Document:

Exhibit 10.6

 

BioCancell Ltd.

(“the Company”)

 

Employee, Officer and Consultant Reward
Plan 2011

 

		1.	The Plan and its objectives

 

The
Plan is designed to incentivize employees, directors, officers and consultants of the Company and of its Affiliate Companies (as
those terms are hereinafter defined), with the object of encouraging them to contribute to the development of its business or
that of the Affiliate Companies, and increase those employees’ identification with the Company or its Affiliate Companies.

 

		2.	Definitions

 

		2.1	Unless the context otherwise requires, the terms set out
below shall in this Plan bear the meaning set out opposite them:

 

	“TASE” -	Tel Aviv Stock Exchange.
	 	 
	“Exercise Notice” -	within the meaning of section 7.4.1 hereof.
	 	 
	“Tax Provisions” -	the tax provisions pursuant to the relevant tax track under Section 102 or the tax provision contained in Section 3(i).
	 	 
	“the Company” - 	BioCancell Ltd., a company incorporated according to the laws of the State of Israel.
	 	 
	“Option Warrants Grant” -	the grant by the Company of the Option Warrants to the Offeree by the Grant Letter (as those capitalized expressions are hereinafter defined). 
	 	 
	the “Ordinance” and/or the “Income Tax Ordinance” - 	the Income Tax (New Version) Ordinance, 5721-1961 as amended from time to time, including such Regulations and/or Rules and/or Orders and/other provisions that have been or will be issued by virtue thereof. 
	 	 
	“Allotment” -	allotment of Option Warrants of the Company to a Trustee on behalf of or to the Offeree.
	 	 
	“Affiliate Company” -	a company that is the controlling stockholder of the Company, a company that is controlled by the Company, or a company which has a controlling stockholder in common with the Company.  
	 	 
	“Law” - 	the laws of the State of Israel, as amended from time to time.

 

    	 

     

    

 

	 “Trading Day” -	a trading day on the TASE. 
	 	 
	“Effective Date” -	the date from which the vesting period of the Option Warrants will commence, and which, unless otherwise prescribed by the Plan Manager in the Grant Letter, shall be the day on which the Option Warrants will be allotted to the Trustee on behalf of or to the Offeree, as the case may be.
	 	 
	“Consultant” -	a party who provides services to the Company (other than a director), who is entitled to receive Option Warrants according to Section 3(i).  
	 	 
	“Section 102 Rules” or “the Rules” -	Income Tax (Tax Relief on the Allotment of Employee Shares) Rules, 5763-2003.
	 	 
	“Option Warrants” -	option warrants to acquire a single ordinary share of the Company pursuant to the terms of this Plan. The Option Warrants will not be listed for trading.  
	 	 
	“Allotment Date” -	as stated in section 6.2.1 or 6.2.2 hereof, as appropriate.
	 	 
	“Exercise Price” -	pursuant to the provisions of section 7.1 hereof.
	 	 
	“Merger” or “Merger Deal” - 	as defined in section 4.5 hereof.
	 	 
	“Grant Letter” -	letter from the Company to the Offeree in which notice will be given to the Offeree regarding the resolution to allot to him Option Warrants pursuant to the provisions of this Plan. The Grant Letter will, inter alia, set out the following: (1) the Exercise Price; (2) the number of Option Warrants that are granted to the Offeree; (3) the tax track elected by the Company or Affiliate Company, as appropriate, pursuant to the provisions of section 11 of the Plan; and (4) the vesting period and vesting dates.     
	 	 
	“Manager” and/or “the Plan Manager” -	the board of directors of the Company (the “BOD” or the “BOD of the Company”)  or Committee that has been appointed by the BOD of the Company and which has been empowered by it to manage this Plan, subject to the provisions of the Companies Law, 5759-1999. If, subject to the provisions of the Company’s by-laws (as amended from time to time) the Plan Manager is a BOD-appointed Committee, such Committee will consist of not less than two (2) members, at least one of whom shall be an external director, all as directed by the BOD.      
	 	 
	“Share or  “Shares -	an ordinary NIS 0.01 par value share of the Company.

 

    	2

     

    

 

	“Exercise Shares” -	shares that have been or will be allotted by the Company following the exercise of Option Warrants that have been granted to the Offeree as more particularly detailed in the provisions of the Plan. The Exercise Shares will be listed for trading, following the allotment thereof.    
	 	 
	“the Tax Track” -	one of the three tax tracks described in Section 102, as follows: (1) capital gains track by trustee;  (2) work income track by trustee; (3) track without a trustee (work income); as more particularly detailed in section 11 of this Plan, respectively.
	 	 
	“Officer” -	as defined in Section 1 of the Companies Law, 5759-1999. 
	 	 
	“Offeree” -	an employee, Consultant (as defined above), director or Officer of the Company or of an Affiliate Company, to whom Option Warrants have been granted pursuant to the provisions of this Plan.
	 	 
	“Trustee”	a trustee within the meaning of Section 102(a) of the Ordinance, and in Rules 2 and 3 of the Rules, who has been appointed by the Company to hold in trust, the Option Warrants that are granted according to this Plan and the Exercise Shares, as the case may be, on behalf of Offerees. 
	 	 
	“Disability” -	for the purposes of this Plan – in the context of the termination of the employer-employee relationship, as such term or like term is defined in the Offeree’s employment agreement and in the absence of such definitions, the Offeree’s inability, as determined by a competent physician whose findings are acceptable to the Company, to effectively perform his primary duties in the Company as a result of sickness or injury for a continuous period exceeding 180 days; 
	 	 
	“Cause” -	for purposes of this Plan – in the context of the termination of the employer-employee relationship, as such term or like term is defined in the Offeree’s employment agreement or in the agreement by virtue of which the Offeree supplies services to the Company (in regard to persons other than an employee of the Company) and in the absence of such definition; (1) conviction of an offense or felony carrying moral ignominy or which affect the Company; (2) the continued unreasonable refusal on the part of the Offeree to perform a reasonable lawful instruction with which he has been tasked by the Company (including the Offeree’s superior) in connection with the Company’s or its Affiliate Company’s business and which could have been performed lawfully; (3) fraud or embezzlement of the funds of the Company or an Affiliate Company; (4) breach of the duty of trust or duty of care towards the Company by its director; (5) the disclosure of confidential information of the Company or breach of the duty of non-competition with the Company or any other breach towards the Company; or (6) such definition of “Cause” as is found in the personal service agreement of an Offeree, being an employee.  

 

    	3

     

    

 

	“Section 102” -	Section 102 of the Ordinance.
	 	 
	“Section 3(i) -	Section 3(i) of the Ordinance.
	 	 
	“Retirement” -	in the context of the termination of the employer-employee relationship, the Offeree reaching the earlier of : (1) the retirement age prescribed by Law; or (2) the retirement age prescribed in the Offeree’s employment agreement. 
	 	 
	“Control” or “Controlling Party” -	as defined in Section 102 of the Ordinance.
	 	 
	“Plan” -	this Plan (as amended from time to time);
	 	 
	“Blocking Period” -	the period that the Option Warrants and Exercise Shares will be held by the Trustee for the benefit of the Offeree, as more particularly described in the provisions of Section 102 and the Tax Track that has been selected by the Company.  
	 	 
	“Option Warrants Term” - 	in relation to the Option Warrants that have been granted but not exercised – the period specified in section 9 hereof. 

  

		2.2	Without derogating from the interpretation of the definitions
appearing in section 2.1 above, expressions used in this Plan and which relate to the singular will include the plural and vice
versa, and expressions pertaining to gender shall equally apply to both genders, save where the context otherwise requires.

 

		3.	Shares designated for the grant of Option Warrants

 

The Plan
Manager may, from time to time, but shall not be obliged to, determine an aggregate number of Exercise Shares that will be granted
according to this Plan and any amendment thereto. Such number of Exercise Shares (if and to the extent so determined) shall be
subject to adjustments that will be required in order to implement the provisions of the Plan pursuant to the provisions of section
4 hereof.

 

    	4

     

    

 

In the event
of the Offeree’s entitlement to all or any of the Option Warrants that have been granted to him for any reason shall expire,
such Option Warrants will revert to the Plan and may be re-allotted.

