Exhibit 10.1

 

CONSULTING AGREEMENT

 

This Consulting Agreement (this “Agreement”) is entered into effective as of May
1, 2020 (the “Effective Date”), by and between Sigma Labs, Inc., a Nevada
corporation (the “Company”), and John Rice (“Consultant”).

 

WHEREAS, prior to April 30, 2020, Consultant served as the Chairman of the Board
of Directors, President and Chief Executive Officer of the Company;

 

WHEREAS, as of April 30, 2020, the Company has appointed Mark K. Ruport, the
Company’s Executive Chairman prior to April 30, 2020, as the Company’s President
and Chief Executive Officer;

 

WHEREAS, the Company wishes to retain Consultant as the Chairman of the Board
and the Company wishes to engage Consultant to provide, among other services
(outside of Consultant’s capacity as a director of the Company) to be determined
by the Company’s Chief Executive Officer, advice regarding the structure of
certain financial and other strategic transactions involving the Company, on an
as-needed basis (the “Services”);

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:

 

1. Resignation from Officer Positions; Amounts Owed; Chairman of the Board
(non-executive).

 

(a) Effective as of April 30, 2020, Consultant resigned from his positions as
President, Chief Executive Officer, principal executive officer and any and all
other officer roles with the Company.

 

(b) On or prior to the Effective Date, the Company paid Consultant all accrued
but unpaid salary, and all accrued and unused vacation time and PTO earned
through April 30, 2020, in each case subject to standard payroll deductions and
withholdings. Consultant acknowledges and agrees that as of April 30, 2020,
Consultant’s accrued and unpaid salary totals $0.00 and Consultant has accrued
$1,987.18 of unused vacation time and has accrued $6,706.73 of PTO (under the
Company’s PTO policy in effect prior to January 1, 2019). Consultant
acknowledges that, except as expressly provided in this Agreement, Consultant
has not earned and will not receive from the Company any additional compensation
(including base salary, bonus, incentive compensation, or equity), severance, or
benefits, with the exception of any vested benefits Consultant may have under
the express terms of a 401(k) account.

 

(c) Consultant will continue to serve as Chairman of the Board of Directors and
as a Class I Director, with a term expiring at the Company’s 2021 annual meeting
of stockholders, and will be entitled to be compensated as a non-employee
director (on a pro-rata basis for 2020 based on the partial year during which
Consultant will serve as a non-employee director) under the Company’s director
compensation program, as may be adjusted from to time for all non-employee
directors.

 

2. Consulting Relationship. During the term of this Agreement, Consultant will
provide the Services as requested by the Chief Executive Officer of the Company
on the Company’s behalf and as agreed to by Consultant. The Company shall not
control the manner or means by which Consultant performs the Services. Unless
otherwise agreed in writing, Consultant shall furnish, at Consultant’s own
expense, the equipment, supplies and other materials used to perform the
Services. The Services shall be non-exclusive.

 

 

 

 

3. Fees. The Company shall pay Consultant $460.00 per hour plus applicable NM
Gross Receipts tax for the Services rendered that are requested by the Chief
Executive Officer of the Company and performed by Consultant; provided, however,
that the minimum amount to be paid to Consultant for Services requested by the
Chief Executive Officer and performed by Consultant with respect to a calendar
month during the term of this Agreement is $2,000.00 as to such month. The
Company shall pay all undisputed fees within thirty (30) days after the
Company’s receipt of each invoice submitted by Consultant. Consultant
acknowledges that Consultant will receive an IRS Form 1099-MISC from the Company
with respect to the fees, and that Consultant shall be solely responsible for
all federal, state and local taxes other than applicable NM Gross Receipts tax.

 

4. Expenses. Consultant is responsible for all “overhead” expenses necessary for
providing the Services, including office, rent, internet, phone, fax and other
office related supplies, fees and services. Consultant shall not be authorized
to incur any expenses on behalf of the Company, except such expenses otherwise
approved in writing in advance by the Company. Consultant shall submit evidence
of payment and related invoices for all approved expenses prior to
reimbursement. Company shall reimburse all reasonable out-of-pocket “travel”
expenses incurred by Consultant in the event that the Company asks Consultant to
travel for the Company in connection with the Services.

 

5. Option; Securities: Subject to Consultant entering into the Company’s
standard-form nonqualified stock option agreement with respect to the option
(“Option”) granted pursuant to this Agreement, on the Effective Date (the
“Option Grant Date”), the Company shall grant Consultant a non-qualified Option
to purchase up to 16,044 shares of common stock of the Company. The Option shall
be fully vested on the Option Grant Date and shall have an exercise price equal
to the closing price of the Company’s common stock on the Option Grant Date. The
Option shall expire on the day before the fifth anniversary of the Option Grant
Date, except that the Option shall expire 90 days after the later of the date
that Consultant is no longer a director of the Company or this Agreement is
terminated, and except that the Option is subject to early termination upon the
occurrence of a Corporate Transaction upon the terms described in the Company’s
2013 Equity Incentive Plan. In the event of any stock split, reverse stock split
or stock dividend after the date hereof, the number of shares of the Company’s
common stock underlying the Option, and the exercise price of the Option shall
be appropriately adjusted for any such stock split, reverse stock split or stock
dividend. The issuance of shares of the common stock of the Company pursuant to
the Option is conditioned upon, and is subject to, the existence of available
shares of common stock under the Company’s 2013 Equity Incentive Plan, as
amended from time to time, or under any successor equity incentive plan. The
stock options that have been previously granted to Consultant that are described
in the Company’s filings with the Securities Exchange Commission shall continue
to remain outstanding in accordance with the terms of the applicable stock
option agreements and the words “employed by the Company or any of its
subsidiaries” in the first sentence of Section 6 of such option agreements shall
be deemed to be replaced with the words “a director or consultant of the
Company”. Effective as of the Effective Date, the 969 shares of the Company’s
common stock granted to Consultant on April 10, 2020 are hereby forfeited. The
Company has no obligation to issue any equity securities to Consultant other
than as set forth herein.

