Exhibit 10.5

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the "Agreement”) is entered into as of
November 1, 2016 by and between Shock, Inc. (the “Company”) and John P. Yeros
(“Executive”). This Agreement will become effective upon the Company
successfully acquiring a third party with at least four (4) additional
compressed natural gas stations (the “Effective Date”). Absent such event, this
Agreement shall be null and void and of no force or effect.

 

1.           Duties and Scope of Employment.

 

(a)            Positions and Duties. During the Employment Term (as defined
below), Executive will serve as Chief Executive Officer of the Company and shall
report to the Company’s Board of Directors (the “Board”). Executive’s authority,
duties, and responsibilities will correspond to Executive’s position and will
include any particular authority, duties, and responsibilities consistent with
Executive’s position that the Board may assign to Executive from time to time.
Executive shall initially report to the Company’s offices located in the
Minneapolis Metropolitan area; provided that Executive’s duties will include
reasonable travel, including but not limited to travel to offices of the
Company, its subsidiaries and affiliates, and such other business travel as is
reasonably necessary and appropriate to the performance of Executive’s duties
hereunder.

 

(b)           Obligations. During the Employment Term, Executive is required to
faithfully and conscientiously perform his assigned duties and to diligently
observe all of his obligations to the Company. Executive agrees to devote his
full business time and efforts, energy and skill to his employment at the
Company, and Executive agrees to apply all his skill and experience to the
performance of his duties and advancing the Company’s interests. The foregoing
shall not preclude Executive from engaging in civic, charitable or religious
activities or, with the prior written consent of the Board, from serving on the
boards of directors of other companies, as long as the activities do not
interfere or conflict with Executive’s responsibilities to or his ability to
perform his duties hereunder. During the Employment Term, Executive may not
perform services as an employee or consultant of any other competitive
organization and Executive will not assist any other person or organization in
competing with the Company or in preparing to engage in competition with the
business or proposed business of the Company. Executive shall comply with and be
bound by Company’s operating policies, procedures, and practices from time to
time in effect during his employment. By signing this Agreement, Executive
confirms to the Company that he has no contractual commitments or other legal
obligations that would prohibit him from performing his duties for the Company.

 

(c)           Employment Term. The term of this Agreement shall be four (4)
years commencing on the Effective Date, unless terminated earlier pursuant to
the terms herein (the “Initial Term”). Unless earlier terminated pursuant to the
terms herein, the Initial Term shall be automatically extended for additional
one-year terms (each, a “Renewal Term”) upon the expiration of the Initial Term
or any Renewal Term unless the Company or Executive delivers to the other at
least 90 days prior to the expiration of the Initial Term or the then-current
Renewal Term, as the case may be, a written notice specifying that the term of
Executive’s employment will not be renewed at the end of the Initial Term or the
then-current Renewal Term, as the case may be. Like the Initial Term, the
then-current Renewal Term is subject to earlier termination pursuant to the
terms herein. The Executive’s period of employment hereunder is referred to
herein as the “Employment Term.” Notice of non-renewal given by the Company
shall constitute the termination of Executive’s employment by the Company
pursuant to Section 7(a) hereof effective as of the last day of the then-current
Initial Term or Renewal Term, as the case may be, unless the Company satisfies
the requirements of Section 7(b) for a termination for Cause, death or
Disability or otherwise enters into an agreement with Executive that supersedes
this Agreement.

 

 

 

2.           At-Will Employment. The parties agree that Executive’s employment
with the Company will be “at-will” employment and may be terminated at any time,
by either party, with or without Cause or Good Reason, or advance notice.
Executive understands and agrees that neither his job performance nor
promotions, commendations, bonuses or the like from the Company give rise to or
in any way serve as the basis for modification, amendment, or extension, by
implication or otherwise, of his employment with the Company. However, as
described in this Agreement, Executive may be entitled to severance benefits
depending upon the circumstances of Executive’s termination of employment as set
forth in Section 7 below.

 

3.           Compensation.

 

(a)            Initial Base Salary. During the Employment Term the Company will
pay Executive an annual base salary as compensation for his services (the “Base
Salary”), initially at the rate of $240,000. The Base Salary will be paid
periodically in accordance with the Company’s normal payroll practices. The Base
Salary will be subject to review and adjustments will be made based upon the
Company’s standard practices.

