UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549  

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of Earliest Event Reported):  January 5, 2018

 

TOMI ENVIRONMENTAL SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Florida

 

000-09908

 

59-1947988

(State or other jurisdiction of

incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

9454 Wilshire Blvd., Penthouse

Beverly Hills, California

 

90212

(Address of principal executive

offices)

 

(Zip Code)

     

 

(800) 525-1698

 

 

(Registrant’s telephone number, including

area code)

 

 

 

Not Applicable

 

(Former name or former address, if changed since last report)

    

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions ( see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 
1
 

Item 1.01. Entry into a Material Definitive Agreement.

As described in Item 5.02 below, on January 5, 2018, TOMI Environmental Solutions, Inc. (the "Company") entered into an employment agreement (the "Employment Agreement") with Elissa J. Shane in connection with her appointment as Chief Operating Officer of the Company. Additional information regarding the Employment Agreement is incorporated herein by reference to "Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers" of this Current Report on Form 8-K.
 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 
Officer Appointment
 
On December 6, 2017, the Board of Directors (the "Board") of TOMI Environmental Solutions, Inc. (the "Company") appointed Elissa J. Shane as Chief Operating Officer of the Company, effective January 1, 2018, subject to the successful negotiation of the Employment Agreement.
 
Ms. Shane, 38, has served as Secretary of the Company since January 2016 and Operations and Compliance Officer of the Company since December 2016. From September 2015 to December 2016, she served as Chief Regulatory and Compliance Officer of the Company. From January 2014 to September 2015, Ms. Shane served as a paralegal with Levi Lubarsky Feigenbaum & Weiss LLP, where she worked with the firm's managing partners and staff attorneys and directed all operational aspects of the litigation cycle from inception through appeal. From September 2009 to January 2014, she served as a paralegal with Olshan Frome Wolosky LLP, where she managed all regulatory and compliance issues, litigation procedures and advertising and promotional matters. Ms. Shane received a B.A. in Psychology and Communications with a minor in Economics from the University of Southern California in 2001.
 
There are no arrangements or understandings between Ms. Shane and any other person pursuant to which she was appointed as an officer. Ms. Shane is the daughter of Halden S. Shane, the Chief Executive Officer and Chairman of the Board of the Company. Other than the foregoing, there are no family relationships between Ms. Shane and any director or executive officer of the Company.
 
Ms. Shane is not a party to any transaction with the Company that would require disclosure under Item 404(a) of Regulation S-K.
 
Employment Agreement
 
On January 5, 2018, in connection with her appointment as Chief Operating Officer of the Company, the Company entered into the Employment Agreement with Elissa J. Shane. Pursuant to the Employment Agreement, which is effective as of January 1, 2018, Ms. Shane will receive an annual base salary of at least $200,000, subject to annual review and discretionary increase by the Compensation Committee of the Board (the "Compensation Committee"). Ms. Shane is eligible to receive an annual cash bonus and other annual incentive compensation, and the Employment Agreement provides that the Company will issue Ms. Shane annually an option to purchase at least 250,000 shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), pursuant to the TOMI Environmental Solutions, Inc. 2016 Equity Incentive Plan (the "2016 Plan"). Additionally, in connection with the execution of the Employment Agreement, on January 5, 2018, the Company issued Mr. Shane an option under the 2016 Plan to purchase 100,000 shares of Common Stock at an exercise price of $0.12 per share, which price is at or above the fair market value per share of Common Stock on such date. The Employment Agreement also provides that the Company will reimburse Ms. Shane for reasonable and necessary business and entertainment expenses that she incurs in performing her duties. During the term of her employment, Ms. Shane will also be entitled to up to four weeks of paid vacation time annually, which will accrue up to six weeks, and to participate in the Company's benefit plans and programs, including but not limited to all group health, life, disability and retirement plans. Ms. Shane is also entitled to the sum of $750 per month as a vehicle allowance. The initial term of the Employment Agreement is three years, which may be automatically extended for successive one-year terms, unless either party provides the other with 120 days' prior written notice of its intent to terminate the Employment Agreement.
 
2
The Employment Agreement provides that Ms. Shane will devote her full business time to rendering services as the Chief Operating Officer of the Company, and to perform the usual and customary duties of such position, including leading the day-to-day operations of the Company's business. Ms. Shane will report to the Chief Executive Officer of the Company and the Board. In addition to the foregoing, the Employment Agreement sets forth Ms. Shane's primary responsibilities and certain immediate and specific objectives.
 
