Document:

TARONIS
FUELS, INC.

EXECUTIVE
SEVERANCE PLAN

 

1.
Introduction

 

1.1.
Purpose. The purpose of the Plan is to ensure that Taronis Fuels, Inc. (the “Company”) will have the continued
dedication of its key employees by providing severance protection to selected individuals. The Plan is intended to be an unfunded
welfare plan maintained primarily for the purpose of providing severance benefits to a select group of key management employees.

 

1.2.
Effective Date. The Plan is effective as of the date the Board approves the Plan.

 

2.
Definitions and Construction

 

2.1.
Definitions. When used in capitalized form in the Plan, the following words and phrases have the following meanings, unless
the context clearly indicates that a different meaning is intended:

 

(a)
“Administrator” means the Compensation Committee of the Board.

 

(b)
“Benefits Coverage Period” means, unless a different period is approved by the Compensation Committee
and reflected in the Participant’s Participation Agreement:

 

(1)
For a Qualifying Termination of the Chief Executive Officer and Chief Financial Officer of the Company during a Change-in-Control
Period, 36 months; and

 

(2)
For other Qualifying Terminations, 24 months for the Chief Executive Officer and Chief Financial Officer and 1 month for each
full year of service for all other Participants;

 

in
each case, beginning on the date of the Participant’s Qualifying Termination.

 

(c)
“Board” means the Board of Directors of Taronis Fuels, Inc.

 

(d)
“Cause” has the meaning provided in Section 4.4(c).

 

(e)
“Change in Control” means the occurrence of one of the following events:

 

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

 

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

 

    	 	 	 

    	 

    

 

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

 

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

 

For
purposes of this Section 2.1(e), persons will be considered to be acting as a group if they are owners of an Entity that enters
into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. If a person,
including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock,
or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the
ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest
in the other corporation. Notwithstanding anything to the contrary in the Plan or any Participation Agreement, an event shall
constitute a Change in Control under the Plan only to the extent such event is a permissible payment event under Section 409A
of the Code and Treas. Reg. § 1.409A-3(i)(5).

 

(f)
“Change-in-Control Period” means a period of 15 months beginning three months before the effective
date of a Change in Control.

 

(g)
“Claim Reviewer” means a person or entity designated in writing by the Administrator as the Claim
Reviewer for this Plan, or if no such person or entity has been designated, the Company’s General Counsel.

 

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

 

(i)
“Company” means Taronis Fuels, Inc. and its affiliates.

 

(j)
“Compensation Committee” means the Compensation Committee of the Board.

 

(k)
“Eligible Employee” means any employee of the Company who is both

 

(1)
designated by the Compensation Committee to be eligible to participate in the Plan; and

 

(2)
either (A) a citizen or lawful permanent resident of the United States, or (B) providing services to the Company in the United
States on a substantially full-time basis.

 

(l)
“Entity” means a corporation, partnership, limited liability company or other entity.

 

(m)
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

(n)
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

(o)
“Exchange Act Person” means any natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company
or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee
or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of
the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange
Act) that, as of the date this Plan is approved, is the owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.

 

    	 	 	 

    	 

    

 

(p)
“Good Reason” has the meaning provided in Section 4.4(b).

 

(r)
“Participant” means an Eligible Employee who participates in the Plan under Section 3.

 

(s)
“Participation Agreement” has the meaning provided in Section 3.2.

 

(t)
“Plan” means the Taronis Fuels, Inc. Executive Severance Plan as set forth in this document.

 

(u)
“Qualifying Termination” has the meaning provided in Section 4.4(a).

 

(v)
“Section” means a section of the Plan, including any subsections of that section.

 

(w)
“Section 409A” means section 409A of the Code.

 

(x)
“Severance Benefit” has the meaning provided in Section 4.1.

 

(y)
“Severance Coverage Period” means, unless a different period is approved by the Compensation Committee
and reflected in the Participant’s Participation Agreement:

 

(1)
For the Chief Executive Officer and Chief Financial Officer of the Company, 24 months from the date of the Participant’s
Qualifying Termination (regardless of whether or not 24 months remain on the officer’s employment contract, the coverage
period shall in no event be less than 24 months); and

 

(2)
For other Participants, 1 month for each full year of service;

 

in
each case, beginning on the date of the Participant’s Qualifying Termination.

 

(z)
“Subsidiary” means any corporation (other than the Company) in an unbroken chain of Entities beginning
with the Company if each corporation other than the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

2.2.
Gender and Number. Words used in the masculine gender in the Plan are intended to include the feminine and neuter genders,
where appropriate. Words used in the singular form in the Plan are intended to include the plural form, where appropriate, and
vice versa.

 

2.3.
Section 409A. Payments under the Plan are intended to be exempt from, or comply with, Section 409A, and the Plan will be interpreted
to achieve this result. However, in no event is the Company responsible for any tax or penalty owed by a Participant with respect
to the payments under the Plan.

 

3.
Participation

 

3.1.
Generally. An employee of the Company participates in the Plan upon the date on which the Company and the employee execute
a Participation Agreement in accordance with Section 3.2.

 

3.2.
Participation Agreement Required. No employee will be eligible to receive a benefit under the Plan unless the employee and
the Company execute a Participation Agreement substantially in the form attached as Exhibit A to the Plan (or another form
approved by the Compensation Committee). The executed Participation Agreement will constitute an agreement between the Company
and the employee that binds both of them to the terms of the Plan and will bind their heirs, executors, administrators, successors,
and assigns, both present and future.

 

    	 	 	 

    	 

    

 

4.
Severance Benefits

 

4.1.
Cash Severance Benefits. A Participant who has a Qualifying Termination is entitled to a Severance Benefit in the amount described
in subsection (a), unless otherwise specified in the Participant’s Participation Agreement. The Severance Benefit shall
be paid in the time and form specified in subsection (b) and shall be conditioned upon the Participant’s timely execution
of a release as provided in Section 6.

 

(a)
Amount.

 

(1)
Base Salary. The Participant’s Severance Benefit includes an amount equal to the Participant’s base salary, at
the rate in effect immediately prior to the Participant’s Qualifying Termination, for the Participant’s Severance
Coverage Period. Notwithstanding the foregoing, in the event the Participant experienced a material reduction in base salary prior
to his or her or its Qualifying Termination that would give rise to a Good Reason, then the base salary rate used in the preceding
sentence shall, if greater, be the rate in effect immediately prior to such material reduction in base salary.

 

(2)
Bonus Award. The Participant’s Severance Benefit may include an amount equal to a prorated amount (to the month) of
the Participant’s target incentive under the Company’s annual cash incentive plan for the measurement period in which
the Qualifying Termination occurs, subject to confirmation of the Compensation Committee that the Participant has achieved the
objectives necessary for the Participant to otherwise receive the Participant’s target incentive for the measurement period.
Notwithstanding the foregoing, in the event of a Change in Control, the Participants shall receive their maximum bonus award under
their employment agreements and any equity awards subject to vesting shall be accelerated and immediately vest on the start of
the Change-in-Control Period.

 

(b)
Time and Form of Payment. If a Participant is entitled to a Severance Benefit, the Severance Benefit will be paid as follows,
unless otherwise specified in the Participation Agreement—

 

(1)
In General. Except as otherwise provided in paragraphs (2) and (3), below, the Participant’s Severance Benefit will
be paid in substantially equal installments over the Severance Coverage Period and in accordance with the Company’s payroll
practices. Each such installment shall be considered a separate payment for purposes of Section 409A.

 

(2)
Change-in-Control Period. If a Participant’s Qualifying Termination occurs during a Change-in-Control Period after the
applicable Change in Control, such Participant’s Severance Benefit will be paid in a lump sum on or before the 60th day
following the Participant’s Qualifying Termination date.

 

(3)
Time of Payment under Section 409A. To comply with Section 409A—

 

(A)
Any payment under the Plan that is subject to Section 409A and that is contingent on a termination of employment is contingent
on a “separation from service” within the meaning of Section 409A.

 

(B)
If, upon separation from service, the Participant is a “specified employee” within the meaning of Section 409A,
any payment under the Plan that is subject to Section 409A and would otherwise be paid within six months after the Participant’s
separation from service will instead be paid in the seventh month following the Participant’s separation from service.

