Document:

Exhibit
10.12

 

EMPLOYMENT
AGREEMENT

 

This
Employment Agreement (the “Agreement”) is entered into as of the 17th day of April 2022, between George
Murray (the “Executive”) and Flexible Solutions International, Inc. (the “Company”).

 

RECITALS

 

WHEREAS,
the Company and Lygos, Inc. (“Lygos”) intend to enter into an Agreement and Plan of Merger and Reorganization by and
between the Company, Lygos and those certain other parties identified therein (the “Merger Agreement”) whereby Lygos
will merge with and into a wholly owned subsidiary of the Company (the “Merger”); and

 

WHEREAS,
in connection with the Merger, the Company desires to enter into this Agreement with Executive, effective as of the closing of the Merger
(the actual date of closing, the “Closing Date”).

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other valid consideration, the sufficiency of which is acknowledged,
the Company and Executive agree as follows:

 

AGREEMENT

 

1.
Employment; Devotion to Duties.

 

(a)
General. The Company will employ Executive as its Director of Operations of Flexible Solutions Division reporting to the
Head-Flexible Solutions Division, and Executive accepts employment to serve in this capacity, all upon the terms and conditions in this
Agreement.

 

(b)
Devotion to Duties. During the Term, Executive will devote approximately 100% of his business time and efforts to the performance
of his duties on the Company’s behalf.

 

2.
Term.

 

Executive
will begin employment under the terms of this Agreement starting on the Closing Date (the “Commencement Date”). Executive
will be employed under this Agreement until five years after the Commencement Date (the “Term”).

 

3.
Location. The location of Executive’s principal place of employment will be at the Company’s offices or the
Executive’s residence in Lebanon, Indiana, whichever location is selected by the Executive. However, the Executive understands
that he may be required to travel and perform services outside of this area as reasonably required to properly perform his duties under
this Agreement.

 

    	1

    	 

    

 

4.
Compensation.

 

(a)
Base Salary. The Company will pay Executive an annual base salary (“Base Salary”) in the amount of $500,000,
subject to future modification in accordance with the Company’s Executive compensation review policies and practices. The Base
Salary will be adjusted annually based upon any increase in the Consumer Price Index during each twelve- month anniversary of the Commencement
Date. The Base Salary will be paid in accordance with the Company’s payroll practices in effect from time to time.

 

(b)
Options. On the Commencement Date, the Company will grant to the Executive options to purchase 400,000 shares of the Company’s
common stock pursuant to the FSI 2022 Equity Incentive Plan. The options will expire seven years after the grant date and will vest and
become exercisable on the twelve-month anniversary of the grant date, subject to Executive’s continuous service to the Company
through such vesting date. The exercise price per share will be equal to the fair market value per share on the date the option is granted,
as determined by the Board in good faith; provided, however, that if the Company, during the twelve-month period following the
grant date, grants any person an option with an exercise price less than the exercise price per share approved for the options held by
the Executive, then the exercise price of the options held by the Executive will be lowered to the lowest exercise price of any option
granted during such twelve-month period. The exercise price per share will in no event be lower than the fair market value per
share on the date the options are granted or, if applicable, the date the options are subsequently repriced, in each case, as determined
by the Company’s Board of Directors (the “Board”) in good faith. Executive should consult with Executive’s
own tax advisor concerning the tax risks associated with accepting an option to purchase a share of the Company’s common stock.

 

(c)
Bonus. Executive will be paid a bonus equal to 3% of year-over-year revenue growth plus 3% of a year-over-year ebitda
growth. Year-over-year determinations will be based upon each twelve-month anniversary of the Commencement Date, as determined
by the Board in good faith.

 

(d)
Registration. The shares issuable to the Executive upon the exercise of the options will be registered by means of a registration
statement on Form S-8 that the Company will file with the Securities and Exchange Commission.

 

5.
Executive Benefits.

 

(a)
Fringe Benefits; Paid Time Off. The Company will provide Executive with those fringe benefits and other Executive benefits
on the same terms and conditions as generally available to senior management from time to time (e.g., health and other insurance
programs, etc.); provided, however, that the Company reserves the right to amend or terminate any employee or Executive benefit plan
or program. Executive is entitled to paid time off (PTO) during each calendar year, with the amount and scheduling of the vacation to
be determined under the Company’s PTO policies as in effect from time to time.

 

(b)
Reimbursement of Expenses. Executive is entitled to be reimbursed by the Company for reasonable business expenses incurred
in performing his duties under the Company’s expense reimbursement policies as in effect from time to time or as otherwise approved
by the Company’s Chief Executive Officer or the Board.

 

    	2

    	 

    

 

6.
Termination of Employment During the Term of the Agreement. Upon, and as of, the date of the Executive’s termination
of employment with the Company for any reason, the Executive will be deemed to have resigned from all positions he then holds as an officer
or employee of the Company. All stock options which Executive holds at the time of such termination shall become fully vested. The Executive’s
employment may be terminated during the Term of this Agreement pursuant to the following terms and conditions:

 

(a)
Company Terminates Executive’s Employment for Cause.

 

(i)
Definition. For purposes of this Agreement, Cause means (A) the Executive’s failure to substantially perform his
reasonably assigned duties (other than on account of Disability); (B) the Executive is convicted of criminal conduct having the effect
of materially adversely affecting the Company, after all rights of appeal have expired or such appeals have been exhausted; (C) the Executive
engages in the use of alcohol or narcotics to the extent that the performance of his duties is materially impaired; (D) the Executive
materially breaches the terms of this Agreement; (E) the Executive engages in willful misconduct that is materially injurious to the
Company, other than business decisions made in good faith; or (F) the Executive commits any act or omission not described above that
constitutes material and willful misfeasance, malfeasance, fraud or gross negligence in the performance of his duties to the Company.

 

(ii)
Effective Date of Termination. Executive’s employment will terminate immediately upon written notice by the Company
to Executive stating that Executive’s employment is being terminated for Cause.

 

(iii)
Compensation and Benefits. If the Company terminates the Executive’s employment for Cause, the Company will pay Executive
(A) any earned but unpaid Base Salary through the effective date of termination, and (B) any other unpaid benefit to which he has earned
under the applicable terms of any applicable plan, program, agreement or arrangement of the Company or its affiliates (the amounts in
(A) and (B) above are referred to elsewhere in this Agreement as “Accrued Amounts”).

 

(b)
Company Terminates Executive’s Employment without Cause.

 

(i)
Effective Date of Termination. Executive’s employment will terminate on the earlier of the (x) last day of the Term,
or (y) 30 day after the Company gives written notice to Executive stating that Executive’s employment is being terminated without
Cause. The Company may, at its discretion, place Executive on a paid administrative leave during all or any part of the notice period.
During the administrative leave, the Company may bar Executive’s access to its offices or facilities or may provide Executive with
access subject to such terms and conditions as the Company chooses to impose. For the avoidance of doubt, the expiration of the Term
in accordance with Section 2 above will not constitute a termination without Cause.

 

(c)
Executive Voluntarily Resigns.

 

(i)
Effective Date of Termination. Executive’s employment will terminate on the earlier of the (x) last day of the Term,
or (y) 30 day after Executive gives written notice to the Company stating that Executive is resigning his employment with the Company
for any reason, unless the Company waives in writing all or part of this notice period (in which case the termination of employment is
effective as of the date of the waiver).

 

    	3

    	 

    

 

(ii)
Compensation and Benefits. If the Executive voluntarily resigns, the Company will pay Executive the Accrued Amounts.

 

(d)
Disability.

 

(i)
Definition. For purposes of this Agreement, Disability or Disabled means the Executive (A) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, or (B) is, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months,
is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering the Company’s
employees.

 

(ii)
Effective Date of Termination. Executive’s employment will terminate on the first day the Company makes a determination
that the Executive is Disabled.

 

(iii)
Compensation and Benefits. Upon a determination that the Executive is Disabled, the Company will pay to Executive any Accrued
Amounts. plus a lump sum equal to six months of Executive’s then Base Salary, reduced by any disability insurance maintained by
the Company to be received by Executive for 6 months following his termination of employment, payable within 30 days following the date
of Executive’s termination of employment.

