Document:

Exhibit 10.2+

 

FY2016 Metric Based Bonus - Employee Plan

Effective February 1, 2015 - January 31, 2016

 

Objectives

 

·                  Promotes team based goals/results linked to corporate goals/results.

·                  Provide incentives to employees to meet and exceed new product and services bookings and renewal rates, thereby increasing the value of Rally (increase shareholder value).

·                  All employees share in the success of Rally.

·                  Align employees with the primary goals of Rally.

·                  Aligns Rally pay with other High Tech companies.

 

Eligibility

 

·                  All non-commissioned regular employees are eligible.

·                  Employees must be employed on the first and last business day of the quarter to be eligible to receive a payout for that respective quarter.

 

Bonus Plan Period

 

FY2016:

 

·                  Q1: February 1, 2015 through April 30, 2015

·                  Q2: May 1, 2015 through July 31, 2015

·                  Q3: August 1, 2015 through October 31, 2015

·                  Q4: November 1, 2015 through January 31, 2016

 

Target Bonus

 

All non-commissioned employees are assigned a grade level with an associated target bonus percentage.  The bonus will be calculated based on actual employee earnings for the time respective period.

 

* Actual earnings include actual base salary earnings only and exclude all other compensation such as bonus payments.

 

Bonus Plan Metrics

 

·                  MBB will be measured against three separate categories for each discrete quarter: (1) New Product Bookings, (2) Services Bookings, and (3) a Renewal Rate.

·                  Metric targets for New Products Bookings, Services Bookings and Renewal Rate are aligned with the Board-approved operating plan.

·                  Quarterly MBB payment will be paid to participants based on a preset schedule defining MBB % payment against metrics (See Below).

·                  Threshold payment will be set at 85% achievement against New Product and Services Bookings with a payment equal to 55% of target bonus.  Threshold payment will be set at 75% achievement against the Renewal Rate with a payment equal to 55% of target bonus.  MBB payment is made for a particular category if that category hits its threshold percentage (i.e. payment in one category is not dependent on a minimum threshold being met in all three categories).

·                  Maximum payment will be set at 110% achievement against New Product and Services Bookings with a payment equal to 150% of target bonus.  Maximum payment will be set at 95% achievement against the Renewal Rate with a payment equal to 150% of target bonus.

 

Metrics Weighting

 

The metrics will be weighted in the following manner.

 

1

 

New Product Booking equals 35% of total achievement, Services Bookings equals 35% of total achievement and the Renewal Rate equals 30% of total achievement.

 

Payout Schedule

 

·                  The New Product and Services Bookings achievement ranges are 85% to 110%.  The Renewal Rate range is 75% to 95%.

 

	
NPB Bookings
    	
 
    	
Employee NPB
   Payout %
    	
 
    
	
85%
    	
 
    	
55%
    	
 
    
	
86%
    	
 
    	
58%
    	
 
    
	
87%
    	
 
    	
61%
    	
 
    
	
88%
    	
 
    	
64%
    	
 
    
	
89%
    	
 
    	
67%
    	
 
    
	
90%
    	
 
    	
70%
    	
 
    
	
91%
    	
 
    	
73%
    	
 
    
	
92%
    	
 
    	
76%
    	
 
    
	
93%
    	
 
    	
79%
    	
 
    
	
94%
    	
 
    	
82%
    	
 
    
	
95%
    	
 
    	
85%
    	
 
    
	
96%
    	
 
    	
88%
    	
 
    
	
97%
    	
 
    	
91%
    	
 
    
	
98%
    	
 
    	
94%
    	
 
    
	
99%
    	
 
    	
97%
    	
 
    
	
100%
    	
 
    	
100%
    	
 
    
	
101%
    	
 
    	
105%
    	
 
    
	
102%
    	
 
    	
110%
    	
 
    
	
103%
    	
 
    	
115%
    	
 
    
	
104%
    	
 
    	
120%
    	
 
    
	
105%
    	
 
    	
125%
    	
 
    
	
106%
    	
 
    	
130%
    	
 
    
	
107%
    	
 
    	
135%
    	
 
    
	
108%
    	
 
    	
