Exhibit 10.9


 


EXECUTIVE
EMPLOYMENT AGREEMENT


 


THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of July 22, 2022, and entered into by and between
EPIEN Medical Inc. (the “Company”), and Dr. Steven Kavros (the “Executive”), each a “Party,”
or, collectively, the “Parties” to be effective as of the date of the consummation of the Company’s initial
public offering of common stock (the “IPO Effective Date”). 


 


WHEREAS,
the Company employed the executive and wishes to continue to employ him on the terms set forth in this Agreement; and


 


WHEREAS,
Executive wishes to remain employed on the terms set forth herein.


 


NOW,
THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the Parties agree as follows:


 


1.
Past Agreements/Employment Term.


 


a)
Past Agreements. All past agreements of employment, oral or written, between the Company and Executive, shall, as of the IPO
Effective Date, terminate and be of no further force or effect. For the avoidance of doubt, it is expressly stated that Executive remains
entitled to any deferred wages, salary, bonuses or other cash compensation, any unreimbursed expenses, and any grants of equity or options,
to which Executive became entitled under any past employment agreements or as a result of any past service to the Company.


 


b)
Employment Term. The Company agrees to employ the Executive “at will” pursuant to the terms of this Agreement
and the Executive agrees to be so employed. Nothing in this Agreement is intended to create a promise or representation of continued
employment or employment for a fixed period of time. The period of time between the IPO Effective Date and the termination of the Executive’s
employment shall be referred as the “Term.”


 


2.
Position and Duties. 


 


a)
Title. The Company hereby agrees to continue to employ the Executive to serve as Chief Medical Officer (“CMO”)
and Vice President of Regenerative Medicine of the Company.


 


b)
Reporting Relationships. As CMO of the Company, the Executive shall: (i) report to the Chief Executive Officer (“CEO”);
and (ii) shall have all authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in
similar capacities in similarly sized companies, and such other duties, authorities, and responsibilities as may reasonably be assigned
to the Executive by the Board.


 


c)
Full-Time Commitment/Policies. Throughout the Executive’s employment, the Executive shall devote substantially all of
his professional time to the performance of his duties of employment with the Company (except as otherwise provided herein) and shall
faithfully and industriously perform such duties. The Executive will be required to comply with all Company policies as may exist and
be in effect from time to time.


 


d) Executive Representations. The Executive represents and warrants to the Company that he is under no obligation or commitments,
whether contractual or otherwise, that are inconsistent with his obligations under this Agreement. The Executive represents and warrants
that he will not use or disclose, in connection with his employment by the Company, any trade secrets or proprietary information or intellectual
property in which the Executive or any other person has any right, title or interest and that his employment by the Company as contemplated
by this Agreement will not infringe or violate the rights of any other person.


 






     


     


    

 


3.
Compensation and Benefits.


 


a)
Base Salary. In consideration for his work under the terms of this Agreement, the Company shall pay to the Executive
a base salary at a rate of $300,000.00 (Three Hundred Thousand Dollars) per year (“Base Salary”) on the last day of
each month of the Term, or more frequently, in accordance with the regular payroll practices of the Company. The Base Salary shall be
subject to such deductions and withholdings as are required by law and otherwise elected by the Executive. If the Term ends other than
on the last day of a month the last salary payment shall be pro-rated based on the number of days in the month that have passed as of
the date of termination.


 


b)
Annual Bonus. Upon the achievement of goals set in the Company’s reasonable discretion, the Company shall pay to the
Executive a cash bonus of $120,000.00 (One Hundred Twenty Thousand Dollars) per year payable at the end of the month following the filing
of the Company’s annual report on Form 10-K. The Annual Bonus shall be subject to such deductions and withholdings as are required
by law and otherwise elected by the Executive. The initial Annual Bonus under this Agreement will be prorated from the IPO Effective
Date until December 31, 2022. The goals for the initial Annual Bonus will be as follows: Fifty percent (50%) will be paid if the Company’s
net revenue for 2022 exceeds $2.25 million; fifty percent (50%) will be paid if the Company receives, on or before December 31, 2022,
a third-party post-IPO equity financing, or advance on future sales, equal to or exceeding $5.0 million. Either portion of the Annual
Bonus may be earned upon satisfaction of one of the conditions without the other condition being satisfied.


