UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed
by
the Registrant x
Filed
by
a Party other than the Registrant o
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appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as Permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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of
Registrant as Specified In Its Charter)
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of
Person(s) Filing Proxy Statement, if other than the Registrant)
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act
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0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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SP
HOLDING CORPORATION
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD ON APRIL
,
2007
To
Stockholders of SP Holding Corporation:
You
are
hereby notified that a Special Meeting (the “Meeting”) of the stockholders of SP
Holding Corporation (the “Company”) will be held at 10100 Santa Monica
Boulevard, 22nd
Floor,
Los Angeles, CA 90067, on April ,
2007,
at 9:00 a.m. Local Time, to act on the following matters:
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(1)
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Amendment
to the Company’s Amended and Restated Certificate of Incorporation to
change the name of the Company from “SP Holding Corporation” to “Organic
To Go Food Corporation”;
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(2)
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Approval
of the 2007 Equity Participation Plan of Organic To Go
Food Corporation (the “Plan”);
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(3)
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Ratification
of previous grants of non-plan options to purchase an aggregate of
1,965,011 shares of the Company’s common stock, par value $.001 (“Common
Stock”); and
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(4)
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Such
other matters as may properly come before the Meeting or any adjournment
thereof.
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The
foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
Stockholders
who owned Common Stock at the close of business on March
,
2007,
are entitled to notice of and to vote at the Meeting.
All
stockholders are cordially invited to attend the Meeting in person. However,
to
assure your representation at the Meeting, you are urged to submit your Proxy
as
promptly as possible according to the enclosed instructions, whether or not
you
plan to attend the Meeting. Submission of a Proxy does not disqualify a
stockholder from attending the Meeting and voting in person. The mailing address
of the Company’s principal executive office is 601 Union Street, Suite 3700,
Seattle, Washington 98101.
By
Order
of the Board of Directors,
Jason
Brown
Chairman
Dated:
March ,
2007
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY COMPLETE, SIGN, AND
DATE
THE ENCLOSED PROXY CARD, AND RETURN IT IN THE ACCOMPANYING ENVELOPE, WHICH
REQUIRES NO POSTAGE, IF MAILED IN THE UNITED STATES.
Page
SP
HOLDING CORPORATION
601
UNION STREET, SUITE 3700
SEATTLE,
WA 98101
(206)
838-4670
FOR
2007
SPECIAL MEETING OF STOCKHOLDERS
General
The
enclosed proxy (“Proxy”) is solicited on behalf of the Board of Directors of SP
Holding Corporation (the “Company,” “we,” “us” or “our”) for use at the Special
Meeting of Stockholders to be held on April ,
2007 at
9:00 a.m. Local Time, or at any adjournment thereof, for the purposes set forth
herein and in the accompanying Notice of Special Meeting of Stockholders. The
Special Meeting will be held at 10100 Santa Monica Boulevard, 22nd
Floor,
Los Angeles, CA 90067. The mailing address of our principal executive office
is
601 Union Street, Suite 3700, Seattle, Washington 98101. The telephone number
at
that address is (206) 838-4670. This Proxy Statement and form of Proxy were
first sent to stockholders on or about March ,
2007.
Record
Date and Shares Outstanding
At
the
close of business on March ,
2007
(the “Record Date”), we had
outstanding
shares
of
common stock, $.001 par value (“Common Stock”), each entitling stockholders to
one vote per share.
Revocability
of Proxies
Any
Proxy
given pursuant to this solicitation may be revoked by the person giving it
at
any time before its use by delivering to us a written notice of revocation
or a
duly executed Proxy bearing a later date, or by attending the Special Meeting
and voting in person. A stockholder’s mere presence at the Special Meeting will
not revoke any Proxy previously given to us.
Voting
Procedures
General.
Your
shares will be voted in accordance with your voting instructions on your form
of
Proxy. If you submit a signed Proxy, but do not mark your instructions, your
shares will be voted as follows:
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FOR
the amendment to our Amended and Restated Certificate of Incorporation
(“Certificate of Incorporation”) to change our name from “SP Holding
Corporation” to “Organic To Go
Food Corporation”;
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FOR
the approval of the 2007 Equity Participation Plan of Organic To Go
Food Corporation;
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· |
FOR
the ratification of previous grants of non-plan options to purchase
an
aggregate of 1,965,011 shares of our Common Stock;
and
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· |
At
the discretion of the stockholders, upon such other business as may
properly come before the Special Meeting or any adjournment or
postponement thereof.
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Submission
of Proxies.
We
encourage you to sign, date, and return the proxy card, even if you plan to
attend the Special Meeting, so that your shares will be voted if you are unable
to attend the meeting. If you attend the Special Meeting and wish to vote in
person, we will provide you with ballots at the Special Meeting. If your shares
are registered directly in your name, you are considered the stockholder of
record, and you have the right to vote in person at the Special Meeting. If
your
shares are held in the name of your broker or other nominee, you will
need
to
bring with you to the Special Meeting a legal proxy from your broker or other
nominee authorizing you to vote these shares.
Solicitation
of Proxies
The
cost
of this solicitation will be borne by us, including the costs of printing and
mailing. In addition to solicitation by mail, proxies may also be solicited
by
our directors, officers, or regular employees, without additional compensation,
personally, or by telephone, telecopier or email. We will reimburse brokerage
firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending this Proxy Statement to the beneficial owners of
Common Stock.
We
will
only deliver one Proxy Statement to multiple stockholders sharing an address
unless we receive contrary instructions from one or more of our stockholders.
Upon written or oral request, we will promptly deliver a separate copy of this
Proxy Statement to any stockholder at a shared address to which a single copy
of
this Proxy Statement was delivered. You should direct any such requests to
the
following address:
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SP
Holding Corporation
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c/o
Jonathan Wernick, Chief Financial Officer
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601
Union Street, Suite 3700
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Seattle,
Washington 98101
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Quorum;
Abstentions; Broker Non-votes
The
presence in person or by Proxy of holders of shares of Common Stock entitling
them to cast a majority of votes entitled to be cast at the meeting constitutes
a quorum for the transaction of business at the Special Meeting. Shares that
are
voted “FOR,” “AGAINST,” or “ABSTAIN” on any matter are treated as present at the
meeting for purposes of establishing a quorum with respect to each matter to
be
considered.
An
abstention will have the same effect as a vote against a proposal.
A
broker
non-vote will not affect the outcome of any vote on proposals two and three,
but
will have the same effect as a vote against proposal one.
Interests
of Certain Persons in Matters to be Acted Upon
None.
Proposals
by Stockholders
None.
Dissenters’
Right of Appraisal
None.
The
following table sets forth certain information regarding Common Stock
beneficially owned on March 6, 2007, for (i) each stockholder known to be the
beneficial owner of more than 5% of Common Stock, (ii) each executive officer
and director, and (iii) all executive officers and directors as a group.
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Name
of Beneficial Owner (1)
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Amount
and Nature of Beneficial Ownership of Common Stock
(2)
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Percent
of Class of Common Stock
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Officers
and Directors:
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Jason
Brown, Chief Executive Officer and Chairman (3)
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2,638,499
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12.9
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%
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Michael
Johnson, VP of Retail Operations (4)
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12,211
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*
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Wendy
Tenenberg, VP of Marketing (5)
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232,009
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1.2
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%
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Jonathan
Wernick, Chief Financial Officer
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0
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*
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Dave
Smith, Director (6)
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90,488
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*
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Peter
Meehan, Director (7)
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69,780
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*
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Roy
Bingham, Director (8)
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195,530
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*
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Douglas
Lioon, Director (9)
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540,368
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2.7
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%
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S.M.
“Hass” Hassan, Director (10)
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122,812
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*
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All
directors and executive officers as a group (9 persons) (11)
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3,901,697
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19.0
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%
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More
than 5% Beneficial Owners:
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Vicis
Capital Master Fund, LLC (12)
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1,898,014
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9.5
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%
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Trinad
Capital Master Fund Ltd. (13)
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1,201,775
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6.0
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%
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*
Less than 1%
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(1)
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Unless
otherwise indicated, the address of the beneficial owner is c/o SP
Holding
Corporation, 601 Union Street, Suite 3700, Seattle, Washington
98101.