If the Company terminates Ms. Shane's employment upon a "Change in Control" of the Company, the Company is obligated to pay her a lump sum equal to one and a half times her annual salary, in addition to which any of Ms. Shane's unvested stock and option awards will immediately vest. A "Change in Control" occurs when (i) any person (other than the Company or an affiliate) is or becomes the beneficial owner of fifty percent or more of the combined voting power of the Company's then outstanding securities; (ii) in the event the directors constituting the Board as of the effective date of the Employment Agreement, as well as any directors whose nomination or election is approved by a vote of at least a majority of such directors serving as of the effective date of the Employment Agreement, cease to constitute a majority of the Board; (iii) the Company's shareholders approve a merger, consolidation or sale of the Company in connection with which the individuals who constitute the Board immediately prior to such transaction no longer constitute at least a majority of the Board upon the consummation of such transaction; and (iv) the Company's shareholders approve a plan of liquidation of the Company or an agreement for the sale or disposition of all or substantially all of the Company's assets to an entity not controlled by the Company.
 
If Ms. Shane's services are terminated upon her disability, the Company is obligated to (i) pay Ms. Shane's base salary and (ii) provide medical insurance, to the extent that it currently makes an employer contribution, in each case for a period of twelve months from the date of termination. If Ms. Shane's services are terminated upon her death, the Company is obligated to (i) pay Ms. Shane's estate her base salary for a period of six months from the date of her death, along with any accrued and unpaid salary, and (ii) provide medical insurance to Ms. Shane's dependents for a period of six months from the date of her death, to the extent that it currently makes an employer contribution.
 
If the Company terminates Ms. Shane's services for cause, Ms. Shane is no longer entitled to receive her base salary and the Company is obligated to pay her any base salary and vacation accrued and unpaid as of the date of termination. The Company may terminate Ms. Shane for cause in the event she (i) is convicted or pleads nolo contendere to a felony, (ii) engages in habitual misconduct in the performance of her duties under the Employment Agreement or (iii) commits an act of dishonesty, gross negligence or misconduct that has a direct, substantial and adverse effect on the Company, its business or its reputation. Any such termination by the Company is subject to certain procedures and a cure period, as set forth in the Employment Agreement.
 
If the Company terminates Ms. Shane's services for any other reason, it must provide her with at least thirty days' prior written notice, and upon such termination, the Company is obligated to (i) pay Ms. Shane's base salary for the remainder of the term of the Employment Agreement or any extension thereof, (ii) provide medical insurance for the greater of the remainder of the term of the Employment Agreement or twelve months following such termination, to the extent that it currently makes an employer contribution, and (iii) pay Ms. Shane any bonus(es) earned pursuant to the Employment Agreement, as determined by the Compensation Committee in its discretion.
 
Ms. Shane may terminate her employment at any time and for any reason upon thirty days' prior written notice to the Company. If Ms. Shane terminates her employment, the Company is obligated to pay Ms. Shane any accrued and unpaid base salary as of the date of termination. In the event Ms. Shane terminates her employment for "good reason", she will be entitled to the same payments and benefits to which she would be entitled in the event of a termination by the Company without cause. "Good reason" is a voluntary termination by Ms. Shane following a "Change in Control" as a result of (i) the assignment of duties inconsistent with her position and without her prior written consent; (ii) a substantial alteration in the nature, status or prestige of Ms. Shane's responsibilities or a change in her title or reporting level; (iii) the relocation of the Company's executive offices or principal business location more than forty miles from the location immediately prior to the "Change in Control"; (iv) the reduction of Ms. Shane's base salary; (v) any action that would substantially diminish the aggregate value of Ms. Shane's incentive awards and other fringe benefits; or (vi) a failure by the Company to obtain from any successor an agreement to assume and perform the Employment Agreement.
 
3
During her employment with the Company and for one year following termination thereof, Ms. Shane may not induce any employee of the Company to leave his or her employment for employment with her or any other entity. The Employment Agreement also contains other restrictive covenants further prohibiting the use or disclosure of confidential and proprietary business information during or after termination of her employment.
 
The Employment Agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing description does not purport to be complete and is qualified in its entirety by reference to such exhibit.
 
 

Item 9.01. Financial Statements and Exhibits.