140%
    	
 
    
	
109%
    	
 
    	
145%
    	
 
    
	
110%
    	
 
    	
150%
    	
 
    

 

	
Services Bookings
    	
 
    	
Employee NPB
   Payout %
    	
 
    
	
85%
    	
 
    	
55%
    	
 
    
	
86%
    	
 
    	
58%
    	
 
    
	
87%
    	
 
    	
61%
    	
 
    
	
88%
    	
 
    	
64%
    	
 
    
	
89%
    	
 
    	
67%
    	
 
    
	
90%
    	
 
    	
70%
    	
 
    
	
91%
    	
 
    	
73%
    	
 
    
	
92%
    	
 
    	
76%
    	
 
    
	
93%
    	
 
    	
79%
    	
 
    
	
94%
    	
 
    	
82%
    	
 
    
	
95%
    	
 
    	
85%
    	
 
    
	
96%
    	
 
    	
88%
    	
 
    
	
97%
    	
 
    	
91%
    	
 
    
	
98%
    	
 
    	
94%
    	
 
    
	
99%
    	
 
    	
97%
    	
 
    
	
100%
    	
 
    	
100%
    	
 
    
	
101%
    	
 
    	
105%
    	
 
    
	
102%
    	
 
    	
110%
    	
 
    
	
103%
    	
 
    	
115%
    	
 
    
	
104%
    	
 
    	
120%
    	
 
    
	
105%
    	
 
    	
125%
    	
 
    
	
106%
    	
 
    	
130%
    	
 
    
	
107%
    	
 
    	
135%
    	
 
    
	
108%
    	
 
    	
140%
    	
 
    
	
109%
    	
 
    	
145%
    	
 
    
	
110%
    	
 
    	
150%
    	
 
    

 

	
Renewal Rate %
    	
 
    	
Employee Ren
   Rate Payout %
    	
 
    
	
75%
    	
 
    	
55.0%
    	
 
    
	
76%
    	
 
    	
59.5%
    	
 
    
	
77%
    	
 
    	
64.0%
    	
 
    
	
78%
    	
 
    	
68.5%
    	
 
    
	
79%
    	
 
    	
73.0%
    	
 
    
	
80%
    	
 
    	
77.5%
    	
 
    
	
81%
    	
 
    	
82.0%
    	
 
    
	
82%
    	
 
    	
86.5%
    	
 
    
	
83%
    	
 
    	
91.0%
    	
 
    
	
84%
    	
 
    	
95.5%
    	
 
    
	
85%
    	
 
    	
100.0%
    	
 
    
	
86%
    	
 
    	
105.0%
    	
 
    
	
87%
    	
 
    	
110.0%
    	
 
    
	
88%
    	
 
    	
115.0%
    	
 
    
	
89%
    	
 
    	
120.0%
    	
 
    
	
90%
    	
 
    	
125.0%
    	
 
    
	
91%
    	
 
    	
130.0%
    	
 
    
	
92%
    	
 
    	
135.0%
    	
 
    
	
93%
    	
 
    	
140.0%
    	
 
    
	
94%
    	
 
    	
145.0%
    	
 
    
	
95%
    	
 
    	
150.0%
    	
 
    

 

MBB Bonus Calculation

 

The bonus payment is equal to the target bonus % for the respective grade multiplied by the New Product Bookings achievement weighted at 35% + Services Booking achievement weighted at 35% + Renewal Rate weighted at 30% multiplied by actual employee earnings:

 

(Target Bonus %) * ((New Product Bookings % * 35%) + (Services Bookings % * 35%) + (Renewal Rate % * 30%)) x (Actual Earnings )

 

2

 

Example:

 

New Product Bookings Achievement (weighted at 35%) = 95%

Services Bookings Achievement (weighted at 35%) = 105%

Renewal Rate (weighted at 30%) = 82%

 

MBB payout percent:

New Product Bookings = 85%

Services Bookings = 125%

Renewal Rate = 86.5%

 

(85% * 35%) + (125% * 35%)+ (86.5% * 30%) = 99.45%

 

Earnings = $22,000 (assuming an annual salary of $88,000)

