Exhibit 10.1

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EMPLOYMENT AGREEMENT
 
THIS AGREEMENT is made and shall be effective as of November 10, 2014 (the
“Effective Date”), by and between BSD Medical Corporation, a Delaware
corporation (“BSD” or the “Company”), and Clinton E Carnell Jr., an individual
and resident of the state of Utah (the “Executive”). The Company and the
Executive are referred to herein collectively as the “Parties” and may be
referred to herein individually as a “Party”.

RECITALS:
 
A.The Executive has, since November 10, 2014, served as the duly elected and
appointed President and Chief Executive Officer (“CEO”) of the Company.
 
B.The Executive has also served as a member of the Board of Directors of the
Company (the “Board”) since November 10, 2014.
 
C.The Company desires to continue the Executive’s employment as President and
CEO on the terms and conditions set forth herein.
 
D.The Executive is willing to continue his employment with the Company in the
positions as President and CEO, and is also willing to continue to serve as a
member of the Company’s Board, all on the terms and conditions set forth herein.
 
E.On or about November 10, 2014, the Parties also executed a Notice of Grant of
Stock Option (the “Option Agreement”).
 
AGREEMENT:
 
NOW THEREFORE, in consideration of the foregoing Recitals and the covenants and
agreements set forth herein, together with other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
 
1. Employment. The Company hereby hires and engages the Executive as a full time
employee of BSD in the position of President and CEO of BSD, and the Executive
accepts such employment. In such capacities, the Executive shall be subject to
the terms and conditions of this Agreement, serve at the pleasure and direction
of the Board of Directors of the Company, and shall have such duties, authority
and responsibilities as are consistent with and customary for the Executive’s
positions as President and CEO of a public company. Additionally, the Executive
will continue to serve as a member of the Board, so long as he is duly elected
or appointed to so serve.
 
2. Term. The Executive’s employment hereunder shall continue from and after the
Effective Date until terminated in accordance with the applicable provisions of
this Agreement (the “Term”).
 
3. Duties. During the Term the Executive shall devote substantially all of his
business time and attention to the performance of his duties hereunder and will
not engage in any other business, occupation or profession for compensation
which would materially interfere or conflict with such duties. Notwithstanding
the foregoing sentence or anything else to the contrary in this Agreement, BSD
hereby acknowledges that the Executive is currently obligated contractually to
provide up to five (5) hours per week of consulting services for the Executive’s
prior employer, MyoScience, Inc., through August 31, 2015, and BSD hereby
approves such continued consulting services. The Executive will report to the
Board of Directors and will have such additional duties as may reasonably be
assigned to him from time to time by the Board. The Executive will be expected
to work at least 40 hours per week and generally will be asked to devote such
time to his duties as is necessary to perform them to the best of his ability.
Because this is an exempt position, the Executive will not be paid overtime
compensation when he works more than 40 hours per week. The Company acknowledges
that the Executive may, in the future, serve as a director, as a trustee or in a
similar position with one or more other entities provided that such positions do
not materially interfere with Executive’s duties to BSD. Any fees or other
compensation received by the Executive for services as a director, or as a
trustee or in a similar position with another entity, shall be retained by the
Executive. The Executive may also engage in such charitable, civic and community
endeavors during the Term as he shall reasonably deem appropriate.
 
 
 

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4. Place of Performance. The principal place of the Executive’s employment shall
be BSD’s principal executive offices, located at 2188 West 2200 South, Salt Lake
City, Utah; provided that the Executive may be required to travel on Company
business from time to time during the Term, but in no event will the Executive
be required to travel on business for the Company in excess of 100 days during
any calendar year of the Term (which may be prorated for the portion of calendar
year 2014 and the portion of the last calendar year of the Term).
 
5. Compensation.
 
5.1 Base Salary.
 
(a) The Company shall pay the Executive an annual base salary at the rate of
$350,000, in periodic installments in accordance with the Company’s customary
payroll practices, but no less frequently than monthly. The Executive’s base
salary shall be reviewed at least annually by the Compensation Committee of the
Board, and the Board may increase (but not decrease) the base salary of the
Executive during the Term. The Executive’s base salary is also subject to
adjustment under Section 5.1(b) below. The Executive’s annual base salary, as in
effect from time to time during the Term is referred to herein as the “Base
Salary”.
 
