Document:

DIRECTOR
SERVICES AGREEMENT

 

THIS
DIRECTOR SERVICES AGREEMENT (this “Agreement”) is made and entered into as of [          ], 2019, by and
between Taronis Fuels, Inc., a Delaware corporation (the “Company”), and [         ], an individual (“Director”).

 

I.
SERVICES. 

 

a.
Board of Directors. The Director has been appointed as an [Independent] Director of the Company’s Board of Directors
(the “Board”), effective upon approval by the Board, until the earlier of the date on which Director ceases
to be a member of the Board for any reason or the date of termination or expiration of this Agreement in accordance with Section
VII hereof (such earlier date being the “Expiration Date”). The Board shall consist of the Director and such
other members as nominated and elected as Directors.

 

b.
Director Services. The Director will use reasonable best efforts to provide the following services to the Company:
(a) participate in regularly scheduled and special Board and committee meetings so long as such meetings are noticed in accordance
with the Company’s Bylaws; (b) meet or otherwise confer with Company executives on an active and regular basis as reasonably
requested by the CEO and/or Chairman of the Board, so long as such requests are noticed in no less than the same manner as required
for a special meeting of the Board in accordance with the Company’s Bylaws; (c) serve as the [chairperson] of the [name
of committee]; (d) serve as a member of certain other committees; (e) timely respond to reasonable time requests for consent,
which consent may be withheld until the Director has been reasonably satisfied of the facts comprising such request as to make
an informed reasonable decision regarding the subject matter thereof; and (f) provide such other reasonable services, and perform
such reasonable duties, as are customary and appropriate for Board members. (the “Director Services”). In the
cases of (a), (b), (e) and (f) above, in the absence of notice as required by the Company’s Bylaws, the Director shall not
be held in breach of this Agreement. The Director’s reasonable failure to comply with every instance of Director Services
set forth in (a), (b), (e) and (f) above shall not constitute a breach of this Agreement. The Director may waive any notice or
information requirement set forth above, but may also refrain from participation in any meeting or consent to which proper notice
or information requirement has not been met. The Company’s failure to comply with its obligations under the Bylaws juxtaposed
with the Director’s adherence thereto shall not constitute a breach of this Agreement.

 

II.
COMPENSATION. 

 

a.
Director’s Fee. In connection with Director’s continuing service as a director and in accordance with the
Director Compensation Policy, the Company shall provide Director with cash compensation of $[  ], per annum, paid quarterly,
reflecting the following:

 

	 	i.	 	$[           ]
    base;
	 	 	 	 
	 	ii.	 	$[           ]
    for service as the [Chairperson/Member] of the [Committee]; and 
	 	 	 	 
	 	iii.	 	$[           ]
    for service as the [Member/Chairperson] of the [Committee]. 

 

    	 

    	 

    

 

Except
in the case of this Agreement being Terminated for Good Reason (defined below), in the event the Director ceases to serve on the
Board, the Director shall be entitled to the pro rata portion of the Director’s Fee for the number of months served on the
Board in a given year and the Company shall ensure that the Director promptly receives all compensation and any other amounts
owed to the Director.

 

b.
Equity Awards. The Director will be entitled to any equity awards approved by the Compensation Committee and the Board.

 

c.
Expense Reimbursement. The Company shall reimburse Director in accordance with the Director Compensation Policy.

 

III.
DIRECTOR/OFFICER INSURANCE. The Director will be named as an insured on the director and officer liability insurance
policy currently maintained by the Company or as may be maintained by the Company from time to time, which coverages shall be
in an amount of no less than $5 million.

 

IV.
INDEMNIFICATION. In addition to being indemnified under Company Bylaws, the Director and the Company will promptly
enter into an indemnification agreement in substantially the same form provided to other similarly situated directors of the Company
to the extent the Director and the Company have not already entered into such an agreement.

 

V.
DUTIES OF DIRECTOR.

 

a.
Fiduciary Duties. In fulfilling his or her managerial responsibilities, the Director shall be charged with a fiduciary
duty to the Company and all of its shareholders. The Director shall be attentive and inform himself or herself of all available
material facts regarding a decision before taking action. In addition, the Director’s actions shall be motivated solely
by the best interests of the Company and its shareholders.