Target Bonus = 5%

 

5% * 99.45% * 22,000 = $1,093.95

 

Other Provisions

 

·                  Metric achievements that fall between percentages will be prorated based on the distance between those percentages.  For example, if NPB achievement were 87.5%, then payout would equal 62.5%. The difference between 87% and 87.5% equals .5%. There is a 3% payout increment for every 1% increase in achievement up to 100%.  The NPB metric payout would be calculated by multiplying .5% (difference between 87% and 87.5%) with 3% (step increase in NPB achievement between 87% and 88%). The result is 1.5%, which is then added to 61% payout for a total NPB payout of 62.5%.

·                  Part-time employees will be paid out in accordance with their reduced schedule based on their actual earnings.

·                  Employees on sabbatical are entitled to full MBB allocation.

·                  Employees on qualified FMLA leave are entitled to full MBB allocation, regardless of duration.

·                  Employees on personal non-medical leave will not receive a payout for the period of unpaid leave.

·                  Management reserves the right to interpret, change or cancel this plan at any time at its discretion.

 

3EX-10.1

 Exhibit 10.1 

EMPLOYMENT AGREEMENT 

THIS AGREEMENT (this “Agreement”) is made on June 3, 2015 but effective as of May 29, 2015 (“Effective Date”),
between Flotek Industries, Inc., a Delaware corporation (the “Company”), and H. Richard Walton (“Employee”). 
 In
consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

1. Employment. The Company shall employ and continue to employ Employee, and Employee shall be employed and continue to be employed
with the Company, upon the terms and conditions set forth in this Agreement for the period beginning on the date hereof and ending on the Termination Date, as defined in Section 4 hereof (the “Employment Period”). 

2. Position and Duties. 

(a) Employee shall serve as Chief Financial Officer Emeritus of the Company and shall be responsible for such duties as may be reasonably
prescribed by the Board of Directors of the Company or the Chief Executive Officer of the Company. 
 (b) Employee shall devote his
reasonable best efforts and his full business time and attention (except for permitted vacation periods, periods of illness or other incapacity) to the business and affairs of the Company. 

3. Base Salary and Benefits. 

(a) Employee’s annual base salary for the Employment Period shall be $350,000 (the “Base Salary”). The Base Salary shall be
payable in approximately equal installments in accordance with the Company’s general payroll practices and shall be subject to required withholding. Any change in Base Salary shall be in the sole discretion of the Board of Directors of the
Company. During the Employment Period, Employee shall be entitled to participate in all of the Company’s employee benefit programs for which employees of the Company are generally eligible (other than health insurance coverage), at a level
commensurate with Employee’s position in the Company. 
 (b) Employee shall be entitled to annual bonuses in accordance with the
Management Incentive Plan of the Company. Employee will be eligible to participate in the Performance Unit Plan of the Company pursuant to the terms of that plan. 

(c) The Company shall reimburse Employee for all reasonable expenses incurred by him in the course of performing his duties under this
Agreement which are consistent with the Company’s policies in effect from time to time for its employees with respect to travel, entertainment and other business expenses, subject to the Company’s requirements for its employees with
respect to reporting and documentation of such expenses pursuant to applicable Treasury Regulations. 

 (d) In addition to the Base Salary, Employee will be eligible to receive raises, bonuses and
incentive compensation to the extent approved from time to time by the Board of Directors of the Company, in its discretion. 
 (e) Employee
shall be eligible for vacations as permitted under Company’s policies in effect from time to time, with a minimum of four weeks vacation during each year in the Employment Period. 