 

(b)           Annual Incentive Bonus. During the Employment Term, Executive will
be eligible, at the discretion of the Board (or a committee thereof), to earn an
annual incentive bonus (an “Annual Bonus”). The Board (or a committee thereof),
in its sole discretion, will determine Executive’s target bonus opportunity and
the criteria for earning such bonus, as well as Executive’s achievement of such
criteria, and the amount of the Annual Bonus earned and payable to Executive for
such year. Any Annual Bonus that is earned and becomes payable pursuant to this
Section 3(b) will be paid no later than March 15 of the calendar year
immediately following the calendar year to which the Annual Bonus relates, but
the Executive must remain continuously employed by the Company through the
payment date in order to earn the Annual Bonus. The determinations of the Board
(or a committee thereof) with respect to the Annual Bonus will be final and
binding.

 

(c)           Equity. Executive will be eligible to receive awards of stock
options pursuant to any plans or arrangements the Company may have in effect
from time to time. The Board (or a committee of the Board, if applicable) will
determine in its discretion whether Executive will be granted any such equity
awards and the terms of any such award in accordance with the terms of any
applicable plan or arrangement that may be in effect from time to time.

 

4.           Employee Benefits. During the Employment Term, Executive will be
entitled to participate in the employee benefit plans and programs currently and
hereafter maintained by the Company of general applicability to other senior
executives of the Company, subject to eligibility requirements and the
applicable terms and conditions of the plan or program in question and the
determination of any committee administering such plan or program. The Company
reserves the right to cancel or change the benefit plans and programs it offers
to its employees at any time.

 

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5.           Vacation. Executive will be entitled to paid vacation of up to 20
days per calendar year, prorated for any partial calendar year of employment, in
accordance with the Company’s vacation policy (including, without limitation,
its policy relation to maximum accrual, carry-over and payout), with the timing
and duration of specific vacations mutually and reasonably agreed to by
Executive and the Board.

 

6.           Expenses. The Company will reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive’s duties hereunder, in
accordance with the Company’s expense reimbursement policy as in effect from
time to time.

 

7.           Severance.

 

(a)           Termination by the Company without Cause; Resignation by Executive
for Good Reason. If the Company terminates Executive’s employment without Cause
or Executive resigns for Good Reason during the Employment Term, then, subject
to Sections 8 and 11(c), Executive will be entitled to:

 

(i)           (A) any unpaid Base Salary through Executive’s termination of
employment; (B) reimbursement for any unreimbursed expenses incurred through
Executive’s termination of employment; and (C) all other accrued payments or
benefits to which Executive is entitled and has earned under the terms of any
applicable compensation arrangement or benefit plan or program (collectively,
the “Accrued Obligations”). Accrued Obligations shall be paid to Executive in a
lump sum in cash within thirty (30) days following Executive’s termination of
employment, unless otherwise required by law or the terms of the applicable
compensation arrangement or benefit plan or program;

 

(ii)           payment of cash severance in an amount equal to (A) the number of
months in the Severance Period, multiplied by (B) the Executive’s monthly
Base Salary (at the level in effect immediately prior to his termination date),
payable to Executive in substantially equal monthly installments in accordance
with the Company’s standard payroll procedures, commencing on the 60th day
following Executive’s termination of employment;

 

(iii)           to the extent Executive and Executive’s spouse and dependent
children properly (and timely) elect COBRA continuation coverage under the
Company’s group health plan, the Company shall reimburse Executive for the
proportionate cost of the premiums due for such coverage, as determined by the
cost ratio policy for the Company’s employees in effect from time to time, for a
period beginning on Executive’s termination date and ending on the earliest to
occur of (A) the date on which Executive is no longer entitled to COBRA
continuation coverage under the Company’s group health plan, (B) the last day of
the month that includes or immediately precedes the first day that Executive is
covered under another employer’s group health plan, and (C) the last day of the
month in which the Severance Period ends, whichever is shortest; provided,
however, that notwithstanding the foregoing or any other provision in this
Agreement to the contrary, the Company may unilaterally amend this Section
7(a)(iii) or eliminate the benefit provided hereunder to the extent it deems
necessary to avoid the imposition of excise taxes, penalties or similar charges
on the Company or any of its subsidiaries or affiliates, including, without
limitation, under Code Section 4980D; provided further that any reimbursements
to which Executive becomes entitled pursuant this Section 7(a)(iii) shall be
paid to Executive no later than the last day of the calendar month immediately
following the calendar month to which they relate (provided, however, that the
first such reimbursement shall be made within ten (10) days after the 60th day
following Executive’s termination of employment and shall include all such
reimbursements as may relate to periods prior to such date).

