Exhibit 10.1

 

SEPARATION AGREEMENT

 

This Separation Agreement (the “Agreement”) is entered as of the Effective Date
by and among Brian Orlopp (“Employee”) and Cyanotech Corporation, a Nevada
corporation (the “Company”).

 

1.           Separation of Employment.

 

(a)     Employee’s final date of employment with the Company will be September
25, 2020 (the “Separation Date”). By signing the Agreement below, Employee will
acknowledge that, on or before the Separation Date, Employee was paid in full
for any and all outstanding salary, wages, bonuses, commissions, and equity
incentives, and no further compensation is due Employee by the Company except as
provided under this Agreement. A copy of Employee’s final pay calculation will
be provided on the Separation Date. Employee’s accrued paid time off in the
gross amount of $22,376.25 (Twenty-Two Thousand Three Hundred Seventy-Six
Dollars and Twenty-Five Cents) (“Accrued PTO”) shall be paid out on or before
the Separation Date.

 

(b)     To the extent Employee has unexercised and vested Incentive Stock
Options as of the Separation Date, he may exercise those vested options in
accordance with the current terms of the Cyanotech Corporation 2016 Equity
Incentive Plan (“Plan”), and this termination shall not be taken for “Cause” as
defined in the applicable Plan. All unvested options shall automatically expire
as of the Separation Date.

 

2.           Company’s Consideration for Agreement. In exchange for executing
this Agreement, and abiding by all terms, the Company will provide Employee with
the following:

 

(a)     Payments equal to two months of current base wages, in the gross amount
of $26,000.00 (Twenty-Six Thousand Dollars);

 

(b)     Payments representing additional monthly amounts paid to Employee for
housing and travel allowance in the total amount of $3,000.00 (Three Thousand
Dollars); and

 

(c)     Payment of premiums for Employee’s health care continuation coverage
under COBRA for two months commencing October 1, 2020, should Employee elect
COBRA coverage, which has a value of $2,078.76 (Two Thousand Seventy-Eight
Dollars and Seventy-Six Cents).

 

Such payments will be made in regular installments on the Company’s regular
payroll dates commencing to the extent practicable within 10 days following the
Effective Date and shall be subject to all required taxes and withholdings.
Employee acknowledges and agrees that, but for Employee’s execution of this
Agreement, Employee would not otherwise be entitled to the benefits described in
this paragraph (the “Severance Benefits”).

 

3.           Employee’s Consideration for Agreement. In consideration for the
payments and undertakings described in this Agreement, Employee releases and
waives any and all claims that Employee might possibly have against the Company,
whether Employee is aware of them or not. In legal terms, this means that,
individually and on behalf of his or her representatives, successors, and
assigns, Employee does hereby completely release and forever discharge the
Company, its parent, subsidiaries, divisions, affiliates, and their respective
predecessors in interest, members, partners, principals, shareholders,
directors, officers, agents, attorneys, employees, and representatives, and the
successors and assigns of each of them (each a “Company Released Party”), from
all claims, rights, demands, actions, obligations, and causes of action of any
and every kind, nature and character, known or unknown, which Employee may now
have, or has ever had. This Release covers all statutory, common law,
constitutional and other claims, including but not limited to:

 

(a)     Any and all claims for wrongful discharge, constructive discharge, or
wrongful demotion;

 

(b)     Any and all claims relating to any contracts of employment, express or
implied, or breach of the covenant of good faith and fair dealing, express or
implied;

 

(c)     Any and all tort claims of any nature, including but not limited to
claims for negligence, defamation, misrepresentation, fraud, or negligent or
intentional infliction of emotional distress;

 

(d)     Any and all claims for wages, compensation, bonuses, commissions,
penalties, and/or benefits under any statutory or common law theory whatsoever;

 

 