 

4.2.
Medical and Dental Benefits. If the Participant has a Qualifying Termination and timely executes a release as provided in
Section 6, the Company will provide the Participant with an additional payment as follows, unless otherwise specified in the Participant’s
Participation Agreement—

 

(a)
Amount. The Company will pay a lump sum equal to the monthly premiums for medical and dental coverage under COBRA at the time
of the Participant’s Qualifying Termination, based on the Participant’s medical and dental coverage in effect immediately
prior to the Qualifying Termination, multiplied by the number of months in the Benefits Coverage Period.

 

(b)
Time of Payment. Any lump sum paid under this Section 4.2 shall be paid on or before the 60th day following the Participant’s
Qualifying Termination, and such lump sum shall be considered a separate payment for purposes of Section 409A. For purposes of
Section 409A, payments under this Section 4 are each a separate payment.

 

    	 	 	 

    	 

    

 

4.3.
Equity Awards.

 

(a)
In General. Upon a Participant’s Qualifying Termination that is not within a Change-in-Control Period, the Participant
will be entitled to pro rata time-based vesting of any Company equity or equity-based awards held by the Participant that are
subject to a vesting schedule for which vesting dates occur less frequently than monthly as if the award had a monthly vesting
schedule. For each such award, the additional number of shares of the Company’s stock for which time-based vesting conditions
will lapse is a number equal to the number of shares that would have vested on the next vesting date for such award occurring
after the Participant’s Qualifying Termination, multiplied by a fraction the numerator of which is the number of complete
months between the most recent vesting date for such award and the date of the Participant’s Qualifying Termination, and
the denominator of which is the number of complete months between the most recent vesting date for such award and the next vesting
date for such award occurring after the Participant’s Qualifying Termination.

 

(b)
Change-in-Control Period. Upon a Participant’s Qualifying Termination that occurs within a Change-in-Control Period,
(1) all of the time-based vesting conditions applicable to the Company equity or equity-based awards held by the Participant will
lapse, and (2) all performance-based vesting conditions applicable to such awards will be deemed satisfied at a level reasonably
determined by the Administrator based on actual performance as of the date of the Qualifying Termination. If a Participant incurs
a Qualifying Termination before a Change in Control, the Participant’s unvested Company equity or equity-based awards will
remain outstanding for three months or such other period of time as the Administrator in its sole discretion concludes is required
to determine whether the Participant will become entitled to the acceleration provided by this Section 4.3(b) as a result of a
Change in Control that occurs after the Participant’s Qualifying Termination; provided, however, that if it is ultimately
determined that such Participant’s Qualifying Termination did not occur during a Change-in-Control Period, the Participant
will not be entitled to any additional vesting as a result of this Section 4.3(b).

 

(c)
Settlement. Any portion of a Company equity or equity-based award (other than a stock right that is exempt from Section 409A
under Treas. Reg. § 1.409A-1(b)(5)) that becomes fully vested due to the provisions of this Section 4.3 will be immediately
settled to the extent that such award constitutes a short-term deferral exempt from application of Section 409A (i.e.,
to the extent that the award is not a “deferred payment” within the meaning of Treas. Reg. § 1.409A-1(b)(4)).

 

4.4.
Qualifying Termination.

 

(a)
A Participant has a Qualifying Termination if his or her or its employment with the Company is terminated—

 

(1)
by the Participant for Good Reason; or

 

(2)
by the Company for any reason other than for Cause.

 

    	 	 	 

    	 

    

 

(b)
Good Reason. “Good Reason” means the existence or occurrence of one or more of the following conditions or events
without the Participant’s prior written consent: (i) the Company (or its successor) requires the Participant to relocate
to a facility or location more than thirty (30) miles away from the location at which the Participant was working immediately
prior to the required relocation, except for required travel by the Participant on the Company’s business to an extent substantially
consistent with the Participant’s business travel obligations prior to the relocation, it also being agreed that the Participant’s
relocation to the greater Phoenix area shall not constitute Good Reason; (ii) a material reduction of the Participant’s
base salary or target bonus opportunity (other than as part of an across-the-board, proportional salary reduction applicable to
all executive officers); (iii) a sustained and material reduction in the Participant’s job title or responsibilities, it
being agreed that “Good Reason” shall not exist solely because the Company reorganizes one or more units of its business,
its functional organization, or its reporting relationships; or (iv) a material breach by the Company of any term of the Participant’s
employment agreement with the Company or of the Participant’s other agreements with the Company; provided, however, that,
in each case under sub-clauses (i) to (iv) above, any termination of employment by the Participant will be for “Good Reason”
only if: (1) the Participant gives the Company written notice, within ninety (90) days following the first occurrence of the condition(s)
that the Participant believes constitute(s) “Good Reason,” which notice shall describe such condition(s); (2) the
Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (such 30-day period,
the “Company Cure Period”); and (3) the Participant voluntarily terminates the Participant’s employment with
the Company within thirty (30) days following the end of the Company Cure Period.

 

(c)
Cause. “Cause” means, with respect to a Participant, the occurrence of any of the following events, as reasonably
determined by the Administrator in its discretion: (i) the Participant’s conviction of, or plea of nolo contendere to, any
felony (other than a vehicular-related felony); (ii) the Participant’s commission of, or participation in, intentional acts
of fraud or dishonesty that in either case results in material harm to the reputation or business of the Company; (iii) the Participant’s
intentional, material violation of any term of the Participant’s employment agreement with the Company or any other contract
or agreement between the Participant and the Company or any statutory duty the Participant owes to the Company that in either
case results in material harm to the business of the Company; (iv) the Participant’s conduct that constitutes gross insubordination
or habitual neglect of duties and that in either case results in material harm to the business of the Company; (v) the Participant’s
intentional, material refusal to follow the lawful directions of the Company’s Board of Directors, the Company’s Chief
Executive Officer, or his or her or its direct manager (other than as a result of physical or mental illness); or (vi) the Participant’s
intentional, material failure to follow, or intentional conduct that violates (or would have violated, if such conduct occurred
within ten (10) years prior to the date the Participant entered this Agreement and has not been previously disclosed to the Company),
the Company’s written policies that are generally applicable to all employees or all officers of the Company and that results
in material harm to the reputation or business of the Company; provided, however, (1) that willful bad faith disregard will be
deemed to constitute intentionality for purposes of this definition and (2) that, in each case under sub-clauses (i) through (vi)
above, any termination of employment by the Company will be for “Cause” only if: (1) the Company gives the Participant
written notice, within ninety (90) days following the date on which the Company first becomes aware of the action or conduct that
it alleges constitutes Cause (or, in the case of clauses (ii), (iii), or (vi), when the Company first becomes aware that the action
or conduct has resulted in material harm to the reputation or business of the Company), which notice shall describe such action
or conduct; (2) in the case of clauses (iii) through (vi), except in circumstances where the Participant’s actions are deemed
by the Company not subject to cure, the Participant fails to remedy such condition(s) within thirty (30) days following receipt
of the written notice (such 30-day period, the “Employee Cure Period”); and (3) except if a reasonable period is needed
to investigate the conduct at issue in (vi) (which investigation, for the avoidance of doubt, shall not constitute Good Reason),
the Company terminates the Participant’s employment within thirty (30) days following the end of the Employee Cure Period
(or, in the case of clauses (i) and (ii), the Company terminates the Participant’s employment within sixty (60) days following
the Participant’s receipt of the written notice).

 

4.5.
Sections 280G and 4999 of the Code.

 

(a)
Limitation on Amounts. Notwithstanding any provision of the Plan to the contrary, if it is determined that part or all of
the compensation and benefits payable to a Participant (whether pursuant to the terms of the Plan or otherwise) before application
of this Section 4.6 would constitute “parachute payments” under Section 280G of the Code, and the payment thereof
would cause the Participant to incur the excise tax under Section 4999 of the Code (or its successor) (“Excise Tax”),
the following provisions shall apply:

 

(1)
The Participant shall receive payment of the greater of the following amounts, determined after subtracting the net amount
of federal, state and local income taxes on such payments and the amount of Excise Tax to which the Participant would be subject
in respect of such payments and after taking into account the phase-out of itemized deductions and personal exemptions attributable
to such payments: (A) the amounts otherwise payable to or for the benefit of the Participant pursuant to the Plan (or otherwise)
that, but for this Section 4.6 would be “parachute payments,” (referred to below as the “Total Payments”),
and (B) the Total Payments reduced to an amount equal to three times the “base amount” (as defined under Section 280G
of the Code) less $1, as reasonably determined by the Consultant (as defined below).

