Document:

OWC
PHARMACEUTICAL RESEARCH CORP.

 

Audit
Committee Charter

 

Purpose

 

The
Committee is appointed by the Board of Directors of OWC Pharmaceutical Research Corp. (the “Company”) to (a) assist
the Board in its oversight of (i) the integrity of the Company’s consolidated financial statements, (ii) the Company’s
compliance with legal and regulatory requirements, (iii) the Company’s system of internal controls, (iv) certain aspects
of the Company’s risk management as described herein, (v) the qualifications and independence of the Company’s independent
registered public accounting firm (“independent auditor”) and (vi) the performance of the Company’s internal
and independent auditors, and (b) prepare a report to be included in the Company’s annual proxy statement.

 

It
is the responsibility of the Company’s management to prepare consolidated financial statements that are complete and accurate
and in accordance with generally accepted accounting principles in the United States (“GAAP”) and to establish satisfactory
internal control over financial reporting. It is the responsibility of the Company’s independent auditor to audit the Company’s
financial statements and the effectiveness of the Company’s internal control over financial reporting. The Committee’s
responsibility in this regard is one of oversight and review. The Committee does not provide any expert or other special assurance
as to such financial statements concerning compliance with laws, regulations or GAAP.

 

Membership

 

	 	1.	The
    Committee shall be comprised of at least three Board members appointed by the Board after considering the recommendation of
    the Nominating and Governance Committee, if any. No Board member shall serve simultaneously on the Committee and the audit
    committee of more than two other public companies, unless the Board shall determine that such simultaneous service would not
    impair the Board member’s ability to serve effectively on the Committee and such determination is disclosed in the Company’s
    proxy statement. Committee members shall serve at the pleasure of the Board and for such term as the Board determines. The
    Board shall designate one Committee member as the Committee’s chair (the “Chair”).
	 	 	 
	 	2.	Each
    Committee member shall have no material relationship with the Company and shall satisfy the independence requirements of the
    Company, the New York Stock Exchange (“NYSE”), the Securities Exchange Act of 1934 (the “Exchange Act”),
    and the rules and regulations of the Securities and Exchange Commission (“SEC”).
	 	 	 
	 	3.	Each
    Committee member shall be financially literate in accordance with NYSE requirements or must become financially literate in
    accordance with such requirements within a reasonable period of time after his or her appointment to the Committee.
	 	 	 
	 	4.	At
    least one Committee member shall have accounting or related financial management expertise in accordance with NYSE requirements,
    and at least one Committee member shall, in the judgment of the Board, be an “audit committee financial expert”
    as defined by the SEC.

 

    	 

     

    

 

Operations

 

	 	1.	The
    Committee shall hold regular meetings at least four times per year and report to the Board on a regular basis. Meetings shall
    include any participants the Committee deems appropriate and shall be of sufficient duration and scheduled at such times as
    the Committee deems appropriate to discharge properly its responsibilities. The Chairman and Chief Executive Officer, Chief
    Financial Officer and other Executive Officers, if any, shall generally attend all regularly scheduled in person quarterly
    meetings of the Committee.
	 	 	 
	 	2.	The
    Committee shall meet, as deemed necessary and appropriate, with the independent auditor and with management, including the
    Chief Financial Officer and other Executive Officers, if any, in separate executive sessions.
	 	 	 
	 	3.	The
    Committee shall receive information and participate in informal meetings and briefings with management, including the Chief
    Financial Officer and other Executive Officers, if any, and representatives of the independent auditor, as necessary and appropriate
    between formal meetings of the Committee. Such briefings and informal meetings may be through the Committee Chair or individual
    Committee members, as appropriate.
	 	 	 
	 	4.	The
    Committee, or the Chair or other individual committee members, may meet with regulators as requested or when determined appropriate,
    regarding matters applicable to the mandate of the Committee.
	 	 	 
	 	5.	The
    Committee shall evaluate the independent auditor’s qualifications, performance and independence and present its conclusions
    to the Board of Directors. The Committee shall review with the full Board any issues arising with respect to the quality or
    integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements,
    the performance and independence of the Company’s independent auditor, or the performance of the internal audit department.
	 	 	 
	 	6.	The
    Committee may form and delegate to one or more subcommittees all or any portion of the Committee’s authority, duties
    and responsibilities, and may establish such rules as it determines necessary or appropriate to conduct the Committee’s
    business.

 

    	 

     

    

 

	 	7.	The
    Committee shall have direct access to, and complete and open communication with, the Company’s management and internal
    and independent auditors and may obtain advice and assistance from internal legal, accounting or other advisors. The Committee
    may retain independent legal, accounting or other advisors. The Committee shall have authority to perform or supervise investigations,
    and the Company shall provide for appropriate funding, as determined by the Committee, for the payment of expenses related
    to any such investigation.
	 	 	 
	 	8.	The
    Company shall provide for appropriate funding, as determined by the Committee, for the payment of: (i) compensation to the
    independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest
    services or other permitted services for the Company; (ii) ordinary administrative expenses of the Committee that are necessary
    or appropriate in carrying out its duties and responsibilities; and (iii) compensation to independent legal, accounting or
    other advisors retained by the Committee.
	 	 	 
	 	9.	The
    Committee shall review and assess annually its performance and report the results to the Board.
	 	 	 
	 	10.	The
    Committee shall review and assess annually the adequacy of this charter and, if appropriate, recommend changes to the charter
    to the Board.

 

Authority,
Duties and Responsibilities

 

The
Committee shall:

 

Oversight
of the Company’s Relationship with the Independent Auditor

 

	 	1.	Have
    the sole authority and responsibility to appoint (which appointment may be presented to shareholders for ratification), compensate,
    retain, oversee, evaluate and, when appropriate, replace the independent auditor engaged for the purpose of preparing or issuing
    an audit report or performing other audit, review and attest services. The independent auditor shall report directly to the
    Committee.
	 	 	 
	 	2.	Preapprove
    all audit, review and attest services and permitted non-audit services to be performed for the Company by its independent
    auditor, subject to the de minimis exception for non-audit services described in Section 10A(i)(1)(B) of the Exchange
    Act that are approved by the Committee prior to the completion of the audit. The Committee may form and delegate authority
    to subcommittees consisting of one or more members the authority to grant preapprovals of audit and permitted non-audit services,
    provided that decisions of such subcommittee to grant preapprovals shall be presented to the full Committee at its next quarterly
    meeting.
	 	 	 
	 	3.	Review
    and evaluate annually the qualifications, performance and independence of the lead partner of the independent auditor and
    assure regular rotation of the lead audit partner, reviewing partner and other audit engagement team partners of the independent
    auditor as required by law. Consider, as appropriate, the rotation of the independent auditor. Review and assess annually
    the qualifications and performance of the independent auditor.

 

    	 

     

    

 

	 	4.	Evaluate
    the independence of the independent auditor by, among other things, ensuring that the independent auditor periodically, and
    at least annually, submits to the Committee a formal written report delineating all relationships between the independent
    auditor and the Company, including any non-audit service permitted under the Exchange Act provided to the Company and the
    matters set forth in Public Company Accounting Oversight Board (“PCAOB”) rules or other applicable laws, regulations
    or standards. Review and evaluate such report and engage in a dialogue with the independent auditor with respect to any disclosed
    relationships or services that may impact their objectivity and independence.
	 	 	 
	 	5.	Obtain,
    review and evaluate, at least annually, a report by the independent auditor describing the independent auditor’s internal
    quality-control procedures, any material issues raised by the most recent internal quality-control review, peer review, or
    PCAOB review, of the independent auditor, or by any inquiry or investigation by governmental or professional authorities,
    within the preceding five years, respecting one or more independent audits carried out by the independent auditor, and any
    steps taken in response to any such issues.
	 	 	 
	 	6.	Set
    policies for the Company with respect to hiring current and former employees of the independent auditor.

 

Oversight
of the Company’s Internal Audit Department and Internal Controls

 

7. Approve
the appointment and, when and if appropriate, replacement of the Global Audit Director, who shall functionally report directly
to the Committee and administratively to the Chief Executive Officer. Review the qualifications, performance and compensation
of the Global Audit Director.

 

8. Review
the significant reports to management, or summaries thereof, prepared by the internal audit department, management’s responses
and the status of associated remediation plans.

