EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT is entered into as of February 19, 2009 (the
“ Effective Date ”) by and among JASON BROWN
(“ Executive ”), ORGANIC TO GO FOOD CORPORATION,
a Delaware corporation (“ Corporation ”), and
ORGANIC TO GO, INC., a Delaware corporation and a wholly-owned
subsidiary of the Corporation (“ Subsidiary ”
and collectively with 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 . Corporation and Subsidiary shall each
employ Executive as its President and Chief Executive Officer for
the term of his employment under this Agreement (“
Employment ”). Executive shall report to
the Boards of Directors (the “ Board ”) of
Corporation and Subsidiary.
(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 Board. 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
$250,000, subject to annual increases by the Board. 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
35% of his Base Compensation per year. The Board may, in
its discretion, pay additional bonuses. 50% of the Incentive Bonus
will be based on achievement by Executive of performance goals
(“ Executive Performance Goals ”), and 50% of
the Incentive Bonus will be based on achievement of performance
goals by the Company (“ Company Performance
Goals” ); provided that the Executive Performance Goals
for 2009 shall be deemed to be fully met, and the Company shall pay
Executive the full bonus payable for achievement of the Executive
Performance Goals for 2009, when the Corporation de-registers its
Common Stock under the Securities Exchange Act of 1934 and
terminates the quotation of its Common Stock on the OTC Bulletin
Board. Except as specifically described in this
paragraph, all goals described in this paragraph shall be mutually
agreed upon by Executive and the Board within sixty (60) days after
the Effective Date (with respect to 2009) and by December 31, 2009
and December 31 of each year thereafter (with respect to 2010 and
each succeeding year).
(i)
New Stock Options . Promptly after the closing
date under the Note Purchase Agreement dated as of February 11,
2009 between Corporation and W.Health L.P. (the “ Note
Purchase Agreement”) , Corporation shall issue to
Executive options to purchase Seven Million Nine Hundred Ninety
Thousand Seven Hundred Fifty-Six (7,990,756) shares of
Corporation’s Common Stock pursuant to its stock option plan
(the “ First Executive Stock Options ”),
representing 4.5% of Corporation’s capitalization, calculated
on a fully-diluted basis, for $0.14 per share. In
addition, in the event that either the $5,000,000.00 Secured
Convertible Promissory Note dated February 19, 2009 will be
converted at a future date into shares of the Corporation’s
Common Stock (the “Conversion Stock” ) or there
shall be an equity investment in the Company in an amount of at
least $5 million (in one transaction or a series of transactions)
on or before March 17, 2010, then, promptly after such conversion
or such equity investment, the Corporation shall issue to Executive
additional options to purchase One Million Six Hundred Eighty Two
Thousand Eight Hundred Seventy-Two (1,682,872) shares of
Corporation’s Common Stock pursuant to its stock option plan
(the “ Second Executive Stock Options ”; and,
together with the First Executive Stock Options, the “ New
Stock Options ”), representing 4.5% of the Conversion
Stock, and having an exercise price equal to the fair market value
of the Corporation’s Common Stock as of such time.
(ii)
Vesting . Twenty percent (20%) of the New
Stock Options shall be vested and exercisable upon the issuance of
the New Stock Options. The balance of the New Stock
Options shall vest and become exercisable in equal annual
installments over four (4) years, commencing on the first
anniversary of the Effective Date (in the case of the First
Executive Stock Options) and commencing on the first anniversary of
the issuance date (in the case of the Second Executive Stock
Options) (in all cases, subject to acceleration in accordance with
the stock option agreement described below).
(iii)
Form of Stock Option Agreement . Except as
described in this Section, the New Stock Options shall be
represented by a Notice of Stock Option Grant and Stock Option
Agreement in the same form as the Notice of Stock Option Grant and
Stock Option Agreement between the Corporation and Executive dated
as of March 11, 2008.
3.
Executive Benefits . During his employment, (i)
Executive shall be entitled to 15 working days of vacation for each
12 months of employment, to be scheduled in advance; (ii) the
Company shall pay the full cost of health, dental and vision
coverage for Executive and his family (excluding any copayments),
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 (“ Health
Benefits ”); and (iii) the Company will purchase and pay
the premiums for an insurance policy or policies in an aggregate
amount of not less than $4,000,000 insuring the life of Executive,
the beneficiaries of which shall be selected by
Executive. Executive shall be paid for any unused
vacation. Executive shall be paid a car allowance of
$750 per month.
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.
(a)
Basic Rule . The Company shall employ Executive
during the period commencing on the Effective Date and ending on
the third anniversary of the Effective Date (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.
(b)
Involuntary Termination, Resignation or Death . The Company
may terminate Executive with or without Cause (as defined
below). Executive may resign 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.
(d)
Termination of Agreement . This Agreement shall
termi