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(2)
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Beneficial
ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting
or
investment power with respect to securities. Shares of Common Stock
which
are purchasable under options or warrants which are currently exercisable,
or which will become exercisable no later than 60 days after March
6,
2007, are deemed outstanding for computing the percentage of the
person
holding such options or warrants, but not deemed outstanding for
computing
the percentage of any other person. Except as indicated by footnote
and
subject to community property laws where applicable, the persons
named in
the table have sole voting and investment power with respect to all
shares
of Common Stock shown as beneficially owned by them.
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(3)
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Mr.
Brown’s holdings consist of 2,183,161 shares of Common Stock, options to
purchase 443,470 shares of Common Stock and warrants to purchase
11,868
shares of Common Stock.
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(4)
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Mr.
Johnson’s holdings consist of options to purchase 12,211 shares of Common
Stock.
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(5)
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Ms.
Tenenberg’s holdings consist of 227,939 shares of Common Stock and options
to purchase 4,070 shares of Common Stock
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(6)
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Mr.
Smith’s holdings consist of 58,255 shares of Common Stock, options to
purchase 32,084 shares of Common Stock and warrants to purchase 149
shares
of Common Stock.
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(7)
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Mr.
Meehan’s holdings consist of 41,868 shares of Common Stock and options to
purchase 27,912 shares of Common Stock.
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(8)
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Mr.
Bingham’s holdings consist of 167,380 shares of Common Stock, options to
purchase 27,912 shares of Common Stock and warrants to purchase 238
shares
of Common Stock.
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(9)
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Mr.
Lioon’s holdings consist of 500,588 shares of Common Stock, options to
purchase 27,912 shares of Common Stock and warrants to purchase 11,868
shares of Common Stock.
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(10)
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Mr.
Hassan’s holdings consist of 66,000 shares of Common Stock, options to
purchase 27,912 shares of Common Stock and warrants to purchase 28,900
shares of Common Stock.
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(11)
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Consists
of 3,245,191 shares of Common stock, options to purchase 603,483
shares of
Common Stock and warrants to purchase 53,023 shares of Common
Stock.
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(12)
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The
address of the beneficial owner is Tower 56, Suite 98101, 126 East
56th
Street, New York, New York 10022. The beneficial owner’s holdings consist
of 1,320,000 shares of Common Stock and warrants to purchase 578,014
shares of Common Stock.
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(13)
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The
address of the beneficial owner is 2121 Avenue of the Stars, Suite
1650,
Los Angeles, California 90067. The beneficial owner’s holdings consist of
944,920 shares of Common Stock and warrants to purchase 256,855 shares
of
Common Stock.
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On
February 12, 2007, our wholly owned subsidiary, Organic Acquisition Corporation,
merged (the “Merger”) with and into Organic Holding Company, Inc. (“Organic”),
pursuant to an Agreement and Plan of Merger and Reorganization dated January
11,
2007, as amended (the “Merger Agreement”). Under the terms of the Merger, each
share of Organic common stock and Organic preferred stock (respectively,
“Organic Common Stock” and “Organic Preferred Stock”) (which included certain
issued and outstanding convertible promissory notes on an “as converted” basis)
outstanding immediately prior to the closing of the Merger was converted into
the right to receive 0.69781 (the “Exchange Ratio”) shares of Common Stock. The
consummation of the Merger occurred concurrently with the completion of a
private placement (the “Private Placement”) of approximately 138 units (the
“Units”) for an aggregate value of approximately $6.9 million. Each Unit is
comprised of (i) 40,000 shares of Common Stock and (ii) a detachable five-year
warrant to purchase 8,000 shares of Common Stock at an exercise price of $2.50
per share. The purchase price per Unit was $50,000.
In
connection with the Merger and Private Placement: (i) Mr. Mark Schaftlein
resigned as our sole officer and director; (ii) Mr. Jason Brown was
appointed as our Chairman and Chief Executive Officer; (iii) Mr. Jonathan
Wernick was appointed as our Chief Financial Officer; and (iv) Messrs. Jason
Brown, Dave Smith, Peter Meehan, Roy Bingham, Douglass Lioon and S.M. “Haas”
Hassan were appointed as members of our Board of Directors. The beneficial
ownership of our Common Stock of the foregoing individuals is set forth in
the
immediately preceding table and notes accompanying the table.
A
more
detailed description of the above transactions can be found in our Current
Report on Form 8-K filed with the Securities and Exchange Commission on February
13, 2007.
For
purposes of the discussion contained in this section entitled “Executive
Compensation,” the relevant information is presented in each instance first with
respect to the Company prior to the Merger and then with respect to Organic
prior to the Merger.
Summary
Compensation
SP
Holding Corporation
Mark
Schaftlein served as our sole officer and director prior to the Merger. Mr.
Schaftlein did not receive direct cash or non-cash compensation during the
fiscal year ended December 31, 2006. From time to time, we utilized the
services of a consulting firm where Mr. Schaftlein is a managing partner
and the fees paid to the firm were $50,727 and $15,000 in years 2005 and 2004,
respectively. We did not pay fees to Mr. Schaftlein’s consulting
firm for the year ended December 31, 2006. No other executive officer
received total compensation in excess of $100,000 during the fiscal year ended
December 31, 2006.
Organic
Holding Company, Inc.
The
following Summary Compensation Table indicates the cash and non-cash
compensation earned during the fiscal year ended December 31, 2006 by Jason
Brown, Organic’s Chief Executive Officer, for the year ended December 31, 2006.
Organic did not have any executive officers, other than Mr. Brown, whose total
compensation exceeded $100,000 for the year ended December 31, 2006.
Certain aspects of Mr. Brown’s compensation are governed by an employment
agreement, the materials terms of which are presented below under the heading
“Employment Agreements.”
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SUMMARY
COMPENSATION TABLE (1)
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Name
and principal position
(a)
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Year
(b)
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Salary
($)
(c)
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Bonus
($)
(d)
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Stock
Awards($)
(e)
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Option
Awards($)
(f)
(2)
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All
Other Compensation ($)
(i)
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Total
($)
(j)
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Jason
Brown, Chairman and
Chief Executive Officer
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2006
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$156,924
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$5,000
(3)
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$161,924
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| (1) |
Mr.
Brown did not receive any Non-Equity
Incentive Plan Compensation or Nonqualified Deferred Compensation
Earnings
during the year ended December 31, 2006. Accordingly, columns (g)
and (h)
of the foregoing table relating to such items were omitted from the
tabular presentation.
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| (2) |
The
Board of Directors of Organic approved the issuance of options to
purchase
60,000 shares of Organic Common Stock to Mr. Brown in 2006, subject
to
stockholder approval, which has not yet been received. In accordance
with
Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised
2004), “Share-Based Payment” (“SFAS 123R”), options which are subject to
stockholder approval are deemed not to have been granted until such
approval has been received. As the options are deemed not to have
been
granted until stockholder approval has been received and the value
of the
options is determined as of the date of grant, the value of the options
issued to Mr. Brown cannot be determined until stockholder approval
has
been received. The options issued in 2006 had a term of 10 years,
an
exercise price of $0.12 per share and vest monthly over two years
from
January 1, 2006. Pursuant to the Merger, Mr. Brown’s options to purchase
60,000 shares of Organic Common Stock were converted into options
to
purchase 41,868 shares of our Common Stock, with the same term and
vesting
as the prior options and with an exercise price of $0.17 per share.
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| (3) |
Mr.
Brown received $5,000 in director’s fees in
2006.
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OUTSTANDING
EQUITY AWARDS
SP
Holding Corporation
Mr.
Schaftlein, who served as our sole officer and director prior to the Merger,
did
not have any option awards, unexercised options, unvested stock awards or equity
incentive plan awards at December 31, 2006.
Organic
Holding Company, Inc.
The
following Outstanding Equity Awards at Fiscal Year-End Table indicates, with
respect to Mr. Brown: (i) the number of securities underlying unexercised
options and that are exercisable; (ii) on
an
award-by-award basis, the number of securities underlying unexercised options
and that are unexercisable; (iii) for each item reported in clauses (i) and
(ii)
above, the exercise or base price of such item; and (iv) for each item reported
in clauses (i) and (ii) above, the expiration date of such item. Mr. Brown
did
not receive any awards under any equity incentive plan or stock awards during
the fiscal year ended December 31, 2006.
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OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
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OPTION
AWARDS
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Name
(a)
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Number
of Securities Underlying Unexercised Options
(#)
Exercisable
(b)
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Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
(c)
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Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
(d)
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Option
Exercise Price
($)
(e)
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Option
Expiration Date
(f)
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Jason
Brown (1) (2)
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19,189
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22,679
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-0-
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$0.17
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2-29-16
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| (1) |
Mr.
