Exhibit 10.2

 

OPTION AWARD AGREEMENT UNDER THE FRESH MARKET, INC. 2010 OMNIBUS INCENTIVE
COMPENSATION PLAN, dated as of [DATE], between The Fresh Market, Inc. (the
“Company”), a Delaware corporation, and [NAME].

 

This Option Award Agreement (the “Award Agreement”) sets forth the terms and
conditions of an award of options to purchase [l] shares (the “Award”) of the
Company’s common stock, $0.01 par value per share (each, a “Share”), that are
being granted to you [on the date hereof] (such date, the “Grant Date”), at an
exercise price of [$l] per Share (the “Exercise Price”), that are subject to the
terms and conditions specified herein (each such option to purchase one Share,
an “Option”), and that are granted to you under The Fresh Market, Inc. 2010
Omnibus Incentive Compensation Plan (the “Plan”). The Options are not intended
to qualify as “incentive stock options” (within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended).

 

THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN AND THIS AWARD
AGREEMENT, INCLUDING THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN SECTION 11
OF THIS AWARD AGREEMENT. BY SIGNING YOUR NAME BELOW, YOU SHALL HAVE CONFIRMED
YOUR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AWARD AGREEMENT.

  

SECTION 1. The Plan. This Award is made pursuant to the Plan, all the terms of
which are hereby incorporated in this Award Agreement. In the event of any
conflict between the terms of the Plan, on the one hand, and the terms of this
Award Agreement or any other arrangement between you and the Company or any of
its Affiliates, including any policy of the Company or any of its Affiliates
(any such arrangement, a “Company Arrangement”), on the other hand, the terms of
the Plan shall govern. Except as set forth in Section 11 of this Award
Agreement, in the event of any conflict between the terms of this Award
Agreement and the terms of any other Company Arrangement, the terms of such
Company Arrangement shall govern.

 

SECTION 2. Definitions. Capitalized terms used in this Award Agreement that are
not defined in this Award Agreement have the meanings as used or defined in the
Plan. As used in this Award Agreement, the following terms have the meanings set
forth below:

 

(a) “Cause” has the meaning set forth in any other Company Arrangement or, if
more favorable to you, means the occurrence of any one of the following:

 

(i) your willful and continued failure to perform substantially your duties with
the Company or any of its Affiliates (other than any such failure resulting from
incapacity due to physical or mental illness);

 

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(ii) your willful engaging in (A) gross misconduct that is materially and
demonstrably injurious to the Company or any of its Affiliates or (B) illegal
conduct;

 

(iii) your willful and material breach of any Company Arrangement;

 

(iv) your willful violation of any material provision of the Company’s Code of
Business Conduct and Ethics; or

 

(v) your willful failure to cooperate with an investigation by any governmental
authority.

 

(b) “Disability” means you are unable to engage in any substantial gainful
activity by reason of any medically determinable sickness or bodily injury that
can be expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months, and the permanence and
degree of which shall be supported by a specific diagnosis made by a Physician
and supported by objective medical evidence satisfactory to the Committee.

 

(c) “Good Reason” means the occurrence of any of the events or circumstances set
forth below without your express prior written consent and other than as a
result of your Disability:

 

(i) the failure of the Company to pay to you any material compensation when due;
or

 

(ii) any reduction of your base salary, other than a reduction by no more than
10% within any two-year period that similarly affects substantially all
similarly situated employees of the Company and its Affiliates, and other than
any such reduction that results from your demotion into a position that you
occupied within the 18 months immediately prior to such demotion.

 

Your right to terminate employment for Good Reason shall not be affected by your
incapacity due to physical or mental illness. Termination of your employment for
Good Reason shall be effectuated by giving the Company written notice (“Notice
of Termination for Good Reason”), not later than 90 days following the date that
you would reasonably be expected to be aware of the occurrence of the
circumstance that constitutes Good Reason, setting forth in reasonable detail
the specific conduct of the Company that constitutes Good Reason. The Company
shall be entitled, during the 30-day period following receipt of a Notice of
Termination for Good Reason, to cure the circumstances that gave rise to Good
Reason, provided that the Company shall be entitled to waive its right to cure
or reduce the cure period by delivery of written notice to that effect to the
Participant (such 30-day or shorter period, the “Cure Period”). If, during the
Cure Period, such circumstance is remedied, you shall not be permitted to
terminate employment for Good Reason as a result of such circumstance. If, at
the end of the Cure Period, the circumstance that constitutes Good Reason has
not been remedied, you shall be entitled to terminate employment for Good Reason
during the 180-day period that follows the end of the Cure Period (the
“Termination Period”). If you do not terminate employment during the Termination
Period, you shall not be permitted to terminate employment for Good Reason as a
result of such circumstance.