 


c)
Grant of Stock-Based Compensation Awards. On the IPO Effective Date, the Company, in accord with the Board’s 2022 resolution,
shall grant Executive stock-based compensation awards subject to the terms of the EPIEN Medical, Inc. 2022 Equity Incentive Plan (the
“Equity Plan”) as follows:


 


		●	100,000
                                            Restricted Stock Units will be granted to the Executive. Such restricted stock units
                                            will vest as follows: 40,000 on January 1, 2023; 20,000 on June 30, 2023; 20,000 on December
                                            31, 2023; and 20,000 on December 31, 2024.



 


		●	750,000
                                            Performance-Based Stock Options will be granted to the Executive. Such performance-based
                                            stock options will vest in the amounts and upon the occurrence of the following: 200,000
                                            upon first FDA or European regulatory clearance to commercialize REVITY for acute and chronic
                                            wounds; 250,000 upon the Company’s achievement of $2.0 million of gross sales from
                                            REVITY; and 300,000 if the Executive initiates and leads a successful merger or acquisition
                                            of the Company’s chronic wound business that is accepted by the Company’s Board
                                            and shareholders.



 


Executive
shall be responsible for all income taxes imposed as a result of such grants except the Company’s share of FICA taxes.


 


d)
Payment of Deferred Compensation. In addition to all compensation and benefits set forth in this Agreement, Executive shall
be entitled to payment of wages, salaries, bonuses, and any other benefits or payments that Executive has deferred receiving during Executive’s
employment with the Company in accordance with the EPIEN Medical Inc. Deferred Compensation Plan.


 


e)
Benefits. Executive shall be eligible for any fringe benefits offered by the Company on the same terms and conditions as other
executives. Under the Company’s current group health and dental plans, the Company shall pay 80% of premiums for Executive and
50% for spouses and family members. Group life insurance premiums are currently being paid in full by the Company. The Company reserves
the right, in its sole discretion, to amend or terminate any employee benefit plan in accordance with applicable law.


 


f)
Paid Time Off. Executive shall be entitled to paid vacation days and paid sick days in accordance with the Company’s
policies. Executive shall also be entitled to paid time off on holidays recognized by the Company. The Company shall not pay Executive
for accrued and unused vacation or sick days when Executive’s employment terminates for any reason.


 






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4.
Termination of Employment. 


 


a)
Notice of Termination. A party may terminate Executive’s employment by giving written notice of such termination in
accordance with the notice provisions of this Agreement. Termination will become effective upon a party’s receipt of notice of
termination.


 


b)
Termination/ Severance Plan. In the event the Executive’s employment terminates for any reason, then: (i) the Company
shall pay to the Executive the Base Salary earned through the date of termination; (ii) the Company shall reimburse the Executive for
any expenses incurred through the date of termination for which the Executive is entitled to reimbursement; (iii) the Executive’s
rights under any benefit plans, programs, or arrangements of the Company shall be determined in accordance with the provisions thereof;
and (iv) the stock-based compensation grants shall be governed by the terms of the Equity Plan. The items in subparagraphs (i) –
(iv) are referred to hereinafter as the “Accrued Amounts.” If Executive’s termination is a “Qualifying
Termination” as that term is defined in the EPIEN Medical Inc. Executive Severance Plan (the “Severance Plan”),
the Executive shall be entitled to those benefits provided by the Severance Plan in accordance with Severance Plan’s requirements,
which will include the execution of a General Release as described in the Severance Plan.


 


5.
Business Expenses. Upon presentation of reasonable substantiation and documentation as the Company may specify from time to
time, the Executive shall be reimbursed in accordance with the Company’s expense reimbursement policy, for all reasonable out-of-pocket
business expenses incurred and paid by the Executive during the Term and in connection with the performance of the Executive’s
duties hereunder. To the extent the Executive is provided with the use of the Company’s credit or charge card for purposes of business
expenses, such credit or charge card shall not be used to incur any personal (non-business-related) expenses; any personal expenses inadvertently
charged to such card shall be reimbursed immediately by the Executive to the Company.


