EXECUTION COPY

Exhibit 10.27

RESIGNATION, WAIVER, SETTLEMENT AGREEMENT AND GENERAL RELEASE

This Resignation, Waiver, Settlement Agreement and General Release (this
“Settlement Agreement”) is made by and between Perry D. Odak (“Executive”), on
the one hand, and Wild Oats Markets, Inc., a Delaware corporation (“Wild Oats”
or the “Company”), on the other hand, as of October 23, 2006 (the “Effective
Date”).

RECITALS

A.  
Executive is party to an Employment Agreement with the Company dated March 6,
2001, as amended by the amendments referenced in the Sixth Amendment dated as of
August 14, 2006 (as so amended, the “Employment Agreement”). Capitalized terms
used herein without definition but defined in the Employment Agreement have the
meanings given to such terms in the Employment Agreement.

B.  
The parties desire to, among other things, (i) provide for the resignation by
Executive of his employment and other positions with Wild Oats and each of its
direct and indirect subsidiaries (each, a “Group Company” and, collectively, the
“Group Companies”), (ii) settle and resolve all existing and potential disputes
between Executive, on the one hand, and the Group Companies, on the other hand,
and (iii) provide for certain other arrangements, in each case subject to the
terms and conditions herein.

NOW, THEREFORE, in consideration of the recitals above, the covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending legally to
be bound, covenant and agree as follows:

1.  
Resignation. Executive hereby resigns, effective as of the Effective Date, from
his position as Chief Executive Officer, President, and a member of the Board of
Directors of Wild Oats, and in each other capacity that Executive serves with
Wild Oats or any of the other Group Companies. Concurrently with the execution
and delivery of this Settlement Agreement, Executive shall deliver to Wild Oats
a signed letter in the form of Exhibit A hereto reflecting the foregoing
resignation.

2.  
Payments and Benefits.

  (a)  
Provided this Settlement Agreement has not been revoked in accordance with its
terms, Wild Oats shall pay to Executive $1,943,346 (the “Payment Amount”), in
full settlement of any and all amounts claimed by Executive from Wild Oats or
any of the other Group Companies under the Employment Agreement or otherwise,
except for any other amounts payable as provided elsewhere herein. The Payment
Amount is being made, among other things, in recognition of the increased
profitability of Wild Oats and in light of the Company’s obligations under the
Employment Agreement. The Payment Amount shall be subject to legally required
withholdings and deductions and shall be paid as provided in Section 2(i)
hereof. Wild Oats and Executive agree and acknowledge that, as of the Effective
Date, Executive has no accrued and unpaid vacation.

 

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  (b)  
In addition to the Payment Amount, Wild Oats shall pay to Executive the Base
Amount (as defined in the Employment Agreement) at the rate in effect on the
Effective Date, for a period of thirty-six months commencing on the Effective
Date, with payments at the Company’s regular bi-weekly payroll intervals, as
provided in Section 5(d) of the Employment Agreement. Wild Oats acknowledges
that Executive shall have no obligation to seek other employment in mitigation
of the Base Amounts payable to the Executive pursuant to this provision of the
Settlement Agreement, nor will there be any offset against these payments of any
future earnings by the Executive. In the event of the death of the Executive,
payments shall be made to his Estate.

  (c)  
From the Effective Date through the third anniversary hereof, Wild Oats shall
continue to contribute to the cost of Executive’s participation (including his
immediate family) in the Company’s medical, dental and vision benefit plans and
group life insurance plan or to provide reimbursement to Executive, as provided
in and subject to the conditions set forth in the last two sentences of
Section 5(d) of the Employment Agreement. During such period, Wild Oats shall
continue to provide Executive with the benefit of the Company’s discount card
plan. Executive acknowledges and agrees that such arrangements shall be in full
satisfaction of the Company’s obligations under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”). Rosalie Vitrano, Executive’s
spouse, will retain any rights that she has under COBRA in respect of
Executive’s resignation, without duplication of the provisions of the first
sentence of this subsection.

  (d)  
The benefits in Sections 2(b) and (c) hereof shall remain subject to the
provisions of Section 6(b) and Section 9(d) of the Employment Agreement.

