8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 3, 2019

Cyanotech Corporation

(Exact name of Registrant as specified in its charter)

Nevada	000-14602	91-1206026
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

73-4460 Queen Kaahumanu Highway, Suite #102 Kailua Kona, HI	96740
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (808) 326-1353

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Item 5.02.     Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 3, 2019, Cyanotech Corporation, a Nevada corporation (the “Company”), named Brian B. Orlopp as its Vice President Finance and Administration, Chief Financial Officer and Secretary. In connection with the foregoing appointment, on January 3, 2019, Jole Deal was reassigned from Chief Financial Officer of the Company to a transitional role of Executive Team Advisor, which she will fill until February 1, 2019 when her employment with the Company will be terminated.  In connection with her resignation, Ms. Deal entered into a Separation Agreement (the “Separation Agreement”) with the Company pursuant to which she will receive severance payments equal to twenty-six weeks of her then current base salary and payment of premiums for continuing health coverage under COBRA for six months in exchange for, among other matters, a general release of claims in favor of the Company and its affiliates and an agreement to not solicit any employee of the Company to leave their employment at the Company for a period of twelve months. The foregoing description of the Separation Agreement is qualified in its entirety by reference to the Separation Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

In connection with his appointment, the Company and Mr. Orlopp entered into Executive Employment Agreement, dated as of November 28, 2018 (the “Employment Agreement”). Under the terms of the Employment Agreement, Mr. Orlopp will receive an annual salary of $225,000 and be eligible to receive a fiscal year-end bonus of up to 35% of his then-current annual salary based on performance and earnings targets and other standards to be established by the Board of Directors. Mr. Orlopp will receive a signing bonus of $22,500 payable in equal monthly installments of $3,750 over six months and will be awarded 50,000 stock option grants (the “Options”) under the Company’s 2016 Equity Incentive Plan (the “Plan”), subject to the terms of the Plan and a Stock Option Grant Notice and Option Agreement. The exercise price per share of the Options is $3.00, which was the closing market price on the date of grant.  The Options are scheduled to vest over four years at 12,500 shares per year.  Mr. Orlopp will be eligible to participate in all other employee benefit plans and compensation programs that the Company maintains for salaried employees and executive officers. The foregoing description of the Employment Agreement is qualified in its entirety by reference to the Employment Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

Since 2012, Mr. Orlopp, has served as VP of Finance, Asia Pacific for Fresh Del Monte Produce based in Manila, Philippines. Before that, he served as CFO for Sumifru Corporation (joint venture with Sumitomo) based in Singapore. Before that, he served as Senior VP/Finance for Hawaii Bioenergy LLC in Honolulu and VP/Strategic Planning for Maui Land & Pineapple Company in Kahului. He began his career working in varied financial management positions for Dole Food Company. His education includes degrees in Agriculture Economics, General Management and Finance.

Item 8.01.     Other Events.

On January 9, 2019, the Company issued a press release that publicly announced the appointment of Mr. Orlopp to serve as Vice President Finance and Administration, Chief Financial Officer and Secretary. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1 attached hereto and is incorporated by reference herein.

Item 9.01.     Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Name and/or Identification of Exhibit
10.1	Separation Agreement, dated as of January 6, 2019, by and between Jole Deal and Cyanotech Corporation
10.2	Executive Employment Agreement, dated as of November 28, 2018, by and between Brian Orlopp and Cyanotech Corporation
99.1	Press Release, dated January 9, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 9, 2019

CYANOTECH CORPORATION
By:	/s/ Brian Orlopp
	Name:  Brian Orlopp
	Title:  Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Name and/or Identification of Exhibit
10.1	Separation Agreement, dated as of January 6, 2019, by and between Jole Deal and Cyanotech Corporation
10.2	Executive Employment Agreement, dated as of November 28, 2018, by and between Brian Orlopp and Cyanotech Corporation
99.1	Press Release, dated January 9, 2019

EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (the “Agreement”) is entered as of the Effective Date by and among Jole Deal (“Employee”) and Cyanotech Corporation, a Nevada corporation (the “Company”).