 

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(d) “Physician” means a person legally licensed, in the jurisdiction in which
care is given, to practice medicine, psychiatry, psychology, psychotherapy or
other legally qualified practice of a healing art that we are required by law to
recognize, who is practicing within the scope of that license and is neither you
nor a member of your immediate family.

 

(e) “Retirement” means a termination of employment by you on or after the date
on which you have (i) attained age 65 and completed at least five years of
service with the Company or any of its Affiliates or (ii) attained age 55 and
completed at least ten years of service with the Company or any of its
Affiliates, but only to the extent that circumstances constituting Cause do not
exist.

 

(f) “Vesting Date” means the date on which your rights with respect to all or a
portion of the Options subject to this Award Agreement may become fully vested,
and the restrictions set forth in this Award Agreement may lapse, as provided in
Section 3(a) of this Award Agreement.

 

SECTION 3. Vesting and Exercise. (a)Normal Vesting. On each Vesting Date set
forth below, your rights with respect to the number of Options that corresponds
to such Vesting Date, as specified in the chart below, shall become vested and
such Options shall become exercisable, provided that you must be continuously
employed by the Company or any of its Affiliates through the relevant Vesting
Date, except as otherwise determined by the Committee in its sole discretion or
as otherwise provided in this Section 3 or in any other Company Arrangement.

 

Vesting Date Percentage of Total Options Eligible to Vest Actual Number of
Options Eligible to Vest [Date] [l]% [# Vesting] [Date] [l]% [# Vesting] [Date]
[l]% [# Vesting] [Date] [l]% [# Vesting]

 

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(b) Change of Control. In the event of a Change of Control following which (i)
the Options are not assumed by, or converted into equivalent awards of, the
acquiring, resulting or successor corporation (as the case may be) or (ii) the
Options are assumed by, or converted into, equivalent awards of the acquiring,
resulting or successor corporation (as the case may be) and within twenty-four
months following such Change of Control, your employment is terminated without
Cause or you terminate employment for Good Reason, your rights with respect to
any then unvested Options awarded pursuant to this Award Agreement shall become
vested as of immediately prior to the Change of Control or on such date of
termination, as applicable, and such Options shall remain exercisable during the
period specified in Section 3(f).

 

(c) Death. In the event of your death while employed by the Company or any of
its Affiliates, your rights with respect to any then unvested Options awarded
pursuant to this Award Agreement shall become vested in your estate or in any
person who acquired such Options by bequest or inheritance, and such Options
shall remain exercisable during the period specified in Section 3(f).

 

(d) Disability. In the event your employment with the Company or any of its
Affiliates terminates due to Disability, your rights with respect to any then
unvested Options awarded pursuant to this Award Agreement shall become vested in
you or your guardian or legal representative, as applicable, as of such
termination and such Options shall remain exercisable during the period
specified in Section 3(f).

 

(e) Retirement. In the event your employment with the Company or any of its
Affiliates terminates due to your Retirement, any then unvested Options awarded
pursuant to this Award Agreement will continue to vest on the Vesting Dates
specified in Section 3(a), without regard to your no longer being employed, but
subject to (i) the conditions to continued vesting described in Section 3(g)
hereof, and (ii) your compliance with any other restrictive covenant (which, for
the avoidance of doubt, includes any non- competition, non- solicitation,
non-disparagement or confidentiality provisions) contained in any Company
Arrangement to which you are subject.