(b) If BSD completes and closes in fiscal year 2015 an equity offering that
generates to BSD at least $5 million in net proceeds (i.e. after BSD’s actual,
reasonable and customary, direct, out-of-pocket expenses [excluding overhead
charges]), then BSD shall engage a compensation consulting firm (selected by the
Compensation Committee of the Board) in fiscal year 2015, such as Radford or a
similar firm, and obtain from that firm, at the conclusion of fiscal year 2015,
a study/survey of chief executive officer compensation in companies comparable
to BSD (the “Compensation Study”). This Compensation Study shall then serve as a
basis to determine and negotiate overall compensation (including Base Salary)
for the CEO for fiscal years after August 31, 2015; provided, however, in no
event shall Executive’s Base Salary be reduced.
 
If BSD does not complete and close an equity offering as described above in
fiscal year 2015, then BSD shall engage the compensation consulting firm
(selected by the Compensation Committee of the Board) in fiscal year 2016 and
obtain a Compensation Study from that firm at the conclusion of fiscal year 2016
. This Compensation Study shall then serve as a basis to determine and negotiate
overall compensation (including Base Salary) for the CEO for fiscal years after
August 31, 2016; provided, however, in no event shall Executive’s Base Salary be
reduced.
 
 
 

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5.2 Bonuses.
 
(a) On the first anniversary of the Effective Date, and subject to the
Executive’s continued employment with BSD, BSD shall pay the Executive a bonus
of $150,000.
 
On the second anniversary of the Effective Date, and subject to the terms and
conditions of a bonus program to be determined by the Board of Directors, after
reasonable consultation with the Executive (the “Year Two Bonus Program”), BSD
shall pay to the Executive a performance bonus of $150,000, or a pro rata
portion thereof, as will be set forth in the Year Two Bonus Program.
 
(b) However, each performance bonus is subject to adjustment based upon the
Compensation Study, as referenced in Section 5.1(b) above; provided, however, in
no event shall the Executive’s second anniversary bonus be less than $150,000.
 
(c) In addition to the bonus amounts set forth in Sections 5.2(a) and 5.2(b) of
this Agreement, the Executive shall be entitled to participate in and be
considered for any annual incentive bonus program adopted or implemented by the
Company for its executive or “Named Executive” officers and shall be entitled to
receive, in addition to the Base Salary, any incentive bonus which may be
awarded to the Executive by the Board from time to time. Any annual incentive
bonus awarded to the Executive by the Board shall be paid (and may not be
deferred) to the Executive within forty five (45) days of the date such
incentive bonus is approved by the Board.
 
5.3 Stock Based Compensation. The Executive will be awarded a nonqualified stock
option to purchase 1,400,000 shares of BSD’s common stock, representing
approximately 3.5% of the currently issued and outstanding common shares. This
option is intended as an inducement option under NASDAQ Listing Rule 5635(c)(4).
The exercise price per share will be equal to the fair market value per share on
the date the option is granted, the effective date of which date will be on or
near the Effective Date of this Agreement. The option will be outside of any
existing equity incentive plans of BSD and will be subject to the terms and
conditions of the Option Agreement. Subject to the Executive’s continued
employment, the option will vest under the Option Agreement one-third each year
on the first, second and third anniversaries of the Effective Date. If there is
any inconsistency between the terms of this Agreement and the terms of the
Option Award, the terms of this Agreement shall be controlling. In conjunction
with BSD’s next round of equity financing following the Effective Date, BSD will
award an additional stock option to the Executive (for common shares), to enable
the Executive to maintain, via the Executive’s options, the right to purchase
approximately 3.5% of the then-issued-and-outstanding common shares following
such round of equity financing. However, the options described herein are
subject to adjustment based upon the Compensation Study, as referenced in
Section 5.1(b) above; provided, however, in no event shall the amount of shares
subject to such option be less than 3.5% of the then-issued-and-outstanding
common shares following such round of equity financing.
 
5.4 Employee Benefits. During the Term, the Executive shall be entitled to
participate in all employee benefit plans, practices and programs maintained by
the Company for its employees including, without limitation, it most senior
executives, as in effect from time to time (collectively the “Employee Benefit
Plans”). The Company reserves the right to amend or terminate any Employee
Benefit Plans so as to eliminate, reduce or otherwise change any benefit payable
thereunder, so long as such change complies with the terms of such Employee
Benefit Plans, and applicable law, and so long as such change similarly affects
all of the Company’s most senior executive level employees.
 