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(e)     Any and all claims for discrimination or harassment based on sex, race,
age, national origin, religion, disability, medical condition, or any other
protected characteristic under federal, state or municipal statutes or
ordinances; any claims under Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, 42 U.S.C. Section 1981, the Age Discrimination in
Employment Act, the Older Workers’ Benefit Protection Act, the Americans With
Disabilities Act, the Employment Retirement Income Security Act, the Family and
Medical Leave Act, the Hawaii Discriminatory Practices law (Haw. Rev. Stat. §§
378-1 to 378-6); Hawaii Whistleblowers' Protection Act (Haw. Rev. Stat. §§
378-61 to 378-68), and any other laws and regulations relating to employment;

 

(f)     Any and all claims for attorneys’ fees or costs; and

 

(g)     Any and all rights Employee may have to any continuing or future
employment with any Released Party.

 

This release is not intended to encompass any rights or claims to Employee’s
vested equity interests, or to claims that cannot be released by Employee as a
matter of law, including, but not limited to, any claims for indemnity, or
claims for workers’ compensation or unemployment benefits. Nor is this release
intended to prevent Employee from filing a statutory claim concerning employment
with the Company or the termination thereof with the federal Equal Employment
Opportunity Commission, the National Labor Relations Board, or similar state
agencies. However, if Employee does so, or if any such claim is prosecuted in
his/her name before any court or administrative agency, Employee waives and
agrees not to take any award of money or other damages from such suit.

 

4.           Waiver of Unknown Future Claims. Employee understands that Employee
hereby voluntarily waives all rights arising under known or unknown claims, and
elects to assume all risks for claims that now exist in his/her favor, known or
unknown, arising from the subject matter of this Agreement.

 

5.           No Claims. Employee represents and warrants that he has not
instituted any complaints, charges, lawsuits or other proceedings against any
Company Released Parties with any governmental agency, court, arbitration agency
or tribunal.

 

6.           Return of Property and Preservation of Proprietary Information.

 

(a)     Prior to the Effective Date of this Agreement, Employee agrees to return
all property of the Company, including keycards, computers, personal
communication devices, passwords, hard copy and electronic files, and any other
proprietary material in Employee’s possession or control. Employee acknowledges
that in the course of his or her employment with the Company, certain factual
and strategic information specifically related to the Company and its affiliates
has been disclosed to Employee in confidence (“Company Information”). Employee
agrees to keep such Company Information confidential, not to make use of such
information on his or her own behalf or for any other purpose, and to return all
tangible forms of such information to the Company no later than the Separation
Date. This obligation does not apply to any Company Information Employee is
affirmatively authorized to disclose pursuant to any provision of applicable
law.

 

(b)     Employee further acknowledges and hereby affirms Employee’s continuing
obligations under the Company’s Confidentiality and Invention Assignment
Agreement, which Employee executed as a condition of employment, which terms,
are incorporated herein by reference. Pursuant to the Defend Trade Secrets Act
of 2016, Employee acknowledges that Employee shall not have criminal or civil
liability under any Federal or State trade secret law for the disclosure of a
trade secret that (A) is made (i) in confidence to a Federal, State, or local
government official, either directly or indirectly, or to an attorney; and (ii)
solely for the purpose of reporting or investigating a suspected violation of
law; or (B) is made in a complaint or other document filed in a lawsuit or other
proceeding, if such filing is made under seal. In addition, if Employee files a
lawsuit for retaliation by the Company for reporting a suspected violation of
law, Employee may disclose the trade secret to his/her attorney and may use the
trade secret information in the court proceeding, if Employee or his/her
attorney files any document containing the trade secret under seal; and does not
disclose the trade secret, except pursuant to court order.

 

7.           Confidentiality of Agreement. Employee agrees that the terms and
conditions of this Agreement are strictly confidential. Employee shall not
disclose, discuss or reveal the existence or the terms of this Agreement to any
persons, entities or organizations except as follows: (a) as required by court
order; (b) to Employee’s spouse; or (c) to Employee’s attorneys or accountants.