Brown did not receive any stock awards during the year ended December
31,
2006 or have any stock awards at such date. Accordingly, columns
(g), (h),
(i) and (j) of the foregoing table relating to such items were omitted
from the tabular presentation.
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| (2) |
The
Board of Directors of Organic approved the issuance of options to
purchase
60,000 shares of Organic Common Stock to Mr. Brown in 2006, subject
to
stockholder approval, which has not yet been received. In accordance
with
SFAS 123R, options which are subject to stockholder approval are
deemed
not to have been granted until such approval has been received. As
the
options are deemed not to have been granted until stockholder approval
has
been received and the value of the options is determined as of the
date of
grant, the value of the options issued to Mr. Brown cannot be determined
until stockholder approval has been received. The options issued
in 2006
had a term of 10 years, an exercise price of $0.12 per share and
vest
monthly over two years from January 1, 2006. Pursuant to the Merger,
Mr.
Brown’s options to purchase 60,000 shares of Organic Common Stock were
converted into options to purchase 41,868 shares of our Common Stock,
with
the same term and vesting as the prior options and with an exercise
price
of $0.17 per share.
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Director
Compensation
SP
Holding Corporation
Prior
to
the Merger, we only had one director, Mr. Schaftlein. Mr. Schaftlein did
not receive any direct compensation for his services as a director. From time
to
time, we utilized the services of a consulting firm where
Mr. Schaftlein
is a managing partner. The fees paid to the firm were $50,727 and $15,000 in
years 2005 and 2004, respectively.
Organic
Holding Company, Inc.
In
connection with the Merger, Mr. Schaftlein resigned as a director.
Concurrently therewith, we appointed six new directors to our Board of
Directors: Messrs. Brown, Smith, Meehan, Bingham, Lioon and Hassan.
The
following Director Compensation Table indicates the compensation earned during
the fiscal year ended December 31, 2006 by the directors of Organic. Each
director of Organic was paid an annual director’s fee of $5,000 and was awarded
a one-time grant of options to purchase 60,000 shares of Common Stock.
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DIRECTOR
COMPENSATION (1) (2)
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Name
(a)
(1) (2)
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Fees
Earned or Paid in Cash
($)
(b)
|
Option
Awards ($)
(d)
(3)
|
All
Other
Compensation ($)
(g)
|
Total
($)
(j)
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Dave
Smith
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$5,000
|
—
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$5,000
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Peter
Meehan
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$5,000
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$5,000
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Roy
Bingham
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$5,000
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$5,000
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Douglas
Lioon
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$5,000
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$5,000
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S.M.
“Hass” Hassan
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$5,000
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$5,000
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| (1) |
Mr.
Brown also serves as a director. He does not receive any additional
compensation beyond that disclosed in the “Summary Compensation Table” set
forth above for his services as a
director.
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| (2) |
None
of the directors received any Non-Equity Incentive Plan Compensation
or
Non-Qualified Deferred Compensation Earnings during the year ended
December 31, 2006. Accordingly, columns (e) and (f) of the foregoing
table
relating to such items were deleted from the tabular
presentation.
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| (3) |
In
2006, the Board of Directors of Organic approved the issuance of
options
to purchase 60,000 shares of Organic Common Stock to each director,
all
subject to stockholder approval, which has not yet been received.
In
accordance with SFAS 123R, options which are subject to stockholder
approval are deemed not to have been granted until such approval
has been
received. As the options are deemed not to have been granted until
stockholder approval has been received and the value of the options
is
determined as of the date of grant, the value of the options issued
to the
directors cannot be determined until stockholder approval has been
received. Pursuant to the Merger, the directors’ options to purchase
shares of Organic Common Stock were converted, in accordance with
the
Exchange Ratio, into options to purchase shares of our Common
Stock.
|
Employment
Agreements
All
of
our employees, other than Mr. Brown, are “at-will” employees. We entered into an
employment agreement with Mr. Brown, effective January 1, 2007, which has a
three-year term. The summary of Mr. Brown’s employment agreement presented
below is qualified in its entirety by reference to full text of the employment
agreement, which was filed with our Current Report on Form 8-K filed with the
Securities and Exchange Commission on February 13, 2007, and is incorporated
by
reference herein.
Pursuant
to the employment agreement, we are obligated to pay Mr. Brown a base salary
at
an annual rate of $225,000, subject to annual increases by the Board of
Directors. Mr. Brown is eligible for a cash incentive bonus of up to 35% of
his
base salary per year. The total amount of Mr. Brown’s cash incentive bonus will
be determined by the following:
|
|
· |
25%
will be based on Mr. Brown achieving certain performance goals mutually
agreed upon by him and the Board of Directors each
year;
|
| |
·
|
25%
will be determined at the discretion of the Board of Directors;
and
|
| |
·
|
50%
will be based on achievement of performance goals set by us.
|
The
Board
of Directors may pay additional bonuses in its discretion. We will also provide
Mr. Brown and his family with certain health benefits and Mr. Brown is entitled
to receive reimbursements for all reasonable business, travel and entertainment
expenses that he incurs or he pays for on our behalf.
Effective
upon the closing of the Merger, we issued to Mr. Brown options to purchase
1,246,674 shares of Common Stock, which was equal to 5% of the outstanding
shares of Common Stock as of the closing of the Merger. Except in connection
with a change in control, 25% of such options vest after 12 months of
employment, with the remainder vesting monthly over the next three years for
a
total vesting period of 48 months. All of Mr. Brown’s options vest immediately
if, within 12 months after a change in control, Mr. Brown is terminated for
any
reason other than for cause or if Mr. Brown terminates his employment for good
reason. Additionally, in the event that Mr. Brown is terminated due to permanent
disability, for any other reason other than for cause, or if Mr. Brown
terminates his employment for good reason, we will be obligated to pay Mr.
Brown
a lump sum equal to one year’s salary (at his then current base salary) and
continue to provide him with his medical and other similar benefits for twelve
months after the date of his termination.
We
may
terminate Mr. Brown’s employment immediately, without prior notice or payment in
lieu of notice, if at any time Mr. Brown:
| |
·
|
becomes
physically or mentally disabled, whether totally or partially, so
that he
is substantially unable to perform his duties for more than 120 days
(whether or not consecutive) in the aggregate in any 365 day
period;
|
| |
·
|
is
convicted of or pleads guilty or no contest to a felony; or
|
| |
·
|
fails
to perform his assigned duties, comply with our written policies
or rules,
or comply with any written agreement between us and Mr. Brown, which
failure continues for more than thirty (30) days after receiving
written
notification of such failure from the Board of Directors.
|
Mr.
Brown’s employment agreement contains restrictive covenants preventing him
from:
| |
·
|
competing
with us during his employment;
|
| |
·
|
competing
with us for a period of 12 months after termination of his employment;
and
|
| |
·
|
using
our confidential business information at any time, except in connection
with the performance of his duties for us.
|
NAME
CHANGE
We
are
proposing to amend our Certificate of Incorporation to change our corporate
name
from “SP Holding Corporation” to “Organic To Go Food Corporation”
(the “Name Change”).
The
Name
Change will be implemented by filing a Certificate of Amendment with the
Delaware Secretary of State (“Certificate of Amendment”). The Certificate of
Amendment will become effective once it is filed with the Secretary of State
of
Delaware.
The
Board
of Directors believes that the Name Change is in our best interests because
it
better identifies our current operations and business strategy.
If
the
amendment is approved by the stockholders, Article I of the Certificate of
Incorporation will be amended to read as provided below:
“The
name
of the corporation is Organic To Go Food Corporation.”
If
the
amendment is approved by the stockholders, we also intend to change our trading
symbol.
Vote
Required
The
affirmative vote of holders of a majority of the shares of Common Stock entitled
to vote at the meeting will be required to approve the amendment to the
Certificate of Incorporation to change the name of the Company from “SP Holding
Corporation” to “Organic To Go Food Corporation.”
Recommendation
of the Board of Directors
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE AMENDMENT TO
THE CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY FROM “SP
HOLDING CORPORATION” TO “ORGANIC TO GO FOOD CORPORATION.”