 

(e)
Death.

 

(i)
Effective Date of Termination. Executive’s employment will terminate immediately upon the Executive’s death.

 

(ii)
Compensation and Benefits. If the Executive dies during the Term, the Company will pay Executive’s designated beneficiary,
or his estate if there is no designated beneficiary, the Accrued Amounts. Any amounts payable under this Section 7(e)(ii) are
in addition to any payments which the Executive’s designated beneficiary or estate may be entitled to receive pursuant to any pension
plan, profit sharing plan, employee benefit plan, or life insurance policy maintained by the Company.

 

(f)
Other Termination.

 

(i)
Compensation and Benefits. If the Executive resigns for Good Reason in connection with or within a period of 12 months
following a Change in Control, the Company terminates Executive’s employment pursuant to Section 6(b) of this Agreement, or the
Executive terminates his employment for Good Reason, then, in addition to the Accrued Amounts:

 

	 	●	The
    Company will pay to Executive (a) all amounts under Section 4(a) due to Executive pursuant to this Agreement, plus three months of
    Executive’s then current Base Salary, which will continue to be paid in semi-monthly installments pursuant to the Company’s
    regular payroll procedures, plus (b) any bonuses under Section 4(c) the Executive would have been entitled to receive during the
    five year term of this Agreement, which will be payable in the year following the year to which any such bonus relates.

 

    	4

    	 

    

 

	 	●	the
    Company will (a) fully accelerate the vesting of any then-unvested stock options held by the Executive and (b) extend the post-termination
    exercise period until the expiration date of the stock options held by the Executive;
	 	 	 
	 	●	to
    the extent permissible under the terms of the Company’s welfare benefit plans, the continuation of all Company welfare benefits,
    including medical, dental, vision, life and disability benefits pursuant to plans maintained by the Company under which the Executive
    and/or the Executive’s family were receiving benefits and/or coverage, or otherwise reimburse Executive for the cost of continuation
    of state health coverage for the Executive and/or the Executive’s family, for the 18-month period following the date of the
    Executive’s termination, and the Executive shall pay any portion of such cost as was required to be borne by key Executives
    of the Company generally on the date of termination; provided, however, that, the coverage for any plan subject to COBRA or state
    continuation of coverage will discontinue if such coverage terminates under Section 4980B of the Code.

 

For
purposes of this Agreement, the term Change in Control means (A) the sale of 50% or more of the outstanding voting securities of the
Company in a single transaction or a series of transaction occurring during a twelve-month period; (B) A majority of the members of the
Board of Directors is replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority
of the Company’s Board of Directors prior to the date of the appointment or election; (C) the Company is merged or consolidated
with another corporation and as a result of such merger or consolidation less than 50% of the outstanding securities of the surviving
or resulting corporation is owned in the aggregate by the shareholders of the Company that existed immediately prior the merger or consolidation;
(D) the Company sells more than 40% of the fair market value of its assets to another corporation that is not a wholly owned subsidiary
of the Company during a twelve-month period or (E) the acquisition by any individual, entity or group having beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of 50% or more of the Company’s either
(1) the then outstanding shares of common stock of the Company or (2) the combined voting power of the then outstanding voting securities
of the Company entitled to vote in the election of directors. For the avoidance of doubt, the Merger will not constitute a Change in
Control for purposes of this Agreement.

 

For
purposes of this Agreement, “Good Reason” means assigning the Executive to any duties that are materially inconsistent
with his position as described in Section 1, a reduction of Executive’s Base Salary without the prior written consent of
the Executive, or a relocation of Executive’s primary job duties to a location more than 50 miles from the location described in
Section 3; provided, however, occasional business travel in accordance with Section 3 will not constitute Good Reason. The foregoing
notwithstanding, a condition is not considered “Good Reason” unless (A) Executive gives the Company written notice
of such condition within 30 days after the condition comes into existence; (B) the Company fails to cure the condition within 30 days
after receiving Executive’s written notice; and (C) Executive terminates his employment within 12 months following the occurrence
of such condition coming into existence.

 

    	5

    	 

    

 

(ii)
Change in Control Payment/Section 280G Limitation.

 

(1)
General Rules. Code Sections 280G and 4999 may place significant tax burdens on both Executive and the Company if the total
payments made to Executive due to certain change in control events described in Code Section 280G (the “Total Change in Control
Payments”) equal or exceed the 280G Cap (three times the Executive’s “Base Amount” as defined in Code
Section 280G). If the Total Change in Control Payments equal or exceed the 280G Cap, Section 4999 of the Code imposes a 20% excise tax
(the “Excise Tax”) on all amounts in excess of one times Executive’s Base Period Income Amount. The Excise Tax
is imposed on Executive, rather than the Company, and will be withheld by the Company from any amounts payable to Executive pursuant
to this Agreement. In determining whether the Total Change in Control Payments will exceed the 280G Cap and result in an Excise Tax becoming
due, and for purposes of calculating the 280G Cap itself, the provisions of Code Sections 280G and 4999 and the applicable regulations
will control over the general provisions of this Section 6(f)(iii).

 

(2)
Limitation on Payments. Subject to the “best net” exception described in Section 6(f)(ii)(3) below,
in order to avoid the imposition of the Excise Tax, the total payments to which Executive is entitled under this Agreement or otherwise
will be reduced to the extent necessary to avoid exceeding the 280G Cap minus $1.00.

 

(3)
“Best Net” Exception. If Executive’s Total Change in Control Payments minus the Excise Tax payable on
all such payments exceeds the 280G Cap minus $1.00, then the total payments to which Executive is entitled under this Agreement or otherwise
will not be reduced pursuant to Section 6(f)(ii)(2). If the “best net” exception applies, Executive shall be responsible
for paying any Excise Tax (and income or other taxes) that may be imposed on Executive pursuant to Code Section 4999 or otherwise.

 

(4)
Calculating the 280G Cap. If the Company believes that the provisions of Section 6(f)(ii)(2) may apply to reduce
the total payments to which Executive is entitled under this Agreement or otherwise, it will notify Executive as soon as possible. The
Company then will engage a “Consultant” (a law firm, a certified public accounting firm, and/or a firm of recognized
Executive compensation consultants) to make any necessary determinations and to perform any necessary calculations required in order
to implement the rules set forth in this Section 6. The Consultant shall provide detailed supporting calculations to both the
Company and Executive and all fees and expenses of the Consultant shall be borne by the Company.

 

If
the Consultant determines that the limitations of Section 6(f)(ii)(2) apply, then the total payments to which Executive is entitled
under this Agreement or otherwise will be reduced to the extent necessary to eliminate the amount in excess of the 280G Cap. Such payments
will be made at the times specified herein, in the maximum amount that may be paid without exceeding the 280G Cap. The balance, if any,
will then be paid, if due, after the opinions called for by Section 6 have been received.

 

    	6

    	 

    

 

If
the amount paid to Executive by the Company is ultimately determined by the Internal Revenue Service to have exceeded the limitations
of Section 6(f)(ii)(2), Executive must repay the excess promptly on demand of the Company. If it is ultimately determined by the
Consultant or the Internal Revenue Service that a greater payment should have been made to Executive, the Company shall pay Executive
the amount of the deficiency within 30 days of such determination.

 

As
a general rule, the Consultant’s determination shall be binding on Executive and the Company. Section 280G and the Excise Tax rules
of Section 4999, however, are complex and uncertain and, as a result, the Internal Revenue Service may disagree with the Consultant’s
conclusions. If the Internal Revenue Service determines that the 280G Cap is actually lower than calculated by the Consultant, the 280G
Cap will be recalculated by the Consultant. Any payment in excess of the revised 280G Cap then will be repaid by Executive to the Company.
If the Internal Revenue Service determines that the actual 280G Cap exceeds the amount calculated by the Executive, the Company shall
pay Executive any shortage.