 

8.           Nonsolicitation. Employee agrees that for a period of twelve (12)
months immediately following the Effective Date of this Agreement, Employee
shall not directly or indirectly solicit any of the Company’s employees to leave
their employment at the Company.

 

9.           Non-Competition. Employee agrees that for two (2) years from the
Separation Date, Employee will not, alone or as a member, employee, or agent of
any individual or partnership, or as an officer, agent, employee, director,
stockholder, or investor of any corporation, directly or indirectly, own,
manage, operate, join, control, or participate in the ownership or management,
operation, or control of, or work for or permit the use of Employee’s name by,
or be connected in any manner with any business or activity which produces,
distributes, sells, markets, or has plans to produce, distribute, sell or
market, any products from Spirulina or Haermatococcus.

 

 

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10.         Non-Disparagement. Employee shall not make any statements, written
or oral, or cause or encourage others to make any statements, written or oral,
that defame, disparage or in any way criticize the personal or business
reputation, practices, or conduct of the Company. Employee acknowledges and
agrees that this prohibition extends to statements, written or oral, made to
anyone, including but not limited to, the news media, investors, potential
investors, any board of directors or advisory board or directors, industry
analysts, competitors, strategic partners, vendors, employees (past and
present), and clients, customers, or potential clients or customers of the
Company and its affiliates. Notwithstanding the foregoing, this provision does
not prohibit disclosures that Employee is required to make to comply with
applicable laws or regulations nor does it preclude the Employee from making
truthful disclosures that Employee is affirmatively authorized to make pursuant
to any provision of applicable law.

 

11.         Cooperation; Third Party Disputes.

 

(a)     Transition Assistance. The parties agree that during the two-month
period commencing with the Separation Date Employee will make himself available
and provide assistance to the Company via phone, email or other remote means by
answering questions and providing information, and so long as such assistance
does not exceed twenty (20) hours in total, Employee shall not be entitled to
additional compensation for such assistance.

 

(b)     Third Party Disputes. The parties agree that certain matters involving
third parties which Employee has been involved during Employee’s employment may
require Employee’s assistance and cooperation with the Company and/or its
representative and legal advisors in the future. Accordingly, to the extent
reasonably requested by the Company, Employee shall cooperate with and make
himself available to the Company in connection with any existing or future
claims, dispute, investigations, administrative proceedings, litigation, and
other legal and business matters, as reasonably requested by the Company;
provided that the Company shall make reasonable efforts to minimize disruption
to Employee’s other professional and personal activities. The Company shall
reimburse Employee for reasonable expenses and time (at an hourly rate
consistent with Employee’s final base salary) incurred in connection with this
cooperation.

 

12.         Older Worker Benefit Protection Act Protections. Pursuant to the Age
Discrimination in Employment Act and the Older Workers’ Benefit Protection Act,
the Company hereby advises Employee of the following:

 

 

(a)

Employee is advised to consult with an attorney prior to signing this Agreement.

 

 

(b)

Employee has up to twenty-one (21) days within which to consider whether
Employee should sign this Agreement. Employee may sign this Agreement at any
time during this 21-day period. Modification to the Agreement will not extend
the consideration period.

 

 

(c)

If Employee signs the Agreement, Employee shall have seven (7) days thereafter
to revoke the Agreement. To revoke the Agreement, Employee must deliver written
notice of the revocation to Amy Nordin the Company’s V.P. Human Resources, so
that it is received before the seven-day revocation period expires. If Employee
revokes the Agreement, Employee shall not be entitled to any Severance Benefits.

 

 

(d)

If Employee does not revoke the Agreement, it becomes effective (the “Effective
Date”) eight days after Employee executes the Agreement below and returns it to
the Company (Attention: Amy Nordin).

 

 

(e)

In signing this Agreement, Employee is not releasing or waiving any claims based
on conduct or events that occur after the Agreement is signed.