4. Term and Termination. 

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

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

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

  
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 (b) Notwithstanding anything to the contrary herein contained, Company shall not be required to
pay any amounts under this Section 5 or elsewhere in this Agreement if Employee is in breach of any of its obligations under this Agreement or any other Agreement with the Company, including without limitation, any obligation relating to the
treatment of Company confidential information and any non-compete obligation. 
 (c) If Employee’s employment with the Company is
terminated for Cause or death or Disability, or Employee resigns without Good Reason, Employee shall be entitled to receive only: (i) Employee’s Base Salary earned and payable through the Termination Date; (ii) any accrued but unused
vacation/time off to the extent required under applicable law; (iii) reimbursement for all incurred but unreimbursed expenses to the extent Employee is entitled to be reimbursed; and (iv) any other earned but unpaid compensation, if
applicable, as of the Termination Date. 
 (d) For purposes of this Agreement, the following terms shall have the meanings set forth below:

 “Cause” shall mean (i) Employee’s continued failure to substantially perform one or more of
Employee’s essential duties and obligations to the Company (other than any such failure resulting from a Disability) which, to the extent such failure is remediable, Employee fails to remedy in a reasonable period of time (not to exceed 30
days) after receipt of written notice from the Company; (ii) Employee’s refusal or failure to comply with the reasonable and legal directives of the Board of Directors after written notice from the Board describing Employee’s failure
to comply and, if such failure is remediable, Employee’s failure to remedy same within 10 days of receiving written notice; (iii) any act of personal dishonesty, fraud or misrepresentation taken by Employee which was intended to result in
substantial gain or personal enrichment of the Employee at the expense of the Company; (iv) Employee’s violation of a federal or state law or regulation applicable to the Company’s business which violation was or is reasonably likely
to be materially injurious to the Company; (v) Employee’s conviction of, or plea of nolo contendere or guilty to, a felony under the laws of the United States or any State that is reasonably likely to reasonably likely to be materially
injurious to the Company; (vi) Employee’s abuse of drugs, other narcotics or alcohol during working hours or where such abuse (whenever occurring) impacts on Employee’s working day, (vii) Employee’s breach of any of his
material obligations under any written agreement with the Company (including without limitation this Agreement and any proprietary information and inventions assignment agreement with the Company); or (viii) Employee’s violation of a
material policy of the Company which, to the extent such failure is remediable, Employee fails to remedy in a reasonable period of time (not to exceed 30 days) after receipt of written notice from the Company. 

“Disability” shall have the meaning assigned to such term in Section 22(e)(3) of the Internal Revenue Code of
1986, as amended (the “Code”). 

  
 3 

 “Good Reason” shall exist upon the occurrence of one of the following
Company actions (unless Employee consents in writing to such action(s)): (i) a material reduction of the Employee’s salary and employee benefits to which the Employee was entitled immediately prior to such reduction, (ii) a material
reduction in the duties, authority or responsibilities relative to the Employee’s duties, authority or responsibilities as in effect immediately prior to such reduction, provided, however, that if the Company assigns to the Employee duties for
another senior executive position with the Company shall not constitute Good Reason; or (iii) the relocation of the Employee to a facility or a location more than fifty (50) miles from the Employee’s then present location; provided,
however, that (A) Employee must provide the Company with written notice of the occurrence of such action(s) within 60 days of the initial occurrence of such action(s) and of his or her intent to terminate employment based on such action(s) and
(B) the Company will have 30 days from the date that such written notice is provided by Employee to cure such action(s). 
 (e)
Notwithstanding anything herein to the contrary, (i) if at the time of Employee’s termination of employment with the Company, Employee is a “specified employee” within the meaning of Section 409A of the Code, and the
deferral of the commencement of any payments or benefits (or portions thereof) otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of
the Code, then the Company will defer the payment of any such payments or benefits (or portions thereof) hereunder (without any reduction in such payments or benefits ultimately paid or provided to Employee) until the date that is six months
following Employee’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) to the extent and amount necessary to comply with Section 409A of the Code, with such delayed
payments to be made in lump sum on the first day of the seventh month following the end of such six month period, and (ii) if any other payments of money or other benefits due to Employee hereunder could cause the application of an accelerated
or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits
shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. The Company shall consult with Employee in good faith regarding the application of this
Section 5(e). Notwithstanding any other provision in the Agreement, the Company and Employee will cooperate in good faith to amend or modify the Agreement so that the payments under this Agreement qualify for exemption from or comply with Code
Section 409A; provided, however, that the Company makes no representations that the payments under the Agreement shall be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from
applying to payments under the Agreement. For purposes of this Section 5, a termination of employment only occurs if it constitutes a “separation from service” under Section 409A of the Code and the regulations promulgated
thereunder. With respect to the payments indentified in Section 5(a)(i)-(iii), each payment, including each separate installment payment identified thereunder, will be considered the right to a series of separate payments. 