  (e)  
All options to purchase Wild Oats common stock held by Executive that are vested
on the Effective Date will remain exercisable for thirty (30) days after the
Effective Date and shall terminate thereafter. The Company has accelerated the
vesting of the grant of 4,167 restricted stock units which were otherwise
scheduled to vest on or about February 8, 2007, subject to the expiry of the
revocation period set forth in Section 7(c)(iv) hereof. All unvested options to
purchase Wild Oats common stock and unvested restricted stock units or unvested
restricted shares are cancelled and terminated.

  (f)  
During the ninety (90) day period following the Effective Date, the Company
shall furnish secretarial services to Executive at the Company’s expense.

  (g)  
The Company shall continue to pay, or reimburse Executive for, the monthly lease
payments on his current Company leased car for the unexpired balance of the term
of the lease as well as for the cost of insurance and maintenance during such
time. Executive shall have the right, as between the Company and Executive, to
exercise the purchase option under such lease.

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  (h)  
Nothing in this Settlement Agreement shall constitute a waiver of any benefits
which are already vested under any Company 401(k) or employee welfare plan.

  (i)  
The Payment Amount shall be payable as follows (in each case without interest):
$250,000 shall be paid to the Executive by the Company by not later than 48
hours of the Effective Date, $200,000 shall be paid by the Company to the
Executive on December 10, 2006, and the balance of the Payment Amount shall be
paid by the Company to the Executive on January 2, 2007, in each case subject to
the right of the Company to defer payment until Executive’s revocation rights
referenced in Section 7(c)(iv) have expired.

3.  
Covenants.

  (a)  
Cooperation with respect to Claims. Executive will cooperate with the Group
Companies in any current or future litigation, arbitration or processing of any
claims involving any Group Company as reasonably requested by Wild Oats and
where Executive’s interests are not adverse to those of such Group Company. Any
such cooperation will be at no cost to any Group Company other than
reimbursement of reasonable out-of-pocket costs of Executive submitted as per
the Company’s expense reimbursement policy or otherwise approved in writing by
Wild Oats.

  (b)  
Transition Assistance; Cooperation. During the period of 90 working days
following the Effective Date, Executive agrees to provide reasonable assistance
to transition his Company responsibilities. At the request of the Company,
Executive agrees to make himself reasonably available to provide such services
by telephone or during pre-arranged meetings, for up to five (5) hours per week,
in each case at mutually acceptable times and locations. Any such work will be
at no cost to any Group Company other than reimbursement of reasonable
out-of-pocket costs of Executive submitted as per the Company’s expense
reimbursement policy or otherwise approved in writing by Wild Oats.

  (c)  
SEC Filing. Upon execution of this Agreement, Executive provides the
representations and warranties set forth in Schedule 1. Executive also agrees
promptly (but in no event more than 3 business days) after delivery to Executive
of the Company’s draft Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2006 (the “Q3 10-Q”), to provide good faith comments, if
any, to the Q3 10-Q (including such comments, the “Modified Q3 10-Q”), and
(i) to provide certifications to the Company with respect to the Modified Q3
10-Q substantially in the forms that would be required of the Company’s
certifying officers pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act
of 2002, and (ii) to provide customary representations to the Company (and, if
requested by the Company, to Ernst & Young LLP) with respect to the SAS 71
review of the Company’s consolidated financial statements contained in the
Modified Q3 10-Q as of and for the period ended September 30, 2006 and the
related attestation regarding control over financial reporting.

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  (d)  
Termination of Employment Agreement. The parties agree that, as of the Effective
Date, the Employment Agreement, and the employment Term contemplated thereby, is
terminated, except that Section 6(b) and Sections 7 through 16 of the Employment
Agreement (including but not limited to Section 13 thereof entitled “No Duty to
Mitigate,” and Section 12 relating to “Indemnification”) shall survive in
accordance with their respective terms and are incorporated by reference herein
as if set forth herein. Executive acknowledges and agrees that he is entitled to
no further payments, rights, wages, bonuses, or other compensation or benefits
pursuant to the Employment Agreement, or any other agreements with the Company
or any Group Company, except as set forth herein. Regardless of anything else
contained herein, from and after the Effective Date, Executive will have no
authority to act for or bind any Group Company and will not hold himself out as
having any such authority or as being an employee, officer, director or agent of
any Group Company.

