Document:

EX-10.1

 Exhibit 10.1 

 

			
	

 	 	10390 Pacific Center Court, San Diego, CA 92121-4340
	 	858—646—1100, FAX: 858—646—1150
	 	www.vical.com

 March 15, 2013 

Jill Broadfoot 
 10390 Pacific Center Court

 San Diego, CA 92121 
 Dear Jill:

 This letter sets forth the substance of the separation and release agreement (the “Agreement”) that Vical
Incorporated (the “Company”) is offering to you to aid in your employment transition. 
 Your last day of work with the
Company and your employment termination date will be April 1, 2013 (the “Separation Date”). On the Separation Date, the Company will pay you all accrued salary and all accrued and unused vacation earned through the Separation
Date, at the rates then in effect, subject to standard payroll deductions and withholdings. You are entitled to these payments by law. 

Although the Company has no obligation to do so, if you sign this Agreement and allow it to become effective as specified below, you will receive the
“Severance Benefits” (subject to Mitigation, each as defined therein) set forth in the attachment to your Amended and Restated Letter Agreement dated January 9, 2009 (“1/9/09 Letter Agreement”). For the avoidance of doubt, you
will not be entitled to any “Change of Control Severance Benefits” as such term is defined in the 1/9/09 Letter Agreement. Any payments otherwise scheduled to be made prior to the Effective Date (as defined below) shall accrue and be paid
or received in the first payroll period that follows the Effective Date. These benefits are contingent upon your cooperation for two (2) months with the reasonable transition of any remaining duties and information to other representatives of the
Company. In this regard, you agree to be reasonably available to answer questions and assist the Company with the transition of your duties, provided, however, that such assistance will not exceed five (5) hours per week to be performed at mutually
agreeable times. 
 You hereby acknowledge that, except as expressly provided in this Agreement, you will not receive any additional
compensation, severance, or benefits from the Company after the Separation Date. In particular, you hereby acknowledge and agree that, except as expressly provided in the immediately preceding paragraph, the Company shall have no obligation or
liability to you under the 1/9/09 Letter Agreement. 
 You currently hold outstanding stock options to purchase shares of common stock of the
Company, as set forth on Exhibit A-1 (the “Options”) granted under the Company’s Amended and Restated Stock Incentive Plan (the “Plan”). Provided that this Agreement becomes effective as specified
herein, and provided that you comply with all material terms of this Agreement, the period during which you may exercise vested shares of the Options shall be extended as provided on Exhibit A. You also currently hold outstanding restricted stock
units (the “RSUs”) and the vesting and delivery of any underlying shares will require the satisfaction of federal, state, local and foreign tax withholding obligations (the “Withholding Taxes”). You
and the Company agree that to the extent permissible, the Company will satisfy the Withholding Taxes obligation relating to the RSUs by its standard practice of withholding shares of the Company’s common stock from the shares issued or
otherwise issuable to you in connection with the RSUs with a fair market value (measured as of the date shares are issued to pursuant to the terms of the RSUs) equal to the amount of such Withholding Taxes. 

You understand and agree that the promises and payments in consideration of this Agreement shall not be construed to be an admission of any liability or
obligation by the Company to you or to any other person, and that the Company makes no such admission. 

 In exchange for the consideration provided to you by this Agreement that you are not otherwise entitled to
receive, you hereby generally and completely release the Company and its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring
prior to or on the date that you sign this Agreement (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to your employment with
the Company, or the termination of that employment; (b) all claims related to your compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for
fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising
under the federal Civil Rights Act of 1964 (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the federal Americans with Disabilities Act of 1990 (as amended), the federal Family and
Medical Leave Act (as amended) (“FMLA”), the federal Equal Pay Act of 1963, the federal Fair Labor Standards Act, the federal Employee Retirement Income Security Act of 1974 (as amended) with respect to severance benefits,
the California Family Rights Act (“CFRA”), the California Labor Code (as amended), and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released
Claims (the “Excluded Claims”): (a) any rights or claims for indemnification you may have pursuant to any written indemnification agreement with the Company to which you are a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; (b) any rights that are not waivable as a matter of law; or (c) any claims arising from the breach of this Agreement. You hereby represent and warrant that, other than the Excluded
Claims, you are not aware of any claims you have or might have against any of the Released Parties that are not included in the Released Claims. 
 You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the ADEA (“ADEA Waiver”). You also acknowledge that the consideration
given for the ADEA Waiver is in addition to anything of value to which you were already entitled. You are advised by this writing, as required by the ADEA, that: (a) your waiver and release do not apply to any claims that may arise after you
sign this Agreement; (b) you should consult with an attorney prior to executing this release; (c) you have twenty-one (21) days within which to consider this release (although you may choose to voluntarily execute this release earlier);
(d) you have seven (7) days following the execution of this release to revoke this Agreement (in a written revocation directed to me); and (e) this Agreement will not be effective until the eighth day after you sign this Agreement,
provided that you have not earlier revoked this Agreement (the “Effective Date”). You will not be entitled to receive any of the benefits specified by this Agreement unless and until it becomes effective. 

