Document:

bwen_Ex10-1

		
			Exhibit 10.1
		

		
			SEVERANCE AND NON-COMPETITION AGREEMENT
		

		
			THIS SEVERANCE AND NON-COMPETITION AGREEMENT (this “Agreement”) is made and entered into as of the 7th day of August, 2017 (the “Effective Date”), by and between JASON BONFIGT (the “Employee”) and BROADWIND ENERGY, INC. (the “Company”), a wholly-owned subsidiary of Broadwind Energy, Inc. 
		

		
			RECITALS
		

		
			A.The Employee is employed as Chief Financial Officer of the Company.
		

		
			B.The Company has agreed to provide the Employee with certain severance benefits in the event the Employee’s employment terminates under certain circumstances, in exchange for the Employee’s agreement to be bound by certain restrictive covenants.
		

		
			C.The parties desire to enter into this Agreement to memorialize the terms and conditions of such agreement.  
		

		
			NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and intending to be legally bound, the parties, upon and subject to the terms and conditions set forth herein, hereby agree as follows:
		

		
			AGREEMENTS
		

		
			1.Restrictive Covenants.
		

		
			(a)Confidentiality Critical.  The parties agree that the business in which the Company is engaged is highly sales-oriented and the goodwill established between the Employee and the Company’s customers and potential customers is a valuable and legitimate business interest worthy of protection under this Agreement.  The Employee acknowledges and agrees that developing and maintaining business relationships is an important and essential business interest of the Company.  The Employee further recognizes that, by virtue of the Employee’s employment by the Company, the Employee will be granted otherwise prohibited access to confidential and proprietary data of the Company which is not known to the Company’s competitors and which has independent economic value to the Company and that the Employee will gain an intimate knowledge of the Company’s business and its policies, customers, employees and trade secrets, and of other confidential, proprietary, privileged or secret information of the Company and its customers (“Customers”) (collectively, all such nonpublic information is referred to as “Confidential Information”).  
		

		
			This Confidential Information includes, but is not limited to data relating to the Company’s products and services; the Company’s marketing and servicing programs, procedures and techniques; business, management and personnel strategies; the criteria and formulae used by the Company in pricing its products and services; the Company’s computer system and software; lists of prospects; customer lists; the identity, authority and responsibilities of key contacts at accounts of Customers; and the composition and organization of Customers’ businesses.  The Employee recognizes and agrees that this Confidential Information constitutes valuable property of the Company, developed over a long period of time and at substantial expense and worthy of protection.  The Employee acknowledges and agrees that only through the Employee’s employment with the Company could the Employee have the opportunity to learn this Confidential Information.  
		

		
			(b)Confidential Information.  The Employee shall not at any time (for any reason), directly or indirectly, on the Employee’s own behalf or on behalf of any other person or entity, (i) disclose to any person or entity (except to employees or other representatives of the Company who need to know such Confidential Information to the extent reasonably necessary for the Employee to perform the Employee’s duties under this Agreement or such employees or representatives to perform their duties on behalf of the Company, and except as required by law) any Confidential Information, including, without limitation, business or trade secrets of, or products or methods or techniques used by, the Company, or any Confidential Information whatsoever concerning 

		 

 

Customers, (ii) use, directly or indirectly, for the Employee’s own benefit or for the benefit of another (other than a Customer) any of such Confidential Information, or (iii) assist any other person or entity in connection with any action described in either of the foregoing clauses (i) and (ii).     
		

		
			(c)Noninterference with Employees.  The Employee further agrees that the Company has expended considerable time, energy and resources on training its other employees (“Co-Workers”).  As a result, during the Employee’s employment with the Company and for a period of twelve (12) months thereafter, the Employee shall not, for any reason, directly or indirectly, on the Employee’s own behalf or on behalf of any other person or entity, (i) induce or attempt to induce any Co-Worker to terminate employment with the Company, (ii) interfere with or disrupt the Company’s relationship with any Co-Worker, (iii) solicit, entice, hire, cause to hire, or take away any person employed by the Company at that time or during the six (6) month period preceding the Employee’s last day of employment with the Company, or (iv) assist any other person or entity in connection with any action described in any of the foregoing clauses (i) through (iii).
		

