Employment Agreement dated May 20, 2019

Exhibit 10.1

Execution Copy

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of May 20, 2019 (the "Effective Date"), by and between Protalix Ltd., a company organized under the laws of the State of Israel (the “Company”) and Mr. Dror Bashan, Israel Identification No. 22945729 (the “Employee” or "Dror") (each of the Company and Employee shall be referred to herein, as a “Party” and collectively, the “Parties”).

NOW, THEREFORE, based on the representations contained herein and in consideration of the mutual promises and covenants set forth herein, the Parties agree as follows:

Notwithstanding the foregoing, after the Commencment Date, the Employee shall be entitled to perform advisory services to such companies disclosed to the Company prior to the Effective Date, provided that such services, in the aggregate, do not exceed 5 (five) hours per calendar month and that such services do not present a conflict of interest with the Company. Any additional occupations, of any kind, shall require the prior approval of the Chairman of the Board.

Other than as stipulated in this Section 1.3, during the term of this Agreement the Employee shall not be engaged in any other employment nor engage in any other business activity or render any services, with or without compensation, for any other person or entity.

The Employee shall notify the Company immediately of any event or circumstance which may hinder the performance of his obligations hereunder or result in the Employee having a conflict of interest with his Position.

In full consideration of Employee’s employment hereunder, commencing as of the Commencement Date (unless otherwise expressly provided in this Section 2), the Employee shall be entitled to the following payments and benefits, it being understood and agreed that any Salary-based benefits shall be calculated exclusively on the basis of the base Salary (without consideration to any other benefit):

2.2.1       Employee shall be entitled to an annual bonus based on multiples of Employee's base monthly Salary, subject to the Board's approval and at the Board's discretion. The determination of the Board (and any other organ approval required under applicable law) shall be made following the end of each calendar year during the term hereof and the bonus shall be payable, if applicable, with the next salary following the publication of the Company's annual financial report. The Board shall determine the bonus on the basis of annual objectives which shall include both measurable (60%) and strategic (40%) parameters, to be agreed in advance with the Employee on an annual basis (the “Objectives”). The Board’s (and any other organ’s approval required under applicable law) decision regarding the foregoing bonus payment shall be based on the Board’s determinations, in its discretion, that the Employee achieved 75% or more of the Objectives (the “Percentage Achievement”). The amount of the bonus is anticipated to fall within the following range: (i) for achievement of 75% of the Objectives, a bonus in an amount equal to 6 (six) Salaries; (ii) for achievement of 100% of the Objectives, a bonus in an amount equal to 8 (eight) Salaries; and (iii) for achievement of 120% of the Objectives, a bonus in an amount equal to 10 (ten) Salaries, which will also be the maximum amount.

2.2.2.       The Board shall be entitled to grant, at any time, and notwithstanding the foregoing, a discretionary bonus to the Employee, based on significant achievements.

2.2.3       Without derogating the foregoing, in the event of Triggered COC (as defined below), Employee shall be entitled to receive a one time bonus in the amount of US$1,000,000 (“COC Bonus”), provided however, that (i) the COC Bonus is inclusive of any termination notice and other applicable amounts stipulated under this Agreement; and (ii) the COC Bonus is inclusive of any milestone achieved following the consummation of such change of control.

For the purpose hereof, Triggered COC shall mean: Change in ownership or control of the Protalix Inc. effected through the direct acquisition by any person or related group of persons (other than an acquisition from or by Protalix Inc. or by a Protalix Inc. -sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, Protalix Inc.) of beneficial ownership (within the meaning of Rule 13d 3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of Protalix Inc.’s outstanding securities pursuant to an agreement which was initiated by the Board of Directors of Protalix Inc. and was led by an investment bank on its behalf.

It is agreed that the definition of Triggered COC is applicable only to this Agreement and not to the Plan (as defined below).

An option under Protalix Inc. 2006 Stock Incentive Plan, as amended (the "Plan") to purchase 1,600,000 shares of common stock, par value US$0.001 per share (the "Option"), shall be granted to Employee on the Commencement Date pursuant to the terms of an Option Agreement dated as of the date hereof, subject to the following terms and conditions:

(i) vesting over a period of four (4) years on a quarterly basis, commencing on the Commencement Date;

(ii) vesting of the Option will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan;

(iii) the shares underlying the Option will have an exercise price equal to the closing sales price of Protalix Inc. common stock on the NYSE for the day immediately preceding the Commencement Date; and

(iv) the Option shall be granted to Employee pursuant to Section 102 of the Tax Ordinance, capital gain route, and the rules, regulations, orders and procedures promulgated hereunder.