 

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(b)           Termination for Cause, Death, Disability or Voluntary Resignation.
If Executive’s employment with the Company terminates for Cause by the Company,
without Good Reason by the Executive, or due to Executive’s death or Disability,
then all payments of compensation by the Company to Executive hereunder will
terminate immediately (except as to Accrued Obligations) and he shall not
receive any amounts or benefits pursuant to Sections 7(a)(ii) or (iii).

 

8.           Conditions to Receipt of Severance.

 

(a)           Separation Agreement and Release of Claims. The receipt of any
amounts or benefits pursuant to Sections 7(a) (other than Accrued Obligations)
will be subject to Executive signing, allowing to become effective, not revoking
and complying with a general release and waiver of claims in favor of the
Company and its officers, directors and affiliates, which general release and
waiver of claims shall be in a form prepared by the Company, in its reasonable
discretion, and delivered to the Company no later than the due date set forth
therein. By way of example and not limitation, the general release and waiver of
claims will include any claims for wages, bonuses, employment benefits, or
damages of any kind whatsoever, arising out of any contracts, express or
implied, any covenant of good faith and fair dealing, express or implied, any
theory of wrongful discharge, any legal restriction on the Company’s right to
terminate employment, or any federal, state or other governmental statute or
ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964, the federal Age Discrimination in Employment Act, the American with
Disabilities Act, the Family and Medical Leave Act, or any other legal
limitation on the employment relationship.

 

(b)           Compliance with Covenants. The receipt of any severance benefits
pursuant to Section 7(a) (other than Accrued Obligations) will be subject to
Executive’s compliance with Sections 9(a), 9(b) and 9(c) of this Agreement. In
the event Executive breaches any of Sections 9(a), 9(b), or 9(c), (i) all
continuing payments and benefits to which Executive may otherwise be entitled
pursuant to Section 7(a) (other than Accrued Obligations) will immediately
cease, and (ii) Executive will repay, or cause to be repaid, to the Company the
full amount of any payments and benefits previously paid by the Company to the
Executive pursuant to Section 7(a) (other than Accrued Obligations) prior to the
date of such breach.

 

9.           Restrictive Covenants.

 

(a)           Non-Competition. In recognition of the consideration set forth
herein, the sufficiency of which is hereby acknowledged, Executive hereby
covenants and agrees that while employed during the Employment Term and for
twenty-four (24) months after termination of Executive’s employment for any
reason, whether voluntary or involuntary (the “Restricted Period”), Executive
shall not either directly or indirectly, whether for consideration or otherwise:
(A) engage in (except on behalf of the Company or its subsidiaries), or compete
with the Company or any of its subsidiaries or affiliates in, a Competing
Business anywhere in the Territory (any such entity, a “Competing Entity”); or
(ii) form or assist others in forming, be employed by, perform services for,
become an officer, director, member or partner of, or participant in, or
consultant or independent contractor to, invest in or own any interest in
(whether through equity or debt securities), assist (financially or otherwise)
or lend Executive’s name, counsel or assistance to any Competing Entity.

 

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(b)           Non-Solicitation. Also in recognition of the consideration set
forth herein, Executive hereby covenants and agrees that during the Restricted
Period, Executive shall not either directly or indirectly, whether for
consideration or otherwise: (A) solicit or accept business from any customer of
the Company for the purpose of providing goods or services in a Competing
Business or solicit or induce any customer of the Company to terminate, reduce
or alter in a manner adverse to the Company, any existing business arrangement
or agreement with the Company, (B) be employed by any customer of the Company,
or (C) solicit, hire, attempt to solicit or attempt to hire any person who is or
was an employee, third party consultant or independent contractor of the Company
or any of its subsidiaries or affiliates at any time during the twelve (12)
months prior to such solicitation or hire. The restrictions set forth in this
Section 9(b) shall not prohibit any form of general advertising or solicitation
that is not directed at a specific person or entity and does not relate to a
Competing Business.