		
			(d)Non-competition.  The Employee further agrees with the Company to the following provisions, all of which the Employee acknowledges and agrees are necessary to protect the Company’s legitimate business interests.  The Employee covenants and agrees with the Company that:
		

		
			(i)Unless otherwise agreed between the parties, the Employee shall not, during the Employee’s employment with the Company and for a period of twelve (12) months thereafter, either directly or indirectly, engage in, render service or other assistance to, or sell products or services, or provide resources of any kind, whether as an owner, partner, shareholder, officer, director, employee, consultant or in any other capacity, whether or not for consideration, to any person, corporation, or any entity, whatsoever, that owns, operates or conducts a business that competes, in any material way, with the Company’s business (which includes, but is not limited to, the business of providing wind turbine towers, weldments, and other technologically advanced high-value other products and services to energy, mining and infrastructure sector customers, primarily in the United States), other than the ownership of five percent (5%) or less of the shares of a public company where the Employee is not active in the day-to-day management of such company.  With respect to the post-employment application of this Section 1(d)(i), the restrictions shall extend only to those specific countries or provinces where the Company conducts business on the day that the Employee’s employment with the Company terminates.  
		

		
			(ii)The Employee shall not, during the Employee’s employment with the Company and for a period of twelve (12) months thereafter, either directly or indirectly, (A) solicit, call on or contact any significant Customer of the Company with whom the Employee has had material contact during the Employee’s employment with the Company for the purpose or with the effect of offering any products or services of any kind offered by the Company at that time or during the Employee’s employment with the Company, (B) request or advise any present or future vendors or suppliers to the Company to cancel any contracts, or curtail their dealings, with the Company, or (C) assist any other person or entity in connection with any action described in either of the foregoing clauses (A) and (B). 
		

		
			(iii)During the Employee’s employment with the Company, the Employee shall not own, or permit ownership by the Employee’s spouse or any minor children under the parental control of the Employee, directly or indirectly, an amount in excess of five percent (5%) of the outstanding shares of stock of a corporation, or five percent (5%) of any business venture of any kind, which operates or conducts a business that competes, in any way, with the Company.  
		

		
			(e)       Non-disparagement.  At any time during or after the Employee’s employment with the Company, the Employee shall not disparage the Company or any shareholders, directors, officers, employees or agents of the Company.   
		

		
			(f)Understandings.           
		

		
			(i)The provisions of this Section 1 shall be construed as an agreement independent of any other claim.  The existence of any claim or cause of action of the Employee against the Company, whether predicated on the Employee’s employment or otherwise, shall not constitute a defense to the 

		 

 

enforcement by the Company of the terms of this Section 1. The Employee waives any right to a jury trial in any litigation relating to or arising from this Agreement.  
		

		
			(ii)The Employee acknowledges and agrees that the covenants and agreements contained herein are necessary for the protection of the Company’s legitimate business interests and are reasonable in scope and content.  The Employee agrees that the restrictions contained in this Section 1 are reasonable and will not unduly restrict the Employee in securing other employment or income in the event the Employee’s employment with the Company ends.            
		

		
			(g)          Injunctive Relief.  The Employee acknowledges and agrees that any breach by the Employee of any of the covenants or agreements contained in this Section 1 would give rise to irreparable injury and would not be adequately compensable in damages.  Accordingly, the Employee agrees that the Company may seek and obtain injunctive relief against the breach or threatened breach of any of the provisions of this Agreement in addition to any other legal or equitable remedies available.  
		

		
			(h)        Reformation and Survival.  The Company and the Employee agree and stipulate that the agreements and covenants contained in this Agreement and specifically in this Section 1 are fair and reasonable in light of all of the facts and circumstances of the relationship between them.  The Company and the Employee agree and stipulate that the Employee has hereby agreed to be bound by the obligations, restrictions and covenants of this Section 1 in consideration of the payments provided for in Section 2 and Section 3 of this Agreement, and all other terms and provisions of this Agreement.  The Company and the Employee acknowledge their awareness, however, that in certain circumstances courts have refused to enforce certain agreements not to compete.  The Company and the Employee agree that, if any term, clause, subpart or provision of this Agreement is for any reason adjudged by a court of competent jurisdiction to be invalid, unreasonable, unenforceable or void, the same will be treated as severable, and shall be modified to the extent necessary to be legally enforceable to the fullest extent permitted by applicable law, and that such modification will not impair or invalidate any of the other provisions of this Agreement, all of which will be performed in accordance with their respective terms.  Thus, in furtherance of, and not in derogation of, the provisions of this Section 1, the Company and the Employee agree that in such event, this Section 1 shall be deemed to be modified or reformed to restrict the Employee’s conduct to the maximum extent (in terms of time, geography and business scope) that the court shall determine to be enforceable.  The provisions of this Section 1 shall survive the termination of this Agreement and the Employee’s resignation or termination of employment, regardless of the reason and whether voluntary or involuntary. 
		