 
 

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5.5 Vacation. During the Term, the Executive shall be entitled to paid vacation
per fiscal year (pro-rated for partial years) in accordance with the Company’s
vacation policies, as in effect from time to time. Any vacation days to which
the Executive is entitled during any fiscal year and which are not actually used
by the Executive, for any reason, shall carry over to the next succeeding fiscal
year and may be used in addition to, and not in limitation of, the vacation days
to which the Executive is entitled in such successive fiscal year.
 
5.6 Business Expenses. The Executive shall be entitled to reimbursement for all
reasonable out-of-pocket business, entertainment and travel expenses incurred by
the Executive in connection with the performance of the Executive’s duties
hereunder in accordance with, and subject to compliance with, the Company’s
expense reimbursement policies and procedures.
 
5.7 Legal Fees incurred in Negotiating this Agreement. The Company shall pay, or
the Executive shall be reimbursed for, the legal fees incurred in negotiation
and drafting this Agreement up to a maximum of $ 5,000 and such payment shall be
made within forty five (45) days of the Effective Date.
 
5.8 Tax Withholdings. All compensation payable to the Executive, including
without limitation any Severance Payments, shall be subject to applicable
Federal and state withholding taxes.

5.9 Indemnification.
 
(a) In the event that the Executive is made a party, or threatened to be made a
party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), arising from the Executive’s
acts or omissions made in the course of Executive carrying out his duties for
the Company or otherwise by reason of the fact that the Executive is, or was, a
director or officer of the Company or is, or was, serving, at the request of the
Company, as a director, officer, member, employee or agent of another
corporation or a partnership, joint venture, trust or other enterprise, the
Company shall defend, indemnity and hold harmless the Executive to the maximum
extent permitted under applicable law and the Bylaws of the Company, from and
against any liabilities, costs, claims and expenses, including all costs and
expenses incurred in defense or appeal of any proceeding (including attorneys’
fees). The Company’s foregoing indemnification obligations shall not apply (i)
to any Proceeding initiated by the Executive or the Company related to any
dispute between the Executive and the Company with respect to this Agreement or
the Executive’s employment hereunder; (ii) if the Proceeding arose because the
Executive acted in bad faith or in a manner the Executive knew was contrary to
the best interests of the Company; or (iii) if the Proceeding arises from the
Executive’s willful misconduct as determined by final judgment by a court of
competent jurisdiction. Notwithstanding any other provision of this Section 5.9,
the Executive shall not be indemnified hereunder for any expenses or amounts
paid in settlement with respect to any action to recover short-swing profits
under Section 16(b) of the Securities Exchange Act of 1934, as amended.
 
(b) Costs and expenses incurred by the Executive in defense or appeal of a
Proceeding (including attorneys’ fees) shall be paid by the Company in advance
of the final disposition of such litigation upon receipt by the Company of: (x)
a written request for payment and (y) appropriate documentation evidencing the
incurrence, amount and nature of the costs and expenses for which payment is
being sought. The Executive shall remain obligated to repay such amounts paid by
Company if it shall ultimately be determined that the Executive is not entitled
to be indemnified by the Company pursuant to the terms of this Agreement.
 
 
 

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(c) During the Term and for a period of six (6) years thereafter, the Company or
any successor to the Company shall purchase and maintain, at its own expense,
directors and officers liability insurance providing coverage to the Executive
on terms that are no less favorable than the coverage provided to other
directors and senior officers of the Company.
 
5.10 Claw Back Provisions. Notwithstanding any other provisions in this
Agreement to the contrary, any incentive-based compensation, or any other
compensation, paid to the Executive pursuant to this Agreement, or any other
Agreement or arrangement with the Company concerning the Executive’s employment
hereunder, which is subject to recovery under any law, government regulation, or
stock exchange listing requirement, will be subject to such deductions and claw
back as may be required to be made pursuant to such law, government regulation
or stock exchange listing requirement (or any policy adopted by the Company as
required pursuant to such law, government regulation or stock exchange listing
requirement).
 
6. Termination and Termination Payments and Rights.
 
6.1 Termination Upon Death. If the Executive dies during the Term of his
employment with the Company, this Agreement shall terminate as of the date of
his death. On termination upon the Executive’s death, the Executive’s estate
shall be entitled to be paid that portion of the Executive’s Base Salary that
would otherwise have been payable to the Executive through and including the
final day of the month in which the Executive’s death occurs, together with all
benefits due to the Executive under the Employee Benefit Plans through and
including such month-end date.
 