1.        Separation of Employment. Employee’s final date of employment with the Company will be on or before February 1, 2019 (the “Separation Date”). On that date, Employee will receive all outstanding wages and accrued vacation, and will voluntarily resign from any officer position(s) she holds with the Company. Employee will sign the Reaffirmation of General Release (“Reaffirmation”) below on her final date of employment, and in doing so Employee will acknowledge that, on or before the Separation Date, Employee was paid in full for any and all outstanding salary, wages, bonuses, commissions, and business expenses, and no further compensation is due Employee by the Company except as provided under this Agreement. A copy of Employee’s final pay calculation will be provided at that time.

2.        Company’s Consideration for Agreement. In exchange for executing this Agreement and the Reaffirmation, and abiding by all terms, the Company will provide Employee with the following:

(a)     Advance notice of termination, subject to Employee’s ongoing assistance during the transition period to the satisfaction of the Company, in its full discretion. Nothing in this Agreement shall modify Employee’s “at-will” status. In the event Employee is terminated prior to February 1, 2019 without good cause, Employee will be paid her full salary, less standard withholdings, through that date;

(b)     Reduced transitional duties for a period of approximately one month, subject to the Company’s election to accelerate Employee’s final date of employment;

(c)     Severance payments equal to 26 weeks of current base wages, in the gross amount of $109,500.00, which shall be subject to all required taxes and withholdings (“Severance Payments”); and

(d)     Payment of premiums for Employee’s health care continuation coverage under COBRA for six months commencing on the month following Employee’s separation, should Employee elect COBRA coverage, which has a value of $10,156.74.

Severance Payments will be made in regular installments on the Company’s regular payroll dates beginning on next payroll date after the Separation Date and Employee’s execution of the Reaffirmation. Employee acknowledges and agrees that, but for Employee’s execution of this Agreement, Employee would not otherwise be entitled to the benefits described in this paragraph (the “Severance Benefits”).

Employee’s accrued PTO, in the gross amount of $19,613.14, which shall be subject to all required taxes and withholdings, shall be paid out in regular equal installments along with her Severance Benefits. Notwithstanding any other provision of this Agreement to the contrary, if Employee materially breaches her duties hereunder, or is terminated with good cause, then Executive shall forfeit her right to receive the benefits set forth in this Section 2, to the extent then unpaid.

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Jole Deal Separation Agreement, 1/6/19

3.        Employee’s Consideration for Agreement. In consideration for the payments and undertakings described in this Agreement, Employee releases and waives any and all claims that Employee might possibly have against the Company, whether Employee is aware of them or not. In legal terms, this means that, individually and on behalf of his or her representatives, successors, and assigns, Employee does hereby completely release and forever discharge the Company, its parent, subsidiaries, divisions, affiliates, and their respective predecessors in interest, members, partners, principals, shareholders, directors, officers, agents, attorneys, employees, and representatives, and the successors and assigns of each of them (each a “Company Released Party”), from all claims, rights, demands, actions, obligations, and causes of action of any and every kind, nature and character, known or unknown, which Employee may now have, or has ever had. This Release covers all statutory, common law, constitutional and other claims, including but not limited to:

(a)     Any and all claims for wrongful discharge, constructive discharge, or wrongful demotion;

(b)     Any and all claims relating to any contracts of employment, express or implied, or breach of the covenant of good faith and fair dealing, express or implied;

(c)     Any and all tort claims of any nature, including but not limited to claims for negligence, defamation, misrepresentation, fraud, or negligent or intentional infliction of emotional distress;

(d)     Any and all claims for wages, compensation, bonuses, commissions, penalties, and/or benefits under any statutory or common law theory whatsoever;

(e)     Any and all claims for discrimination or harassment based on sex, race, age, national origin, religion, disability, medical condition, or any other protected characteristic under federal, state or municipal statutes or ordinances; any claims under the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. Section 1981, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the Americans With Disabilities Act, the Employment Retirement Income Security Act, the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, the Hawaii Discriminatory Practices law (Haw. Rev. Stat. §§ 378-1 to 378-6); Hawaii Whistleblowers' Protection Act (Haw. Rev. Stat. §§ 378-61 to 378-68), and any other laws and regulations relating to employment;

(f)     Any and all claims for attorneys’ fees or costs; and

(g)     Any and all rights Employee may have to any continuing or future employment with any Released Party.