At each time that the Board elects to grant options to purchase shares of common stock of Protalix Inc. or other similar equity incentives to the Company’s and/or Protalix Inc.’s executive officers generally (i.e., not to include one-time grants made to new officers), the Board shall grant to the Employee additional options as part of such general grant. Sub-section (ii) above shall apply to any such additional equity grant.

In the event that the Employee shall elect to be insured in a Manager’s Insurance Policy or a provident fund which is not a Pension Fund - the Company’s contributions for benefits (Tagmulim) shall include payment for disability insurance in an amount which will ensure 75% of the Salary, provided however, that in any event the contributions of the Company for benefits shall be equal to at least 5% of the Salary, and the total cost of the Company for disability insurance and benefits shall not exceed 7.5% of the Salary.

The Parties hereby declare and agree that the pension arrangement in accordance with this clause constitutes a “beneficial arrangement” for the purpose of the Extension Order (Combined Version) for Mandatory Pension under the Collective Agreements Law, 5717-1957 (the “Pension Extension Order”), and the Company shall not be under any obligation to provide any pension arrangement as provided in the Pension Extension Order other than as provided in this Section.

Without derogating from the generality of the aforesaid, all payments made by the Company to the Policy shall be in lieu of severance pay due to the Employee or his heirs from the Company, and the Company shall not have any additional or other obligations to pay the Employee severance payments, and the Employee hereby consents to this arrangement in accordance with Section 14 of the Severance Pay Law 5723-1963 and the “General Approval Regarding Payments by Employers to a Pension Fund and Insurance Fund in Lieu of Severance Pay” (the “General Approval”), a copy of which is attached to this Agreement as Exhibit A, and the provisions of the General Approval shall apply to the Employee and this Agreement.

For avoidance of doubt, as of the date indicated herein, the General Approval has not yet been updated to reflect the percentages of contributions/deductions indicated above. In the event of discrepancy between the updated General Approval and the percentages stated herein, the updated General Approval shall prevail.

The Company hereby waives any entitlement and/or right for reimbursement with respect to the severance compensation and acknowledges, that upon termination of the Employee's employment in the Company, including inter alia, in the event of the Employee's resignation, the Company shall release the severance compensation and shall transfer the severance compensation to the Employee, except in the event that: (i) the Company has terminated the Employee’s employment due to circumstances under which his entitlement for severance payment is denied pursuant to Articles 16 or 17 of the Severance Law; or (ii) the Employee has already withdrawn funds from the Policy and not because of “EIROA MEZAKE” according to Section 2(b) of the General Approval.

Employee shall coordinate in advance with the Chairman of the Board the dates of the vacation hereunder.

For the purposes of this Agreement, the term “Cause” shall mean: (i) a material breach by Employee of this Agreement, provided such event is not cured within 30 days after receipt by the Employee of a written notice from the Company; (ii) any breach by Employee of his fiduciary duties or duties of care to the Company; (iii) Employee’s dishonesty or fraud or felonious conviction; (iv) Employee’s embezzlement of funds of the Company; (v) any conduct by Employee, alone or together with others, which is intent to cause materially injurious to the Company, monetary or otherwise; (vi) Employee’s gross negligence or willful misconduct in performance of his duties and/or responsibilities hereunder; (vii) Employee’s disregard or insubordination of any lawful resolution and/or instruction of the Board with respect to Employee’s duties and/or responsibilities towards the Company, provided such event is not cured within 30 days after receipt by the Employee of a written notice from the Company; (viii) the occurrence of an event or circumstance which result in the Employee having a conflict of interest with his position with the Company, without Employee having notified the Company thereof, as provided herein; (ix) any breach by Employee of his confidentiality undertakings to the Company; or (x) any consequences which would entitle the Company to terminate Employee's employment without severance payments under the Severance Pay Law.

Arbitration proceedings shall be conducted for no longer than forty-five (45) days. The proceedings shall be conducted in Hebrew and according to the rules of substantive law. The arbitrator will not be bound by rules of evidence or procedure and will give a reasoned decision, in writing. The arbitrator's decision shall be final and binding in any court. Unless otherwise determined by the arbitrator, each party to the proceedings shall bear its own expenses and the arbitrator's fees and expenses shall be borne in equal parts by the parties to the proceedings.

This Section shall constitute an arbitration agreement between the Parties.

[Signature Page to Protalix Ltd. Employment Agreement]

IN WITNESS WHEREOF, the Parties hereto have executed this Employment Agreement as of the date first above-mentioned.