 

(c)           Non-Disclosure and Non-Use of Confidential Information. At all
times both during employment of Executive with the Company, and after the
employment relationship with the Company has ended for any reason, Executive
agrees that he will not, either directly or indirectly, (i) divulge, use,
disclose (in any way or in any manner, including by posting on the Internet),
reproduce, distribute, or reverse engineer or otherwise provide Confidential
Information to any person, firm, corporation, reporter, author, producer or
similar person or entity; (ii) take any action that would make available
Confidential Information to the general public in any form; (iii) take any
action that uses Confidential Information to solicit any customer or prospective
customer of the Company; or (iv) take any action that uses Confidential
Information for solicitation or marketing for any service or product or on
Executive’s behalf or on behalf of any entity other than the Company or its
subsidiaries or affiliates with which Executive may become associated, except
(A) as required in connection with the performance of such Executive’s duties to
the Company, (B) as required to be included in any report, statement or
testimony requested by any municipal, state or national regulatory body having
jurisdiction over Executive or his affiliates, (C) as required in response to
any summons or subpoena or in connection with any litigation, (D) to the extent
necessary in order to comply with any law, order, regulation, ruling or
governmental request applicable to Executive, (E) as required in connection with
an audit by any taxing authority, or (F) as permitted by the express written
consent of the Board of Directors. In the event that Executive is required to
disclose Confidential Information pursuant to the foregoing exceptions,
Executive shall promptly notify the Company of such pending disclosure and
assist the Company (at the Company’s expense) in seeking a protective order or
in objecting to such request, summons or subpoena with regard to the
Confidential Information. If the Company does not obtain such relief prior to
the time that Executive is legally compelled to disclose such Confidential
Information, Executive may disclose that portion of the Confidential Information
which counsel to Executive advises Executive that he is legally compelled to
disclose or else stand liable for contempt or suffer censure or penalty. In such
cases, Executive shall promptly provide the Company with a copy of the
Confidential Information so disclosed. This provision applies without limitation
to unauthorized use of Confidential Information in any medium, including film,
videotape, audiotape and writings of any kind (including books, articles,
e-mails, texts, blogs and websites).

 

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Executive is hereby notified, pursuant to the federal Defend Trade Secrets Act
of 2016 (“DTSA”), that an individual shall not be held criminally or civilly
liable under any federal or state trade secret law for the disclosure of a trade
secret that is made (i) in confidence to a federal, state, or local government
official, either directly or indirectly, or to an attorney, and (ii) solely for
the purpose of reporting or investigating a suspected violation of law; or where
the disclosure of a trade secret is made in a complaint or other document filed
in a lawsuit or other proceeding, if such filing is made under seal.  In
addition, Executive is hereby notified under the DTSA that if an individual
files a lawsuit for retaliation by an employer for reporting a suspected
violation of law, the individual may disclose a trade secret to his or her
attorney and use the trade secret information in the court proceeding if the
individual (i) files any document containing the trade secret under seal; and
(ii) does not disclose the trade secret, except pursuant to court order.

 

(d)           Inventions and Patents; Third Party Information. The results and
proceeds of Executive’s services to the Company hereunder (whether prior to or
after the date of this Agreement), including, without limitation, any works of
authorship related to the Company resulting from Executive’s services during
Executive’s employment with the Company and any works in progress, will be
works-made-for-hire and the Company (or its designee) will be deemed the sole
owner throughout the universe of any and all rights of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed, with the right to use the same in perpetuity in any
manner the Company determines in its sole discretion without any further payment
to Executive whatsoever. If, for any reason, any of such results and proceeds
will not legally be a work-for-hire and/or there are any rights which do not
accrue to the Company under the preceding sentence, then Executive hereby
irrevocably assigns and agrees to assign any and all of Executive’s right, title
and interest thereto, including, without limitation, any and all copyrights,
patents, trade secrets, trademarks and/or other rights of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed to the Company, and the Company will have the right to
use the same in perpetuity throughout the universe in any manner the Company
determines without any further payment to Executive whatsoever. Executive will,
from time to time, as may be requested by the Company and at the Company’s sole
expense, do any and all things which the Company may deem useful or desirable to
establish or document the Company’s exclusive ownership of any and all rights in
any such results and proceeds, including, without limitation, the execution of
appropriate copyright and/or patent applications or assignments. To the extent
Executive has any rights in the results and proceeds of Executive’s services to
the Company that cannot be assigned in the manner described above, Executive
unconditionally and irrevocably waives the enforcement of such rights. This
Section 9(d) is subject to, and will not be deemed to limit, restrict or
constitute any waiver by the Company of any rights of ownership to which the
Company may be entitled by operation of law by virtue of the Company being
Executive’s employer. This Agreement does not apply to an invention for which no
equipment, supplies, facility or trade secret information of the Company was
used and which was developed entirely on Executive’s own time, and (1) which
does not relate (a) directly to the business of the Company or (b) to the
Company’s actual or demonstrably anticipated research or development, or (2)
which does not result from any work performed by you for the Company.