 
(d)  Exhibits

 
Exhibit Number
Description
 
 
10.1+
Employment Agreement, entered into as of January 5, 2018, by and between the Company and Elissa J. Shane, effective as of January 1, 2018
 

+  Indicates a management contract or compensatory plan.

 
 
4
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 

 

TOMI ENVIRONMENTAL SOLUTIONS, INC.

Date: January 8, 2018

 

 

/s/ Halden Shane

 

Halden Shane

 

Chief Executive Officer

 
 
5
EXHIBIT INDEX
 
Exhibit Number
Description
 
 
10.1+
Employment Agreement, entered into as of January 5, 2018, by and between the Company and Elissa J. Shane, effective as of January 1, 2018
 

+  Indicates a management contract or compensatory plan.

 
 
6

 
Exhibit 10.1
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of January 1, 2018, by and between TOMI Environmental Solutions, Inc., a Florida corporation ("Employer" or "the Company"), and Elissa Jessica Shane ("Executive").
 
WITNESSETH:

 
WHEREAS, Executive has served Employer in various executive capacities and Employer desires to obtain the benefit of continued service by Executive, and Executive desires to render continued services to Employer;
 
WHEREAS, the Board of Directors of Employer (the "Board") has determined that because of Executive's substantial experience in connection with the business of Employer, it is in the Employer's best interest and that of its stockholders to secure services of Executive and to provide Executive certain additional benefits; and
 
WHEREAS, Employer and Executive desire to set forth in this Agreement the terms and conditions of Executive's employment with Employer.
 
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows:
 
AGREEMENT
 
SECTION 1.   TERM .   Employer hereby employs Executive and Executive hereby accepts such employment, in accordance with the terms of this Agreement, commencing on January 1, 2018 and terminating on December 31, 2020 (the "Term"), unless (a) terminated as provided herein in Section 6, or (b) automatically renewed for successive one-year periods as provided in Section 8.
 
SECTION 2.   SERVICES .   So long as this Agreement shall continue in effect, Executive shall use her commercially reasonable efforts and abilities to promote Employer's business, affairs and interests, and shall perform the services contemplated by this Agreement in accordance with policies established by Employer.
 
SECTION 3.   SPECIFIC POSITION; DUTIES AND RESPONSIBILITIES .   Executive shall serve as Chief Operating Officer with the powers and duties consistent with such position. Executive agrees to devote her full business time to rendering the services as Chief Operating Officer. Executive agrees to observe and comply with the rules and regulations of Employer as adopted by the Board respecting the performance of Executive's duties and agrees to carry out and perform the directions and policies of Employer and its Board as they may be, from time to time, stated either orally or in writing. Employer agrees that the duties which may be assigned to Executive shall be the usual and customary duties of the job position as set forth in this Section 3, and shall not be inconsistent with the provisions of the charter documents of Employer or applicable law. Executive shall have such corporate power and authority as shall reasonably be required to enable the discharge of duties in any office that may be held. The duties of the job position shall be the following at a minimum: The COO shall have the primary responsibility of leading the day - to - day operations of TOMI business. This responsibility will be in accordance with shaping and executing on the vision and strategic planning of all business operations, while adapting and adhering to operating and capital budgets.
 
The COO reports to the TOMI's Chief Executive Officer ("CEO") and TOMI's Board of Directors. Without limiting the generality of the foregoing - primary responsibilities of the COO are as follows:
 
1. Develop an annual operating plan that supports TOMI's long term operations strategy in collaboration with the CEO and the Chief Financial Officer (the "CFO");
 
2. Monitor throughout the year that sales and budget projections are being met implementing strategies to address any and all shortfalls that may be inhibiting the original Board approved sales and budget projections;
 
3. Assist the CEO and the CFO in developing and overseeing the long-term business strategies of TOMI;
 
4. Assist the CEO in establishing an appropriate organizational structure;
 
5. Establish a motivated diverse group of top - quality employees who will effectively grow the business to ensure financial strength and operational efficiency;
 
6. Create a positive and ethical work climate which encourages the personal and professional growth of all team members and instills a willingness to excel in their individual roles and contributions to the TOMI mission of providing technology for a safer world;
 
7. Assist the CEO in overseeing TOMI's achievements while sustaining its competitive position in a heavily regulated and competitive industry populated by large well-established corporations with limitless budgets;
 
8. Direct all operational matters - ensure strong communication with internal and external partners and prospects, expediate resolutions fairly, and advance product development, efficacy studies, and intellectual property;
 