 

 

13.         Consequences of Breach. Employee shall indemnify and hold each
Company Released Party harmless from any loss, cost, damage, or expense
(including attorneys’ fees) incurred by them arising out of Employee’s breach of
any portion of this Agreement. In addition, Employee agrees that if the Employee
breaches any of Employee’s obligations under the Agreement the Company may cease
payments due to Employee, or recover any payments made to Employee, under
paragraph 2 to the extent permitted by law, and obtain all other relief provided
by law or equity, including the right to recover as damages the amount of any
judgment recovered against it, reasonable attorney's fees and other costs and
expenses of defending against any claim brought in breach of this Agreement.

 

14.         Acknowledgment.      Employee represents and agrees that in
executing this Agreement he is relying solely upon his or her own judgment,
belief and knowledge, and the advice and recommendations of any independently
selected counsel, concerning the nature, extent and duration of his or her
rights and claims. Employee acknowledges that he has executed this Agreement
voluntarily, free of any duress of coercion. Further, Employee acknowledges that
he has a full understanding of the terms of this Agreement and that he is not
executing this Agreement in reliance on any promise, representation, or warranty
not contained in this Agreement.

 

 

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15.         Miscellaneous

 

(a)     Binding on Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Company and
shall inure to the benefit of and be binding upon Employee’s heirs, executors,
administrators, successors and assigns. This Agreement is specific to Employee
and may not be assigned by Employee.

 

(b)     Arbitration. Any controversy, dispute or claim arising out of or
relating to this Agreement, the formation, breach, interpretation or
enforceability of this Agreement, including the employment relationship between
the parties or the termination of the employment relationship between the
parties, shall be settled through final and binding arbitration in Kona, Hawaii,
Honolulu Hawaii, or such other location as agreed to by the parties, under the
applicable rules of the American Arbitration Association (“AAA”) or, if the
parties mutually agree, under the applicable rules of JAMS. The arbitrator
selected shall have the authority to grant Employee or the Company or both all
remedies otherwise available by law.

 

  Notwithstanding anything to the contrary in the AAA or JAMS rules, the
arbitration shall (i) provide for reasonable written discovery and depositions;
and (ii) provide for a written decision by the arbitrator that includes the
essential findings and conclusions upon which the decision is based. Each party
shall bear its or his own costs and expenses (including without limitation
attorneys' fees) in connection with alternative dispute resolution procedures
set forth in this paragraph, except as required by the applicable AAA or JAMS
rules and except that the Company shall bear the arbitrator’s and AAA’s or JAMS’
fees and expenses. Judgment upon any award rendered may be entered in any court
of competent jurisdiction. Hawaiian law shall apply to this Agreement and the
arbitration proceeding but excluding any principles of conflicts of laws that
would invoke the laws of another jurisdiction.

 

(c)     Severability. If any term or provision of this Agreement is invalid,
illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Agreement
or invalidate or render unenforceable such term or provision in any other
jurisdiction. Upon such determination that any term or other provision is
invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

 

(d)     Entire Agreement. This Agreement and the document(s) expressly
incorporated herein contain the entire agreement and understanding between
Employee and the Company regarding the matters set forth herein and replace all
prior agreements, arrangements and understandings, written or oral. This
Agreement cannot be amended, modified, supplemented, or altered, except by
written amendment or supplement signed by Employee and the Company.

 

(e)     Headings; Interpretation. The various headings contained herein are for
reference purposes only and do not limit or otherwise affect any of the
provisions of this Agreement. It is the intent of the parties that this
Agreement not be construed more strictly with regard to one party than with
regard to any other party.

 

(f)     Counterparts. This Agreement may be executed in counterparts, including
facsimile counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be effective delivery of a manually executed counterpart to this
Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date indicated below.

 

 

Cyanotech Corporation

 

By:

/s/Gerald R. Cysewski

Date:

September 30, 2020

 

Name: Gerald R. Cysewski

     

Title: CEO

   

 

 

 

EMPLOYEE

 

By:

/s/Brian Orlopp

Date:

September 30, 2020

 

Brian Orlopp, an individual