		
			2. Termination.
		

		
			(a)Termination by the Company for Cause. The Company has the right, at any time, to terminate the Employee’s employment with the Company for Cause (as defined below), effective immediately, by giving written notice to the Employee as described in this Section 2(a).  If the Company terminates the Employee’s employment for Cause, the Company’s obligation to the Employee shall be limited solely to the payment of unpaid base salary accrued up to the effective date of termination plus any accrued but unpaid benefits to the effective date of termination, and any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination.  Any such accrued and earned but unpaid amounts shall be paid to the Employee as soon as reasonably practicable but in no event later than the Company’s next regularly scheduled payroll date following the effective date of termination.
		

		
			As used in this Agreement, the term “Cause” shall mean and include (i) the Employee’s abuse of alcohol that affects the Employee’s performance of the Employee’s duties under this Agreement, or use of any controlled substance; (ii) a willful act of fraud, dishonesty or breach of fiduciary duty on the part of the Employee with respect to the business or affairs of the Company; (iii) material failure by the Employee to comply with applicable laws and regulations or professional standards relating to the business of the Company; (iv) material failure by the Employee to satisfactorily perform the Employee’s job duties, a material breach by the Employee of this Agreement, or the Employee engaging in conduct that materially conflicts with the best interests of the Company or that may materially harm the Company’s reputation; (v) the Employee being subject to an inquiry or investigation by a governmental authority or self-regulatory organization such that the existence of such inquiry or investigation may result in damage to the Company’s business interests, licenses, reputation or prospects; or (vi) conviction of a felony or a misdemeanor involving moral turpitude.
		

		
			

		 

 

		

		
			(b) Termination by the Company without Cause. The Company shall have the right, at any time, to terminate the Employee’s employment with the Company without Cause by giving written notice to the Employee, which termination shall be effective thirty (30) calendar days from the date of such written notice.  The Company may provide thirty (30) days’ pay in lieu of notice if discharge occurs immediately upon notice. If the Company terminates the Employee’s employment without Cause, the Company’s obligation to the Employee shall be limited solely to (i) unpaid base salary accrued up to the effective date of termination plus any accrued but unpaid benefits to the effective date of termination, and any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination; and (ii) if the Employee has been employed by the Company for a period of  at least twelve (12) months prior to the effective date of termination (and only in such event), then severance in an amount equal to the Employee’s then-current base salary for a period of twelve (12) months. The Employee’s rights with regard to equity incentive awards, including stock options and restricted stock units, shall be governed by separate applicable agreements entered into between the Employee and the Company. As a condition to the Employee’s receipt of the post-employment payments and benefits under this Section 2(b) (other than the payments described in clause (i) of the second sentence of this paragraph), the Employee must be in compliance with Section 1 of this Agreement, and must, on or before the 30th day following the effective date of termination, deliver to the Company an irrevocable general release of claims agreement in favor of the Company and related entities and individuals in such form as may be prescribed by the Company.  The amount described in clause (i) of the second sentence of this paragraph shall be paid to the Employee as soon as reasonably practicable but in no event later than the Company’s next regularly scheduled payroll date following the effective date of termination, and the post-employment severance described in clause (ii) of the second sentence of this paragraph shall be paid in installments according to the Company’s normal payroll schedule, with the first payment to the Employee to be made on the next scheduled payroll date that occurs after the 30th day following the effective date of termination; provided, however, that the first such installment shall be in an amount equal to all amounts that otherwise would have been paid pursuant to normal payroll practices during the thirty (30) days following the effective date of termination. For the avoidance of doubt, no payment or benefit shall ever be due to the Employee under clause (ii) of the second sentence of this paragraph unless the Employee has delivered the irrevocable general release of claims agreement described above on or before the 30th day following the effective date of termination. The Employee shall have no duty to mitigate damages under this Section 2(b) during the applicable severance period and, in the event the Employee shall subsequently receive income from providing the Employee’s services to any person or entity, including self-employment income, or otherwise, no such income shall in any manner offset or otherwise reduce the payment obligations of the Company hereunder.
		

		
			Notwithstanding anything herein to the contrary, this Section 2(b) shall not apply if the Employee’s employment is terminated by the Company or a succeeding entity without Cause upon or within one (1) year of a Change of Control as described in Section 3 of this Agreement.  In such case, Section 3 of this Agreement shall control.
		

		
			(c) Termination upon Disability.  The Company shall have the right, at any time, to terminate the Employee’s employment if the Employee becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States who is mutually acceptable to the Company and the Employee, so that the Employee is unable to perform the essential functions of the Employee’s job duties, with or without reasonable  accommodation, (i) for a period of three (3) consecutive months, or (ii) for shorter periods aggregating ninety (90) calendar days during any twelve (12) month period.  If the Company terminates the Employee’s employment under this Section 2(c), the Company’s obligation to the Employee shall be limited solely to the payment of unpaid base salary accrued up to the effective date of termination plus any accrued but unpaid benefits to the effective date of termination, and any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination.  Any such accrued and earned but unpaid amounts shall be paid to the Employee as soon as reasonably practicable but in no event later than the Company’s next regularly scheduled payroll date following the effective date of termination.
		

		
			(d)Termination upon Death. If the Employee dies, this Agreement shall terminate, except that the Employee’s legal representatives shall be entitled to receive the base salary and other accrued benefits earned up to the date of the Employee’s death.  Any such accrued and earned but unpaid amounts shall be paid to the Employee’s legal representative as soon as reasonably practicable but in no event later than the Company’s next regularly scheduled payroll date following the effective date of termination or, if later, as soon as reasonably practicable following appointment of a legal representative.
		

		
			

		 

 

		

		
			3.Change of Control.
		

		
			(a)Anything in this Agreement to the contrary notwithstanding, if, upon or within one (1) year of a Change of Control (as defined below), the Company or a succeeding entity terminates the Employee’s employment without Cause (as defined above), the Company or the succeeding entity’s obligation to the Employee shall be (i) unpaid base salary, bonus and benefits accrued up to the effective date of termination, and (ii) a lump sum payment equal to the Employee’s then-current base salary for a period of eighteen (18) months.  In the event of a without Cause Change of Control termination by the Company, the payments set forth in this Section 3(a) shall be in lieu of, and not in addition to, any severance pay or benefits set forth in Section 2(b) of this Agreement.  As a condition to the Employee’s receipt of the post-employment payments and benefits under this Section 3(a) (other than the payments described in clause (i) of the first sentence of this paragraph), the Employee must be in compliance with Section 1 of this Agreement, and must, on or before the 30th day following the effective date of termination, deliver to the Company an irrevocable general release of claims agreement in favor of the Company and related entities and individuals in such form as may be prescribed by the Company.  The amount described in clause (i) of the first sentence of this paragraph shall be paid to the Employee as soon as reasonably practicable but in no event later than the Company’s next regularly scheduled payroll date following the effective date of termination, and the post-employment severance described in clause (ii) of the first sentence of this paragraph shall be paid in a single lump sum on the first business day after the 30th day following the effective date of termination.  For the avoidance of doubt, no payment or benefit shall ever be due to the Employee under clause (ii) of the first sentence of this paragraph unless the Employee has delivered the irrevocable general release of claims agreement described above on or before the 30th day following the effective date of termination.
		

		
			(b)Change of Control Defined. For purposes of this Agreement, a “Change of Control” means: (i) the consummation of any merger, consolidation, exchange, or reorganization to which the Company is a party if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such transaction have, immediately following the effective date of such transaction, beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power of all classes of securities issued by the surviving entity; (ii) a sale, lease or other transfer of all or substantially all of the assets of the Company to any person or entity which is not an affiliate of the Company; or (iii) the acquisition, without prior approval by resolution adopted by the Company’s Board of Directors, of direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of securities of the Company representing, in the aggregate, more than fifty percent (50%) of the total combined voting power of all classes of the Company’s then-issued and outstanding securities by any person or entity or by a group of associated persons or entities acting in concert; provided, however, that a Change of Control will not be deemed to occur if such acquisition is initiated by the Employee or an entity in which the Employee owns fifty percent (50%) or more of the total combined voting power of all classes of such entity’s securities, or if the Employee or such entity is a member of the group of associated persons or entities acting in concert.  In all cases, the determination of whether a Change of Control has occurred shall be made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations, notices and other guidance of general applicability issued thereunder.
		

		
			4.Tax Withholding.  The Company shall withhold from amounts payable to the Employee hereunder all applicable federal, state or local income or employment taxes.
		

		
			5.Confidentiality.  The Employee hereby agrees not to disclose any information concerning the contents or terms of this Agreement to anyone except the Employee’s attorney, accountant, financial adviser or members of the Employee’s immediate family, unless required by law.  If the Employee fails to comply with this confidentiality clause, the Company shall be relieved of all of its obligations under this Agreement.
		

		
			6.No Right to Employment.  Neither this Agreement nor any action taken pursuant to this Agreement shall be construed as giving the Employee any right to be retained in the employ of the Company.
		

		
			7.Attorneys’ Fees.  The Employee agrees that the Company shall be entitled to its reasonable attorneys’ fees and costs incurred in connection with any enforcement effort undertaken pursuant to the terms of this Agreement.         
		

		
			8.Survival.  This Agreement shall remain in full force and effect after the termination of the Employee’s employment with respect to those provisions which require the Employee to perform or not to perform 

		 

 

certain actions, including the restrictive covenants contained in Section 1 of this Agreement and any obligations for the payment of attorneys’ fees and costs in accordance with the provisions hereof.     
		

		
			9.Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Illinois, without giving effect to the principles of conflict of laws of such State, except as expressly provided herein.  In any court action to enforce the provisions of this Agreement, the parties consent to the jurisdiction of the state and federal courts in Illinois and further agree that venue is proper in the Circuit Court of Cook County, Illinois and/or the United States District Court for the Northern District of Illinois 
		

		
			10.Amendment.  This Agreement may not be amended or modified except by written agreement signed by the Employee and the Company.
		

		
			11.Assignment.  The Employee may not assign, pledge or encumber this Agreement or any interest herein.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and the successors and assigns of the Company.
		

		
			12.Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.  
		

		
			13.Integration.  This Agreement comprises the entire agreement of the parties hereto regarding the subject matter hereof.  
		

		
			IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						BROADWIND ENERGY, INC.

					
					
						 

					
					
						 

					
					
						JASON BONFIGT

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By: /s/ Stephanie K. Kushner

					
					
						 

					
					
						 

					
					
						/s/ Jason Bonfigt

				

		
			Name: Stephanie K. Kushner
		

		
			Title:    Authorized Signatoryex_101106.htm

Exhibit 10.1

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of December 1, 2017 by and between NovaBay Pharmaceuticals, Inc. (“Company”) and Lewis Stuart (“Executive”).

 

RECITAL

 

The Company and Executive desire to formalize and reflect Executive’s employment under the terms and conditions of this Agreement. 

 

NOW, THEREFORE, in consideration of the foregoing recital, the mutual covenants herein contained and for other good and valuable consideration, the parties hereto hereby agree as follows:

 

I.     EMPLOYMENT.

 

A.     Position and Responsibilities. The Company hereby employs the Executive as its Chief Commercial Officer (“CCO”). Executive shall do and perform all such services and acts as necessary or advisable to fulfill the duties and obligations of said position and/or such other and/or additional responsibilities as reasonably delegated to Executive by Executive’s superior and/or the Company’s Board of Directors (the “Board”) typically performed by a CCO consistent with the Company’s Bylaws. 

 

B.     Term. Executive’s employment with the Company is at-will and shall be governed by the terms of this Agreement, commencing on December 1, 2017 and continuing to and including November 30, 2019, unless this Agreement is terminated at some earlier time in accordance with the terms of this Agreement. 

 

C.     Devotion. Except as heretofore or hereafter excepted by the Company in writing, during the term of this Agreement, Executive (i) shall devote full time and attention to the foregoing responsibilities, (ii) shall not engage in any other business or other activity which may materially interfere with Executive’s performance of said responsibilities, and (iii) except as to any investment made in a publicly traded entity not amounting to more than 1% of its outstanding equity, shall not, directly or indirectly, as an employee, consultant, partner, principal, director or in any other capacity, engage or participate in any business that is in competition with the Company.

 

D.     Services’ Uniqueness. It is agreed that Executive’s services to be performed under this Agreement are special, unique and extraordinary and give rise to peculiar value, the loss of which may not be reasonably or adequately compensated by a damages award, in any legal action. Accordingly, in addition to any other rights or remedies available to the Company, the Company shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of the terms of this Agreement by Executive. 

 

1

 

 

II.     PROPRIETARY RIGHTS, CONFIDENTIAL INFORMATION, NONSOLICITATION, ETC. 

 

Executive has executed an agreement relating to the treatment of (and Executive’s obligations as to) proprietary rights, confidential information, and certain non-solicitation and other matters. It is further understood and agreed that said agreement is deemed to continue in full force and effect, binding and not affected, in any manner, by the terms in this Agreement.

 

III.     COMPENSATION AND BENEFITS.

 

Executive’s compensation and bonus rights are as follows:

 

	 	
			A.

				
			Salary. Executive shall be entitled to an annual salary of Three Hundred Thousand US dollars ($300,000) (the “Base Salary”), subject to such deductions, withholding and other charges as required by law, payable in accordance with the Company’s standard payroll schedule. Executive’s salary shall be subject to at least an annual review by the Company and may be adjusted by action of the Board, based on Executive’s performance, the financial performance of the Company and the compensation paid to a CCO (in comparable positions). Such adjustment shall not reduce your then current annual base salary unless you provide written consent. 

			

 

	 	
			B.

				
			Equity.

			

 

	 	
			1.     Stock Options. The Company will recommend to the Board of Directors that the Executive be granted an award of 100,000 stock options at the next Board meeting, currently scheduled for December 14, 2017 (“Grant Date”). The exercise price will be the closing price of one share of Common Stock on the NYSE American on the Grant Date. Twenty five percent (25%) of the award will vest on the first anniversary of the Grant Date with 6.25% of the remaining award vesting every three months thereafter.

			
	 	 
	 	
			2.     Restricted Stock Units. The Company will also recommend to the Board of Directors that the Executive be granted an award of 10,000 Restricted Stock Units (“RSUs”) at the next Board meeting, currently scheduled for December 14, 2017 (“Grant Date”). The RSUs will vest on August 1, 2018, provided that the Executive has successfully completed the performance criteria. The performance criteria will be determined at the end of the second quarter of 2018 and communicated to the Executive at that time. 

			

 

2

 

 

C.     Bonus. The Executive shall be eligible for any bonus plan that is deemed appropriate by the Board of Directors of the Company. 

 

1.     Annual Bonus. Executive shall be entitled to an Annual Bonus of up to 30% of Base Salary. Such amount of bonus payment, if any, as considered and approved by the Board in its sole discretion annually (for each year of services) during the term of this Agreement, which bonus amount shall be determined by all factors deemed relevant for that purpose by Board and shall include (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to Executive as set by Executive and the Company’s President and/or the Board, before the end of the first calendar Quarter (ii) the evaluation of Executive by the Company’s President and/or the Board, (iii) the Company’s financial, product and expected progress and (iv) other pertinent matters relating to the Company’s business and valuation. The amount of any annual bonus determined with respect to performance during a calendar year or the Company’s fiscal year, as the case may be, will be paid in full on or before the date that is 21⁄2 months following the end of the year for which the bonus was earned. The Compensation Committee of the Board of Directors shall have the sole discretion to pay any or all of the Annual Bonus in the form of equity compensation. Any such equity compensation shall be issued from the Company’s Omnibus Incentive Plan, and shall be fully vested upon payment.

 

D.     Other Benefits. Executive shall be entitled to four (4) weeks of paid vacation for each calendar year to be taken pursuant to the Company’s vacation benefits policy. Executive is also entitled to other benefits as (i) are generally available to the Company’s other similar, high level executives, consisting of such medical, retirement and similar benefits as are so available and (ii) are deemed special to Executive and approved by the Board.

 

IV.     TERMINATION.

 

A.     At-Will Employment. It is understood and agreed by the Company and Executive that this Agreement does not contain any promise or representation concerning the duration of Executive's employment with the Company. Executive specifically acknowledges that his employment with the Company is at-will and may be altered or terminated by either Executive or the Company at any time, with or without cause and subject to the notice requirement in paragraph E below. In addition, that the rate of salary, any bonuses, paid time off, other compensation, or vesting schedules are stated in units of years or months or weeks does not alter the at-will nature of the employment, and does not mean and should not be interpreted to mean that Executive is guaranteed employment to the end of any period of time or for any period of time. In the event of conflict between this disclaimer and any other statement, oral or written, present or future, concerning terms and conditions of employment, the at-will relationship confirmed by this disclaimer shall control. This at-will status cannot be altered except in a writing signed by Executive and approved by the Board.

 

B.     Termination of Employment. Although Executive’s employment hereunder shall be deemed “at will,” any termination shall be subject to the following terms:

 

1.     For Cause. In the event that Executive is terminated for cause (as hereinafter defined), Executive shall be entitled to Executive’s earned wages through the date his employment with the Company is terminated, his accrued but unused vacation, reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and any other portion of his compensation earned through the termination date.

 

3

 

 

2.     Without Cause. In the event that Executive is terminated without cause, as hereinafter defined, and provided such termination constitutes a “separation from service” as such term is defined in Section 409A of the Internal Revenue Code (the “Code”), and further subject to the Executive's compliance with his obligations under the agreement referenced in Section II herein, and his execution of a release of claims in favor of the Company in a form acceptable to the Company in the Company’s sole discretion (the "Release"), Executive shall be entitled to an amount equal to the Executive’s annualized Base Salary in effect on the date of termination or separation from service (the “Severance Amount”). The Severance Amount will be paid in twelve (12) equal consecutive monthly installments at the monthly Base Salary rate in effect at the time of Executive’s termination, with such installments commencing within sixty (60) days following Executive’s separation from service, provided that (i) the Release is executed, delivered to the Company and not revoked by Executive during the applicable revocation period, and (ii) if such sixty (60) day period begins in one calendar year and ends in the next calendar year, Executive shall not designate, nor have the right to designate, the calendar year in which such installment payments commence. The amounts payable under this Section IV.B.2 shall be in addition to Executive’s earned wages through the date his employment is terminated from the Company, his accrued but unused vacation, reimbursements of his outstanding expenses incurred and submitted in compliance with Company policies and any other portion of his compensation earned through the termination date.

 

C.     Related Provisions. The following terms, conditions and definitions shall apply to the termination of Executive:

 

1.     “Termination Without Cause.” For purposes of Section IV.B above, a termination without cause shall be deemed to constitute any termination of Executive’s employment hereunder by the Company, or by Executive, other than a termination for cause as defined below. Notwithstanding any contrary provision herein, it is understood that a termination without cause also shall include a termination which:

 

(a)     occurs due to the death of Executive or to any physical or mental Long-Term Disability that would prevent the performance of Executive’s duties under this Agreement. For the purposes of this Agreement, a “Long-Term Disability” shall mean a long-term disability that after consideration and implementation of reasonable accommodations (provided that no accommodation that imposes undue hardship on the Company will be required), renders or will render Executive unable to perform his essential job functions for one hundred eighty (180) days out of any three hundred sixty-five (365) -day period or for four consecutive months. The determination of Executive’s Long-Term Disability shall be made by Executive’s attending physician unless the Board disagrees with such determination, in which case Executive’s Long-Term Disability shall be determined by a majority of three physicians qualified to practice medicine in the State of the Executive’s residence, one to be selected by each of the Executive (or his authorized representative) and the Board and the third to be selected by such two designated physicians; or

 

2.     “Termination For Cause.” Subject to the notice requirement as provided in paragraph E below, for purposes of Section IV.B.2 (and Section IV.C.1) above, a termination for cause shall be a termination of Executive’s employment hereunder made:

 

(a)     by the Company, if Executive:

 

(i)     materially breaches any material terms of this Agreement which has caused demonstrable injury to the Company;

 

4

 

 

(ii)     commits willful gross acts of dishonesty, fraud, misrepresentation, or other acts of moral turpitude taken by Executive in connection with Executive responsibilities as an employee provided that no act or failure to act shall be considered "willful" under this definition unless Executive acted, or failed to act, with an absence of good faith and without a reasonable belief that his action, or failure to act, was in the best interest of the Company; 

 

(iii)     is convicted of any felony or any crime involving moral turpitude resulting in either case in significant and demonstrable harm to the Company; or

 

(iv) fails to achieve the stated milestones and tasks as requested in writing by the Board of Directors, including but not limited to failure to perform, or continuing to neglect the performance of duties assigned to Executive, which failure or neglect will significantly and adversely affect the Company’s business or business prospects and which failure is due to circumstances within Executive’s reasonable control.

 

(b)     by Executive.

 

D.     Company Actions. All relevant determinations to be made by the Company under paragraph C.2(a) above shall be made in the reasonable discretion of the Board (or, if so delegated by said Board, by a committee of the Board), acting in good faith, and, except as otherwise specified herein, shall be conclusive and binding, but shall be subject to arbitration in accordance with Section V below. This Agreement is intended to comply with the requirements of Internal Revenue Code Section 409A (“Section 409A”) and the Board and the Board committee will interpret its provisions accordingly. If, at the time of Executive’s termination, any stock of the Company is publicly-traded and the Company determines that Executive is a “specified employee” within the meaning of Section 409A of the Code at such time, then (i) the salary continuation payments specified herein (to the extent that they are subject to Section 409A of the Code) will commence on the earlier of (A) the first business day following expiration of the six-month period measured from your separation or (B) the date of your death and (ii) the installments that otherwise would have been paid prior to such date will be paid in a lump sum when the salary continuation payments commence. Executive understands and agrees that the Company makes no assurances with respect to the tax consequences arising as a result of this Agreement and the payment of any tax liabilities or related penalties arising out of this Agreement is solely and exclusively the responsibility of Executive, without any expectation or understanding that the Company will pay or reimburse Executive for such taxes or other items. Concerning any Section 409A taxes or related penalties the Company will use its best efforts in good faith to reduce or eliminate such tax liabilities or penalties including but not limited to a delay of such payments the minimum time necessary to avoid tax liabilities or penalties. If any payment is delayed pursuant to this paragraph on the date of payment the Company shall pay in a lump sum all payments that otherwise would have been paid during the period of the delayed payments.

 

5

 

 

E.     Notice and Remedy. In the event that any reason for termination by the Company under paragraph C.2(a) above may be cured by Executive, then the Company shall first give a written notice to the Executive (by mail, or by email, or by fax, to the last known address of the recipient; said notice being deemed given, if by mail, as of the earlier of four days after mailing or as of the date when actually received, or, if by email or fax, when sent), specifying the reason for termination and providing a period of 30 days to cure the fault or reason specified. Lacking such cure within said 30 days, or if the notified party earlier refuses to effect the cure, the termination shall then be deemed effective. If such cure is so made, the termination shall not then be deemed effective, but any later conduct of a similar nature constituting a reason for termination shall allow the Company the right to cause the termination effectiveness without need for any further period of time to cure. All communications shall be sent to the address as set forth on the signature page hereof, or to such other address as a party may designate by ten days’ advance written notice to the other party hereto. 

 

V.     ARBITRATION.

 

A.     Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, or any of the rights, benefits or obligations resulting from its terms, shall be settled by arbitration in San Francisco, California. Except for the right of the Company and Executive to seek injunctive relief in court, any controversy, claim or dispute of any type arising out of or relating to Executive’s employment or the provisions of this Agreement shall be resolved in accordance with this Section V of the Agreement, regarding resolution of disputes, which will be the sole and exclusive procedure for the resolution of any such disputes. This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement provisions of which are incorporated by this reference. Matters subject to these provisions include, without limitation, claims or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination, discrimination, harassment, compensation and benefits. Matters to be resolved under these procedures also include claims and disputes arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the California Labor code, and the California Fair Employment and Housing Act. Nothing in this provision is intended to restrict Executive from submitting any matter to an administrative agency with jurisdiction over such matter.

 

6

 

 

The Executive and the Company agree that any disputes related to or arising out of the Executive’s employment with the Company will be determined by arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified herein. The arbitration will be conducted by a sole neutral arbitrator. If the Company and Executive cannot agree on an arbitrator, then the arbitrator will be selected by JAMS in accordance with Rule 12 of the JAMS employment arbitration rules and procedures. Reasonable discovery will be permitted by both parties and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which any dispute is subject to arbitration in this Section V and may award any relief permitted by law. The arbitrator must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The parties hereto hereby waive to the fullest extent permitted by law any rights to appeal or to review of such award by any court. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of arbitration under Section V of this Agreement. At the request of any party, the arbitrator, attorneys, parties to the arbitration, witnesses, experts, court reporters or other persons present at the arbitration shall agree in writing to maintain the strict confidentiality of the arbitration proceedings. The arbitrator’s fees and cost of the Arbitration will be paid in full by the Company.

 

B.     Acknowledgement. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION V, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO ARBITRATION, AND THAT THE PROVISIONS SET FORTH IN THIS SECTION V CONSTITUTE A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL.

 

C.     No Duty to Mitigate. Executive is under no contractual or legal obligation to mitigate Executive’s damages in order to receive the severance benefits provided in this Agreement.

 

VI.     LEGAL ADVICE.

 

Executive acknowledges that an opportunity has been afforded to Executive to consult with legal counsel with respect to this Agreement and that no individual representing the Company has given legal advice with respect to this Agreement.

 

VII.     MISCELLANEOUS AND CONSTRUCTION.

 

Except as otherwise specifically provided herein, this Agreement:

 

A.     and any benefits or obligations herein may not be assigned or delegated by Executive (but may be so assigned or delegated by the Company);

 

B.     contains the entire understandings of the parties as to its subject matter, and replaces and supersedes any existing employment agreement and any and all contrary prior understandings or agreements;

 

C.      may be amended or modified only by a written amendment or modification signed by the Company and Executive;

 

D.     is made in, and shall be construed under the laws of, the State of California;

 

7

 

 

E.     inures to the benefit of, and is binding upon, the permitted successors, assigns, distributees, personal representatives, heirs and other successors-in-interest to and of the parties hereto;

 

F.     shall not be interpreted by reference to any of the captions or headings of the paragraphs herein, which captions or headings have been inserted for convenience purposes only;

 

G.     shall be fully effectuated in accordance with its tenor, effect and purposes by each of the parties hereto by executing such further documents or taking such other actions as may be reasonably requested by the other party hereto;

 

H.     shall be interpreted, as to its remaining provisions, to be fully lawful and operative, to the extent reasonably required to fulfill its principal tenor, effect and purposes, in the event that any provision either is found by any court of competent jurisdiction to be unlawful or inoperative or violates any statutory or legal requirement, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; and

 

I.     may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

8

 

 

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the day and year first above written.

 

	
			 

				
			COMPANY:

				
			 

			
	 	 	 
	 	NOVABAY PHARMACEUTICALS, INC.	 
	 	 	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Mark M. Sieczkarek

				
			 

			
	
			 

				
			Name: 

				
			Mark M. Sieczkarek 

				
			 

			
	
			 

				
			Title:

				
			Chairman & Chief Executive Officer

				
			 

			
	 	 	 	 
	 	Address:  	2000 Powell Street, Suite 1150
	 	 	Emeryville, CA 94608	 
	 	 	 	 
	 	E-mail:	[Redacted] 	 
	 	 	 	 
	 	 	 	 
	 	EXECUTIVE:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Lewis Stuart	 
	 	Name: 	Lewis Stuart	 
	 	 	 	 
	 	Address:	[Redacted]	 
	 	 	 	 
	 	Telephone No.:	[Redacted]	 
	 	 	 	 
	 	E-mail:	[Redacted]	 

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}]]