9. Provide direct, unlimited access and support to current and future leadership teams and the TOMI field salesforce in order to achieve all financial and strategic goals;
 
10. Coordinate the sustainability strategies of TOMI;
 
11. Ensure that there is an effective succession plan in place for the COO position and other key executives and personnel of TOMI;
 
12. Evaluate the performance of all TOMI personnel and external partners and report to the CEO;
 
13. Report to the CEO in a timely and candid manner of daily operations - provide updates on the achievement of established goals and/or any material deviations from the goals, objectives and/or policies established by the Executive Team and Board;
 
14. Assist CEO on operational matters for review in advance of meetings of the Board and assist in drafting the CEO report presented during quarterly Board meetings;
 
15. Attend meetings of the Board and its Committees and present the relevant information when necessary or advised; and
 
16. Perform all other functions related to the office of the COO or as may be requested by the CEO or the TOMI Board.
 
Without limiting the generality of the foregoing - immediate and specific objectives of the COO are as follows:
 
1. Recruit TOMI's head of domestic sales and continue to advance the efforts and closing ratios of the TOMI Sales team in all divisions and develop initiatives to shorten the length of the sale cycle;
 
2. Research and select a new manufacturing partner who understands the industry marketplace and who will enable TOMI to dramatically increase revenue by closing a higher percentage of its proposals and produce a higher quality product;
 
3. Continue to improve internal quality controls and assurance;
 
4. Recruit TOMI Service Technicians, seeking candidates with backgrounds or education in electrical engineering;
 
5. Recruit a Customer Service Manager to draft and distribute proposals for both SteraMist TM Service Proposals and Custom Build-Ins and work closely with CRM Manager in order to track and follow-up on current customers and BIT Solution ordering;
 
6. Continue to develop comprehensive and integrated marketing campaigns across all divisions, which includes an increase in the publication of independently peer reviewed papers on our innovative technology and case studies on bacteria, molds, and viruses;
 
7. Initiate a plan to collect relevant information on the needs of the market in regard to GLP and third-party studies to remain competitive - conclude current third-party studies on C. Bovis, Monkeypox, and Pinworms;
 
8. Host quarterly training seminars for current employees for professional development in a variety of disciplines which will expand their skills in respective roles;
 
9. Establish IOQ/PQ procedures as a means to maintain competitive advantage while increasing revenue streams by complying to TOMI's new customer base in the Life Science division;
 
10. Continue advancing Intellectual Property, specifically a Utility Patent application submission with the USPTO followed by an application to the EPO; and
 
11. Continue to further domestic and international product registrations, while finalizing the many ongoing initiatives in registrations.
 
SECTION 4.   COMPENSATION .  
 
(a)   Base Salary and Bonus .
 
(i)   Base Salary . During the term of this Agreement, Employer agrees to pay Executive a base salary of at least $200,000.00 per year in semi-monthly installments on the same dates the other senior officers of Employer are paid ("Base Salary"). The Board (or its Compensation Committee) shall review the Base Salary annually and may in its discretion increase the Base Salary each calendar year.
 
(ii)   Bonus . Executive shall receive an annual cash bonus to be determined by the Compensation Committee upon meeting agreed milestones.
 
(iii)   Options . Executive shall receive a grant of 100,000 options from the Companies 2016 Equity Plan exercisable at market price on the day of execution of this Agreement and a minimum of 250,000 options from the Companies 2016 Equity Plan exercisable at market price at the end of each calendar year that the agreement is in effect.
 
(b)   Expense Reimbursement . Employer shall reimburse Executive promptly for reasonable and necessary business and entertainment expenses incurred in pursuit and furtherance of Employer's business and goodwill. Employer shall reimburse Executive for all such expenses upon presentation by the Executive, from time to time, of an itemized written accounting of such expenditures.
 
(c)   Benefits . Employer shall provide Executive with the following benefits during the Term and any renewals thereof:
 
(i)   Participation in Benefit Plans and Policies . Executive shall be entitled to participate in all insurance and other benefit plans and policies maintained for senior executives of Employer, including, but not limited to, all group health, life disability and retirement plans (the "Plans").
 
(ii)   Vacation . Executive shall be entitled to four (4) weeks paid vacation time each year during the term of this Agreement. Vacation shall not be taken more than 10 days at a time, and only when it will not interfere with the operation of the company. Any vacation not taken will be accrued and paid, with a maximum of six (6) weeks accrual.
 