 

9. Discuss,
as appropriate, the adequacy of the Company’s internal controls with the internal and independent auditors and management
including, without limitation, reports from the Chief Executive Officer and the Chief Financial Officer regarding significant
deficiencies and material weaknesses in the design or operation of internal control over financial reporting or any fraud, whether
or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

 

10. Review
and discuss, as appropriate, any major issues as to the adequacy of the Company’s internal controls and any special audit
steps adopted in light of material control deficiencies.

 

    	 

     

    

 

11. Review
the Chief Executive Officer and Chief Financial Officer certification process and the role of the Company’s Disclosure Committee.

 

12. Review
and discuss with management and the internal and independent auditors management’s annual report on, and the independent
auditor’s evaluation of the effectiveness of, the Company’s internal control over financial reporting. Receive reports
from management regarding management’s quarterly evaluations of changes in internal control over financial reporting and
discuss with management and the internal and independent auditors as appropriate.

 

13. Review
the annual plan and scope of work and coverage of the internal audit department, including the risk-based approach to development
of the plan, and receive updates on significant changes in scope of the plan and coverage during the year, as appropriate. Review
the responsibilities, budget, resources and staffing of the internal audit department, including any outsourcing or co-sourcing
of services. Review the results of internal and external quality assurance reviews of the internal audit department, and participate
in selection of the third parties engaged to conduct external quality assurance reviews. Review and approve the internal audit
department charter, as appropriate.

 

Oversight
of the Financial Statements, Audit and Disclosure

 

14. Review
(i) the results of internal and independent audits and reviews of, and meet to review and discuss with management and the independent
auditor, the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (including the Company’s annual
audited consolidated financial statements and condensed consolidated quarterly and year-to-date financial statements) and (ii)
the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results
of Operations,” and other matters required by applicable PCAOB standards or under applicable legal, regulatory or NYSE requirements.

 

15. Regularly
review with the independent auditor significant issues regarding accounting principles and financial statement presentations,
including (i) any significant changes in the Company’s selection or application of accounting principles; (ii) analyses
prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made
in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods
on the financial statements; and (iii) any significant communications between the independent audit team and the independent auditor’s
national office respecting auditing or accounting issues presented by the engagement.

 

16. Review
and discuss with the independent auditor and, to the extent appropriate, management, in connection with the Company’s Annual
Report on Form 10-K, and otherwise, as appropriate, any reports of the independent auditor required by law or professional auditing
standards, including reports on: (i) critical accounting policies and practices used in preparing the financial statements; (ii)
alternative treatments under GAAP for policies and procedures related to material items discussed with management, ramifications
of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (iii) other
material written communications between the independent auditor and management of the Company, such as any “management”
or “internal control” letter issued, or proposed to be issued, by the independent auditor to the Company, and a schedule
of unadjusted differences, if any.

 

    	 

     

    

 

17. Discuss
with the independent auditor the matters required to be discussed relating to the audit, in accordance with applicable audit standards,
including the quality and appropriateness of the Company’s accounting principles, difficulties encountered in the course
of the audit work, restrictions on the scope of activities or access to requested information, significant disagreements with
management, and management’s response.

 

18. Review
the annual plan and scope of work and coverage of the independent auditor. Receive updates on significant changes in scope of
the plan and coverage and status of the plan during the year.

 

19. Obtain
a statement from the independent auditor that the audit was conducted in a manner consistent with PCAOB standards and applicable
portions of Section 10A of the Exchange Act.

 

20. After
review, recommend to the Board the acceptance and inclusion of the annual audited consolidated financial statements in the Company’s
Annual Report on Form 10-K.

 

21. Review
or discuss, as and when appropriate: (i) the information to be disclosed and the type of presentation to be made in earnings press
releases, including the use of “pro forma” or “adjusted” non-GAAP information and any reconciliation to
GAAP information, that have been, or will be, issued by the Company, as well as the financial information and earnings guidance
that have been, or will be, provided to analysts and rating agencies; and (ii) the effect of regulatory and accounting initiatives
and off-balance sheet structures on the Company’s consolidated financial statements.

 

22. Be
responsible for resolution of disagreements between management and the independent auditor regarding financial reporting.

 

Oversight
of Compliance with Legal and Regulatory Requirements

 

23. When
deemed appropriate, review with the Company’s SEC Counsel or appropriate delegates, legal, disclosure or other matters that
may have a material impact on the Company’s consolidated financial statements or on the Company’s compliance policies.

 

24. Review
significant regulatory reports and findings of regulators, as applicable to the mandate of the Committee, including management’s
associated remediation plans and progress against such plans.

 

    	 

     

    

 

25. Obtain,
review and evaluate reports from the SEC Counsel or management with respect to the Company’s policies and procedures regarding
compliance with applicable legal and regulatory requirements, and the Company’s Code of Ethics and Business Conduct. The
Company’s SEC Counsel shall have the authority to communicate personally to the Committee promptly on any matter involving
criminal conduct or potential criminal conduct and, at least annually, shall report to the Committee on the implementation and
effectiveness of the Company’s compliance and ethics program.

 

26. Obtain,
review and evaluate reports from the Company’s SEC Counsel with respect to the Company’s Anti-Money Laundering/Bank
Secrecy Act and Office of Foreign Assets Control compliance program.

 

27. Establish
procedures for: (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal
accounting controls, or auditing matters; and (ii) the confidential, anonymous submission by Company employees of concerns regarding
questionable accounting or auditing matters.

 

28. Discuss
with management and the independent auditor any significant correspondence with regulators or governmental agencies and any external
or employee complaints or published reports that raise material issues regarding the Company’s financial statements or accounting
policies.

 

29. Review
and discuss, as and when appropriate, the Internal Audit department’s review of perquisites, expenses and conflicts of interest,
if any, of members of senior management.

 

30. Provide
the report of the Committee as required by the SEC for inclusion in the Company’s annual proxy statement.

 

Oversight
of the Company’s Risk Management

 

31. Review
or discuss, as and when appropriate, with the members of management, the Company’s guidelines and policies that govern the
process for risk assessment and risk management.

 

32. Review
the major legal and compliance risk exposures of the Company and the steps management has taken to monitor and control such exposures.

 

33. The
management shall each have access to communicate with the Committee on any matter relevant to risk and compliance.

 

Coordination
with Management and Other Board Committees

 

34. Coordinate
with management (which coordination may be through the Committee Chair) to help ensure that the committees have received the information
necessary to permit them to fulfill their duties and responsibilities with respect to oversight of risk management and risk assessment
guidelines and policies.

 

    	 

     

    

 

35. Coordinate
with the Chief Executive Officer and the Compensation, Management Development and Succession Committee, if any (which coordination
may be through the Committee Chair) in relation to the compensation and performance of the Company’s management.

 

Other
Authority

 

36. Make
such recommendations with respect to any of the above and other matters as the Committee deems necessary or appropriate.

 

37. Have
such other authority, duties and responsibilities as may be delegated to the Committee by the Board.

 

The
Committee’s authority, duties and responsibilities are discharged through evaluating reports given to the Committee, presentations
made to the Committee and other significant financial reporting decisions reported to the Committee by management, the internal
and independent auditors and by other persons or organizations the Committee deems appropriate.

 

Ratified
and Approved:

 

	Dated:
    January 1, 2018	 	 	 	 
	 	 	 	 	 
	/s/
    Mordechai Bignitz, Director	 	/s/
    Dr. Stanley Hirsch, Chairman	 	/s/
    Hannah Feuer, DirectorOWC
PHARMACEUTICAL RESEARCH CORP.

 

2016
ISRAELI EMPLOYEE SHARE OPTION PLAN

 

    	1

     

    

 

PREFACE

 

This
plan, as amended from time to time, shall be known as the “OWC Pharmaceutical Research Corp.” -Israeli Employee Share
Option Plan” (the “Plan”).

 

	1.	PURPOSE
    OF THE PLAN

 

The
purpose of this Plan is to foster and promote the long-term financial success of OWC and its Affiliates and increase shareholder
value by:

 

	 	(a)	Motivating superior
    performance by means of performance-related incentives;
	 	 	 
	 	(b)	Encouraging and
    providing for the acquisition of an ownership interest in the Company by eligible Employees; and
	 	 	 
	 	(c)	Enabling OWC to
    attract and retain the services of outstanding management team and other qualified and dedicated Employees upon whose judgment,
    interest and special effort the successful conduct of its operations is largely dependent.