In granting the release herein, which includes claims that may be unknown to you at present, you acknowledge that you have read and understand Section
1542 of the California Civil Code: “A general release does not extend to claims that the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.” You hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction with respect to the
releases granted herein, including but not limited to the release of unknown and unsuspected claims granted in this Agreement. 

 You hereby acknowledge your continuing obligations under your Employee’s Proprietary Information and
Inventions Agreement (“EPIIA”), a copy of which has been provided to you. Pursuant to the EPIIA, you understand that among other things, you must not use or disclose any confidential or proprietary information
of the Company without written authorization from the Company and must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in your possession or control. 

This Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and you with regard to the subject
matter hereof. You acknowledge that you are not relying on any promise or representation by the Company that is not expressly stated herein. This Agreement may only be modified by a writing signed by both you and a duly authorized officer of the
Company. 
 If this Agreement is acceptable to you, please sign below and return the original to me within the 21-day period specified above.

 We wish you the best in your future endeavors. 
 Sincerely, 
 Vical Incorporated 

 

			
	By:	 	 /s/  Vijay Samant

		 	      Vijay Samant
		 	      Chief Executive Officer

 I HAVE READ, UNDERSTAND AND AGREE
FULLY TO THE FOREGOING AGREEMENT: 
  

	
	 /s/ Jill Broadfoot

	JILL BROADFOOT

 Date: March 15, 2013 

 EXHIBIT A 

OPTION TERMS 
 1.1 Extension; Amendment. You acknowledge that certain of the Options are currently outstanding incentive stock options held by you to purchase shares of common stock of the Company. Your
employment with the Company will terminate on the Separation Date, and therefore the term of each of the Options is currently scheduled to expire no later than 90 days following the Separation Date. In consideration of your promises herein, and
effective and contingent upon (i) this Agreement becoming effective in accordance with the terms below; and (ii) your consent (by signing and not revoking this Agreement) to the amendment of the Options as described herein, the Board has approved an
amendment to the Options to extend the post-termination exercise period to permit you to exercise the Options for a period of 12 months following the Separation Date (the “Amendment”); provided, however, that nothing in this
Agreement shall prevent earlier termination of the Options in connection with a merger or consolidation of the Company that occurs during such period, as further specified in the Plan. 
 1.2 Modification; Tax Treatment. Section 424(h) of the Internal Revenue Code of 1986, as amended (the “Code”), provides that if the terms of an option are modified, then
such modification shall be considered as the granting of a new option. An extension of the post-termination exercise period of the Options would be deemed a modification and, thus, the grant of new options. Section 422(b) of the Code provides that
an option is treated as an incentive stock option only if the option price is not less than the fair market value of the stock at the time such option is granted. The Amendment would be treated as the grant of a new option (as described above) and,
thus, would require a new comparison of the option exercise price and the current fair market value of the Company’s common stock. As a result, to the extent that one or more of the Options that is an incentive stock option has an exercise
price less than the fair market value of the Company’s common stock as of the Separation Date, then each such option would immediately fail to be treated as an incentive stock option but rather, will be treated as a nonstatutory stock option.
Under Section 424(h) of the Code relating to modification, you also understand and acknowledge that even if the Options do not immediately lose incentive stock option status as a result of the Amendment, the holding period with respect to the
disposition of shares acquired pursuant to the Options necessary to obtain the favorable tax treatment of incentive stock option (i.e., 2 years from the date of grant) would restart as of the Separation Date, which is the effective date of
the new grant. Section 422(a)(2) of the Internal Revenue Code provides that the holder of an incentive stock option must be an employee of the Company (or an affiliate of the Company) during the period beginning on the date that the option is
granted and ending on the day three (3) months before the date of exercise. According to this rule, you understand and acknowledge that even if the Options do not immediately lose incentive stock option status as a result of the Option Amendment, if
you exercise the Options more than 3 months after the Separation Date, then each such option would fail to be treated as an incentive stock option, but rather, will be treated as a nonstatutory stock option. 

1.3 Consent to Amendment. You understand that the Board may not amend the terms of the Options in a manner that would adversely affect your rights
under such Options without your written consent. You further understand that you are under no obligation to consent to the Amendment. You represent that have read this consent and have had sufficient time to review and discuss this matter. You
acknowledge that neither the Company nor its agents have recommended or influenced your decision to consent to the Amendment. You further acknowledge that you have had the opportunity to seek independent advice regarding this matter from your legal
counsel and tax advisor. After due consideration of the above, you hereby agree to the Amendment and to the provisions of this Agreement which amend the vesting of the Options. You acknowledge that the Amendment may result in a loss of incentive
stock option status for each of the Options.EX-10.1

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS AGREEMENT (this “Agreement”) is made
effective as of March 13, 2013 (“Effective Date”), between Flotek Industries, Inc., a Delaware corporation (the “Company”), and H. Richard Walton (“Employee”). 

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows: 
 1. Employment. The Company shall employ and continue to
employ Employee, and Employee shall be employed and continue to be employed with the Company, upon the terms and conditions set forth in this Agreement for the period beginning on the date hereof and ending on the Termination Date, as defined in
Section 4 hereof (the “Employment Period”). 
 2. Position and Duties. 

