Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into by and between Kathi
Niffenegger (you) and Stellar Biotechnologies, Inc., a California corporation
(the “Company”) to establish the terms and conditions governing your employment
by Company. This Agreement is conditional upon the closing of the transactions
contemplated by that certain Share Exchange Agreement (the “Share Exchange
Agreement”) entered into on March 7, 2019 by and among Stellar Biotechnologies,
Inc., a company organized under the laws of British Columbia and the parent
entity of Company (“Stellar”), Edesa Biotech Inc., an Ontario corporation
(“Edesa”), and the shareholders of Edesa (the “Edesa Shareholders”), and shall
become effective upon “Closing,” as defined in the Share Exchange Agreement.

 

1.     Title and Duties. You shall hold the title of Chief Financial Officer
(“CFO”) of the Company, Stellar (which shall change its name to Edesa Biotech
Inc. at or following the Closing) and its affiliated entities (collectively, the
“Edesa Entities”). You will be responsible for performing such duties as the CEO
of the Edesa Entities or his designee may assign, including all duties usually
and customarily rendered by and required of the CFO of a publicly traded
company, and including such duties as are described in any written job
description that may be provided to you and amended from time to time. You will
devote your full business time and attention to performing your duties
diligently and with undivided loyalty toward the Company and the other Edesa
Entities. While employed by the Company, you will not compete with or take steps
to compete with the Edesa Entities, assist any other person or entity to compete
with or prepare to compete with the Edesa Entities, or engage in any other
conduct that creates a conflict of interest with your duty of loyalty to the
Company and the other Edesa Entities.

 

2.     Required Licenses. The CFO of the Company must be a Certified Public
Accountant (“CPA”) licensed by the State of California. You represent and
warrant that you are a California CPA and that you have never been the subject
of public or private discipline by the California Board of Accountancy or any
other comparable state or federal licensing entity. You agree to maintain and
keep current all professional licenses and certifications necessary for the
performance of your duties under this Agreement. The Company will reimburse you
for all associated costs, including license fees, AICPA dues and continuing
education courses necessary to maintain your CPA license and competency.

 

3.     Start Date. Your employment will begin upon “Closing.”

 

4.     Location. You will perform your duties from your principal residence or
other reasonable location of your choice on a regular basis, or as necessary
from the Company’s offices in Port Hueneme, California. You agree to undertake
such travel as may be reasonably necessary in connection with your position from
time to time. The Company will reimburse you for reasonable expenses you incur
in the performance of your duties remotely including, but not limited to,
travel, computer, cell phone and monthly service plan, and internet expenses.

 

5.     At-Will Employment. Your employment will be “at will,” which means that
you or the Company may terminate the employment relationship at any time, with
or without Cause (as defined in Section 7), and with or without advance notice.
This at-will employment arrangement cannot be modified in any way except in
writing signed by you and the CEO or President of the Edesa Entities.

 

 

 

 

6.     Compensation and Benefits.

 

6.1       Base Salary. As compensation for your services, provided you are not
in default of any material obligation to the Company or the other Edesa
Entities, the Company shall pay you wages in the gross amount of Two Hundred and
Fifteen Thousand Dollars ($215,000) per year (the “Base Salary”), subject to
legally required withholding and payable in accordance with the Company’s usual
payroll policies and practices.

 

6.2       Retention Bonus. As additional consideration for your acceptance of
this Agreement, you shall be entitled to a one-time hiring and retention bonus
of $53,750, payable in cash by certified bank check or wire transfer no later
than fifteen (15) days from the Closing; provided, however, that in the event
you voluntarily terminate your employment with the Company on or prior to the
first anniversary of the Closing other than in connection with a “constructive
termination” (as defined below), you shall be required to repay a portion of the
hiring and retention bonus to the Company in an amount equal to (i) $53,750
multiplied by (ii) the number of the days in the period between the Separation
Date (as defined below) and March 1, 2020 divided by (iii) 365.

 

6.3       Discretionary Bonus. You may be eligible for a discretionary bonus in
an amount up to 25% of your Base Salary, subject to legally required
withholding, based on your performance and the performance of the Edesa
Entities. All decisions related to such bonus, including whether or when to
review you for such bonus, and the date on which to issue such bonus, are at the
sole discretion of the Edesa Entities. Notwithstanding whether a bonus has been
anticipated or budgeted, no entitlement to any portion of any bonus shall accrue
prior to the date on which the bonus is actually paid to you and on the date
your employment ends you will immediately cease to be eligible to receive
payment of any discretionary bonus.