 

	2.	DEFINITIONS

 

For
purposes of this Plan and related documents, including the Grant Letter, the following definitions shall apply:

 

	 	2.1	“102
    Option” - means an Option that the Board intends to be a “102 Option” which shall only be granted
    to Employees, and shall be subject to and construed consistently with the requirements of Section 102 of the Ordinance. Approved
    102 Options may either be classified as Capital Gains Track Options (CGTO) or Ordinary Income Track Options (OITO).
    102 Options may either be granted to a Trustee or without a Trustee.
	 	 	 
	 	2.2	“3(i)
    Option” - means Options granted pursuant to Section 3(i) of the Ordinance.
	 	 	 
	 	2.3	“Administrator”
    - means the Board or the Committee as shall be administering this Plan, in accordance with Section ‎3 מתחת.
	 	 	 
	 	2.4	“Affiliate”
    - means any company eligible to be qualified as an “employing company”, with respect to the Company, within the
    meaning of Section 102(a) of the Ordinance including any and all rules and regulations promulgated thereunder, as now in effect
    or as hereafter amended.
	 	 	 
	 	2.5	“Approved
    102 Option” - means an Option granted pursuant to Section 102(b) of the Ordinance, including any and all rules and
    regulations promulgated thereunder, as now in effect or as hereafter amended, and held in trust by a Trustee for the benefit
    of the Optionee, pursuant to Section 102.
	 	 	 
	 	2.6	“Articles
    of Association” - means the Articles of Association of the Company as same are in effect from time to time.
	 	 	 
	 	2.7	“Board”
    - means the Board of Directors of the Company.
	 	 	 
	 	2.8	“Capital
    Gains Track Option” or “CGTO” - as defined in Section ‎5.4 מתחת.

 

    	2

     

    

 

	 	2.9	“Cashless
    Exercise” shall mean a way of paying the Exercise Price not in cash but by getting a number of Shares that reflects
    only the economic benefit the Optionee has at exercise point of time, so the Company allocates the Optionee a smaller number
    of Shares comparing the number of Shares the Optionee would receive according to the conversion rate set forth in the Grant
    Letter.
	 	 	 
	 	2.10	“Cause”
    - means, with respect to an Employee (i) as such term is defined in the individual employment agreement or other engagement
    agreement between an Employee and OWC or its any of Affiliates, or (ii) if no such agreement is in place, then ‘Cause’
    shall mean any one of the following: (a) conviction of any felony involving moral turpitude or affecting OWC; (b) any failure
    to carry out, as an Employee of OWC or its Affiliates, a reasonable directive of the chief executive officer, OWC’s
    board or the Optionee’s direct supervisor, which involves the business of OWC or its Affiliates and which was capable
    of being lawfully performed by Optionee; (c) embezzlement or theft of funds of OWC or its Affiliates; (d) any breach of the
    Optionee’s fiduciary duties or duties of care of OWC, including, without limitation, self-dealing, prohibited disclosure
    of confidential information of, or relating to, OWC, engagement in any business competitive to the business of OWC or of its
    Affiliates or breach of non-solicitation covenants; (e) any conduct (other than conduct in good faith) reasonably determined
    by the Board to be materially detrimental to OWC, and (f) any other circumstances under which OWC is entitled to terminate
    Optionee’s employment with OWC without paying Optionee severance pay under applicable law; and with respect to a Non-Employee
    (i) as such term is defined in the individual engagement agreement between the Optionee and OWC or its Affiliates, or (ii)
    if no such agreement is in place, then ‘Cause’ shall mean any one of the circumstances set forth in (a) through
    and including (e) herein, as applicable to such Non-Employee.
	 	 	 
	 	2.11	“Chairperson”
    - means the chairperson of the Committee.
	 	 	 
	 	2.12	“Committee”
    - means a share option compensation committee appointed by the Board, which shall consist of no fewer than two members
    of the Board, and if no such compensation committee is appointed, then the Board.
	 	 	 
	 	2.13	“Company”
    – means OWC Pharmaceutical Research Corp., a company organized and existing under the laws of the state of New York,
    USA, whose principal office is at Wall Street 40 NY, NY, USA 10005.
	 	 	 
	 	2.14	“Companies
    Law” - means the Israeli Companies Law, 5759-1999, including any rules and regulations promulgated thereunder
    and any provisions of the Companies Ordinance [New Version], 1983 still in effect, as amended from time to time.
	 	 	 
	 	2.15	“Controlling
    Shareholder” - shall have the meaning ascribed to it in Section 32(9) of the Ordinance.
	 	 	 
	 	2.16	“Cut-Off
    Date” – as defined in Section ‎11.3‎(b) מתחת.
	 	 	 
	 	2.17	“Date
    of Grant” - means the date of grant of an Option, as determined by the Board and set forth in the Optionee’s
    Grant Letter, and in any event not earlier than the first date on which the Company is permitted to effect Option grants under
    this ESOP and the provisions of the Ordinance, including any and all rules and regulations promulgated thereunder, as now
    in effect or as hereafter amended.
	 	 	 
	 	2.18	“Disability”
    – as defined in Section ‎9.5‎(v) מתחת.
	 	 	 
	 	2.19	“Election”
    – as defined in Section ‎5.6 מתחת.

 

    	3

     

    

 

	 	2.20	“Employee”
    - means a person who is employed by the Company or its Affiliates including an individual who is serving as a director or
    an office holder, but excluding Controlling Shareholders.
	 	 	 
	 	2.21	“Event”
    – as defined in Section ‎11.2 מתחת.
	 	 	 
	 	2.22	“Expiration
    Date” - means the date upon which an Option shall expire, as set forth in Section ‎9.2 below.
	 	 	 
	 	2.21	“Grant
    Letter” - means the grant letter given by the Company to the Optionee and signed by the Optionee, and which sets
    out the terms and conditions of an Option.
	 	 	 
	 	2.22	“ESOP”
    - means as defined in the preface hereto.
	 	 	 
	 	2.23	“ITA”
    - means the Israeli Tax Authority.
	 	 	 
	 	2.24	“NIS”
    – means, New Israeli Shekels.
	 	 	 
	 	2.25	“Non-Employee”
    - means a consultant, adviser, service provider, Controlling Shareholder or any other person who is not an Employee.
	 	 	 
	 	2.26	“Ordinary
    Income Track Option” or “OITO” - as defined in Section ‎5.5 מתחת.
	 	 	 
	 	2.27	“Option”
    - means an option to purchase one or more Shares of the Company pursuant to this ESOP.
	 	 	 
	 	2.28	“Optionee”
    - means a person who receives or holds an Option under this ESOP.
	 	 	 
	 	2.29	“Ordinance”
    - means the Israeli Income Tax Ordinance [New Version] 1961.
	 	 	 
	 	2.30	“Exercise
    Price” - means the exercise price for each Share underlying an Option, as determined in Section ‎0 מתחת.
	 	 	 
	 	2.31	“Representative”
    – as defined in Section ‎9.1 מתחת.
	 	 	 
	 	2.32	“Restricted
    Period” – as defined in Section ‎6.1 מתחת.
	 	 	 
	 	2.33	“Section
    102” - means Section 102 of the Ordinance, including any and all rules, regulations, orders and procedures
    promulgated thereunder, as now in effect or as hereafter amended.
	 	 	 
	 	2.34	“Share”
    - means the Ordinary Shares of the Company, of nominal value NIS 0.1 each.
	 	 	 
	 	2.35	“Successor
    Company” - means any entity into or with which the Company is merged or by which, the Company is acquired,
    pursuant to a Transaction in which the Company is not the surviving entity.
	 	 	 
	 	2.36	“Transaction”
    – means (i) a merger, acquisition or reorganization of the Company with one or more other entities in which the
    Company is not the surviving entity, or (ii) a sale of all or substantially all of the assets or shares of the Company.
	 	 	 
	 	2.37	“Trustee”
    - means any individual or entity appointed by the Company to serve as a trustee and who has been approved by the ITA,
    all in accordance with the provisions of Section 102(a) of the Ordinance, including any and all rules and regulations promulgated
    thereunder, as now in effect or as hereafter amended.
	 	 	 