(a) Employee shall initially serve as Chief Financial Officer and shall be responsible for such duties as are normally performed by a
Chief Financial Officer in companies similarly situated with the Company, and such other duties, consistent with the duties customarily performed by a Chief Financial Officer as may be reasonably prescribed by the Board of Directors of the Company
or the Chief Executive Officer of the Company. 
 (b) Employee shall devote his reasonable best efforts and his full business
time and attention (except for permitted vacation periods, periods of illness or other incapacity) to the business and affairs of the Company. 
 3. Base Salary and Benefits. 
 (a) Employee’s annual base salary for
the Employment Period shall be $325,000 (the “Base Salary”). The Base Salary shall be payable in approximately equal installments in accordance with the Company’s general payroll practices and shall be subject to required withholding.
Any change in Base Salary shall be in the sole discretion of the Board of Directors of the Company. During the Employment Period, Employee shall be entitled to participate in all of the Company’s employee benefit programs for which employees of
the Company are generally eligible (other than health insurance coverage), at a level commensurate with Employee's position in the Company. 
 (b) Employee shall be entitled to annual bonuses in accordance with the Management Incentive Plan of the Company for the calendar year of 2013, with a “Target Bonus” for purposes of such plan of
60% of Base Salary (a “Target Bonus”). Employee will be eligible to participate in the Performance Unit Plan of the Company pursuant to the terms of that plan. 
 (c) The Company shall reimburse Employee for all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with the Company’s policies in
effect from time to time for its employees with respect to travel, entertainment and other business expenses, subject to the Company’s requirements for its employees with respect to reporting and documentation of such expenses pursuant to
applicable Treasury Regulations. 

 (d) In addition to the Base Salary, Employee will be eligible to receive raises, bonuses and
incentive compensation to the extent approved from time to time by the Board of Directors of the Company, in its discretion. 

(e) Employee shall be eligible for vacations as permitted under Company’s policies in effect from time to time, with a minimum of
four weeks vacation during each year in the Employment Period. 
 4. Term and Termination. 

(a) The Employment Period shall continue until terminated upon the earlier of (i) March 31, 2015 (the “Expiration
Date”), (ii) Employee’s resignation with or without Good Reason or Employee’s death or Disability, or (iii) the termination of the Employment Period by the Company with or without Cause. The date on which Employee’s
employment with the Company terminates is referred to herein as the “Termination Date.” 
 (b) Employee’s
employment with the Company will be “at will,” meaning that either Employee or the Company may terminate Employee’s employment at any time and for any reason, with or without Cause or Good Reason. Any contrary representations
that may have been made to Employee are superseded by this Agreement. However, depending on the reason for such termination, Employee may be eligible for a severance package on the terms and conditions set forth below. 

(c) In the event the Employment Period terminates on account of the death of Employee, the Company shall cause all restricted stock and
stock options in effect on the Effective Date to vest and be exercisable. 
 5. Severance. In no way limiting the
Company’s policy of employment at will: 
  

	 	(a)	 If Employee’s employment with the Company is terminated by the Company without Cause or by Employee with Good Reason prior to the Expiration Date,
and provided that all of the following have occurred within 60 days following the termination of Employee’s employment with the Company (such 60th day being referred to as the “Release Date”): (i) Employee first signs and delivers to the Company a
Confidential Severance and Release Agreement in substantially the same form as that attached hereto as Exhibit B (the “Release Agreement”), (ii) any revocation right of the Employee under such Release Agreement shall have expired, and
(iii) such Release Agreement shall have become effective, Employee shall be entitled to receive severance compensation equal to 75% of his annual Base Salary and Target Bonus in effect for the year in which the Termination Date occurs
(determined regardless of the actual results of the Company for that year), payable in nine monthly installments equal to one-ninth of such severance compensation, subject to required withholding, payable at the end of each of the next nine
(9) full calendar months following the first full calendar month following the Release Date. 