APPROVAL
OF THE 2007
EQUITY PARTICIPATION PLAN
OF
ORGANIC TO GO FOOD CORPORATION
The
2007
Equity Participation Plan of Organic To Go Food Corporation (the “Plan”) is
being submitted for stockholder approval. The Board of Directors believes that
adoption of the Plan will be in our best interests by strengthening the desire
of employees, directors and consultants to continue their employment or
association with us, by helping us attract and secure services of employees,
directors and consultants that are eligible for awards under the Plan, by
aligning their interests with ours, and by securing other benefits for us
through options and restricted stock grants to be granted
thereunder.
As
of the
Record Date, we
had
shares
of
Common Stock issued and outstanding. If the Plan is approved, we will have
the
ability to issue up to 3,600,000 shares of Common Stock which may be granted
as
restricted stock (“Restricted Stock”) and/or issued upon the exercise of stock
options (“Options,” and collectively, with the Restricted Stock, “Awards”),
which would represent
approximately %
of our
issued and outstanding Common Stock as of the Record Date.
The
essential features of the Plan are outlined below. The Plan is attached as
Exhibit A. The description of the Plan in this Proxy Statement is qualified
in
its entirety by reference to Exhibit A.
Plan
Summary
Types
of Awards and Eligibility.
Under
the Plan, we may grant Options and Restricted Stock to our employees, directors
and consultants. As of March 6, 2007, we had approximately 213 employees,
directors and/or consultants eligible to participate in the Plan.
Administration.
The
Plan may be administered by the Board of Directors or by a committee (the
“Committee”) to which administration of the Plan, or part of the Plan, is
delegated by the Board of Directors (in either case, the “Administrator”). The
Administrator will have the authority, in its discretion to grant Awards; to
determine the fair market value of the Common Stock subject to Awards; to
determine the exercise price of Options granted; to determine the persons to
whom, and the time or times at which, Awards will be granted, and the number
of
shares subject to each Option and/or the number of shares of Restricted Stock;
to interpret the Plan; to prescribe, amend, and rescind the rules and
regulations relating to the Plan; to determine the terms and provisions of
each
Award granted; to modify or amend any Award with the consent of the participant;
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Administrator may delegate nondiscretionary
administrative duties to employees of the Company as it deems
proper.
Stock
Subject to the Plan.
The
total number of shares of Common Stock which may be granted as Restricted Stock
and/or issued upon the exercise of Options granted pursuant to the Plan shall
not exceed 3,600,000 shares of Common Stock in the aggregate.
Stock
Options.
We may
grant both incentive stock options (“ISOs”) intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the “Code”), or “nonqualified options” (“NQOs”). The
exercise price of NQOs may not be less than 100% of the fair market value of
our
Common Stock on the date of the grant, or otherwise determined by the
Administrator in good faith based on actual trading data in accordance with
the
requirements of Section 409A of the Code. The exercise price of ISOs granted
to
any person who owns stock representing more than 10% of the total combined
voting power of all of our Common Stock or the stock of any of our affiliates
may not be less than 110% of the fair market value of our Common Stock on the
date of grant. The exercise price of all other ISOs will be determined in
accordance with the applicable provisions of the Code and may not be less than
the fair market value of our Common Stock on the date of grant.
Except
with the express written approval of the Administrator with respect to NQOs,
Options granted under the Plan are not transferable, otherwise than by will
or
the laws of descent and distribution, and, during the lifetime of the Option
holder, Options are exercisable only by an Option holder. Unless otherwise
provided for by the Option agreement or the Plan, Options granted pursuant
to
the Plan terminate three months after the date of termination of employment,
except that in the event of the death or permanent disability of the Option
holder, the Option may be exercised by the holder (or the Option holder’s
representative, as the case may be) until six months after the date of death
or
permanent disability.
Duration
of Options.
Options
granted under the Plan will expire no more than ten (10) years from the date
on
which the Option is granted, or such lesser period of time as is set forth
in
the Option agreement. ISOs granted to holders of more than 10% of our Common
Stock will expire no more than five (5) years from the date the Option is
granted.
Exercise
of Options.
Options
granted under the Plan vest and become exercisable immediately as of the
effective date of the Option agreement or in accordance with the schedule set
by
the Administrator specified in the Option agreement relating to such Option.
Restricted
Stock.
The
Administrator may grant Restricted Stock to individuals under the Plan, in
such
amounts, and subject to such terms and conditions as the Administrator may
determine in its sole discretion. Unless otherwise determined by the
Administrator at the time of the grant, the holder of Restricted Stock will
have
the right to vote the Restricted Stock and to receive dividends, until such
shares are forfeited.
Adjustments.
Except
as
otherwise provided for in the Plan, if the Common Stock is changed by reason
of
a stock split, reverse stock split, stock dividend or recapitalization,
combination or reclassification, appropriate adjustments shall be made by the
Board of Directors in (i) the number and class of shares of stock subject to
the
Plan and each Option and Restricted Stock grant outstanding under the Plan,
and
(ii) the exercise price of each outstanding Option. In the event of a proposed
dissolution or liquidation of the Company, the Administrator will notify each
participant at least thirty (30) days prior to such proposed action. Except
as
otherwise permitted by the Administrator, all outstanding Options and unvested
Restricted Stock grants will terminate immediately prior to consummation of
such
proposed action. In the event of a merger or consolidation of the Company in
which the Company does not survive, or in the event of a sale of all or
substantially all of the assets of the Company in which the stockholders of
the
Company receive securities of the acquiring entity, all Options and Restricted
Stock will be assumed or equivalent awards will be substituted by the successor
entity. If the successor entity does not agree to assume the Options or
Restricted Stock or to substitute equivalent awards, the Administrator may
permit the full vesting or exercise of any of the Restricted Stock or Options
prior to consummation of such event.
Federal
Income Tax Consequences.
We will
not, nor will the optionee, recognize taxable income or deduction for federal
income tax purposes from the grant or exercise of an ISO. When an optionee
sells
Common Stock acquired upon exercise of an ISO, the optionee will be taxed at
long-term capital gain rates, if the Common Stock has been held for at least
one
year and the Option was granted at least two years prior to the date of sale
(“Holding Period Requirements”). If the optionee fails to meet the Holding
Period Requirements, the difference between the exercise price and the fair
market value of the Common Stock at the time of exercise will be taxable to
the
optionee as ordinary income and we will be entitled to a deduction equal to
the
amount of ordinary income recognized by the optionee, if we comply with
applicable withholding requirements, and if the amount qualifies as an ordinary
and necessary business expense. Although the optionee will not recognize taxable
income for federal income tax purposes upon the exercise of an ISO, the
difference between the exercise price and fair market value of the Common Stock
at the time of exercise gives rise to an adjustment in calculating alternative
minimum taxable income.
We
will
not, nor will the optionee, recognize taxable income or deduction from the
grant
of a NQO at fair market value. At the time of exercise of a NQO, the optionee
will recognize ordinary income in an amount equal to the difference between
the
exercise price and the fair market value of the Common Stock. We will be
entitled to a deduction for tax purposes in an amount equal to the ordinary
income recognized by the optionee, if we comply with applicable tax withholding
requirements.
A
participant will not have taxable income upon grant of Restricted Stock unless
he or she elects to be taxed at that time. Instead, he or she will recognize
ordinary income at the time of vesting equal to the fair market value (on the
vesting date) of the Common Stock received minus any amount paid for the Common
Stock.
Amendment
of Plan.
The
Board of Directors may at any time amend, alter, suspend or discontinue the
Plan. Without the consent of an optionee and/or a participant, no amendment,
alteration, suspension or discontinuance may adversely affect
(a) outstanding Options except to conform the Plan and ISOs granted under
the Plan to the requirements of federal or other tax laws relating to incentive
stock options and/or (b) Restricted Stock grants. No amendment, alteration,
suspension or discontinuance will require stockholder approval unless
(a) stockholder approval is required to preserve incentive stock option
treatment for federal income tax purposes or (b) the Board of Directors
otherwise concludes that stockholder approval is advisable.
Other
Information
The
grant
of Options and Restricted Stock under the Plan is subject to the discretion
of
the Administrator. As of the date of this Proxy Statement, there has been no
determination by the Administrator with respect to future Awards under the
Plan.
The
closing price of a share of our Common Stock as of March 6, 2007 was $3.25
per
share.