6.2 Termination By the Company for Cause. The Company may, at any time, by
written notice to the Executive terminate the Executive’s employment under this
Agreement immediately, but subject to the procedures set out in the last
paragraph of this Section 6.2 to the extent such are applicable, and the
Executive shall have no right to receive any compensation or benefit hereunder
on or after the date of such notice, in the event that an event of “Cause”
occurs and is not remedied by the Executive within thirty (30) days of written
notice from the Company reasonably detailing such Cause. For purposes of this
Agreement “Cause” shall mean:
 
(a) The Executive’s willful and repeated refusal or failure to comply with a
lawful, written and valid directive of the Company’s Board;
 
(b) The Executive’s grossly negligent or willful misconduct in the performance
of his duties to the Company which causes material harm to the Company;
 
(c) The Executive’s willful commission of an act of fraud with respect to the
Company or its property; or
 
(d) The Executive’s conviction of a crime that constitutes a felony (or the
state law equivalent) or a crime that constitutes a misdemeanor involving moral
turpitude, if such felony or such other crime is work related, materially
impairs the Executive’s ability to perform his duties hereunder or results in
material harm to the Company.
 
For purposes of this Agreement, no conduct by the Executive will be deemed
“willful” unless it is done by the Executive in bad faith or without reasonable
belief that such conduct was in the best interest of the Company or was done in
direct contradiction to written instructions or directions of the Company’s
Board. Any conduct based upon specific authority given pursuant to a resolution
duly adopted by the Board, or upon the specific instructions of the Board, shall
be conclusively presumed to be done by the Executive in good faith and in the
best interest of the Company to the extent such conduct is in accordance with
such specific authority or specific instructions. The termination of the
Executive’s employment shall not be deemed for Cause unless and until the
Company delivers to the Executive a copy of a resolution duly adopted by the
affirmative vote of at least two thirds (2/3) of the Board at a meeting of the
Board called and held for that purpose (after reasonable notice is provided to
the Executive and the Executive is given a reasonable opportunity, together with
counsel, to be heard before the Board) finding that in the good faith opinion of
the Board, the Executive was engaged in the conduct described in subsections
(i), (ii), (iii) or (iv) of this Section 6.2 and, where applicable, that any
other applicable conditions described in such subsections have been met. Upon
termination by the Company for Cause, the Executive shall be entitled to be paid
that portion of the Executive’s Base Salary that is due through and including
the effective date of such termination.
 
 
 

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6.3 Termination Without Cause.
 
(a) The Company may terminate the Executive’s employment under this Agreement
without Cause by giving thirty (30) days written notice to the Executive, and
the Executive shall have the right to receive an amount equal to his Base Salary
for a period of two (2) years (such amount, the “Severance Payment”), in
addition to all portions of the Executive’s Base Salary due as of the effective
date of such termination of employment and a prorated portion of any bonus that
otherwise would be owed to the Executive.
 
(b) Subject to the Executive’s compliance with his covenants set forth in
Section 9 below, the Severance Payment and applicable pro-rated bonus payment
shall be paid to the Executive in one lump sum payment, which shall be made by
the Company thirty (30) days following the effective date of the termination of
the Executive’s employment pursuant to this Section 6.3.
 
(c) In addition to the Severance Payment, the Executive shall, to the extent
permitted by the terms of the Employee Benefit Plans, be entitled to receive
(without cost to the Executive) all benefits provided by such Employee Benefit
Plans for a period of twelve (12) months following the termination of his
employment pursuant to this Section 6.3. In the event that such termination
results in the Executive not being covered by the Company’s health insurance
benefits, Company shall pay in cash to Executive (within 10 business days of
each applicable monthly period) for twelve (12) months following the date of
termination, an amount equal to the premiums charged to the Executive to
maintain COBRA benefits continuation coverage for Executive and Executive's
eligible dependents.
 