  
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 (b) Notwithstanding anything to the contrary herein contained, Company shall not be required
to pay any amounts under this Section 5 or elsewhere in this Agreement if Employee is in breach of any of its obligations under this Agreement or any other Agreement with the Company, including without limitation, any obligation relating to the
treatment of Company confidential information and any non-compete obligation. 
 (c) If Employee’s employment with the
Company is terminated for Cause or death or Disability, or Employee resigns without Good Reason, Employee shall be entitled to receive only: (i) Employee’s Base Salary earned and payable through the Termination Date; (ii) any accrued
but unused vacation/time off to the extent required under applicable law; (iii) reimbursement for all incurred but unreimbursed expenses to the extent Employee is entitled to be reimbursed; and (iv) any other earned but unpaid
compensation, if applicable, as of the Termination Date. 
 (d) For purposes of this Agreement, the following terms shall have
the meanings set forth below: 
 “Cause” shall mean (i) Employee’s continued failure to
substantially perform one or more of Employee’s essential duties and obligations to the Company (other than any such failure resulting from a Disability) which, to the extent such failure is remediable, Employee fails to remedy in a reasonable
period of time (not to exceed 30 days) after receipt of written notice from the Company; (ii) Employee’s refusal or failure to comply with the reasonable and legal directives of the Board of Directors after written notice from the Board
describing Employee’s failure to comply and, if such failure is remediable, Employee’s failure to remedy same within 10 days of receiving written notice; (iii) any act of personal dishonesty, fraud or misrepresentation taken by
Employee which was intended to result in substantial gain or personal enrichment of the Employee at the expense of the Company; (iv) Employee’s violation of a federal or state law or regulation applicable to the Company’s business
which violation was or is reasonably likely to be materially injurious to the Company; (v) Employee’s conviction of, or plea of nolo contendere or guilty to, a felony under the laws of the United States or any State that is reasonably
likely to reasonably likely to be materially injurious to the Company; (vi) Employee’s abuse of drugs, other narcotics or alcohol during working hours or where such abuse (whenever occurring) impacts on Employee’s working day,
(vii) Employee’s breach of any of his material obligations under any written agreement with the Company (including without limitation this Agreement and any proprietary information and inventions assignment agreement with the Company); or
(viii) Employee’s violation of a material policy of the Company which, to the extent such failure is remediable, Employee fails to remedy in a reasonable period of time (not to exceed 30 days) after receipt of written notice from the
Company. 

  
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 “Disability” shall have the meaning assigned to such term in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). 
 “Good
Reason” shall exist upon the occurrence of one of the following Company actions (unless Employee consents in writing to such action(s)): (i) a material reduction of the Employee’s salary and employee benefits to which the Employee was
entitled immediately prior to such reduction, (ii) a material reduction in the duties, authority or responsibilities relative to the Employee's duties, authority or responsibilities as in effect immediately prior to such reduction, provided,
however, that if the Company assigns to the Employee duties for another senior executive position with the Company shall not constitute Good Reason; or (iii) the relocation of the Employee to a facility or a location more than fifty
(50) miles from the Employee's then present location; provided, however, that (A) Employee must provide the Company with written notice of the occurrence of such action(s) within 60 days of the initial occurrence of such action(s) and of
his or her intent to terminate employment based on such action(s) and (B) the Company will have 30 days from the date that such written notice is provided by Employee to cure such action(s). 

(e) Notwithstanding anything herein to the contrary, (i) if at the time of Employee’s termination of employment with the
Company, Employee is a “specified employee” within the meaning of Section 409A of the Code, and the deferral of the commencement of any payments or benefits (or portions thereof) otherwise payable hereunder as a result of such
termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the payment of any such payments or benefits (or portions thereof) hereunder (without any
reduction in such payments or benefits ultimately paid or provided to Employee) until the date that is six months following Employee’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of
the Code) to the extent and amount necessary to comply with Section 409A of the Code, with such delayed payments to be made in lump sum on the first day of the seventh month following the end of such six month period, and (ii) if any other
payments of money or other benefits due to Employee hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment
or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional
tax. The Company shall consult with Employee in good faith regarding the application of this Section 5(e). Notwithstanding any other provision in the Agreement, the Company and Employee will cooperate in good faith to amend or modify the
Agreement so that the payments under this Agreement qualify for exemption from or comply with Code Section 409A; provided, however, that the Company makes no representations that the payments under the Agreement shall be exempt from or comply
with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to payments under the Agreement. For purposes of this Section 5, a termination of employment only occurs if it constitutes a “separation
from service” under Section 409A of the Code and the regulations promulgated thereunder. With respect to the payments indentified in Section 5(a)(i)-(iii), each payment, including each separate installment payment identified
thereunder, will be considered the right to a series of separate payments. 

  
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 6. Confidential Information. 

(a) Company Information. The Company agrees, in consideration for Employee’s agreement to the various terms of this Agreement,
to provide Employee with Confidential Information (as defined below) belonging to the Company. Employee agrees at all times, during the term of employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the
Company or in connection with Employee’s responsibilities under his employment, or to disclose to any person, firm, corporation or other entity without written authorization of an officer of the Company any Confidential Information of the
Company. Employee further agrees not to make copies of such Confidential Information except as authorized in writing by the Company or required for the performance of Employee’s responsibilities under his employment. Any such copies made
pursuant to the preceding sentence shall be available to, and shall remain the sole property of, the Company at all times. Employee understands that “Confidential Information” means any Company proprietary information, technical data,
trade secrets or know-how, including, but not limited to, (i) information derived from reports, investigations, experiments, research and work in progress, (ii) methods of operation, (iii) market data, (iv) technology, hardware,
proprietary computer programs and code (in object code and source code format), (v) drawings, designs, plans and proposals, (vi) marketing and sales programs, (vii) customer, licensee and supplier lists and any other information about
the Company’s relationships with others, (viii) historical financial information and financial projections, (ix) network and system architecture, (x) all other formulae, patterns, devices or compilations, concepts, ideas,
materials and information prepared or performed for or by the Company, (xi) all information related to the business plan, business, products, purchases or sales of the Company or any of its suppliers and customers, (xii) software or
applications of software, developments, inventions, models, samples, flowcharts, statistical data and compilations, (xiii) computer programs, disks, diskettes, tapes, and (xiv) all other proprietary information disclosed to Employee by the
Company either directly or indirectly in writing, orally or by drawings or observation, or created by Employee during the period of his employment, using Company time and/or materials or equipment. Employee understands that Confidential Information
includes, but is not limited to, information pertaining to any aspects of the Company’s business which is either information not known by actual or potential competitors of the Company, or proprietary information of the Company or its customers
or suppliers or other third parties with which it has business relationships, whether of a technical or financial nature, or otherwise. Employee further understands that Confidential Information does not include any of the foregoing items which are
publicly available or which become publicly known and made generally available through no wrongful act of Employee or of others who were under confidentiality obligations as to the item or items involved. 