 

b.
Confidentiality. During the term of this Agreement, and for a period of one (1) year after the Expiration Date, the
Director shall maintain in strict confidence all information he or she has obtained or shall obtain from the Company, which the
Company has designated as “confidential” or which is by its nature confidential, relating to the Company’s business,
operations, properties, assets, services, condition (financial or otherwise), liabilities, employee relations, customers (including
customer usage statistics), suppliers, prospects, technology, or trade secrets, except to the extent such information (i) is in
the public domain through no act or omission of the Company, (ii) is required to be disclosed by law or a valid order by a court
or other governmental body, or (iii) is independently learned by Director outside of this relationship (the “Confidential
Information”).

 

c.
Nondisclosure and Nonuse Obligations. The Director will use the Confidential Information solely to perform the Director
Services for the benefit of the Company. Director will treat all Confidential Information of the Company with the same degree
of care as Director treats its own Confidential Information, and Director will use its best efforts to protect the Confidential
Information. Director will not use the Confidential Information for his or her own benefit or the benefit of any other person
or entity, except as may be specifically permitted in this Agreement. The Director will immediately give notice to the Company
of any unauthorized use or disclosure by or through him or her, or of which he or she becomes aware, of the Confidential Information.
Director agrees to assist the Company in remedying any such unauthorized use or disclosure of the Confidential Information.

 

    	 

    	 

    

 

d.
Return of The Company Property. All materials furnished to the Director by the Company, whether delivered to Director
by the Company or made by Director in the performance of Director Services under this Agreement (the “Company Property”),
are the sole and exclusive property of the Company and the Company may reasonably request the Director to return original copies
of any and all Company Property to the Company’s corporate headquarters upon reasonable request; the Director may retain
copies of Company Property, subject to compliance with the Director’s confidentiality obligations.

 

VI.
COVENANTS OF DIRECTOR.

 

a.
No Conflict of Interest. During the term of this Agreement, and for a period of one (1) year after the Expiration Date,
the Director shall not be employed by, own, manage, control or participate in the ownership, management, operation or control
of any business entity that is competitive with the Company or otherwise undertake any obligation inconsistent with the terms
hereof, provided that the Director may continue Director’s current affiliation or other current relationships with the entity
or entities described on Exhibit A (all of which entities are referred to collectively as “Current Affiliations”).
This Agreement is subject to the current terms and agreements governing Director’s relationship with Current Affiliations,
and nothing in this Agreement is intended to be or will be construed to inhibit or limit any of Director’s obligations to
Current Affiliations. Director represents that nothing in this Agreement conflicts with Director’s obligations to Current
Affiliations. A business entity shall be deemed to be “competitive with the Company” for purpose of this Article IV
only if and to the extent it engages in the business substantially similar to substantial parts of the Company’s business.

 

b.
Noninterference with Business. During the term of this Agreement, and for a period of one (1) year after the Expiration
Date, Director agrees not to interfere with the business of the Company in any manner. By way of example and not of limitation,
Director agrees not to solicit or induce any employee, independent contractor, customer or supplier of the Company to terminate
or breach his, her or its employment, contractual or other relationship with the Company.

 

c.
Compliance with Company Policies. The Director agrees to adhere to the Company’s policies currently in effect
or hereinafter adopting, including, but not limited to, the Director Compensation Policy and Stock Ownership Guidelines.

 

VII.
TERM AND TERMINATION. 

 

a.
Term. This Agreement is effective as of the date first written above and will continue until the Expiration Date.

 

b.
Termination. The Director may terminate this Agreement at any time upon thirty (30) days prior written notice to the
Company, or such shorter period as the parties may agree upon. Notwithstanding the foregoing, in the event that a majority of
the Board, acting in good faith, reasonably determines that the Director has acted in a manner that has been or could be materially
detrimental to the Company or places the Company in a meaningful level of negative light (“Termination for Good Reason”),
then the Board can direct the Company to terminate this Agreement without prior notice. In the event that the Board votes to terminate
the Director as such and the vote is a tie, then the Chairman of the Board shall cast the deciding vote with respect to such termination.
In the event of such termination, the Director shall not be entitled to receive any more compensation pursuant to Section II of
this Agreement beyond the date of such termination, and the Company shall ensure that the Director receives all compensation and
any other amounts owed to the Director within six (6) months of such termination.