 

    	 	 	 

    	 

    

 

(2)
If the Total Payments are reduced under paragraph (1), above, such reductions shall be made by the Company in its reasonable
discretion in the following order: (A) reduction of any cash payment, excluding any cash payment with respect to the acceleration
of equity awards, that is otherwise payable to the Participant that is exempt from Section 409A of the Code, (B) reduction of
any other payments or benefits (other than equity awards) otherwise payable to the Participant on a pro-rata basis or such other
manner that complies with Section 409A of the Code, (C) reduction of any payment with respect to the acceleration of equity awards
that is otherwise payable to the Participant that is exempt from Section 409A of the Code, and (D) reduction of any payment, on
a pro rata basis, with respect to the acceleration of equity awards that is otherwise payable to the Participant that is subject
to Section 409A of the Code.

 

(3)
All determinations under this Section 4.6 shall be made by a nationally recognized accountant, executive compensation consultant,
or law firm appointed by the Company (the “Consultant”) that is acceptable to the Participant on the basis of “substantial
authority” (within the meaning of Section 6662 of the Code). The Consultant’s fee shall be paid by the Company. The
Consultant shall provide a report to the Participant that may be used by the Participant to file the Participant’s federal
tax returns.

 

(b)
It is possible that payments will be made by the Company that should not have been made (each, an “Overpayment”)
due to the uncertain application of Section 280G of the Code at the time of a determination hereunder. In the event that there
is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that
an Overpayment has been made, any such Overpayment shall be repaid by the Participant to the Company together with interest at
the prime rate of interest in effect on the date of such Overpayment; provided, however, that no amount shall be payable by the
Participant to the Company if and to the extent such payment would not reduce the amount that is subject to taxation under Section
4999 of the Code.

 

5.
Covenants

 

5.1.
Generally. In consideration for the benefits provided under the Plan, each Participant will agree to the covenants set forth
in this Section 5.

 

5.2.
Non-disparagement. The Participant will at no time make any derogatory, misleading or otherwise negative statement about the
actions, performance or behavior of the Company or its officers, directors, employees and agents.

 

5.3.
Cooperation. The Participant will cooperate with the Company in order to ensure an orderly transfer of his or her or its duties
and responsibilities. In addition, the Participant will at all times, both before and after termination of employment, (a) provide
reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) that relates
to events occurring during the Participant’s employment hereunder, provided that such cooperation does not materially interfere
with the Participant’s then current employment, and (b) cooperate with the Company in executing and delivering documents
requested by the Company, and taking any other actions, that are necessary or requested by the Company to assist the Company in
patenting, copyrighting, or registering any programs, ideas, inventions, discoveries, patented or copyrighted material, or trademarks,
and to vest title thereto in the Company.

 

    	 	 	 

    	 

    

 

5.4.
Recoupment. If the Participant breaches any of the covenants set forth in this Section 5, the Company will have no further
obligation to pay to the Participant any benefit under the Plan, and the Participant will be obligated to repay to the Company
all benefits previously paid to, or on behalf of, the Participant under the Plan. All benefits under the Plan are subject to the
Company’s Clawback Policy.

 

6.
Release

 

6.1.
Generally. A Participant will not be entitled to any benefits under the Plan unless, at the time of the Participant’s
Qualifying Termination, he or she or it executes and does not subsequently revoke a release satisfactory to the Company releasing
the Company, its affiliates, subsidiaries, shareholders, directors, officers, employees, representatives, and agents and their
successors and assigns from any and all employment-related claims the Participant or his or her or its successors and beneficiaries
might then have against them (excluding any claims the Participant might then have under the Plan or any employee benefit plan
sponsored by the Company). The release will be substantially in the form that is attached as Exhibit B to the Plan.

 

6.2.
Time Limit for Providing Release. A Participant will execute and submit the release to the Company within 30 days after the
date of the Participant’s Qualifying Termination. However, if the Participant has a Qualifying Termination in connection
with an exit incentive or other employment termination program offered to a group or class of employees, the Participant will
have 50 days after the Participant terminates employment to execute and submit the release to the Company. With respect to any
payment under the Plan that is subject to Section 409A, if payment is otherwise due prior to the latest date on which the release
may become irrevocable and the period between separation from service and such date spans two calendar years, payment shall be
made in the second of those two years.

 

7.
Nature of Participant’s Interest in the Plan

 

7.1.
No Right to Assets. Participation in the Plan does not create, in favor of any Participant, any right or lien in or against
any asset of the Company. Nothing contained in the Plan, and no action taken under its provisions, will create or be construed
to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person. The Company’s
promise to pay benefits under the Plan will at all times remain unfunded as to each Participant, whose rights under the Plan are
limited to those of a general and unsecured creditor of the Company.

 

7.2.
No Right to Transfer Interest. Rights to benefits payable under the Plan are not subject in any manner to alienation, sale,
transfer, assignment, pledge, or encumbrance. However, the Administrator may recognize the right of an alternate payee named in
a domestic relations order to receive all or part of a Participant’s benefits under the Plan, but only if (a) the domestic
relations order would be a “qualified domestic relations order” within the meaning of section 414(p) of the Code (if
section 414(p) applied to the Plan), (b) the domestic relations order does not attempt to give the alternate payee any right to
any asset of the Company, (c) the domestic relations order does not attempt to give the alternate payee any right to receive payments
under the Plan at a time or in an amount that the Participant could not receive under the Plan, and (d) the amount of the Participant’s
benefits under the Plan are reduced to reflect any payments made or due the alternate payee.

 

7.3.
No Employment Rights. No provisions of the Plan and no action taken by the Company or the Administrator will give any person
any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or
discharge any Participant for any reason or no reason and at any time.

 

7.4.
Withholding and Tax Liabilities. All payments under the Plan will be subject to tax withholding or other withholding required
or permitted by applicable law to the extent deemed necessary by the Administrator. The Participant will bear the cost of any
taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required.

 

    	 	 	 

    	 

    

 

8.
Administration, Interpretation, and Modification of Plan

 

8.1.
Plan Administrator. The Administrator will administer the Plan.

 

8.2.
Powers of the Administrator. The Administrator’s powers include, but are not limited to, the power to adopt rules consistent
with the Plan; the power to decide all questions relating to the interpretation of the terms and provisions of the Plan; and the
power to resolve all other questions arising under the Plan (including, without limitation, the power to remedy possible ambiguities,
inconsistencies, or omissions by a general rule or particular decision). The Administrator has full discretionary authority to
exercise each of the foregoing powers.

 

8.3.
Incapacity. If the Administrator determines that any Participant entitled to benefits under the Plan is unable to care for
his or her or its affairs because of illness or accident, any payment due (unless a duly qualified guardian or other legal representative
has been appointed) may be paid for the benefit of such Participant to his or her or its spouse, parent, brother, sister, or other
party deemed by the Administrator to have incurred expenses for such Participant. If a Participant dies after having a Qualifying
Termination, any payment of the Participant’s Severance Benefit or benefit under Section 4.2 remaining due to the Participant
will be paid to the Participant’s estate at the time such payment would otherwise be paid to the Participant but no later
than 90 days after the Participant’s death.

 

8.4.
Amendment, Suspension, and Termination. The Compensation Committee has the right by written resolution to amend, suspend,
or terminate the Plan at any time, subject to the terms of this Section 8.4. After a Change in Control, no amendment, suspension,
or termination that reduces the benefits to which a Participant is entitled under the Plan will apply to an employee who, at the
time the amendment is adopted, already is a Participant without his or her express written consent. Notwithstanding the foregoing,
the Compensation Committee may amend the Plan at any time to the extent necessary to comply with Section 409A, provided that,
to the extent possible, such amendment does not reduce the benefits of an employee who is already a Participant.

 

8.5.
Power to Delegate Authority. The Administrator may, in its sole discretion, delegate to any person or persons all or part
of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan.

 

8.6.
Headings. The headings used in this document are for convenience of reference only and may not be given any weight in interpreting
any provision of the Plan.