 

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(e)           Enforcement; Remedies. Executive acknowledges that the covenants
set forth in Sections 9(a), 9(b), 9(c) and 9(d) impose a reasonable restraint on
Executive in light of the business and activities of the Company and its
subsidiaries or affiliates. Executive acknowledges that Executive’s expertise is
of a special and unique character which gives this expertise a particular value,
and that a breach of Sections 9(a), 9(b), 9(c) or 9(d) by Executive will cause
serious and potentially irreparable harm to the Company and its subsidiaries or
affiliates. Executive therefore acknowledges that a breach of Sections 9(a),
9(b), 9(c) or 9(d) by Executive cannot be adequately compensated in an action
for damages at law, and equitable relief would be necessary to protect the
Company and its subsidiaries or affiliates from a violation of this Agreement
and from the harm which this Agreement is intended to prevent. By reason
thereof, Executive acknowledges that the Company and its subsidiaries or
affiliates are entitled, in addition to any other remedies it may have under
this Agreement or otherwise, to preliminary and permanent injunctive and other
equitable relief to prevent or curtail any breach of this Agreement. Executive
acknowledges, however, that no specification in this Agreement of a specific
legal or equitable remedy may be construed as a waiver of or prohibition against
pursuing other legal or equitable remedies in the event of a breach of this
Agreement by Executive. If Executive breaches or threatens to breach this
Agreement, Executive shall pay the reasonable attorneys’ fees and costs incurred
by the Company in connection with enforcing its rights under this Agreement.
Executive’s sole and exclusive remedy in the event of a breach of this Agreement
by the Company shall be payment of severance benefits pursuant to Section 7(a).

 

(f)           Modification. In the event that any provision or term of Section
9(a), 9(b), 9(c) or 9(d), or any word, phrase, clause, sentence or other portion
thereof (including, without limitation, the geographic and temporal restrictions
and provisions contained in Section 9(a) or 9(b)) is held to be unenforceable or
invalid for any reason, such provision or portion thereof will be modified or
deleted in such a manner as to be effective for the maximum period of time for
which it/they may be enforceable and over the maximum geographical area as to
which it/they may be enforceable and to the maximum extent in all other respects
as to which it/they may be enforceable. Such modified restriction(s) shall be
enforced by the court or adjudicator. In the event that modification is not
possible, because each of Executive’s obligations in Sections 9(a), 9(b), 9(c)
and 9(d) is a separate and independent covenant, any unenforceable obligation
shall be severed and all remaining obligations shall be enforced.

 

10.           Definitions.

 

For purposes of this Agreement, the following defined terms have the following
meanings:

 

(a)           “Cause” means any of the following: (i) Executive’s conviction of,
or plea of guilty or nolo contendere to, a misdemeanor involving dishonesty,
wrongful taking of property, immoral conduct, bribery or extortion or any
felony; (ii) willful material misconduct by Executive in connection with the
business of the Company and its affiliates; (iii) Executive’s continued and
willful failure to perform substantially his responsibilities to the Company
under this Agreement, after written demand for substantial performance has been
given by the Board that specifically identifies how Executive has not
substantially performed his responsibilities; (iv)  Executive’s improper
disclosure of confidential information or other material breach of this
Agreement; (v) Executive’s material fraud or dishonesty against the Company or
its affiliates; (vi)  Executive’s willful and material breach of the Company’s
written code of conduct and business ethics or other material written policy,
procedure or guideline in effect from time to time (provided that Executive was
given access to a copy of such policy, procedure or guideline prior to the
alleged breach) relating to personal conduct; or (vii) Executive’s willful
attempt to obstruct or willful failure to cooperate with any investigation
authorized by the Board or any governmental or self-regulatory entity. Any
determination of Cause by the Company shall be made by a resolution approved by
a majority of the members of the Board, provided that, with respect to Section
10(a)(iii), the Board must give the Executive notice and thirty (30) days to
cure the substantial nonperformance.

 

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(b)            “Code” means the Internal Revenue Code of 1986, as amended.