 

The
Company has the right to challenge any determinations made by the Internal Revenue Service. If the Company agrees to indemnify Executive
from any taxes, interest and penalties that may be imposed on Executive in connection with such challenge, then Executive must cooperate
fully with the Company. the Company shall bear all costs associated with the challenge of any determination made by the Internal Revenue
Service and the Company shall control all such challenges.

 

Executive
must notify the Company in writing of any claim or determination by the Internal Revenue Service that, if upheld, would result in the
payment of Excise Taxes. Such notice shall be given as soon as possible but in no event later than 15 days following Executive’s
receipt of the notice of the Internal Revenue Service’s position.

 

(5)
Effect of Repeal. If the provisions of Code Sections 280G and 4999 are repealed without succession, this Section 6(f)(ii)
will not apply. In addition, if this provision does not apply to Executive for whatever reason (e.g., because Executive is
not a “disqualified individual” for purposes of Code Section 280G), this Section will not apply.

 

(g)
Reserved.

 

    	7

    	 

    

 

(h)
Compliance with Code Section 409A. The payments and benefits provided under Sections 6(a) and 6(b) are intended to be exempt
from or comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will
be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be
exempt or so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take
such reasonable actions that are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to Executive under Section 409A. Notwithstanding anything to the contrary in this Agreement, no severance pay
or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance
payments or separation benefits, are considered deferred compensation not exempt under Section 409A (together, the “Deferred
Payments”) will be paid or otherwise provided until Executive has a Separation from Service (as defined below). Any payment
under this Section 6 is subject to the provisions of this Section 6(h) (except for a payment pursuant to Disability or
death under Section 6(d) or (e)). If Executive is a “Specified Employee” of the Company for purposes of Code
Section 409A at the time of a payment event in Section 6(b) and if no exception from Code Section 409A applies in whole or in
part, the Deferred Payments will be made to Executive by the Company on the first day of the seventh month following the date of the
Executive’s Separation from Service (the “409A Payment Date”). Should this Section 6(h) result in a delay
of payments to Executive, the Company will begin to make the payments as described in this Section 6, provided that any amounts
that would have been payable earlier but for the application of this Section 6(h), will be paid in lump-sum on the 409A Payment
Date. The balance of the severance payments will be payable in accordance with regular payroll timing and the COBRA premiums will be
paid monthly. Each payment, installment and benefit payable under this Agreement is intended to constitute a separate payment for purposes
of Section 1.409A-2(b)(2) of the Treasury Regulations. For purposes of the provision, the term Specified Employee has the meaning in
Code Section 409A(a)(2)(B)(i), or any successor provision and the issued treasury regulations and rulings. “Separation from
Service” or “Termination of Employment” means, with respect to any payment that is subject to Code Section
409A, either (a) termination of Executive’s employment with Company and all affiliates, or (b) a permanent reduction in the level
of bona fide services Executive provides to Company and all affiliates to an amount that is 20% or less of the average level of bona
fide services Executive provided to Company in the immediately preceding 36 months, with the level of bona fide service calculated in
accordance with Treasury Regulations Section 1.409A-1(h)(1)(ii). Solely for purposes of determining whether Executive has a “Separation
from Service,” Executive’s employment relationship is treated as continuing while Executive is on military leave, sick leave,
or other bona fide leave of absence (if the period of such leave does not exceed six months, or if longer, so long as Executive’s
right to reemployment with Company or an affiliate is provided either by statute or contract). If Executive’s period of leave exceeds
six months and Executive’s right to reemployment is not provided either by statute or by contract, the employment relationship
is deemed to terminate on the first day immediately following the expiration of such six-month period. Whether a termination of employment
has occurred will be determined based on all of the facts and circumstances and in accordance with regulations issued by the United States
Treasury Department pursuant to Code Section 409A. If the payment is not subject to Code Section 409A, the term termination of employment
will be given its ordinary meaning.

 

(i)
Mitigation/Offset. The Executive is under no obligation to seek other Employment or to otherwise mitigate the obligations
of the Company under this Agreement, and the Company may not offset against amounts or benefits due Executive under this Agreement or
otherwise on account of any claim (other than any preexisting debts then due in accordance with their terms) the Company or its affiliates
may have against him or any remuneration or other benefit earned or received by Executive after such termination.

 

7.
Executive’s Other Obligations.

 

(a)
Confidentiality Agreement. Executive’s acceptance of this Agreement and Executive’s employment with the Company
is contingent upon the execution, and delivery to an officer of the Company, of the Company’s Confidential Information and Invention
Assignment Agreement, a copy of which is attached hereto as Attachment A for Executive’s review and execution (the “Confidentiality
Agreement”), prior to or on Executive’s Commencement Date.

 

    	8

    	 

    

 

(b)
Survival. The provisions of this Section 7 shall survive the termination of this Agreement.

 

(c)
Cooperation; No Disparagement. Following the Termination of this Agreement, for whatever reason, Executive agrees to provide
reasonable assistance to the Company (including assistance with litigation matters), upon the Company’s request, concerning the
Executive’s previous employment responsibilities and functions with the Company. In consideration for such cooperation, but only
if the Executive is not receiving severance pursuant to this Agreement, Company will compensate Executive for the time Executive spends
on such cooperative efforts (at an hourly rate based on Executive’s Base Salary during the year preceding the date of termination)
and Company will reimburse Executive for his reasonable out-of-pocket expenses Executive incurs in connection with such cooperative efforts.
Additionally, at all times after the Executive’s employment with the Company has terminated, Company (defined for this purpose
only as any Company press release and the Board, the CEO and the CEO’s direct reports, and no other employees) and Executive agree
to refrain from making any disparaging or derogatory remarks, statements and/or publications regarding the other, its employees or its
services.

 

8.
General Provisions.

 

(a)
Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any applicable
law, then, if legally permissible, such provision will be deemed to be modified to the extent necessary to render it legal, valid and
enforceable, and if no modification will make the provision legal, valid and enforceable, then this Agreement will be construed as if
not containing the provision held to be invalid, and the rights and obligations of the parties will be construed and enforced accordingly.

 

(b)
Assignment by Company. Nothing in this Agreement precludes the Company from consolidating or merging into or with, or transferring
all or substantially all of its assets to, another corporation or entity that assumes this Agreement and all obligations and undertakings
hereunder. Upon any consolidation, merger or transfer of assets and assumption, the term “Company” means any other corporation
or entity, as appropriate, and this Agreement will continue in full force and effect. This Agreement and all of Executive’s rights
and obligations hereunder are personal to Executive and may not be transferred or assigned by Executive at any time.

 

(c)
Entire Agreement. This Agreement (and any agreements referred to herein) and any agreements concerning equity compensation
or other benefits, embody the parties’ complete agreement with respect to the subject matter in this Agreement and supersede any
prior written or contemporaneous oral, understandings or agreements between the parties that may have related in any way to the subject
matter in this Agreement, including but not limited to any offer letter provided to or signed by Executive. This Agreement may be amended
only in writing executed by the Company and Executive.

 

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(d)
Governing Law. Because it is mutually agreed that it is in the best interests of the Company and all of its employees that
a uniform body of law consistently interpreted be applied to the employment agreements to which the Company is a party, the laws of the
State of California will govern the interpretation and application of all of the provisions of this Agreement.

 

(e)
Notice. Any notice required or permitted under this Agreement must be in writing and will be deemed to have been given
when delivered personally or by overnight courier service or three days after being sent by mail, postage prepaid, at the address indicated
below or to such changed address as such person may subsequently give such notice of:

 

	 	if
    to the Company:	Lygos
    Holdings, Inc.
	 	 	1249
    Eighth St.
	 	 	Berkeley,
    CA 94710
	 	 	 
	 	if
    to Executive:	George
    Murray

 

(f)
Withholding. All of Executive’s compensation under this Agreement will be subject to deduction and withholding authorized
or required by applicable law.