  (e)  
Indemnity. Executive agrees to indemnify and hold harmless the Company Releasees
(as defined below) from all material Losses (as defined below) resulting from
any material breach of any representation, warranty or covenant of Executive
contained herein. Wild Oats agrees to indemnify and hold harmless Executive from
all material Executive Losses (as defined below) resulting from any material
breach of any representation, warranty or covenant of Wild Oats contained
herein.

4.  
Restrictive Covenants.

  (a)  
Executive acknowledges and agrees that, in the performance of the services on
behalf of the Group Companies, Executive had access to, received and was
entrusted with Confidential Information (as defined below). From and after the
Effective Date, Executive will not, except as required by applicable law,
disclose to others or use, whether directly or indirectly, any Confidential
Information regarding any Group Company without the prior written consent of
Wild Oats. “Confidential Information” will mean information about the Group
Companies, and their respective suppliers, employees, business partners, clients
and customers that is not available to the general public or generally known in
the industry and that was learned by Executive through his relationship with any
Group Company. Executive acknowledges that such Confidential Information is
specialized, unique in nature and of great value to the Group Companies, and
that such information gives the Group Companies a competitive advantage.

  (b)  
Executive recognizes that Executive possesses extensive Confidential Information
of the Group Companies. Executive recognizes that such Confidential Information
is not generally known, is of substantial value to Group Companies in developing
its business, and was acquired by Executive because of Executive’s employment
with the Company. Executive also acknowledges that if Executive violated this
Section 4, Executive would be unable, despite Executive’s best efforts and
intentions, to avoid using, disclosing, or compromising in some material way
such confidential information and that such violation would result in

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an inevitable disclosure of the Confidential Information in a manner that would
be materially injurious to the Company. Therefore, Executive agrees that the
limitations set forth in this Section 4 are reasonably necessary to protect such
confidential information from such disclosure.

  (c)  
Executive, on the one hand, and Wild Oats, on the other hand, agrees that such
party will not, directly or indirectly, disparage or talk negatively about the
other party or any of its affiliates (including, in the case of Wild Oats, any
Company Releasee) to any person or entity (including without limitation to any
former, existing, or prospective clients or employees or any person or entity
with whom any such other party does business) and will not, directly or
indirectly, make or ratify any public statement, oral or written, that
disparages or talks negatively about any such other party or any of its
affiliates (including, in the case of Wild Oats, each Company Releasee).
Notwithstanding the foregoing, nothing in this Section shall prevent any person
or entity from (i) responding publicly to any incorrect, disparaging or
derogatory public statement to the extent reasonably necessary to correct or
refute such public statement or (ii) making any truthful statement to the extent
(x) necessary with respect to any litigation, arbitration or mediation involving
this Settlement Agreement, including, but not limited to, the enforcement of
this Settlement Agreement or (y) required by law or by any court, arbitrator,
mediator or administrative or legislative body (including any committee thereof)
with actual or apparent jurisdiction to order such person to disclose or make
accessible such information.

  (d)  
The parties agree and acknowledge that each of the covenants set forth in this
Section 4 are separate, distinct, and independent of each other. Furthermore, if
it is finally determined that any covenant in this Section 4 is unenforceable or
invalid in any respect under applicable law, it is the express intention of all
of the parties that such covenant should be modified or amended to render it
enforceable to the maximum extent permitted by applicable law.

5.  
Representations and Warranties of the Executive. Executive represents and
warrants that:

  (a)  
Authority. (i) He has the capacity, power, and legal right to execute and
deliver this Settlement Agreement and to consummate the transactions
contemplated hereby, (ii) he has duly executed and delivered this Settlement
Agreement, (iii) this Settlement Agreement is valid, binding on and enforceable
against him, (iv) no approval or consent of any third party, including without
limitation any spouse or former spouse or any children or trust therefor, is
necessary for the execution, delivery, or performance by him of this Settlement
Agreement, and (v) the execution, delivery and performance by Executive of this
Settlement Agreement does not and will not conflict with or constitute a breach
under any law, order, contract or other arrangement to which Executive is
subject or bound.

