EXHIBIT 10.15
EMPLOYMENT AGREEMENT
October 17, 2000
Xx. Xxxxxxx Xxxxxxxx
0000 Xxxxxxx Xxx.
Xxx Xxxxxxx, Xx. 00000
Dear Xxxxxxx:
I am pleased to offer you the position of Vice President and
Chief Financial Officer of Obagi Medical Products, Inc. (the "Company") on the
following terms:
A. DUTIES
You will perform the duties customarily associated with this
position with respect to the Company's operations on a full-time basis, and will
report directly to the President and Chief Executive Officer of the Company.
Your employment will commence no later than November 15, 2000
B. COMPENSATION
SALARY: Your salary shall be $180,000 per annum subject to annual cost of living
increases based on the Consumer Price Index for All Items, All Urban Consumers
for the Los Angeles-Anaheim-Riverside, CA area or such greater increase as may
be approved by the Company's Board of Directors in its discretion. Your salary
shall be paid in accordance with the Company's normal payroll practices, subject
to standard payroll deductions and withholdings.
ANNUAL PERFORMANCE BONUS: You shall be entitled to an annual performance bonus
of up to 30% of your base salary based on the achievement of certain individual
and corporate goals as set forth in Exhibit A attached hereto. No bonus is
payable unless you are employed by the Company on December 31 of the applicable
year. All bonuses will be subject to the legal deductions and withholdings, etc.
as customary. You are guaranteed a minimum bonus of $25,000.00 for calendar
2001, payable no later than March 1, 2002.
STOCK OPTION GRANT: The Company will grant you 50,000 Incentive Stock Options
("ISO's") to purchase the common stock of the Company. The terms of such ISO's
are set forth in Exhibit B attached hereto.
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CAR ALLOWANCE: You will receive $800 per month as a car allowance, subject to
the standard payroll deductions and withholdings, which you shall apply to
any and all vehicle operation, lease and/or purchase expenses.
BENEFITS: You will be eligible for three weeks vacation annually and sick
leave according to standard Company policy. You will also receive all other
benefits the Company provides to its senior employees (e.g., health and
dental insurance coverage, participation in the Company's 401(k) plan).
C. EXPENSES
The Company shall reimburse you for all other reasonable,
ordinary and necessary expenses incurred in the performance of your duties
(such reimbursement shall be conditioned upon the submission of reasonable
detailed receipts and/or invoices substantiating such expenses).
D. TERMINATION
Either you or the Company may terminate your employment
with or without cause, at any time, for any reason whatsoever by giving at
least 30 day prior written notice. This at-will employment relationship
cannot be changed except in writing signed by the Chairman of the Board of
the Company.
If the Company terminates your employment without cause
during the first year of your employment, you will receive as your sole
severance, your base salary and benefits for six (6) months payable in
accordance with the Company's normal payroll practices, subject to standard
payroll deductions and withholdings. These payments shall cease immediately
if you violate any provision of this agreement, including the provisions of
Section F. If the Company exercises this right to terminate your employment
without cause, no compensation will be owed to you other than the severance
payment referred to in the previous sentence.
If you voluntarily terminate your employment except for
Good Reason (as defined below), if you die or become physically or mentally
disabled (subject to the Company's requirement to comply with all applicable
laws), or if the Company terminates your employment for cause, all
compensation and benefits shall cease immediately, and you will receive no
severance benefits. For purposes of this agreement, termination for cause
shall mean material misconduct, including, but not limited to (i) conviction
of any felony or any crime involving moral turpitude or dishonesty or which
is punishable by imprisonment in a state or federal correctional facility;
(ii) participation in a fraud or act of dishonesty against the Company or any
of its customers or suppliers; (iii) willful and material breach of any rules
or regulations of any government or regulatory body, which is or is
reasonably expected to be materially injurious to the financial condition of
the Company; (iv) refusal to perform your duties on a full-time basis; (v)
material breach of this Agreement; (vi) intentional damage to Company
property; (vii) a material violation of any fiduciary duty owed to the
Company. In
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the case of sections iii, iv, and v, Company must provide Employee with
written notice of their intent to terminate and Employee shall be given 30
days to correct the "cause" in order to avoid termination. The determination
as to the adequacy of such "corrective" action on the part of the employee
shall be subject to the good faith and reasonable determination of the Board
of Directors of the Company.