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Jole Deal Separation Agreement, 1/6/19

This release is not intended to encompass any rights or claims with respect to any accrued vested benefits, or any rights or claims that cannot be released by Employee as a matter of law, including, but not limited to, any claims for indemnity under California Labor Code Section 2802, or claims for workers’ compensation or unemployment benefits. Nor is this release intended to prevent Employee from filing a statutory claim concerning employment with the Company or the termination thereof with the federal Equal Employment Opportunity Commission, the National Labor Relations Board, or similar state agencies. However, if Employee does so, or if any such claim is prosecuted in his/her name before any court or administrative agency, Employee waives and agrees not to take any award of money or other damages from such suit.

4.        Waiver of Unknown Future Claims. Employee has read Section 1542 of the Civil Code of the State of California, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Employee understands that Section 1542 gives him the right not to release existing claims of which Employee is not now aware, unless Employee voluntarily chooses to waive this right. Even though Employee is aware of this right, Employee nevertheless hereby voluntarily waives the rights described in Section 1542, and elects to assume all risks for claims that now exist in his/her favor, known or unknown, arising from the subject matter of this Agreement.

5.        No Claims. Employee represents and warrants that she has not instituted any complaints, charges, lawsuits or other proceedings against any Company Released Parties with any governmental agency, court, arbitration agency or tribunal.

6.        Return of Property and Preservation of Proprietary Information. Prior to the Separation Date, Employee agrees to return all property of the Company, including keycards, computers, personal communication devices, passwords, hard copy and electronic files, and any other proprietary material in Employee’s possession or control. Employee acknowledges that in the course of his or her employment with the Company, certain factual and strategic information specifically related to the Company and its affiliates has been disclosed to Employee in confidence (“Company Information”). Employee agrees to keep such Company Information confidential, not to make use of such information on his or her own behalf or for any other purpose, and to return all tangible forms of such information to the Company no later than the Separation Date. This obligation does not apply to any Company Information Employee is affirmatively authorized to disclose pursuant to any provision of applicable law. Employee further acknowledges and hereby affirms Employee’s continuing obligations under the Company’s Associate Invention, Secrecy, and Non-Compete Agreement, which Employee executed as a condition of employment, which terms, with the exception of the restrictive covenant in paragraph 5, are incorporated herein by reference. For purposes of clarity, the post-termination restrictive covenant in Paragraph 5 is not incorporated herein. Pursuant to the Defend Trade Secrets Act of 2016, Employee acknowledges that Employee shall not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Employee files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Employee may disclose the trade secret to his/her attorney and may use the trade secret information in the court proceeding, if Employee or his/her attorney files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.

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Jole Deal Separation Agreement, 1/6/19

7.        Confidentiality of Agreement. Employee agrees that the terms and conditions of this Agreement are strictly confidential. Employee shall not disclose, discuss or reveal the existence or the terms of this Agreement to any persons, entities or organizations except as follows: (a) as required by court order; (b) to Employee’s spouse; or (c) to Employee’s attorneys or accountants.

8.        Nonsolicitation. Employee agrees that for a period of twelve (12) months immediately following the Separation Date, Employee shall not directly or indirectly solicit any of the Company’s employees to leave their employment at the Company.

9.        Older Worker Benefit Protection Act Protections. Pursuant to the Age Discrimination in Employment Act and the Older Workers’ Benefit Protection Act, the Company hereby advises Employee of the following:

(a)	Employee is advised to consult with an attorney prior to signing this Agreement.
(b)	Employee has up to twenty-one (21) days within which to consider whether Employee should sign this Agreement. Employee may sign this Agreement at any time during this 21-day period. Modification to the Agreement will not extend the consideration period.
(c)	If Employee signs the Agreement, Employee shall have seven (7) days thereafter to revoke the Agreement. To revoke the Agreement, Employee must deliver written notice of the revocation to Amy Nordin the Company’s Director of Human Resources, so that it is received before the seven-day revocation period expires. If Employee revokes the Agreement, Employee shall not be entitled to any Severance Benefits.
(d)	If Employee does not revoke the Agreement, it becomes effective (the “Effective Date”) eight days after Employee executes the Agreement below and returns it to the Company (Attention: Amy Nordin). If Employee revokes this Agreement, she shall have no entitlement to any of the benefits offered hereunder.
(e)	In signing this Agreement, Employee is not releasing or waiving any claims based on conduct or events that occur after the Agreement is signed.

