Exhibit 10.1
EMPLOYMENT AGREEMENT
June 18, 2008
Preston
Romm
43 New Haven
Laguna Niguel, CA 92677
Dear
Preston:
I am pleased to offer you the
position of Chief Financial Officer/Executive Vice President,
Finance, Operations and Administration, and Treasurer of Obagi
Medical Products, Inc. (the “Company”), effective
July 1, 2008 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 CEO and President.
B.
Compensation
Salary : Your salary shall be $320,000 per annum paid in
accordance with the Company’s normal payroll practices, and
subject to standard payroll deductions and withholdings.
Annual Performance Bonus : You shall be entitled to an
annual performance bonus based on the achievement of certain
benchmarks to be set by the Board of Directors of the Company in
its sole discretion. You will be eligible for an annual performance
bonus of up to 60% of your base salary beginning in the year 2009
as adjusted for performance in accordance with the benchmarks to be
established. No bonus is payable unless you are employed by the
Company on the day the Board approves bonuses of the applicable
year. All bonuses are subject to Board approval and will be paid in
accordance with the Company’s normal payroll practices,
subject to standard payroll deductions and withholdings. For fiscal
year 2008, you will be (a) entitled to a performance bonus of
up to 60% of your base salary pro rated based upon your starting
date of July 1, 2008, but in no event shall such performance bonus
for 2008 be less than $50,000 and (b) eligible for an additional
bonus of up to $50,000 based on the Company’s 2008
performance.
Stock
Options: You will be eligible to receive a stock option grant
of 150,000 shares, subject to the stock option plan and Board
Approval. The grant of the stock options will be subject to the
other terms and provisions of the Company’s 2005 Stock
Incentive Plan and related Stock Option Agreement, and to the
satisfaction of all federal and state securities laws. The exercise
price of such options will be 125% of the closing price of the
Company’s stock on the grant date and shall vest and be
exercisable in three equal annual installments beginning on the
first anniversary of the grant date.
Benefits: You will be eligible to enroll in the
Company’s Executive group life, medical, dental and vision
plans on July 1, 2008. Additional information regarding plan
options and benefit summaries is enclosed.
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Annual
Leave:
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You will be eligible for the
following annual leave: |
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3 Weeks Vacation |
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4 Floating days |
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6 Days of sick leave |
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9 Holidays |
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 without advance notice. This at-will
employment relationship cannot be changed except by in writing
signed by the CEO of the Company. Your signature below confirms
your understanding that your employment with Obagi is
“At-Will” at all times.
If the Company terminates your
employment for any reason, except for cause, during the first year
of your employment, you will receive as your sole severance, your
base salary for the greater of the remaining term of the initial
twelve months or 6 months, payable semi-monthly, subject to
standard payroll deductions and withholdings. If the Company
terminates your employment for any reason, except for cause, after
the first year of your employment, you will receive as your sole
severance, your base salary for twelve (12) months payable
semi-monthly, subject to standard payroll deductions and
withholdings. If the Company terminates your employment, except for
cause, after the first year of your employment, but due to a change
of control within twelve months of the change of control, you will
receive as your sole severance, your base salary for twelve
(12) months payable semi-monthly, 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 G. If the Company exercises either of
these rights to terminate your employment, you will be paid all
earned wages upon termination, and no further compensation will be
owed to you other than the severance payment referred to
herein.
If you voluntarily terminate your
employment, 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, you will be paid all earned wages upon termination, and no
further compensation or including severance benefits, will be owed
to you. 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
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