EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT is entered into as of May 4, 2007 by and between XXXX
X.
XXXXXXXX (“Executive”)
and
ORGANIC TO GO, INC., a Delaware corporation (the “Company”).
In
consideration of the mutual covenants in this Agreement and for other good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Duties
and Scope of Employment.
(a) Position.
The
Company shall employ Executive as its Chief Financial Officer for the term
of
his employment under this Agreement (“Employment”).
Executive shall report to the Chief Executive Officer (the “CEO”)
of the
Company.
(b) Obligations.
Executive shall devote his full business efforts and time to the Company
and
shall not render services to any other person or entity without the express
prior approval of the CEO (other than services associated with Mia Roma
restaurant which do not interfere with Executive’s performance of his duties
under this Agreement). Executive represents and warrants to the Company that
he
is under no contractual obligations or commitments inconsistent with his
obligations under this Agreement.
2. Cash
and Incentive Compensation.
(a) Salary.
The
Company shall pay Executive as compensation for his services a base salary
at an
annual rate of $200,000, subject to increase by the CEO annually in the CEO’s
discretion. Such salary shall be payable in accordance with the Company’s
standard payroll procedures. The annual compensation specified in this
subsection (a) is referred to in this Agreement as “Base
Compensation.”
(b) Incentive
Bonuses.
Executive shall be eligible for a cash bonus (the “Incentive
Bonus”)
of
$50,000 per year. 25% of the Incentive Bonus will be based on achievement
by
Executive of performance goals which will be mutually agreed upon by Executive
and the CEO at the beginning of each year, 25% of the Incentive Bonus will
be
subject to the discretion of the CEO, and 50% of the Incentive Bonus will
be
based on achievement of performance goals by the Company which will be mutually
agreed upon by Executive and the CEO at the beginning of each year.
(c) Stock
Option Award.
Subject
to approval by the Board of Directors of SP Holding Corporation (“Parent”)
Executive shall be granted options to purchase 304,690 shares of Parent’s Common
Stock, which shall be nonqualified stock options. The stock options shall
be
granted in accordance with the terms and conditions of Parent’s 2007 Equity
Participation Plan. The exercise price under the options shall be the fair
market value of a share of Parent’s Common Stock on the date of stockholder
approval of Parent’s 2007 Equity Participation Plan. 25% of the stock options
shall vest after 12 months of employment, and the remainder shall vest over
the
next 36 months in equal monthly installments for a total vesting period of
48
months; provided that the unvested options shall immediately vest in full
if
Executive’s employment is terminated by the Company without Cause within 12
months after a change in control of the Company or Parent.
3. Executive
Benefits.
During
Employment, Executive shall be entitled to 15 working days of vacation for
each
12 months of employment, to be scheduled in advance. During Employment,
Executive and his family shall be eligible to participate in any employee
benefit plans maintained by the Company for the benefit of its senior executives
(including without limitation health, dental and vision coverage), subject
in
each case to the generally applicable terms and conditions of the plan in
question and to the determinations of any person or committee administering
such
plan.
4. Business
Expenses.
Executive shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with his duties.
The
Company shall reimburse Executive for all such expenses upon presentation
of
appropriate supporting documentation.
5. Term
of Employment.
(a) Basic
Rule.
The
Company shall employ Executive from May 4, 2007 until May 3, 2009 (the
“Expiration
Date”),
provided that (i) Executive’s employment may be terminated at any time as
described below; and (ii) after the Expiration Date, this Agreement shall
automatically renew for successive one (1) year terms unless either party
gives
the other written notice of its election not to renew this Agreement not
less
than ninety (90) days before the Expiration Date or any anniversary of the
Expiration Date. Executive’s Employment with the Company shall be “at will.” Any
contrary representation which may have been made to Executive shall be
superseded by this Agreement. This Agreement shall constitute the full and
complete agreement between Executive and the Company on the “at will” nature of
Executive’s Employment, which may only be changed in an express written
agreement signed by Executive and a duly authorized officer of the
Company.
(b) Involuntary
Termination, Resignation or Death.
The
Company and Executive may each terminate Executive’s Employment at any time and
for any reason (or no reason) effective upon delivery of written notice of
termination. Executive’s Employment shall terminate automatically in the event
of his death.