 


6.
Confidentiality and Intellectual Property.


 


a)
Confidential Information. The Executive acknowledges that the Executive will occupy a position of trust and confidence. The
Company, from time to time, may disclose to the Executive, and the Executive will require access to and may generate confidential and
proprietary information (no matter how created or stored) concerning the business practices, products, services, and operations of the
Company which is not known to their competitors or within their industry generally and which is of great competitive value to them, including,
but not limited to: (i) Trade Secrets, inventions, mask works, ideas, concepts, drawings, materials, documentation, procedures, diagrams,
specifications, models, processes, formulae, source and object codes, data, software, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques; (ii) information regarding research, development, products, marketing
plans, market research and forecasts, bids, proposals, quotes, business plans, budgets, financial information and projections, overhead
costs, profit margins, pricing policies and practices, accounts, processes, planned collaborations or alliances, licenses, suppliers
and customers; (iii) operational information including deployment plans, means and methods of performing services, operational needs
information, and operational policies and practices; and (iv) any information obtained by the Company from any third party that the Company
treats or agrees to treat as confidential or proprietary information of the third party (collectively, “Confidential Information”).
The Executive acknowledges and agrees that Confidential Information includes Confidential Information disclosed to the Executive prior
to entering into this Agreement.


 


b)
Trade Secrets. “Trade Secrets” means any information, including any data, plan, drawing, specification,
pattern, procedure, method, computer data, system, program or design, device, list, tool, or compilation, that relates to the present
or planned business of the Company and which: (i) derives economic value, actual or potential, from not being generally known to, and
not readily ascertainable by proper means to, other persons who can obtain economic value from their disclosure or use; and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain their secrecy. To the extent that the foregoing definition
is inconsistent with a definition of “trade secret” under applicable law, the latter definition shall control.


 


c)
Restrictions On Use and Disclosure of Confidential Information. The Executive recognizes that the Company’s business
interests require the full protection of its Confidential Information. The Executive agrees during his employment and after his employment
ends, the Executive will hold the Confidential Information in strict confidence and will neither use the information nor disclose it
to anyone, except to the extent necessary to carry out the Executive’s responsibilities as an employee of the Company or as specifically
authorized in writing by a duly authorized officer of the Company. The Parties agree that the restrictions in this Section will not apply
to any portion of the Confidential Information which: (i) was known to the public prior to its disclosure to the Executive; (ii) becomes
generally known to the public subsequent to disclosure to the Executive through no wrongful act of the Executive; or (iii) the Executive
is required to disclose by applicable law, regulation or legal process (provided, if permitted, that the Executive provides the Company
with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking to protect such information).
Nothing in this Agreement shall be deemed to prohibit the Executive from disclosing any concerns about suspected unlawful conduct to
any proper government authority subject to proper jurisdiction. This provision shall survive the termination of the Executive’s
employment for so long as the Company maintains the secrecy of the Confidential Information and the Confidential Information has competitive
value; and to the extent such information is otherwise protected by statute for a longer period, for example and not by way of limitation,
the Defend Trade Secrets Act of 2016 (“DTSA”), then until such information ceases to have statutory protection.


 






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d)
Defend Trade Secrets Act. Misappropriation of a Trade Secret of the Company in breach of this Agreement may subject the Executive
to liability under the DTSA, entitle the Company to injunctive relief, and require the Executive to pay compensatory damages, double
damages, and attorneys’ fees to the Company. Notwithstanding any other provision of this Agreement, the Executive hereby is notified
in accordance with the DTSA that the Executive will not be held criminally or civilly liable under a federal or state law for the disclosure
of a trade secret that is made in confidence to a federal, state or local government official, either directly or indirectly, or to an
attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal. If the Executive files a lawsuit for retaliation by the Company
for reporting a suspected violation of law, the Executive may disclose the trade secret to the Executive’s attorney and use the
trade secret information in the court proceeding, provided that the Executive must file any document containing the trade secret under
seal, and must not disclose the trade secret, except pursuant to court order. 


 


e)
Ownership of Inventions. All ideas, data, deliverables, reports, work products, innovations, improvements, know-how, inventions,
designs, developments, techniques, methods and other results of the Executive’s employment with the Company (in draft and final
forms), and all related documentation (such as, but not limited to, notes, records, documents, drawings, and designs), which the Executive
makes, conceives, reduces to practice, or develops in whole or in part, either alone or jointly with others, in connection with his services
to the Company or which relate to any Confidential Information (collectively, the “Inventions”) will be the sole and
exclusive property of the Company , and will be considered “works made for hire” pursuant to the United States Copyright
Act (17 U.S.C. Section 101). The Executive hereby assigns to the Company or its designees all of the Executive’s right, title and
interest in and to all of the foregoing without compensation. To the extent the Executive has any “moral rights” in the Inventions
which are not assignable by law, the Executive hereby waives any such moral rights relating to the Inventions, including any and all
rights of identification of authorship and any and all rights of approval, restriction or limitation on use or subsequent modifications.
The Executive further represents that, to the best of the Executive’s knowledge and belief, none of the Inventions that the Executive
creates will violate or infringe upon any right, patent, copyright, trademark or right of privacy, or constitute libel or slander against
or violate any other rights of any person, firm or corporation, and that the Executive will use the Executive’s commercially reasonable
efforts to prevent any such violation.