	 	2.38	“US$”
    – means United States of America dollars.

 

    	4

     

    

 

	 	2.39	“Vested
    Option” – means any Option that has already become vested and exercisable according to its Vesting Schedule
    or otherwise (e.g. acceleration upon certain events).
	 	 	 
	 	2.40	“Vesting
    Schedule” - means, with respect to any Option, the date(s) as of which the Optionee shall be entitled to exercise
    such Option, as set forth Optionee’s individual Grant Letter, and if no such date(s) are specified in Optionee’s
    individual Grant Letter, then as set out in Section ‎10.2 מתחת.
	 	 	 
	 	2.41	“Unapproved
    102 Option” - means an Option granted pursuant to Section 102(c) of the Ordinance, including any and all rules and
    regulations promulgated thereunder, as now in effect or as hereafter amended, and not held in trust by a Trustee.

 

	3.	ADMINISTRATION
    OF THIS ESOP

 

This
Plan shall be administered by the Board. The Board shall have the authority in its sole discretion, subject and not inconsistent
with the express provisions of this Plan, to administer this Plan and to exercise all the powers and authorities specifically
granted to it under this Plan as necessary and advisable in the administration of this Plan.

 

Provided
that the Board is entitled by the Articles of Association and by law to delegate all and any of its powers and authority granted
to it under this Plan to a Committee, then such powers and authority may be delegated to the Committee. The Committee shall have
the responsibility of construing and interpreting this Plan and of establishing and amending such rules and regulations, as it
deems necessary or desirable for the proper administration of this Plan.

 

	 	3.1	The Committee
    shall select one of its members as its Chairperson and shall hold its meetings at such times and places, as the Chairperson
    shall determine or as otherwise convened in accordance with the Articles of Association. The Committee shall keep records
    of its meetings and shall make such rules and regulations for the conduct of its business, as it shall deem advisable.
	 	 	 
	 	3.2	The Committee
    shall have the power to recommend to the Board, and the Board shall have the full power and authority to: (i) designate Optionees;
    (ii) determine the Date of Grant, terms and provisions of the respective Grant Letters (which need not be identical), including,
    but not limited to, the number of Options to be granted to each Optionee, the number of Shares to be covered by each Option,
    provisions concerning the time and extent to which the Options may be exercised, and the nature and duration of restrictions
    as to the transferability, or restrictions constituting substantial risk of forfeiture upon occurrence of certain events;
    (iii) designate the type of Options; and (iv) cancel or suspend Options, as necessary.
	 	 	 
	 	3.3	Subject to the
    provisions of this Plan, the Articles of Association, the applicable laws and, the specific duties delegated by the Board
    to the Committee, and subject to the approval of any relevant authorities, the Committee shall have the authority, in its
    sole discretion:

 

	 	(i)	To construe and
    interpret the terms of this Plan and any Options granted pursuant hereto;
	 	 	 
	 	(ii)	To designate
    the Employees and Non-Employees to whom Options may from time to time be granted hereunder;
	 	 	 
	 	(iii)	To determine
    the number of Shares to be covered by each such Option granted hereunder;
	 	 	 
	 	(iv)	To prescribe
    forms of agreements and/or Grant Letters for use under this ESOP;

 

    	5

     

    

 

	 	(v)	To determine
    the terms of any Option granted hereunder;
	 	 	 
	 	(vi)	To determine
    the Exercise Price of any Option granted hereunder;
	 	 	 
	 	(vii)	To prescribe,
    amend and rescind rules and regulations relating to this Plan, provided that any such amendment or rescindment that would
    adversely affect the rights of an Optionee that has received or been granted an Option shall not be made without the Optionee’s
    written consent.
	 	 	 
	 	(viii)	To take all other
    action and make all other determinations necessary for the administration of this Plan.
	 	 	 
	 	(ix)	To determine
    the total number of Shares with in the pool allocated for the purpose of this Plan from time to time, and or any additional
    awards hereafter, subject to this Plan.

 

		3.4	Subject
                                         to the Articles of Association and applicable law, all decisions and selections made
                                         by the Board or the Committee pursuant to the provisions of this Plan shall be made by
                                         a majority of its members. Any decision reduced to writing shall be executed in accordance
                                         with the provisions of the Articles of Association, as the same may be in effect from
                                         time to time.
	 	 	 
		3.5	Any
                                         decision or action taken or to be taken by the Committee, arising out of or in connection
                                         with the construction, administration, interpretation and effect of this Plan and of
                                         its rules and regulations, shall, to the maximum extent permitted by applicable law,
                                         be within its absolute discretion (except as otherwise specifically provided herein)
                                         and shall be conclusive and binding upon all Optionees and any person claiming under
                                         or through any Optionee.
	 	 	 
		3.6	The
                                         liability of any member of the Board or the Committee, with respect to this Plan or any
                                         Option granted hereunder, shall be in accordance with the Articles of Association and
                                         applicable law.
	 	 	 
		3.7	Any
                                         member of the Committee shall be eligible to receive Options under this Plan while serving
                                         on the Committee, unless otherwise specified herein. No person shall be eligible to be
                                         a member of the Committee if that person’s membership would prevent this Plan from
                                         complying with exemptions provided under applicable laws.

 

	4.	DESIGNATION
    OF OPTIONEES

 

	 	4.1	The persons eligible
    for participation in this Plan as Optionees shall include any Employees and/or Non-Employees of the Company or of any Affiliate
    thereof; provided, however, that (i) Employees may only be granted 102 Options; and (ii) Non-Employees may only be granted
    3(i) Options.
	 	 	 
	 	4.2	Each Option granted
    pursuant to this Plan shall be evidenced by a Grant Letter, substantially in such form attached hereto as Exhibits A
    and B. Each Grant Letter shall state, among other matters, the number of Shares to which the Option relates, the type
    of Option granted thereunder (whether an CGTO, OITO, Unapproved 102 Option or a 3(i) Option), the Vesting Schedule, the Exercise
    Price per share, the Expiration Date and such other terms and conditions included in the Grant Letter, including any such
    other terms that the Committee or the Board in their discretion may prescribe, provided in all cases that they are consistent
    with this Plan. The Grant Letter shall be delivered to the Optionee and executed by the Optionee and shall incorporate the
    terms of this Plan by reference and specify the terms and conditions thereof and any rules applicable thereto.

 

    	6

     

    

 

	 	4.3	Neither this
    Plan nor any Grant Letter nor any offer of Options to an Optionee shall impose any obligation on the Company to continue to
    employ or to engage the services of any Optionee, and nothing in this Plan or in any Option granted pursuant thereto shall
    give any Optionee any right to continued employment, service with or engagement by the Company or restrict the right of the
    Company to terminate such employment, services or engagement at any time. Further, the Company and each Affiliate expressly
    reserves the right at any time to dismiss an Optionee free from any liability, or any claim under thisPlan, except as provided
    herein or in any agreement entered into with respect to an Option.
	 	 	 
	 	4.4	The grant of
    an Option hereunder shall neither entitle the Optionee to participate nor disqualify the Optionee from participating in, any
    other grant of Options pursuant to this Plan or any other option or share plan of the Company or any of its Affiliates.
	 	 	 
	 	4.5	Notwithstanding
    anything in the Plan to the contrary, all grants of Options to directors and office holders shall be authorized and implemented
    in accordance with the provisions of the Companies Law.

 

	5.	DESIGNATION
    OF OPTIONS PURSUANT TO SECTION 102

 

	 	5.1	The Company may
    designate Options granted to Employees pursuant to Section 102 as Unapproved 102 Options or Approved 102 Options.
	 	 	 
	 	5.2	The grant of
    Approved 102 Options under this ESOP shall be made in accordance with the provisions herein, including the provisions of Section
    ‎6 below, and shall be conditioned upon the approval of this Plan by the ITA.
	 	 	 
	 	5.3	An Approved 102
    Option may either be classified as either a Capital Gains Track Option (CGTO) or an Ordinary Income Track Option (OITO).
	 	 	 
	 	5.4	An Approved 102
    Option elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions
    of Section 102(b)(2) shall be referred to herein as “CGTO”.
	 	 	 
	 	5.5	An Approved 102
    Option elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions
    of Section 102(b)(1) shall be referred to herein as “OITO”.
	 	 	 