 

(g)
Non-Waiver; Construction; Counterparts. The failure in any one or more instances of a party to insist upon performance
of any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege conferred in this Agreement, or the
waiver by that party of any breach of any of the terms, covenants or conditions of this Agreement, will not be construed as a subsequent
waiver of any such terms, covenants, conditions, rights or privileges, but the waiver will continue and remain in full force and effect
as if no such forbearance or waiver had occurred. No waiver is effective unless it is in writing and signed by an authorized representative
of the waiving party. This Agreement will be construed fairly as to both parties and not in favor of, or against, either party, regardless
of which party prepared the Agreement. This Agreement may be executed in multiple counterparts, each of which will be deemed to be an
original, and all such counterparts will constitute but one instrument.

 

(h)
Successors and Assigns. This Agreement is solely for the benefit of the parties and their respective successors, assigns,
heirs and legatees. Nothing in this Agreement will be construed to provide any right to any other entity or individual.

 

(i)
Indemnification. The Company agrees to indemnify the Executive to the fullest extent provided under the Company’s
limited liability company agreement and By-Laws, on the same terms and conditions as indemnification is generally provided to the Company’s
officers and directors, in the event that he was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, by reason of the fact that the Executive is or was a director, officer, employee or agent of the Company
or any of its affiliates; provided, however, that the Executive is not entitled to indemnification under this Section 9(i) relating
to any claims, actions, suits or proceedings arising from his breach of this Agreement.

 

10.
Dispute Resolution. Any dispute, controversy, or claim, whether contractual or non-contractual, including without limitation
any federal or state statutory claim, common law or tort claim, or claim for attorneys’ fees, between the parties arising directly
or indirectly out of or connected with this Agreement and/or the parties’ employment relationship, unless mutually settled by the
parties hereto, must be resolved by binding arbitration conducted pursuant to the rules of the American Arbitration Association (the
“AAA”) in effect at the time. The parties agree that before proceeding to arbitration, they will mediate their dispute(s)
before a mutually selected mediator. If the parties are unable to mutually select a mediator within thirty (30) days (or as otherwise
agreed), then either party may request the AAA’s assistance in appointing a mediator. Any arbitration will be conducted by an arbitrator
mutually selected by the parties. If the parties are unable to mutually select an arbitrator within thirty (30) days (or as otherwise
agreed), then either party may request the AAA’s assistance in selecting an arbitrator. All such disputes, controversies or claims
will be conducted by a single arbitrator, unless the parties mutually agree that the arbitration will be conducted by a panel of three
arbitrators. The arbitration shall be conducted pursuant to Employment Arbitration Rules of the AAA in effect at the time, or as otherwise
agreed. The arbitrator(s) may award any relief available in a court of competent jurisdiction. The resolution of the dispute by the arbitrator(s)
will be final, binding, nonappealable (except as provided by the Federal Arbitration Act) and fully enforceable by a court of competent
jurisdiction pursuant to the Federal Arbitration Act. The arbitration award will be in writing and will include a statement of the reasons
for the award. The arbitration will be held at the location that is mutually agreed to by the parties. The Company will initially pay
all AAA, mediation, and arbitrator’s fees and costs. The arbitrator(s) may award reasonable attorneys’ fees and/or costs
to the prevailing party. The Company and the Executive agree that each may bring claims against the other in an individual capacity only,
and not as a class representative or class member in any purported collective, class or representative proceeding. Further, unless both
the Company and the Executive agree otherwise, the Arbitrator may not consolidate more than one party’s claims into a single arbitration
proceeding and may not otherwise preside over any form of a collective, class or representative proceeding.

 

    	10

    	 

    

 

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

 

	 	FLEXIBLE
    SOLUTIONS INTERNATIONAL, INC.,
	 	 	 
	 	By:	/s/
    John Bientjes 4-17-22
	 	Name: 	John
    Bientjes
	 	Title:	Director,
    Audit Committee Chair and Compensation Committee Member
	 	 	 
	 	EXECUTIVE
	 	 	 
	 	 	/s/
    George Murray 4-17-22
	 	Name:	George
    Murray

 

Attachment
A: Confidential Information and Invention Assignment Agreement

 

    	11

    	 

    

 

ATTACHMENT
A

 

CONFIDENTIAL
INFORMATION AND INVENTION ASSIGNMENT AGREEMENT

 

[See
Attached]

 

    	12Exhibit
10.13
 

lygos,
inc.

 

1249
Eight St.

Berkeley,
CA 94710

 

May
3, 2022

Bryce
Dille

 

	Re:	 	EMPLOYMENT
    AGREEMENT

 

Dear
Bryce:

 

This
Employment Agreement (the “Agreement”) between you (referred to hereinafter as the “Executive”)
and Lygos, Inc., a Delaware corporation (the “Company”) sets forth the terms and conditions that shall govern
the period of Executive’s continued employment with the Company (referred to hereinafter as “Employment”
or the “Employment Period”).

 

1.
Duties and Scope of Employment.

 

(a)
At-Will Employment. Executive will continue as a full-time employee with the Company under the terms of which will be governed
by this Agreement. Executive’s Employment with the Company is for no specified period and constitutes “at will” employment.
As a result, Executive is free to terminate Employment at any time, with or without advance notice, and for any reason or for no reason.
Similarly, the Company is free to terminate Executive’s Employment at any time, with or without advance notice, and with or without
Cause (as defined below). Furthermore, although the terms and conditions of Executive’s Employment with the Company may change
over time, nothing shall change the at-will nature of Executive’s Employment.

 

(b)
Position and Responsibilities. During the Employment Period, the Company agrees to continue to employ Executive in the
position of Chief Financial Officer. Executive will report to the Company’s Chief Executive Officer, or to such other Person as
the Company subsequently may determine (your “Supervisor”), and Executive will be working out of the Company’s
office in Berkeley, CA. Executive will perform the duties and have the responsibilities and authority customarily performed and held
by an employee in Executive’s position or as otherwise may be assigned or delegated to Executive by your Supervisor.

 

(c)
Obligations to the Company. During the Employment Period, Executive shall perform Executive’s duties faithfully and
to the best of Executive’s ability and will devote Executive’s full business efforts and time to the Company. During the
Employment Period, without the prior written approval of your Supervisor, Executive shall not render services in any capacity to any
other Person and shall not act as a sole proprietor or partner of any other Person or own more than five percent (5%) of the stock of
any other corporation. Notwithstanding the foregoing, Executive may serve on civic or charitable boards or committees, deliver lectures,
fulfill speaking engagements, teach at educational institutions, or manage personal investments without advance written consent of your
Supervisor; provided that such activities do not individually or in the aggregate interfere with the performance of Executive’s
duties under this Agreement or create a potential business or fiduciary conflict. Executive shall comply with the Company’s policies
and rules, as they may be in effect from time to time during Executive’s Employment.

 

    	 

    	 

    

 

(d)
Business Opportunities. During Executive’s Employment, Executive shall promptly disclose to the Company each business
opportunity of a type, which based upon its prospects and relationship to the business of the Company or its affiliates, the Company
might reasonably consider pursuing. In the event that Executive’s Employment is terminated for any reason, the Company or its affiliates
shall have the exclusive right to participate in or undertake any such opportunity on their own behalf without any involvement by or
compensation to Executive under this Agreement.

 

(e)
No Conflicting Obligations. Executive represents and warrants to the Company that Executive is under no obligations or
commitments, whether contractual or otherwise, that are inconsistent with Executive’s obligations under this Agreement or that
would otherwise prohibit Executive from performing Executive’s duties with the Company. In connection with Executive’s Employment,
Executive shall not use or disclose any trade secrets or other proprietary information or intellectual property in which Executive or
any other Person has any right, title or interest and Executive’s Employment will not infringe or violate the rights of any other
Person. Executive represents and warrants to the Company that Executive has returned all property and confidential information belonging
to any prior employer.