(iii)   Car Allowance . The Employer agrees to pay to the Executive, during the term of this Agreement and in addition to other salary and benefits herein provided, the sum of $750.00 per month as a vehicle allowance to be used to purchase, lease, or own, operate and maintain a personal vehicle.
 
SECTION 5.   CHANGE IN CONTROL .  In the event of a change in control of the Company that results in termination of Executive, Executive will be entitled to a lump sum payment of one and half (1 1/2) of her annual salary. Additionally, any stock and option grants will be accelerated.
 
A "Change in Control" as used in the Agreement shall mean any of the following:
 
(a)  any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than Employer or its Affiliate), is or becomes the "beneficial owner" (as defined in Rule 1 3d 3 under the Exchange Act), directly or indirectly, of securities of Employer (not including in the securities beneficially owned by such person any securities acquired directly from Employer or Executive) representing fifty percent (50%) or more of the combined voting power of Employer's then outstanding securities; or
 
(b)  in the event that the individuals who at the beginning of the Term constitute the Board of Directors, and any new director whose election by the Board or nomination for election by Employer's stockholders was approved by a vote of at least a majority of the Board then still in office who either were members of the Board at the beginning of the Term or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; or
 
(c)  the stockholders of Employer approve a merger or consolidation of Employer with or the sale of Employer to any other entity and, in connection with such merger, consolidation or sale; individuals who constitute the Board immediately prior to the time any agreement to effect such merger or consolidation is entered into fail for any reason to constitute at least a majority of the board of directors of the surviving corporation following the consummation of such merger or consolidation; or
 
(d)  the stockholders of Employer approve a plan of complete liquidation of Employer or an agreement for the sale or disposition by Employer of all or substantially all of Employer's assets to an entity not controlled by Employer.
 
SECTION 6.   TERMINATION .  The compensation and other benefits provided to Executive pursuant to this Agreement, and the employment of Executive by Employer, shall be terminated prior to expiration of the term of this Agreement only as provided in this Section 6:
 
(a)   Disability . In the event that Executive shall fail, because of illness, incapacity or injury which is determined to be total ("Disability") by a physician selected by Employer or its insurers and acceptable to Executive or Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably), to render, for three consecutive months or for shorter periods aggregating ninety (90) or more business days in any twelve (12) month period, the services contemplated by this Agreement, Executive's employment hereunder may be terminated by sixty (60) days' prior written notice of termination from Employer to Executive. Thereafter, Employer shall continue to (i) pay the Base Salary to Executive for a period of twelve (12) months after the date of termination, and (ii) provide medical insurance as in effect prior to such termination for a period of twelve (12) months following the date of termination, to the extent that it currently makes an employer contribution. Thereafter, no further salary shall be paid or medical insurance be provided. This Agreement in all other respects will terminate upon the termination of employment pursuant to this paragraph.
 
(b)   Death . In the event of Executive's death during the term of this Agreement, Executive's Base Salary shall continue for a period of six (6) months payable to the estate of the Executive and Employer shall pay to the estate of Executive the Base Salary accrued to the date of Executive's death to the extent not theretofore paid. If Executive's death occurs while receiving payments under Section 6(a) above, such payments shall continue for a period of six (6) months payable to the Estate of the Executive. Executive's rights under the Plans subsequent to her death shall be determined under the applicable provisions of the respective Plans; provided that, notwithstanding any provisions to the contrary therein, Employer shall continue to provide medical insurance to the dependents of Executive for a period of six (6) months following the death of Executive, to the extent that it currently makes an employer contribution. This Agreement in all other respects will terminate upon the death of Executive.
 
(c)   For Cause . The employment of Executive hereunder shall be terminable by Employer in the event that Executive (i) is convicted of, or pleads nolo contandre to a felony; (ii) has engaged in habitual misconduct in the performance of her duties under this Agreement, (iii) has committed an act of dishonesty, gross negligence or misconduct, which has a direct, substantial and adverse effect on Employer, its business or reputation.
 