  (b)  
Compensation. He was paid all payments, rights, wages, bonuses, and other
compensation and benefits to which he was entitled through the Effective Date

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except for amounts to be included in the initial regular bi-weekly payroll
payment to be paid under Section 2(b) hereof.

  (c)  
Return of Documents and Property. On the Effective Date, Executive shall return
to the Company any and all property of a Group Company not previously delivered
to the Company and that is in his possession or under his control. Regardless of
the foregoing, Executive has returned any and all Confidential Information (as
defined below) of a Group Company not previously delivered to the Company and
that is in his possession or under his control and is in physical, electronic of
other form (including any such information on his laptop computer, and Executive
and has retained no copies thereof in any form.

  (d)  
Tax and Legal Matters. He (i) is a U.S. resident for tax purposes, (ii) has
reviewed with his own legal and tax advisors the consequences of this Settlement
Agreement and whether the consideration payable hereunder is subject to any
taxation, and (iii) has relied solely on such advisors and not on any
statements, advice or representations of any Company Releasee (as defined below)
as to the necessity for withholding or the taxability of such payments, whether
pursuant to foreign, federal, provincial, state or local income tax statutes or
otherwise. Executive agrees that he shall be exclusively responsible and liable
for the payment of all foreign, federal, provincial, state and local taxes in
connection with the consideration paid to him under this Settlement Agreement,
and Executive represents and warrants that he shall make payments of such taxes
at the appropriate time and in the amount required of each of them, if any.

  (e)  
Payment Amount. The Payment Amount was determined through arm’s-length
negotiations between the parties and does not represent the result of any
specific calculation or formula.

  (f)  
Ownership of Claims; No Claims Filed. (i) The Releasing Parties (as defined
below) are the sole and lawful owners of all right, title and interest in and to
every claim being released by each and any of them hereunder and every other
matter which they purport to release hereby (collectively, the “Released
Claims”), (ii) Executive has the sole and exclusive right and authority to
execute and deliver this Settlement Agreement, to release the Released Claims on
behalf of Executive and the Releasing Parties, and to receive one hundred
percent (100%) of the sums payable hereunder free and clear of any interest or
claims of any third party, as to which Executive shall indemnify the Company
against any claims by any third party related hereto and any expenses incurred
by the Company in connection therewith, (iii) the Releasing Parties have not
heretofore assigned or transferred, or purported or attempted to assign or
transfer, and will not hereafter assign or transfer, to any person or entity any
Released Claim or other matter herein released, and (iv) no Releasing Party has
filed any complaints, charges, lawsuits, or other legal actions with any court
or government agency relating to any Released Claim or other matter herein
released.

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6.  
Representations and Warranties of Wild Oats and the Company. Wild Oats
represents that (i) this Settlement Agreement has been duly approved by all
requisite corporate action required by Wild Oats and it has the authority,
power, and legal right to execute and deliver this Settlement Agreement and to
consummate the transactions contemplated hereby, (ii) it has duly executed and
delivered this Settlement Agreement, (iii) this Settlement Agreement is valid,
binding on and enforceable against it, (iv) no approval of any third party is
necessary for the execution, delivery, or performance by it of this Settlement
Agreement, and (v) the execution, delivery and performance by Wild Oats of this
Settlement Agreement does not and will not conflict with or constitute a breach
under any law, order, contract or other arrangement to which either is subject
or bound