 

		4.	Adjustments

 

The Option
Warrants are subject to the following adjustments:

 

		4.1	Bonus shares

 

In the event
of the Company distributing bonus shares, the Effective Date for the distribution of which will fall after the allotment date of
the securities to the Offeree, but prior to the securities having been exercised or having expired, the aggregate number of shares
that may be allotted under the Plan (and for which Grant Letters have not yet been granted or have been granted but expired, but
which may be re-granted pursuant to the terms of the Plan) and the number of Exercise Shares to which the Offeree is entitled at
the time of exercising the securities will increase by such number of shares to which the Offeree would have been entitled as bonus
shares had he exercised the securities before the record date for the distribution of the bonus shares. The Exercise Price of each
security shall be unchanged as a result of the increase of the number of the Exercise Shares to which the Offeree is entitled following
the distribution of the bonus shares.

 

		4.2	Alteration of capital

 

In the
event of a split, consolidation or re-classification of the Company’s share capital or other like equity event, the Plan
Manager will effect the necessary adjustments required to the aggregate number of shares that may be allotted under the Plan (for
which the Grant Letters have yet to be granted or have been granted but have expired and which may be re-granted pursuant to the
terms of the Plan (and likewise to the number of the Exercise Shares to which the Offeree is entitled at the time of the exercise
of the securities and also to the Exercise Price in order to prevent the dilution or the increase of an Offeree’s rights
in the framework of the Plan in relation to the number of the Exercise Shares.

 

		4.3	Rights issue

 

In the event
of a rights offering by the Company to all of its shareholders or of options to acquire shares or securities that are convertible
into the Company’s shares, the Effective Date for the distribution of which will fall after the date of the allotment of
the securities to the Offeree, but prior to the securities having been exercised or expired, the aggregate number of shares that
may be allotted under the Plan (for which the Grant Letters have yet to be granted or which have been granted but expired and which
may be re-granted pursuant to the terms of the Plan) will increase and likewise the number of Exercise Shares to which the Offeree
is entitled at the time of exercising the securities pursuant to the benefit component inherent in such grant of rights or options.
The benefit component as well as such adjustments mentioned will be set by the Plan Manager, inter alia, based on the relevant
TASE Rules.

 

    	5

     

    

 

		4.4	Cash dividend

 

In the event
of the Company distributing a cash dividend, the Effective Date for whose distribution will fall after the allotment date of the
securities to the Offeree, but prior to the securities having been exercised or expired, the Exercise Price of each security will
be reduced by the amount of the dividend per share less tax, provided that the Exercise Price will not be less than the nominal
value of the share. For the avoidance of any doubt, it is clarified that save as detailed above, no adjustment will be made to
the number of the Exercise Shares or the Exercise Price in consequence of the distribution of a cash dividend.

 

		4.5	Merger, acquisition or sale of assets

 

		4.5.1	In the event of: (a) a merger or consolidation in which
the Company is not the “absorbing” entity or in consequence of which the other company will become the parent company
of the Company, directly or indirectly, or in which the Company is the absorbing entity (company) but in consequence of which
a third party will hold 50% or more of the voting rights in the Company; or (b) the acquisition of all or a majority of the ordinary
shares of the Company; or (c) in the event of the sale of all or a majority of the Company’s assets; or (d) spinoff of the
Company; or (e) such other transaction being substantially similar in nature; (each of such events being hereinafter called in
this section: “Merger”), the securities that have been granted but have yet to be exercised will be exchanged
by alternative securities of the Company following the Merger or in its Affiliate Company, as determined by it, and pursuant to
that described below. In the event of the merged Company or its parent company or subsidiary not granting such alternative securities,
then and in such case the securities held by the Offerees, including those which have yet to vest pursuant to the vesting terms
of the allotment, may be exercised by no later than ten days following the date of the completion of the Merger provided that,
unless otherwise prescribed by the Plan Manager, the realization of Option Warrants which, had it not been for the purchase, would
not have been exercisable, will be conditional on the completion of the Merger.

 

		4.5.2	For the purposes of this section, an Option Warrant will be deemed to have been replaced if, following
the Merger, the Option Warrant will grant the holder thereof the right to acquire or receive for each share to which he would have
been entitled by virtue of the securities which were in his possession concurrently with the Merger, the consideration (whether
by way of shares, cash, other securities or other assets) which was discharged in the Merger transaction to the Company’s
shareholders for each share that was held by them on the Effective Date for the Merger (or the equivalent proceeds or such other
mechanism as will be fixed by the Plan Manager, at its sole determination).

 

		4.5.3	The Plan Manager’s authority to effect adjustments and provide clarifications and make determinations
in connection with the grant of the securities will be construed as widely as possible in order to afford the Plan Manager the
maximum power and flexibility in interpreting and implementing the provisions of the Plan in the case of a Merger, in order to
prevent the dilution or increase of an Offeree’s rights in the framework of the Plan in relation to the number of the Exercise
Shares.

 

		4.6	In relation to the adjustments that have been set above,
the following provisions will apply:

 

The adjustments
will be made by the Plan Manager whose determinations on this subject are final and binding.

 

		4.7	In the event of the Company being required, as a result
of the adjustments described in this section to allot fractional shares, the Company shall not allot such fractional shares and
the number of the Exercise Shares that will be allotted to an Offeree will be rounded upwards to the nearest complete share.

 

    	6

     

    

 

		5.	Management of the Plan

 

		5.1	Powers

 

Subject to
the provisions of the Law, the corporate documents of the Company and any other resolution by the BOD of the Company, the Plan
Manager will be authorized at its sole determination, to exercise all of the powers and authorities (subject to obtaining BOD approval,
if such approval is required by law), whether such powers and authorities have been granted expressly under the Plan or such powers
and authorities are required or desirable in order to manage the Plan, including:

 

		5.1.1	To resolve on:

 

		5.1.1.1	The parties who will be the Offerees under the Plan, the number of Option Warrants that will be
granted to each Offeree, the vesting period with respect to each Offeree and the Exercise Price of the Option Warrants (subject
to receiving BOD approval, if such approval is required by law);

 

		5.1.1.2	The date and/or the dates on which Option Warrants will be granted;

 

		5.1.1.3	Whether, the extent and under such circumstances it will be possible to repay, cancel, attach,
exchange or waive an Option Warrant;

 

		5.1.1.4	Such other direction or condition according to which the
Option Warrant will be granted, in addition to those that are set out in the Plan;

 

		5.1.1.5	To take such other step or action as is necessary or desirable in order to manage and implement
the Plan;

 

		5.1.1.6	The making of modifications to the Plan;

 

		5.1.2	To construe any provision of the Plan and effect
any action that is required as a result of such construction, including1:

 

		5.1.2.1	To accelerate the dates according to which the Option Warrants that are granted may be exercised;

 

		5.1.2.2	To exercise the authorities granted to it pursuant to the provisions of the Plan;

 

		5.1.2.3	To the extent necessary – to interpret and instruct how any of the provisions of the Plan
should be performed.

 

 

1
If there are American Offerees according to the Plan – the exercise of some of the Plan Manager’s authorities according
to section 5.1.2 of the Plan may cause the Plan to be deemed to be variable pursuant to the provisions of US GAAP. For this reason,
the Plan Manager will consult a professional consultant prior to exercising such authorities.

 

    	7

     

    

 

		5.2	Restrictions

 

Notwithstanding
that stated in section 5.1 above, no interpretation, decision or action by or of the Plan Manager will deviate from the provisions
contained in Section 102 and the Rules, and any waiver or amendment to or of any of the terms of the Plan will not materially affect
the Offerees’ rights in respect of Option Warrants that have been granted under the Plan, without the consent of the above
Offerees first being received.

 

		6.	Allotment of Option Warrants

 

		6.1	Conditions for allotting Option Warrants

 

Option Warrants
may be allotted on any date after the following cumulative conditions have been fulfilled, the complete fulfillment of which is
a sine qua non to effecting the allotment to the Offeree:

 

		6.1.1	Obtaining approval for the Plan from the authorized Company
organs;

 

		6.1.2	In relation to an allotment according to Section 102 of the Ordinance with a Trustee – thirty
(30) days have elapsed from the date of the filing of the application for approval of the Plan with the tax authorities in Israel
pursuant to the requirements appearing in the Ordinance or in Section 102 and the Rules, as appropriate, (if the filing of such
application is required according to Section 102)2;

 

		6.1.3	All the remaining approvals, consents and other conditions that are required according to the Law
will have been received or fulfilled.