 


7.
Covenants Not To Solicit or Compete.


 


a)
Non-Solicitation of Personnel. During the Executive’s employment with the Company and for a period of six (6) months
following the termination of the Executive’s employment (the “Restricted Period”), the Executive shall not,
directly or indirectly, solicit, induce, recruit or encourage any Protected Personnel of the Company to leave their employment, or end
their engagement with the Company, to provide services for the Executive or any other person, business, or organization. “Protected
Personnel” means: (i) any person currently employed or engaged as an independent contractor by the Company; and (ii) any former
employee or independent contractor of the Company, for a period of three (3) months after termination of such employee’s employment,
or independent contractor’s engagement, with the Company.


 


b)
Non-Competition. During the Term, and during the Restricted Period, Executive shall not, anywhere within the United States,
either as principal, agent, employee, consultant, partner, officer, director, shareholder, or in any other individual or representative
capacity, own (more than 5%), manage, finance, operate, control or otherwise engage or participate in any manner or fashion in any business
engaged in the same or similar business as the Company, including those engaged in the business
of developing, selling, distributing, or marketing wound disinfection or wound care products, dental care products, or veterinary medicine.



 






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8.
Survival of Provisions. The obligations contained in Sections 7, 8, 9, and 10 shall survive the termination of the Executive’s
employment with the Company and shall be fully enforceable thereafter.


 


9.
Return of Property. On the date of the Executive’s termination of employment with the Company for any reason (or at
any time prior thereto at the Company’s request), the Executive shall return all property belonging to the Company or its affiliates
and not retain any copies, including, but not limited to, any keys, access cards, badges, laptops, computers, cell phones, wireless electronic
mail devices, USB drives, other equipment, documents, reports, files, and other property provided by or belonging to the Company or the
Company.


 


10.
Non-Disparagement. During the Executive’s employment and following termination of employment for whatever reason, the
Executive shall not, directly or indirectly, make or publish denigrating or derogatory remarks, comments, or statements (whether written
or oral) in any forum or through any medium of communication regarding the Company, its services, or any of its owners, managers, officers,
employees, or consultants. Notwithstanding the foregoing, nothing in this section shall or shall be deemed to prevent or impair the Executive
from making truthful statements in any legal or administrative proceeding or from otherwise complying with legal requirements.


 


11.
Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in the Agreement shall
be in writing and shall be deemed to have been given when delivered by email with return receipt requested, upon the obtaining of a valid
return receipt from the recipient, by hand or mailed by nationally recognized overnight delivery service, addressed to the Parties’
addresses specified below or to such other address as any Party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt:


 


To
the Company:


 


EPIEN
Medical Inc.


Attn:
Reginald R. Dupre, Chief Executive Officer


600
Highway 169, Suite 820


St.
Louis Park, MN 55426


 


With
a copy (which shall not constitute notice) to:


 


Matthew
Gray, Esq.


Ellenoff
Grossman & Schole LLP


1345
Avenue of the Americas


New
York, NY 10105


Email:
mgray@egsllp.com


 


To
the Executive:


 


Dr.
Steven Kavros


At
the address provided on Executive’s most recent Form W-4 and any email address Executive has supplied to the Company.


 


12.
Tax Matters.


 


a)
Withholding. The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state
and local taxes as may be required to be withheld pursuant to any applicable law or regulation.


 


b)
Code Section 409A. The payments described in this Agreement are intended either to comply with the requirements of Code Section
409A, to the extent they are subject to Code Section 409A, or to be exempt from such requirements, regulations and guidance (where an
exemption is available), and will be construed accordingly. Notwithstanding any other provision of this Agreement, the Parties agree
that the Company has the right, to the extent the Company deems necessary or advisable, in its sole discretion, to unilaterally amend
this Agreement to ensure that the payments hereunder comply with Section 409A. The Company is not responsible for, and makes no representation
or warranty whatsoever in connection with the tax treatment hereunder, and the Executive should consult his own tax advisor, including
without limitation the applicability of Code Section 409A as to the tax effect of amounts payable to the Executive under this Agreement.
In any case, the Executive shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed
on the Executive in connection with this Agreement (including any taxes and penalties under Code Section 409A), and neither the Company
nor any of its affiliates shall have any obligation to indemnify or otherwise hold the Executive harmless from any or all of such taxes
or penalties.