 

(c)           “Competing Business” means (i) a business that is engaged in the
acquisition or operation of compressed natural gas fueling stations, or (ii) any
other business in which the Company or any of its subsidiaries or affiliates is
then-currently engaged or was engaged at any time in the twelve (12) month
period prior to Executive’s last day of employment with the Company.

 

(d)           “Confidential Information” means confidential or proprietary
information and/or techniques of the Company or its subsidiaries or affiliates
entrusted to, developed by, or made available to Executive, whether in writing,
in computer form, reduced to a tangible form in any medium, or conveyed orally,
that is not generally known by others in the form in which it is or was used by
the Company or its subsidiaries or affiliates. Examples of Confidential
Information include, without limitation: (i) sales, sales volume, sales methods,
sales proposals, business plans or statements of work; (ii) customers,
prospective customers, and customer records, including contact, preference and
other customer information; (iii) costs and general price lists and prices
charged to specific customers; (iv) the names, addresses, contact information
and other information concerning any and all brokers, vendors and suppliers and
prospective brokers, vendors and suppliers; (v) pricing information; (vi) terms
of contracts; (vii) non-public information and materials describing or relating
to the business or financial affairs of the Company or its subsidiaries or
affiliates, including but not limited to, financial statements, budgets,
projections financial and/or investment performance information, research
reports, personnel matters, products, services, operating procedures,
organizational responsibilities and marketing matters, policies or procedures;
(viii) information and materials describing existing or new processes, products
and services of the Company or its subsidiaries or affiliates, including
marketing materials, analytical data and techniques, and product, service or
marketing concepts under development, and the status of such development; (ix)
the business or strategic plans of the Company or its subsidiaries or
affiliates; (x) the information technology systems, network designs, computer
program code, and application practices of the Company or its subsidiaries or
affiliates; (xi) acquisition candidates of the Company or its subsidiaries or
affiliates or any studies or assessments relating thereto; and (xii) trademarks,
service marks, trade secrets, trade names and logos. Confidential Information
does not include information that, other than as a result of a breach by
Executive of this Agreement, is or becomes generally known to and available for
use by the public.

 

(e)            “Disability” means Executive’s inability to perform one or more
essential functions of his position, notwithstanding the provision of reasonable
accommodation, by reason of any medically diagnosed physical or mental
impairment which inability has lasted for a continuous period of 120 calendar
days or more. A determination of such Disability will be made by a physician
reasonably acceptable to the Company.

 

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(f)           “Good Reason” means the occurrence of any of the following events,
without the written consent of Executive:

 

(i)           a reduction by the Company in Executive’s Base Salary (as may have
been increased after the Effective Date) by more than ten percent (10%), except
as part of an across the board uniformly applied reduction affecting all senior
executives;

 

(ii)           A material and permanent reduction in Executive’s authority,
duties or responsibilities, other than any reduction which occurs solely as a
result of the Company being acquired and made a part of a larger entity (as for
example, when the Chief Executive Officer of the Company remains as such
following an acquisition and is not made the Chief Executive Officer of the
acquiring corporation or entity);

 

(iii)           Any other action or inaction that constitutes a material breach
by the Company of this Agreement or any other agreement under which Executive
provides services to the Company.

 

Notwithstanding any other provision of this Agreement to the contrary, Executive
shall not be deemed to have terminated his employment for Good Reason unless
(A) Executive notifies the Company in writing of the condition that Executive
believes constitutes Good Reason within ninety (90) days of the initial
existence thereof (which notice specifically identifies such condition and the
details regarding its existence), (ii) the Company fails to remedy such
condition within thirty (30) days after the date on which it receives such
notice (the “Remedial Period”), and (iii) Executive terminates employment with
the Company (and its subsidiaries and affiliates) within thirty (30) days after
the end of the Remedial Period.

 

(g)           “Section 409A” means Section 409A of the Code and the
Treasury Regulations and guidance issued thereunder.

 

(h)           “Severance Period” means (i) the period between the Executive’s
last day of employment and the one year anniversary of Executive’s employment
hereunder if Executive’s employment is terminated under Section 7(a) prior to
such one year anniversary or (ii) six (6) months, whichever period is longer.

 

(i)           “Territory” means any State in the United States in which the
Company, its subsidiaries or affiliates then-currently conduct their business or
have conducted their business at any time in the prior twelve (12) months.