 

		6.2	Allotment date

 

		6.2.1	On an allotment under a Track with a Trustee – the allotment date for the purpose of this
Plan will be deemed to be the date on which the Company notifies the Trustee in writing that Option Warrants have been allotted
in its name on the Offerees’ behalf pursuant to the provisions of this Plan.

 

		6.2.2	On an allotment under a Track without a Trustee – the allotment date for purposes of this
Plan will be deemed to be the date on which the employee will have signed the Grant Letter pursuant to the provisions of this Plan.

 

		7.	Exercise of Option Warrants

 

		7.1	Exercise Price

 

Unless otherwise
prescribed by the Plan Manager, the Exercise Price for each Option Warrant that will be allotted according to this Plan shall be
the average closing price of the Company’s shares on the TASE during the twenty two (22) trading days on the TASE which preceded
the date on which the BOD approved the allotment of the Option Warrants for that Offeree, provided that it is not lower than the
par value of the share or the share price in the market at the end of the day of the approval of the allotment thereof by the BOD.
The Exercise Price will be set out in the Grant Letter. The manner of exercise will be pursuant to that stated in section 7.4 hereof.
Payment for the Exercise Shares will be made: (1) in cash; or (2) by check to the order of the Company or (3) such other means
of payment that is acceptable to the Company, as determined by the Plan Manager.

 

 

2
In any event, on an allotment according to Section 102 of the Ordinance with a Trustee, the Allotment
Plan and the Trustee must be approved by the Tax Office Assessing Officer, but if the Assessing Officer has failed to respond
within 90 days of the date of filing the Plan and the Trustee for approval, the Allotment Plan or the Trustee, as appropriate,
will be regarded as having been approved.

 

    	8

     

    

 

		7.2	Vesting period and acceleration of vesting

 

Unless otherwise
prescribed by the Plan Manager, Option Warrants for a particular Offeree will vest and may be exercised in sixteen (16) equal portions
(each portion to be 6.25% of the total number of the Option Warrants that have been granted to the Offeree), at the end of each
calendar quarter from the date of the allotment and shall be exercisable until the end of the Option Warrants Term on condition
that the Offeree will be employed by the Company or an Affiliate Company or will provide them with services on such vesting dates
mentioned.

 

Pursuant
to the foregoing, all of the Options will vest and be exercisable on the expiry of 16 calendar quarters after the date of the allotment
of the Option Warrants to the Trustee on the Offeree’s behalf.

 

The Plan
Manager may, at its sole determination, resolve that certain circumstances as will be set out in the resolution justify the acceleration
of the Vesting Period of Option Warrants that have yet to vest, in whole or in part, in relation to all or some of the Offerees.

 

		7.3	Minimum exercise

 

Option
Warrants may not be exercised into fractions of shares.

 

It is clarified
that the partial exercise of a number of Option Warrants that have been granted to an Offeree will not cause the expiration, termination
or cancellation of the remaining Option Warrants that are held on his behalf by the Trustee, and which have yet to be exercised
by him.

 

		7.4	Manner of exercise

 

Subject to
the remaining terms prescribed in this Plan and in the Grant Letter, insofar as the Offeree shall wish to exercise all or part
of his Option Warrants according to this Plan, he may do, so from time to time, during the Exercise Period only, by written Exercise
Notice given pursuant to the terms set out below.

 

		7.4.1	Exercise Notice

 

Subject
to the provisions of this Plan, the Offeree may exercise all or part of the Option Warrants during the Option Term by the Offeree
signing an Exercise Notice in the form to be prescribed by the Plan Manager and delivery of the Exercise Notice signed in the original
by personal delivery to the Company (at its registered office) and to the Trustee. The Exercise Notice shall inter alia,
include: “(1) the Offeree’s identity; (2) number of Option Warrants that the Offeree seeks to exercise; and (3) the
Exercise Price in respect of the Exercised Option Warrants; (hereinafter: “the Exercise Notice”) and the Exercise
Notice will be delivered to the Company on a trading day only. The Plan Manager may direct a change in the form of the Exercise
Notice or the manner of the dispatch thereof.

 

    	9

     

    

 

		7.4.2	Delivery of the Exercise Notice accompanied by the
Exercise Price:

 

Delivery
of the Exercise Notice will be effected at the Company’s offices, by no later than the expiration of the Exercise Period
accompanied by payment of the Exercise Price (as defined above) in respect of each Option Warrant the exercise of which is requested
in the Exercise Notice.

 

It is clarified
that insofar as the Exercise Price on the exercise date (after the making of the adjustments mentioned in section 4 above, to the
extent necessary), shall be lower than the nominal value of an ordinary share of the Company (hereinafter: “the Differential”),
then the Company shall, by the date of the allotment of the Exercise Shares, convert in its financial statements an amount equaling
the Differential into “share capital” pursuant to Section 304 of the Companies Law, 5759-1999. In the event of this
not being possible, then exercise of the Option Warrants shall be subject to payment by the Offeree in respect of the full nominal
value of all of the Exercise Shares.

 

Fractional
shares will be rounded up to the nearest complete share.

 

The
Plan Manager may, at its exclusive determination, determine a manner of exercise that is at variance with the methods of exercise
described above.

 

		7.5	Allotment of Exercise Shares

 

The Company
shall, within a reasonable time following the receipt of the signed Exercise Notice and payment of the Exercise Price, allot the
Exercise Shares to the Trustee (pursuant to the appropriate blocking period) or to the Offeree, as the case may be.

 

		7.6	Exercise costs

 

The costs
of the exercise and any commission involved in the exercise (if any) shall be borne by the Offeree.

 

		8.	Waiver of Option Warrants

 

The Offeree
may, at any date prior to the expiry of the Option Warrants granted, waive Option Warrants that have been granted to him by giving
written notice at the registered office of the Company. The notice of waiver will specify the number of Option Warrants that were
granted to the Offeree and which he is waiving, and be signed by the Offeree.

 

Upon receipt
of the notice of waiver by the Company, such Option Warrants will be cancelled and may be re-allotted.

 

		9.	Option Warrants Term

 

Unless
otherwise prescribed by the BOD of the Company and unless they have previously expired in accordance with the terms of this Plan,
all of the Option Warrants that have been allotted on behalf of any Offeree according to this Plan but not exercised, including
Option Warrants that have vested, will expire and be cancelled at 17:00 Israel time, ten years after the date of the allotment
thereof (hereinafter: “the Option Term”).

 

    	10

     

    

 

		10.	Termination of employment

 

		10.1	Termination of employment

 

Unless otherwise
prescribed by the Plan Manager, if the engagement between the Company and an Offeree (hereinafter: “the Engagement Termination”)
will terminate then the Offeree may exercise the Option Warrants that he holds during the period prescribed for that purpose and
specified in the Grant Letter or in the Plan provided that the Option Warrants in question have vested as of the date of the Engagement
Termination (but in no event after the expiration of the Option Warrants Term as determined in the framework of the Grant Letter).
To the extent Option Warrants exist on the date of the Engagement Termination that have not yet vested, they will revert and may
be re-granted pursuant to the terms of the Plan. If the Offeree has not exercised the vested Option Warrants within the time frame
prescribed for that purpose in the framework of the Grant Letter or the Plan, then the Option Warrants will expire and the number
of the above shares will revert and may be granted under the terms of the Plan.

 

In the absence
of provisions to the contrary in the Grant Letter, the following provisions will apply:

 

		10.1.1	Engagement Termination without Cause (including in
the case of death or Disability).

 

In the event
of the Engagement Termination between the Offeree and the Company for any reason or Cause being other than that defined in the
Plan as a “Cause” for terminating his employment, including as a result of the death or Disability (hereinafter: “Employment
Termination”), then Option Warrants that have been granted to the Offeree and which have vested may be exercised by the
earlier of: (1) twelve (12) months following the date of the Engagement Termination; (2) the expiration date of the Option Warrants
Term.

