EXHIBIT 10.19
EMPLOYMENT AGREEMENT
February 24, 1999
Xxxxxx X. Xxxxxxx
00 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
Dear Xxx:
I am pleased to offer you the position of Chief Financial
Officer of Obagi Medical Products, Inc. ("OMP" or the "Company") effective March
8, 1999 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.
B. COMPENSATION
SALARY: Your salary shall be $135,000 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 semi-monthly, subject to standard payroll deductions and
withholdings.
BONUS: You shall be entitled to an annual bonus based on the achievement of
certain benchmarks as set forth on Exhibit "A" attached hereto. You will be
eligible to earn a bonus of 25% of base salary, as adjusted for performance in
accordance with the benchmarks set forth in Exhibit "A." 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.
STOCK OPTION GRANT: The Company intends to grant you stock options to purchase
common stock of the Company. The terms of the stock options are set forth on
Exhibit "B" attached hereto.
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BENEFITS: During the first ninety days of your employment, you will are not
eligible for certain benefits, such as vacation, holiday pay, or medical and
dental benefits. You will be eligible for vacation and sick leave according to
standard Company policy for employees having at least ten (10) years' seniority.
You will also receive all other benefits the Company provides to its most senior
employees (e.g., health and dental insurance coverage). You will be eligible to
participate in the Company's 401k 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 without advance notice.
This at-will employment relationship cannot be changed except by a writing
signed by the Chairman of the Board of the Company.
If the Company terminates your employment without cause after
the first ninety days but during the first year of your employment, you will
receive as your sole severance, your base salary for six (6) 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 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, 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 Company
policies or willful violation of reasonable rules, regulations, orders or
directives of the Company's Board of Directors; (iv) refusal to perform your
duties on a full-time basis; (v) material breach of any term of this Agreement;
(vi) intentional damage to Company property; (vii) conduct by you which in the
good faith and
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reasonable determination of the Board of Directors of the company
demonstrates gross negligence, willful malfeasance or gross unfitness to serve.
In 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. 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.
F. 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
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this agreement and the corresponding employment relationship created hereby.
You agree that while you are employed by the Company and for a
period of three years thereafter, you will not, without the prior written
consent of the Company's Board of Directors:
a. Whether for compensation or otherwise,
directly or indirectly engage in the Company's business, or any part thereof, or
assist any other person in such person's conduct of the Company's business, or
any part thereof, whether as a director, officer, employee, consultant, adviser,
independent contractor or otherwise;
b. Hold a legal or beneficial interest in any
person which is engaged in the Company's business or any part thereof, whether
such interest is as an owner, investor, partner, creditor (other than as a trade
creditor in the ordinary course of business), joint venture or otherwise;
c. Solicit, divert or attempt to divert from
the Company or any person deriving title to the goodwill of the Company (a
"Transferee") any business constituting, or any customer of, any part of the
Company's business then conducted by the Company or such Transferee; or
d. Induce or attempt to induce any person then,
or during the immediately preceding six (6) month period, engaged or employed
(whether part-time or full-time) by the Company or any Transferee, whether as an
officer, employee, consultant, salesman, adviser or independent contractor to
leave the employ of the Company or such Transferee, as the case may be, or to
cease providing the services to the Company or such Transferee, as the case may
be, then provided by such person, or in any other manner seek to engage or
employ any such person (whether or not for compensation) as an officer, employee
consultant, adviser or independent contractor such that such person would
thereafter be unable to devote his or her full business time and attention to
the business then conducted by the Company or such Transferee, as the case may
be.
You hereby specifically acknowledge and agree that the restrictions contained in
this paragraph are reasonable and necessary to protect the business and
prospective business of Company, and that the enforcement of the provisions of
this paragraph will not work an undue hardship on you.
However, in the event your employment is terminated by the
Company without cause, you shall be permitted to do the following as of the
first anniversary of the date of such termination:
a. Whether for compensation or otherwise,
directly or indirectly engage in the Company's business, or any part thereof, or
assist any other person in such person's conduct of the Company's business, or
any part thereof, whether as a director,
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officer, employee consultant, adviser, independent contractor or otherwise; or
b. Hold a legal or beneficial interest in any
person which is engaged in the Company's business or any part thereof, whether
such interest is as an owner, investor, partner, creditor (other than as a trade
creditor in the ordinary course of business), joint venture or otherwise; or
G. 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.
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 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.
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We look forward to your joining the Company and to a
successful and enjoyable working relationship.
Sincerely,
Obagi Medical Products, Inc.
By /s/ Xxx Xxxxxx
-----------------------------------------
Xxx Xxxxxx, Chief Operating Officer
Accepted By:
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx
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