(c) Rights
Upon Termination.
Except
as expressly provided in Section 6, upon the termination of Executive’s
Employment, he shall only be entitled to the compensation, benefits and
reimbursements described in Sections 2, 3 and 4 for the period preceding
the
effective date of the termination. The payments under this Agreement shall
fully
discharge all responsibilities of the Company to Executive.
(d) Termination
of Agreement.
This
Agreement shall terminate when all obligations of the parties hereunder have
been satisfied. The termination of this Agreement shall not limit or otherwise
affect any of Executive’s obligations under Sections 7 and 8.
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6. Benefits
Upon Termination for Reasons Other than Cause or Permanent
Disability.
(a) Eligibility
for Termination Benefits.
This
Section 6 shall apply if, during the term of this Agreement, the Company
terminates Executive’s Employment for any reason other than Cause (as defined
below) or Permanent Disability (as defined below).
(b) Severance
Pay.
If this
Section 6 applies, then the Company shall continue to pay Executive his
compensation at the Base Compensation rate for the Continuation Period (as
defined below) in installments in accordance with the Company’s standard payroll
procedures. The above described payments and actions shall be made or taken
in
exchange for a general release of all claims Executive and his successors
may
have against the Company in a form acceptable to the Company which Executive
shall execute and deliver before any payment is made pursuant to this Section
6.
(c) Definition
of “Cause.”
For all
purposes under this Agreement, “Cause”
shall
mean:
(i) An
unauthorized use or disclosure by Executive of the Company’s confidential
information or trade secrets, which use or disclosure causes material harm
to
the Company;
(ii) A
material breach by Executive of any agreement between Executive and the
Company;
(iii) A
material failure by Executive to comply with the Company’s written policies or
rules;
(iv) Executive’s
conviction of, or plea of “guilty” or “no contest” to, a felony under the laws
of the United States or any state thereof;
(v) Executive’s
gross negligence or willful misconduct; or
(vi) A
continued failure by Executive to perform assigned duties after receiving
written notification of such failure from the CEO.
(d) Definition
of “Permanent Disability.”
For all
purposes under this Agreement, “Permanent
Disability”
shall
mean that Executive, when notice of termination is given, has failed to perform
his duties under this Agreement for not less than one hundred twenty (120)
days
(whether or not consecutive) in any 365-day period as a result of his incapacity
due to physical or mental illness or injury.
(e) Definition
of “Continuation Period.”
For
all
purposes under this Agreement “Continuation
Period”
shall
mean a period commencing on the date of the termination of Employment and
ending
on the date which is six (6) months following the termination of
Employment.
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7. Non-Competition
and Non-Sollicitation.
(a) Non-Competition.
(i) While
employed by the Company and for one (1) year after the termination of his
Employment for any reason, Executive shall not, directly or indirectly,
throughout the United States, (i) engage in any business activity which is
competitive to the Company’s business, now or in the future (the “Business”);
(ii)
render any services to any person or entity engaged in activities which compete
with the Company; (iii) engage in any business activity or perform services
in
connection with a business activity that was generated or initiated through
Executive’s performance of services for the Company; or (iv) become interested
in any entity which competes with the Company or any affiliate in any capacity,
including, without limitation, as an individual, partner, shareholder, officer,
director, member, principal, employee, agent, trustee, consultant, creditor
or
financier.
(ii) Executive
shall not, directly or indirectly, assist or encourage any other person in
carrying out, directly or indirectly, any activity that would be prohibited
by
the above provisions of this Section 7 if such activity were carried out
by
Executive, either directly or indirectly, and in particular Executive shall
not,
directly or indirectly, induce any employee of the Company to carry out,
directly or indirectly, any such activity.
(iii) Ownership
by Executive, as a passive investment, of less than one percent (1%) of the
outstanding shares of capital stock of any Company listed on a national
securities exchange or publicly traded in the over-the-counter market shall
not
constitute a breach of this Section 7(a).
(b) Non-Solicitation.