 

		10.1.2	Engagement Termination for Cause

 

Unless
otherwise prescribed by the Plan Manager, in the event of the Engagement Termination between the Offeree and the Company following
Cause (as defined above) then Option Warrants that have been granted to the Offeree and which have vested may be exercised by the
date of the Engagement Termination.

 

		10.2	Employment Termination date

 

For
purposes of the Plan or any Option Warrant or Grant Letter of Option Warrants, and unless otherwise specified in the relevant Grant
Letter, the date of the Engagement Termination (either for Cause or other cause), shall be the date of the effective termination
of the engagement with the Offeree.

 

		10.3	Absence without pay

 

Save
where the Plan Manager will determine otherwise, the Vesting Term of securities that have been granted according to the Plan will
be suspended during the Offeree’s absence without pay.

 

    	11

     

    

 

		10.4	Change of status

 

A person
supplying services to the Company (as employee, director, Officer or Consultant of the Company or of an Affiliate Company) will
continue to be deemed the provider of services in the event also of (a) absence of the Company’s approval; (b) relocation
between different locations of the Company or between the Company and the Parent Company or subsidiary or other company replacing
the same; (c) change of status (from employee to director, from employee to Consultant and the like); provided that such change
does not impact the specific conditions in the Offeree’s Grant Letter.

 

		11.	Trust arrangement and Blocking Period according to
the Ordinance

 

		11.1	General

 

This
Plan and the allotments thereunder are subject to the provisions of Section 102 and 3(i) of the Ordinance – as existing from
time to time, and the Rules by virtue thereof, and the Offerees are bound to act pursuant to the provisions of the Ordinance and
such Rules.

 

		11.2	Allotment tracks by trustee

 

If the Company
elects to grant Option Warrants by: (1) a capital gains track by trustee; or (2) work income track by trustee; then, pursuant to
the requirements of Section 102, the Company will appoint one trustee only to hold the Option Warrants in trust for the benefit
of the Offeree as will be allotted on the Offeree’s behalf and the Exercise Shares that will be allotted upon the exercise
of Option Warrants.

 

The
Blocking Period of Option Warrants that have been granted under the Allotment Track by Trustee, shall be as follows:

 

		(a)	Capital gains by trustee Taxation Track - if the
Company elects to allot the Option Warrants pursuant to the terms of this track, then the Blocking Period shall be 24 months commencing
on the date of the allotment of the Option Warrants to the Trustee on the Offeree’s behalf, or during such other period
as will be determined under any amendment of Section 102.

 

		(b)	Work – income Taxation Track by trustee –

 

If the
Company elects to allot the Option Warrants pursuant to the terms of this track, then the Blocking Period shall be 12 months commencing
on the date of the allotment of the Option Warrants to the Trustee on the Offeree’s behalf, or during such other period as
will be determined under any amendment of Section 102.

 

Subject
to the conditions of Section 102 and the Rules, an Offeree may not receive from the Trustee, sell or effect any disposition whatsoever
of the Option Warrants and/or the Exercise Shares before the expiration of the Blocking Period. If an Offeree sells or transfers
from the Trustee the Exercise Shares before the expiration of the Blocking Period (hereinafter: “Breach”), the
Offeree shall pay all of the required taxes for the payment following the Breach according to Section 7 of the Rules.

 

    	12

     

    

 

		11.3	Allotment track by means of Section 3(i) or otherwise
than by a Trustee

 

If the
Company elects to allot Option Warrants according to Section 3(i) or under a track otherwise than by means of a trustee, the Option
Warrants shall not be subject to any blocking period.

 

		11.4	Election of Tax Track

 

If the Company
shall, at its exclusive determination, select the Tax Track under which Option Warrants will be allotted and notify the Offeree
of the particular track under which the Option Warrants are granted. Allotment of Option Warrants to a Consultant and/or to the
Controlling party shall only be effected according to Section 3(i) of the Ordinance. One Tax Track only will be selected for an
Allotment Plan of Option Warrants to the extent the allotment is under a track with a trustee, unless the provisions contained
in Section 102(g) of the Ordinance apply to employees of one of the Employer Companies (as defined in Section 102(a) of the Ordinance).

 

		11.5	Cumulative conditions

 

The
Blocking Period (if any) is in addition to the Vesting Term mentioned in section 7.3 above. The Blocking Period and the Vesting
Term may overlap, but do not constitute an alternative for one another and each of them constitutes an independent condition for
the Option Warrants to be granted.

 

		11.6	Trust Agreement

 

The appropriate
conditions of the trust deriving from the particular Tax Track that will have been selected by the Company will be set out in a
trust agreement that will be signed between the Company and the Trustee (“Trust Agreement”).

 

		11.7	Foreign–resident Offerees

 

The Company
may, in accordance with this Plan and subject to the provisions of the Ordinance, grant Option Warrants on a track without a trustee
and/or according to Section 3(i) of the Ordinance, to Offerees residing outside of Israel (hereinafter collectively called: “Foreign–resident
Offerees”). It is clarified that additionally, the Option Warrants to Offerees to whom the Company has resolved or will
resolve to allot Option Warrants on a track without a trustee and/or according to Section 3(i) of the Ordinance, will be deposited
with a trustee and the exercise thereof will be effected by means of a trustee on the same procedure that is prescribed in this
Plan. For the avoidance of doubt it is clarified that the services that will be supplied by the Trustee to Foreign–resident
Offerees as stated above will be supplied by virtue of plan management services that the Trustee supplies to the Company and not
by virtue of the Trustee’s position as trustee in accordance with the provisions of Section 102 of the Ordinance.

 

Notwithstanding
the foregoing as mentioned in this clause, with respect to Foreign-resident Offerees, the Plan Manager may, at its exclusive decision,
determine that the manner of exercising the Option Warrants will be effected otherwise than in the form detailed in this Plan;
including in a manner by which on the exercise date of such Option Warrants and subject to compliance with all the remaining provisions
contained in this Plan, the Company by which the foreign-resident employee is employed (being a corporation controlled by the Company)
will acquire on his behalf shares of the Company in the number to which he is entitled against the exercise of the Option Warrants
by him, this being subject to the provisions of any law, including those contained in Section 309 of the Companies Law regarding
permitted distribution tests at the time of the acquisition of a parent company’s shares by a subsidiary.

 

    	13

     

    

 

		12.	Holding period of the Shares in trust

 

The Exercise
Shares and the additional rights that have been allotted by the Company to the Trustee will be held by the Trustee for the benefit
of the Offeree at the Company’s expense for a period not exceeding three (3) years from the date of the termination of the
Option Warrants Term. The Plan Manager will instruct the Trustee in regard to the manner of the transfer of the Exercise Shares
and such additional rights.

 

		13.	Rights as a shareholder of the Company

 

The Exercise
Shares will rank pari passu with the rights of the ordinary shares of the Company, in all respects, immediately upon allotment
and shall be entitled to all and any dividend or other bonus/benefit the effective entitlement record date of which falls on or
after the allotment date thereof.

 

Whenever
the Offeree shall be entitled to receive rights and/or bonus shares and/or any other right to the extent it is granted to an Offeree
by virtue of the Option Warrants and/or the Exercise Shares (hereinafter: “the Rights”), and on the Effective
Date for the distribution of the Rights the Option Warrants and/or the Exercise Shares are held by the Trustee, the Rights will
be transferred to the Trustee, the Company to be the party to deduct tax at source according to the Trustee’s instructions
pursuant to the provisions of law, (if and to the extent the same applies) and all the Rights will be allotted to the Trustee for
the benefit of the Offerees and be held by the Trustee until the expiration of the Blocking Period of the Option Warrants in respect
of which the Rights have been allotted and the terms of the particular Tax Track will apply to such additional Rights.

 

In the event
of the Company distributing a cash dividend and on the Effective Date for the distribution of the dividend the Trustee holds Exercise
Shares on behalf of any of the Offerees, the Company shall transfer to the Trustee the dividend amounts in respect of the Exercise
Shares that are so held by the Trustee on behalf of each Offeree, the Trustee to be the party to deduct tax at source by law, (if
and to the extent this will be required) and will then transfer the dividend amounts (after deduction of the tax) to the Offeree.
The Trustee and the Company may determine that the dividend will be remitted by the Company directly to the Offerees and the Company
will deduct tax at source according to the Trustee’s instructions pursuant to the provisions of any law and submit a certificate
of the deduction of the tax to the Trustee.