 

11.           Tax Matters

 

(a)           Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.

 

(b)           Responsibility. Notwithstanding anything to the contrary herein,
the Company makes no representations or warranties to Executive with respect to
any tax, economic or legal consequences of this Agreement or any payments or
other benefits provided hereunder, including without limitation under Section
409A, and no provision of the Agreement shall be interpreted or construed to
transfer any liability for failure to comply with Section 409A or any other
legal requirement from Executive or any other individual to the Company or any
of its subsidiaries or affiliates. Executive, by executing this Agreement, shall
be deemed to have waived any claim against the Company and its subsidiaries and
affiliates with respect to any such tax, economic or legal consequences.

 

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(c)           Section 409A. The parties intend that this Agreement and the
payments and other benefits provided hereunder be exempt from the requirements
of Section 409A to the maximum extent possible, whether pursuant to the
short-term deferral exception described in Treasury Regulation Section
1.409A-1(b)(4), the involuntary separation pay plan exception described in
Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise. To the extent
Section 409A is applicable to this Agreement and any such payments and benefits,
the parties intend that this Agreement and such payments and benefits comply
with the deferral, payout and other limitations and restrictions imposed under
Section 409A. Notwithstanding any other provision of this Agreement to the
contrary, this Agreement shall be interpreted, operated and administered in a
manner consistent with such intentions. Without limiting the generality of the
foregoing, and notwithstanding any other provision of this Agreement to the
contrary:

 

(i)           if at the time Executive’s employment hereunder terminates,
Executive is a “specified employee,” as defined in Treasury Regulation
Section 1.409A-1(i) and determined using the identification methodology selected
by the Company from time to time, or if none, the default methodology, then to
the extent necessary to avoid subjecting Executive to the imposition of any
additional tax under Section 409A, any and all amounts payable under this
Agreement on account of such termination of employment that would (but for this
provision) be payable within six (6) months following the date of termination,
shall instead be paid in a lump sum on the first day of the seventh month
following the date on which Executive’s employment terminates or, if earlier,
upon Executive’s death;

 

(ii)           a termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service,” as defined in Treasury
Regulation Section 1.409A-1(h) after giving effect to the presumptions contained
therein, and, for purposes of any such provision of this Agreement, references
to “terminate,” “termination,” “termination of employment” and like terms shall
mean separation from service;

 

(iii)           each payment made under this Agreement shall be treated as a
separate payment and the right to a series of installment payments under this
Agreement shall be treated as a right to a series of separate payments; and

 

(iv)           with regard to any provision in this Agreement that provides for
reimbursement of expenses or in-kind benefits, except for any expense,
reimbursement or in-kind benefit provided pursuant to this Agreement that does
not constitute a “deferral of compensation,” within the meaning of Treasury
Regulation Section 1.409A-1(b), (A) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another benefit,
(B) the amount of expenses eligible for reimbursement, or in-kind benefits
provided, during any taxable year shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year,
and (C) such payments shall be made no later than two and a half months after
the end of the calendar year in which the expenses were incurred.

 

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(d)           Limitation on Payments Under Certain Circumstances.

 

(i)           Notwithstanding any other provision of this Agreement to the
contrary, in the event that Executive becomes entitled to receive or receives
any payments, options, awards or benefits (including, without limitation, the
monetary value of any non-cash benefits and the accelerated vesting of stock
awards) under any plan, agreement or arrangement with the Company or any person
affiliated with the Company (collectively, the “Payments”), that may separately
or in the aggregate constitute “parachute payments” within the meaning of Code
Section 280G and the Treasury regulations promulgated thereunder (“Section
280G”) and it is determined that, but for this Section 12(d)(i), any of the
Payments will be subject to any excise tax pursuant to Code Section 4999 or any
similar or successor provision (the “Excise Tax”), the Company shall pay to
Executive either (i) the full amount of the Payments or (ii) an amount equal to
the Payments reduced by the minimum amount necessary to prevent any portion of
the Payments from being an “excess parachute payment” (within the meaning of
Section 280G) (the “Capped Payments”), whichever of the foregoing amounts
results in the receipt by Executive, on an after-tax basis (with consideration
of all taxes incurred in connection with the Payments, including the Excise
Tax), of the greatest amount of Payments notwithstanding that all or some
portion of the Payments may be subject to the Excise Tax. For purposes of
determining whether Executive would receive a greater after-tax benefit from the
Capped Payments than from receipt of the full amount of the Payments and for
purposes of Section 11(d)(iii) (if applicable), Executive shall be deemed to pay
federal, state and local taxes at the highest marginal rate of taxation for the
applicable calendar year.