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Jole Deal Separation Agreement, 1/6/19

10.       Non-Disparagement. Employee shall not make any statements, written or oral, or cause or encourage others to make any statements, written or oral, that defame, disparage or in any way criticize the personal or business reputation, practices, or conduct of the Company. Employee acknowledges and agrees that this prohibition extends to statements, written or oral, made to anyone, including but not limited to, the news media, investors, potential investors, any board of directors or advisory board or directors, industry analysts, competitors, strategic partners, vendors, employees (past and present), and clients or potential clients of the Company and its affiliates. Notwithstanding the foregoing, this provision does not prohibit disclosures that Employee is required to make to comply with applicable laws or regulations nor does it preclude the Employee from making truthful disclosures that Employee is affirmatively authorized to make pursuant to any provision of applicable law.

11.       Consequences of Breach. Employee shall indemnify and hold each Company Released Party harmless from any loss, cost, damage, or expense (including attorneys’ fees) incurred by them arising out of Employee’s breach of any portion of this Agreement. In addition, Employee agrees that if the Employee breaches any of Employee’s obligations under the Agreement the Company may cease payments due to Employee, or recover any payments made to Employee, under paragraph 2 to the extent permitted by law, and obtain all other relief provided by law or equity, including the right to recover as damages the amount of any judgment recovered against it, reasonable attorney's fees and other costs and expenses of defending against any claim brought in breach of this Agreement.

12.       Acknowledgment.      Employee represents and agrees that in executing this Agreement Employee is relying solely upon his or her own judgment, belief and knowledge, and the advice and recommendations of any independently selected counsel, concerning the nature, extent and duration of his or her rights and claims. Employee acknowledges that Employee has executed this Agreement voluntarily, free of any duress of coercion. Further, Employee acknowledges that Employee has a full understanding of the terms of this Agreement and that Employee is not executing this Agreement in reliance on any promise, representation, or warranty not contained in this Agreement.

13.       Miscellaneous

(a)     Binding on Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company and shall inure to the benefit of and be binding upon Employee’s heirs, executors, administrators, successors and assigns. This Agreement is specific to Employee and may not be assigned by Employee.

(b)     Governing Law. This Agreement shall be governed by and construed and enforced according to the laws of the State of Hawaii, without regard to conflicts of laws principles thereof.

(c)     Arbitration. Any controversy, dispute or claim arising out of or relating to this Agreement, the formation, breach, interpretation or enforceability of this Agreement, including the employment relationship between the parties or the termination of the employment relationship between the parties, shall be settled through final and binding arbitration in in Kona, Hawaii, Honolulu Hawaii, or such other location as agreed to by the parties, under the applicable rules of the American Arbitration Association (“AAA”) or, if the parties mutually agree, under the applicable rules of JAMS. The arbitrator selected shall have the authority to grant Employee or the Company or both all remedies otherwise available by law.

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Jole Deal Separation Agreement, 1/6/19

Notwithstanding anything to the contrary in the AAA or JAMS rules, the arbitration shall (i) provide for reasonable written discovery and depositions; and (ii) provide for a written decision by the arbitrator that includes the essential findings and conclusions upon which the decision is based. Each party shall bear its or his own costs and expenses (including without limitation attorneys' fees) in connection with alternative dispute resolution procedures set forth in this paragraph, except as required by the applicable AAA or JAMS rules and except that the Company shall bear the arbitrator’s and AAA’s or JAMS’ fees and expenses. Judgment upon any award rendered may be entered in any court of competent jurisdiction. California law shall apply to this Agreement and the arbitration proceeding but excluding any principles of conflicts of laws that would invoke the laws of another jurisdiction.

(d)     Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

(e)     Entire Agreement. This Agreement and the document(s) expressly incorporated herein contain the entire agreement and understanding between Employee and the Company regarding the matters set forth herein and replace all prior agreements, arrangements and understandings, written or oral. This Agreement cannot be amended, modified, supplemented, or altered, except by written amendment or supplement signed by Employee and the Company.

(f)      Headings; Interpretation. The various headings contained herein are for reference purposes only and do not limit or otherwise affect any of the provisions of this Agreement. It is the intent of the parties that this Agreement not be construed more strictly with regard to one party than with regard to any other party.

(g)     Counterparts. This Agreement may be executed in counterparts, including facsimile counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective delivery of a manually executed counterpart to this Agreement.