 

		14.	Absence of special rights in employment

 

This Plan
does not operate to grant to any Offeree any right whatsoever for the continued employment or provision of services to the Company
or to an Affiliate Company or operate to clog in any manner the Company’s or the Affiliate Company’s right to terminate
the employment or the provision of the services by the Offeree at any time or increase or reduce the salary which is given to an
Offeree.

 

    	14

     

    

 

		15.	Restrictions on the sale of Option Warrants

 

The Trustee
will not effect any transaction or operation of or with the Option Warrants and/or the Exercise Shares, nor shall it transfer or
assign the same or draw the same or impose any attachment or charge the same voluntarily, nor shall it grant on account thereof
any power of attorney or deed of transfer, having immediate or future effect, save for a transfer by way of testamentary disposition
or operation of law, until after the payment of the applicable tax by reason of the allotment thereof or after payment of such
tax is secured; on a transfer of the Shares by reason of a testamentary disposition or by operation of law, the provisions of Section
102 and those of the Rules applicable to the successors or assigns of the Offeree will, as appropriate, apply. The Trustee will
not transfer Option Warrants to any third party including the Offeree save in accordance with the instructions that it will receive
from the Plan Manager.

 

		16.	Voting

 

As long as
Exercise Shares are held for the benefit of Offerees by the Trustee, the Offeree may vote in respect of the Exercise Shares. The
Company will send notices regarding general meetings of the Company to the Trustee and the Trustee in turn will remit such notices
to each Offeree according to the Plan. An Offeree wishing to participate in general meetings of the Company or exercise his right
to vote in respect of the Exercise Shares that are held for his benefit by the Trustee, will approach the Trustee in writing at
least fourteen days before the date of the meeting and the Trustee will send the Offeree a power of attorney to participate in
the general meeting and vote in respect of the Exercise Shares that are held for the Offeree’s benefit by the Trustee, in
accordance with the mechanism set by the Company for all its shareholders.

 

		17.	Taxes

 

		17.1	This Plan shall be subject to, construed in accordance
with and satisfy all the requirements of Section 102, the Rules and Section 3(i) and any written confirmation from the tax authorities
in Israel. All the tax ramifications pursuant to any statute that will ensue as a result of the grant or allotment of Option Warrants
or the Exercise Shares, from the exercise of Option Warrants or the holding or sale of the Exercise Shares (or of any other security
that will be allotted according to the Plan) by or on behalf of the Offeree will be paid by the Offeree. The Offeree will indemnify
the Company or the Affiliate Company or the Trustee, as appropriate, and absolve them from any liability for any payment of tax
or any penalty, interest or linkage.

 

		17.2	If the Company elects to allot Option Warrants according
to the conditions of the work-income track without a trustee (as stated in section 11.3 above) and if before the exercise of part
or all of the above Option Warrants the Offeree will cease to be an employee, Consultant, Officer or director of the Company or
of the Affiliate Company, the Offeree will deposit with the Company a guarantee or such other security as is required by the Law
to secure the payment of the appropriate tax at the time of a realisation of the above Option Warrants.

 

    	15

     

    

 

		17.3	Deduction of tax at source

 

		17.3.1	Wherever payment is required from the Offeree or the Company
or the Affiliate Company by means of deduction of tax at source in connection with the Option Warrants granted to the Offeree
or the Exercise Shares, the Company or the Affiliate Company and/or the Trustee may demand from the Offeree an amount sufficient
to cover any such demand for the deduction of tax at source and on any event on which shares or other assets in kind are transferred
in consequence of the exercise of Option Warrants, the Company or the Affiliate Company and/or the Trustee shall have the right
to demand from the Offeree the transfer of an amount in cash sufficient to fulfil any demand of the deduction of tax at source
and if such amount will not be transferred when due, the Company or the Affiliate Company and/or the Trustee shall have the right
to withhold or set off (subject to the Law) the shares or such other asset until such payment has been transferred by the Offeree.

 

		17.3.2	Before such applicable tax mentioned in Section 7 of the
Rules has been paid, neither the Option Warrants or the Exercise Shares shall be transferable, assignable, available for pledge,
attachment or other voluntary charge nor shall any power of attorney or deed of transfer be granted by reason thereof having effect
immediately or at a future date, save for a transfer by virtue of testamentary disposition or operation of law; and in the event
of the transfer of the Option Warrants or the Exercise Shares by virtue of such testamentary disposition or by operation of law,
the provisions contained in Section 102 and in the Rules shall apply to the Offeree’s successors or assigns.

 

		18.	Prohibition against the transfer of Option Warrants

 

The Trustee
shall not transfer Option Warrants to any third party including the Offeree, save in accordance with the instructions that it will
receive from the Plan Manager.

 

		19.	Transfer of rights on death

 

A transfer
of rights to Option Warrants or Exercise Shares pursuant to a testamentary disposition or pursuant to Law shall be valid and binding
on the Company only after the following certifications, signed and certified by a notary will have been furnished to the Company:

 

		19.1	written application to transfer and a copy of the legal
document creating or affirming the right of such person to act in relation to the Offeree’s estate and giving rise to or
affirming the transferee’s right;

 

		19.2	written agreement of the transferee to pay any amount relating
to the Option Warrants or the Exercise Shares and consent to pay any payment so required pursuant to the terms of the Plan and
consent to comply with all of the terms of the Plan;

 

		19.3	Such other evidence as will, in the opinion of the Plan
Manager be required to substantiate the right to transfer the Option Warrants or the Exercise Shares and the validity of the transfer.

 

		20.	Absence of other rights in respect of Option Warrants

 

Subject to
the provisions of the Plan, no person other than an Offeree shall have any rights whatsoever in relation to Option Warrants that
have been allotted to an Offeree under the Plan.

 

		21.	Expenses and proceeds

 

Expenses
incurred in relation to the administration and implementation of this Plan (including stamp duty) will be borne by the Company.
The Company may apply any proceeds that will be received following the exercise of any Option (to the extent such proceeds are
received) for general purposes and for other corporate objectives.

 

    	16

     

    

 

		22.	Required approvals

 

The Plan
is subject to the receipt of all the approvals required according to Section 102, the Rules and the Law.

 

		23.	Applicable law and jurisdiction

 

This Plan
and all the documents ancillary thereto that have been delivered or signed by a company of the Company Group in connection with
this Plan will be construed, administered and subject to the laws of the State of Israel. The jurisdiction in relation to all matters
connected with this Plan and all of such ancillary documents shall be exclusively vested in the relevant Courts of Tel Aviv-Jaffa.

 

		24.	Treatment of the Offerees

 

Not all
the Offerees need be treated in like manner.

 

		25.	Deviations

 

Unless otherwise
directed by the Plan Manager, in the event of any deviation between the terms of this Plan and the Grant Letter, the provisions
of the Plan will prevail.

 

		26.	Undertakings of the Offeree

 

The Offeree,
shall at the time of receiving Option Warrants according to the Plan, warrant and declare as follows: (1) to agree and acknowledge
that he has received and read the Plan and the Grant Letter and agrees to all of the terms thereof, including, without derogating
from the generality of the foregoing, his consent to bear all tax liabilities and other compulsory payments that will emanate as
a result of the offer and allotment of the Option Warrants, the exercise or sale of the Exercise Shares, including agreeing to
and authorising the Company to deduct at source (including, if necessary, from a number of the Option Warrants and/or of the Exercise
Shares) any such tax that will apply; (2) undertake to fulfill all of the conditions set forth in Section 102 (including provisions
relevant to the Tax Track), Section 102 Rules or the provisions of Section 3(i) (as appropriate), the Plan, the Grant Letter and
the Trust Agreement; and (3) subject to the provisions and conditions of Section 102 and the Rules (to the extent that the same
apply to the Offeree), the Offeree undertakes not to sell or remove the Exercise Shares from the Trust before the expiration of
the Blocking Period; (4) the Offeree’s undertaking to fulfil the exercise procedure of Option Warrants and sale of the Exercise
Shares, as will be agreed between the Company and the Trustee.