Notwithstanding the foregoing, no termination of Executive by Employer pursuant to clauses (ii) (iii) or (iv) above shall be valid unless and until the following procedures have been complied with by Employer: (a) no more than thirty (30) days after the chairperson of the Board has obtained knowledge of "cause" to terminate Executive pursuant to any of clauses (ii) or (iii) above, he/she shall provide Executive with written notice of Employer's intent to terminate this Agreement pursuant to this Section 6(c), including in reasonable detail the reasons therefor (the "Termination Notice"); (b) at a mutually agreed upon time and place, but in any event no more than ten (10) days following receipt by Executive of the Termination Notice, the Board shall provide Executive the opportunity to participate in a meeting of the Board regarding the Termination Notice; (c) if the matter cannot be resolved by mutual agreement of Employer and Executive at such meeting, Executive shall thereafter be given thirty (30) days to cure such "cause" as detailed in the Termination Notice (the "Cure Period"); and (d) if Executive does not cure such "cause" within the Cure Period, Employer shall thereafter terminate Executive's employment hereunder in writing within thirty (30) days of the end of the Cure Period. Any determination of "cause" as used in this Section 6(c) shall be made only in good faith by an affirmative majority vote of the Board (not counting Executive).
 
In the event of Executive's termination pursuant to this subsection 6(c), Executive's rights to receive Base Salary shall immediately terminate and Employer shall pay to Executive her Base Salary and vacation accrued to the date of such termination to the extent not theretofore paid. Executive's rights under the Plans subsequent to termination shall be determined under the applicable provisions of the respective plans. This Agreement in all other respects will terminate upon such termination.
 
(d)   Without Cause . Notwithstanding any other provision of this Section 6, the Board shall have the right to terminate Executive's employment with Employer without cause at any time upon at least thirty (30) days' prior written notice to Executive. The following conditions shall thereupon become applicable:
 
(i)   Severance Pay . Employer shall continue to pay Executive the Base Salary on a semi-monthly basis for the remainder of the Term or any extension thereof.
 
(ii)   Medical Insurance Continuation . Employer shall continue to provide (under COBRA) medical insurance as in effect prior to such termination for the greater of the remainder of the Term or twelve (12) months following such termination, to the extent that it currently makes an employer contribution.
 
(iii)   Bonus Payment . If Executive is terminated without cause, Executive shall also be paid for any earned bonuses under this Agreement (the "Bonus Severance"). The amount of any such Bonus Severance shall be determined by compensation committee.
 
(e)   Voluntary Termination . At any time during the term of this Agreement, Executive shall have the right, upon thirty (30) days' prior written notice to Employer, to terminate her employment with Employer. Upon termination of Executive's employment pursuant to this subsection 6(e), (i) Executive's right to receive Base Salary shall immediately terminate and Employer shall pay to Executive her Base Salary accrued to the date of such termination to the extent not theretofore paid, and (ii) Executive's rights under the Plans subsequent to such termination shall be determined under the applicable provisions of the respective Plans. This Agreement in all other respects with the exception of Section 7 will terminate upon such termination.
 
(f)   Termination by Executive for "Good Reason" . Notwithstanding any other provisions of this Agreement, Employer shall provide Executive with the payments and benefits set forth in Section 6(d) in the event Executive terminates employment for "Good Reason." For purposes of this Agreement, "Good Reason" for Executive to terminate employment shall mean voluntary termination following a Change in Control of Employer as defined in Exhibit A attached hereto as a result of (1) the assignment of the Executive of duties inconsistent with the position as status of Executive as set forth in the Agreement without Executive's prior written consent, (ii) a substantial alteration in the nature, status or prestige or Executive's responsibilities as set forth in the Agreement or a change in Executive's title or reporting level from that set forth in this Agreement, (iii) the relocation of Employer's executive offices or principal business location to a point more than forty (40) miles from the location of such offices or business at the time of the Change in Control, (iv) reduction by Employer of Executive's Base Salary in effect on the date hereof or as the same may be increased from time- to time, (v) any action by Employer (including the elimination of benefit plans without providing substitutes therefore or the reduction of Executive's benefits thereunder) that would substantially diminish the aggregate value of Executive's incentive awards and other fringe benefits, (vi) a failure by Employer to obtain from any successor, before the succession takes place, an agreement to assume and perform this Agreement.
 
SECTION 7.   JOINING EMPLOYER'S EMPLOYEES .  During Executive's employment hereunder, and for one (1) year following termination of employment, Executive shall not, directly or indirectly, induce any employee of Employer or any subsidiary or affiliate of Employer to leave such employment for employment with Executive or any other entity outside of Employer. Executive shall not be in breach of this covenant if, following his employment hereunder, he is contacted on an unsolicited basis by an employee of Employer who desires to leave Employer.
 
SECTION 8.   CONFIDENTIALITY; NON-COMPETITION .  
 