 

c.
Survival. The rights and obligations contained in Articles IV, V and VI will survive any termination or expiration
of this Agreement, and the Director shall have the right to the benefits of the director and officer liability insurance policy
referenced in Article III of this Agreement for any acts or omissions or claims based on action or inaction that took place during
the Term. Irrespective of the termination or expiration of this Agreement, the Director is entitled to any rights and benefits
provided in any other agreements or letters signed by the Company that provide any such rights and benefits to the Director.

 

    	 

    	 

    

 

VIII.
MISCELLANEOUS.

 

a.
Assignment. Except as expressly permitted by this Agreement, neither party shall assign, delegate, or otherwise transfer
any of its rights or obligations under this Agreement without the prior written consent of the other party. Subject to the foregoing,
this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

 

b.
No Waiver. The failure of any party to insist upon the strict observance and performance of the terms of this Agreement
shall not be deemed a waiver of other obligations hereunder, nor shall it be considered a future or continuing waiver of the same
terms.

 

c.
Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with
notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification
of receipt; (iii) by facsimile transmission upon acknowledgment of receipt of electronic transmission; (iv) by electronic mail
so long as such electronic mail is received by the recipient, or (v) by certified or registered mail, return receipt requested,
upon verification of receipt. Notice shall be sent to the addresses and electronic email address set forth on the signature page
of this Agreement or such other address as either party may specify in writing. Either party to this Agreement may amend the address
and electronic email address set forth on the signature page of this Agreement using any of the notice methods set forth above.

 

d.
Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware, without regard
to conflicts of law principles thereof.

 

e.
Severability. Should any provisions of this Agreement be held by a court of law to be illegal, invalid or unenforceable,
the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.

 

f.
Entire Agreement. This Agreement, along with the Director Compensation Policy and Stock Ownership Guidelines, constitutes
the entire agreement between the parties relating to this subject matter and supersedes all prior or contemporaneous oral or written
agreements concerning such subject matter. The terms of this Agreement will govern all Director Services undertaken by Director
for the Company.

 

g.
Amendments. This Agreement may only be amended, modified or changed by an agreement signed by the Company and Director.
The terms contained herein may not be altered, supplemented or interpreted by any course of dealing or practices.

 

h.
Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

[Signature
Page Follows]

 

[The
Remainder of This Page is Intentionally Blank]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	 	 	 	 
	Company:	 	TARONIS FUELS, INC.
	Address:	 	 	 
	 	 	 	 
	 	 	By:	        
	 	 	Name: 	 
	 	 	Title:	 
	Email:

        
	 	 	 
	 	 	 	 
	[Independent]
    Director:	 	 	 
	Address:	 	 	 
	 	 	 
	Email:	 	 

 

    	 

    	 

    

 

EXHIBIT
A

 

Director’s
Current AffiliationsDIRECTOR
COMPENSATION POLICY AND STOCK OWNERSHIP GUIDELINES

 

The
Compensation Committee of the Board of Directors (the “Board”) of Taronis Fuels, Inc. (the “Company”)
has adopted this Director Compensation Policy and Stock Ownership Guidelines (the “Policy”), pursuant to which
any member of the Board who is not an employee of the Company or any of its affiliates (each, a “Non-Employee Director”)
will be compensated as set forth in this Policy.

 

I.
Cash Compensation

 

Following
the Effective Date, an annual cash retainer of $90,000 will be paid to each Non-Employee Director, subject to applicable withholding.
The following additional annual cash retainers will be paid to each Non-Employee Director who serves in one of the following roles:

 

	Audit
    Committee	Chair:
    $15,000 
	 	 
	 	Member:
    $7,500 
	 	 
	Compensation
    Committee	Chair:
    $15,000 
	 	 
	 	Member:
    $7,500
	 	 
	Nominating
    and Corporate Governance Committee	Chair:
    $15,000 
	 	 
	 	Member:
    $7,500 
	 	 
	Acquisition
    Committee	Chair:
    $15,000
	 	 
	 	Member:
    $7,500
	 	 
	External
    Communications Committee	Chair:
    $15,000
	 	 
	 	Member:
$7,500
	 	 
	Chairperson
    of the Board	$30,000
    

 

A
committee chair will receive the chair retainer for the applicable committee, but also will not receive the committee member annual
retainer. All cash compensation is earned on a daily basis, payable at the end of each calendar quarter. The amount of quarterly
cash compensation that each Non-Employee Director will be entitled to receive for service as a director, committee chair, or committee
member, as the case may be, will be equal to (i) a fraction, (1) the numerator of which is the annual cash retainer for the applicable
role, and (2) the denominator of which is the number of days in the calendar year; multiplied by (ii) the number of days the Non-Employee
Director served as a director, committee member, or committee chair, as the case may be, during such quarter.