 

		27.	Term of the Plan

 

The Plan
Manager may grant Option Warrants according to this Plan for 10 years from the date on which Option Warrants will first have been
granted according to this Plan. After such term, the Plan will expire and Option Warrants thereunder may no longer be granted or
allotted unless the term of the Plan has been extended by the Plan Manager before the date of the expiration thereof.

 

 ***

 

    	17Exhibit 10.7

 

 

BioCancell Ltd.

 

Compensation
Policy for Officers

 

February
2017

 

 

 

 

 

www.biocancell.com

1/3 High-Tech Village, Givat Ram, PO
Box 39264, Jerusalem 9139102, Israel

 

    	 

     

    

 

Contents

 

	 	Page
	 	 
	Background	3
	 	 
	Objectives of the Compensation Policy	4
	 	 
	Structure and Components of the Compensation Policy	4
	 	 
	Intra-Company Compensation Ratio	5
	 	 
	Ratio Between the Variable and Fixed Compensation	5
	 	 
	Fixed Compensation (Base Salary and Benefits)	6
	 	 
	Variable Compensation	7
	 	 
	Directors’ Compensation	10
	 	 
	Insurance, Exemption and Indemnity	11
	 	 
	Non-material Change in Terms of Service	11
	 	 
	Termination of Engagement	12
	 	 
	Clawback	12
	 	 
	Reduction of the Discretion of the BOD	12
	 	 
	Management, Control and Review of Adjustments as Necessary	12
	 	 
	Miscellaneous	13

 

    	2

     

    

 

		1.	Background

 

		1.1.	On December 12, 2012, Amendment No. 20 of the Companies
Law, 5759-1999 (hereinafter: the “Companies Law”) came into force. The amendment deals with the regulation
of the compensation structure for officers in public companies and bond companies, as defined in the Companies Law, and provides
for a special procedure for the approval thereof. According to chapter 4A of Part VI of the Companies Law, the compensation committee
and board of directors (hereinafter: “BOD”) of BioCancell Ltd., (hereinafter: the “Company”)
adopted this compensation policy (the “Compensation Policy” or the “Policy”).

 

		1.2.	The considerations guiding the Company’s compensation
committee (hereinafter: “Compensation Committee”) and the BOD in adopting this Policy are to promote the objectives
of the Company, its work plan and policy in a long-term overview; the creation of proper incentives for the Company’s officers,
taking into account, inter alia, the Company’s risk management policy; the size of the Company and the nature of
its activities; and with respect to the terms of office and employment that comprise variable components – the officers’
contribution to achieving the Company’s targets and maximizing its profits and its valuation, in the long-term overview
and according to the officers’ duties.

 

		1.3.	The Compensation Policy was prepared taking into account
the size and nature of the Company as an active corporation in the field of biotechnology, with attention to the Company's current
scope of operations, as well as to its business and clinical objectives and plans for the near future, which include, inter
alia, listing on a US stock exchange and the initiation of pivotal clinical trials.

 

		1.4.	The principles of the Compensation Policy were formulated
after internal discussions that were held by the Compensation Committee and the Company’s BOD, in consultation with external
financial and legal advisors. The Policy was designed to determine informed, appropriate and fair compensation principles for
the Company’s officers so as to ensure that their compensation would be consistent with the interests and strategy of the
Company across the board, amid consideration of the Company’s risk management policy, align the Company’s officers’
interests with those of the Company’s shareholders while at the same time, bring about an increased sense of solidarity
with the Company and its activity on the part of high-quality officers in the Company, and their retention over time..

 

		1.5.	The compensation principles are a benchmark-based tool
that derives, inter alia, from the Company’s annual work plan, long-term plans and strategy as determined by the
BOD from time to time.

 

		1.6.	The provisions of this Compensation Policy apply to the
senior officers (as defined in the Securities Law – 5728-1968) of the Company (hereinafter: “Officers”).

 

    	3

     

    

 

		2.	Objectives of the Compensation Policy

 

The Compensation
Policy aims to assist the Company in achieving its targets, objectives and milestones. The Compensation Policy is intended to serve
as a platform for the retention and/or recruitment where necessary, of Officers in key positions, with emphasis on an attractive
compensation plan, while being competitive in the market.

 

		2.1.	Generating motivation for achievement while balancing
risk-taking

 

The Compensation
Policy is intended to encourage managers to meet the Company’s objectives as determined by its corporate organs. The Compensation
Policy is designed to encourage target compliance in various timeframes (whether in the short, medium and long-term) while assuming
risks in accordance with the level of risk decided by the organs of the Company. In addition, the Compensation Policy should assist
in aligning the interests of the Officers with those of the Company's shareholders. The higher the Officer’s management position,
responsibility and expertise, the more decisive will be his or her contribution to achievement of the Company’s business
results, which may respectively affect the scope of variable compensation to which such Officer may be entitled.

 

		2.2.	Manager retention

 

To enable
the Company to achieve its objectives, the Compensation Policy is designed to attract and retain highly talented professionals,
in Israel and abroad, with the necessary skills and capabilities to promote creativity and manage global operations, ensure optimal
execution of the Company's strategy in the best interests of the Company, including its employees and shareholders, and otherwise
assist the Company in reaching its clinical, business and financial long-term goals. The Compensation Policy aims to provide the
Officers with a balanced compensation package that includes a competitive salary, performance-based compensation, reward in the
form of equity, and social benefits. This objective is key for the creation of added value for the Company and its shareholders.

 

		2.3.	Consistency

 

The Compensation
Policy is designed to create an infrastructure for the ongoing management of the Officers of the Company, while establishing principles
which will guide the Company’s management in the future. For that purpose, this Compensation Policy charts a policy, principles
and wage ranges. In order to keep these principles current, the Company will review the Compensation Policy periodically.

 

		3.	Structure and Components of the Compensation Policy

 

The components
of the Compensation Policy will address each of the following:

 

		3.1.	Fixed Components: Salary, fringe benefits ancillary
to the salary, signing and relocation bonus and payments on departure, as more particularly set forth in this document.

 

    	4

     

    

 

		3.2.	Variable Compensation Components (mainly for the medium
and short term): Bonuses of various classes that consist, inter alia, of an annual bonus, special bonus, etc.

 

		3.3.	Variable Compensation Components (mainly for the long
term): Equity-based compensation.

 

		3.4.	Insurance, Exemption and Indemnity: Directors'
and officers’ liability insurance (in the normal course of business as well as in respect of past events), exemption from
liability for Officers, and grant of an undertaking to indemnify the officers, in advance and retroactively.

 

This Compensation
Policy applies to the overall terms of service and employment of the Officers, including the grant of exemption, insurance, undertaking
to indemnify or indemnification according to an indemnity authorization, retirement bonus, a payment or undertaking to make such
payment, given by reason of such service or employment.

 

The amounts, rates and caps
mentioned in this policy document are for a full-time position.

 

		4.	Intra-Company Compensation Ratio

 

		4.1.	In the process of formulating this Compensation Policy,
the BOD and the Compensation Committee examined the ratio of the employer costs associated with the terms of service and employment
of the Company’s Officers to the employer costs associated with the average and median salary of the other employees of
the Company (including contract employees as defined in the Companies Law). As of this date, the ratios are as follows (based
on a 100% position, as required):

 

	Position	 	Ratio to the average

overall cost of

employment of all other

Company employees

(including the other

Officers)	 	Ratio to the median

overall cost of

employment of all other

Company employees

(including the other

Officers)
	CEO	 	4.55	 	6.24
	C-level Officers	 	Not more than 3.59*	 	Not more than 5.15*

 

		*	This ratio represents those highest paid from among the
Company’s C-level Officers. For C-level Officers earning a lower salary, the ratios are lower.

 

		5.	Ratio Between the Variable and Fixed Compensation

 

The Company
strives for a balance between the fixed compensation and the variable compensation (which comprises mainly an annual bonus and
equity-based compensation) in order to, among other things, appropriately incentivize Officers to meet the Company’s short-
and long-term objectives while taking into consideration the Company’s needs.