(a)   Proprietary Information . For purposes of this Agreement, the term "Proprietary Information" means and includes: all written, oral and visual information about Employer's customers, clients, employees, consultants, designs, products, inventions, business practices, programs, processes, techniques, know-how, data, management programs, and methodologies, subject to the final sentence of this subparagraph. Proprietary Information includes but is not limited to all of the following insofar as it pertains to Employer: financial information, trade secrets, designs, customer lists, pricing and fee information, agreements and arrangements with affiliated companies, employee files, personnel records, internal corporate records, correspondence, and memoranda, contacts and relationships, opportunities, telephone logs and messages, video or audio tapes and/or disks, photographs, film and slides, computer disks and files, software, information stored on Employer's computers, addresses and telephone numbers, contracts, releases, other writings of any kind, and any and all other materials and information pertaining to Employer or its business to which Executive is exposed or has access solely as a consequence of her employment by Employer. For purposes hereof, the term "Proprietary Information" shall not include any information (i) that was known by the public or outside of this Agreement generally on or prior to the date hereof, (ii) which becomes known by the public or outside of this Agreement generally after the date hereof through no fault of Executive, (iii) that was developed by or with the participation of Executive on or prior to the date hereof, or (iv) that is independently developed by or with the participation of Executive following Executive's employment with Employer.
 
(b)   Rights to Proprietary Information . All Proprietary Information, regardless of whether it is in intangible or tangible form, is and shall be the sole property of Employer, its successors and assigns, and Employer, its successors and assigns shall be the sole owner of all patents, trademarks, service marks and copyrights, and other rights (collectively referred to herein as "Rights") pertaining to the Proprietary Information. Executive hereby assigns and/or agrees to assign to Employer any rights Executive may have or acquire in Proprietary Information or Rights pertaining to the Proprietary Information. Executive further agrees as to all Proprietary Information to assist Employer or any person designated by it in every necessary or appropriate manner to obtain, and from time to time enforce, Rights relating to said Proprietary Information. Executive will execute all documents for use in applying for, obtaining, and enforcing such Rights on such Proprietary Information as Employer may desire, together with any assumptions thereof to Employer or persons designated by it.
 
(c)   Confidentiality of Proprietary Information . As a material condition of employment, at all times both during and for five (5) years after the cessation of her employment with Employer for any reason, Executive will keep in strictest confidence all Proprietary Information, and Executive will not disclose, use, or induce or assist in the use or disclosure of any such Proprietary Information or Rights pertaining thereto, without the prior, express written consent of Employer, except as may be necessary in the ordinary course of performing her duties as an employee at Employer, or as may be required by law.
 
(d)   Work for Hire/Assignment of Inventions . Executive agrees that all designs, products, inventions, materials or other original works written, created, developed, or acquired by Executive during the term of and in connection with her employment hereunder (whether alone or in conjunction with any other person), and all rights of any and every kind whatsoever in and to the results and proceeds of Executive's services rendered hereunder, whether or not such rights are now known, recognized or contemplated, and the complete, unconditional and unencumbered ownership in and to such materials, results and proceeds for all purposes whatsoever shall be "works for hire," as that term is defined in the United States Copyright Act (17 U.S.C. Section 101), and shall be the sole and absolute property of Employer, its successors and assigns, and Executive agrees that she shall and does not have and will not claim to have, either under this Agreement or otherwise, any right, title or interest of any kind or nature whatsoever in or to said property. Executive hereby assigns and/or agrees to assign to Employer any and all inventions, designs, programs, or products that Executive may create during her employment with Employer; provided, however, that Executive is hereby notified that the foregoing does not apply to an invention that Executive creates entirely on her own time, without the use of any equipment, supplies, facilities, Proprietary Information or copyright of Employer, and that does not relate to Employer's business, research or development or result from any work performed by Executive for Employer.
 
(e)   Trade Secrets of Others . To the best of Executive's knowledge, Executive's performance of her duties will not violate any agreements with or trade secrets of any other person or entity.
 
SECTION 9.   RENEWAL .  If this Agreement has not terminated pursuant to the provisions of Section 6, the Term shall be automatically renewed for successive one-year periods commencing on each anniversary date of the original Term, unless either party provides the other with written notice of its intent to terminate the Agreement given not less than one hundred twenty (120) days prior to the end of the Term, or any renewals thereof as provided for herein.
 