 

8.7.
Severability. If an arbitrator or court of competent jurisdiction determines that any term, provision, or portion of the Plan
is void, illegal, or unenforceable, the other terms, provisions, and portions of the Plan will remain in full force and effect,
and the terms, provisions, and portions that are determined to be void, illegal, or unenforceable will either be limited so that
they will remain in effect to the extent permissible by law, or such arbitrator or court will substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to the Company, to the fullest extent permitted by applicable
law, the benefits intended by the Plan.

 

8.8.
Governing Law. The Plan will be construed, administered, and regulated in accordance with the laws of Arizona (excluding any
conflicts or choice of law rule or principle), except to the extent that those laws are preempted by federal law.

 

8.9.
Complete Statement of Plan. The Plan contains a complete statement of its terms. The Plan may be amended, suspended, or terminated
only in writing and then only as provided in Section 8.4 or 8.5. A Participant’s right to any benefit of a type provided
under the Plan will be determined solely in accordance with the terms of the Plan. No other evidence, whether written or oral,
will be taken into account in interpreting the provisions of the Plan. Notwithstanding the preceding provisions of this Section
8.9, for purposes of determining benefits with respect to a Participant, the Plan will be deemed to include (a) the provisions
of any Participation Agreement executed in accordance with Section 3.2, and (b) the provisions of any other written agreement
between the Company and the Participant to the extent such other agreement explicitly provides for the incorporation of some or
all of its terms into the Plan.

 

    	 	 	 

    	 

    

 

9.
Claims and Appeals

 

9.1.
Application of Claims and Appeals Procedures.

 

(a)
If a Participant is not receiving, or believes that he or she or it is not receiving, the full amount of benefits under the
Plan to which he or she or it is entitled, the Participant may file a claim under the provisions of this Section 9. However, to
the extent that the Participant requests a determination of disability, the procedures for disability benefit claims set forth
in Department of Labor Regulation § 2560.503-1 shall apply.

 

(b)
No claim for non-payment or underpayment of benefits allegedly owed under the Plan may be filed in court until the claimant
has exhausted the claims review procedures established in accordance with this Section 9.

 

9.2.
Initial Claims.

 

(a)
Any claim for benefits will be in writing (which may be electronic if permitted by the Administrator) and will be delivered
to the Claim Reviewer.

 

(b)
Each claim for benefits will be decided by the Claim Reviewer within a reasonable period of time, but not later than 90 days
after such claim is received by the Claim Reviewer (without regard to whether the claim submission includes sufficient information
to make a determination), unless the Claim Reviewer determines that special circumstances require an extension of time for processing
the claim. If the Claim Reviewer determines that an extension of time for processing is required, the Claim Reviewer will notify
the claimant in writing before the end of the initial 90-day period of the circumstances requiring an extension of time and the
date by which a decision is expected.

 

(c)
If any claim is denied in whole or in part, the Claim Reviewer will provide to the claimant a written decision, issued by
the end of the period prescribed by subsection (b), above, that includes the following information:

 

(1)
The specific reason or reasons for denial of the claim;

 

(2)
References to the specific Plan provisions upon which such denial is based;

 

(3)
A description of any additional material or information necessary to perfect the claim, and an explanation of why such material
or information is necessary;

 

(4)
An explanation of the appeal procedures Plan’s and the applicable time limits; and

 

(5)
A statement of the claimant’s right to bring a civil action under section 502(a) of ERISA, if his or her claim is denied
upon review.

 

9.3.
Appeals.

 

(a)
If a claim for benefits is denied in whole or in part, the claimant may appeal the denial to the Claim Reviewer. Such appeal
will be in writing (which may be electronic, if permitted by the Claim Reviewer), may include any written comments, documents,
records, or other information relating to the claim for benefits, and will be delivered to the Claim Reviewer within 60 days after
the claimant receives written notice that his or her or its claim has been denied.

 

    	 	 	 

    	 

    

 

(b)
The Claim Reviewer will decide each appeal within a reasonable period of time, but not later than 60 days after such claim
is received by the Claim Reviewer, unless the Claim Reviewer determines that special circumstances require an extension of time
for processing the appeal.

 

(1)
If the Claim Reviewer determines that an extension of time for processing is required, the Claim Reviewer will notify the
claimant in writing before the end of the initial 60-day period of the circumstances requiring an extension of time and the date
by which the Claim Reviewer expects to render a decision.

 

(2)
If an extension of time pursuant to paragraph (1), above, is due to the claimant’s failure to submit information necessary
to decide the appeal, the period for deciding the appeal will be tolled from the date on which the notification of extension is
sent to the claimant until the date on which the claimant responds to the request for additional information.

 

(c)
In connection with any appeal, the claimant will be provided, upon request and free of charge, reasonable access to, and copies
of, all documents, records, and other information relevant to his or her or its claim for benefits. A document, record, or other
information will be considered relevant to a claim for benefits if such document, record, or other information:

 

(1)
Was relied upon in making the benefit determination;

 

(2)
Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such
document, record, or other information was relied upon in making the benefit determination; or

 

(3)
Demonstrates compliance with processes and safeguards designed to ensure and to verify that the benefit determination was
made in accordance with the terms of the Plan and that such terms of the Plan have been applied consistently with respect to similarly
situated claimants.

 

(d)
The Claim Reviewer review on appeal will take into account all comments, documents, records and other information submitted
by the claimant, without regard to whether such information was considered in the initial benefit determination.

 

(e)
If any appeal is denied in whole or in part, the Claim Reviewer will provide to the claimant a written decision, issued by
the end of the period prescribed by subsection (b), above, that includes the following information:

 

(1)
The specific reason or reasons for the decision;

 

(2)
References to the specific Plan provisions upon which the decision is based;

 

(3)
An explanation of the claimant’s right to receive, upon request and free of charge, reasonable access to, and copies
of, all documents, records, and other information relevant to his or her claim for benefits (as determined pursuant to subsection
(c), above); and

 

(4)
A statement of the claimant’s right to bring a civil action under section 502(a) of ERISA.

 

9.4.
Other Rules and Rights Regarding Claims and Appeals.

 

(a)
A claimant may authorize a representative to pursue any claim or appeal on his or her or its behalf. The Claim Reviewer may
establish reasonable procedures for verifying that any representative has in fact been authorized to act on his or her behalf.

 

(b)
Notwithstanding the deadlines prescribed by this Section 9.4, the Claim Reviewer and any claimant may agree to a longer period
for deciding a claim or appeal or for filing an appeal, provided that the Claim Reviewer will not extend any deadline for filing
an appeal unless imposition of the deadline prescribed by Section 9.3(a) would be unreasonable under the applicable circumstances.

 

9.5.
Interpretation. The provisions of this Section 9 are intended to comply with section 503 of ERISA and will be administered
and interpreted in a manner consistent with such intent.

 

    	 	 	 

    	 

    

 

Exhibit
A

 

	Date:
    	[Date]
	 	 
	To:
    	[Executive]
	 	 
	From:
    	[Name]

                                                         [Title]

 

Subject:
Taronis Fuels, Inc. Executive Severance Plan Participation Agreement

 

I
am pleased to advise that you have been designated as an “Eligible Employee” for the purposes of the Taronis Fuels,
Inc. Executive Severance Plan, as amended from time to time (the “Plan”). A copy of the current plan document is enclosed).

 

This
means that, upon your execution of this agreement, you will be eligible to receive the severance benefits described in the Plan
in the event you experience a “Qualifying Termination” as defined under the Plan. If you have any questions please
contact me or [name], [title].

 

By
signing the attached signature page and in consideration of the opportunity to participate in the Plan, you agree to be bound
by the terms of the Plan, including the covenants set forth in Section 5 of the Plan. Your participation in the Plan does not
confer any rights to continue in the employ of Taronis Fuels or any of the affiliates.

 

Please
sign the attached signature page and return the original to me as soon as possible.

 

	Best
    regards,	 
	 	 
	 	[name]	 
	 	[title]	 

 

    	 	 	 

    	 

    

 

Taronis
Fuels, Inc. Executive Severance Plan

Agreement
Signature Page

 

[date]

 

I,
[name], have read the Taronis Fuels, Inc. Executive Severance Plan and agree to its terms, and I agree to be bound by the
terms of the covenants in Section 5 of the Plan. This agreement supersedes any and all prior agreements and communications, whether
written or oral, between the Company and me regarding the subject matter of the Plan.

 

	 	 	 
	Signature	 	Date

 

Return
to [name] [title] by [date].