 

2.
Cash and Incentive Compensation.

 

(a)
Base Salary. The Company shall pay Executive, as compensation for Executive’s services, a base salary (with a retroactive
effective date as of January 1, 2022) at a gross annual rate of $375,000, less all required tax withholdings and other applicable deductions,
in accordance with the Company’s standard payroll procedures; provided, however, upon the Closing Date (as defined below), the
Executive’s base salary shall be increased to a gross annual rate of $450,000. The annual compensation specified in this subsection
(a), together with any permitted modifications in such compensation that the Company may make from time to time, is referred to in this
Agreement as the “Base Salary.” Executive’s Base Salary will be subject to review and potential adjustments
that will be made based upon the Company’s normal performance review practices. Effective as of the date of any change to Executive’s
Base Salary, the Base Salary as so changed shall be considered the new Base Salary for all purposes of this Agreement.

 

(b)
Signing Bonus. The Company will pay you a one-time signing bonus of $260,000, which will be paid to you, less applicable
withholdings and required deductions, within 30 days following the date of this Agreement, subject to your continued employment through
such payment date.

 

(c)
Cash Incentive Bonus. Effective as of the Closing Date, Executive will be eligible to be considered for an annual cash
incentive bonus (the “Cash Bonus”) each calendar year during the Employment Period based upon the achievement
of certain objective or subjective criteria (collectively, the “Performance Goals”). In compliance with all
relevant legal requirements and based on Executive’s level within the Company, the Performance Goals for Executive’s Cash
Bonus for a particular year will be established by, and in the sole discretion of, the Company’s Board of Directors (the “Board”),
any Compensation Committee of the Board (the “Committee”), or a delegate of either the Board or the Committee
(the “Delegate”), as applicable. The initial target amount for any such Cash Bonus will be 50% of Executive’s
Base Salary (the “Target Bonus Percentage”), less all required tax withholdings and other applicable deductions.
The determinations of the Board, the Committee or the Delegate, as applicable, with respect to such Cash Bonus or the Target Bonus Percentage
shall be final and binding. Executive’s Target Bonus Percentage for any subsequent year may be adjusted up or down, as determined
in the sole discretion of the Board, the Committee or the Delegate, as applicable. Executive shall not earn a Cash Bonus unless Executive
is employed by the Company on the date when such Cash Bonus is actually paid by the Company.

 

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(d)
Stock Options.

 

(i)
First Option. Subject to the approval of the Board, the Committee or the Delegate, as applicable, the Company shall grant
Executive a stock option, to purchase 1,200,000 shares of the Company’s common stock (the “First Option”).
The First Option shall be granted as soon as reasonably practicable following the date of this Agreement. The exercise price per share
will be equal to the fair market value per share on the date the First Option is granted, as determined by the Board in good faith. There
is no guarantee that the Internal Revenue Service will agree with this value. Executive should consult with Executive’s own tax
advisor concerning the tax risks associated with accepting an option to purchase a share of the Company’s common stock. The term
of the First Option shall be ten (10) years, subject to earlier expiration in the event of the termination of Executive’s services
to the Company. Subject to any vesting acceleration rights Executive may have, the First Option will vest on a monthly basis over a 4-year
period, subject to Executive continuing to provide services to the Company through each vesting date. The First Option will be subject
to the terms, definitions and provisions of the Company’s 2021 Equity Incentive Plan (the “Lygos Plan”)
and the stock option agreement by and between Executive and the Company evidencing the grant of the First Option, which Executive will
be required to sign, both of which documents are incorporated herein by reference.

 

(ii)
Second Option. Following the Closing Date, and subject to the approval of the Board, the Committee or the Delegate, as
applicable, the Company shall grant Executive a stock option with a grant date fair value of $3,000,000 (the “Second Option”).
The Second Option shall be granted as soon as reasonably practicable after the Closing Date. The exercise price per share will be equal
to the fair market value per share on the date the Second Option is granted, as determined by the Board in good faith. There is no guarantee
that the Internal Revenue Service will agree with this value. Executive should consult with Executive’s own tax advisor concerning
the tax risks associated with accepting an option to purchase a share of the Company’s common stock. The term of the Second Option
shall be ten (10) years, subject to earlier expiration in the event of the termination of Executive’s services to the Company.
Subject to any vesting acceleration rights Executive may have, the Second Option will vest on a monthly basis over a 4-year period, subject
to Executive continuing to provide services to the Company through each vesting date. The Second Option will be subject to the terms,
definitions and provisions of the Company’s then-current equity incentive plan (the “Equity Plan”) and
the stock option agreement by and between Executive and the Company evidencing the grant of the Second Option, which Executive will be
required to sign, both of which documents are incorporated herein by reference.

 

    	 	- 3 -	 

    	 

    

 

(iii)
Third Option. Following the Closing Date, and subject to the approval of the Board, the Committee or the Delegate, as applicable,
and subject to the achievement of certain Company performance milestones established by, and in the sole discretion of, the Board, the
Committee or the Delegate, as applicable, Executive shall be eligible to receive a stock option grant with a grant date fair value of
$3,000,000 (the “Third Option”). The exercise price per share will be equal to the fair market value per share
on the date the Third Option is granted, as determined by the Board in good faith. There is no guarantee that the Internal Revenue Service
will agree with this value. Executive should consult with Executive’s own tax advisor concerning the tax risks associated with
accepting an option to purchase a share of the Company’s common stock. The term of the Third Option shall be ten (10) years, subject
to earlier expiration in the event of the termination of Executive’s services to the Company. Subject to any vesting acceleration
rights Executive may have, the Third Option will vest on a monthly basis over a 4-year period, subject to Executive continuing to provide
services to the Company through each vesting date. The Third Option will be subject to the terms, definitions and provisions of the Equity
Plan and the stock option agreement by and between Executive and the Company evidencing the grant of the Third Option, which Executive
will be required to sign, both of which documents are incorporated herein by reference.

 

3.
Employee Benefits. During the Employment Period, Executive shall be eligible to (a) receive paid time off (“PTO”)
in accordance with the Company’s PTO policy, as it may be amended from time to time and (b) participate in the employee benefit
plans maintained by the Company and generally available to similarly situated employees of the Company, subject in each case to the generally
applicable terms and conditions of the plan or policy in question and to the determinations of any Person or committee administering
such employee benefit plan or policy. The Company reserves the right to cancel or change the employee benefit plans, policies and programs
it offers to its employees at any time.

 

4.
Business Expenses. The Company will reimburse Executive for necessary and reasonable business expenses incurred in connection
with Executive’s duties hereunder upon presentation of an itemized account and appropriate supporting documentation, all in accordance
with the Company’s generally applicable policies.

 

5.
Rights Upon Termination. Except as expressly provided in Section 6, upon the termination of Executive’s Employment,
Executive shall only be entitled to (i) the accrued but unpaid Base Salary compensation and PTO, (ii) other benefits earned and the reimbursements
described in this Agreement or under any Company-provided plans, policies, and arrangements for the period preceding the effective date
of the termination of Employment, each in accordance with the governing documents and policies of any such benefits, reimbursements,
plans and arrangements, and (iii) such other compensation or benefits from the Company as may be required by law (collectively, the “Accrued
Benefits”).

 

    	 	- 4 -	 

    	 

    

 

6.
Termination Benefits.

 

(a)
Termination without Cause or Resignation for Good Reason Other Than in Connection with a Change in Control. If, other than
during the twelve (12)-month period immediately following a Change in Control, (x) the Company terminates Executive’s employment
with the Company for a reason other than Cause, Executive becoming Disabled or Executive’s death, or (y) Executive resigns from
such employment for Good Reason, then, subject to Section 7, Executive will receive the following severance benefits from the Company:

 

(i)
Accrued Compensation. The Company will pay Executive all Accrued Benefits.

 

(ii)
Severance Payment. Executive will receive continuing payments of severance pay based on the Monthly Base Salary Rate (as defined
below) for a period of 3 months following Executive’s termination of employment (the “Severance Period”),
less all required tax withholdings and other applicable deductions, which will be paid in accordance with the Company’s regular
payroll procedures commencing on the Release Deadline (as defined in Section 7(a)); provided, that the first payment
shall include any amounts that would have been paid to Executive if payment had commenced on the date of Executive’s separation
from service; provided, further, that if Executive accepts new employment during the Severance Period, Executive
shall notify the Company of such new employment and all severance payments shall cease as of the date Executive commences such new employment.