(b) Former Employer Information. Employee represents and warrants that Employee’s performance of this Agreement has not
breached, and will not breach, any agreement or trust relationship between himself and any former, concurrent, or subsequent employer or other third party (collectively, “Other Party”), including, without limitation, any agreement with
respect to such Other Party’s inventions, unpublished documents or confidential or proprietary information. Employee agrees that Employee will not disclose to the Company, bring on the Company’s premises, or induce the Company to use any
Other Party’s inventions, unpublished documents or confidential or proprietary information without such Other Party’s prior written consent, a copy of which Employee also shall provide to the Company. 

  
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 (c) Third Party Information. Employee recognizes that the Company has received and in
the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee
agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out Employee’s work for the Company consistent
with the terms of this Agreement 
 7. Inventions. 

(a) Inventions Retained and Licensed. Employee has attached hereto, as Exhibit A, a list describing all ideas,
discoveries, inventions, original works of authorship, developments, designs, work products, innovations, concepts, know-how and trade secrets which were made by Employee prior to Employee’s employment with the Company (collectively referred to
as “Prior Inventions”), which belong to Employee, which relate to the Company’s current or proposed business, products or research and development, whether or not specifically within Employee’s duties or responsibilities with the
Company, whether or not patentable or registrable under copyright or similar laws and whether or not reduced to writing, and which are not assigned to the Company hereunder; or, if no such list is attached, Employee represents that there are no such
Prior Inventions. If, in the course of Employee’s employment with the Company, Employee incorporates into a Company product, process, program, software or machine a Prior Invention owned by Employee or in which Employee has an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free, transferable, irrevocable, perpetual, worldwide license to make, have made, modify, use, reproduce, distribute, create derivative works from, publicly perform, publicly display
and sell such Prior Invention as part of, or in connection with such product, process, program, software, work or machine. Employee agrees that Employee will not, without the prior approval of the Company, incorporate in any Company product,
process, program, software, work or machine any photographs, video or film, music, computer programs or other materials obtained from a third party (via the Internet or otherwise) for which the Company has not been granted an express license for
such incorporation. 
 (b) Assignment of Inventions. Employee agrees that Employee will promptly make full written
disclosure to the Company of any and all ideas, discoveries, inventions, original works of authorship, developments, designs, work products, innovations, concepts, know-how, and trade secrets which relate to the Company’s current or proposed
business, products or research and development, whether or not specifically within Employee’s duties or responsibilities with the Company and whether or not patentable or registrable under copyright or similar laws and whether or not reduced to
writing, which Employee may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time Employee is employed with the Company, whether or not during working
hours or by the use of the facilities of the Company (collectively referred to as “Inventions”). Employee further agrees that Employee will hold in trust for the sole right and 

  
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benefit of the Company, and hereby assigns to the Company, or its designee, all Employee’s right, title, and interest in and to any and all such Inventions which Employee may solely or
jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, using the Company’s time and/or materials or equipment. Employee further acknowledges that all of the above-described Inventions
made during the period of Employee’s employment with the Company are “works made for hire”, as that term is defined in the United States Copyright Act, to the greatest extent permitted by applicable law, and are compensated by
Employee’s salary. All Inventions or other work product created by Employee or on Employee’s behalf or by Employee’s affiliates pursuant to this Agreement shall be free and clear of all encumbrances, including without limitation,
security interest(s), licenses, liens or other restrictions other than as expressly provided for in this Agreement. Employee hereby appoints the Company as Employee’s attorney-in-fact to execute on Employee’s behalf any assignments or
other documents deemed necessary by the Company to protect or perfect its rights to any Inventions. 
 (c) Inventions Assigned
to the United States. Employee agrees to assign to the United States government all Employee’s right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between
the Company and the United States or any of its agencies. 
 (d) Maintenance of Records. Employee agrees to create and
maintain adequate and current written records of all Inventions made by Employee (solely or jointly with others), and assigned to the Company under Section 7(b) above, during the term of Employee’s employment with the Company. The records
will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times. Employee agrees not to remove such records from
the Company’s place of business except as expressly permitted by the Company policy, which may, from time to time, be revised at the sole discretion of the Company. 
 (e) Patent and Copyright Registrations. Employee agrees to reasonably assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in
the Inventions and any copyrights, patents, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall reasonably deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company,
its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights, moral rights or other intellectual property rights relating thereto. Employee further
agrees that Employee’s obligation to execute or cause to be executed, when it is in Employee’s power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of
Employee’s mental or physical incapacity, unavailability, or for any other reason to secure Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering
Inventions or original works of authorship assigned to the Company as above, then Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and 

  
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agents as Employee’s agent and attorney in fact, to act for and in Employee’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent, copyright registrations or enforcement of other intellectual property rights thereon with the same legal force and effect as if executed by Employee. 