(d) Any compensation awards of the Executive based on, or in the form of,
Company equity (e.g. the stock options under the Option Agreement or any other
restricted stock, restricted stock units, stock options or similar instruments)
("Equity Awards") that are outstanding and unvested at the time of such
termination but which would, but for a termination of employment, have vested
during the eighteen (18) months following such termination (such period, the
"Equity Acceleration Period") shall vest (and with respect to awards other than
stock options and stock appreciation rights, settle) as of the date of such
termination of employment, and any amount that would vest under this provision
but for the fact that outstanding performance conditions have not been satisfied
shall vest (and with respect to awards other than stock options and stock
appreciation rights, settle) if, and at such point as, such performance
conditions are satisfied; and provided further that if any Equity Awards made
subsequent to the Effective Date of this Agreement specifies a more favorable
post-termination vesting schedule for such equity, the terms of the award
agreement for such Equity Award shall govern; and
 
(e) Any options of Executive (including options vesting as a result of 6.3(d)
above) to purchase Company equity, shall remain exercisable through the date
that is eighteen (18) months following the date of such termination or, if
earlier, through the scheduled expiration date of such options.
 
 
 

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6.4 Termination by the Executive With Good Reason.
 
(a) The Executive may at any time and upon thirty (30) days written notice to
the Company with Good Reason terminate his employment under this Agreement, and
provided that such notice is given within ninety (90) days of the date of the
occurrence of an event or circumstance giving rise to Good Reason and further
provided that the Executive signs and delivers to Company a general release in
the form set forth in Exhibit A, attached hereto on or before the Good Reason
Payment Date, the Executive will have the right to receive (i) the Severance
Payment and a prorated portion of the Executive’s bonus, which amounts shall be
paid by the Company thirty (30) days following the effective date of the
termination of the Executive’s employment pursuant to this Section 6.4 (“Good
Reason Payment Date”), and (ii) the Employee Benefit Plans and COBRA
reimbursement benefits provided by Section 6.3(c) hereof). In addition, upon the
Executive’s termination of this Agreement for Good Reason, Sections 6.3(d) and
6.3(e) shall apply.
 
(b) For purposes of this Agreement “Good Reason” shall mean one of the reasons
set forth below which remains uncured for a period of fifteen (15) days
following receipt of notice thereof from the Executive to the Company:
 
(i) The Company's material breach of any material provision of this Agreement;
 
(ii) The material reduction in the Executive's title, duties, reporting
responsibilities or level of responsibilities as President and CEO;
 
(iii) The Company’s requirement that the Executive perform the duties of his
employment at a location that is more than fifty (50) miles from the Company’s
present principal executive offices, which are located at 2188 West 2200 South,
Salt Lake City, Utah.
 
6.5 Termination by the Executive Without Good Reason. The Executive may
terminate his employment under this Agreement without Good Reason upon thirty
(30) days prior written notice to the Company, and upon the effective date of
such termination the Executive will be entitled to receive only that portion of
his Base Salary which is due and owing upon such effective date of termination.
 
6.6 Termination by the Executive Following a Change of Control.
 
(a) If a "Change Control" (as herein defined) occurs during the Term, and if
during the period of two (2) months immediately prior to or six (6) months
immediately following the effective date of such Change in Control (i) the
Company terminates the employment of the Executive without Cause, or (ii) the
Executive terminates his employment with Good Reason, in addition to the
Severance Payment, all options or other incentive awards granted to the
Executive by the Company shall immediately vest and become fully exercisable for
a period of one-hundred eighty (180) days following the effective date of such
Change in Control, notwithstanding any provision of this Agreement or of any
Employee Benefit Plans pursuant to which such options or awards were granted.
 
 
 

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(b) For purposes of this Agreement, the term "Change in Control" shall mean the
occurrence of any of the following:
 
(i) One person (or more than one person acting as a group), corporation or other
entity acquires ownership of stock of the Company that, together with the stock
held by such person or group prior to such acquisition, constitutes more than
fifty-percent (50%) of the total voting power of all of the issued and
outstanding stock of the Company; or
 
(ii) One person (or more than one person acting as a group), corporation or
other entity acquires (or has acquired during the twelve-month period ending on
the date of the most recent acquisition) ownership, directly or indirectly, of
the Company's stock possessing thirty percent (30%) or more of the total voting
power of all of the issued and outstanding stock the Company; or
 
(iii) A majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election is not endorsed
by 2/3 of the members of the Board of Directors as constituted before the date
of such appointment or election; or
 
(iv) The sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all the assets of the Company;
or
 
(v) Approval by stockholders of the Company of (a) any consolidation or merger
of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of stock of the Company would be
converted into cash, securities or other property, other than a consolidation or
merger of the Company in which holders of its common stock immediately prior to
the consolidation or merger have substantially the same proportionate ownership
of common stock of the surviving corporation immediately after the consolidation
or merger as immediately before.
 
