Exhibit 10.56
Amended and Restated
Executive Employment Agreement
This Amended and
Restated Employment Agreement (this " Agreement "), is executed and
delivered effective as of June 15, 2009 (the " Effective
Date "), by and between Obagi Medical Products, Inc., a
Delaware corporation (the " Company "), and Laura B. Hunter,
an individual resident of the State of California ("
Executive ").
1. Position And
Responsibilities
(a) Position . Executive is employed by the
Company to render services to the Company in the position
of
Vice President, General Counsel and Secretary.
Executive shall report directly to the Chief Financial
Officer. Executive shall perform such duties and
responsibilities as are normally related to such position, in
accordance with industry standards, and any additional duties now
or hereafter assigned to Executive by the Board of Directors of the
Company. Executive shall abide by the Company's rules,
regulations and practices, as adopted or modified from time to time
in the Company's sole discretion.
(b) Other Activities . Except
with the prior written consent of the Company, Executive shall not,
during the term of this Agreement, (i) accept any other employment,
or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary gain) that might
interfere with Executive's duties and responsibilities hereunder or
create a conflict of interest with the
Company. Executive may serve as a member of the board of
directors of any Company that does not compete directly with the
Company. Notwithstanding the foregoing, Executive may
also devote reasonable time and attention to civic, charitable or
social organizations so long as such activities do not interfere
with the performance of her duties to the Company.
(c) No Conflict . Executive represents and
warrants that Executive's execution of this Agreement, Executive's
employment with the Company and the performance of Executive's
proposed duties under this Agreement shall not violate any
obligations Executive may have to any prior employer, or any other
person or entity, including, without limitation, any obligations
with respect to proprietary or confidential information of any
prior employer, or any other person or entity.
2. Compensation And
Benefits
(a)
Base Salary . In consideration of the services to be
rendered under this Agreement, the Company shall pay to Executive a
salary at the current rate of Two hundred Sixty Thousand Dollars
($260,000.00) per year, as adjusted from time to time as described
below (the " Base Salary "). The Base Salary shall be paid
in accordance with the Company's standard bi-weekly payroll
practices. The Base Salary will be reviewed and adjusted from time
to time in accordance with the Company's procedures for adjusting
salaries for senior executives and as approved by the Compensation
Committee of the Board of Directors.
(b)
Bonus . Executive shall be eligible to receive an
annual bonus based on a percentage of Executive’s Base Salary
(currently 50%), or other increased percentage as may be determined
by the Company’s Board of Director’s from time to time
(the “ Bonus ”). Any such Bonus shall
be
subject to
Executive's achievement of corporate financial metrics or other
goals and objectives to be established from time to time by the
Company's Board of Directors (or a committee thereof).
(c)
Stock Option/Restricted Stock Awards . The
Company has previously granted to Executive non-qualified stock
options under the Company’s 2005 Stock Incentive Plan (the
“ Plan ”) to purchase forty thousand (40,000)
shares and fifteen thousand (15,000) shares of the Company's Common
Stock, $0.001 par value per share (the " Common Stock "), at
an exercise price of $9.45 and $5.86 per share, respectively,
pursuant to the form of stock option agreement adopted for use
under the Plan (the “ Options
”). Other than as set forth in Section 3(c), 3(d)
or 3(e) below, the Options vests in three equal annual installments
from the date of grant. The Options shall expire on the
tenth (10th) anniversary of the date of grant. Unless otherwise
agreed to by the Compensation Committee of the Board of Directors,
future option grants shall be subject to these same general terms
and conditions (" Subsequent Options "). Other
than as set forth in this Agreement, all options granted to
Executive, including the Options, shall be subject to the terms and
conditions of the respective stock option agreement and related
plan documents, and any additional terms approved by the
Compensation Committee of the Board of Directors at the time of
grant.
From time to
time, the Compensation Committee of the Board of Directors may also
grant restricted stock units to Executive pursuant to the Plan
(“ Subsequent RSUs ”). Any such future
Subsequent RSUs will be subject to vesting terms to be approved at
that time.
(d)
Benefits . Executive shall continue to be
eligible to participate in any and all medical, dental, vision,
retirement, life insurance, AD&D and other benefits (the
“ Benefits ”) established by the Company that
are made generally available by the Company to executive officers
of the Company, as such plans may be amended from time to time in
the Company's sole discretion. Without limiting the generality of
the foregoing, Executive, and to the extent applicable, Executive's
covered dependants, shall be eligible to participate in the
Company's 401(k) program and shall receive immediate enrollment for
health benefits to the maximum extent possible under the Company's
benefit plans.
(e)
Vacation . Executive shall receive three (3) weeks of
paid vacation time per calendar year, which amount shall increase
in accordance with the Company's vacation policy for employees of
the Company generally. Executive may take such accrued vacation at
such times as are mutually convenient to Executive and the Company.
In addition, Executive shall be entitled to all holidays provided
under the Company's regular holiday schedule.
(f)
Business Expenses . The Company will reimburse
Executive for reasonable and necessary expenses appropriately
incurred by Executive in performing her duties and obligations to
the Company in accordance with, and subject to, such policies and
procedures regarding executive officer expenses generally as the
Company may from time to time have in effect.