 

    	 

    	 

    

 

Compensation
of the Chairperson of the Board will be determined from time to time by the Compensation Committee, in consultation with the Nominating
and Corporate Governance Committee, and the Board.

 

Compensation
for service on any other special or standing committees of the Board will be determined by the Compensation Committee, in consultation
with the Nominating and Corporate Governance Committee, and the Board.

 

II.
Equity Compensation

 

The
Non-Employee Directors may be issued equity compensation from time to time as determined by the Compensation Committee (each,
an “Equity Award”).

 

	 	●	All
    Equity Awards, if not already fully vested, shall be deemed fully vested at the termination/resignation of a Non-Employee
    Director (in which case vesting will be accelerated to the date of termination/resignation of such Non-Employee Director).
    The Compensation Committee will have the authority to reasonably determine in good faith whether or not to accelerate the
    vesting of an Equity Award if a Non-Employee Director is disqualified or removed, with or without cause, from the Board. 
	 	 	 
	 	●	Unless
    otherwise determined by the Board, the actual grant value of an Equity Award will be converted into the number of shares underlying
    the award based on the average daily closing price per share of the Company’s common stock in the month prior to the
    grant date (rounded down to the nearest whole share).
	 	 	 
	 	●	All
    Equity Awards will vest in equal monthly installments. 
	 	 	 
	 	●	All
        Equity Awards will be subject to the Company’s standard form of Equity Award Agreement.

        

        

	 	 	 
	 	●	All
    Equity Awards will be accelerated in full in the event of a Change-in-Control, regardless of whether or not a Non-Employee
    Director is removed, with or without cause. 

 

The
Company represents and warrants that it will do the following, regardless of whether a Non-Employee Director is still a Non-Employee
Director of the Company at such time: (a) use its “best efforts” to assist with the removal of the restrictive legends
on any Company stock certificate held (even if not a part of an Equity Award) or in the dividing up of any certificate, as applicable,
(b) assist with the filing of Form 4’s (as applicable), and (c) to the extent feasible and at the direction of the Compensation
Committee and/or the Board, include restricted Equity Award shares on the Company’s next registration statement slated to
be filed and on subsequent registration statement(s), as applicable unless the underlying common stock is already registered at
the time of issuance.

 

For
purposes of this Policy, “Change in Control” means the occurrence of one of the following events:

 

(1)
the consummation of any consolidation or merger of the Company with any other entity, other than transaction which would result
in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately
after such consolidation or merger;

 

    	 

    	 

    

 

(2)
any Exchange Act Person (within the meaning of Section 13(d) or 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty
percent (50%) of the total voting power represented by the Company’s then-outstanding voting securities; provided, however,
that for purposes of this subclause (b) the acquisition of additional securities by any one person who is considered to own more
than fifty percent (50%) of the total voting power of the securities of the Company will not be considered a Change in Control;

 

(3)
the consummation of the sale or disposition by the Company of all or substantially all of its assets, except where such sale,
lease, transfer or other disposition is made to the Company or one or more wholly owned subsidiaries of the Company; or

 

(4)
a change in the effective control of the Company that occurs on the date that a majority of members of the Board is replaced
during any twelve (12) month period by members of the Board whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election. For purpose of this subclause (d), if any person is considered
to be in effective control of the Company, the acquisition of additional control of the Company by the same person will not be
considered a Change in Control.

 

III.
Other Compensation

 

Expense
Reimbursement

 

All
members of the Board will be reimbursed for their reasonable out-of-pocket expenses, including travel and lodging, incurred in
attending meetings of the Board and committees thereof, following submission by the Non-Employee Director of reasonable written
substantiation for the expenses, consistent with the Company’s reimbursement policy.

 

IV.
Effective Date

 

The
effective date of the Policy is August 15, 2019 (the “Effective Date”). If an individual becomes a Non-Employee
Director after the effective date of the Policy, the Policy will apply to such individual commencing on the date he or she or
it becomes a Non-Employee Director.

 

V.
Amendment

 

This
Policy will be reviewed periodically and may be amended from time to time by the Compensation Committee and the Board.

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