6.7 No Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provision of this Agreement and any amounts
payable to the Executive pursuant to this Section 6 shall not be reduced by any
compensation earned by the Executive on account of employment with another
employer following the termination of his employment hereunder.
 
6.8 Return of Materials. BSD may provide the Executive with certain equipment
and materials for his use as CEO. Upon termination of employment by either Party
for any reason herein, the Executive agrees to immediately deliver such
equipment and materials to an authorized representative of BSD, as directed by
the Chairman of BSD’s Board.
 
 
 

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7. Section 280G.
 
(a) If any of the payments or benefits received or to be received by the
Executive (including, without limitation, any payment or benefits received in
connection with a Change in Control or the termination of the Executive’s
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement, or otherwise) (all such payments collectively refer to
herein as the "280G Payments") constitute "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code") and will be subject to the excise tax imposed under Section 4999 of the
Code (the "Excise Tax"), the Company shall pay to the Executive, no later than
the time such Excise Tax is required to be paid by the Executive or withheld by
the Company, an additional amount equal to the sum of the Excise Tax payable by
the Executive, plus the amount necessary to put the Executive in the same
after-tax position (taking into account any and all applicable federal, state
and local excise, income or other taxes at the highest applicable rates on such
280G Payments and on any payments under this Section 7(a) or otherwise) as if no
Excise Tax had been imposed.
 
(b) All calculations and determinations under this Section 7 shall be made by an
independent accounting firm or independent tax counsel appointed by the Company
(the "Tax Counsel") whose reasonable, good faith determination shall be
conclusive and binding on the Company and the Executive for all purposes. For
purposes of making the calculations and determinations required by this Section
7(b), the Tax Counsel may rely on reasonable, good faith assumptions and
approximations concerning the applicability of Section 280G and Section 4999 of
the Code. The Company and the Executive shall furnish the Tax Counsel with such
information and documents as the Tax Counsel may reasonably request in order to
make its determinations under this Section 7(b). The Company shall bear all
costs of the Tax Counsel reasonably incurred in connection with the performance
of its duties under this Section 7(b).
 
8. Representations and Warranties of the Executive. The Executive represents and
warrants that neither the execution nor delivery of this Agreement, nor the
employment of the Executive by the Company pursuant to the terms hereof will (a)
result in the breach of any agreement to which the Executive is a party, or (b)
result in the misappropriation of any confidential information or trade secrets
of his former employer or any other third party.
 
9. Covenants. In order to induce the Company to enter into this Agreement, the
Executive covenants and agrees that:
 
(a) Confidentiality. Subject to the exceptions provided in this Section 9(a),
the Executive will not at any time, whether during or after the termination of
the Executive’s employment, knowingly and intentionally reveal to any entity,
business, or person or use for the Executive’s benefit or that of any other
entity, business, or person any of the trade secrets or confidential information
concerning the organization, business or finances of the Company or any
Affiliate (as defined below) or of any third party which the Company or any
Affiliate is under an obligation to keep confidential (including but not limited
to trade secrets or confidential information respecting finances, members,
shareholders, officers, managers, directors, providers, inventions, products,
designs, methods, business plans, methods of operation, know-how, techniques,
systems, processes, works of authorship, customer lists, projects, plans and
proposals), (collectively, “Confidential Information”) except as may be required
in the ordinary course of performing the Executive’s duties as an employee of
the Company. The Executive will keep secret all confidential matters entrusted
to him and shall not use or attempt to use any such Confidential Information in
any manner which is likely to injure or cause loss or may be intended to injure
or cause loss to the Company or any Affiliate. Confidential Information shall
not include that information defined as Confidential Information above that is
or subsequently becomes publicly available without the Executive’s breach of
this Agreement. The requirements of this Section 9(a) shall not apply to the
Executive’s disclosure of Confidential Information in accordance with any
subpoena, order or process issued by any court or government agency, provided
the Executive gives the Company reasonable notice prior to such disclosure and
complies with any applicable protective order.
 
