regarding the Company’s share capital be necessary prior to the registration
of the Company’s ordinary shares on a Stock Exchange, such arrangements or reorganization may be also carried out in respect
of the Participants and their Options and/or Shares.


 


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


 


14.3. The
Company does not undertake to cause the ordinary shares or the Shares to be listed on a Stock Exchange, or that the registration
of the ordinary shares for trade, if at all, shall take place within a certain period of time.


 


15. The
Rights Attached to the Shares


 


15.1. Equal
Rights. The Shares constitute part of the ordinary shares of the Company, and they shall have equal rights for all intents
and purposes as the rights attached to the ordinary shares of the Company, subject to the provisions of this Plan and any Option
Agreement. The Shares, being part of the ordinary shares of the Company, shall not be protected against dilution in any manner
whatsoever, unless otherwise determined by the Board. It is hereby clarified that the Shares shall not constitute a separate class
of shares, but shall be an integral part of the Company’s ordinary shares.


 


Any change of the
Company’s Articles of Association, which may change the rights attached to the Company’s ordinary shares, shall also
apply to the Shares, and the provisions hereof shall apply with the necessary modifications arising from any such change.


 


The grant of Options
and Shares under this Plan shall not restrict the Company in any way regarding future creation of additional and/or other classes
of shares, including classes of shares, which may in any manner be preferred over the currently existing ordinary shares which
are offered to Participants under this Plan. Subject to section 12.1 above, the grant of Options and Shares under this Plan shall
not entitle any Participant to receive any compensation in the event of any change of the Company’s capital.


 






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15.2. Dividend
Rights. No Participant shall have any rights to receive dividends in respect of Shares, until such Shares are issued to the
Participant or the Trustee. Following the issuance of such Shares by the Company, such Shares will entitle the Participant to receive
any dividend, to which other holders of ordinary shares in the Company are entitled.


 


15.3. Right
of First Refusal 


 


15.3.1. Notwithstanding
anything to the contrary in the incorporation documents of the Company, none of the Participants shall have a right of first refusal
in relation with any sale of shares in the Company by virtue of the Shares held by such Participant or for its benefit.


 


15.3.2. Unless
otherwise determined by the Board, until consummation of an initial public offering of the Company’s securities under the
securities laws of any jurisdiction (“IPO”), a Participant shall not have the right to sell Shares issued upon
the exercise of an Option within six (6) months and one day of the date of exercise of such Option or issuance of such Shares.


 


15.3.3. Sale
of Shares by the Participant shall be subject to a right of first refusal as set forth in the incorporation documents of the Company
or any shareholders agreements, investors’ rights agreements or similar agreement(s) by which some or all holders of ordinary shares
of the Company are bound. In the event that the incorporation documents or such agreements of the Company do not contain any provision
regarding rights of first refusal, then, unless otherwise determined by the Board, until consummation of an IPO, the sale of Share
issuable upon the exercise of an Option shall be subject to a right of first refusal on the part of the Repurchaser(s).


 


“Repurchaser(s)”
means (i) the Company, if permitted by applicable law, (ii) if the Company is not permitted by applicable law, then any affiliate
of the Company designated by the Board; or (iii)
if no decision is reached by the Board, then the Company’s then existing shareholders who hold more than 2% of the then issued
and outstanding share capital of the Company (save, for avoidance of doubt, for other Participants who already exercised their
Options), pro rata in accordance with their respective shareholding. 


 


The Participant
shall give a notice of sale (hereinafter the “Notice”) to the Company in order to offer the Shares to the Repurchaser(s).


 


15.3.4. The
Notice shall specify the name of each proposed purchaser or other transferee (hereinafter the
“Proposed Transferee”), the number of Shares offered for sale, the price per Share and the payment terms. The
Repurchaser(s) will be entitled for thirty (30) days from the day of receipt of the Notice (hereinafter the “Notice Period”),
to purchase all or part of the offered Shares on a pro rata basis based upon their respective holdings in the Company. 


 


15.3.5. If
by the end of the Notice Period not all of the offered Shares have been purchased by the Repurchaser(s), the Participant shall
be entitled to sell all Shares at any time during the ninety (90) days following the end of the Notice Period on terms not more
favorable than those set out in the Notice, provided that the Proposed Transferee
agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee.
Any sale of Shares issued under the Plan by the Participant that is not made in accordance with the Plan or the Option Agreement
shall be null and void.