 

(iii)
Continued Employee Benefits. If Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”) for Executive and Executive’s eligible dependents, within the time
period prescribed pursuant to COBRA, the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels
in effect immediately prior to Executive’s termination or resignation) until the earlier of (A) the three (3) month period following
Executive’s termination of employment, or (B) the date upon which Executive and/or Executive’s eligible dependents become
covered under similar plans. COBRA reimbursements will be made by the Company to Executive consistent with the Company’s normal
expense reimbursement policy and will be taxable to the extent required to avoid adverse consequences to Executive or the Company under
either Code Section 105(h) or the Patient Protection and Affordable Care Act of 2010.

 

(b)
Termination without Cause or Resignation for Good Reason in Connection with a Change in Control. If during the twelve (12)-month
period immediately following a Change in Control, (x) the Company terminates Executive’s employment with the Company for a reason
other than Cause, Executive becoming Disabled or Executive’s death, or (y) Executive resigns from such employment for Good Reason,
then, subject to Section 7, Executive will receive the following severance benefits from the Company in lieu of the severance benefits
described in Section 6(a) above:

 

    	 	- 5 -	 

    	 

    

 

(i)
Accrued Compensation. The Company will pay Executive all Accrued Benefits.

 

(ii)
Severance and Continued Employee Benefits. The Executive will be entitled to the benefits described in Section 6(a)(ii) and (iii)
above.

 

(iii)
Equity. All of Executive’s unvested and outstanding equity awards shall immediately vest and become exercisable as of the
date of Executive’s termination.

 

(c)
Disability; Death; Voluntary Resignation; Termination for Cause. If Executive’s employment with the Company is terminated
due to (i) Executive becoming Disabled or Executive’s death, (ii) Executive’s voluntary resignation (other than for Good
Reason during the twelve (12) month period immediately following a Change of Control), or (iii) the Company’s termination of Executive’s
employment with the Company for Cause, then Executive or Executive’s estate (as the case may be) will receive the Accrued Benefits,
but will not be entitled to any other compensation or benefits from the Company except to the extent required by law (for example, COBRA).
All Accrued Benefits shall in all cases be paid within thirty (30) days of Executive’s termination of employment (or such earlier
date as required by applicable law) pursuant to this Section 6(c).

 

(d)
Timing of Payments. Subject to any specific timing provisions in Section 6(a) or 6(b), as applicable, or the provisions
of Section 7, payment of the severance and benefits hereunder shall be made or commence to be made as soon as practicable following Executive’s
termination of employment.

 

(e)
Exclusive Remedy. In the event of a termination of Executive’s employment with the Company (or any parent, subsidiary
or successor of the Company), the provisions of this Section 6 are intended to be and are exclusive and in lieu of any other rights or
remedies to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement
(other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses). Executive will
be entitled to no other severance, benefits, compensation or other payments or rights upon a termination of employment, including, without
limitation, any severance payments and/or benefits provided in the Employment Agreement, other than those benefits expressly set forth
in Section 6 of this Agreement or pursuant to written equity award agreements with the Company.

 

(f)
No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement,
nor will any earnings that Executive may receive from any other source reduce any such payment.

 

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7.
Conditions to Receipt of Severance.

 

(a)
Release of Claims Agreement. The receipt of any severance payments or benefits pursuant to this Agreement is subject to
Executive signing and not revoking a separation agreement and release of claims in a form acceptable to the Company (the “Release”),
which must become effective no later than the sixtieth (60th) day following Executive’s termination of employment (the “Release
Deadline”), and if not, Executive will forfeit any right to severance payments or benefits under this Agreement. To become
effective, the Release must be executed by Executive and any revocation periods (as required by statute, regulation, or otherwise) must
have expired without Executive having revoked the Release. In addition, in no event will severance payments or benefits be paid or provided
until the Release actually becomes effective. If the termination of employment occurs at a time during the calendar year where the Release
Deadline could occur in the calendar year following the calendar year in which Executive’s termination of employment occurs, then
any severance payments or benefits under this Agreement that would be considered Deferred Payments (as defined in Section 7(d)(i)) will
be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or
such later time as required by (i) the payment schedule applicable to each payment or benefit as set forth in Section 6, (ii) the date
the Release becomes effective, or (iii) Section 7(d)(ii); provided that the first payment shall include all amounts that would have been
paid to Executive if payment had commenced on the date of Executive’s termination of employment.

 

(b)
Non-Solicitation. The receipt of any termination benefits pursuant to Section 6 will be subject to Executive not violating
the provisions of Section 9. In the event Executive breaches the provisions of Section 9, all continuing payments and benefits to which
Executive may otherwise be entitled pursuant to Section 6 will immediately cease

 

(c)
Confidential Information Agreement. Executive’s receipt of any payments or benefits under Section 6 will be subject
to Executive continuing to comply with the terms of the Confidentiality Agreement (as defined in Section 11 below).

 

(d)
Section 409A.

 

(i)
Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any,
pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred
compensation not exempt under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided
until Executive has a “separation from service” within the meaning of Section 409A. And for purposes of this Agreement, any
reference to “termination of employment,” “termination” or any similar term shall be construed to mean a “separation
from service” within the meaning of Section 409A. Similarly, no severance payable to Executive, if any, pursuant to this Agreement
that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive
has a “separation from service” within the meaning of Section 409A.

 

(ii)
Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the
meaning of Section 409A at the time of Executive’s termination of employment (other than due to death), then the Deferred Payments,
if any, that are payable within the first six (6) months following Executive’s separation from service, will become payable on
the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation
from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment
or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but
prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will
be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments
will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment, installment and benefit
payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

    	 	- 7 -	 

    	 

    

 

(iii)
Without limitation, any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule
set forth in Section 1.409A-1(b)(4) of the Treasury Regulations is not intended to constitute Deferred Payments for purposes of clause
(i) above.

 

(iv)
Without limitation, any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from
service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit is not intended
to constitute Deferred Payments for purposes of clause (i) above. Any payment intended to qualify under this exemption must be made within
the allowable time period specified in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations.

 

(v)
To the extent that reimbursements or in-kind benefits under this Agreement constitute non-exempt “nonqualified deferred compensation”
for purposes of Section 409A, (1) all reimbursements hereunder shall be made on or prior to the last day of the calendar year following
the calendar year in which the expense was incurred by Executive, (2) any right to reimbursement or in-kind benefits shall not be subject
to liquidation or exchange for another benefit, and (3) the amount of expenses eligible for reimbursement or in-kind benefits provided
in any calendar year shall not in any way affect the expenses eligible for reimbursement or in-kind benefits to be provided, in any other
calendar year.

 

(vi)
The payments and benefits provided under Sections 6 are intended to be exempt from or comply with the requirements of Section 409A so
that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section
409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. The Company and Executive agree to
work together in good faith to consider amendments to this Agreement and to take such reasonable actions that are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

 

8.
Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

 

(a)
Cause. “Cause” means:

 

(i)
Executive’s gross negligence or willful misconduct in the performance of his or her duties and responsibilities to the Company
or Executive’s violation of any written Company policy;

 

(ii)
Executive’s conviction of, or pleading guilty or nolo contendre to, any felony or a lesser crime involving dishonesty or moral
turpitude;

 

    	 	- 8 -	 

    	 

    

 

(iii)
Executive’s commission of any act of fraud, theft, embezzlement, financial dishonesty or any other willful misconduct that has
caused or is reasonably expected to result in injury to the Company, whether or not related to performance of employment obligations;

 

(iv)
Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any affiliate of the
Company, or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s relationship with
the Company;

 

(v)
Executive’s material breach of any obligations under any written agreement or covenant with the Company or any affiliate of the
Company, and Executive’s failure to cure such breach within 30 days after receiving written notice thereof;

 

(vi)
Executive’s alcohol abuse or other substance abuse;

 

(vii)
Executive’s continued failure to substantially perform Executive’s employment duties and failure to cure such failure within
30 days after receipt of a written demand of performance from the Company (for clarity, it is noted that this clause (vii) refers to
such matters as failure to attend work or omission of specific duties from the work performed, and not to disputes with respect to the
quality of work performed in good faith).