8. Conflicting Employment. Employee agrees that, during the Employment Period, Employee will not engage in any other employment,
occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the Employment Period, nor will Employee engage in any other activities that conflict with
Employee’s obligations to the Company. 
 9. Returning Company Documents. Employee agrees that, at the time of
termination of Employee’s employment with the Company, Employee will deliver to the Company (and will not keep in Employee’s possession, copy, reproduce, recreate or deliver to anyone else) any and all devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any of the aforementioned items developed by Employee pursuant to Employee’s
employment with the Company or otherwise belonging to the Company, its successors or assigns. Employee further agrees that any property situated on the Company’s premises or on the Company’s computers or servers, including disks and other
storage media, email, and filing cabinets and other work areas, is subject to inspection by Company personnel at any time with or without notice. 
 10. Notification of New Employer. Upon termination of Employee’s employment with the Company, Employee hereby grants consent to notification by the Company to Employee’s new employer or
any other party with which Employee may enter into a new relationship with respect to Employee’s obligations under this Agreement. 
 11. Certain Covenants. 
 (a) Solicitation of Employees, Consultants and
Customers. In consideration of the Company’s obligations under this Agreement and the other consideration recited above, including but not limited to the Company’s obligations pursuant to Section 5, Employee agrees that, during
the Employment Period and for a period of twenty-four months immediately following the Termination Date (“Restricted Period”), Employee shall not, either directly or indirectly, either alone or in concert with others, solicit, induce,
recruit, encourage or entice, or attempt to solicit, induce, recruit, encourage or entice, any employee of or consultant to the Company to leave the Company or work for anyone in the businesses in which the Company and its affiliates are engaged at
any time during the one-year period ending on the Termination Date (“Company Business”). Also, during the Restricted Period, Employee will not directly or indirectly, either for himself or for any other person, firm or corporation, divert
or take away or attempt to divert or take away, call on or solicit or attempt to call on or solicit, any customer of the Company, in connection with any business or activity similar to or related to the Company Business, including but not limited to
those on whom Employee called or whom Employee solicited or with whom Employee became acquainted while engaged as an employee of or a consultant to the Company. During his employment, Employee agrees not to plan or otherwise take any steps,
preliminary or otherwise, either alone or in concert with others, to set up or engage in any business enterprise that would be in competition with the Company. 

  
 8 

 (b) Noncompetition. (i) Employee agrees that, during the Restricted Period, Employee
will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control, or participate in the ownership, management, operation, financing, or control of, be employed by, associated with, or in any manner connected with, or
render services or advice to, any business whose primary line of business is competitive with the Company Business or personally engage in, manage or operate, or personally participate in the conduct, management or operation of, be employed by,
associated with, or render services or advice to, any business competitive with the Company Business anywhere in Houston, Texas or in any geographical area within fifty (50) miles of the city limits of Houston, Texas. 

(ii) Notwithstanding the provisions of this Section 11, Employee’s non-competition obligations hereunder shall not preclude
Employee from owning less than one percent (1%) of any class of securities of any enterprise conducting business in the Company Business (but without otherwise participating in the activities of such enterprise) if such securities are listed on
any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934. 
 (iii) Employee agrees that the time periods and the geographic scope within this Section 11 are reasonable in order for the Company to be protected from unfair competition and to preserve the
Company’s Confidential Information and other legitimate business interests, and are ancillary to and designed to ensure Employee’s compliance with the confidentiality provisions of this Agreement. Employee specifically recognizes and
acknowledges that the work of the Company is so specialized and unique that only such geographic scope can protect the Company from unfair competition. 
 (c) Breach. In the event of Employee’s breach of any covenant set forth in this Section 11, the term of such covenant will be extended by the period of the duration of such breach.

 (d) Severability. If at any time the provisions of this Section 11 are determined to be invalid or unenforceable
by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 11 shall be considered divisible and shall be immediately amended to only such area, duration or scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over the matter; and Employee agrees that this Section 11 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included
herein. 

  
 9 

 12. Notices. Any notice provided for in this Agreement shall be in writing and shall
be either personally delivered, sent by a nationally recognized overnight delivery service, or mailed by first class mail, return receipt requested, to the recipient at the address below indicated: 

Notices to Employee: 
 Richard Walton 
 Notices to the Company: 

Flotek Industries, Inc. 
 10603 W. Sam Houston Pkwy. N., Suite 300 
 Houston, TX 77064 

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.
Any notice under this Agreement shall be deemed to have been given when so delivered or, if sent by first class mail, three (3) days after so mailed. 
 13. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 
 14. Complete Agreement. Except with respect to any proprietary information and inventions assignment agreement between the Company and the Employee, this Agreement embodies with respect to the
subject matter hereof the complete agreement and understanding among the parties and supersedes and preempts with respect to the subject matter hereof any prior understandings, agreements or representations by or among the parties, written or oral,
which may have related to the subject matter hereof in any way. 
 15. Counterparts. This Agreement may be executed in
separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. 
 16. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Employee, the Company and their respective heirs, successors and assigns, except
that Employee may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company except by operation of law to Employee’s estate upon the death of Employee. 

17. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Texas or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of Texas. 

  
 10 

 18. Consent to Personal Jurisdiction. Subject to terms and conditions of
Section 19, any suit, action or other proceeding arising out of or based upon this Agreement shall be brought in the federal and state courts located within Harris County, Texas. 

19. Arbitration and Equitable Remedies. 
 (a) Arbitration. Except as provided in Section (b) below, Employee agrees that any dispute or controversy arising out of or relating to any interpretation, construction, performance or breach
of this Agreement, shall be settled by arbitration to be held in Houston, Texas, in accordance with the rules then in effect of the American Arbitration Association, provided however, the parties will be entitled to full and liberal evidentiary
discovery in accordance with the rules governing civil litigation in courts of the same jurisdiction. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. The Company and Employee shall split 50%-50% the costs and expenses of such arbitration, and the substantially
prevailing party shall be entitled to an award of attorneys fees. 
 (b) Equitable Remedies. Each of the Company and
Employee agree that disputes relating to or arising out of a breach of the covenants contained in Sections 6 through 11 of this Agreement would likely require injunctive relief to maintain the status quo of the parties pending the appointment of an
arbitrator pursuant to this Agreement. The parties hereto also agree that it would be impossible or inadequate to measure and calculate the damages from any breach of the covenants contained in this Agreement prior to resolution of any dispute
pursuant to arbitration. Accordingly, if either party claims that the other party has breached any covenant contained in Sections 6 through 11 of this Agreement, that party will have available, in addition to any other right or remedy, the right to
obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and/or to specific performance of any such provision of this Agreement pending resolution of the dispute through arbitration. The parties
further agree that no bond or other security shall be required in obtaining such equitable relief and hereby consents to the issuance of such injunction and to the ordering of specific performance. However, upon appointment of an arbitrator, the
arbitrator shall review any interim, injunctive relief granted by a court of competent jurisdiction and shall have the discretion, jurisdiction, and authority to continue, expand, or dissolve such relief pending completion of the arbitration of such
dispute or controversy. The parties agree that any orders issued by the arbitrator may be enforced by any court of competent jurisdiction if necessary to ensure compliance by the parties. 

20. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the
Company and Employee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement. 

[remainder of page intentionally left blank] 

  
 11 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective
Date. 
  

			
	FLOTEK INDUSTRIES, INC.
		
	By:	 	 /s/ John W. Chisholm

		 	Name: John W. Chisholm
		 	Title: President/CEO
	
	 /s/ H. Richard Walton

	H. Richard Walton

 SIGNATURE PAGE TO 

EMPLOYMENT AGREEMENT 

 EXHIBIT A 

LIST OF PRIOR INVENTIONS 
 AND ORIGINAL WORKS OF AUTHORSHIP 
  

					
	 Title
	  	 Date
	  	 Identifying Number

or Brief Description

 EXHIBIT B 
 CONFIDENTIAL SEVERANCE AND RELEASE AGREEMENT 
 This Confidential Severance
and Release Agreement (“Agreement”) is entered into on [date], by and between [name] (the “Employee”) and Flotek Industries, Inc. (the “Company”). 

WHEREAS, Employee was employed by Company as a [position]; 
 WHEREAS, Employee’s employment has terminated effective [date]; 
 WHEREAS,
the Company has offered to provide Employee with the a severance package to facilitate his transition from the Company as provided in Section 5 of the Employment Agreement dated as of
            , 20    (the “Employment Agreement”), by and between Employee and Company, contingent on the execution delivery and effectiveness of this Agreement
(the “Severance”); and 
 WHEREAS, Employee has agreed to release the Company from any claims arising from or related
to Employee’s employment relationship with the Company; 
 NOW THEREFORE, in consideration of the mutual promises made
herein, the Company and Employee (jointly referred to as the “Parties”) hereby agree as follows: 
 1.
Termination. Employee’s employment with the Company will terminate on [date] (the “Termination Date”). 

2. Consideration. The Company agrees to pay Employee the Severance, less applicable payroll deductions. Provided Employee
complies with his obligations pursuant to Section 7, below, Company shall pay the Severance amount in accordance with the Company’s general payroll practices as provided in the Employment Agreement, subject to required withholding.
Employee acknowledges that in the absence of this Agreement, he would not be entitled to this payment. 
 3. Release by
Employee. Employee, on behalf of himself and his respective past, present, and future representatives, attorneys, agents, heirs, successors and assigns, hereby releases the Company and its affiliates and their respective past, present, and
future employees, directors, officers, representatives, attorneys, agents, heirs, successors and assigns, and each of them (collectively, the “Released Parties”), from any and all claims, demands, causes of action, obligations, damages,
and liabilities, whether or not now known, suspected, or claimed, that Employee may possess against the Company arising from his employment up to, until, and including the Effective Date of this Agreement, other than claims, demands, causes of
action, obligations, damages, and liabilities arising from the fraud or gross misconduct of the Released Parties (the “Released Claims”) . Without limiting the generality of this release, Employee agrees to waive any and all Released
Claims against the Released Parties arising from employment with the Company, and covenants not to sue them for any such claims including, but not limited to, those based on state or federal law regarding age, sex (including sexual harassment),
religion, handicap, national origin or other discrimination, the Age Discrimination in Employment Act, the Fair Labor Standards Act (including the Equal Pay Act), the Americans 