New
Plan Benefits
As
of the
date hereof, the benefits or amounts that will be received by or allocated
to
participants under the Plan are not determinable. An estimate of the benefits
or
amounts which would have been received by or allocated to certain participants
at December 31, 2006 if the Plan had been in effect is set forth in the table
below:
|
Name
and Position
|
Average
Per Share
Exercise
Price
|
Number
of Shares
Underlying
Options
(1)
|
|
Jason
Brown - Chief Executive Officer
|
$0.17
|
41,868
|
|
All
Current Executive Officers as a Group
|
$0.17
|
370,183
|
|
All
Current Non-Executive Directors as a Group
|
$0.17
|
223,645
|
|
All
Non-Executive Officer Employees as a Group
|
$0.17
|
177,939
|
| (1) |
Consists
of prior grants of non-plan options at December 31, 2006.
|
Vote
Required
The
affirmative vote of the majority of Common Stock present in person or
represented by Proxy at the meeting and entitled to vote on the subject matter
will be required to approve the Plan.
Recommendation
of the Board of Directors
STOCKHOLDERS
SHOULD NOTE THAT BECAUSE DIRECTORS MAY RECEIVE STOCK OPTIONS AND RESTRICTED
STOCK GRANTS UNDER THE PLAN, OUR CURRENT DIRECTORS HAVE A PERSONAL INTEREST
IN
THE PROPOSAL AND ITS APPROVAL BY STOCKHOLDERS. HOWEVER, THE BOARD OF DIRECTORS
BELIEVE THAT THE APPROVAL OF THE PLAN IS IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS.
RATIFICATION
OF NON-PLAN OPTIONS
We
are
proposing to ratify grants of non-plan options to purchase an aggregate of
1,965,011 shares of Common Stock issued to 19 persons as directors, officers,
employees and/or consultants of the Company for services rendered. Certain
of
the non-plan options were originally exercisable into shares of Organic Common
Stock and were converted, in accordance with the Exchange Ratio, into options
to
purchase shares of our Common Stock upon closing of the Merger. The non-plan
options have been approved by the Board of Directors, subject to ratification
by
stockholders at the Special Meeting.
As
of the
Record Date, we
had
shares
of Common Stock issued and outstanding. If the ratification of grants of
non-plan options is approved, we may issue 1,965,011 additional shares of Common
Stock underlying the non-plan options, which would represent
approximately %
of our
issued and outstanding Common Stock as of the Record Date.
General
Summary of the Non-Plan Options
The
vesting schedules of the non-plan options vary from grant to grant, ranging
from
immediately exercisable to fully exercisable four years from the date of grant.
The exercise price for each non-plan option, except as otherwise set forth
below, is $0.17.
|
Name
|
Number
of Shares of
Common
Stock Underlying
Non-Plan
Options
|
Date
of Grant
|
Expiration
Date
|
|
Roy
Bingham
|
41,868
|
3/1/2006
|
2/29/2016
|
|
Jason
Brown (1)
|
1,288,542
|
(1)
|
(1)
|
|
Deborah
Ciolfi
|
13,956
|
11/17/2006
|
11/16/16
|
|
Barbara
Emmitt
|
41,868
|
7/1/2006
|
6/30/2016
|
|
Fresh
Ideas Group, Inc.
|
16,699
|
11/1/2006
|
10/31/2016
|
|
S.M.
“Hass” Hassan
|
41,868
|
11/28/2006
|
11/27/2016
|
|
Michael
Johnson (2)
|
83,736
|
(2)
|
(2)
|
|
Inge
Juchzter (3)
|
34,890
|
(3)
|
(3)
|
|
Dan
Karzen
|
59,313
|
10/27/2006
|
10/26/2016
|
|
Douglas
Lioon
|
41,868
|
3/1/2006
|
2/29/2016
|
|
Marypat
Maher
|
27,912
|
11/28/2006
|
11/27/2016
|
|
Peter
Meehan
|
41,868
|
3/1/2006
|
2/29/2016
|
|
Tom
Rogers (4)
|
41,868
|
(4)
|
(4)
|
|
Dave
Smith
|
56,173
|
3/1/2006
|
2/29/2016
|
|
Kathleen
Tehada
|
13,956
|
12/11/2006
|
12/10/2016
|
|
Wendy
Tenenberg (5)
|
20,934
|
(5)
|
(5)
|
|
Prem
Thudia (6)
|
20,934
|
(6)
|
(6)
|
|
Randy
Wans
|
13,956
|
3/1/2006
|
2/29/2016
|
|
Jonathan
Wernick
|
62,802
|
1/23/2007
|
1/22/2017
|
| (1) |
Mr.
Brown was granted: (i) options to purchase 41,868 shares of Common
Stock
at $0.17 per share, issued on March 1, 2006 and expiring on February
29,
2016; and (ii) options to purchase 1,246,674 shares of Common Stock
at
$1.38 per share, issued on February 12, 2007 and expiring on February
11,
2016.
|
| (2) |
Mr.
Johnson was granted: (i) options to purchase 41,868 shares of Common
Stock, issued on March 1, 2006 and expiring on February 29, 2016;
and (ii)
options to purchase 41,868 shares of Common Stock, issued on July
1, 2006
and expiring on June 30, 2016.
|
| (3) |
Ms.
Juchzter was granted: (i) options to purchase 13,956 shares of Common
Stock, issued on March 1, 2006 and expiring on February 29, 2016;
and (ii)
options to purchase 20,934 shares of Common Stock, issued on July
1, 2006
and expiring on June 30, 2016.
|
| (4) |
Mr.
Rogers was granted: (i) options to purchase 27,912 shares of Common
Stock,
issued on March 1, 2006 and expiring on February 29, 2016; and (ii)
options to purchase 13,956 shares of Common Stock, issued on July
1, 2006
and expiring on June 30, 2016.
|
| (5) |
Ms.
Tenenberg was granted: (i) options to purchase 13,956 shares of Common
Stock, issued on March 1, 2006 and expiring on February 29, 2016;
and (ii)
options to purchase 6,978 shares of Common Stock, issued on July
1, 2006
and expiring on June 30, 2016.
|
| (6) |
Prem
Thudia was granted: (i) options to purchase 13,956 shares of Common
Stock,
issued on March 1, 2006 and expiring on February 29, 2016; and (ii)
options to purchase 6,978 shares of Common Stock, issued on July
1, 2006
and expiring on June 30, 2016.
|
Federal
Income Tax Consequences of the Stock Option Agreements
No
taxable income will be realized by any of the optionees upon the grants to
them
of the non-plan options. Upon the exercise of a non-plan option, the optionee
will realize ordinary income in the amount of the excess of the fair market
value of the shares of the Common Stock on the date of exercise over the option
price. At that time, the Company will be entitled to a corresponding deduction
in the amount of the ordinary income recognized by the optionee.
Upon subsequent disposition of the shares of Common Stock, the optionee will
realize short-term or long-term capital gain or loss, depending on the period
of
time that the shares of Common Stock are held and the selling price.
The Company will not be entitled to any further deduction at that
time.
Vote
Required
The
affirmative vote of the majority of Common Stock present in person or
represented by Proxy at the meeting and entitled to vote on the subject matter
will be required to ratify the grants of the non-plan options.
Recommendation
of the Board of Directors
STOCKHOLDERS
SHOULD NOTE THAT OUR CURRENT DIRECTORS HAVE A PERSONAL INTEREST IN THE PROPOSAL
AND ITS APPROVAL BY STOCKHOLDERS. HOWEVER, THE BOARD OF DIRECTORS BELIEVE THAT
THE RATIFICATION OF THE NON-PLAN OPTIONS IS IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS.
A
copy of
our Annual Report on Form 10-KSB, as filed with the Securities Exchange
Commission, is available upon written or oral request and without charge to
stockholders by writing to c/o Secretary, SP Holding Corporation, 601 Union
Street, Suite 3700, Seattle, WA 98101, telephone number (206) 838-4670.
We
do not
know of any business to be presented at the Special Meeting other than as set
forth in this Proxy Statement. If any other matter properly comes before the
Special Meeting, the persons named on the accompanying of Proxy will vote the
Proxy according to their best judgment.
It
is
important that your Common Stock be represented at the Special Meeting,
regardless of the number of shares of Common Stock that you hold. You are,
therefore, urged to execute and return the accompanying Proxy in the envelope
that has been enclosed, at your earliest convenience.