 

(a)
Change in Control. “Change in Control” will mean and include any of the following: (i) a merger or consolidation
of the Company with or into any other corporation or other entity (A) in which the Company is not the surviving entity or (B) in which
the Company is the surviving entity but in which holders of the Company’s voting securities immediately prior to such merger or
consolidation will not continue to hold at least a majority of the outstanding voting securities of the Company; (ii) a sale, lease,
exchange or other transfer (in one transaction or a related series of transactions, but excluding any merger or consolidation not having
an effect described in (a) above) of all or substantially all of the Company’s assets; or (iii) the acquisition by any person or
any group of persons, acting together in any transaction or related series of transactions, of such quantity of the Company’s voting
securities as causes such person, or group of persons, to own beneficially, directly or indirectly, as of the time immediately after
such transaction or series of transactions, 50% or more of the combined voting power of the voting securities of the Company other than
as a result of (i) an acquisition of securities directly from the Company or (ii) an acquisition of securities by the Company which by
reducing the voting securities outstanding increases the proportionate voting power represented by the voting securities owned by any
such person or group of persons to 50% or more of the combined voting power of such voting securities; provided that a Change of Control
will not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received
by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof.

 

(b)
Closing Date. “Closing Date” means the actual date of closing of the Merger.

 

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

 

    	 	- 9 -	 

    	 

    

 

(d)
Disability. “Disability” or “Disabled” means that Executive is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which
has lasted, or can be expected to last, for a continuous period of not less than one (1) year.

 

(e)
Good Reason. Good Reason” means Executive’s termination of employment within thirty (30) days following the
expiration of any cure period (discussed below) following the occurrence of one or more of the following, without Executive’s consent:

 

(i)
A material reduction of Executive’s duties, authority or responsibilities, relative to Executive’s duties, authority or responsibilities
in effect immediately prior to such reduction; provided, however, that a reduction in duties, authority or responsibilities solely by
virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Financial Officer of the Company
remains as such following a change of control but is not made the Chief Financial Officer of the acquiring corporation) will not constitute
Good Reason;

 

(ii)
A material reduction in Executive’s Base Salary (except where there is a reduction applicable to all similarly situated executive
officers generally); provided, that a reduction of less than ten percent (10%) will not be considered a material reduction in Base Salary;

 

(iii)
A material change in the geographic location of Executive’s primary work facility or location; provided, that a relocation of less
than fifty (50) miles from Executive’s then-present work location will not be considered a material change in geographic location;
or

 

(iv)
A material breach by the Company of a material provision of this Agreement.

 

Executive
will not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds
for Good Reason within sixty (60) days of the initial existence of the grounds for Good Reason and a reasonable cure period of not less
than thirty (30) days following the date the Company receives such notice during which such condition must not have been cured.

 

(f)
Governmental Authority. “Governmental Authority” means any federal, state, municipal, foreign or other government,
governmental department, commission, board, bureau, agency or instrumentality, or any private or public court or tribunal.

 

(g)
Merger. “Merger” has the meaning ascribed to it in that certain Agreement and Plan of Merger and Reorganization,
dated as of April 17, 2022, by and among Flexible Solutions International Inc., an Alberta, Canada corporation, the Company and those
certain other parties identified therein.

 

(h)
Person. “Person” shall be construed in the broadest sense and means and includes any natural person, a partnership,
a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization
and other entity or Governmental Authority.

 

(i)
Section 409A. “Section 409A” means Section 409A of the Code, and the final regulations and any guidance promulgated
thereunder or any state law equivalent.

 

    	 	- 10 -	 

    	 

    

 

(j)
Section 409A Limit. “Section 409A Limit” shall mean two (2) times the lesser of: (i) Executive’s annualized
compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding Executive’s taxable
year of his or her separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which Executive’s separation from service occurred.

 

9.
Restrictive Covenants.

 

(a)
Non-Solicitation. During the period commencing on the date of this Agreement and continuing until the first anniversary of the
date when Executive’s Employment terminated for any reason, Executive shall not directly or indirectly, personally or through others,
solicit, recruit or attempt to solicit or recruit (on Executive’s own behalf or on behalf of any other Person) either (i) any current
employee or any consultant of the Company or any of the Company’s affiliates, (ii) any former employee or consultant of the Company
or any of the Company’s affiliates who left the Company’s (or such affiliate’s) service within the six (6) months preceding
the Executive’s termination date, or (iii) the business of any customer of the Company or any of the Company’s affiliates
on whom Executive called or with whom Executive became acquainted during Executive’s Employment. Executive represents that Executive
is (i) familiar with the foregoing covenant not to solicit, and (ii) fully aware of Executive’s obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.

 

(b)
Non-Disparagement. Executive shall not make any remarks disparaging the conduct or character of the Company, any of the Company’s
affiliates, any of the Company’s or any Company affiliates’ current or former employees, officers, directors, successors
or assigns.

 

10.
Golden Parachute.

 

(a)
Anything in this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company or otherwise
(“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the
Code; and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the
largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax; or (y) the largest portion,
up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment
taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt,
on an after-tax basis, of the greater amount of the Payment. Any reduction made pursuant to this Section 10(a) shall be made in accordance
with the following order of priority: (i) stock options whose exercise price exceeds the fair market value of the optioned stock (“Underwater
Options”) (ii) Full Credit Payments (as defined below) that are payable in cash, (iii) non-cash Full Credit Payments that
are taxable, (iv) non-cash Full Credit Payments that are not taxable (v) Partial Credit Payments (as defined below) and (vi) non-cash
employee welfare benefits. In each case, reductions shall be made in reverse chronological order such that the payment or benefit owed
on the latest date following the occurrence of the event triggering the excise tax will be the first payment or benefit to be reduced
(with reductions made pro-rata in the event payments or benefits are owed at the same time). “Full Credit Payment”
means a payment, distribution or benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, that if reduced in value by one dollar reduces the amount of the parachute payment (as defined in Section 280G of the Code)
by one dollar, determined as if such payment, distribution or benefit had been paid or distributed on the date of the event triggering
the excise tax. “Partial Credit Payment” means any payment, distribution or benefit that is not a Full Credit
Payment.

 

    	 	- 11 -	 

    	 

    

 

(b)
A nationally recognized certified public accounting firm selected by the Company (the “Accounting Firm”) shall
perform the foregoing calculations related to the Excise Tax. If a reduction is required pursuant to Section 10(a), the Accounting Firm
shall administer the ordering of the reduction as set forth in Section 10(a). The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

 

(c)
The Accounting Firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation,
to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered.
Any good faith determinations of the Accounting Firm made hereunder shall be final, binding, and conclusive upon Executive and the Company.

 

11.
Confidentiality Agreement. Executive acknowledges and agrees that at all times in the future, Executive will remain bound
by the Confidential Information and Invention Assignment Agreement previously entered into by and between the Company and Executive (the
“Confidentiality Agreement”), a copy of which is attached hereto as Attachment A.

 

12.
Arbitration.

 

(a)
Arbitration. In consideration of Executive’s Employment with the Company, its promise to arbitrate all employment-related
disputes, and Executive’s receipt of the compensation, pay raises and other benefits paid to Executive by the Company, at present
and in the future, Executive agrees that any and all controversies, claims, or disputes with anyone (including the Company and any employee,
officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or
resulting from Executive’s Employment with the Company or termination thereof, including any breach of this Agreement, will be
subject to binding arbitration under the Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2,
including Section 1281.8 (the “Act”), and pursuant to California law. The Federal Arbitration Act shall also
apply with full force and effect, notwithstanding the application of procedural rules set forth under the Act.