 

    	 	 	 

    	 

    

 

EXHIBIT
B

 

Release

 

In
consideration of the Benefits (as defined below) provided and to be provided to me by Taronis Fuels, Inc., or any successor thereof
(the “Company”) pursuant to the Taronis Fuels, Inc. Executive Severance Plan (the “Plan”) and in connection
with the termination of my employment, I agree to the following general release (the “Release”).

 

	 	1.	On
    behalf of myself, my heirs, executors, administrators, successors, and assigns, I hereby fully and forever generally release
    and discharge the Company, its current, former and future parents, subsidiaries, affiliated companies, related entities, employee
    benefit plans, and, in such capacities, their fiduciaries, predecessors, successors, officers, directors, shareholders, agents,
    employees and assigns from any and all claims, causes of action, and liabilities up through the date of my execution of the
    Release. The claims subject to this release include, but are not limited to, those relating to my employment with the Company
    and/or any predecessor to or affiliate of the Company and the termination of such employment. All such claims (including related
    attorneys’ fees and costs) are barred without regard to whether those claims are based on any alleged breach of a duty
    arising in statute, contract, or tort. This expressly includes waiver and release of any rights and claims arising under any
    and all laws, rules, regulations, and ordinances, including, but not limited to: Title VII of the Civil Rights Act of 1964;
    the Older Workers Benefit Protection Act; the Americans With Disabilities Act; the Age Discrimination in Employment Act; the
    Fair Labor Standards Act; the National Labor Relations Act; the Family and Medical Leave Act; the Employee Retirement Income
    Security Act of 1974; the Workers Adjustment and Retraining Notification Act; the provisions of the Arizona Labor Code (if
    applicable); the Equal Pay Act of 1963; in each case, as amended, and any similar law of any other state or governmental entity.
    The parties agree to apply Arizona law in interpreting the Release. Accordingly, I further waive any rights under Section
    1542 of the Civil Code of the State of California or any similar state statute. Section 1542 states: “A GENERAL RELEASE
    DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
    TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
    THE DEBTOR OR RELEASED PARTY.” This Release does not extend to, and has no effect upon, any benefits that have accrued
    or equity that has vested or is eligible for vesting post-employment, under any employee benefit or equity plan, program,
    policy or grant sponsored or maintained by the Company, or to my right to indemnification by the Company, and continued coverage
    by the Company’s director’s and officer’s insurance.

 

    	 	 	 

    	 

    

 

	 	2.	In
    understanding the terms of the Release and my rights, I have been advised to consult with an attorney of my choice prior to
    executing the Release. I understand that nothing in the Release shall prohibit me from exercising legal rights that are, as
    a matter of law, not subject to waiver such as: (a) my rights under applicable workers’ compensation laws; (b) my right,
    if any, to seek unemployment benefits; (c) my right to applicable state-law right to indemnity; (d) my right to file a charge
    or complaint with a government agency such as but not limited to the Equal Employment Opportunity Commission, the National
    Labor Relations Board, the Department of Labor, or other applicable state agency; and (e) my right to report any violation
    to the Securities and Exchange Commission or any other federal or state agency. I further understand that nothing in this
    Release precludes me from entitlement to any monetary recovery awarded by the Securities and Exchange Commission in connection
    with any action asserted by the Securities and Exchange Commission. Moreover, I will continue to be indemnified for my actions
    taken while employed by the Company to the same extent as other former directors and officers of the Company under the Company’s
    Amended and Restated Certificate of Incorporation and Bylaws and the Director and Officer Indemnification Agreement between
    me and the Company, if any, and I will continue to be covered by the Company’s directors and officers liability insurance
    policy as in effect from time to time to the same extent as other former directors and officers of the Company, each subject
    to the requirements of the laws of the State of Delaware. To the fullest extent permitted by law, any dispute regarding the
    scope of this general release shall be resolved through binding arbitration as set forth in the alternative dispute resolution
    agreement previously entered into by me and the Company.
	 	 	 
	 	3.	I
    understand and agree that the Company will not provide me with the Benefits unless I execute the Release. I also understand
    that I have received or will receive, regardless of the execution of the Release, all wages owed to me together with any accrued
    but unused vacation pay, less applicable withholdings and deductions, earned through my termination date.
	 	 	 
	 	4.	As
    part of my existing and continuing obligations to the Company, I have returned to the Company all Company documents (and all
    copies thereof) and other Company property that I have had in my possession at any time, including but not limited to Company
    files, notes, drawings, records, business plans and forecasts, financial information, specification, computer-recorded information,
    tangible property (including, but not limited to, computers, laptops, pagers, etc.), credit cards, entry cards, identification
    badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the
    Company (and all reproductions thereof, except as otherwise I am entitled to retain under any agreement with the Company).
    I understand that, even if I did not sign the Release, I am still bound by any and all confidential/proprietary/trade secret
    information, non-disclosure and inventions assignment agreement(s) signed by me in connection with my employment with the
    Company, or with a predecessor or successor of the Company pursuant to the terms of such agreement(s).
	 	 	 
	 	5.	I
    represent and warrant that I am the sole owner of all claims relating to my employment with the Company and/or with any predecessor
    of the Company, and that I have not assigned or transferred any claims relating to my employment to any other person or entity.
	 	 	 
	 	6.	I
    agree to keep the Benefits and the provisions of the Release confidential and not to reveal its contents to anyone except
    my lawyer, my spouse or other immediate family member, and/or my financial consultant, or as required by legal process or
    applicable law or requested by taxing authorities unless and until they become publicly available.
	 	 	 
	 	7.	I
    understand and agree that the Release shall not be construed at any time as an admission of liability or wrongdoing by either
    the Company or myself.

 

    	 	 	 

    	 

    

 

	 	8.	I
    agree that for two years following my termination of employment, I will not, directly or indirectly, make any disparaging
    statements or comments, either as fact or as opinion, about the Company, its employees, officers, directors, shareholders,
    vendors, products or services, business, technologies, market position or performance. The Company agrees that for two years
    following my termination of employment, neither the Company’s Board of Directors (the “Board”), nor any
    member thereof, nor any C-level officer of the Company will, directly or indirectly, make any disparaging statements or comments,
    either as fact or as opinion, about me or my performance at the Company, and the Board will use commercially reasonable efforts
    to ensure that the Company’s other executive officers, and any authorized spokesperson for the Company who handles public
    statements by the Company or who interacts with the press or potential or actual investors, also abide by the non-disparagement
    covenant set forth in this sentence. Nothing in this paragraph shall prohibit me or the Company from providing truthful information
    in response to a subpoena or other legal process rebutting false or misleading statements or making normal competitive type
    statements in the course of my performance of duties to a subsequent employer.
	 	 	 
	 	9.	The
    Company and I will refer prospective employers or others seeking verification of my employment to the Company’s Human
    Resources department, which will verify my dates of employment and job title only. Additionally, and at my request and direction,
    my salary can be verified.
	 	 	 
	 	10.	I
    acknowledge that, except as expressly provided in this Release, I will not receive any additional compensation or benefits
    after the date of my termination of employment with the Company. Thus, for any Company-sponsored employee benefits not referenced
    in this Release (including, but not limited to, the Company’s 401(k), life insurance, and long-term disability insurance
    plans), I will be treated as a terminated employee as of the date of my termination of employment.
	 	 	 
	 	11.	I
    agree that, by no later than ten (10) days after the date of my termination of employment, I will submit my final documented
    expense reimbursement statement reflecting all business expenses I incurred through the date of my termination of employment,
    if any, for which I seek reimbursement. The Company will reimburse me for these expenses (if any) pursuant to its regular
    business practice. If the Company determines that personal expenses have been charged with the Company credit card, and those
    expenses are outstanding, I agree that the Company may deduct any such personal expenses from the Benefits.
	 	 	 
	 	12.	I
    agree to reasonably cooperate with the Company in any internal investigation, any administrative, regulatory, or judicial
    proceeding or any dispute with a third party related to my employment period. I understand and agree that my cooperation may
    include, but not be limited to, making myself reasonably available to the Company upon reasonable notice for interviews and
    factual investigations; appearing at the Company’s reasonable request to give testimony without requiring service of
    a subpoena or other legal process; volunteering to the Company pertinent information; and turning over to the Company all
    relevant documents which are or may come into my possession all at times and on schedules that are reasonably consistent with
    my other permitted activities and commitments. The Company shall to the extent reasonably feasible limit my travel and not
    interfere with my other obligations in seeking such cooperation. The Company shall reimburse my reasonable expenses incurred
    in connection with such cooperation.
	 	 	 
