Exhibit 10.13
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this
“ Agreement ” is entered into as of this 1st day
of March, 2005, by and between Steven Robert Carlson
(“Executive”) and OMP, Inc., a Delaware
corporation (the “Company”) . Capitalized terms
not otherwise defined in the text of this Agreement have the
meanings set forth in Appendix A , which is incorporated
into this Agreement by reference.
Background
The Executive’s experience and
demonstrated skills and abilities and his unique
qualifications are needed by the Company, and the Company
has determined that it is in the best interests of the Company and
its stockholders to engage Executive as the Company’s
President; and
The Company recognizes the need to
provide Executive with a level of compensation and relative
security that provides him the necessary economic and performance
incentives that will be of benefit to the Company stockholders in
the long term.
THEREFORE, the Company has offered
Executive employment for compensation and other benefits set forth
in this Agreement, and Executive is willing to accept employment on
such terms, of which terms, including, but limited to duties,
responsibilities, title, salary and benefits may not be reduced at
any time during this Agreement. The parties agree as
follows:
ARTICLE I
EMPLOYMENT
1.1
Employment by the Company of Executive and Acceptance by
Executive. The Company employs Executive during the term of
this Agreement in such capacities and upon such conditions
concerning rates of compensation, benefits and other matters as are
hereinafter stated. Executive accepts such employment and agrees to
devote a significant majority of his 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 or on behalf of the Company’s Board of
Directors (the “Board”), which approval shall
not be unreasonably withheld. Notwithstanding the foregoing,
Executive may serve on corporate, civic or charitable boards or
committees, deliver lectures, fulfill speaking engagements, teach
at educational institutions, or manage personal investments without
such advance written consent, provided that such activities do not
individually or in the aggregate materially interfere with the
performance of his duties under this Agreement.
1.2
Capacity. Executive shall be employed during the term of
this Agreement as President of the Company with such duties,
functions, responsibilities
and authority that are commensurate with and
appropriate for such position and as are from time-to-time set
forth in the Bylaws of the Company reporting to the Chief Executive
Officer (“CEO”) and otherwise delegated to Executive by
the CEO including but not limited to managing the day to day
operations of the Company including the 2005 Bonus Plan, Profit
Forecasts, Budgets and Ongoing Strategic Planning. Executive shall
spend such time in Long Beach, California as his responsibilities
and duties require.
1.3
Indemnification. The Company shall indemnify Executive to
the maximum extent permitted by applicable law and the
Company’s Bylaws with respect to Executive’s service
and the Executive shall also be covered under a directors and
officers liability insurance policy(ies) paid for by the Company to
the extent that the Company maintains such a liability insurance
policy(ies).
1.4
Term. Subject to the other provisions of this Agreement, the
term of this Agreement and Executive’s employment shall be
deemed to have commenced on March 1, 2005 upon signing of the
Agreement, and shall continue for a period of three years or until
the occurrence of an Event of Termination (as defined in Section
3.1) (the “Initial Term”) . Following the
expiration of the Initial Term, the Initial Term shall be
automatically renewed for successive one-year periods
(collectively, the “Renewal Terms”; individually, a
“Renewal Term”) unless, at least sixty (60) days
prior to the expiration of the Initial Term or of the then current
Renewal Term, either party provides the other with a notice of
intention not to renew, in which case Executive’s employment
with the Company, and the Company’s obligations shall
terminate as of the end of the Initial Term or said Renewal Term,
as applicable. If the Initial Term is renewed, the terms of this
Agreement during such Renewal Term shall be the same as the terms
in effect immediately prior to such renewal, subject to any such
changes or modifications as mutually may be agreed between the
parties as evidenced in a written instrument signed by both the
Company and Executive.
ARTICLE II
COMPENSATION, BENEFITS AND
EXPENSE REIMBURSEMENT
2.1
Compensation and Benefits. For services rendered pursuant to
this Agreement, Executive’s compensation and benefits will
consist of the following:
(a) Base
Salary . The Company agrees to pay to Executive in accordance
with its normal payroll practices (but not less frequently than
monthly), and Executive agrees to accept, during the Initial Term
of this Agreement an annual base salary at the rate of Three
Hundred Thousand Dollars ($300,000) per year or such greater amount
as the Board or the compensation committee thereof (the
“Compensation Committee”) may from time-to-time
determine (the “ Base Salary ”). Such Base
Salary shall be reviewed at least annually by the Board or the
Compensation Committee. Effective as of the date of any such
increase, the Base Salary as so increased shall be considered the
new Base Salary for all purposes of this Agreement.