7.  
Waivers and Releases.

  (a)  
(i) Executive Release. Executive, on behalf of himself, and each of his
respective controlled affiliates, heirs, executors, administrators,
conservators, and successors and assigns (the “Releasing Parties”), fully and
forever RELEASES, DISCHARGES and COVENANTS NOT TO SUE Wild Oats and each other
Group Company and each of their respective predecessors, parents, direct and
indirect subsidiaries, and affiliates, and each of their respective officers,
employees, directors, stockholders, managers, members, agents, attorneys,
insurers, accountants, heirs, executors, administrators, conservators, and
successors and assigns (collectively, the “Company Releasees”) from any and all
claims, demands, liens, actions, suits, causes of action, obligations,
controversies, debts, costs, attorneys’ fees, expenses, damages, judgments,
orders, and liabilities of whatever kind or nature at law, in equity, or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden, that have existed or may have existed, or that do
exist or that hereafter can, will or may exist, based on any facts, events, or
omissions occurring from the beginning of time to the date of this Settlement
Agreement (each, a “Loss”) relating to or arising out of any Group Company, the
operation, management and/or ownership of any Group Company, the rendering of
services by Executive as director, employee, officer or otherwise to any Group
Company and the complete termination thereof, and all matters reasonably related
to or arising from the foregoing, including but limited to any claims arising
under any foreign, federal, provincial, state or local statute, including,
without limitation, the Americans with Disabilities Act, the Age Discrimination
in Employment Act, the Older Workers’ Benefit Protection Act, the Rehabilitation
Act of 1973 (including Section 504 thereof), the Family Medical Leave Act, Title
VII of the 1964 Civil Rights Act, the Civil Rights Act of 1866 (42 U.S.C. §
1981), the Civil Rights Act of 1991, the Equal Pay Act, the Fair Labor Standards
Act, the National Labor Relations Act, the Worker Adjustment and Retraining
Notification Act, the New York State Human Rights Law, the New York City Human
Rights Law, and the Employee Retirement Income Security Act of 1974, all as
amended, except in any case for Executive’s rights under this Agreement. This
release also specifically includes, but is not limited to, any rights that
Executive may have arising under applicable laws prohibiting discrimination
and/or harassment on the basis of race, color, age,

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religion, sexual orientation, creed, sex, national origin, ancestry, alienage,
citizenship, nationality, mental or physical disability, marital status,
harassment or any other basis prohibited by law as well as under applicable
securities laws.

  (b)  
(ii) Company Release. The Company, on behalf of itself and each of its
affiliates, and each of their respective officers, employees, managers, members,
agents, attorneys, insurers, accountants, heirs, executors, administrators,
conservators, and successors and assigns (the “Company Releasing Parties”),
fully and forever RELEASES, DISCHARGES and COVENANTS NOT TO SUE Executive from
any and all claims, demands, liens, actions, suits, causes of action,
obligations, controversies, debts, costs, attorneys’ fees, expenses, damages,
judgments, orders, and liabilities of whatever kind or nature at law, in equity,
or otherwise, whether now known or unknown, suspected or unsuspected, and
whether or not concealed or hidden, that have existed or may have existed, or
that do exist or that hereafter can, will or may exist, based on any facts,
events, or omissions occurring from the beginning of time to the date of this
Settlement Agreement (each, an “Executive Loss”) relating to or arising out of
any Group Company, the operation or management of any Group Company, the
rendering of services by Executive as director, employee, officer or otherwise
to any Group Company and the termination thereof, and all matters reasonably
related to or arising from the foregoing, except in any case for (i) the Company
Releasing Parties’ rights under this Agreement, (ii) any right or claim that
Wild Oats may have in connection with any assertion by Executive of any right to
or claim for indemnity, and (iii) any claim based upon fraudulent or illegal
activity discovered subsequent to the date hereof, or arising from any claim,
investigation or proceeding by any regulatory or other governmental agency or
entity.

  (c)  
Unknown Claims. Except for those obligations arising out of this Agreement and
as otherwise provided in Section 7(a) above, the releases contained in
Section 7(a) are intended to be effective as a general release of and bar to any
and all claims. Executive and the Company each acknowledges that a Releasing
Party or Company Releasing Party, as the case may be, later may discover claims
or facts in addition to or different from those which Executive or Company now
knows or believes to exist with respect to the subject matter of this Agreement
and which, if known or suspected at the time of executing this Agreement, may
have materially affected its terms and/or Executive’s or Company’s decision to
execute this Agreement. Executive and Company acknowledges and agrees that by
reason of this Agreement, and the release contained in Section 7(a), Executive,
Company and their respective Releasing Parties are assuming any risk of such
unknown facts and such unknown and unsuspected claims and that this Agreement is
intended to be effective as a bar to all such claims.