The
Board
of Directors of SP Holding Corporation
___________________________________
By:
Jason
Brown
Chairman
Dated:
March ,
2007
2007
EQUITY PARTICIPATION PLAN
OF
ORGANIC TO
GO FOOD CORPORATION
1. PURPOSES
OF THE PLAN
The
purposes of this 2007 Equity Participation Plan (the “Plan”) of Organic
To Go Food Corporation, a Delaware corporation (the “Company”), are
to:
(a) Encourage
selected employees, directors and consultants to improve operations and increase
profits of the Company;
(b) Encourage
selected employees, directors and consultants to accept or continue employment
or association with the Company or its Affiliates (as such term is defined
in
Section 2); and
(c) Increase
the interest of selected employees, directors and consultants in the Company’s
welfare through participation in the growth in value of the Company’s common
stock (the “Common Stock”) through (i) the grant of stock options under
this Plan (“Options”) and/or (ii) the issuance of shares of restricted
Common Stock (“Restricted Stock”) under this Plan.
Options
granted under this Plan may be “incentive stock options” (“ISOs”) intended to
satisfy the requirements of Section 422 of the Internal Revenue Code of
1986, as amended, and the regulations thereunder (the “Code”), or “nonqualified
options” (“NQOs”).
2. ELIGIBLE
PERSONS
Every
person who, at the date of grant of an Option and/or Restricted Stock, is an
employee of the Company or of any Affiliate of the Company is eligible to
receive NQOs, ISOs and/or Restricted Stock under this Plan. Every person who,
at
the date of grant, is a consultant to, or non-employee director of, the Company
or any Affiliate of the Company is eligible to receive NQOs and/or Restricted
Stock under this Plan. The term “Affiliate” as used in this Plan means a parent
or subsidiary corporation as defined in the applicable provisions (currently
Sections 424(e) and (f), respectively) of the Code. The term
“employee” includes an officer or director who is an employee of the Company.
The term “consultant” includes persons employed by, or otherwise affiliated
with, a consultant.
3. STOCK
SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS
Subject
to the provisions of Section 6.1.1 and Section 8.5 of this Plan,
the total number of shares of Common Stock which may be granted as Restricted
Stock and/or issued upon the exercise of Options granted pursuant to this Plan
shall not exceed 3,600,000 shares of Common Stock in the aggregate. The shares
of Common Stock covered by the portion of any Option grant under this Plan
which
expires or remains unexercised shall become available again for grant under
this
Plan. If any shares of Restricted Common Stock expire or are otherwise
terminated, cancelled, surrendered or forfeited, then such shares of Common
Stock shall also be available again for grant under this Plan.
4. ADMINISTRATION
(a) The
Plan
shall be administered by the Board of Directors of the Company (the “Board”) or
by a committee (the “Committee”) to which administration of this Plan, or of
part of this Plan, is delegated by the Board (in either case, the
“Administrator”). The Board shall appoint and remove members of the Committee in
its discretion in accordance with applicable laws. If necessary in order to
comply with Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and Section 162(m) of the Code, the
Committee shall, in
the
Board’s discretion, be comprised solely of “non-employee directors” within the
meaning of said Rule 16b-3 and “outside directors” and “disinterested
persons” within the meaning of Section 162(m) of the Code. The
foregoing notwithstanding, the Administrator may delegate nondiscretionary
administrative duties to such employees of the Company as it deems proper and
the Board, in its absolute discretion, may at any time and from time to time
exercise any and all rights and duties of the Administrator under this
Plan.
(b) Subject
to the other provisions of this Plan, the Administrator shall have the
authority, in its discretion: (i) to grant Options; (ii) to determine
the fair market value of the Common Stock subject to Options; (iii) to
determine the exercise price of Options granted; (iv) to determine the
persons to whom, and the time or times at which, Options and/or Restricted
Stock
shall be granted, and the number of shares subject to each Option and/or the
number of shares of Restricted Stock; (v) to interpret this Plan;
(vi) to prescribe, amend, and rescind rules and regulations relating
to this Plan; (vii) to determine the terms and provisions of each Option
granted (which need not be identical), including but not limited to, the time
or
times at which Options shall be exercisable; (viii) to determine the form
of a grant of Restricted Stock under this Plan (a “Restricted Stock
Grant”); (ix) to determine the terms and provisions of each Restricted
Stock Grant; (x) with the consent of the optionee, to modify or amend any
Option; (xi) with the consent of the participant, to modify or amend any
Restricted Stock Grant; (xii) to defer (with the consent of the optionee) the
exercise date of any Option; (xiii) to authorize any person to execute on behalf
of the Company any instrument evidencing the grant of an Option and/or the
grant
of Restricted Stock; and (xiv) to make all other determinations deemed
necessary or advisable for the administration of this Plan. The Administrator
may delegate nondiscretionary administrative duties to such employees of the
Company as it deems proper.
(c) All
questions of interpretation, implementation, and application of this Plan shall
be determined by the Administrator. Such determinations shall be final and
binding on all persons.
5. GRANTING
OF OPTIONS; OPTION AGREEMENT
(a) No
Options shall be granted under this Plan after 10 years from the date of
adoption of this Plan by the Board.
(b) Each
Option shall be evidenced by a written stock option agreement, in form
satisfactory to the Administrator, executed by the Company and the person to
whom such Option is granted.
(c) The
stock
option agreement shall specify whether each Option it evidences is an
NQO or an ISO.
(d) Subject
to Section 6.3.3 with respect to ISOs, the Administrator may approve the
grant of Options under this Plan to persons who are expected to become employees
of the Company, but are not employees at the date of approval, and the date
of
approval shall be deemed to be the date of grant unless otherwise specified
by
the Administrator.
6. TERMS
AND CONDITIONS OF OPTIONS
Each
Option granted under this Plan shall be subject to the terms and conditions
set
forth in Section 6.1. NQOs shall be also subject to the terms and
conditions set forth in Section 6.2, but not those set forth in
Section 6.3. ISOs shall also be subject to the terms and conditions set
forth in Section 6.3, but not those set forth in
Section 6.2.
6.1. Terms
and Conditions to Which All Options Are Subject. All
Options granted under this Plan shall be subject to the following terms and
conditions:
6.1.1 Changes
in Capital Structure. Subject
to Section 6.1.2, if the stock of the Company is changed by reason of a
stock split, reverse stock split, stock dividend, or recapitalization,
combination or reclassification, appropriate adjustments shall be made by the
Board in (a) the number and class of shares of stock subject to this Plan
and each Option outstanding under this Plan, and (b) the exercise price of
each outstanding Option; provided, however, that the Company shall not be
required to issue fractional shares as a result of any such adjustments. Each
such adjustment shall be subject to approval by the Board in its sole
discretion.
6.1.2 Corporate
Transactions. In
the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each optionee at least 30 days prior to such proposed
action. To the extent not previously exercised, all Options will terminate
immediately prior to the consummation of such proposed action; provided,
however, that the Administrator, in the exercise of its sole discretion, may
permit exercise of any Options prior to their termination, even if such Options
were not otherwise exercisable. In the event of a merger or consolidation of
the
Company with or into another corporation or entity in which the Company does
not
survive, or in the event of a sale of all or substantially all of the assets
of
the Company in which the shareholders of the Company receive securities of
the
acquiring entity or an affiliate thereof, all Options shall be assumed or
equivalent options shall be substituted by the successor corporation (or other
entity) or a parent or subsidiary of such successor corporation (or other
entity); provided, however, that if such successor does not agree to assume
the
Options or to substitute equivalent options therefor, the Administrator, all
Options will terminate immediately prior to such merger or consolidation;
provided, further, the Administrator, in the exercise of its sole discretion,
may permit the exercise of any of the Options prior to consummation of such
event, even if such Options were not otherwise exercisable.
6.1.3 Time
of Option Exercise. Subject
to Section 5 and Section 6.3.4, Options granted under this Plan shall
be exercisable (a) immediately as of the effective date of the stock option
agreement granting the Option, or (b) in accordance with a schedule as may
be set by the Administrator (in any case, the “Vesting Base Date”) and specified
in the written stock option agreement relating to such Option. In any case,
no
Option shall be exercisable until a written stock option agreement in form
satisfactory to the Administrator (but not inconsistent with this Plan) is
executed by the Company and the optionee. Notwithstanding the foregoing, to
the
extent required by applicable laws, rules and regulations, the right to
exercise Options granted pursuant to this Plan shall vest at the rate of at
least 20% per year from the date of grant.
6.1.4 Option
Grant Date. The
date of grant of an Option under this Plan shall be the date as of which the
Administrator approves the grant.