 

    	 	- 12 -	 

    	 

    

 

(b)
Dispute Resolution. Disputes that Executive agrees to arbitrate, and thereby agrees to waive any right to a jury trial,
include any statutory claims under local, state, or federal law, including, but not limited to, claims under Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act, the Sarbanes Oxley Act, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing
Act, the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, claims of harassment, discrimination,
and wrongful termination, and any statutory or common law claims. Executive further understands that this agreement to arbitrate also
applies to any disputes that the Company may have with Executive.

 

(c)
Procedure. Executive agrees that any arbitration will be administered by Judicial Arbitration & Mediation Services,
Inc. (“JAMS”), pursuant to its Employment Arbitration Rules & Procedures (the “JAMS Rules”).
The arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment
and/or adjudication, motions to dismiss and demurrers, and motions for class certification, prior to any arbitration hearing. The arbitrator
shall have the power to award any remedies available under applicable law, and the arbitrator shall award attorneys’ fees and costs
to the prevailing party, except as prohibited by law. The Company will pay for any administrative or hearing fees charged by the administrator
or JAMS, and all arbitrator’s fees, except that Executive shall pay any filing fees associated with any arbitration that Executive
initiates, but only so much of the filing fee as Executive would have instead paid had Executive filed a complaint in a court of law.
Executive agrees that the arbitrator shall administer and conduct any arbitration in accordance with California law, and that the arbitrator
shall apply substantive and procedural California law to any dispute or claim, without reference to the rules of conflict of law. To
the extent that the JAMS Rules conflict with California law, California law shall take precedence. The decision of the arbitrator shall
be in writing. Any arbitration under this Agreement shall be conducted in San Francisco County, California.

 

(d)
Remedy. Except as provided by the Act, arbitration shall be the sole, exclusive, and final remedy for any dispute between
Executive and the Company. Accordingly, except as provided by the Act and this Agreement, neither Executive nor the Company will be
permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have
the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to
adopt a policy not otherwise required by law that the Company has not adopted.

 

(e)
Administrative Relief. Executive is not prohibited from pursuing an administrative claim with a local, state, or federal
administrative body or government agency that is authorized to enforce or administer laws related to employment, including, but not limited
to, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National Labor Relations Board, or
the Workers’ Compensation Board. However, Executive may not pursue court action regarding any such claim, except as permitted by
law.

 

(f)
Voluntary Nature of Agreement. Executive acknowledges and agrees that Executive is executing this Agreement voluntarily
and without any duress or undue influence by the Company or anyone else. Executive further acknowledges and agrees that Executive has
carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and
binding effect of this Agreement and fully understands it, including that EXECUTIVE IS WAIVING EXECUTIVE’S RIGHT TO A JURY
TRIAL.

 

    	 	- 13 -	 

    	 

    

 

(g)
Independent Advice. Executive acknowledges that Executive has been advised to obtain independent advice and legal counsel
to advise Executive concerning this Agreement, and that Executive has either done so or has knowingly waived that opportunity of Executive’s
own free choice. Neither the Company nor any attorneys for the Company have advised Executive concerning this Agreement, and Executive
is relying solely upon the advice of Executive’s own independent counsel (if any); nor has the Company or any attorneys for the
Company coerced, used undue influence, or otherwise induced Executive to enter into this Agreement.

 

13.
Successors.

 

(a)
Company’s Successors. This Agreement shall be binding upon any successor (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or
assets. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s
business or assets that become bound by this Agreement or any affiliate of any such successor that employs Executive.

 

(b)
Executive’s Successors. This Agreement and all of Executive’s rights hereunder shall inure to the benefit of,
and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

 

14.
Miscellaneous Provisions.

 

(a)
Indemnification. In addition to any individual indemnification agreement entered into between the Company and the Executive,
which shall control, the Company shall indemnify Executive to the maximum extent permitted by applicable law and the Company’s
Bylaws with respect to Executive’s service and Executive shall also be covered under a directors and officers liability insurance
policy paid for by the Company to the extent that the Company maintains such a liability insurance policy now or in the future. Executive
agrees to indemnify and save Company and its affiliates harmless from any damages, which Company may sustain in any manner primarily
through Executive’s willful misconduct or gross negligence or a material breach of the provisions of this Agreement.

 

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

 

(c)
Notice.

 

(i)
General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been
duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.
In Executive’s case, mailed notices shall be addressed to Executive at the home address that Executive most recently communicated
to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

 

    	 	- 14 -	 

    	 

    

 

(ii)
Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice
of termination to the other party hereto given in accordance with Section 14(c)(i) of this Agreement. Such notice will indicate the specific
termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30)
days after the giving of such notice), subject to any applicable cure period. The failure by Executive or the Company to include in the
notice any fact or circumstance which contributes to a showing of Good Reason or Cause, as applicable, will not waive any right of Executive
or the Company, as applicable, hereunder or preclude Executive or the Company, as applicable, from asserting such fact or circumstance
in enforcing his or her or its rights hereunder, as applicable.

 

(d)
Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).
No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall
be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

(e)
Whole Agreement. This Agreement supersedes any prior offer letter entered into by and between the Company and Executive.
No other agreements, representations or understandings (whether oral or written and whether express or implied) that are not expressly
set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This Agreement
and the Confidentiality Agreement contain the entire understanding of the parties with respect to the subject matter hereof.

 

(f)
Withholding Taxes. All payments made under this Agreement shall be subject to reduction to reflect taxes or other deductions
required to be withheld by law.

 

(g)
Choice of Law and Severability. This Agreement shall be interpreted in accordance with the laws of the State of California
without giving effect to provisions governing the choice of law. If any provision of this Agreement becomes or is deemed invalid, illegal
or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall
be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision
cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder
of this Agreement shall continue in full force and effect. If any provision of this Agreement is rendered illegal by any present or future
statute, law, ordinance or regulation (collectively, the “Law”) then that provision shall be curtailed or limited
only to the minimum extent necessary to bring the provision into compliance with the Law. All the other terms and provisions of this
Agreement shall continue in full force and effect without impairment or limitation.

 

(h)
No Assignment. This Agreement and all of Executive’s rights and obligations hereunder are personal to Executive and
may not be transferred or assigned by Executive at any time. The Company may assign its rights under this Agreement to any entity that
assumes the Company’s obligations hereunder in connection with any sale or transfer to such entity of all or a substantial portion
of the Company’s assets.

 

(i)
Acknowledgment. Executive acknowledges that Executive has had the opportunity to discuss this matter with and obtain advice
from Executive’s personal attorney, has had sufficient time to, and has carefully read and fully understood all the provisions
of this Agreement, and is knowingly and voluntarily entering into this Agreement.

 

(j)
Counterparts. 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 of a facsimile copy will have the same force and effect
as execution of an original, and a facsimile signature will be deemed an original and valid signature.

 

(k)
Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to this Agreement
by electronic means. Executive hereby consents to receive such documents by electronic delivery.

 

[Signature
Page Follows]

 

    	 	- 15 -	 

    	 

    

 

After
you have had an opportunity to review this Agreement, please feel free to contact me if you have any questions or comments. To indicate
your acceptance of this Agreement, please sign and date this letter in the space provided below and return it to the Company.

 

	 	Very truly yours,
	 	 
	 	lygos, inc.
	 	 
	 	By:	/s/ Eric Steen
	 	 	(Signature)
	 	Name:	Eric Steen
	 	Title:	Chief Executive Officer

 

	ACCEPTED AND AGREED:	 
	 	 
	BRYCE DILLE	 
	 	 
	/s/ Bryce Dille	 
	(Signature)	 
	 	 
	5/3/2022 	 
	Date	 

 

Attachment
A: Confidential Information and Invention Assignment Agreement.

 

    	 	- 16 -	 

    	 

    

 

ATTACHMENT
A

 

CONFIDENTIAL
INFORMATION AND INVENTION ASSIGNMENT AGREEMENT

 

(See
Attached)

 

    	 	- 17 -

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