	 	5.6	The Company’s
    election of the type of Approved 102 Options as CGTO or OITO granted to Employees (the “Election”) shall
    be appropriately filed with the ITA before the first Date of Grant of an Approved 102 Option under such Election. Such Election
    shall become effective beginning the first Date of Grant of an Approved 102 Option under such Election and shall remain in
    effect until changed, but in any case not earlier than the end of the year following the year during which the Company first
    granted Approved 102 Options under such Election. The Election shall obligate the Company to grant only the type of Approved
    102 Option it has elected, and shall apply to all Optionees who were granted Approved 102 Options during the period indicated
    herein, all in accordance with the provisions of Section 102(g) of the Ordinance, including any and all rules and regulations
    promulgated thereunder, as now in effect or as hereafter amended. For avoidance of doubt, such Election shall not prevent
    the Company from granting Unapproved 102 Options simultaneously.
	 	 	 
	 	5.7	Designation of
    Approved 102 Options – if an Optionee exercises and sells his Shares within the Restricted Period, the Company shall
    not bear any tax liability arising due to the exercise and or sale of such Shares resulting from Optionee’s termination
    of employment, except for the tax liability mentioned in Section ‎21 מתחת.
	 	 	 
	 	5.8	All Approved
    102 Options must be held in trust by the Trustee, as described in Section ‎6 מתחת.
	 	 	 
	 	5.9	For avoidance
    of doubt, the designation of Unapproved 102 Options and Approved 102 Options shall be subject to the terms and conditions
    set forth in Section 102.

 

    	7

     

    

 

	6.	TRUSTEE

 

	 	6.1	Approved 102
    Options which shall be granted under this Plan and/or any Shares allocated or issued upon exercise of such Approved 102 Options
    and/or other shares received subsequently following any realization of rights, including, without limitation, bonus shares,
    shall be allocated or issued to the Trustee (and registered in the Trustee’s name in the Company’s shareholders
    register) and held by the Trustee for the benefit of the Optionees to whom such Approved 102 Options were granted for such
    period of time as required by Section 102 (the “Restricted Period”). All certificates representing Shares
    issued to the Trustee under this ESOP shall be deposited with the Trustee, and shall be held by the Trustee until such time
    that such Shares are released from the aforesaid trust as herein provided. If the requirements for Approved 102 Options are
    not met, the Approved 102 Options may be treated as Unapproved 102 Options, all in accordance with the provisions of Section
    102.
	 	 	 
	 	6.2	Notwithstanding
    anything to the contrary herein, the Trustee shall not release any Shares allocated or issued upon exercise of Approved 102
    Options prior to the full payment of the Optionee’s tax liabilities arising from Approved 102 Options, which were granted
    to such Optionee and/or any Shares allocated or issued upon exercise of such Options.
	 	 	 
	 	6.3	With respect
    to any Approved 102 Option, subject to the provisions of Section 102, an Optionee shall not sell or release from trust any
    Share received upon the exercise of an Approved 102 Option and/or any share received subsequently following any realization
    of rights, including without limitation, bonus shares, until the lapse of the Restricted Period required under Section 102.
    Notwithstanding the above, if any such sale or release occurs during the Restricted Period, the sanctions under Section 102
    shall apply to and shall be borne by such Optionee.
	 	 	 
	 	6.4	Upon receipt
    of Approved 102 Option, the Optionee will sign an undertaking to release the Trustee from any liability in respect of any
    action or decision duly taken and bona fide executed in relation with this Plan, or any Approved 102 Option or Share granted
    to him hereunder. Such release may be incorporated into the Grant Letter.
	 	 	 
	 	6.5	3(i) Options
    which shall be granted under the Plan, may, but need not, be issued to the Trustee, and if so issued to the Trustee, shall
    be held for the benefit of the Optionee. The Trustee shall hold such Options and the shares issued upon the exercise thereof
    (in the event of an exercise of such Options) pursuant and subject to Section 3(i) of the Ordinance, including any and all
    rules, regulations, orders and procedures promulgated thereunder, as now in effect or as hereafter amended. Anything to the
    contrary notwithstanding, the Trustee shall not release any 3(i) Options held by it and which were not already exercised into
    shares of the Company by the Optionee, nor shall the Trustee release any shares issued upon the exercise of 3(i) Options –
    in both cases - prior to the full payment of the relevant Optionee’s tax liabilities arising from those 3(i) Options
    which were granted to him and any shares issued upon the exercise of such 3(i) Options.

 

	7.	SHARES
    RESERVED FOR THE PLAN; RESTRICTIONS THEREON

 

	 	7.1	The Company shall
    from time to time reserve, out of its authorized but un-issued share capital, such number of Shares as the Board deems appropriate
    (subject to the Articles of Association) for the purposes of this Plan and/or for the purposes of any other share option plans
    which have previously been, or may in the future be, adopted by the Company, subject to adjustment as set forth in Section
    ‎11 below. Any Shares which remain un-issued and which are not subject to then outstanding Options at the termination
    or expiration of this Plan shall cease to be reserved for the purpose of this Plan, but may continue to be reserved for other
    share option plans then in effect, and in any event, until termination of this Plan the Company shall at all times reserve
    sufficient number of Shares to meet the requirements of any then outstanding Options. Should any Option for any reason expire
    or be canceled prior to its exercise or relinquishment in full, the Shares subject to such Option may again be subjected to
    a new Option under this Plan or under the Company’s other share option plans, provided, however, that Shares that have
    actually been issued under this Plan shall not be returned to the pool under this Plan and shall not become available for
    future distribution under this Plan.

 

    	8

     

    

 

	8.	EXERCISE
    PRICE

 

	 	8.1	The Exercise
    Price of each Share subject to an Option shall be as determined by the Committee in its sole and absolute discretion in accordance
    with applicable law, subject to any guidelines as may be determined by the Board from time to time. Each Grant Letter will
    contain the Exercise Price determined for each Option covered thereby (but in any event, not less than the nominal value of
    the Share issuable upon exercise thereof). In no event shall the Exercise Price of an Option be less than the par value of
    the shares for which such Option is exercisable. The Exercise Price shall also be subject to adjustment as provided in Section
    ‎11.5 hereof.
	 	 	 
	 	8.2	The total consideration
    to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by
    the Administrator and may consist entirely of (1) cash, (2) check, or (3) any combination of the foregoing methods of payment.
    In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such
    consideration may be reasonably expected to benefit the Company. The Committee shall have the authority to postpone the date
    of payment on such terms as it may determine.
	 	 	 
	 	8.3	The Exercise
    Price shall be denominated in NIS or US$ or otherwise as determined by the Committee.
	 	 	 
	 	8.4	The proceeds
    received by the Company from the issuance of Shares subject to the Options will be added to the general funds of the Company
    and used for its corporate purposes.

 

	9.	TERM
    AND EXERCISE OF OPTIONS

 

	 	9.1	Options shall
    be exercised by the Optionee by giving written notice to the Company and/or to any third party designated by the Company (the
    “Representative”), in such form and method as may be determined by the Committee and when applicable, by
    the Trustee in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice
    by the Company and/or the Representative and the payment of the Exercise Price at the Company’s or the Representative’s
    principal office. The notice shall specify the number of Shares with respect to which the Option is being exercised.
	 	 	 
	 	9.2	Options, to the
    extent not previously exercised, shall terminate forthwith upon the earlier of: (i) the date set forth in the Grant Letter
    (and unless otherwise determined in accordance with the provisions of this Plan with respect to any Option(s), such date shall
    be ten (10) years from the respective Date of Grant); or (ii) the expiration of any extended period in any of the events set
    forth in Section ‎9.5 מתחת (the “Expiration Date”).
	 	 	 
	 	9.3	The Options may
    be exercised by the Optionee in whole at any time or in part from time to time, to the extent that the Options become vested
    and exercisable, prior to the Expiration Date, and provided that, subject to the provisions of Section ‎9.5 מתחת,
    the Optionee who is an Employee is employed by or providing services to the Company or any of its Affiliates, at all times
    during the period beginning with the granting of the Option and ending upon the date of exercise. An Optionee who is a Non-Employee
    may exercise the Options in whole at any time or in part from time to time, to the extent that the Options have become vested
    and exercisable, prior to the Expiration Date.

