Exhibit 10.9
SEPARATION AND RELEASE
AGREEMENT
Zein Obagi, M.D. (“Dr.
Obagi” or “Employee”) and OMP, Inc.
(“OMP”) and OMP’s parent Obagi Medical Products,
Inc. (“Obagi Medical”, collectively the
“Employer”) hereby knowingly and voluntarily agree to
enter into this Separation and Release Agreement (“Separation
Agreement”) in order to resolve all outstanding issues and
set forth all obligations between the parties. Employee and
Employer acknowledge and agree that this Separation Agreement
constitutes the sole obligation of each to the other with respect
to the termination of Employee’s employment with and service
as an officer and/or director to the Employer, and that no other
promises, commitments, or representations have been made with or by
each of the parties to the other with respect to such employment
and/or service.
One : Employee’s employment with
Employer will terminate effective June 29, 2006 (“Termination
Date”). In connection with the termination of
Employee’s employment, Employer and Employee agree that
Employee shall:
(a)
Resign as an officer of
OMP;
(b)
Resign as an officer of Obagi
Medical;
(c)
Resign as a director of OMP;
and
(d)
Resign as a director of Obagi
Medical.
Such resignations shall be effective
as of the Termination Date.
Two : As consideration for Employee’s
execution of this Separation Agreement and his agreement to the
obligations set forth herein, Employer will make a single lump-sum
payment to Employee in the amount of three hundred sixty-eight
thousand and fifty-seven dollars ($368,057.00), less applicable
deductions (“Severance Payment”). Employer will make
the Severance Payment to Employee no later than fifteen (15)
business days after receipt of this Separation Agreement, provided
Employee does not revoke his assent to same.
Employee acknowledges the Severance
Payment as defined herein includes and encompasses any severance
pay to which Employee may otherwise be entitled to from any of the
Releasees (as defined in Section Seven of this Separation
Agreement) and is adequate consideration for Employee’s
agreement to the release, non-compete and other obligations set
forth herein.
Three : Employee may be eligible to continue
health insurance benefits pursuant to federal and state COBRA for a
period of up to thirty-six (36) months after the Termination Date.
In addition to the Severance Payment described in Section Two
above, Employer agrees to reimburse Employee for the cost of the
premiums for Employee’s health insurance under COBRA during
his period of eligibility. At the conclusion of Employee’s
COBRA eligibility, Employer shall continue to reimburse Employee
for the actual cost of his and his qualified family member’s
health insurance premiums, if any, for an additional twenty-four
(24) months provided, however, that such reimbursements
shall be capped at an amount equal to not more
than eight (8) percent more per year than
Employee’s premium rate during his period of COBRA
eligibility. Employer’s obligations to Employee pursuant to
this Section Three will continue for the time periods set forth
herein unless and until Employee obtains comparable health
insurance coverage from a third-party employer or other source
(Employee agrees to provide Employer with notice of same). In the
event that Employee obtains health insurance coverage from another
employer or source, Employer’s obligations pursuant to this
Section Three shall cease immediately. Employer will provide
Employee with additional information regarding COBRA under separate
cover.
Four : Employee will return all Employer-owned
property, documents, records and other information of any type
whatsoever concerning or relating to the business and affairs of
Employer or any predecessor corporation.
Five : Employee acknowledges that he is not
entitled to any other benefits, payments or wages in connection
with his employment with the Employer and/or his service as an
officer and/or director to Employer, except as set forth in this
Separation Agreement. This Separation Agreement supersedes all
previous agreements, whether written or oral, between Employee and
Employer with respect to such employment and/or service.
Six : Employee agrees that acceptance of this
Separation Agreement constitutes a full, complete, and knowing
waiver of any claims asserted or non-asserted which he may have
against Employer arising out of his employment and termination of
employment including any claims Employee may have under the common
law of torts, contracts, or employment agreements or under any
federal, state, or local statute, regulation, rule, ordinance, or
order which covers or purports to cover or relates to any aspect of
employment, including, but not limited to, discrimination based on
race, sex, age, religion, national origin, sexual orientation,
physical, medical, or mental condition, or marital status under,
among other statutes, Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Americans with Disabilities Act,
the Age Discrimination in Employment Act, the Fair Labor Standards
Act, the Family and Medical Leave Act, the Employee Retirement
Income Security Act and the Worker Adjustment and Retraining
Notification Act.
Seven : As a material inducement to Employer to
enter into this Separation Agreement and in exchange for the
valuable consideration described herein, Employee hereby
irrevocably and unconditionally releases, acquits, and forever
discharges Employer and each of Employer’s directors,
officers, employees, representatives, attorneys, and all persons
acting by, through, under or in concert with any of them
(collectively “Releasees”), or any of them, from any
and all charges, complaints, claims, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses,
debts, and expenses (including attorneys’ fees and costs
actually incurred), known or unknown, which Employee now has, owns,
holds, or claims to have, own, or hold, or claimed to have, own, or
hold, or which Employee at any time hereafter may have, own, or
hold, or claim to have, own, or hold, from the beginning of time
until the execution date of this Separation Agreement, arising out
of or in any manner relating to all events or circumstances in any
way related to Employee’s employment with and/or service to
Employer or the cessation of that employment with and/or service to
each of the Releasees.
2
As a material inducement to Employee
to enter into this Separation Agreement, Employer hereby
irrevocably and unconditionally releases, acquits and forever
discharges Employee from any and all charges, complaints, claims,
controversies, damages, actions, causes of action, suits, rights,
demand