 


15.3.6. The
Board shall be entitled not to approve and/or recognize a transfer of Shares if such a transfer has not been performed in accordance
with the provisions of this section 15.3 or in the event that it has not been preformed in accordance with the provisions of Section
102 and/or section 11 above.


 






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15.3.7. In
the event that the Participant’s Shares shall be over-subscribed, each Repurchaser shall be entitled to purchase his pro-rate
share of the Shares (calculated by dividing each acquiring Repurchaser’s
rates of holdings or beneficially ownership in the Company, by the aggregate rates of holdings or beneficially ownership in the
Company of all the Repurchaser who wish to acquire the Shares).


 


15.3.8. Without
derogating from the aforementioned, any sale of Shares in accordance with this section 15.3 shall be subject to the prior approval
of the Board.


 


15.4. Bring
Along. For the avoidance of doubt it is clarified that as part of the ordinary shares of the Company, Shares
issued upon exercise of Options or in connection thereto shall be subject to any bring-along provision included in the incorporation
documents of the Company or any shareholders agreement or similar agreement(s) by which some or all holders of ordinary shares
of the Company are bound. 


 


15.5. Voting
Rights. No Participant shall have any rights to vote in the Company’s meetings in respect of underlying Shares, until
certificates in respect of such Shares will be issued to the Participant, or the Trustee. Following the issuance of such Shares
certificates by the Company, the Participant shall have the same voting rights as other holders of ordinary shares in the Company
do. Notwithstanding the aforesaid, and as long as the Company’s ordinary shares are not traded on a Stock Exchange, the Participants
shall be obliged to enter into voting agreements with the Company, and/or with certain shareholders of the Company, if so determined
by the Board, and as included in the Option Agreement.


 


16. Changes
to the Plan. The Board shall be entitled, from time to time, to update and/or change the terms of this Plan, in whole or in
part, at its sole discretion, provided that in the Board’s opinion such a change shall not materially derogate from the rights
attached to the Options and/or Shares already granted under this Plan, unless mutually agreed otherwise between the Participant
and the Company. The Board shall be entitled to terminate this Plan at any time, provided that such termination shall not materially
affect the rights of Participants, to whom Options have already been granted.


 


17. Effective
Date and Duration of the Plan


 


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


 


17.2. The
Company shall obtain the approval of the Company’s shareholders for the adoption of this Plan or for any amendment to this
Plan, if shareholders’ approval is necessary or desirable to comply with any Applicable Law, including without limitation
the securities laws of jurisdictions applicable to Options granted to Participants under this Plan, or if shareholders’ approval
is required by any authority or by any governmental agency or by any national securities exchange, including without limitation
the US Securities and Exchange Commission.


 


17.3. Termination
of the Plan shall not affect the Board’s ability to exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.


 






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18. Successors
and Assigns. The Plan and any Option granted thereafter shall be binding on all successors and assigns of the Company and a
Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate,
or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.


 


19. Miscellaneous



 


19.1. Notices.
Notices and requests regarding this Plan shall be sent in writing by registered mail or by courier to the addresses of the Company
and the Participant as follows: if to the Company: at its principal offices; if to the Participant - to the Participant’s
address, as registered in the Company’s registries. Such notices shall be deemed received at the addressee as follows: if
sent by registered mail - within three (3) business days following their deposit for mailing at a post office located in the country
of addressee, or seven (7) business days following their deposit for mailing at a post office located outside the country of addressee,
and if hand-delivered - on the day of delivery (or refusal to receive).


 


19.2. This
Plan (together with the applicable Option Agreement(s) entered into with any Participant) constitutes the entire agreements and
understandings between the Company and such Participant in connection with the grant of Options to Participant. Any representation
and/or promise and/or undertaking made and/or given by the Company or by whosoever on its behalf, which has not been explicitly
expressed herein, shall have no force and effect.


 


19.3. Choice
of Law. Unless otherwise specified in a specific Option Agreement, this Plan shall be governed by and construed in accordance
with the laws of Israel, without giving effect to principles of conflicts of law. The competent courts of Tel Aviv-Jaffa shall
have exclusive jurisdiction to hear all disputes arising in connection with this Plan.


 


* * * *
*


 


 


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