 

    	9

     

    

 

	 	9.4	Subject to the
    provisions of Section ‎9.5 מתחת, in the event of termination of Optionee’s employment or
    services, with the Company or any of its Affiliates, all Options granted to such Optionee that are at the time of termination
    non-vested will immediately expire. A notice of termination of employment or service shall be deemed to constitute termination
    of employment or service. For the avoidance of doubt, in case of such termination of employment or service, the unvested portion
    of the Optionee’s Option shall not vest and shall not become exercisable and any unvested portion of the Optionee’s
    Option shall revert to the pool of Shares under this Plan or that of other share option plans then in effect.
	 	 	 
	 	9.5	Notwithstanding
    anything to the contrary herein and unless otherwise determined in the Optionee’s Grant Letter, an Option may be exercised
    after the date of termination of Optionee’s employment or service with the Company or any Affiliates during an additional
    period of time beyond the date of such termination, but only with respect to the number of Vested Options at the time of such
    termination according to the Vesting Schedule, as follows:

 

	 	(i)	If termination
    is without Cause, then any Vested Option still in force and un-expired may be exercised within a period of three (3) months
    after the date of such termination, provided however, that no Option shall be exercisable prior to the lapse of the first
    anniversary following the Date of Grant;
	 	 	 
	 	(ii)	If termination
    is the result of death, or Disability (defined below) of the Optionee, then any Vested Option still in force and un-expired
    may be exercised within a period of twelve (12) months after the date of such termination;
	 	 	 
	 	(iii)	With respect
    to (i) and (ii) above, prior to the expiration of the periods set out therein (i.e., the 3-month period in (i) above, and
    the 12-month period in (ii) above), the Committee may authorize an extension of the terms of exercise post-termination of
    all or part of the Vested Options beyond the date of such termination for a period not to exceed the period during which the
    Options by their terms would otherwise have been exercisable.
	 	 	 
	 	(iv)	For avoidance
    of any doubt, notwithstanding anything herein to the contrary, if termination of employment or service is for Cause any outstanding
    unexercised Option (whether vested or non-vested), will immediately expire and terminate, and the Optionee shall not have
    any right in connection to such outstanding Options.
	 	 	 
	 	(v)	As used herein:
    the term “Disability” shall have the meaning ascribed thereto in the individual employment or engagement
    agreement between the Optionee and the Company or any of its Affiliates, as applicable and if no such definition exists, then
    “Disability” shall mean Optionee’s inability to perform his/her duties to the Company or to any of
    its Affiliates, for a consecutive period of at least 180 days, by reason of any medically determinable physical or mental
    impairment as determined by a medical doctor satisfactory to the Committee.

 

	 	9.6	To avoid doubt,
    the Optionees shall not be deemed owners of the Shares issuable upon the exercise of Options and shall not have any of the
    rights or privileges of shareholders of the Company in respect of any Shares purchasable upon the exercise of any Option,
    nor shall they be deemed to be a class of shareholders of the Company for any purpose, including but not limited for the purpose
    of the operation of Sections 350 and 351 of the Companies Law or any successor to such section, until registration of the
    Optionee as holder of such Shares in the Company’s register of shareholders upon exercise of the Option in accordance
    with the provisions of this Plan, but in case of Options and Shares held by the Trustee, subject to the provisions of Section
    ‎6 מעל. Notwithstanding anything herein to the contrary, in no event shall the Optionees be deemed a
    class of creditors of the Company for any purpose whatsoever, including but not limited to for the purpose of the operation
    of Sections 350 and 351 of the Companies Law or any successor to such section.

 

    	10

     

    

 

	 	9.7	The form of Grant
    Letter customarily used by the Company in connection with the grant of Options, provided it is consistent with the provisions
    of this Plan, may contain such other provisions, as the Committee or the Board may, from time to time, deem advisable.
	 	 	 
	 	9.8	The inability
    of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
    counsel to be necessary for the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability
    in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
	 	 	 
	 	9.9	With respect
    to Unapproved 102 Options, if the Optionee ceases to be employed the Company or any Affiliate, the Optionee shall extend to
    the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of Shares, all in
    accordance with the provisions of Section 102. In respect of any employer’s tax liability for the purpose of employment
    taxes such as in the case of social taxes, see Section ‎21 מתחת.
	 	 	 
	 	9.10	Shares shall
    not be issued pursuant to the exercise of an Option unless the exercise of such Option, the method of payment and the issuance
    and delivery of such Shares shall comply with applicable laws.
	 	 	 
	 	9.11	Upon their issuance,
    the Shares shall carry equal voting rights on all matters where such vote is permitted by applicable laws of the jurisdiction
    of incorporation of the Company.
	 	 	 
	 	9.12	It is hereby
    clarified that the Company shall have no liability to an Optionee, or to any other party, if an Option (or any part thereof),
    which is intended to be a 102 Option, does not eventually qualify as a 102 Option.
	 	 	 
	 	9.13	Voting Proxy.
    The right to vote any Shares acquired under this Plan pursuant to a Grant Letter shall, unless otherwise determined by the
    Committee, be given by the Optionee, pursuant to an irrevocable proxy (in a form approved by the Board or the Committee),
    to the Chairman of the Board of the Company or to any other person or persons designated by such. Such a proxy shall include
    a provision according to which such Shares shall be voted in the same proportion as the result of the shareholder vote at
    the shareholders meeting or written consent in respect of which such Shares will be voted. Unless otherwise determined by
    the Committee, all Options granted hereunder shall be conditioned upon the execution of such irrevocable proxy. So long as
    any such Shares are held by a Trustee, such Shares shall be voted by the Trustee (or a proxy thereof designated by the Board
    or the Committee), and such Shares shall be voted in the same proportion as the result of the shareholder vote at the shareholders
    meeting or written consent in respect of which the Shares held by the Trustee are being voted.

 

    	11

     

    

 

	10.	VESTING
    OF OPTIONS

 

	 	10.1	Subject to the
    provisions of this Plan, each Option shall vest and become exercisable commencing on the Vesting Date thereof, as determined
    by the Board or by the Committee, for the number of Shares as shall be provided in the Grant Letter. However, no Option shall
    be exercisable prior to the lapse of the first anniversary following the Date of Grant and after the Expiration Date.
	 	 	 
	 	10.2	Unless otherwise
    determined by the Administrator, all Options granted pursuant to this Plan, shall, subject to the Optionee’s continued
    employment with or service to the Company or its Affiliate, become vested over a two (2) year period from its Date of Grant,
    as follows:

 

	 	10.2.1	Thirty three
    percent (33%) of the Options shall vest on the Date of Grant;
	 	 	 
	 	10.2.2	Eight and a quarter
    percent (8.25%) of the Options shall vest on a quarterly basis from the Date of Grant and until the end of the first anniversary
    of the Date of Grant; and
	 	 	 
	 	10.2.3	Eight and a half
    percent (8.5%) of the Options shall vest on a quarterly basis from the first anniversary of the Date of Grant and until the
    end of the second anniversary from the Date of Grant.
	 	 	 
	 	10.2.4	 

 

	 	10.3	An Option may
    be subject to such other terms and conditions on the time or times when it may be exercised, as the Committee may deem appropriate.
    The vesting provisions of individual Options may vary.
	 	 	 
	 	10.4	To remove any
    doubt, no Option shall be exercisable prior to the lapse of the first anniversary following the Date of Grant.

 

	11.	ADJUSTMENTS

 

	 	11.1	Changes
    in Capitalization. Subject to any required action by the shareholders of the Company, the number of Shares covered
    by each outstanding Option, the number of Shares which have been reserved for issuance under this Plan and/or any other share
    option plan adopted by the Company, but as to which no Options have yet been granted or which have been returned to this Plan
    or such other share option plans upon cancellation or expiration of an Option, as well as the Exercise Price per share of
    Shares covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease resulting from
    a share split, bonus shares (share dividend), combination or reclassification of the Shares, or any other increase or decrease
    in the number of issued Shares effected without receipt of consideration by the Company. The adjustments described herein
    shall be made by the Administrator, 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 the price of Shares subject
    to an Option. If the Options or the Shares issued upon the exercise of such Options will be deposited with a Trustee, as determined
    by the Administrator, all of the Shares formed by these adjustments also will be deposited with the Trustee on the same terms
    and conditions as the original Options or Shares.