 

(ii)           All computations and determinations called for by Sections
11(d)(i) and 12(d)(iii) shall be made and reported in writing to the Company and
Executive by a third-party service provider selected by the Company (the “Tax
Advisor”), and all such computations and determinations shall be conclusive and
binding on the Company and Executive. For purposes of such calculations and
determinations, the Tax Advisor may rely on reasonable, good faith
interpretations concerning the application of Code Sections 280G and 4999. The
Company and Executive shall furnish to the Tax Advisor such information and
documents as the Tax Advisor may reasonably request in order to make their
required calculations and determinations. The Company shall bear all fees and
expenses charged by the Tax Advisor in connection with its services.

 

(iii)           In the event that Section 11(d)(i) applies and a reduction is
required to be applied to the Payments thereunder, the Payments shall be reduced
by the Company in a manner and order of priority that provides Executive with
the largest net after-tax value; provided that payments of equal after-tax
present value shall be reduced in the reverse order of payment. Notwithstanding
anything to the contrary herein, any such reduction shall be structured in a
manner intended to comply with Section 409A.

 

12.           Assignment. This Agreement and Executive’s rights under this
Agreement is personal to Executive and shall not be assignable by Executive. The
Company may assign this Agreement to any affiliated or successor company. As
used in this Agreement, “Company” means Shock, Inc. and any successor to its
business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by contract, operation of law or otherwise; and as long as such
successor assumes and agrees to perform this Agreement, the termination of
Executive’s employment by one such entity and the immediate hiring and
continuation of Executive’s employment by the succeeding entity shall not be
deemed to constitute a termination or trigger any severance obligation under
this Agreement. All the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.

 

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13.           Notices. All notices, requests, demands and other communications
called for hereunder will be in writing and will be deemed given (a) on the date
of delivery if delivered personally, (b) one (1) day after being sent by a well
established commercial overnight service, or (c) four (4) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors at the following addresses, or at
such other addresses as the parties may later designate in writing:

 

If to the Company:

 

Shock, Inc.

 

2415 Annapolis Lane, Suite 100

 

Plymouth, MN 55441

 

Attn: Chair, Board of Directors

 

If to Executive:

 

John P. Yeros

 

7874 Vallagio Lane

 

Englewood, CO 80112

 

14.           Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement will continue in full force and effect without said
provision.

 

15.           Integration. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration or modification of any of the provisions of this Agreement will be
binding unless in writing that specifically references this Section and signed
by duly authorized representatives of the parties hereto.

 

16.           Waiver of Breach. The waiver of a breach of any term or provision
of this Agreement, which must be in writing, will not operate as or be construed
to be a waiver of any other previous or subsequent breach of this Agreement.

 

17.           Headings. All captions and section headings used in this Agreement
are for convenient reference only and do not form a part of this Agreement.

 

18.           Governing Law. This Agreement will be construed and interpreted in
accordance with, and any dispute or controversy arising from any breach or
asserted breach of this Agreement will be governed by, the laws of the State of
Colorado, without regard to any choice of law rules. Any action brought to
enforce or interpret this Agreement must be brought in the state or federal
courts for the State of Colorado, sitting in Denver County, and the parties
hereby consent to the jurisdiction and venue of such courts in the event of any
dispute. Each of the parties knowingly and voluntarily waives all right to trial
by jury in any action or proceeding arising out of or relating to this
Agreement, Executive’s employment by the Company, or for recognition or
enforcement of any judgment.

 

19.           Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

 

20.           Counterparts. This Agreement may be executed in counterparts,
including by facsimile or electronic transmission, and each counterpart will
have the same force and effect as an original and will constitute an effective,
binding agreement on the part of each of the undersigned.

 

{Signature Page Follows}

 

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IN WITNESS WHEREOF, each of the parties has executed this Executive Employment
Agreement, in the case of the Company by its duly authorized officers, as of the
day and year first above written.

 

COMPANY:           Shock, Inc.             By: /s/ Randy Gilbert   Date:
November 22, 2016 Title: Chief Financial Officer             EXECUTIVE:        
  /s/ John P. Yeros   Date: November 1, 2016 John P. Yeros