(b) Bonus
Opportunity . The Board or the Compensation Committee shall
award Executive an annual bonus (the “Bonus”) of
up to fifty percent (50%) of the Base Salary based on achievement
of the benchmarks related to OMP’s revenue and EBITDA or such
other objectives which shall be set by the Compensation Committee
of the Board. The objectives for the Bonus during the first year of
the Initial Term are attached hereto this contract as Exhibit
“A”. The structure of Executive’s Bonus shall be
similar to that which has been in effect for key Senior Executives
of the Company provided that such Bonus shall be paid in a single
lump-sum cash payment as soon as practical after the Compensation
Committee can determine whether and the degree to which the
objectives have been achieved following the close of the year. The
Compensation Committee may, at its discretion, award such other
incremental bonus payments as it finds appropriate.
(c)
Benefit Plans . Executive will be eligible to participate in
the Company’s retirement plans that are qualified under
Section 40I(a) of the Internal Revenue Code of 1986, as amended,
and in the Company’s health, disability and other welfare
benefit plans that are generally applicable to all executive
employees of the Company, in accordance with the terms and
conditions thereof.
(d)
Relocation Assistance . The Company agrees to pay the
Executive a payment of $50,000 upon execution of this Agreement to
cover expenses associated with the Executive establishing housing
accommodations for his working in the Long Beach area. The Company
further agrees on January 1, 2006 or the next business day
thereafter, to pay the Executive an additional $50,000.
The Executive hereby agrees that in the event
the Executive voluntarily terminates his employment, as per Section
3.2, within 12 months of receipt of the first payment as described
above, the Executive will be required to repay the company the
intial $50,000 that was received. Such payment can be paid directly
to the Company by the Executive or the Company can deduct the
amount due from any final payment owed the Executive per Section
3.2.
(e)
Vacation . Executive shall be awarded three weeks of
vacation, consistent with vacation policy for Senior Executives of
the Company, for each full year of his employment under this
Agreement. Executive shall also be entitled to take 5 additional
personal or sick days. Vacation shall cease to accrue if
Executive’s accrued but unused vacation reaches a total of
seven weeks (“the Cap”) until such time as he takes
vacation and his accrual falls below the Cap.
(f)
Upon approval of the Board of Directors, you will be granted
options to purchase 250,000 shares of the Company’s
non-qualified common stock at the fair market value as determined
by the Board. At the sole discretion of the Board of Directors, it
may award additional non-qualified, qualified, or incentive stock
options to the Executive from time to time. These options shall
vest in accordance with and be subject to all other terms of the
Company’s Stock Option Plan and Stock Option Agreement
attached to this Agreement as Exhibit “B”. Such options
will vest over a three (3) year period in equal installments on the
anniversary date of your employment in years 1, 2, and 3. In
addition, any additional stock awards issued by the Board, beyond
the
initial 250,000 as specified above, shall be
subject to the terms and conditions of such awards at the time of
issuance.
2.2
Expenses. The Company shall reimburse Executive for all
reasonable expenses incurred in the course of the performance of
Executive’s duties and responsibilities pursuant to this
Agreement and consistent with the Company’s policies with
respect to travel, entertainment and miscellaneous expenses, and
the reasonable and customary requirements with respect to the
reporting of such expenses.
2.3
Withholding. The Company shall be entitled to withhold from
amounts to be paid to Executive hereunder any federal, state or
local withholding or other taxes or charges that it is from
time-to-time required to withhold. The Company shall be entitled to
rely on an opinion of counsel if any questions as to the amount or
requirement of any such withholding shall arise.