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Jole Deal Separation Agreement, 1/6/19

14.       Additional Clarifications / Requests

(a)     Current executive reimbursed housing requires 60day notice of departure. Company agrees to reimburse employee for executive housing and exit costs for the months of January and February.

(b)     Reverse relocation of personal items will be paid by the company and boxed items will be shipped from the company Kona location.

(c)     Ohana product pricing policy will continue to be extended after departure from the company.

(d)     Payment of premiums for Employee’s health care continuation coverage under COBRA for three additional months, if employee should require additional COBRA coverage, which has a value of $5,078.37.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date indicated below.

Cyanotech Corporation

By:/s/ Mawae Morton		Date:        1/6/2019
	Name: Mawae Morton
	Title: CEO
EMPLOYEE
By: /s/ Jole Deal		Date:        1/6/2019
	Jole Deal, an individual

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Jole Deal Separation Agreement, 1/6/19

REAFFIRMATION OF GENERAL RELEASE

To be signed on Employee’s Final Date of Employment

By signing below, I extend the release contained herein through the date signed below, and further extend all covenants and promises made herein. I acknowledge and agree that I have been paid all salary, wages, commissions, bonuses, accrued vacation, reimbursable expenses, and any and all other earned or accrued compensation, save and except any severance benefits payable pursuant to the terms of this Agreement.

Dated: ______________________________
	Jole Deal

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Jole Deal Separation Agreement, 1/6/19

EX-10.2

Exhibit 10.2

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) entered into between Brian Orlopp (“Executive”), and Cyanotech Corporation (the “Company”), will be effective upon execution by both parties of the date signed by Executive and Company below (the “Effective Date”).

1.            Position; Commencement Date.

Executive will be employed by the Company under this Agreement in the position of CFO, VP of Finance and Administration, Secretary. Executive shall report to Mawae Morton, the Chief Executive Officer of the Company (“CEO”). Executive’s primary work location will be Kailua-Kona, Hawaii. Executive’s employment is contingent upon Executive’s successful completion of any pre-employment testing, including a background check and drug screen, and Executive’s ability to demonstrate the lawful right to work in the United States. Executive’s first day of work will be January 2, 2019 or such other date mutually agreed upon by the parties.

2.            Duties.

As the Company’s Chief Financial Officer, VP of Finance and Administration, Secretary, the Executive shall perform such duties and functions as are determined from time to time by the company’s CEO. In the performance of Executive’s duties with the Company, Executive shall at all times comply with the written policies of the Company and be subject to the reasonable direction of the CEO.

3.            At-Will Employment.

Executive’s employment is “at will.” Executive or the Company may terminate Executive’s employment or modify it, at any time for any reason or for no reason, with or without notice.

4.            Base Salary.

Executive will receive an annual base salary of $225,000.00 (Two Hundred Twenty Five Thousand Dollars and No Cents), which will be paid in accordance with the Company’s regular payroll practices, subject to withholdings required by law or authorized by Executive. Executive’s annual base salary will be subject to review annually at the end of each calendar year, to determine whether, in the Company’s sole discretion, the annual base salary should be increased.

5.            Signing Bonus.

The Company shall pay Executive a signing bonus in the gross amount of $22,500.00 (Twenty Two Thousand Five Hundred Dollars and No Cents), payable in equal monthly installments of $3,750.00 (Three Thousand Seven Hundred Fifty Dollars and No Cents), over six (6) months, which shall be subject to standard tax withholdings. The first installment of the signing bonus will be payable upon Executive’s completion of the first payroll cycle and will be issued along with his regular base pay.

6.            Bonuses and Equity Incentives.

Executive shall be eligible to participate in the Cyanotech Management Bonus Plan and Cyanotech Corporation Equity Incentive Plan, subject to the terms and conditions of those plans. At the time of this agreement, according to the Cyanotech Management Bonus Plan, the CFO position is included in the 35% (Thirty Five percent) tier. The Board will grant Executive 50,000 (Fifty Thousand) stock options exercisable for shares of common stock of the Company under the Company’s 2016 Equity Incentive Plan (the “Plan”), over four (4) years at 12,500 (Twelve Thousand Five Hundred) shares per year. The exercise price for the stock option award will be the closing market price on the date of grant. All stock option grants hereunder will be evidenced by and subject to the terms of the Plan and a Stock Option Grant Notice and Option Agreement. The vesting schedule and terms for the stock options will be set forth in the Stock Option Grant Notice and Option Agreement.