E. TERMINATION FOR GOOD REASON
If you terminate your employment for Good Reason (as
Defined), you shall be entitled to receive the severance payments as set
forth in D to this Agreement. For purposes of this Agreement, Good Reason
shall mean the occurrence of any of the following events unless such events
are corrected within 30 days following written notification by you to the
Company that you intend to terminate employment for one of the reasons set
forth below:
(1) A material breach of any material provisions of this Agreement
including, but not limited to, the assignment to you of any
duties inconsistent with your current position in the Company
or an adverse alteration in the nature or status of your
responsibilities;
(2) The Company's requiring you to be based in a geographic area
other than in the Los Angeles/Long Beach area;
(3) The assignment of you without your consent to a position of a
lesser title, status or degree of responsibility than the
position provided herein;
(4) The occurrence of a change in control of the Company which
shall be defined as (i) the sale of substantially all of the
assets of the Company; or (ii) the acquisition by one or more
unaffiliated third parties in a merger, exchange or acquisition
of more than 50% of the equity securities in the Company in a
single transaction or in a series of transactions other than
the Company's or its existing shareholders' (including their
assignees) issuing or selling of shares of the Company's equity
securities pursuant to an underwritten public offering of
existing shareholders.
F. POLICIES AND PROCEDURES
You will be expected to abide by all Company policies and
procedures. Company may issue policies, rules, regulations, guidelines,
procedures, or other informational material, whether in the form of handbooks,
memoranda, or otherwise, relating to its employees. These materials are general
guidelines for your information and shall not be construed to alter, modify, or
amend this agreement for any purpose whatsoever, and this agreement shall
control over such policies, to the extent of any conflict.
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G. CONFIDENTIALITY/NON-COMPETITION
At any time following execution of this agreement, you
agree not to use or disclose, directly or indirectly, for any reason,
whatsoever or in any way any confidential information or trade secrets of
Company, including, but not limited to, information with respect to Company
as follows: the identity, lists, and/or descriptions of any customers of
Company; financial statements, cost reports, and other financial information;
product or service pricing information; contract proposals and bidding
information; processes, policies and procedures developed as part of a
confidential business plan; and management systems and procedures, including
manuals and supplements thereto, other than (i) at the direction of Company
during the course of your employment (ii) after receipt of the prior written
consent of Company, (iii) as required by any court or governmental regulatory
agency having competent jurisdiction over Company, or (iv) information made
public by Company.
You agree that all copyrights, trademarks, tradenames,
service marks, inventions, processes and other intangible or intellectual
property rights that may be invented, conceived, developed or enhanced by you
while you are employed by the Company that relate to the Company's business,
or that result from any work performed by you for the Company, shall be the
sole property of the Company, and you hereby assign to the Company any right
or interest that you may otherwise have in respect thereof. Upon the
reasonable request of the Company, you shall execute, acknowledge, deliver
and file any instrument or document necessary or appropriate to give effect
to this provision and do all other acts and things necessary to enable the
Company to exploit the same or to obtain patents or similar protection with
respect thereto. You agree that the covenants set forth in this paragraph
shall accrue to the benefit of Company, irrespective of the reason for
termination of the other provisions of this agreement and the corresponding
employment relationship created hereby.
H. MISCELLANEOUS
To ensure rapid and economical resolution of any disputes
which may arise with the Company, or any of its officers or directors or
under this agreement, you agree that any and all disputes or controversies,
whether of law or fact of any nature whatsoever (including, but not limited
to, all state and federal statutory and discrimination claims whether for
race, sex, sexual orientation, religion, national origin, age, marital
status, or medical condition, handicap or disability, or otherwise) arising
from any such dispute or regarding the interpretation, performance,
enforcement or breach of this agreement shall be resolved by final and
binding arbitration under the Judicial Arbitration and Mediation Services
Rules of Practice and Procedure in Los Angeles, California. Depositions may
be taken and other discovery may be obtained during such arbitration
proceedings to the same extent as authorized in civil judicial proceedings.
If any provision of this agreement is held to be illegal,
invalid, or unenforceable under present or future laws, such provision shall
be fully severable, and this agreement and each separate provision hereof
shall be construed and enforced as if such illegal invalid, or unenforceable
provision had never comprised a part of this agreement, and the remaining
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provisions of this agreement, shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its
severance from this agreement. In addition, in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of
this agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable, if such reformation is allowable under applicable law.
This agreement constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with
respect to the terms and conditions of your employment, and it supersedes any
other agreements or promises made to you by anyone, whether oral or written.
You agree that, except as provided herein, no other representations or
promises were made to you regarding your employment with the Company. This
agreement shall be construed and interpreted in accordance with the laws of
the State of California.
We look forward to your joining the Company and to a
successful and enjoyable working relationship.
Sincerely,
Obagi Medical Products, Inc.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, R. Ph.
President and CEO
Accepted By:
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
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