 

6.4       Option Grant. You may be eligible for future share and/or option
grants in accordance with the Company’s executive compensation policy as in
effect from time to time as determined by the Company’s Compensation Committee
subject to availability of shares and/or options for grant under the Company’s
Incentive Compensation Plan.

 

6.5       Other Benefits. You shall be eligible for such other employee benefits
and executive perquisites as are generally provided to similarly situated
executives of the Edesa Entities subject to any waiting time periods or other
limitations set forth in the policy or plan document governing each benefit.
Neither the Company nor any Edesa Entity shall be under any obligation to
provide, or continue to maintain, any particular plan or program, or any
particular benefit level under any plan or program. At present, the Company
offers the following benefits:

 

·Group health insurance (the full premium for your choice of any ACA Gold or
Platinum plan paid by the Company)

 

·Group dental and vision insurance (the full premium paid by the Company)

 

 

 

 

·Vacation (accrued on a pro-rated basis at the rate of 208 hours per year;
accrual is capped at 312 hours; unused vacation is paid upon termination of
employment)

 

·Paid Sick Leave (48 hours provided upon Closing and on January 1 of each
calendar year thereafter; unused sick leave does not carry-over from
year-to-year; unused sick leave is not paid upon termination of employment)

 

·Six Paid Holidays (New Year’s Day, Memorial Day, July 4th, Labor Day,
Thanksgiving Day, and Christmas Day)

 

·401K (the Company will make a non-elective employer contribution of 3% of your
Base Salary)

 

·Coverage under the Company’s D&O Insurance.

 

7.     Termination. The parties may terminate their employment relationship and
this Agreement as follows:

 

7.1       Termination by Company for Cause. The Company may terminate your
employment at any time for “Cause.” For the purpose of this Agreement, Cause
means: (a) you have performed (or failed to perform) any act in bad faith to the
detriment of the Company’s or any Edesa Entity’s business or reputation; (b) you
have habitually neglected the duties of your position; (c) you have engaged in
dishonesty, gross negligence, or intentional misconduct in connection with your
employment; (d) you have materially breached any written policy of the Company
or any Edesa Entity or any written agreement with the Company or any Edesa
Entity; or (e) you have been convicted of, or pled no contest to, any crime
involving dishonesty or breach of trust. If the Company terminates your
employment for Cause, the Company’s only obligations shall be to provide you
with: (i) your accrued salary through and including your last day of employment
(the “Separation Date”); (ii) reimbursement of any reimbursable expenses you
have properly incurred through and including the Separation Date; and (iii) any
benefit required under applicable law (including but not limited to compliance
with COBRA and/or Cal-COBRA).

 

7.2       Resignation by You. You may resign your employment at any time. If you
resign your employment, the Company’s only obligation shall be to provide you
with the same payments and benefits as would be provided in case of a
termination of your employment by the Company for Cause.

 

7.3       Termination by Company without Cause. The Company may terminate your
employment at any time without Cause. If the Company terminates your employment
without Cause or constructively terminates your employment without Cause as
defined in Section 7.4, the Company’s only obligations shall be: (a) to provide
you with the same payments and benefits as would be provided if the Company had
terminated your employment for Cause; and (b) if you execute a general release
of claims in a form reasonably required by the Company (“Release Agreement”)
within sixty (60) days after your Separation Date, you will also be paid, as
severance, an amount equal to 12 months of your Base Salary at your then-current
rate (the “Severance”). The Severance will be paid no later than 14 calendar
days after the date on which the Release Agreement becomes effective.