(a)
At-Will Termination by Company . The employment of
Executive shall be "at-will" at all times. The Company may
terminate Executive's employment with the Company at any time,
without any advance notice, for any reason or no reason at all,
notwithstanding anything to the contrary contained in or arising
from any statements, policies or practices of the Company relating
to the employment, discipline or termination of its employees. Upon
and after the date of
such
termination, all obligations of the Company shall cease, except as
set forth below in Section 3(b), 3(c), 3(d) or
3(e).
(b)
At-Will Termination by Executive . Executive may terminate
employment with the Company at any time for any reason or no reason
at all, upon two weeks' advance written notice. During
such notice period Executive shall continue to diligently perform
all of Executive's duties hereunder. The Company shall have the
option, in its sole discretion, to make Executive's termination
effective at any time prior to the end of such notice period as
long as the Company pays Executive all compensation (including all
accrued Base Salary (at the annual rate then in effect), vacation
and any other amounts owed to Executive at the time of termination)
accrued to which Executive is entitled up through the last day of
the two-week notice period. Any such amounts shall be paid on the
effective date of termination. All reimbursable expenses incurred
up to and including the date of termination shall be submitted for
payment within thirty (30) days of termination and contain all
documentation required pursuant to Company policy. Any
and all options to acquire shares of Common Stock that have vested
under the Options, or any Subsequent Options or Subsequent RSUs
shall continue to belong to Executive. Executive shall
have ninety (90) days in which to exercise any vested portion of
any Options and Subsequent Options. All shares that
remain unvested under such Options, and any Subsequent Options or
Subsequent RSUs shall cease to vest on the date of
termination. Thereafter all obligations of the Company
shall cease.
(c)
Involuntary Termination by Company without Cause Other
Than for Good Reason.
(i) If the Company terminates Executive's employment
for reasons other than for Cause (as defined below) or death or
disability (which is governed by subparagraph (e) below), which
will be dealt in accordance with the relevant plan
documents, then, during the Severance Period (as
defined below), the Company shall (A) pay to Executive a sum equal
to six (6) months of Base Salary (as then in effect) and
(B) continue to make available to Executive, at the Company’s
expense, the Benefits (including the full premium for COBRA
continuation coverage if applicable for Executive and her eligible
dependents) made generally available by the Company to its
Executives for the Severance Period, to the extent permitted under
applicable law and the terms of such benefit plans. The cash
consideration payable pursuant to subsection (A) above shall
be paid in equal monthly installments as salary continuation pay,
subject to deduction of ordinary payroll taxes, commencing on the
date that is no later than the earlier of thirty (30) days
following termination or the execution of the General Release (as
defined below). In addition, if the Company
terminates Executive's employment for reasons other than for Cause,
or death or disability (as provided in subparagraph (e) below) or
disability (which will be dealt with on a case-by-case basis at the
time either such event occurs) then, Options, and any
Subsequent Options or Subsequent RSUs automatically shall cease to
vest pursuant to the terms of the applicable stock option
agreements and restricted stock unit agreements, and in the case of
Options or Subsequent Options, Executive (or her estate in the
event of death) shall have one (1) year in which to exercise any
vested portion of such Options and any Subsequent Options in
accordance with the relevant plan documents. Executive
will own any vested Subsequent RSUs without any further action on
Executive’s part. For purposes of this Agreement, the term "
Severance Period " shall mean the six (6)-month period
immediately following the date of Executive's
termination. Any accrued vacation pay and any other
amounts owed to Executive at the time of termination shall be paid
on the effective date of Executive’s
termination. All reimbursable expenses incurred up to
and including the date of termination shall be submitted for
payment within thirty (30) days of termination and contain all
documentation required pursuant to Company policy.
(ii) The Company's termination of Executive's employment
shall be for " Cause " if Executive: (A) exhibits willful
misconduct or dishonesty which materially and adversely effects the
business reputation of Executive or the Company; (B) is convicted
of a felony; (C) acts (or fails to act) in the performance of her
duties to the Company in bad (good) faith and to the Company's
detriment; (D) materially breaches this Agreement or any other
agreement with the Company, which if curable, is not cured to the
Company's reasonable satisfaction within thirty (30) days of
written notice thereof; or (E) engages in misconduct that is
demonstrably and materially injurious to the Company, including,
without limitation, willful and material failure to perform her
duties as an officer or Executive of the Company or excessive
absenteeism unrelated to illness or vacation.
(d)
Termination by Executive for Good Reason.
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If Executive
terminates her employment for Good Reason (as defined below) then,
during the Severance Period, the Company shall (A) pay to Executive
a sum equal to twelve (12) months of the Base Salary (as then in
effect) and (B) continue to make available to, and pay on
Executive’s behalf, the Benefits (including the full premium
for COBRA continuation coverage if applicable for Executive and her
eligible dependents) made generally available by the Company to its
Executives for that twelve (12)-month period, to the extent
permitted under applicable law and the terms of the benefit plans.
The cash consideration payable pursuant to subsection (A)
above shall be paid as salary continuation pay in equal monthly
installments, subject to normal payroll deductions, commencing on
the date that is no later than the earlier of thirty (30)) days
following termination or the execution of the General
Release. Any Benefits shall also be paid in equal
monthly installments during the Severance Period. All
reimbursable expenses incurred up to and including the date of
termination shall be submitted for payment within thirty (30) days
of termination and contain all documentation required pursuant to
Company policy. All accrued vacation and any other
amounts owed to Executive as of the termination date shall be paid
on the effective date of termination.
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In addition,
notwithstanding an
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