 






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13.
Assignment. The Executive may not assign any part of the Executive’s rights or obligations under this Agreement. The
Executive agrees and hereby consents that the Company may assign this Agreement to a third party that acquires or succeeds to the Company’s
business, that the provisions hereof are enforceable against the Executive by such assignee or successor in interest, and that this Agreement
shall become an obligation of, inure to the benefit of, and be assigned to, any legal successor or successors to the Company.


 


14.
Headings. Titles or captions of sections or paragraphs contained in this Agreement are intended solely for the convenience
of reference, and shall not serve to define, limit, extend, modify, or describe the scope of this Agreement or the meaning of any provision
hereof. The language used in this Agreement is deemed to be the language chosen by the Parties to express their mutual intent, and no
rule of strict construction will be applied against any person.


 


15.
Severability. The provisions of this Agreement are severable. The unenforceability or invalidity of any provision or portion
of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement, it
being intended that all rights and obligations of the Parties hereunder shall be enforceable to the full extent permitted by applicable
law.


 


16.
Governing Law; Venue. This Agreement, the rights and obligations of the Parties hereto, and any claims or disputes relating
thereto, shall be governed by and construed in accordance with the laws of the State of Minnesota (without regard to its conflicts of
laws provisions). Except as provided in Section 17 (Arbitration) of this Agreement, the Parties consent to the personal jurisdiction
of the State of Minnesota and further agree to the exclusive jurisdiction of the courts of the State of Minnesota, County of Ramsey and
the United States District Court for the District of Minnesota, as applicable, in connection with, or incident to, any dispute, claim,
case, controversy or matter arising out of or relating to Executive’s employment or this Agreement, to the exclusion of the courts
of any other state, territory or country. The Parties knowingly, willingly, and voluntarily, WAIVE ALL RIGHT TO TRIAL BY JURY
in any such proceedings.


 


17.
Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement, its enforcement, arbitrability
or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions and Employee’s
employment with the Company, including any alleged violation of statute, common law or public policy shall be submitted to final and
binding arbitration before the American Arbitration Association (“AAA”) to be held in Minneapolis, Minnesota, before
a single arbitrator, in accordance with then-current AAA Employment Arbitration Rules. The arbitrator shall issue a written opinion stating
the essential findings and conclusions on which the arbitrator’s award is based. Company will pay the arbitrator’s fees and arbitration
expenses and any other costs unique to the arbitration hearing (recognizing that each side bears its own deposition, witness, expert
and attorney’s fees and other expenses to the same extent as if the matter were being heard in court). If, however, any party prevails
on a statutory claim that affords the prevailing party attorneys’ fees and costs, then the arbitrator may award reasonable attorneys’
fees and costs to the prevailing party. Any dispute as to who is a prevailing party and/or the reasonableness of any fee or costs shall
be resolved by the arbitrator.


 


/s/
SK___ By initialing here, Executive acknowledges he has read this paragraph and agrees with the arbitration provision
herein.


 


18.
Waiver; Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the Executive and a duly authorized officer of the Company. No waiver by either Party
hereto at any time of any breach by the other Party hereto of, or compliance with, any condition or provision of this Agreement to be
performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time.


 


19.
Recitals; Entire Agreement. The Recitals are hereby incorporated into this Agreement. This Agreement sets forth the entire
agreement of the Parties with respect to the subject matter contained herein and supersedes any and all prior agreements or understandings
between the Executive and the Company with respect to the subject matter hereof. No agreements, inducements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have been made by either Party which are not expressly set
forth in this Agreement and the Transfer Agreement.


 


20.
Counterparts. This Agreement may be executed in counterparts, and each executed counterpart shall have the efficacy of a signed
original and may be transmitted by facsimile or email. Each copy, facsimile copy, or emailed copy of any such signed counterpart may
be used in lieu of the original for any purpose.


 


[Signature
Page Follows]


 




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IN
WITNESS WHEREOF, the Parties hereto have executed this Executive Employment Agreement effective as of the date first written above.


 


EPIEN
MEDICAL, INC.


 


	By:	/s/
    Reginald R. Dupre	 
	 	Reginald R. Dupre	 
	 	Chief Executive Officer	 


 


EXECUTIVE


 


	/s/
  Steven J. Kavros	 
	Steven J. Kavros	 



 


 


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