SECTION 10.   MISCELLANEOUS .  
 
(a)   Succession; Survival . This Agreement shall inure to the benefit of and shall be binding upon Employer, its successors and assigns. Absent the prior written consent of Executive, this Agreement may not be assigned by Employer other than in connection with a merger or sale of all or substantially all the assets of Employer or a similar transaction in which the successor or assignee assumes (whether by operation of law or express assumption) all obligations of Employer hereunder. The obligations and duties of Executive hereunder are personal and otherwise not assignable. Executive's obligations and representations under this Agreement will survive the termination of Executive's employment, regardless of the manner of such termination.
 
(b)   Notices . Any notice or other communication provided for in this Agreement shall be in writing and sent it to Employer to its office at:
 
TOMI Environmental Solutions, Inc.
9454 Wilshire Blvd, Ph./G-1
Beverly Hills, California, 90212
 
or at such other address as Employer may from time to time in writing designate, and if to Executive at such address as Executive may from time to time in writing designate (or Executive's business address of record in the absence of such designation). Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section 7 and an appropriate answer back is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address.
 
(c)   Entire Agreement; Amendments . This Agreement contains the entire agreement of the parties relating to the subject matter hereof and it supersedes any prior agreements, undertakings, commitments and practices relating to Executive's employment by Employer. No amendment or modification of the terms of this Agreement shall be valid unless made in writing and signed by Executive and, on behalf of Employer, by an officer expressly so authorized by the Board.
 
(d)   Waiver . No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right.
 
(e)   Choice of Law . This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of California, applicable to contracts made and performed in such State and without regard to conflicts of law doctrines, to the extent permitted by law.
 
(f)   Binding Arbitration . The Employer and the Executive agree that any controversy, dispute, or claim between them relating to or arising under this Agreement or relating to or arising from the Executive's hiring, employment, or termination with the Company (including, without limitation, any claims for harassment, discrimination, or retaliation under Title VII of the United States Code, 29 U.S.C. § 2002e, et. seq., the Americans With Disabilities Act, the Age Discrimination in Employment Act, or the California Fair Employment and Housing Act, or any equivalent provision of the statutory or common law of any state), shall be submitted to final and binding arbitration, to be held in the County of Los Angeles in accordance with and pursuant to the rules of the American Arbitration Association ("AAA") then in force or any successor rules except as set forth below. The award of the arbitrator shall be final and binding upon the parties and may be entered as a judgment in any California court of competent jurisdiction, and the parties hereby consent to the jurisdiction of the courts of the State of California. The prevailing party in any arbitration hereunder shall be entitled to an award of all reasonable fees and costs of counsel incurred by such party in connection with such arbitration.
 
(g)   Attorney's Fees . If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees, costs and necessary disbursements from the non-prevailing party in addition to any other relief to which such party may be entitled.
 
(h)   Confidentiality; Proprietary Information . Executive agrees to not make use of, divulge or otherwise disclose, directly or indirectly, any trade secret or other confidential or proprietary information concerning the business (including but not limited to its products, employees, services, practices or policies) of Employer or any of its affiliates of which Executive may learn or be aware as a result of Executive's employment during the term of the Agreement or prior thereto as stockholder, employee, officer or director of, or consultant to, Employer, except to the extent such use or disclosure is (i) necessary to the performance of this Agreement and in furtherance of Employer's best interests, (ii) required by applicable law, (iii) lawfully obtainable from other public sources, or (iv) authorized in writing by or pursuant to a written agreement with Employer. The provisions of this subsection (g) shall survive the expiration, suspension or termination, for any reason, of this Agreement.
 
(i)   Severability . If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law.
 
(j)   Withholding; Deductions . All compensation payable hereunder, including salary and other benefits, shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions.
 
(k)   Section Headings . Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
 
(l)   Counterparts . This Agreement and any amendment hereto may be executed in one or more counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
 
"EMPLOYER" TOMI Environmental Solutions, Inc. By Name: Kelly Anderson Title: Compensation Committee Member "EXECUTIVE" Elissa Jessica Shane
 
   
"Employer"
   
   
TOMI Environmental Solutions, Inc.
   
   
  By:
  /s/ Kelly Anderson
 
_______________________________________________
   
Name: Kelly Anderson
   
Title:Compensation Committee Member
   
   
"EXECUTIVE"
   
 
  /s/ Elissa Jessica Shane
 
_______________________________________________
   
Elissa Jessica Shane