  (d)  
ADEA. Executive acknowledges and agrees that, among the matters Executive is
waiving and releasing hereunder, are any and all rights or claims that Executive
may have arising under the Age Discrimination in Employment Act of 1967, as
amended (the “ADEA”), which have arisen on or before the date of execution of
this Settlement Agreement. Because the ADEA contains special provisions

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affecting the release of ADEA claims, Executive also expressly acknowledges and
agrees that:

  (i)  
In return for this Settlement Agreement, Executive will receive consideration
beyond that which Executive was already entitled to receive before entering into
this Settlement Agreement.

  (ii)  
Executive was orally advised by the Company and is hereby advised in writing to
consult with an attorney before signing this Settlement Agreement.

  (iii)  
Executive was given a copy of this Settlement Agreement on October 20, 2006 and
informed that Executive had 21 days within which to consider this Settlement
Agreement although Executive may sign it sooner if Executive so determines.

  (iv)  
Executive was informed that he has seven days following the date of execution of
this Settlement Agreement in which to revoke in writing the release of rights or
claims that Executive may have arising under the ADEA.

  (v)  
Executive has voluntarily chosen to enter into this Settlement Agreement and has
not been forced or pressured in any way to sign it.

8.  
Confidentiality of Agreement; Filings.

  (a)  
Each party, for itself and its representatives, agrees that, except as may be
required by law, such party shall keep confidential all communications related
to the negotiation of this Settlement Agreement and shall not, except as may be
required by law, directly or indirectly, whether orally, in writing, disclose
any of the foregoing to any third party, or in any way respond to, participate
in, or contribute to, whether orally, in writing, by signal, gesture, or any
other means, any inquiry, discussion, notice, or publicity concerning any aspect
of any of the foregoing. The only exceptions to the obligations imposed by this
Section 8 are that a party may disclose any of the foregoing: (a) to such
party’s agents, employees, attorneys, potential financing sources, accountants
and tax advisers who agree to keep the foregoing confidential; (b) as necessary
to enforce this Settlement Agreement, (c) as necessary to comply with applicable
laws, including but not limited to any disclosures required to be made under
applicable rules and regulations under securities laws, and (d) if called as a
witness or as may be required by process of law or by court order.

  (b)  
Executive shall have the right to review to the full extent practical and
suggest edits to the Company’s press release and Form 8-K filing relating to
this Settlement Agreement. Such press release and Form 8-K shall state that
Executive has resigned because the Company and he were unable to reach agreement
on the terms of a new or modified employment agreement.

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9.  
Governing Law. The rights and obligations of the parties hereunder shall be
construed and enforced in accordance with, and shall be governed by, the laws of
the State of Delaware, without regard to principles of conflict of laws.

10.  
Arbitration.

  (a)  
Arbitration. Any controversy, claim or dispute between Executive, on the one
hand, and the Group Companies and their respective officers, directors,
employees and/or agents, on the other hand, in any way arising out of, relating
in any way to, or connected with this Settlement Agreement, its enforcement or
interpretation, or because of an alleged breach, default or misrepresentation in
connection with any of its provisions, or any controversy or claim arising out
of, related to, or connected with any Released Claim and every other matter
which such party purports to release hereby, will be submitted to final and
binding arbitration in Denver, Colorado, in accordance with the then existing
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association. In the event of arbitration each party will initially
pay the fees of their respective attorneys, the expenses of their witnesses and
any other expenses connected with presenting their claim. Other costs of the
arbitration, including the fees of the arbitrator, administrative fees of the
American Arbitration Association, and any costs relating to arbitration
facilities (“Arbitration Costs”), shall be borne by Wild Oats (any party
ordering the preparation of a transcript of proceedings shall bear transcription
costs, or this cost will be shared equally if both parties order a transcript).
The arbitrator has the power to award to the substantially prevailing party the
reimbursement of such party’s reasonable attorneys’ fees and costs (including,
but not limited to, expert fees and Arbitration Costs) in connection with such
arbitration. Any dispute as to the reasonableness of any fee or cost will be
resolved by the arbitrator. Except as may be necessary to enter judgment upon
the award or to the extent required by applicable law, all claims, defenses and
proceedings (including, but not limited to, the existence of a controversy and
the fact that there is an arbitration proceeding) will be treated in a
confidential manner by the arbitrator and all those involved in the proceeding.
Any controversy relating to the arbitration presented to a court will be filed
under seal to the extent permitted by law. An arbitration award rendered
pursuant to this Section 10 will be final and binding on the parties and may be
submitted to a court of competent jurisdiction for entry of a judgment thereon.