 

The total
fixed compensation of each Officer shall not be less than 20% of the total compensation package of such Officer on an annual basis.
The Compensation Committee and BOD believe that such range expresses the appropriate mix of the compensation components in the
event that all performance objectives are achieved and assumes that all compensation components are granted with respect to a given
year.

 

    	5

     

    

 

In this regard,
the variable equity components for a single calendar year (cumulatively) shall be assessed according to the economic value on the
grant date of any variable component distributed linearly over the vesting period (years) and not according to the accounting value
attributed to that year.

 

		6.	Fixed Compensation (Base Salary and ancillary/fringe
benefits)

 

		6.1.	The base salary and benefits provide stable compensation
to Officers, allowing the Company to attract and retain competent executive talent and maintain a stable management team. Base
salaries vary among Officers, and are individually determined.

 

		6.2.	In determining a new Officer’s base salary, the following
considerations, inter alia, will be taken into account:

 

		6.2.1.	Experience, past performance and achievements;

 

		6.2.2.	Position and spheres of responsibility;

 

		6.2.3.	Education, expertise and qualifications;

 

		6.2.4.	Terms of service and employment for Officers in similar positions at the Company;

 

		6.2.5.	The ratio to the salary of the other Company employees and to the salaries of the other Officers,
separately;

 

		6.2.6.	Previous salary agreements of the Officer;

 

		6.2.7.	Comparison with terms of service and employment for similar positions in other companies in the
relevant market.

 

		6.3.	When updating an incumbent Officer’s salary terms,
the following will be additionally considered:

 

		6.3.1.	Performance and contribution in the Company;

 

		6.3.2.	An adjustment in the Officer’s current areas of responsibility.

 

		6.4.	The following are ceilings for the base salary of Officers
in the Company for a full-time position:

 

	Position	 	CEO	 	Israeli C-level

Officers 	 	Non-Israeli C-

level Officers 
	Cost of Salary	 	USD 600K	 	NIS 1,200K	 	USD 570K

 

		6.5.	Social and Other Benefits

 

The cost of
salary may include various benefits, in order, among other things, to comply with legal requirements and to attract, motivate and
retain Officers. These benefits can include contribution to social benefits (retirement bonus/managers insurance), contribution
to a study fund, vacation days, sick days, and time off for emergencies and personal matters; supplementary sick pay according
to the law; and contribution on behalf of the Officer towards health, life, dental and disability insurance. The Company may offer
additional benefits to its Officers, including a car, public transport travel reimbursement, parking, cellphone, travel benefits
and other customary benefits, including their gross-up.

 

    	6

     

    

 

		6.6.	Signing Bonus and Relocation Bonus

 

The Company
may, under circumstances to be approved by the Compensation Committee and Board of Directors and where recruiting that Officer
is highly important to the Company, offer the Officer a signing bonus or a relocation bonus.

 

The total
signing bonus shall not exceed USD 50,000. The Company may determine, upon the award date of the signing bonus and at the discretion
of the Compensation Committee and the BOD, that the Officer will be required to reimburse the Company for the signing bonus, in
whole or in part, should he/she fail to complete a minimum term in office at the Company.

 

A relocation
bonus will be awarded in a case where the Officer was relocated to another state/country for his or her work with the Company.
The total relocation bonus will be calculated based on actual expenses incurred by the Officer with respect to his or her relocation
and against presentation of receipts, but shall not exceed USD 75,000, at the discretion of the Company's Compensation Committee
and BOD.

 

		6.7.	Reimbursements

 

In addition,
the Company may reimburse its Officers for reasonable work-related expenses incurred as part of their activities, including meeting
attendance expenses, reimbursement of business travel including a daily stipend and accommodation expenses, provided, however,
that such reimbursement were defined in the Company’s policies and procedures. The Company may set predetermined reimbursement
for Officers in connection with work-related expenses.

 

		6.8.	The Company may link the salaries of Officers to a rise
in the consumer price index (CPI).

 

		6.9.	The Company may grant compensation packages in volumes
lower than those set forth above, at the discretion of the BOD.

 

		7.	Variable Compensation

 

		7.1.	Annual Bonus

 

		7.1.1.	The Company may award an Officer an annual bonus, which
shall be determined in accordance with an annual bonus plan based on the following principles:

 

    	7

     

    

 

		7.1.1.1.	The maximum annual bonus shall not exceed the following
(in terms of monthly salaries):

 

	Position	 	CEO	 	 	Israeli C-level
 Officers	 	 	Non-Israeli
 C-level
 Officers	 
	Annual Bonus	 	 	12	 	 	 	10	 	 	 	10	 

 

		7.1.1.2.	The annual bonus shall be calculated based on the achievement
of certain objectives, which shall include the following:

 

		a)	Company and individual objectives – At least
two performance or financial benchmarks, each with weight of at least 25%. The objectives for the CEO will be determined by the
Compensation Committee and BOD, and the objectives for C-level Officers will be determined by the CEO.

 

Annual bonus
objectives may be: (i) success of clinical trials; (ii) achievement of clinical trials or other development milestones; (iii) obtaining
regulatory approvals; (iv) agreements with the regulatory authorities; (v) completion of milestones in production; (vi) execution
of material agreements; (vii) cooperation and licensing agreements; (viii) compliance with reporting procedures and internal procedures;
(ix) compliance with budget targets; (x) fundraising; (xi) Company's share price or market cap on the stock exchange where it is
traded; (xii) HR related goals, including hiring, management and company organization; (xiii) IT.

 

		b)	Managerial assessment – based on the qualitative
assessment of the Compensation Committee and the BOD (with respect of the CEO) and of the CEO (with respect of C-level Officers),
taking into consideration the Officer’s contribution to the Company and his or her performance during the fiscal year for
which such bonus is granted.

 

With respect
of the CEO, the annual managerial assessment component of the annual bonus shall not exceed a sum equals to three (3) monthly salaries.
With respect of C-level Officers the annual managerial assessment component of the annual bonus (together with the Company and
individual objectives bonus) shall not exceed the maximum annual bonus.

 

		7.1.2.	Calculation of the annual bonus

 

At
the beginning of each fiscal year (in proximity to the approval of the annual financial statements), the Compensation Committee
and BOD shall adopt a resolution on the following:

 

    	8

     

    

 

		7.1.2.1.	The maximum annual bonus for each Officer and the objectives
by which the annual bonus for that fiscal year will be calculated (with respect of C-level Officers, based on the CEO's decision);

 

		7.1.2.2.	The annual bonus for each Officer for the previous fiscal
year, based on the annual bonus plan approved that year.

 

Insofar as
an Officer was employed by the Company for a period of less than the entire calendar year, the calculation shall be made pro rata.
Employees joining the Company after September 30 will not be entitled to a bonus.

 

The Compensation
Committee and BOD may approve a lower annual bonus than the amount calculated based on the objectives previously approved, or decide
not to approve a bonus for that fiscal year, at its sole discretion.

 

		7.2.	Special Bonuses

 

The Board
of Directors and the Compensation Committee are authorized, at their discretion and beyond the annual bonuses and any other reward
described in this policy, to grant special bonuses reflecting special efforts or exceptional achievements of Officers. The special
bonus shall not exceed three (3) monthly salaries for any Officer.

 

		7.3.	Equity-Based Compensation

 

The use of
equity-based compensation enables alignment between the Officers’ targets and the objectives of the shareholders, creates
a retention component in the compensation plan that takes a long-term perspective on the Company’s results, and motivates
the Officers to work for the benefit of the Company and for long-term policy considerations while taking controlled risks.

 

The equity-based
compensation may be granted from time to time and will be individually determined for each Officer, taking into consideration the
performance, education, prior business experience, qualifications, roles and areas of responsibility of the relevant Officer.

 

The Company
may grant equity-based compensation from time to time to the Officers based on the following provisions :

 

		7.3.1.	Exercise price – The exercise price shall
not be less than the market value of the Company’s share at the close of trading on the day prior to the date of the Board
of Directors’s resolution. The exercise price may be shown in US dollars at the exchange rate published on the date of the
BOD’s resolution with regard to the grant.