While
employed by the Company and for the Non-Solicitation Period (as defined below),
Executive shall not, either directly or indirectly, on his own behalf or
in the
service or on behalf of others (i) solicit or divert, or attempt to solicit
or
divert (A) any person then employed by the Company or (B) any person then
serving as a sales representative of, or a consultant to the Company, or
(ii)
solicit, divert or do business with, or attempt to solicit, divert or do
business with any client, customer of, or supplier to, the Company. For purposes
of this Agreement, the “Non-Solicitation
Period”
shall
mean (1) the one year period immediately after the termination of Executive’s
Employment by Executive or by the Company with Cause, and (2) the nine month
period immediately after the termination of Executive’s Employment without
Cause, and there shall be no Non-Solicitation Period if Executive’s Employment
is terminated following his Permanent Disability.
8. Nondisclosure.
Upon
the
execution and delivery of this Agreement, Executive shall enter into an Employee
Proprietary Information and Inventions Assignment Agreement with the Company
(the “Proprietary
Information Agreement”),
which
is incorporated herein by reference.
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9. Successors.
(a) Company’s
Successors.
This
Agreement shall be binding upon any successor (whether direct or indirect
and
whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to
all or substantially all of the Company’s business and/or assets. For all
purposes under this Agreement, the term “Company” shall include any successor to
the Company’s business and/or assets which becomes bound by this
Agreement.
(b) Executive’s
Successors.
This
Agreement and all rights of Executive hereunder shall inure to the benefit
of,
and be enforceable by, Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.
10. Miscellaneous
Provisions.
(a) Notice.
Notices
and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or
when
mailed by U.S. registered mail, return receipt requested and postage prepaid.
In
the case of Executive, mailed notices shall be addressed to him at the home
address that he most recently communicated to the Company in writing. In
the
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.
(b) Modifications
and Waivers.
No
provision of this Agreement shall be modified, waived or discharged unless
the
modification, waiver or discharge is agreed to in writing and signed by
Executive and by an authorized officer of the Company (other than Executive).
No
waiver by either party of any breach of, or of compliance with, any condition
or
provision of this Agreement by the other party shall be considered a waiver
of
any other condition or provision or of the same condition or provision at
another time.
(c) Whole
Agreement.
This
Agreement supersedes any prior agreement between Executive and the Company
in
its entirety. No other agreements, representations or understandings (whether
oral or written and whether express or implied) which are not expressly set
forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. This Agreement and the Proprietary
Information Agreement contain the entire understanding of the parties with
respect to their subject matter.
(d) Withholding
Taxes.
All
payments made under this Agreement shall be subject to reduction to reflect
taxes and other charges required to be withheld by law.
(e) Choice
of Law.
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of Washington (except their provisions
governing the choice of law).
(f) Severability.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
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(g) Arbitration.
Any
controversy or claim arising out of or relating to this Agreement, or the
breach
thereof, shall be settled in Seattle, Washington, by arbitration in accordance
with the JAMS Employment Arbitration Rules and Procedures. The decision of
the
arbitrator shall be final and binding on the parties, and judgment on the
award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be empowered to enter an equitable decree
mandating specific enforcement of the terms of this Agreement. The Company
and
Executive shall share equally all fees and expenses of the arbitrator; provided,
however, that the Company or Executive, as the case may be, shall bear all
fees
and expenses of the arbitrator and all of the legal fees and out-of-pocket
expenses of the other party if the arbitrator determines that the claim or
position of the Company or Executive, as the case may be, was without reasonable
foundation.
(h) No
Assignment.
This
Agreement and all rights and obligations of Executive hereunder are personal
to
Executive and may not be transferred or assigned by Executive at any time.
The
Company may assign its rights under this Agreement to any entity that assumes
the Company’s obligations hereunder in connection with any sale or transfer of
all or a substantial portion of the Company’s assets to such
entity.
(i) Counterparts.
This
Agreement may be executed in two or counters each of which shall be deemed
an
original, but all of which together shall constitute one and the same
instrument,
IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of
the Company by its duly authorized officer, as of the day and year first
above
written.
ORGANIC
TO GO, INC.
a
Delaware corporation
| By: | /s/ Xxxxx Xxxxx | /s/ Xxxx Xxxxxxxx | ||
|
Xxxxx Xxxxx, Chief Executive Officer |
XXXX X. XXXXXXXX |
|||
|
“Company”
|
“Executive” |
|||
|
Dated:
May 7, 2007
|
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