  
 4 

 6. Confidential Information. 

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

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

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

  
 5 

 7. Inventions. 

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

  
 6 

 
right, title, and interest in and to any and all such Inventions which Employee may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced
to practice, using the Company’s time and/or materials or equipment. Employee further acknowledges that all of the above-described Inventions made during the period of Employee’s employment with the Company are “works made for
hire”, as that term is defined in the United States Copyright Act, to the greatest extent permitted by applicable law, and are compensated by Employee’s salary. All Inventions or other work product created by Employee or on Employee’s
behalf or by Employee’s affiliates pursuant to this Agreement shall be free and clear of all encumbrances, including without limitation, security interest(s), licenses, liens or other restrictions other than as expressly provided for in this
Agreement. Employee hereby appoints the Company as Employee’s attorney-in-fact to execute on Employee’s behalf any assignments or other documents deemed necessary by the Company to protect or perfect its rights to any Inventions. 

(c) Inventions Assigned to the United States. Employee agrees to assign to the United States government all Employee’s right,
title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies. 

(d) Maintenance of Records. Employee agrees to create and maintain adequate and current written records of all Inventions made by
Employee (solely or jointly with others), and assigned to the Company under Section 7(b) above, during the term of Employee’s employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times. Employee agrees not to remove such records from the Company’s place of business except as expressly permitted by
the Company policy, which may, from time to time, be revised at the sole discretion of the Company. 
 (e) Patent and Copyright
Registrations. Employee agrees to reasonably assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights, moral
rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall reasonably deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive
rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights, moral rights or other intellectual property rights relating thereto. Employee further agrees that Employee’s obligation to execute or cause to
be executed, when it is in Employee’s power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of Employee’s mental or physical incapacity, unavailability, or
for any other reason to secure Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as
above, then Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney in fact, to act for and in Employee’s behalf and stead to

  
 7 

 
execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright registrations or enforcement of other
intellectual property rights thereon with the same legal force and effect as if executed by Employee. 
 8. Conflicting Employment.
Employee agrees that, during the Employment Period, Employee will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during
the Employment Period, nor will Employee engage in any other activities that conflict with Employee’s obligations to the Company. 
 9.
Returning Company Documents. Employee agrees that, at the time of termination of Employee’s employment with the Company, Employee will deliver to the Company (and will not keep in Employee’s possession, copy, reproduce, recreate or
deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any of the
aforementioned items developed by Employee pursuant to Employee’s employment with the Company or otherwise belonging to the Company, its successors or assigns. Employee further agrees that any property situated on the Company’s premises or
on the Company’s computers or servers, including disks and other storage media, email, and filing cabinets and other work areas, is subject to inspection by Company personnel at any time with or without notice. 

10. Notification of New Employer. Upon termination of Employee’s employment with the Company, Employee hereby grants consent to
notification by the Company to Employee’s new employer or any other party with which Employee may enter into a new relationship with respect to Employee’s obligations under this Agreement. 

11. Certain Covenants. 

(a) Solicitation of Employees, Consultants and Customers. In consideration of the Company’s obligations under this Agreement and
the other consideration recited above, including but not limited to the Company’s obligations pursuant to Section 5, Employee agrees that, during the Employment Period and for a period of twenty-four months immediately following the
Termination Date (“Restricted Period”), Employee shall not, either directly or indirectly, either alone or in concert with others, solicit, induce, recruit, encourage or entice, or attempt to solicit, induce, recruit, encourage or entice,
any employee of or consultant to the Company to leave the Company or work for anyone in the businesses in which the Company and its affiliates are engaged at any time during the one-year period ending on the Termination Date (“Company
Business”). Also, during the Restricted Period, Employee will not directly or indirectly, either for himself or for any other person, firm or corporation, divert or take away or attempt to divert or take away, call on or solicit or attempt to
call on or solicit, any customer of the Company, in connection with any business or activity similar to or related to the Company Business, including but not limited to those on whom Employee called or whom Employee solicited or with whom Employee
became acquainted while engaged as an employee of or a consultant to the Company. During his employment, Employee agrees not to plan or otherwise take any steps, preliminary or otherwise, either alone or in concert with others, to set up or engage
in any business enterprise that would be in competition with the Company. 