 

		7.3.2.	Vesting Schedule – All equity-based incentives
granted to Officers shall be subject to vesting periods determined to promote long-term retention of the awarded Officers. Grants
to Officers shall vest gradually over a minimum period of three (3) years, where the first portion of equity-based compensation
shall vest at least one (1) year after the date of grant. In special circumstances, where an Officer was employed prior to being
granted equity-based compensation, the Compensation Committee and the BOD may determine that the start date of the vesting period
shall commence prior to the grant date, provided such date is not more than six (6) months prior to the BOD’s resolution.
The Company's options plan may provide for vesting acceleration provisions, including in case of change of control.

 

    	9

     

    

 

		7.3.3.	Exercise Period – The exercise period of options granted to Officers shall be determined
in accordance with the Company's options plan and shall not exceed a period of ten (10) years from the date of grant.

 

		7.3.4.	Maximum Dilution –The maximum dilution in respect of equity-based compensation for
all grants made in the Company, shall be limited so as not to exceed 20% of the Company's issued and outstanding share capital
at maximum dilution for the term of the Compensation Policy.

 

		7.3.5.	Maximum Value – The value of the maximum equity-based compensation actually paid shall
not exceed 8% or 18 monthly salaries for the CEO and 2% or 12 monthly salaries for C-level Officers. On this matter, the variable
equity components for a single calendar year (cumulatively) shall be assessed according to the economic value on the grant date
of any variable component distributed linearly over the vesting period (years), and not according to the accounting value attributed
to that year.

 

		7.3.6.	Equity compensation may be exercised by "cashless exercise", as determined by
the BOD from time to time.

 

		7.3.7.	Subject to any applicable law, the Company may decide, at the discretion of the Compensation Committee
and the BOD, the tax regime under which equity-based compensation may be granted, including a tax regime which will maximize the
benefit to the Officers.

 

		7.3.8.	All other terms of the equity awards shall be in accordance with the Company’s option plans,
as may be adopted from time to time, subject to customary terms with regard to the grant of options, including adjustments for
dividends, bonus shares, capital changes (consolidation, split, etc.), rights issues (split, merger, etc.), and the like. In addition,
when adopting an options plan, he plan shall include reference to terms that will apply in the event of termination of employment
as a result of dismissal or as a result of death or disability of an Officer.

 

		8.	Directors’ Compensation

 

The directors
of the Company will be entitled to annual pay and attendance pay in accordance with the Companies (Rules regarding Remuneration
and Expenses of External Directors) Regulations, 2000,
according to the Company’s ranking, as may be from time to time. Additionally, the directors will be entitled to reimbursement
of expenses and also to insurance, in accordance with the Company’s directors' and officers’ insurance policy and to
letters of indemnification and exemption if and insofar as they have been or will be granted (as described in section 9). At the
request of a director, the Company may provide the compensation described in this section to the director’s employer or partner,
including to the controlling shareholder in the Company.

 

    	10

     

    

 

		9.	Insurance, Exemption and Indemnity

 

		9.1.	The Company may grant the Officers an exemption from liability,
liability insurance (including a run-off insurance policy) as well as an undertaking to indemnify, subject to the provisions of
the Companies Law and the Company’s by-laws.

 

		9.2.	As decided by the Compensation Committee and without derogating
from the generality of the above, the Company may, at any time during the term of this Compensation Policy, purchase directors’
and officers’ insurance including run-off (including directors and officers who are or are deemed to be or who represent
the controlling stakeholders of the Company) serving in the Company from time to time, extend or renew the existing insurance
policy and/or enter into a new policy on the renewal date or during the period of the insurance, with the same or a different
insurer, in Israel or abroad, on the conditions listed below:

 

		9.2.1.	The premium for the period of insurance in respect of an
annual policy shall not exceed USD 250 thousand.

 

		9.2.2.	The cover amount under every policy purchased shall not
exceed USD 50 million, any one occurrence and for the entire period of insurance.

 

		9.2.3.	The insurance policy shall cover also the liability of
directors and Officers who are and/or whose relatives are the controlling shareholders of the Company at the time of approval
of the Compensation Policy and/or in which the controlling shareholders of the Company might have a personal interest in their
inclusion in the insurance policy, from time to time, provided that the cover terms in respect of such directors and Officers
do not exceed those of the other directors and/or Officers in the Company.

 

		10.	Non-material Amendment to Terms of Service

 

A non-material
modification of the terms of service of a C-level Officer, relating to an existing engagement, can be approved by the CEO, provided
that the terms of service comply with the Compensation Policy.

 

Insofar as
such modification relates to a quantitative value, then for the purposes of this section a change in a threshold of up to 5% (in
real terms) relative to all the terms of service and employment of the Officer for that fiscal year, shall be deemed to be immaterial.
If the modification does not relate to a quantitative value, the materiality shall be examined on its merits and its intrinsic
nature.

 

    	11

     

    

 

		11.	Termination of Engagement

 

		11.1.	Notice Period

 

As a rule,
prior notice of an intention to terminate an employment agreement will be delivered by the Company or by the Officer in writing
to the counterparty, giving up to 9 months' notice with respect of the CEO of the Company and up to 6 months’ notice with
respect of any other Officer. The Officer will, after the delivery of such prior notice by either party notwithstanding, continue
to fulfil his duties until the actual termination of the agreement, unless otherwise decided by the Company.

 

		11.2.	Special Departure Grants

 

	Seniority	 	Entitlement effective as from the date 

of employment
	More than 5 years	 	Up to 2 months acclimatization
	More than 10 years	 	Up to 4 months acclimatization

 

The Compensation
Committee and the BOD may approve the grant of a special departure bonus that is a derivative of the Officer’s monthly salary
and the cap set out in the above table. The Compensation Committee and the BOD will consider the grant of the departure bonuses
noted above, including the Officer’s contribution to the achievement of the Company’s goals, its financial position
and the circumstances of his departure.

 

		12.	Clawback

 

On the payment
date of the bonus, the Officers will sign an undertaking to return to the Company the amount of the bonus or part thereof should
it transpire in the future that calculation of the bonus was made on the basis of data that were subsequently shown to be incorrect
and were restated in the financial statements. There will be no clawback in the event of a change in accounting and reporting regulations.
The clawback will be available up to three years from the date of the payment of the bonus.

 

		13.	Reduction at the Discretion of the BOD

 

The BOD may
reduce the extent of the variable compensation and further determine, at its discretion, that no variable compensation will be
given at all in that year.

 

		14.	Management, Control and Review of Adjustments as
Necessary

 

The Compensation
Committee will review, from time to time but at least annually, the Compensation Policy and the need to adjust it if any material
change occurs in the circumstances that existed at the time it was determined, and if necessary, adjustments in the Compensation
Policy will be approved subject to the provisions of law.

 

    	12

     

    

 

		15.	Miscellaneous

 

		15.1.	It is clarified that this policy is designed solely for
the benefit of the Company. Nothing in this document shall establish, for Officers, directors, employees or any third party, any
right to receive any reward of any kind in respect of their service in the Company or for any other reason. The grant of compensation
to an Officer in the Company to whom the Compensation Policy applies, shall be only with individual approval by the competent
organs of the Company.

 

		15.2.	This Compensation Policy shall come into force from the
date of its approval by the general meeting. This Policy shall be valid for engagements and agreements of the Company with its
Officers following such approval and until the end of the term of the Compensation Policy subject to the provisions of the Companies
Law. If there is any contradiction between the existing employment agreements of the incumbent Officers of the Company and this
Policy, those existing employment agreements shall prevail. The Company policy is that the employment agreements of the Officers
in the Company will undergo modifications from time to time, in accordance with this Policy.

 

		15.3.	It is clarified that nothing contained in this Policy shall
derogate from the provisions of the Companies Law and/or the Company’s by-laws concerning the manner of approving the Company’s
engagement with any Officer in relation to the terms of his/her service and employment, and nothing contained in the provisions
of this Policy shall derogate from any reporting obligation in respect of grant of compensation to Officers pursuant to the Securities
Law, 1968, and its regulations.

 

		15.4.	The BOD may, after approving a particular annual compensation
plan, decide that no compensation will be paid pursuant to the plan, and may instruct that the entire plan or part of it be cancelled
or suspended, as the Board of Directors sees fit.

 

    	13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}]]