  (b)  
Temporary or Injunctive Relief: Notwithstanding the parties’ agreement to submit
all disputes to final and binding arbitration, the parties shall have the right
to seek and obtain temporary or preliminary injunctive relief in any court of
competent jurisdiction. Such courts shall have authority to, among other things,
grant temporary or provisional injunctive relief (with such relief effective
until the arbitrator has rendered a final award) in order to protect any party’s
rights under this Settlement Agreement or its intellectual property rights.

  (c)  
Waiver of Jury Trial. EACH OF THE PARTIES ACKNOWLEDGES AND AGREES THAT BY
ENTERING THIS SETTLEMENT AGREEMENT, SUCH

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PARTY IS WAIVING THE RIGHT TO PURSUE ANY SUCH CLAIMS IN STATE OR FEDERAL COURT
BEFORE A JUDGE OR JURY.

11.  
Integrated Agreement. This Settlement Agreement is an integrated document and
constitutes and contains the entire agreement and understanding with respect to
the subject matter addressed, and supersedes and replaces all prior negotiations
and all agreements proposed or otherwise, whether written or oral, including the
Employment Agreement (except to the extent it is incorporated herein by
reference, or otherwise continues in force and effect pursuant to the terms of
this Settlement Agreement), the Rights Agreement and the Subscription Agreement,
concerning the subject matter hereof.

12.  
Severability. If any provision of this Settlement Agreement or the application
thereof is held invalid, such invalidation shall not affect other provisions or
applications of this Settlement Agreement which can be given effect without the
invalid provisions or application and to this end the provisions of this
Settlement Agreement are declared to be severable.

13.  
Drafting. Each party has cooperated in the drafting and preparation of this
Settlement Agreement. Hence, in any construction or interpretation of this
Settlement Agreement, the same shall not be construed against any party on the
basis that the party was the drafter.

14.  
Counterparts. This Settlement Agreement may be executed in counterparts, and
each counterpart, when executed, shall have the efficacy of a signed original.
Photographic and facsimile copies of such signed counterparts may be used in
lieu of the originals for any purpose.

15.  
Modification. This Settlement Agreement cannot be modified except in a written
document signed by all of the parties to this Settlement Agreement.

16.  
Voluntary and Knowing Agreement. By their authorized signatures below, the
parties certify that they have carefully read and fully considered the terms of
this Settlement Agreement, that they have had a reasonable time in which to
consider the terms of this Settlement Agreement, that they have had an
opportunity to discuss these terms with attorneys or advisors of their own
choosing, that they agree to all of the terms of this Settlement Agreement, that
they intend to be bound by them and to fulfill the promises set forth herein,
and that they voluntarily and knowingly enter into this Settlement Agreement
with full understanding of its binding legal consequences.

17.  
Notices. All notices, and all documents, instruments, shares, certificates or
other materials required, to be delivered pursuant to this Settlement Agreement,
shall be given (a) in person; (b) by registered or certified mail, postage
prepaid, return receipt requested to the address set forth below, or (c) by a
generally recognized same-day, next-day, or second-day courier or messenger
service that provides written acknowledgement of receipt by the addressee, to
the address set forth below. Notices are deemed delivered when actually
delivered to the recipient party (or when such delivery is refused by such

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recipient party). Any party may furnish, from time to time, other addresses for
notices to it.

     
                    If to Executive:
  Perry D. Odak
22101 Bear Tooth Drive
Golden, Colorado 80403
 
                    With a copy to:
  Carlton Fields, P.A
4221 West Boy Scout Boulevard, Suite 1000
Tampa, Florida 33607
Attention: John P. McAdams, Esq.
 
                    If to Wild Oats:
  Wild Oats Markets, Inc.
3375 Mitchell Lane
Boulder, Colorado 80301
Attention: Gregory Mays
 
                    With a copy to:
  Kaye Scholer LLP
1999 Avenue of the Stars, Suite 1700
Los Angeles, California 90067
Attention: Barry L. Dastin, Esq.

18.  
Further Assurances; Additional Acts. Each party agrees to cooperate fully with
the other party, to take such actions, to execute such further instruments,
documents, and agreements and to give such further written assurances, as may be
reasonably requested by the other party to evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the intents
and purposes of this Settlement Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Settlement Agreement to be executed as of the dates set forth below:

     
/s/ Perry D. Odak          
  Date:      10/24/06     
Perry D. Odak
 

 
WILD OATS MARKETS, INC.
 
 

/s/ Gregory Mays          
  Date:      10/24/06     
By: Gregory Mays
 

Title: Authorized Signatory
 

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EXHIBIT A

LETTER OF RESIGNATION

October 19, 2006

Wild Oats Markets, Inc.
3375 Mitchell Lane
Boulder, Colorado 80301

Re: Resignation

Ladies and Gentlemen:

I resign, effective as of the date written above, from my position as Chief
Executive Officer and a member of the Board of Directors of Wild Oats Markets,
Inc. (the “Company”), and from each and every other capacity that I hold with
the Company and its direct and indirect subsidiaries and affiliates. As
discussed, I am resigning because the Company and I were unable to reach
agreement on the terms of a new or modified employment agreement.

Sincerely,

/s/ Perry D. Odak
Perry D. Odak

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Schedule 1

Representations and Warranties

I hereby represent and warrant, to the best of my actual knowledge and belief as
of the date hereof:

  (1)  
The financial and other information contained in Wild Oat’s quarterly and annual
reports filed during my employment with Wild Oats, as of the date of filing of
such reports, did not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading.

  (2)  
There are no transactions between Wild Oats or its subsidiaries with me (or any
parties related to me), that would be required to be publicly disclosed by Wild
Oats in an SEC filing that have not been so disclosed, except for those that are
not required to be disclosed as of the date of this Settlement Agreement
consisting of the transaction contemplated herein.

  (3)  
I have not entered into any agreements on behalf of Wild Oats which contravenes
Wild Oats’ policies in any material respect.

  (4)  
No violation of law has occurred that would have a material adverse effect on
the financial statements or the financial position of Wild Oats that have not
been disclosed in an SEC filing, and I am not aware of any fraud of any
magnitude (including fraud resulting in immaterial misstatements) on the part of
Wild Oat’s senior management, with the exception of such issues, if any, which
have been previously disclosed to the Board of Directors of Wild Oats or the
audit committee of the Board of Directors.

  (5)  
The representations in the letters to Ernst & Young LLP signed by me in
connection with financial information contained in Wild Oat’s SEC filings were,
as of the dates of such letters, accurate in all material respects.

  (6)  
During the period of my employment, Wild Oat’s chief financial officer and I
were responsible for supervising the establishment and maintenance of disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and the
internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) for Wild Oats which were disclosed to the
Audit Committee of the Wild Oats Board of Directors, and:

  (a)  
I, with the assistance of the Wild Oats chief financial officer, have designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision,

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to ensure that material information relating to Wild Oats, including its
consolidated subsidiaries, is made known to us by others within those entities;

  (b)  
I, with the assistance of the Wild Oats chief financial officer, have designed
such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;

  (c)  
I, with the assistance of the Wild Oats chief financial officer, have evaluated
the effectiveness of Wild Oat’s disclosure controls and procedures, and I am
aware of no change since June 30, 2006, about the effectiveness of the
disclosure controls and procedures, as of September 30, 2006; and;

  (d)  
I am aware of no material change since June 30, 2006, in Wild Oat’s internal
control over financial reporting that occurred during the fiscal quarter ended
September 30, 2006 that has materially affected, or is reasonably likely to
materially affect, Wild Oat’s internal control over financial reporting.

  (7)  
I have disclosed, based on the most recent evaluation by me of internal control
over financial reporting, to Wild Oat’s auditors and the audit committee of Wild
Oat’s board of directors (or persons performing the equivalent function).

  (a)  
all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting of which I was aware which are
reasonably likely to adversely affect Wild Oat’s ability to record, process,
summarize and report financial information; and;

  (b)  
any fraud, whether or not material, of which I was aware that involves
management or other employees who have a significant role in Wild Oat’s internal
control over financial reporting.

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