 

6. Independent Contractor. The parties acknowledge and agree that Consultant is
an independent contractor of the Company and neither Consultant nor Company is
the legal representative, agent, joint venture, partner, or employee of the
other party for any purpose whatsoever in connection with Consultant’s
performance of the Services. Neither party has any right or authority to assume
or create any obligations of any kind or to make any representation or warranty
on behalf of the other party, whether express or implied, or to bind the other
party in any respect whatsoever. Consultant shall not be eligible for any of
Company’s employee benefits and Consultant shall waive any and all rights
thereto. Consultant is not, and will not be considered, an employee with regard
to any laws concerning Social Security, disability insurance, unemployment or
workers’ compensation, federal, state, or local income tax withholding at local
source, or any other laws, regulations, or orders relating to employees,
vacation or sick pay, health and welfare benefits, profit sharing, employee
stock option or stock purchase plans. This section is intended to apply to
Consultant’s capacity as a consultant of the Company.

 

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7. Term and Termination. The term of this Agreement shall commence on the
Effective Date and shall continue until December 31, 2020, provided that either
party may terminate this Agreement at such party’s sole discretion upon fifteen
(15) days’ prior written notice to the other party.

 

8. Effect of Termination. Upon termination of this Agreement: (a) the Company
shall pay immediately upon the effective date of termination, all undisputed
amounts owing to, and invoiced by, Consultant for the Services completed prior
to the termination date, and related approved expenses, if any, in accordance
with the provisions of Sections 3 and 4 (Fees and Expenses); (b) the parties
shall meaningfully consult on any remaining work to be performed, as the Company
deems necessary in its sole discretion; and (c) Consultant shall promptly return
to the Company, or permanently erase or destroy, at the Company’s option, all
tangible documents and materials (and any copies) containing, reflecting or
based on confidential information of the Company in connection with the Services
performed hereunder. Section 7 (Term and Termination), and Section 10
(Confidentiality) shall survive termination of this Agreement.

 

9. Intellectual Property Rights. All processes, trademarks, inventions,
improvements, discoveries and other information (collectively, “developments”)
directly related to the business of the Company conceived or developed by
Consultant as part of the Services, alone or with others during the term of this
Agreement, whether or not during regular working hours or through the use of
material or facilities of the Company, shall be the sole and exclusive property
of the Company, and upon request Consultant shall deliver to the Company all
drawings, sketches, models and other data and records relating to such
development. In the event any such development shall be deemed by the Company to
be patentable, Consultant shall, at the expense of the Company, assist the
Company in obtaining a patent or patents thereon and execute all documents and
do all other things necessary or proper to obtain letters patent and invest the
Company with full title thereto.

 

10. Confidentiality. Consultant shall at no time, either during the term of this
Agreement or after the term of this Agreement, use or disclose to any person,
directly or indirectly, any confidential or proprietary information concerning
the business of the Company, including, without limitation, any business secret,
trade secret, financial information, software, internal procedure, business
plan, marketing plan, pricing strategy or policy or customer list, except to the
extent that such use or disclosure is (a) necessary to the performance of the
Services during the term of this Agreement, (b) required by an order of a court
of competent jurisdiction, or (c) authorized in writing by the Company’s Chief
Executive Officer. The prohibition that is contained in the preceding sentence
shall not apply to any information that is or becomes generally available to the
public other than through a disclosure by Consultant or by a person acting in
concert with Consultant. Within five days after the termination of this
Agreement, Consultant shall return to the Company all memoranda, notes and other
documents in your possession or control that relate to the confidential
information of the Company. Upon the Company’s request, Consultant agrees to
execute and deliver to the Company any form of confidentiality agreement that
the Company requires generally from its service providers. Consultant
understands that, notwithstanding the foregoing limitations on the disclosure of
trade secrets, Consultant cannot be held criminally or civilly liable under any
Federal or State trade secret law for the disclosure of a trade secret that (a)
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 (b) is
made in a complaint or other document filed in a lawsuit or other proceeding, if
such filing is made under seal.

 

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11. Entire Understanding. This Agreement sets forth the entire understanding of
Consultant and the Company with respect to the matters contained herein in
connection with the Services. Nothing in this Agreement is intended to limit
Consultant’s duties in Consultant’s capacity as a director of the Company.

 

12. Governing Law. This Agreement shall be interpreted under the internal laws
of the State of New Mexico.

 

13. Amendment. This Agreement may be amended only by a writing signed by
Consultant and by a duly authorized representative of the Company.

 

14. Assignment. This Agreement may not be assigned by Consultant without the
Company’s prior written consent.

 

(Signature page follows)

 

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IN WITNESS WHEREOF, both the Company and Consultant have executed this Agreement
as of the date first above written.

 

  Sigma Labs, Inc.         By: /s/ Mark K. Ruport   Name: Mark K. Ruport  
Title: Chief Executive Officer

 

  /s/ John Rice   John Rice

 

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