7.            Employee Benefit Programs.

Executive will be eligible to participate in, and be covered by, the Company’s employee benefit programs, subject to any preconditions in those programs, upon Executive’s Commencement Date. Specific programs currently in place include; health (physician, prescription, dental, vision) insurance for Executive and his family; a short term and long term disability insurance plan; and group or individual life insurance. In addition, Executive will be entitled to four (4) weeks of paid personal time off (“PTO”) for each twelve (12) months Executive is employed by the Company.

8.            Relocation Assistance.

The Company shall pay Executive a total of $21,000.00 (Twenty One Thousand Dollars and No Cents), for relocation assistance, and where taxable, that amount shall be grossed up 34% (Thirty Four percent) to cover standard tax withholdings, to a maximum total amount of $31,818.18 (Thirty One Thousand Eight Hundred Eighteen Dollars and Eighteen Cents). The travel assistance shall be comprised of:

8.1     an amount equal to $3,000.00 (Three Thousand Dollars and No Cents), grossed up 34% if taxable, for Executive’s air travel and related transportation, including for his final trip to Hawaii, payable upon Executive’s completion of the first payroll cycle;

8.2     an amount equal to $8,000.00 (Eight Thousand Dollars and No Cents), grossed up 34% if taxable, for van line charges for the relocation of personal goods, payable according to the following schedule:

(a)     an amount equal to $5,000.00 (Five Thousand Dollars and No Cents) payable upon Executive’s completion of the first payroll cycle; and

(b)     the remaining amount payable in equal monthly installments of $1,500.00 (One Thousand Five Hundred Dollars and No Cents), over the following two (2) months, issued with his regular base pay on the first payroll cycle of each month; and

8.3     an amount equal to $10,000.00 (Ten Thousand Dollars and No Cents) grossed up 34% if taxable, for temporary housing, payable in equal monthly installments of $3333.33 (Three Thousand, Three Hundred, Thirty Three Dollars and Thirty Three Cents), payable over three (3) months, with the first installment payable upon Executive’s completion of the first payroll cycle.

9.            Reimbursements.

Executive will be reimbursed on a regular basis for reasonable, necessary and properly documented business and travel expenses incurred for the purpose of conducting the Company’s business.

10.          Conflicting Employment.

Executive shall devote Executive’s entire business time, attention and energies exclusively to the business interests of the Company while employed by the Company except as otherwise specifically approved in writing by the CEO. Subject to approval by the CEO, Executive may accept speaking or presentation engagements in exchange for honoraria and may serve on boards of directors and advisory boards of charitable organizations as long as such service does not adversely affect the performance of his duties under this Agreement.

11.          Confidentiality, Invention Assignment, and Non-Compete Agreement.

11.1     Non-Competition.      Executive agrees that for two (2) years after Executive’s employment with the Company, Executive will not, alone or as a member, employee, or agent of any individual or partnership, or as an officer, agent, employee, director, stockholder, or investor of any corporation, directly or indirectly, own, manage, operate, join, control, or participate in the ownership or management, operation, or control of, or work for or permit the use of Executive’s name by, or be connected in any manner with any business or activity which produces, distributes, sells, markets, or has plans to produce, distribute, sell or market, any products that directly compete with Cyanotech Corporation or Nutrex Hawaii products.

11.2     Confidentiality and Invention Assignment. Executive acknowledges and agrees to at all times abide by the terms of the Company’s Confidentiality and Invention Assignment Agreement. Any modifications to the Confidentiality and Invention Assignment Agreement must be made and approved in writing by the Company’s CEO.

12.          Successors and Assigns.

This Agreement shall be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and assigns. This Agreement is specific to Executive and may not be assigned.

13.          Waiver and Amendment.

No modification, waiver or amendment of this Agreement will be effective unless in writing signed by the Executive and by the Company. No waiver by either party of any condition or provision of this Agreement shall be considered a waiver of any other condition or provision or a waiver of the same condition or provision at another time.

14.          Entire Agreement.

This Agreement sets forth the entire agreement and understanding between the Company and Executive relating to the subject matters herein and supersedes all prior or contemporaneous discussions and agreements between the parties, whether oral or written, with respect to such terms.

15.          Governing Law.

This Agreement shall be governed by the laws of the State of Hawaii.