6.1.5 Nontransferability
of Option Rights. Except
with the express written approval of the Administrator, which approval the
Administrator is authorized to give only with respect to NQOs, no Option granted
under this Plan shall be assignable or otherwise transferable by the optionee
except by will or by the laws of descent and distribution. During the life
of
the optionee, an Option shall be exercisable only by the optionee.
6.1.6 Payment. Except
as provided below, payment in full, in cash, shall be made for all stock
purchased at the time written notice of exercise of an Option is given to the
Company, and proceeds of any payment shall constitute general funds of the
Company. The Administrator, in the exercise of its absolute discretion after
considering any tax, accounting and financial consequences, may authorize any
one or more of the following additional methods of payment:
(a) Acceptance
of the optionee’s full recourse promissory note for all or part of the Option
price, payable on such terms and bearing such interest rate as determined by
the
Administrator (but in no event less than the minimum interest rate specified
under the Code at which no additional interest would be imputed), which
promissory note may be either secured or unsecured in such manner as the
Administrator shall approve (including, without limitation, by a security
interest in the shares of the Company);
(b) Subject
to the discretion of the Administrator and the terms of the stock option
agreement granting the Option, delivery by the optionee of shares of Common
Stock already owned by the optionee for all or part of the Option price,
provided the fair market value (determined as set forth in Section 6.1.10)
of such shares of Common Stock is equal on the date of exercise to the Option
price, or such portion thereof as the optionee is authorized to pay by delivery
of such stock; and
(c) Subject
to the discretion of the Administrator, through the surrender of shares of
Common Stock then issuable upon exercise of the Option, provided the fair market
value (determined as set forth in Section 6.1.10) of such shares of Common
Stock is equal on the date of exercise to the Option price, or such portion
thereof as the optionee is authorized to pay by surrender of such
stock.
6.1.7 Termination
of Employment. If
for any reason other than death or permanent and total disability, an optionee
ceases to be employed by the Company or any of its Affiliates (such event being
called a “Termination”), Options held at the date of Termination (to the extent
then exercisable) may be exercised in whole or in part at any time within three
months of the date of such Termination, or such other period of not less than
30
days after the date of such Termination as is specified in the stock option
agreement or by amendment thereof (but in no event after the Expiration Date,
as
such term is defined in Section 6.1.11); provided, however, that if such
exercise of the Option would result in liability for the optionee under
Section 16(b) of the Exchange Act, then such three-month period
automatically shall be extended until the tenth day following the last date
upon
which optionee has any liability under Section 16(b) (but in no event
after the Expiration Date). If an optionee dies or becomes permanently and
totally disabled (within the meaning of Section 22(e)(3) of the Code)
while employed by the Company or an Affiliate or within the period that the
Option remains exercisable after Termination, Options then held (to the extent
then exercisable) may be exercised, in whole or in part, by the optionee, by
the
optionee’s personal representative or by the person to whom the Option is
transferred by devise or the laws of descent and distribution, at any time
within six months after the death or six months after the permanent and total
disability of the optionee or any longer period specified in the stock option
agreement or by amendment thereof (but in no event after the Expiration Date).
For purposes of this Section 6.1.7, “employment” includes service as a
director or as a consultant. For purposes of this Section 6.1.7, an
optionee’s employment shall not be deemed to terminate by reason of sick leave,
military leave or other leave of absence approved by the Administrator, if
the
period of any such leave does not exceed 90 days or, if longer, if the
optionee’s right to reemployment by the Company or any Affiliate is guaranteed
either contractually or by statute.
6.1.8 Withholding
and Employment Taxes. At
the time of exercise of an Option and as a condition thereto, or at such other
time as the amount of such obligations becomes determinable (the “Tax Date”),
the optionee shall remit to the Company in cash all applicable federal and
state
withholding and employment taxes. Such obligation to remit may be satisfied,
if
authorized by the Administrator in its sole discretion, after considering any
tax, accounting and financial consequences, by the optionee’s (i) delivery
of a promissory note in the required amount on such terms as the Administrator
deems appropriate, (ii) tendering to the Company previously owned shares of
Common Stock or other securities of the Company with a fair market value equal
to the required amount, or (iii) agreeing to have shares of Common Stock
(with a fair market value equal to the required amount) which are acquired
upon
exercise of the Option withheld by the Company.
6.1.9 Other
Provisions. Each
Option granted under this Plan may contain such other terms, provisions, and
conditions not inconsistent with this Plan as may be determined by the
Administrator, and each ISO granted under this Plan shall include such
provisions and conditions as are necessary to qualify the Option as an
“incentive stock option” within the meaning of Section 422 of the
Code.
6.1.10 Determination
of Value. For
purposes of this Plan, the fair market value of Common Stock or other securities
of the Company shall be determined as follows:
(a) If
the
stock of the Company is regularly quoted by a recognized securities dealer,
and
selling prices are reported, its fair market value shall be the closing price
of
such stock on the date the value is to be determined, but if selling prices
are
not reported, its fair market value shall be the mean between the high bid
and
low asked prices for such stock on the date the value is to be determined (or
if
there are no quoted prices for the date of grant, then for the last preceding
business day on which there were quoted prices).
(b) In
the
absence of an established market for the stock, the fair market value thereof
shall be determined in good faith by the Administrator, with reference to the
Company’s net worth, prospective earning power, dividend-paying capacity, and
other relevant factors, including the goodwill of the Company, the economic
outlook in the Company’s industry, the Company’s position in the industry, the
Company’s management, and the values of stock of other corporations in the same
or a similar line of business.
6.1.11 Option
Term. Subject
to Section 6.3.4, no Option shall be exercisable more than 10 years after
the date of grant, or such lesser period of time as is set forth in the stock
option agreement (the end of the maximum exercise period stated in the stock
option agreement is referred to in this Plan as the “Expiration
Date”).
6.2. Terms
and Conditions to Which Only NQOs Are Subject. Options granted
under this Plan which are designated as NQOs shall be subject to the following
terms and conditions:
6.2.1 Exercise
Price.
The
exercise price of a NQO shall not be less than 100% of the fair market
value of the stock subject to the Option on the date of grant, as determined
in
accordance with Section 6.1.10 or otherwise determined by the Administrator
in good faith based on actual trading data in accordance with the requirements
of Section 409A of the Code.
6.3. Terms
and Conditions to Which Only ISOs Are Subject. Options
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 Exercise
Price.
(a) Except
as
set forth in Section 6.3.1(b), the exercise price of an ISO shall be
determined in accordance with the applicable provisions of the Code and shall
in
no event be less than the fair market value (as determined in accordance with
Section 6.1.10) of the stock covered by the Option at the time the Option
is granted.
(b) The
exercise price of an ISO granted to any person who owns, directly or by
attribution under the Code, stock representing more than ten percent of the
total combined voting power of all classes of stock of the Company or of any
Affiliate shall in no event be less than 110% of the fair market value
(determined in accordance with Section 6.1.10) of the stock covered by the
Option at the time the Option is granted.
6.3.2 Disqualifying
Dispositions. If
stock acquired by exercise of an ISO granted pursuant to this Plan is disposed
of in a “disqualifying disposition” within the meaning of Section 422 of
the Code (a disposition within two years from the date of grant of the Option
or
within one year after the exercise of the Option), the holder of the stock
immediately before the disposition shall promptly notify the Company in writing
of the date and terms of the disposition and shall provide such other
information regarding the Option as the Company may reasonably
require.
6.3.3 Grant
Date. If
an ISO is granted in anticipation of employment as provided in
Section 5(d), the Option shall be deemed granted, without further approval,
on the date the grantee assumes the employment relationship forming the basis
for such grant, and, in addition, satisfies all requirements of this Plan for
Options granted on that date.
6.3.4 Term. Notwithstanding
Section 6.1.11, no ISO granted to any Ten Percent Shareholder shall be
exercisable more than five years after the date of grant.
7. MANNER
OF EXERCISE
(a) An
optionee wishing to exercise an Option shall give written notice to the Company
at its principal executive office, to the attention of the officer of the
Company designated by the Administrator, accompanied by payment of the exercise
price and withholding taxes as provided in Sections 6.1.6 and 6.1.8. The
date the Company receives written notice of an exercise hereunder accompanied
by
payment of the exercise price will be considered as the date such Option was
exercised.