  
 8 

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

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

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

  
 9 

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

Notices to Employee: 

Richard Walton 
 Notices to the
Company: 
 Flotek Industries, Inc. 

10603 W. Sam Houston Pkwy. N., Suite 300 

Houston, TX 77064 
 or such other address or to
the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered or, if sent by first class mail, three
(3) days after so mailed. 
 13. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained
herein. 
 14. Complete Agreement. Except with respect to any proprietary information and inventions assignment agreement between the
Company and the Employee, this Agreement embodies with respect to the subject matter hereof the complete agreement and understanding among the parties and supersedes and preempts with respect to the subject matter hereof any prior understandings,
agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. 

15. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same agreement. 
 16. Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Employee, the Company and their respective heirs, successors and assigns, except that Employee may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company
except by operation of law to Employee’s estate upon the death of Employee. 
 17. Choice of Law. All issues and questions
concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas. 

  
 10 

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

19. Arbitration and Equitable Remedies. 

(a) Arbitration. Except as provided in Section (b) below, Employee agrees that any dispute or controversy arising out of or
relating to any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Houston, Texas, in accordance with the rules then in effect of the American Arbitration Association, provided
however, the parties will be entitled to full and liberal evidentiary discovery in accordance with the rules governing civil litigation in courts of the same jurisdiction. The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Company and Employee shall split
50%-50% the costs and expenses of such arbitration, and the substantially prevailing party shall be entitled to an award of attorneys fees. 

(b) Equitable Remedies. Each of the Company and Employee agree that disputes relating to or arising out of a breach of the covenants
contained in Sections 6 through 11 of this Agreement would likely require injunctive relief to maintain the status quo of the parties pending the appointment of an arbitrator pursuant to this Agreement. The parties hereto also agree that it would be
impossible or inadequate to measure and calculate the damages from any breach of the covenants contained in this Agreement prior to resolution of any dispute pursuant to arbitration. Accordingly, if either party claims that the other party has
breached any covenant contained in Sections 6 through 11 of this Agreement, that party will have available, in addition to any other right or remedy, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or
threatened breach and/or to specific performance of any such provision of this Agreement pending resolution of the dispute through arbitration. The parties further agree that no bond or other security shall be required in obtaining such equitable
relief and hereby consents to the issuance of such injunction and to the ordering of specific performance. However, upon appointment of an arbitrator, the arbitrator shall review any interim, injunctive relief granted by a court of competent
jurisdiction and shall have the discretion, jurisdiction, and authority to continue, expand, or dissolve such relief pending completion of the arbitration of such dispute or controversy. The parties agree that any orders issued by the arbitrator may
be enforced by any court of competent jurisdiction if necessary to ensure compliance by the parties. 
 20. Amendment and Waiver. The
provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Employee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement. 

  
 11 

 [remainder of page intentionally left blank] 

  
 12 

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

  

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

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

	H. Richard Walton

 SIGNATURE PAGE TO 

EMPLOYMENT AGREEMENT 

 EXHIBIT A 

LIST OF PRIOR INVENTIONS 

AND ORIGINAL WORKS OF AUTHORSHIP 
  

					
	 Title
	  	 Date
	  	 Identifying Number

or Brief Description

		  		  	
		  		  	
		  		  	

 EXHIBIT B 

CONFIDENTIAL SEVERANCE AND RELEASE AGREEMENT 

This Confidential Severance and Release Agreement (“Agreement”) is entered into on [date], by and between [name] (the
“Employee”) and Flotek Industries, Inc. (the “Company”). 
 WHEREAS, Employee was employed by Company as a [position];

 WHEREAS, Employee’s employment has terminated effective [date]; 

