ARCH THERAPEUTICS, INC.


FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


 


This FIRST AMENDMENT
TO THE EMPLOYMENT AGREEMENT (the “Amendment”) is made by and between Arch Therapeutics, Incorporated (the “Company”)
and William Cotter (the “Employee”), effective as of March 13, 2014 upon approval by the Company’s Board of Directors,
with reference to the following facts:


 


WHEREAS, (i) the
Company and the Employee entered into the Employment Agreement dated as of July 2, 2013 (the “Agreement”) and (ii)
the parties desire to amend the Agreement as set forth herein.


 


NOW THEREFORE,
in consideration of the foregoing recitals and the provisions contained herein, the adequacy and sufficiency of which are hereby
acknowledged, the parties agree as follows:


 


		1.	Amendment. The Agreement is hereby amended as follows:



 


		1.1	Section 2 (a) of the Agreement is hereby deleted and replaced in its entirety with the following:



 


Annual Base Salary. As compensation
for Executive’s performance of his duties hereunder, the Company shall pay to Executive an initial base annual salary of
two-hundred forty thousand dollars ($240,000), starting on February 1, 2014, (the “Annual Base Salary”), payable in
accordance with the normal payroll practices of Company, less required deductions for state and federal withholding tax, social
security and all other employment taxes and payroll deductions. If, due to the Company’s capital constraints, the Company
is unable to pay to Executive any portion of the Annual Base Salary when due, such unpaid portion of the Annual Base Salary shall
be deferred, without bearing interest, and shall remain payable until such time as the Company’s capital constraints are
resolved and the outstanding Annual Base Salary is fully paid.


 


		1.2	Section 2 (b) of the Agreement is hereby deleted and replaced in its entirety with the following:



 


Annual Bonus. Executive
shall be eligible at the sole discretion of the Board of Directors to receive an annual cash bonus in an amount up to twenty-five
percent (25%) of his then-current Annual Base Salary (the “Annual Bonus”). The actual amount of the Annual Bonus will
be determined by the Board of Directors based on Executive’s achieving Company and personal goals established and mutually
agreed upon between the Executive and the Company. If awarded, the Annual Bonus will be paid on or before March 15 of the year
following the year in which the Annual Bonus was earned. If, due to the Company’s capital constraints, the Company is unable
to pay to Executive any portion of the Annual Bonus when due, such unpaid portion of the Annual Bonus shall be deferred, without
bearing interest, and shall remain payable until such time as the Company’s capital constraints are resolved and the outstanding
Annual Bonus is fully paid.


 




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		2.	Governing Law. This Agreement will be governed by and construed in accordance with the laws
of the United States and the State of New York, without giving effect to its conflict of law rules. Except for actions for injunctive
or other equitable relief, which may be brought in any court of competent jurisdiction, any legal suit, action or proceeding arising
out of or relating to this Agreement shall be commenced in a federal court in the Commonwealth of Massachusetts or in state court
in the Commonwealth of Massachusetts, and each party hereto irrevocably submits to the exclusive jurisdiction and venue of any
such court in any such suit, action or proceeding



 


		3.	Counterparts. This Amendment may be executed in separate counterparts, each of which so
executed and delivered shall constitute an original but all such counterparts shall together constitute one and the same instrument
and any one of which may be used to evidence this Amendment.



 


		4.	Severability. All provisions of this Amendment are severable and any provision which may
be prohibited by law shall be ineffective to the extent of such prohibition without invalidating the remaining provisions of this
Amendment and the parties hereto agree to cooperate to provide a legal substitute for any provision which is prohibited by law.



 


		5.	Entire Agreement; Modifications and Amendments. This Amendment, together with the Agreement,
constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements and
understandings both oral and written, between the parties with respect to the subject matter hereof. No provision of this Amendment
may be amended or waived unless such amendment or waiver is agreed to in writing, signed by the parties to this Amendment.



  


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


 


	WILLIAM COTTER	 
	 	 
	/s/ William Cotter	 
	Name: William Cotter	 
	 	 	 
	ARCH THERAPEUTICSS, INC.	 
	 	 	 
	By:	/s/ Terrence W. Norchi, MD	 
	Name: 	Terrence W. Norchi, MD	 
	Title:	President and CEO	 


 


[Signature Page to Employment Agreement
Amendment]


 








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