 
 

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(b) Non-compete. During the term of Executive’s employment, and continuing for a
period of one (1) year after the termination of the Executive’s employment with
the Company (“Restricted Period”), the Executive shall not, directly or
indirectly, whether as principal, agent, consultant, independent contractor,
partner or otherwise, manage, operate, finance, control, participate in, advise,
perform services to or guarantee the obligations of any entity, business, or
person other than the Company engaged in or planning to become engaged in during
the Restricted Period, anywhere in North America, any business that is
competitive with the business conducted by the Company (i.e. microwave tumor
ablation and oncology products) (“Restricted Businesses”). Nothing in this
Section shall prohibit the Executive from owning as a passive investment not in
excess of 2% in the aggregate of any class of capital stock of any corporation
if such stock is publicly traded or from being. With respect to entities that
have multiple divisions or affiliates, the restrictions set forth in this
Section shall only apply to the divisions and affiliates that constitute
Restricted Businesses and not the parent company or other divisions or
affiliates that whose operations would not otherwise qualify them as Restricted
Businesses.
 
(c) Nonsolicitation. During the term of Executive’s employment and for a period
ending one (1) year after the termination of Executive’s employment pursuant to
this Agreement hereof, the Executive will not, directly or indirectly, employ,
retain or hire any employee of the Company or induce or attempt to persuade, on
behalf of any other business organization in competition with the Company or any
Affiliate, any employee, agent or customer of the Company or any Affiliate at
any time during the term of Executive’s employment to terminate such employment,
consulting, agency or business relationship in order to enter into any such
relationship with any such business organization. This restriction shall not
apply to general solicitations or advertisements. For purposes of this
Agreement, a “customer” of the Company means any person or entity to whom
Company provided any products or services at any time during the six (6) month
period immediately preceding the effective date of the termination of this
Agreement. The terms of this Section 9(c) shall not apply to the Executive’s
personal assistant, which the Executive may solicit for employment elsewhere
following the Executive’s termination.
 
(d) Representation of the Executive. The Executive understands, acknowledges,
and represents that (i) he is familiar with the covenants in this Section 9,
(ii) he is fully aware of his obligations hereunder, (iii) finds the length of
time, and scope of these covenants to be reasonable, (iv) is receiving
specified, bargained-for consideration for these covenants, including without
limitation the employment given and compensation promised to the Executive
herein and an extraordinary investment that will be made by the Company in the
training and education of the Executive, and (v) the covenants here are
necessary to protect the goodwill, trade secrets, and other legitimate business
interests of BSD.
 
(e) Remedies. The Executive agrees that any breach of this Section 9 by the
Executive will cause irreparable damage to the Company or its Affiliates and
that in the event of such breach the Company shall have, in addition to any and
all remedies of law, the right to an injunction, specific performance or other
equitable relief to prevent the violation of the Executive’s obligations
hereunder, without any requirement of posting bond or other security. The
Company agrees that in the event of any material breach of this Agreement by the
Company, the provisions of Subsections (b) and (c) of this Section 9 shall be
null and void.
 
 
 

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10. Section 409A; Section 105(h).
 
(a) It is intended that the provisions of this Agreement comply with Section
409A, and all provisions of this Agreement shall be construed and interpreted in
a manner consistent with the requirements for avoiding taxes or penalties under
Section 409A.
 
(b) If, at the time of the Executive’s separation from service (within the
meaning of Section 409A), (i) the Executive shall be a specified employee
(within the meaning of Section 409A and using the identification methodology
selected by the Company from time to time) and (ii) the Company shall make a
good faith determination that an amount payable under a Company benefit plan
(“Company Plan”) constitutes deferred compensation (within the meaning of
Section 409A) the payment of which is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A in order to avoid taxes or
penalties under Section 409A, then the Company (or its affiliate, as applicable)
shall not pay such amount on the otherwise scheduled payment date but shall
instead accumulate such amount and pay it, together with interest credited at
the Applicable Federal Rate in effect as of the date of your termination of
employment, on the first business day after such six-month period.
 
(c) Notwithstanding any provision of this Agreement or any Company Plan to the
contrary, in light of the uncertainty with respect to the proper application of
Section 409A, the Company reserves the right to make amendments to any Company
Plan as the Company deems necessary or desirable to avoid the imposition of
taxes or penalties under Section 409A.
 
(d) For purposes of Section 409A, each payment under the terms of this Agreement
will be deemed to be a separate payment as permitted under Treasury Regulation
Section 1.409A-2(b)(2)(iii).
 