	 	13.	I
    agree that I have had at least twenty-one (21) calendar days in which to consider whether to execute the Release, no one hurried
    me into executing the Release during that period, and no one coerced me into executing the Release. I understand that the
    offer of the Benefits and the Release shall expire thirty-first (31st) calendar day after my employment termination date if
    I have not accepted it by that time (unless the Company notifies me that the offer will expire on a later date pursuant to
    Section 6.2 of the Plan). I further understand that the Company’s obligations under the Release shall not become effective
    or enforceable until the eighth (8th) calendar day after the date I sign the Release provided that I have timely delivered
    it to the Company (the “Effective Date”) and that in the seven (7) day period following the date I deliver a signed
    copy of the Release to the Company, I understand that I may revoke my acceptance of the Release. I understand that the Benefits
    will become available to me only after the Effective Date in accordance with the terms of the Plan.

 

    	 	 	 

    	 

    

 

	 	14.	In
    executing the Release, I acknowledge that I have not relied upon any statement made by the Company, or any of its representatives
    or employees, with regard to the Release unless the representation is specifically included herein. Furthermore, the Release
    contains our entire understanding regarding eligibility for Benefits and supersedes any or all prior representation and agreement
    regarding the subject matter of the Release. However, the Release does not modify, amend or supersede written Company agreements
    that are consistent with enforceable provisions of this Release such as my employment agreement, proprietary information and
    invention assignment agreement, and any stock, stock option and/or stock purchase agreements between the Company and me. Once
    effective and enforceable, this agreement can be changed only by another written agreement signed by me and an authorized
    representative of the Company.
	 	 	 
	 	15.	Should
    any provision of the Release be determined by an arbitrator, court of competent jurisdiction, or government agency to be wholly
    or partially invalid or unenforceable, the legality, validity and enforceability of the remaining parts, terms, or provisions
    are intended to remain in full force and effect. Specifically, should a court, arbitrator, or agency conclude that a particular
    claim may not be released as a matter of law, it is the intention of the parties that the general release and the waiver of
    unknown claims above shall otherwise remain effective to release any and all other claims. I acknowledge that I have obtained
    sufficient information to intelligently exercise my own judgment regarding the terms of the Release before executing the Release.
	 	 	 
	 	16.	The
    “Benefits” provided and to be provided to me by the Company consist of the benefits and payments in accordance
    with the Taronis Fuels, Inc. Executive Severance Plan.
	 	 	 
	 	17.	I
    hereby agree to remain bound to the alternative dispute resolution agreement previously entered into by me and the Company,
    and that my obligations thereunder shall continue notwithstanding my termination and entry into this Release.

 

    	 	 	 

    	 

    

 

EMPLOYEE’S
ACCEPTANCE OF RELEASE

 

BEFORE
SIGNING MY NAME TO THE RELEASE, I STATE THE FOLLOWING: I HAVE READ THE RELEASE, I UNDERSTAND IT AND I KNOW THAT I AM GIVING UP
IMPORTANT RIGHTS. I HAVE OBTAINED SUFFICIENT INFORMATION TO INTELLIGENTLY EXERCISE MY OWN JUDGMENT. I HAVE BEEN ADVISED THAT I
SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING IT, AND I HAVE SIGNED THE RELEASE KNOWINGLY AND VOLUNTARILY.

 

EFFECTIVE
UPON EXECUTION BY EMPLOYEE AND THE COMPANY.

 

	 	 	Date
    delivered to employee _________, _________.
	 	 	 
	 	 	Executed
    this day _________ of _________, _____.
	 	 	 
	 	 	 
	 	 	Your
    Signature
	 	 	 
	 	 	 
	 	 	Your
    Name (Please Print)
	 	 	 
	Agreed
    and Accepted:	 	 
	Taronis
    Fuels, Inc.	 	 
	 	 	 
	 	 	 
	By:	 	 
	 	 	 
	Date:	 	 

 

[Signature
Page to General Release Agreement]TARONIS
FUELS, INC.

INSIDER
TRADING POLICY

and
Guidelines with Respect to 

Certain
Transactions in Company Securities

 

This
Insider Trading Policy (the “Policy”) provides guidelines to employees, officers and directors of Taronis Fuels,
Inc. (the “Company”) with respect to transactions in the Company’s securities. The Company has adopted
this policy and the procedures set forth herein to help prevent insider trading and to assist the Company’s employees, officers
and directors in complying with their obligations under the federal securities laws. Employees, officers and directors are individually
responsible to understand and comply with this Policy.

 

Applicability
of Policy

 

This
Policy applies to all transactions in the Company’s securities, including common stock, restricted stock, restricted stock
units, options and warrants to purchase common stock and any other debt or equity securities the Company may issue from time to
time, such as bonds, preferred stock and convertible debentures, as well as to derivative securities relating to the Company’s
securities, whether or not issued by the Company, such as exchange-traded options. It applies to all employees, officers and directors
of the Company and members of their immediate families who reside with them or anyone else who lives in their household and family
members who live elsewhere but whose transactions in Company securities are directed by such employees, officers and directors
or subject to their influence and control (collectively referred to as “Family Members”). This Policy also
imposes specific black-out period and pre-clearance procedures on officers, directors and certain other designated employees who
receive or have access to Material Non-Public Information (defined below) regarding the Company and/or are subject to the reporting
provisions and trading restrictions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

The
current “Insider Trading Compliance Officer” referred to herein is the Chief Legal Officer of the Company.

 

“Material
Non-Public Information”; Defined.

 

“Material
Non-Public Information” is material information that has not been previously disclosed to the general public through
a press release or securities filings and is otherwise not available to the general public.

 

    	 

    	 

    

 

That
said, it is not possible to define all categories of material information. However, information should be regarded as material
if there is a substantial likelihood that it would be considered important to a reasonable investor in making a voting decision
or an investment decision to buy, hold or sell securities. Any information that could be expected to affect the market price of
the Company’s securities, whether such information is positive or negative, should be considered material. Because trading
that receives scrutiny will be evaluated after the fact with the benefit of hindsight, when it is unclear whether particular information
is material, then such information should be treated as material and trading should be avoided. Officers, directors and certain
other employees are subject to the Blackout Period provisions described below.

 

While
it may be difficult under this standard to determine whether particular information is material, there are various categories
of information that are particularly sensitive and, as a general rule, should always be considered material.

 

Examples
of such information may include:

 

	 	●	Financial
    results;
	 	●	Projections
    of future earnings or losses;
	 	●	News
    of a pending or proposed merger, acquisition or tender offer;
	 	●	News
    of a pending or proposed acquisition or disposition of significant assets;
	 	●	Actions
    of regulatory agencies;
	 	●	News
    of a pending or proposed acquisition or disposition of a subsidiary; 
	 	●	Impending
    bankruptcy or financial liquidity problems;
	 	●	Gain
    or loss of a significant customer or supplier;
	 	●	Significant
    pricing changes;
	 	●	Stock
    splits and stock repurchase programs;
	 	●	New
    equity or debt offerings;
	 	●	Significant
    litigation exposure due to actual or threatened litigation; and 
	 	●	Changes
    in senior management. 

 

STATEMENT
OF POLICY 

 

General
Policy

 

It
is the policy of the Company to oppose the unauthorized disclosure of any non-public information acquired in the workplace, the
use of Material Non-Public Information in securities trading and any other violation of applicable securities laws.

 

    	 

    	 

    

 

Specific
Policies

 

1.
Trading on Material Non-Public Information. No employee, officer or director of the Company and its subsidiaries and
no Family Member of any such person, shall engage in any transaction involving a purchase or sale of the Company’s securities,
including any offer to purchase or offer to sell (other than pursuant to a trading plan that complies with SEC Rule 10b5-1 pre-cleared
by the Company’s Insider Trading Compliance Officer), during any period commencing with the date that he or she or it possesses
Material Non-Public Information concerning the Company and ending at the close of business on the second Trading Day (as defined
below) following the date of public disclosure of that information, or at such time as such non-public information is no longer
material. As used in this Policy, the term “Trading Day” shall mean a day on which national stock exchanges
are open for trading. If, for example, the Company were to make an announcement on a Monday, Designated Insiders (as defined below)
shall not trade in the Company’s securities until Thursday.