 

    	12

     

    

 

	 	11.2	Dissolution
    or Liquidation. In the event of any dissolution or liquidation of the Company, whether voluntary or involuntary (the
    “Event”), the Administrator shall notify each Optionee as soon as practicable prior to the effective date
    of such Event. The Option holders shall then have fifteen (15) days to exercise any unexercised Vested Options held by them
    at that time, in accordance with the exercise procedure set forth herein. Upon the expiration of such 15-day period, all remaining
    unexercised Options and any non-Vested Options will terminate immediately. The Administrator in its sole discretion may allow
    the exercise of any or all-outstanding Options, whether or not such Options are Vested Options, during a longer period following
    such notification and prior to the Event, all subject to the provisions of applicable laws. To the extent it has not been
    previously exercised, an Option and all Optionee’s rights thereto will terminate immediately prior to the Event.
	 	 	 
	 	11.3	Transaction.

 

	 	(a)	In the event
    of a Transaction, and to the extent possible by the terms of the Transaction, each outstanding Option shall be assumed for
    an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation,
    and appropriate adjustments shall be made in the number of options in order to reflect such an action and to keep the Optionee
    harmless due to the Transaction.
	 	 	 
	 	(b)	In the event
    that as part of the Transaction the successor corporation refuses to assume or substitute outstanding Options, the vesting
    periods defined in the Grant Letters shall be accelerated so that any unvested Option or any portion thereof shall be immediately
    vested as of the date which is ten (10) days prior to the effective date of the Transaction, in which event the Company shall
    notify the Optionee that the Options are fully exercisable for a period of ten (10) days from the date of such notice, and
    the Options shall terminate upon the expiration of such period. [Odelia: Need to check if this does not cause a taxable event
    to the Optionee Subject to the following paragraph of this Section ‎11.3‎(b), any Vested Options shall be fully exercisable
    for such period as determined by the Board, where any un-Vested or Vested but un-exercised Options shall terminate upon the
    expiration of such period.
	 	 	 
	 	 	In
    any event, any Vested Option not exercised by the date determined above (the “Cut-Off Date”), and any un-Vested
    Options on such Cut-Off Date, shall immediately terminate and no longer be exercisable by the Optionee as of the Cut-Off Date.
	 	 	 
	 	(c)	Without derogating
    from the provisions of paragraph ‎(b) מעל, if as a condition precedent to a Transaction, all Optionees
    are required to sell or exchange their Vested Options and/or any Shares issued upon exercise thereof as part of the Transaction,
    then each Optionee shall be obligated to sell or exchange, as the case may be, any Vested Options and/or Shares such Optionee
    holds or purchased under this Plan, in accordance with the instructions of the Board, at its sole and absolute discretion,
    in connection with the Transaction, and on the same terms as shall be determined to all the holders of Ordinary Shares in
    the Company. For avoidance of doubt, on the Cut-Off Date, any Vested Options not sold or exchanged and any non-Vested Options
    shall terminate and expire as of the Cut-Off Date.
	 	 	 
	 	(d)	For the purposes
    of this paragraph, the Option shall be considered assumed if, following a Transaction, the Optionee receives the right to
    purchase or receive, for each Share subject to the Option immediately prior to the Transaction, the consideration (whether
    in shares, stocks, cash, other securities or property or any other manner as the Administrator shall determine, which may
    include procedures for Cashless Exercise) received in the Transaction by holders of Shares for each Share held on the effective
    date of the Transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders
    of a majority of the outstanding Shares); provided, however, that if such consideration received in the Transaction is not
    solely shares of the successor corporation or its parent or subsidiary, the Administrator may, with the consent of the successor
    corporation, provide for each Optionee to receive solely Shares of the successor company or its parent or subsidiary equal
    to the per share consideration received by holders of Shares in the Transaction.

 

    	13

     

    

 

	 	11.4	No changes will
    be made to the terms of the Options upon the consummation of a Transaction, except as the Board determines to be necessary
    or desired to effect such Transaction.
	 	 	 
	 	11.5	Stock Dividend,
    Bonus Shares, Stock Split.

 

	 	(a)	If the outstanding
    shares of the Company shall at any time be changed or exchanged by declaration of a share dividend (bonus shares), share split,
    combination or exchange of shares, recapitalization, or any other like event by or of the Company, and as often as the same
    shall occur, then the number, class and kind of the Shares subject to this Plan or subject to any Options therefor granted,
    and the Exercise Prices, shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares
    without changing the aggregate Exercise Price, provided, however, that the Exercise Price shall not be less than the nominal
    value of the Share underlying any such Options, and provided further, that no adjustment shall be made by reason of the distribution
    of subscription rights (rights offering) on outstanding shares. Upon the occurrence of any of the foregoing, the class and
    aggregate number of Shares issuable pursuant to this Plan (as set forth in Section 7 hereof), in respect of which Options
    have not yet been exercised, shall be appropriately adjusted, all as will be determined by the Board whose determination shall
    be final.
	 	 	 
	 	(b)	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 subject to an Option.

 

	12.	PURCHASE
    FOR INVESTMENT; REPRESENTATIONS

 

	 	12.1	The Company’s
    obligation to issue or allocate Shares upon exercise of an Option granted under this Plan is expressly conditioned upon: (a)
    the Company’s completion of any registration or other qualifications of such Shares under all applicable laws, rules
    and regulations or (b) representations and undertakings by the Optionee (or his legal representative, heir or legatee, in
    the event of the Optionee’s death) to assure that the sale of the Shares complies with any registration exemption requirements
    which the Company in its sole discretion shall deem necessary or advisable. Such required representations and undertakings
    may include representations and agreements that such Optionee (or his legal representative, heir, or legatee): (a) is purchasing
    such Shares for investment and not with any present intention of selling or otherwise disposing thereof; and (b) agrees to
    have placed upon the face and reverse of any certificates evidencing such Shares a legend setting forth (i) any representations
    and undertakings which such Optionee has given to the Company or a reference thereto; and (ii) that, prior to effecting any
    sale or other disposition of any such Shares, the Optionee must furnish to the Company an opinion of counsel, satisfactory
    to the Company, that such sale or disposition will not violate the applicable laws, rules, and regulations, whether of the
    State of Israel or of any other State having jurisdiction over the Company and the Optionee.
	 	 	 
	 	12.2	The Optionee
    acknowledges that in the event that the Company’s shares shall be registered for trading in any public market, Optionee’s
    rights to sell the Shares may be subject to certain limitations (including a lock-up period), as will be requested by the
    Company or its underwriters, and the Optionee unconditionally agrees and accepts any such limitations.

 

    	14

     

    

 

	 	12.3	If any Shares
    shall be registered under the United States Securities Act of 1933, no public offering otherwise than a national securities
    exchange (as defined in the United States Securities Exchange Act of 1934, as amended) of any Shares shall be made by the
    Optionee (or any other person) under such circumstances that he or she (or such other person) may be deemed an underwriter,
    as defined in the United States Securities Act of 1933.
	 	 	 
	 	12.4	Upon the grant
    of Options to an Optionee or the issuance of Shares upon the exercise thereof, the Company shall obtain from the Optionee
    the representations and undertakings as follows, and any other representations and warranties that the Committee may deem
    advisable, and the giving of such representations and warranties by the Optionee shall be a condition precedent to Optionee’s
    right to receive the Option and/or be issued the Shares upon exercise thereof:

 

	 	(a)	That the Optionee
    knows that there is no certainty that the exercise of the Options will be financially worthwhile. The Optionee thereby undertakes
    not to have any claim against the Company or any of its directors, employees, stockholders or advisors if it emerges, at the
    time of exercising the Options, that the Optionee’s investment in the Company’s Shares was not worthwhile, for
    any reason whatsoever.
	 	 	 
	 	(b)	That the Optionee
    knows and understands that his rights regarding the Options and the Shares are subject for all intents and purposes to the
    instructions of the Company’s documents of incorporation and to the agreements of the shareholders in the Company.
	 	 	 
	 	(c)	That the Optionee
    knows that in addition to the allocations set forth above, the Company has allocated and/or is entitled to allocate Options
    and Shares to other employees and other people, and the Optionee shall have no claim regarding such allocations, their quantity,
    the relationship among them and between them and the other shareholders in the Company, exercising of the options or any matter
    related to or stemming from them.
	 	 	 