 

 

 

 

7.4        Termination Related to Change of Control. For the purpose of this
Agreement, “Change of Control” shall mean a transaction or series of
transactions whereby directly or indirectly: (i) any person or combination of
persons acting jointly or in concert acquires shares or other securities in
excess of the number which, directly or following the conversion, exercise or
exchange thereof, would entitle the holders thereof to cast 40% or more of the
votes attached to the securities of Stellar which may be cast to elect directors
of Stellar; and (ii) the votes attached to all or any of such securities are
exercised so as to cause or result in the election of a majority of directors of
Stellar who were not directors immediately prior to the acquisition of such
shares or securities. For purposes of this Agreement, a “constructive
termination” shall mean a material change in your title, responsibilities,
authority or status, and/or a reduction of your Base Salary (except when all
executives are subject to the same reduction or a salary deferral), or the
Company requires you to be based at a location which is at least thirty (30)
miles further from your principal residence than such residence is from your
current job location. In the event that your employment is terminated or
constructively terminated by the Company without Cause upon or within a 12 month
period following a Change of Control, the Company’s only obligations shall be to
provide you with the payments and benefits provided at clauses 7.3 (a) and (b)
above (subject to your execution of a Release Agreement), plus an additional
change of control payment equal to 12 months of your then-current Base Salary.

 

8.     Proprietary Information and Inventions Assignment Agreement. As a
condition of your employment, if requested by the Company, you shall sign a
Proprietary Information and Inventions Assignment Agreement in a form acceptable
to the Company.

 

9.     Arbitration. As a condition of employment, or continued employment, with
the Company, you may be required to sign arbitration agreements that the Company
may issue from time to time.

 

10.   Non-Solicitation. While you are employed by the Company and for a period
of one year after your employment ends for any reason, you will not solicit for
employment by you or by any person or entity other than the Company or an Edesa
Entity, any individual who is then employed by the Company or an Edesa Entity or
who was employed by the Company or an Edesa Entity during the preceding 12
months.

 

11.   Non-Interference. At no time during or after your employment by the
Company shall you engage in any of the following conduct: (a) make use of any
trade secret to solicit or attempt to solicit, on your own behalf or on behalf
of any person or entity other than the Company or an Edesa Entity, business from
any customer of the Company or another Edesa Entity; or (b) induce or attempt to
induce, on your own behalf or on behalf of any person or entity other than the
Company or an Edesa Entity, any consultant, independent contractor, licensee or
other third party to sever any existing contractual relationship with the
Company or another Edesa Entity.

 

12.   Construction of Agreement. The language of all parts of this Agreement
shall be construed as a whole according to its fair meaning, and not strictly
for or against any party. All parties have cooperated in the drafting and
preparation of this Agreement, and the Agreement shall not be construed more
favorably for or against any party by reason of which party drafted the
Agreement. The headings contained in this Agreement are for reference purposes
only, and shall not affect the meaning or interpretation of this Agreement.

 

 

 

 

13.   Severability. If any portion of this Agreement shall be held to be void,
voidable or unenforceable, such portion shall be modified only to the minimum
extent required to render it enforceable, and the remaining portions of the
Agreement shall remain in full force and effect.

 

14.   Amendments. This Agreement cannot be altered or amended except in writing
signed by you and the CEO or President of the Edesa Entities.

 

15.   Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of California without regard to
conflict-of-law principles.

 

16.   Successors and Assigns. This Agreement is personal to you and cannot be
assigned by you, and any purported assignment by you shall be null and void from
the outset. This Agreement cannot be assigned by the Company other than to
another Edesa Entity.

 

17.   Waiver. No waiver of any provision of this Agreement is effective unless
it is in writing and signed by the party against whom it is being enforced. No
waiver by any party to this Agreement on one occasion shall be deemed a waiver
of any provision on any other occasion.

 

18.   Entire Agreement. This Agreement constitutes the entire and complete
understanding between you and the Company concerning the subject matter hereof.
All prior representations, agreements, arrangements and understandings between
the parties, whether oral or written, have been fully and completely merged
herein and are fully superseded by this Agreement. To the extent that any
provision of this Agreement conflicts with any provision of any general policy
of the Company, including policies in the Company’s Employee Handbook, this
Agreement shall control.

 

19.   Counterparts; Signatures. This Agreement may be executed in counterparts,
each of which is deemed to be an original, but such counterparts together shall
constitute one and the same document. Electronic signatures and copies of
executed signature pages, including copies conveyed via fax or email, shall be
valid and binding for all purposes to the same extent as original executed
signature pages.

 

 

 

 

 

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

 

STELLAR BIOTECHNOLOGIES, INC.   KATHI NIFFENEGGER       By:   /s/ Sean McDonald
  /s/ Kathi Niffenegger       Its:   Authorized Signatory   Date:  June 9, 2019
      Date:   June 9, 2019