 

2.
Tipping. No employee, officer or director of the Company shall disclose or pass on (“tip”) Material
Non-Public Information to any other person, including a Family Member or friend, nor shall such person make recommendations or
express opinions on the basis of Material Non-Public Information as to trading in the Company’s securities.

 

3.
Confidentiality of Non-Public Information. Non-public information relating to the Company is the property of the Company
and the unauthorized disclosure of such information is forbidden.

 

POTENTIAL
CRIMINAL AND CIVIL LIABILITY

AND/OR
DISCIPLINARY ACTION

 

4.
Liability for Insider Trading. Any employee, officer or director who engages in a transaction in the Company’s
securities at a time when they have knowledge of Material Non-Public Information may be subject to penalties and sanctions, including:

 

	 	●	Up
    to 20 years in jail;
	 	●	A
    criminal fine of up to $5,000,000; 
	 	●	A
    civil penalty of up to $1,000,000 or, if greater, 3x times the profit gained or loss avoided; and
	 	●	SEC
    civil enforcement injunctions.

 

5.
Liability for Tipping. Any employee, officer or director who tips (“tippers”) a third party (commonly
referred to as a “tippee”) may also be liable for improper transactions by tippees to whom they have tipped
Material Non-Public Information regarding the Company or to whom they have made recommendations or expressed opinions on the basis
of such information as to trading in the Company’s securities. Tippers and tippees would be subject to the same penalties
and sanctions as described above, and the SEC has imposed large penalties even when the tipper or tippee did not profit from the
trading. The SEC, the stock exchanges, NYSE and NASDAQ use sophisticated electronic surveillance techniques to uncover insider
trading.

 

    	 

    	 

    

 

6.
Control Persons. The Company and its supervisory personnel, if they fail to take appropriate steps to prevent illegal
insider trading, may in certain circumstances, be subject to the following penalties:

 

	 	●	a
    civil penalty of up to 3 times the profit gained or loss avoided as a result of the employee’s violation; and
	 	●	a
    criminal penalty of up to $25,000,000. 

 

7.
Possible Company-Imposed Disciplinary Actions. Employees of the Company who violate this Policy shall also be subject
to disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity
incentive plans or termination of employment.

 

MANDATORY
GUIDELINES

 

8.
Trading Blackout Period. To ensure compliance with this Policy and applicable federal securities laws, and to avoid
even the appearance of trading on the basis of inside information, the Company requires that officers, directors and all employees
in the accounting and finance departments of the Company designated by the Company’s Insider Trading Compliance Officer
as subject to the Blackout Period (as defined below) prohibitions because of their access to the Company’s internal financial
statements or other Material Non-Public Information regarding the Company’s performance during annual and quarterly fiscal
periods (collectively, “Designated Insiders”) and Family Members of the foregoing, refrain from conducting
transactions involving the purchase or sale of the Company’s securities during the Blackout Periods established below.

 

Each
of the following periods will constitute a “Blackout Period”:

 

●
The period commencing on the tenth calendar day of the third fiscal month of each of the first three fiscal quarters (i.e. March
10, June 10 and September 10, as applicable) and commencing on the first calendar day of the third fiscal month of the fourth
fiscal quarter (i.e. December 1) and, in each case, ending at the close of business on the second Trading Day following the date
of public disclosure of the financial results for such fiscal quarter (which is generally 30 to 75 days after the end of such
quarter).

 

○
If such public disclosure occurs on a Trading Day before the markets close, then that day shall be considered the first
Trading Day. If such public disclosure occurs after the markets close on a Trading Day, then the date of public disclosure
shall not be considered the first Trading Day following the date of public disclosure.

 

●
In addition to the Blackout Periods described above, the Company may announce “special” Blackout Periods from time
to time. Typically, this will occur when there are non-public developments that would be considered material for insider trading
law purposes, such as, among other things, developments relating to regulatory proceedings or a major corporate transaction. Depending
on the circumstances, a “special” Blackout Period may apply to all Designated Insiders or only a specific group of
Designated Insiders. The Insider Trading Compliance Officer will provide written notice to Designated Insiders subject to a “special”
Blackout Period. Any person made aware of the existence of a “special” Blackout Period should not disclose the existence
of the Blackout Period to any other person. The failure of the Company to designate a person as being subject to a “special”
Blackout Period will not relieve that person of the obligation not to trade while aware of Material Non-Public Information. As
used in this Policy, the term “Blackout Period” shall mean all periodic Blackout Periods and all “special”
Blackout Periods announced by the Company.

 

    	 

    	 

    

 

 

The
purpose behind the Blackout Period is to help establish a diligent effort to avoid any improper transactions. Trading in the Company’s
securities outside a Blackout Period should not be considered a “safe harbor”, and all employees, officers and directors
and other persons subject to this Policy should use good judgment at all times. Even outside a Blackout Period, any person possessing
Material Non-Public Information concerning the Company should not engage in any transactions in the Company’s securities
until such information has been known publicly for at least two Trading Days after the date of announcement. Although the Company
may from time to time impose special Blackout Periods, because of developments known to the Company and not yet disclosed to the
public, each person is individually responsible at all times for compliance with the prohibitions against insider trading.

 

9.
Pre-Clearance of Trades. The Company has determined that all executive officers and directors and their Family Members
must refrain from trading in the Company’s securities, without first complying with the Company’s “pre-clearance”
process. Each executive officer or director must contact the Company’s Insider Trading Compliance Officer not less than
two (2) business days prior to commencing any trade in the Company’s securities. This pre-clearance requirement applies
to any transaction or transfer involving the Company’s securities, including a stock plan transaction such as an option
exercise, or a gift, transfer to a trust or any other transfer, but does not apply to shares sold under a 10b5-1 trading plan.

 

a.
The Insider Trading Compliance Officer must pre-clear each proposed trade or transfer. The Insider Trading Compliance Officer
is not under any obligation to approve a trade submitted for pre-clearance, and may determine not to permit a trade.

 

b.
To facilitate the process, the Company has prepared a pre-clearance form, attached hereto as Exhibit A, to be completed
and provided to the Insider Trading Compliance Officer. The Insider Trading Compliance Officer will assist with the approval process.

 

c.
No trade or transfer may be effected until the requesting employee, officer or director has received the approved Pre-Clearance
Request Form, even if two (2) business days have passed since the Pre-Clearance Request Form was submitted.

 

d.
The Company may also find it necessary, from time to time, to require compliance with the pre-clearance process from employees
designated as Designated Insiders.

 

e.
Any executive officer and director who wishes to implement a trading plan under SEC Rule 10b5-1 must first pre-clear the plan
with the Insider Trading Compliance Officer. As required by Rule 10b5-1, an executive officer or director may enter into a trading
plan only when he or she or it is not in possession of Material Non-Public Information. In addition, a trading plan may not be
entered into during a Blackout Period. Transactions effected pursuant to a pre-cleared trading plan will not require further pre-clearance
at the time of the transaction.

 

    	 

    	 

    

 

10.
Individual Responsibility. Each employee, officer and director has an individual responsibility to comply with this
Policy against insider trading, regardless of whether a transaction is executed outside a Blackout Period or is pre-cleared by
the Company. The restrictions and procedures are intended to help avoid inadvertent instances of improper insider trading, but
appropriate judgment should always be exercised by each employee, officer and director in connection with any trade in the Company’s
securities. An employee, officer or director may, from time to time, have to forego a proposed transaction in the Company’s
securities even if he or she or it planned to make the transaction before learning of the Material Non-Public Information and
even though the Insider believes he or she or it may suffer an economic loss or forego anticipated profit by waiting.

 

CERTAIN
EXCEPTIONS

 

11.
Stock Options Exercises. For purposes of this Policy, the Company considers that the exercise of stock options under
the Company’s stock option plans (but not the sale of the underlying stock) to be exempt from this Policy. This Policy does
apply, however, to any sale of stock as part of a broker-assisted “cashless” exercise of an option, or any market
sale for the purpose of generating the cash needed to pay the exercise price of an option.

