On October 23, 2012, Obagi Medical Products, Inc. (the "Company") and its wholly-owned subsidiary, OMP, Inc. (together with the Company, the "Obagi Parties"), entered into a Confidential Settlement Agreement and Release (the "Agreement") with National Fire Insurance Company of Hartford and American Casualty Company of Reading, PA (collectively, the "Insurers"), relating to the previously disclosed legal proceedings between the Obagi Parties and the Insurers (the "Coverage Action"). Such proceedings related to the scope of coverage the Insurers were required to provide the Obagi Parties in defending the complaint and arbitration proceedings filed against the Obagi Parties by Zein E. Obagi, M.D., ZO Skin Health, Inc. and certain of their affiliates, which were subsequently settled in May 2011. Pursuant to the Agreement, the Obagi Parties will release the Insurers of all claims that the Obagi Parties did assert and could have asserted in the motions filed by the Obagi Parties against the Insurers and in the Coverage Action. In consideration for the final disposition of the matter, the Insurers paid the Company $14.0 million. As the matter was handled on a contingency basis, the Company recorded $8.4 million as a gain on legal settlement.

The description of the Agreement set forth above is qualified in its entirety by reference to the actual terms of such Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference herein.

(d) Exhibits

Exhibit Number   Description
10.1             Confidential Settlement Agreement and Release, dated
                 October 23, 2012, by and among National Fire
                 Insurance Company of Hartford and American Casualty
                 Company of Reading, PA, on the one hand, and the
                 Company and OMP, Inc. on the other hand