ARTICLE III
TERMINATION
Each of the following events shall
be considered an “Event of
Termination”:
3.1
Termination By the Company For Cause. The Company may
terminate this Agreement and Executive’s employment hereunder
at any time for Cause by giving notice to Executive stating the
basis for such termination, effective immediately upon giving such
notice or at such other time thereafter as the Company may
designate. If the Executive’s employment is terminated for
Cause pursuant to this Section 3.1 , notwithstanding the
other terms of this Agreement, Executive shall have no further
rights against the Company hereunder, except the right to receive
(i) any unpaid Base Salary with respect to the period prior to the
effective date of termination, and (ii) any accrued but unused
vacation, and (iii) reimbursement of expenses to which Executive is
entitled under Sections 2.1(d) and 2.2 hereof. All unexercised
options, vested and unvested, shall immediately
terminate.
3.2
Executive Resigns or Voluntarily Terminates Employment.
While Executive expects to fulfill the obligations of his
employment to the satisfaction of the Board, and maintain his
employment throughout the term of this Agreement, Executive may
terminate his employment under this Agreement if Executive provides
the Company at least sixty (60) days advance written notice. During
this notice period, Executive may be relieved of any
responsibilities. The Company and the Executive will meet and
discuss a mutually satisfactory way to make any necessary
transition. If Executive’s employment is terminated by the
Executive pursuant to this Section 3.2. notwithstanding the
other terms of this Agreement, Executive shall have no further
rights against the Company hereunder, except for the right to
receive (i) any unpaid Base Salary with respect to the period prior
to the effective date of termination, (ii) Base Salary during the
60 day notice period whether relieved of his duties or not, (iii)
any accrued but unused vacation, and (iv) reimbursement of expenses
to which Executive is
entitled under Sections 2.1 (d) and 2.2 hereof.
All unexercised and unvested options shall immediately terminate
and all unexercised and vested options must be exercised by the
Executive within ninety (90) days of termination of employment or
they shall terminate.
3.3
Termination by Death or Disability . Executive’s
employment and the Company’s obligations under this Agreement
shall terminate as follows: (i) automatically, effective
immediately and without any notice being necessary, upon
Executive’s death; and (ii) in the event that Executive
becomes Disabled, by the Company giving notice of termination to
Executive. If Executive’s employment is terminated pursuant
to this Section 3.3 because of the Executive’s death
or disability, notwithstanding the other terms of this Agreement,
Executive shall have no further rights against the Company
hereunder, except for the right to receive (i) any unpaid Base
Salary with respect to the period prior to the effective date of
termination plus a continuation of the Base Salary for a period of
six (6) months after the termination of employment and (ii)
any accrued but unused vacation, and (iv) reimbursement of expenses
to which Executive is entitled under Sections 2.1d and 2.2
hereof, plus the greater of any accrued Bonus or Bonus prorated for
the period through the termination, that has been earned but not
yet paid with respect to the period prior to the effective date of
termination. All unexercised and vested options must be exercised
by the Executive, or Executive’s estate, within one hundred
eighty (180) days of termination of employment or they shall
terminate.
3.4
Termination by the Company Without Cause . While the Company
and Executive both expect to maintain a satisfactory relationship
throughout the term of this Agreement, the Company may terminate
Executive’s employment without Cause. If Executive’s
employment is terminated by the Company without Cause pursuant to
this Section 3.4 , notwithstanding the other terms of this
Agreement, Executive shall have the right to receive (i) any unpaid
Base Salary plus the greater of any accrued Bonus or Bonus prorated
for the period through termination that has been earned but not yet
paid with respect to the period prior to the effective date of
termination payable on the regularly payroll dates, (ii) any
accrued but unused vacation, and (iv) an amount equal to eighteen
(18) months of Base Salary, and (v) reimbursement of expenses to
which Executive is entitled under Sections 2.1(d) and 2.2 hereof
and (vi) if Executive elects to continue his health insurance
coverage under the Consolidated Omnibus Budget Reconciliation Act
of l985 (“COBRA”) following the termination of his
employment, then the Company shall pay Executive’s monthly
premium under COBRA (including any premium for coverage of
Executive’s spouse and/or dependents) as is consistent with
the Senior Executive Cobra Coverage. In addition, the number of
shares subject to Executive’s outstanding options equal to
the number of shares that would vest over the twelve (12) month
period following Executive’s termination of employment, shall
immediately vest and become exercisable. Except for COBRA premium
payments