(e) To the extent that the reimbursement of any expenses or the provision of any
in-kind benefits under this Agreement is subject to Section 409A, (i) the amount
of such expenses eligible for reimbursement, or in-kind benefits to be provided,
during any one calendar year shall not affect the amount of such expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year (provided, that, this clause (i) will not be violated with regard
to expenses reimbursed under any arrangement covered by Code Section 105(b)
solely because such expenses are subject to a limit related to the period the
arrangement is in effect); (ii) reimbursement of any such expense shall be made
by no later than December 31 of the year following the calendar year in which
such expense is incurred; and (iii) Employee's right to receive such
reimbursements or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
 
(f) Notwithstanding any provision of this Agreement to the contrary, to the
extent necessary to satisfy Section 105(h) of the Internal Revenue Code, the
Company will be permitted to alter the manner in which medical benefits are
provided to the Executive following termination of the Term; provided that the
after-tax cost to the Executive of such benefits shall not be greater than the
cost applicable to similarly situated executives of the Company who have not
terminated employment.
 
 
 

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11. Miscellaneous.
 
(a) Company Policies. The Executive shall comply with the Company’s lawful
policies and rules that are provided to Executive, as they may be in effect from
time to time.
 
(b) Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, or sent by
certified, registered or express mail, postage prepaid, to the Parties at the
following addresses, or at such other addresses as shall be specified by the
Parties by like notice, and shall be deemed given when so delivered personally
or, if mailed, two days after the date of mailing, as follows:
 
If to Company to:
BSD Medical Corporation
2188 West 2200 South
Salt Lake City, Utah 84119
Attn: Chief Financial Officer
If to the Executive:
Clinton E. Carnell Jr.
2891 West View Trail
Park City, UT 84098
With a copy to:
Roger L. Armstrong, Esq.
2574 Aspen Springs Drive
Park City, Utah 84060

 
(c) Entire Agreement. This Agreement contains the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all prior
contracts and other agreements, written or oral, with respect thereto.
 
(d) Waivers and Amendments. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the Parties or, in the case of a
waiver, by the Party waiving compliance.
 
(e) Governing Law. This Agreement shall be governed by, and construed in
accordance with and subject to, the laws of the State of Utah without regard to
its conflicts of laws principles.
 
(f) Consent to Jurisdiction. The Parties irrevocably submit to the exclusive
jurisdiction of any state or federal court in Salt Lake City, Utah, in any
action, suit or proceeding brought by or against such Party in connection with,
arising from or relating to this Agreement, and each Party hereby waives and
further agrees not to assert as a defense in any such suit, action or proceeding
any claim that such Party is not personally subject to the jurisdiction of any
such courts, that the venue of the suit, action or proceeding is brought in an
inconvenient forum or that this Agreement or the subject matter hereof may not
be enforced in or by such courts.
 
 
 

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(g) Assignment. This Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign this
Agreement and its rights, together with its obligations, hereunder only in
connection with any sale, transfer or other disposition of all or substantially
all of its assets or business, whether by merger, consolidation or otherwise.
This Agreement will be binding upon the Company’s successors and assigns which
shall be required to perform this Agreement in the same manner and to the same
extent that Company would be required to perform if no sale, transfer or other
disposition of all or substantially all of its assets or business, whether by
merger, consolidation or otherwise, had occurred. This Agreement shall inure to
the benefit of and be binding upon the Parties hereto and any successors and
permitted assigns.
 
(h) Counterparts; Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Execution and delivery of
this Agreement by facsimile or e-mail is legal, valid and binding execution and
delivery for all purposes.
 
(i) Headings. The headings in this Agreement are for reference purposes only and
shall in no way affect the meaning or interpretation of this Agreement.
 
(j) Survival. Sections 5.9, 5.10, 6, 7, 10, and 11 shall survive termination of
this Agreement.
 
(k) Severability. To the extent any provision of this Agreement shall be invalid
or unenforceable, it shall be considered deleted herefrom and the remainder of
such provision and of this Agreement shall be unaffected and shall continue in
full force and effect.
 
(l) Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to either Party upon any breach or default of the other party
hereto shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default or
an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of a breach or default be deemed to be a waiver
of any other breach or default.
 
IN WITNESS WHEREOF, the Parties have executed this Employment Agreement as of
the Effective Date, as herein first written.
 
The Company:
BSD MEDICAL CORPORATION

/s/ Douglas P. Boyd
Chairman Compensation Committee

The Executive:

/s/ Clinton E. Carnell Jr.
CLINTON E. CARNELL JR.
 
 
 

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