 
with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act, Title VII of the Civil Rights Act of 1964, the Texas Labor Code, the Texas Administrative
Code, any other applicable state or local codes or ordinances, and contract or tort claims, whether such claim be based upon an action filed by Employee or a governmental agency, and any and all claims for attorneys’ fees and/or costs. The
Parties agree that the release set forth in this Paragraph shall be and remain in effect in all respects as a complete and general release as to the matters released. This release does not extend to any obligations incurred under this Agreement or
to any obligations under the Bylaws of the Company to Employee with regard to indemnification and advancement of expenses to or for the benefit of Employee. 
 4. Unknown Claims. Employee expressly acknowledges that this Agreement resolves and releases all legal claims he may have against Company as of the date of this Agreement arising from his
employment with the Company, including claims of which he may not be aware. 
 5. Non-Admission. The fact and
terms of this Agreement are not an admission by the Company of liability or other wrongdoing under any law. 
 6. Payment of
Salary. Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, and any and all other benefits due Employee, other than the consideration described in this Agreement, as well as any expenses with respect to
which Employee is entitled to be reimbursed. 
 7. Returning Company Property. Employee agrees to deliver to the Company
on or before [date], and not to keep in his possession, recreate, or deliver to anyone else, any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment,
other documents or property provided to Employee by the Company, developed by Employee pursuant to his employment with the Company, or otherwise belonging to the Company. 
 8. Restrictions. Employee understands that, following the termination of his employment with Company, he must still comply with the terms of the Employment Agreement which includes a
two-year non-solicitation and non-compete agreement following the termination of his employment, and provisions relating to the Confidential Information of the Company and Inventions (as such terms are defined in the Employment Agreement).

 9. Non-Disparagement. The Parties agree to refrain from any defamation, libel, or slander of the other or any of the
Released Parties or tortious interference with the contracts and relationships of the other Party or any of the Released Parties. The Parties further agree that each will not act in any manner that might damage the business or reputation of the
other Party or any of the Released Parties. The Company agrees to respond to any request for information regarding Employee by providing only neutral information, such as Employee’s dates of employment and position held. 

10. No Cooperation. Employee agrees that he will not counsel or assist any attorneys or their clients in the presentation
or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, stockholder, or attorney of the Company and/or any other of
the Released Parties, unless under a subpoena or other court order to do so. 

  
 2 

 11. Attorneys’ Fees. If either Employee or the Company (including any of
the Released Parties) brings an action against the other Party, or otherwise seeks to enforce this Agreement, by reason of the breach of any covenant, warranty, representation, or condition of this Agreement, or otherwise arising out of this
Agreement, whether for declaratory or other relief, the action must be submitted for arbitration to the American Arbitration Association in Houston, Texas. The prevailing party in such arbitration shall be entitled to its costs and attorneys’
fees. 
 12. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall constitute one and the same instrument. 
 13.
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 shall continue in full force and effect without said provision.

 14. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection
with this Agreement . 
 15. Entire Agreement. This Agreement is the entire agreement and understanding between
the Parties on the subject matter covered herein. The Parties further agree that this Agreement may not be altered except in a writing duly executed by all of the Parties. The laws of the State of Texas shall govern this Agreement, excepting its
principles of conflicts of law. 
 16. Effective Date. This Agreement is effective immediately following the
Parties’ execution of the Agreement, and will be enforceable following the expiration of the 7-day revocation period described below in Paragraph 17 (“Effective Date”). 

17. OWBPA. Under the Older Workers Benefit Protection Act of 1990, Employee acknowledges the following: 

a. That Employee has been advised and is hereby advised by the Company to consult an attorney regarding this Agreement before executing
it; 
 b. That Employee has been afforded twenty-one (21) days to consider whether he is willing to enter into it, although
Employee may, in the exercise of his own discretion, sign it or reject it at any time before the expiration of the 21 days; 
 c.
That, within seven (7) days after executing this Agreement, Employee may revoke it; and 
 d. That this Agreement is not
enforceable until the 7-day revocation period has passed. 

  
 3 

 18. Voluntary Execution of Release Agreement. The Parties enter into this Agreement
voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: 
 a. They have read this Agreement; 
 b. They have been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of their own choice, or have knowingly waived such representation; 
 c. They know and understand the terms and consequences of this Agreement and of the releases it contains; and 
 d. They are fully aware of the legal and binding effect of this Agreement. 
 IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. 
  

					
	DATED: [date]	  	By:	 	  

		  		 	[Company rep]
			
		  	By:	 	  

	DATED: [date]	  		 	[Employee]

  
 4

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