(b) Promptly
after receipt of written notice of exercise of an Option and the payments called
for by Section 7(a), the Company shall, without stock issue or transfer
taxes to the optionee or other person entitled to exercise the Option, deliver
to the optionee or such other person a certificate or certificates for the
requisite number of shares of stock. An optionee or permitted transferee of
the
Option shall not have any privileges as a shareholder with respect to any shares
of stock covered by the Option until the date of issuance (as evidenced by
the
appropriate entry on the books of the Company or a duly authorized transfer
agent) of such shares.
8. RESTRICTED
STOCK
8.1. Terms
of Grant. The
Administrator may grant Restricted Stock Grants to such employees, consultants
and directors, in such amounts and subject to such terms and conditions as
the
Administrator may determine in its sole discretion, including such restrictions
on transferability and other restrictions as the Administrator may impose,
which
restrictions may lapse separately or in combination at such times, under such
circumstances, in such installments, or otherwise, as the Administrator shall
determine. No Restricted Stock Grants shall be granted under this Plan after
10
years from the date of adoption of this Plan by the Board.
8.2. Purchase
Price. The
Administrator shall, in its sole discretion, determine the purchase price,
if
any, and form of payment for Restricted Stock.
8.3. Restricted
Stock Grant Agreement. Restricted
Stock shall be granted pursuant to a written agreement, in form satisfactory
to
the Administrator, which shall set forth the terms of the Restricted Stock
Grant. Restricted Stock granted under a restricted stock grant agreement shall
be evidenced by certificates registered in the name of the participant, which
certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock. The Company
may retain physical possession of any such certificates, and the Company may
require a participant awarded Restricted Stock to deliver a stock power to
the
Company, endorsed in blank, relating to the Restricted Stock for so long as
the
Restricted Stock is subject to a risk of forfeiture.
8.4. Rights
as Shareholder. Unless
otherwise determined by the Administrator at the time of a grant, the holder
of
Restricted Stock shall have the right to vote the Restricted Stock and to
receive dividends thereon, unless and until such shares are
forfeited.
8.5. Adjustments.
8.5.1 Changes
in Capital Structure. If
the stock of the Company is changed by reason of a stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification,
appropriate adjustments shall be made by the Board in the number and class
of
shares of stock subject to this Plan and each Restricted Stock Grant outstanding
under this Plan; provided, however, that the Company shall not be required
to
issue fractional shares as a result of any such adjustment. Each such adjustment
shall be subject to approval by the Board in its sole discretion.
8.5.2 Corporate
Transactions. In
the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each participant at least 30 days prior to such
proposed action. The unvested Restricted Stock Grants will be cancelled
immediately prior to the consummation of such proposed action; provided,
however, that the Administrator, in the exercise of its sole discretion, may
permit the full vesting of any Restricted Stock Grant prior to its cancellation,
even if such Restricted Stock Grant were not otherwise vested. In the event
of a
merger or consolidation of the Company with or into another corporation or
entity in which the Company does not survive, or in the event of a sale of
all
or substantially all of the assets of the Company in which the shareholders
of
the Company receive securities of the acquiring entity or an affiliate thereof,
all Restricted Stock Grants shall be assumed or equivalent awards shall be
substituted by the successor corporation (or other entity) or a parent or
subsidiary of such successor corporation (or other entity); provided, however,
that if such successor does not agree to assume the Restricted Stock Grants
or
to substitute equivalent awards therefor, the Administrator, in the exercise
of
its sole discretion, either may cancel or may permit the full vesting of any
of
the Restricted Stock Grants prior to consummation of such event, even if such
Restricted Stock Grants were not otherwise vested.
9. EMPLOYMENT
OR CONSULTING RELATIONSHIP
Nothing
in this Plan, nor any Restricted Stock Grant, nor or any Option grant, shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate any participant’s or optionee’s employment
or
consulting at any time, nor confer upon any participant or optionee any right
to
continue in the employ of, or consult with, the Company or any of its
Affiliates.
10. CONDITIONS
UPON ISSUANCE OF SHARES
Neither
shares of Restricted Stock nor shares of Common Stock underlying Options shall
be issued to the participant or the optionee unless the issuance and delivery
of
such shares of Restricted Stock, the exercise of such Option and the issuance
and delivery of such shares of Common Stock underlying such Option shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended (the “Securities Act”).
11. NONEXCLUSIVITY
OF THE PLAN
The
adoption of this Plan shall not be construed as creating any limitations on
the
power of the Company to adopt such other incentive or equity participation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options or the issuance of shares of Common Stock other than
under this Plan.
12. AMENDMENTS
TO PLAN
The
Board
may at any time amend, alter, suspend or discontinue this Plan. Without the
consent of an optionee and/or a participant, no amendment, alteration,
suspension or discontinuance may adversely affect (a) outstanding Options
except to conform this Plan and ISOs granted under this Plan to the requirements
of federal or other tax laws relating to incentive stock options and/or
(b) Restricted Stock Grants. No amendment, alteration, suspension or
discontinuance shall require shareholder approval unless (a) shareholder
approval is required to preserve incentive stock option treatment for federal
income tax purposes or (b) the Board otherwise concludes that shareholder
approval is advisable.
13. EFFECTIVE
DATE OF PLAN; TERMINATION
This
Plan
shall become effective upon adoption by the Board provided, however, that no
Option shall be exercisable unless and until written consent of a majority
of
the shareholders of the Company, or approval of shareholders of the Company
voting at a validly called shareholders’ meeting, is obtained within twelve
months after adoption by the Board. If such shareholder approval is not obtained
within such time, Options granted hereunder shall terminate and be of no force
and effect, and any Restricted Stock Grants or exercises that have already
occurred shall be rescinded, from and after expiration of such twelve-month
period. Options may be granted and exercised under this Plan only after there
has been compliance with all applicable federal and state securities laws.
This
Plan (but not the Options and/or the Restricted Stock Grants previously granted
under this Plan) shall terminate within ten years from the date of its adoption
by the Board.
14. DELIVERY
OF FINANCIAL STATEMENTS
To
the
extent required by applicable laws, rules and regulations, the Company
shall deliver to each optionee financial statements of the Company at least
annually while such optionee holds an outstanding Option.
SP
HOLDING CORPORATION
601
Union Street, Suite 3700, Seattle, WA 98101
This
Proxy is Solicited on Behalf of the Board of Directors
The
undersigned revokes all previous proxies, acknowledges receipt of the Notice
of
the Special Meeting of Stockholders and the Proxy Statement and appoints Jason
Brown with full power of substitution, the Proxy of the undersigned, to vote
all
shares of SP Holding Corporation (the “Company”) held of record by the
undersigned as of the close of business on March ,
2007,
either on his or her own behalf or on behalf of any entity or entities, at
the
Special Meeting of Stockholders of the Company, and at any adjournment or
postponement thereof, with the same force and effect as the undersigned might
or
could do if personally present thereat. The Special Meeting will be held at
10100 Santa Monica Boulevard, 22nd
Floor,
Los Angeles, CA 90067, on April ,
2007,
at 9:00 a.m. Local Time. The shares represented by this Proxy shall be voted
in
the manner set forth below.
|
1.
|
To
amend the Company’s Amended and Restated Certificate of Incorporation to
change the name of the Company from “SP Holding Corporation” to “Organic
To Go Food Corporation.”
|
¨
FOR ¨
AGAINST ¨
ABSTAIN
|
2.
|
To
approve the 2007 Equity Participation Plan of Organic To Go Food
Corporation.
|
¨
FOR ¨
AGAINST ¨
ABSTAIN
|
3.
|
To
ratify previous grants of non-plan options to purchase an aggregate
of
1,965,011 shares of the Company’s common stock.
|
¨
FOR ¨
AGAINST ¨
ABSTAIN
|
4.
|
To
transact such other business as may properly come before the meeting
or
any adjournment or postponement
thereof.
|
(PLEASE
DATE AND SIGN ON REVERSE SIDE)
THE
UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING AND PROXY
STATEMENT FOR THE APRIL ,
2007
SPECIAL MEETING.
PLEASE
SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
MARK
HERE
FOR ADDRESS CHANGE AND INDICATE NEW ADDRESS IN SPACE PROVIDED.
¨ NEW
ADDRESS:
NOTE:
Please sign exactly as name(s) appear(s). When signing as executor,
administrator, attorney, trustee or guardian, please give your full title as
such. If a corporation, please sign in full corporation name by president or
other authorized officer. If a partnership, please sign in partnership name
by
authorized person. If a joint tenancy, please have both tenants sign.
Signature:
________________________________ Dated:
Signature:
________________________________ Dated: