EXHIBIT 10.9
RETIREMENT AND CONSULTING
AGREEMENT
THIS RETIREMENT
AND CONSULTING AGREEMENT (this "Agreement"), is made, entered into
and effective as of January 1, 2009, by and between NovaBay
Pharmaceuticals, Inc. (hereinafter referred to as ”NovaBay or
Company"), located at 5980 Horton Street, Suite 550, Emeryville,
California, 94608 and John “Jack” O’Reilly
("JOR"), residing at 736 Southampton Drive, Palo Alto, California,
94303..
WITNESSETH:
WHEREAS, JOR has given seven years of
dedicated, faithful and valued service to NovaBay, and has served
NovaBay well and dutifully in numerous capacities including Chief
Executive Officer and, most recently, as the SVP for Business and
Corporate Development and a member of the Board of Directors of the
Company; and
WHEREAS, JOR has determined that, effective December 31,
2008, he wishes to retire from his employment with NovaBay due to
hearing loss that has been increasingly preventing him from playing
a full role within the company.; and
WHEREAS, JOR has determined that he shall also resign
from the directorship of NovaBay;
WHEREAS , NovaBay desires to retain JOR, because of his
vast experience and knowledge of NovaBay’s business, markets
and products, after his retirement to provide consulting services,
and JOR agrees to provide such consulting services as described
more fully herein; and
WHEREAS, NovaBay and JOR desire to set forth the payments
and benefits that JOR will be entitled to receive from NovaBay for
his valuable services as consultant;
WHEREAS , JOR’s benefits in connection with the
cessation of his employment with NovaBay shall be governed by the
Executive Agreement dated January 1, 2007.
NOW,
THEREFORE, in
consideration of the promises and agreements contained herein and
intending to be legally bound, NovaBay and JOR hereby agree as
follows:
1. RETIREMENT
. As of December 31, 2008 (the
"Retirement Date"), JOR is resigning as an employee, Board member
and officer of the Company, and from all positions JOR may hold
with the Company and any affiliated entities.
2. ACCRUED SALARY AND PAID TIME
OFF.
A. ACCRUED SALARY. On the
Retirement Date, the Company has paid all accrued salary and
vacation, with standard payroll deductions and
withholdings.
3. CONSULTING
. NovaBay agrees to
retain JOR, and JOR agree to make himself available and perform, as
a consultant, under the terms specified below.
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As requested by
NovaBay in writing or e-mail and at times of mutual convenience,
JOR will provide up to 40 days of consulting and advice, including
time spent working on the on-going business of Galderma, KCI,
Pathogenics and Alcon (but not including time spent on agreements
on indications or uses not currently in discussion or currently
covered by agreements). Any agreements relating to such
new indications would fall under Section 3.B of this Agreement. Any
additional time beyond 40 days requested by NovaBay and accepted by
JOR shall be charged at a daily rate of $1,500. JOR will
submit weekly records of time spent under Sections 3.A, 3.B and 3.C
hereof. From the onset of a transaction that NovaBay
wishes JOR to work on, NovaBay must inform JOR in writing whether
the compensation will be time (daily rate of $1,500 per hour) or
success based pursuant to Section 3.B hereof.
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JOR will
provide support for NovaBay at NovaBay’s request in writing
or by e-mail from the CEO of the Company on new transactions, other
than transactions mentioned in Section 3.A hereof, on a success fee
basis. On any transaction that is closed by NovaBay
where JOR has provided support, JOR will receive success fees as
set forth below. The “Value” of the
transaction shall only include amounts received by NovaBay as
upfront fees or upon the signing of the agreement or upon
milestones achieved, and only as, if and when received, and shall
not include amounts received as royalties or upon the sale of
active ingredients or compounds. The amount of the
Success Fee for any applicable transaction shall be:
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a.
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For the first
Value received for that transaction: $20,000
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On Value
received exceeding $1,000,000 for that
transaction: $10,000
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On Value
received exceeding $3,000,000 for that
transaction: $20,000
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On Value
received exceeding $5,000,000 for that
transaction: $25,000
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on the first
transaction for which any amounts are payable pursuant to this
Section 3.B there shall be an additional one-time only payment of
$20,000
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on the first
transaction where Value received exceeds $1,000,000, there shall be
a one-time only additional payment of $30,000
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on the first
transaction where the Value received exceeds $3,000,000, there
shall be an additional one-time only payment of $10,000.
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The methodology
of these payments is illustrated in Exhibit 1.
Success Fees
shall be due on any transaction in which JOR has been involved in
the twelve months prior to termination under Section
3.F. In the event that JOR is providing support on a
potential transaction that is being used for competitive or back-up
purposes to a like transaction that closes with another party on
which JOR is not providing support then Success Fees shall be due
on the Value of whichever transaction is entered into by
NBY.
If, after JOR
has commenced working on a transaction with a specific
company, NovaBay requests JOR to cease working on such
transaction, then the success fee shall only be due if a
transaction closes with that specific company (or a competitive or
back-up company) within 12 months of the cessation
request.
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In addition to
the services under Section 3.A and Section 3.B hereof, JOR will
continue as a general strategic advisor to NovaBay until the expiry
of the last to expire options under Section 4 hereof and shall make
himself available for a minimum of two days per year at times of
mutual convenience commencing January 1, 2010 for such
purposes. Days beyond two days shall be charged at
$1,500 per day.
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NovaBay will
reimburse JOR for all reasonable travel, hotel and out of pocket
expenses incurred in connection with Sections 3.A, 3.B and 3.C
hereof including conference fees as may be agreed in
advance.
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NovaBay will
continue to pay for cell phone and data card expenses, and will
provided suitable access to a PC, GoTo My PC, NovaBay’s data
network and the Recap database to enable JOR to effectively provide
the services under Sections 3.A, and 3.B hereof.
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NovaBay may
terminate the Advisory Agreement except for Section 3.A, 3.C, for
expenses incurred under 3.D prior to the termination and Section 5
hereof at any time, except that any payments due under Section 3.B
will continue to be due as earned for transactions where JOR has
provided support prior to the termination.
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G.
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NovaBay
will not deduct or withhold any amount for taxes and other
applicable deductions from any compensation paid pursuant to the
Advisory Agreement (&
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