WHEREAS, the Company has offered to provide Employee with the a severance package to facilitate his transition from the Company as provided in
Section 5 of the Employment Agreement dated as of                     , 20     (the “Employment Agreement”), by
and between Employee and Company, contingent on the execution delivery and effectiveness of this Agreement (the “Severance”); and 

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

 
with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act, Title VII of the Civil Rights Act of 1964, the Texas Labor Code, the Texas Administrative
Code, any other applicable state or local codes or ordinances, and contract or tort claims, whether such claim be based upon an action filed by Employee or a governmental agency, and any and all claims for attorneys’ fees and/or costs. The
Parties agree that the release set forth in this Paragraph shall be and remain in effect in all respects as a complete and general release as to the matters released. This release does not extend to any obligations incurred under this Agreement or
to any obligations under the Bylaws of the Company to Employee with regard to indemnification and advancement of expenses to or for the benefit of Employee. 

4. Unknown Claims. Employee expressly acknowledges that this Agreement resolves and releases all legal claims he may have against
Company as of the date of this Agreement arising from his employment with the Company, including claims of which he may not be aware. 
 5.
Non-Admission. The fact and terms of this Agreement are not an admission by the Company of liability or other wrongdoing under any law. 

6. Payment of Salary. Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, and any and all other
benefits due Employee, other than the consideration described in this Agreement, as well as any expenses with respect to which Employee is entitled to be reimbursed. 

7. Returning Company Property. Employee agrees to deliver to the Company on or before [date], and not to keep in his possession,
recreate, or deliver to anyone else, any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property provided to Employee by the
Company, developed by Employee pursuant to his employment with the Company, or otherwise belonging to the Company. 
 8.
Restrictions. Employee understands that, following the termination of his employment with Company, he must still comply with the terms of the Employment Agreement which includes a two-year non-solicitation and non-compete agreement following
the termination of his employment, and provisions relating to the Confidential Information of the Company and Inventions (as such terms are defined in the Employment Agreement). 

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

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

  
 2 

 11. Attorneys’ Fees. If either Employee or the Company (including any of the Released
Parties) brings an action against the other Party, or otherwise seeks to enforce this Agreement, by reason of the breach of any covenant, warranty, representation, or condition of this Agreement, or otherwise arising out of this Agreement, whether
for declaratory or other relief, the action must be submitted for arbitration to the American Arbitration Association in Houston, Texas. The prevailing party in such arbitration shall be entitled to its costs and attorneys’ fees. 

12. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and shall bind the
signatory, but all of which together shall constitute one and the same instrument. 
 13. Severability. In the event that any
provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision. 

14. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with this
Agreement. 
 15. Entire Agreement. This Agreement is the entire agreement and understanding between the Parties on the subject
matter covered herein. The Parties further agree that this Agreement may not be altered except in a writing duly executed by all of the Parties. The laws of the State of Texas shall govern this Agreement, excepting its principles of conflicts of
law. 
 16. Effective Date. This Agreement is effective immediately following the Parties’ execution of the Agreement, and will
be enforceable following the expiration of the 7-day revocation period described below in Paragraph 17 (“Effective Date”). 
 17.
OWBPA. Under the Older Workers Benefit Protection Act of 1990, Employee acknowledges the following: 
 a. That Employee has been
advised and is hereby advised by the Company to consult an attorney regarding this Agreement before executing it; 
 b. That Employee has
been afforded twenty-one (21) days to consider whether he is willing to enter into it, although Employee may, in the exercise of his own discretion, sign it or reject it at any time before the expiration of the 21 days; 

c. That, within seven (7) days after executing this Agreement, Employee may revoke it; and 

d. That this Agreement is not enforceable until the 7-day revocation period has passed. 

  
 3 

 18. Voluntary Execution of Release Agreement. The Parties enter into this Agreement
voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: 

a. They have read this Agreement; 

b. They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice, or have
knowingly waived such representation; 
 c. They know and understand the terms and consequences of this Agreement and of the releases it
contains; and 
 d. They are fully aware of the legal and binding effect of this Agreement. 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. 

 

							
	DATED: [date]				By:		  

							[Company rep]
				
	DATED: [date]				By:		  

							[Employee]

  
 4

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