	 	(d)	That the Optionee
    knows that neither this Plan nor the grant of Option or Shares thereunder shall impose any obligation on OWC to continue the
    engagement of the Optionee, and nothing in this Plan or in any Option or Shares granted pursuant thereto shall confer upon
    any Optionee any right to continue being engaged by the Company, or restrict the right of the Company to terminate such engagement
    at any time.

 

	13.	DIVIDENDS

 

With
respect to all Shares (but excluding, for avoidance of any doubt, any unexercised Options) allocated or issued upon the exercise
of Options purchased by the Optionee and held by the Optionee or by the Trustee, as the case may be, the Optionee shall be entitled
to receive dividends in accordance with the quantity of such Shares, subject to the provisions of the Articles of Association
and subject to any applicable taxation on distribution of dividends, and, when applicable, subject to the provisions of Section
102.

 

	14.	RESTRICTIONS
    ON ASSIGNABILITY AND SALE OF OPTIONS

 

	 	14.1	No Option or
    any right with respect thereto, purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given
    as collateral or any right with respect to it given to any third party whatsoever, except as specifically allowed under this
    Plan, and during the lifetime of the Optionee each and all of such Optionee’s rights to purchase Shares hereunder shall
    be exercisable only by the Optionee.
	 	 	 
	 	 	Any such action
    made directly or indirectly, for an immediate validation or for a future one, shall be void.
	 	 	 
	 	14.2	So long as Options
    and/or Shares are held by the Trustee on behalf of the Optionee, all rights of the Optionee over the Shares are personal,
    can not be transferred, assigned, pledged or mortgaged, other than by will or pursuant to the laws of descent and distribution.

 

    	15

     

    

 

	15.	EFFECTIVE
    DATE AND DURATION OF THE PLAN

 

This
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, unless terminated earlier in accordance with Section ‎0 מתחת.

 

	16.	AMENDMENTS
    OR TERMINATION

 

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

 

	17.	GOVERNMENT
    REGULATIONS

 

This
Plan, and the grant and exercise of Options hereunder, and the obligation of the Company to sell and deliver Shares under such
Options, shall be subject to all applicable laws, rules, and regulations, whether of the State of Israel any other State having
jurisdiction over the Company and the Optionee, including, without limitation, the United States Securities Act of 1933, the Companies
Law, the Securities Law, 1968, and the Ordinance (including any and all rules and regulations promulgated thereunder, as now in
effect or as hereafter amended), and to such approvals by any governmental agencies or national securities exchanges as may be
required. Nothing herein shall be deemed to require the Company to register the Shares under the securities laws of any jurisdiction.

 

	18.	CONTINUANCE
    OF EMPLOYMENT OR HIRED SERVICES

 

Neither
this Plan nor the Grant Letter with the Optionee shall impose any obligation on the Company or an Affiliate thereof, to continue
any Optionee in its employ or service, and nothing in this Plan or in any Option granted pursuant thereto shall confer upon any
Optionee any right to continue in the employ or service of the Company or an Affiliate thereof or restrict the right of the Company
or an Affiliate thereof to terminate such employment or service at any time.

 

	19.	GOVERNING
    LAW & JURISDICTION

 

This
Plan shall be governed by and construed and enforced in accordance with the laws of the State of Israel applicable to contracts
made and to be performed therein, without giving effect to the principles of conflict of laws. The competent courts of Tel Aviv
district, Israel shall have sole and exclusive jurisdiction in any matters pertaining to this Plan and any Grant Letters effected
hereunder.

 

	20.	INTEGRATION
    OF SECTION 102 AND TAX COMMISSIONER’S PERMIT

 

	 	20.1	With regards
    to Approved 102 Options, the provisions of this Plan and the Grant Letter shall be subject to the provisions of Section 102
    and the ITA Commissioner’s permit, and the said provisions and permit shall be deemed an integral part of this Plan
    and of the individual Grant Letters with each Optionee.
	 	 	 
	 	20.2	Any provision
    of Section 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section
    102, which is not expressly specified in this Plan or the individual Grant Letter of the Optionees, shall be considered binding
    upon the Company and the Optionees.

 

    	16

     

    

 

	21.	TAX
    CONSEQUENCES

 

	 	21.1	Any tax consequences
    arising from the grant or exercise of any Option, from the payment for Shares covered thereby or from any other event or act
    (of the Company and/or its Affiliates, the Trustee or the Optionee), hereunder, shall be borne solely by the Optionee. The
    Company and/or its Affiliates and/or the Trustee shall withhold taxes according to the requirements of any applicable laws,
    rules, and regulations, including withholding taxes at source. Furthermore, the Optionee shall agree to indemnify the Company
    and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or
    interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld,
    any such tax from any payment made to the Optionee.
	 	 	 
	 	21.2	The Company and,
    when applicable, the Trustee shall not be required to release any Share or share certificate representing such Shares to an
    Optionee until all required payments have been fully made.
	 	 	 
	 	21.3	To the extent
    provided by the terms of any Grant Letter, the Optionee may satisfy any tax withholding obligation relating to the exercise
    or acquisition of Shares under an Option by any of the following means (in addition to the Company’s right to withhold
    from any compensation paid to the Optionee by the Company) or by a combination of such means: (i) tendering a cash payment;
    (ii) subject to the Committee’s approval on or prior to the payment date, authorizing the Company to withhold Shares
    from the Shares otherwise issuable to the Optionee as a result of the exercise or acquisition of Shares under the Option in
    an amount not to exceed the minimum amount of tax required to be withheld by law; or (iii) subject to Committee approval on
    or prior to the payment date, delivering to the Company owned and unencumbered Shares; provided that Shares acquired on exercise
    of Options have been held for at least 6 months from the date of exercise.
	 	 	 
	 	21.4	The Company shall
    have the right to deduct from all amounts paid to an Optionee in cash (whether under this Plan or otherwise) any taxes required
    by law to be withheld in respect of Options under this Plan. In the case of any Option satisfied by the issuance of Shares,
    no Shares shall be issued unless and until arrangements satisfactory to the Committee shall have been made to satisfy any
    withholding tax obligations applicable with respect to such Option. Without limiting the generality of the foregoing and subject
    to such terms and conditions as the Committee may impose, the Company shall have the right to retain, or the Committee may,
    subject to such terms and conditions as it may establish from time to time, permit Optionees to elect to tender, Shares to
    satisfy, in whole or in part, the amount required to be withheld.
	 	 	 
	 	21.5	In respect of
    any employer’s tax liability arising only for the purpose of employment taxes such as in the case of social taxes resulting
    from a breach of Section 102, the Company shall not bear any tax due at the time of sale of Shares, all in accordance with
    the provisions of Section 102.
	 	 	 
	 	21.6	Notwithstanding
    anything herein to the contrary of Section ‎21.5 above, only in the event of termination of employment by the Company,
    other than termination for Cause, Company should bear the tax liability arising only for the purpose of employment taxes such
    as in the case of social taxes.
	 	 	 
	 	21.7	For avoidance
    of any doubt, notwithstanding anything herein to the contrary, if termination of employment or service is for Cause, the Company
    shall not bear any tax liability derived due to the exercise and or sale of the Options as a result of Optionee’s termination.

 

    	17

     

    

 

	22.	NON-EXCLUSIVITY
    OF THIS ESOP

 

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

 

For
the avoidance of doubt, prior grant of options to Employees and/or Non-Employees of the Company under their employment agreements
or other engagement agreements, and not in the framework of any previous option plan, shall not be deemed an approved incentive
arrangement for the purpose of this Section ‎22.

 

	23.	MULTIPLE
    AGREEMENTS

 

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

 

	24.	DISPUTES

 

Any
dispute or disagreement which may arise under or as a result of or pursuant to this Plan or the individual Grant Letters shall
be determined by the Board in its sole discretion and any interpretation made by the Board of the terms of this Plan or the individual
Grant Letters shall be final, binding and conclusive.

 

This
ESOP was adopted by the Board on May 29, 2016.

 

/s/
Mordechai Bignitz, CEO

OWC
Pharmaceutical Research Corp.

 

    	18

     

    

 

Exhibit
A

 

Form
of 102 Options Grant Letter

 

    	19

     

    

 

Exhibit
B

 

Form
of 3(i) Options Grant Letter

 

    	20

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