16.          Severability.

The invalidity or unenforceability of one or more provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect to the maximum extent of the law.

17.          Arbitration.

Executive and the Company mutually agree that they will submit all disputes arising under this Agreement or arising out of or related to Executive’ employment with Company to final and binding arbitration in Honolulu, Hawaii, under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA Rules) or, if the parties mutually agree, under the Employment Arbitration Rules and Procedures of JAMS. The arbitrator selected shall have the authority to grant Executive or the Company or both all remedies otherwise available by law.

Notwithstanding anything to the contrary in the AAA or JAMS Rules, the arbitration shall provide (i) for written discovery and depositions adequate to give the parties access to documents and witnesses that are essential to the dispute and (ii) for a written decision by the arbitrator that includes the essential findings and conclusions upon which the decision is based. Executive and the Company shall each bear his or its own costs and attorneys’ fees incurred in conducting the arbitration.

In disputes where Executive asserts a claim under a state or federal statute prohibiting discrimination in employment (“Statutory Claim”), reasonable attorneys’ fees shall be awarded by the arbitrator based on the same standard as such fees would be awarded if the Statutory Claim had been asserted in state or federal court. Judgment upon any award rendered may be entered in any court of competent jurisdiction.

18.           Counterparts.

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

Cyanotech Corporation By: /s/ Mawae Rex Morton                                                                     Name: Mawae Rex Morton Title:   CEO	Date:  11/28/2018
Executive /s/ Brian Orlopp                                                                                       Name:  Brian Orlopp	Date:  11/28/2018

EX-99.1

Exhibit 99.1

News Release		Contact: Bruce Russell
		(310) 346-6131
	brussell@cyanotech.com

Cyanotech Names Brian Orlopp as VP Finance & Chief Financial Officer

KAILUA KONA, Hawaii (January 9, 2019) — Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, announced that Brian B. Orlopp has been appointed Vice President Finance and Administration, Chief Financial Officer and Secretary effective January 3, 2019. He replaces Jole Deal who has held these positions since 2011. Ms. Deal will serve as Executive Team Advisor with the Company until February 1, 2019 and assist with the transition process.

Commenting on the appointment, Cyanotech’s Chief Executive Officer, Mawae Morton, said, “We are pleased to have Brian join us in this vital role as we work to grow Cyanotech. His more than 25 years’ experience as a senior level executive in global agri-business brings valuable experience to our leadership team. His expertise includes financial and strategy planning, budget development and management, business expansion and M&A for large multi-national companies.  Brian not only brings a deep experience with international business and markets in the Asia Pacific region, he also has strong connections to Hawaii.”

Mr. Orlopp was VP-Finance, Asia Pacific from 2012 for Fresh Del Monte Produce based in Manila. Previously, he was CFO for Sumifru Corporation (joint venture with Sumitomo) based in Singapore. Before that, he was Senior VP/Finance for Hawaii Bioenergy LLC in Honolulu and VP/Strategic Planning for Maui Land & Pineapple Company in Kahului. He began his career working in varied financial management positions for Dole. His education includes degrees in Agriculture Economics, General Management and Finance.

“I look forward eagerly to the challenge presented by Cyanotech,” Mr. Orlopp said. “It blends my expertise and experience in agri-business and finance to help contribute to the continued growth of this unique, successful enterprise.”

About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology for over 30 years, produces BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina Pacifica®. These all natural, dietary ingredients and supplements leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. The Company’s mission is to fulfill the promise of whole health through Hawaiian microalgae. Cyanotech’s BioAstin® offers superior antioxidant activity which supports skin, eye and joint health, as well as recovery from exercise*. Cyanotech's Spirulina products offer nutrition that supports cardiovascular health and immunity.* All Cyanotech products are produced from microalgae grown at our 90-acre facility in Kona, Hawaii using patented and proprietary technology and are Generally Recognized as Safe (GRAS) for use in food products. Cyanotech sells its products direct to consumers at retail locations in the United States and online at www.nutrex-hawaii.com and also distributes to dietary supplement, nutraceutical and cosmeceutical manufacturers and marketers. The Company is regulated by the FDA. Visit www.cyanotech.com for more information.

*These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

73-4460 Queen Kaahumanu Highway, #102  ~  Kailua-Kona, Hawaii 96740

(808) 326-1353  fax (808) 329-3597  ~ www.cyanotech.com