 

12.
401(k) Plan. This Policy does not apply to purchases of Company stock in the Company’s 401(k) plan resulting
from periodic contributions of money to the plan pursuant to payroll deduction elections. This Policy does apply, however, to
certain elections that may be made under the 401(k) plan, including (a) an election to increase or decrease the percentage of
periodic contributions that will be allocated to the Company stock fund, if any, (b) an election to make an intra-plan transfer
of an existing account balance into or out of the Company stock fund, (c) an election to borrow money against a 401(k) plan account
if the loan will result in a liquidation of some or all of a participant’s Company stock fund balance and (d) an election
to pre-pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund.

 

13.
Employee Stock Purchase Plan. This Policy does not apply to purchases of Company stock in the Company’s employee
stock purchase plan, if any, resulting from periodic contributions of money to the plan pursuant to the elections made at the
time of enrollment in the plan. This Policy also does not apply to purchases of Company stock resulting from lump sum contributions
to the plan, provided that the participant elected to participate by lump-sum payment at the beginning of the applicable enrollment
period. This Policy does apply to a participant’s election to participate in or increase his or her or its participation
in the plan, and to a participant’s sales of Company stock purchased pursuant to the plan.

 

14.
Dividend Reinvestment Plan. This Policy does not apply to purchases of Company stock under the Company’s dividend
reinvestment plan, if any, resulting from reinvestment of dividends paid on Company securities. This Policy does apply, however,
to voluntary purchases of Company stock that result from additional contributions a participant chooses to make to the plan, and
to a participant’s election to participate in the plan or increase his level of participation in the plan. This Policy also
applies to his, her or it sale of any Company stock purchased pursuant to the plan.

 

    	 

    	 

    

 

APPLICABILITY
OF POLICY TO INSIDE INFORMATION

REGARDING
OTHER COMPANIES

 

This
Policy and the guidelines described herein also apply to Material Non-Public Information relating to other companies, including
the Company’s customers, vendors or suppliers (“business partners”), when that information is obtained
in the course of employment with, or other services performed on behalf of, the Company. Civil and criminal penalties, and termination
of employment, may result from trading on inside information regarding the Company’s business partners. All employees should
treat Material Non-Public Information about the Company’s business partners with the same care required with respect to
information related directly to the Company.

 

Section
16 Liability - Directors and Officers

 

Certain
officers and all directors of the Company must also comply with the reporting obligations and limitations on short-swing profit
transactions set forth in Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”). The practical
effect of these provisions is that any officer or director who purchases and sells the Company’s securities within a six-month
period must disgorge all profits to the Company whether or not he or she or it had knowledge of any Material Non-Public Information.
Under these provisions, and so long as certain other criteria are met, neither the receipt of stock or stock options under the
Company’s stock plans, nor the exercise of options nor the receipt of stock under the Company’s employee stock purchase
plan, dividend reinvestment plan or the Company’s 401(k) retirement plan is deemed a purchase that can be matched against
a sale for Section 16(b) short-swing profit disgorgement purposes; however, the sale of any such shares so obtained is a sale
for these purposes. Moreover, no such officer or director may ever make a short sale of the Company’s common stock which
is unlawful under Section 16(c) of the Exchange Act. The Company will provide separate memoranda and other appropriate materials
to the affected officers and directors regarding compliance with Section 16 and its related rules.

 

The
rules on recovery of short-swing profits are absolute and do not depend on whether a person has Material Non-Public Information.

 

Publicly
Traded Options

 

A
transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the
appearance that the employee, officer or director is trading based on inside information. Transactions in options also may focus
the trader’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly,
transactions in puts, calls or other derivative securities related to the Company, on an exchange or in any other organized market,
are prohibited. Option positions arising from certain types of hedging transactions are governed by the section below captioned
“Hedging or Monetization Transactions.”

 

    	 

    	 

    

 

Hedging
or Monetization Transactions

 

Certain
forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an employee, officer
or director to lock in much of the value of his stock holdings, often in exchange for all or part of the potential for upside
appreciation in the stock. These transactions would allow an employee, officer or director to continue to own the covered securities,
but without the full risks and rewards of ownership. When that occurs, their interests and the interests of the Company and its
shareholders may be misaligned and may signal a message to the trading market that may not be in the best interests of the Company
and its shareholders at the time it is conveyed. Accordingly, hedging transactions and all other forms of monetization transactions
related to the Company are prohibited.

 

Margin
Accounts and Pledges

 

Securities
held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin
call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults
on the loan. A margin sale or foreclosure sale may occur at a time when the pledgor is aware of Material Non-Public Information
or otherwise is not permitted to trade in Company securities pursuant to Blackout Period restrictions. Thus, employees, officers
and directors are prohibited from pledging Company securities as collateral for a loan. Additionally, shares of Company stock
may not be held in a margin account.

 

Post-Termination
Transactions

 

This
Policy continues to apply to transactions in Company securities even after an employee, officer or director has resigned or terminated
employment for a period of not less than six (6) months. Notwithstanding the foregoing, if the person who resigns or separates
from the Company is in possession of Material Non-Public Information at that time, he or she or it may not trade in Company securities
until that information has become public or is no longer material.

 

Communications
with the Public

 

The
Company is subject to the SEC’s Regulation FD and must avoid selective disclosure of Material Non-Public Information. The
Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination
of the information immediately upon its release. Pursuant to Company policy, only the executive officers who have been authorized
to engage in communications with the public may disclose information to the public regarding the Company and its business activities
and financial affairs. The public includes, without limitation, research analysts, portfolio managers, financial and business
reporters, news media and investors. In addition, because of the risks associated with the exchange of information through such
communications media, employees are strictly prohibited from posting or responding to messages containing information regarding
the Company on Internet “bulletin boards,” Internet “chat rooms” or in similar online forums. Employees
who inadvertently disclose any Material Non-Public Information must immediately advise the Insider Trading Compliance Officer
so the Company can assess its obligations under Regulation FD and other applicable securities laws.

 

    	 

    	 

    

 

Inquiries

 

Please
direct questions as to any of the matters discussed in this Policy to the Company’s Insider Trading Compliance Officer at
the following address:

 

Taronis
Fuels, Inc.

Attn:
Chief Legal Officer

Address:

Telephone:

E-mail:

 

Certifications

 

All
employees, officers and directors of the Company must certify their understanding of, and intent to comply with, this Policy.
Please return the enclosed certification immediately to:

 

Taronis
Fuels, Inc.

Attn:
Chief Legal Officer

Address:

Telephone:

E-mail:

 

    	 

    	 

    

 

CERTIFICATIONS

 

I
certify that:

 

I
have received, read and understand the Company’s Insider Trading Policy, I understand that the Insider Trading Compliance
Officer is available to answer any questions I have regarding the Insider Trading Policy.

 

I
will comply with the Insider Trading Policy for as long as I am subject to the Policy.

 

	Signature:	 
	 	 
	Print
    Name:	 
	 	 
	Date:	 

 

    	 

    	 

    

 

 

TARONIS
FUELS, INC.

PRE-CLEARANCE
REQUEST FORM

 

	To:	Taronis
    Fuels, Inc. (the “Company”)
	Attn:	Insider
    Trading Compliance Officer
	From:
    	_________________________
	Re: 	Proposed transaction in the Company’s Securities

 

This
is to advise you that the undersigned intends to execute a transaction in the Company’s securities on ___________ _____,
20_____ and thereafter until the trading window shall close and does hereby request that the Company pre-clear the transaction
as required by the Company’s Insider Trading Policy (the “Policy”).

 

The
general nature of the transaction is as follows (i.e. open market purchase of 10,000 shares of common stock through NYSE, privately
negotiated sale of warrants for the purchase of 5,000 shares of common stock, etc.):

 

	 
	 
	 

 

The
undersigned is not in possession of Material Non-Public Information (as defined in the Insider Trading Policy) about the Company
and will not enter into the transaction if the undersigned comes into possession of Material Non-Public Information about the
Company between the date hereof and the proposed trade execution date.

 

The
undersigned has read and understands the Policy and certifies that to the best of the undersigned’s knowledge that the above
proposed transaction will not violate the Policy.

 

The
undersigned agrees to advise the Company promptly if, as a result of future developments, any of the foregoing information becomes
inaccurate or incomplete in any respect. The undersigned understands that the Company may reasonably require additional information
about the transaction, and agrees to provide such information upon request.

 

Dated:______                                                                                                
Very truly yours,

 

	[Signature]	 
	 	 
	[Print
    Name]	 
	 	 
	Approved:	 
	 	 
	Insider
    Trading Compliance Officer

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