 

(f) Exercise of Options. Options, to the extent that they are vested, may be
exercised, in whole or in part (but for the purchase of whole Shares only), by
delivery to the Company (i) of a written or electronic notice, complying with
the applicable procedures established by the Committee or the Company, stating
the number of Options that are thereby exercised and (ii) full payment, in
accordance with Section 6(b) of the Plan, of the aggregate Exercise Price for
the Shares with respect to which the Options are thereby exercised. The notice
shall be signed by you or any other person then entitled to exercise the
Options. Upon exercise and full payment of the Exercise Price for Shares with
respect to which the Options are thereby exercised, subject to Section 7(a) of
this Award Agreement, the Company shall issue to you or your legal
representative (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company, the delivery of
share certificates or as otherwise determined by the Company) one Share for each
Option you have exercised. Notwithstanding the foregoing, unless the Committee
determines otherwise, vested and unexercised Options shall expire (A)
automatically on the date of the termination of your employment for Cause, (B)
subject to (i) the conditions for continued exercisability set forth in Section
3(g) hereof, and (ii) your compliance with any other restrictive covenant
(which, for the avoidance of doubt, includes any non-competition,
non-solicitation, non-disparagement or confidentiality provisions) contained in
any Company Arrangement to which you are subject (the “Exercise Conditions”),
three months after the date of the termination of your employment if your
employment is terminated by the Company for any reason other than Cause, death
or Disability, (C) subject to the Exercise Conditions, three months after the
date of the termination of your employment if you resign voluntarily for any
reason other than Retirement, (D) twelve months after the date of termination of
your employment due to death or Disability and (E) subject to the Exercise
Conditions, thirty-six months after the date of termination of your employment
for Retirement and, solely with respect to any such Options that vest after the
thirty-fourth month after your Retirement in accordance with Section 3(e)
hereof, thirty days following any such vesting date. Notwithstanding any
provision of this Award Agreement or any other Company Arrangement to the
contrary, all Options shall automatically expire on the tenth anniversary of the
Grant Date.

 

 

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(g) Conditions Related to Continued Post-Employment Vesting During Retirement
and Exercisability Following Termination. You acknowledge by your acceptance of
this Award Agreement that the continued (i) vesting, after your Retirement, of
any Options that were unvested as of the date of your Retirement, and (ii)
exercisability of any Options that were vested as of the date of termination of
your employment by the Company for any reason other than Cause, death or
Disability or due to your voluntary resignation or Retirement are each subject
to compliance with the conditions set forth in this Section 3(g). [Further, you
acknowledge that these conditions do not impede your ability to seek employment,
but rather they subject certain post-employment benefits related to your Award
that the Company is providing to you that are not required by applicable law to
conditions.] In the event you (i) directly or indirectly, without the prior
written consent of the Company, engage in or invest as an owner, partner,
stockholder (except for passive investments in less than two percent of the
stock of publicly traded, stock exchange listed companies), licensor, director,
officer, agent, employee or consultant for any person or entity engaged
primarily in the retail grocery business in any state in which the Company or
any subsidiary then operates, (ii) accept employment with any person or entity
that is engaged in any manner in the retail grocery business if such employment
would result in you being involved in the management, operations or business
affairs of the subsidiary, division, segment or other portion of such person or
entity that conducts such grocery business in any state in which the Company or
any subsidiary then operates, (iii) disclose or misuse any confidential
information of the Company or any subsidiary (except, in the case of disclosure,
as required by applicable law or by order of a court or governmental agency
having jurisdiction over such matter), (iv) directly or indirectly solicit, or
assist another person or entity in soliciting, any employees of the Company or
any subsidiary to terminate such employment, (v) disparage or criticize, orally
or in writing, the business, products, policies, decisions, directors, officers
or employees of Company or any subsidiary to any person, or (vi) violate or fail
to comply with any restrictive covenant (which, for the avoidance of doubt,
includes any non-competition, non-solicitation, non-disparagement or
confidentiality provisions) contained in any Company Arrangement to which you
are subject, then (x) following your Retirement, this Award, to the extent it
remains unvested, shall cease to vest automatically on the date on which you
first engaged in such conduct and (y) following termination of your employment
by the Company for any reason other than Cause, death or Disability or due to
your voluntary resignation or Retirement this Award, to the extent it remains
unexercised, shall terminate automatically on the date on which you first
engaged in such conduct.

 

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SECTION 4. Forfeiture of Options. Unless the Committee determines otherwise, and
except as provided in Section 3 or in any other Company Arrangement, if your
rights with respect to any Options awarded pursuant to this Award Agreement have
not become vested prior to the date on which your employment with the Company
and its Affiliates terminates, your rights with respect to such unvested Options
shall immediately terminate, and you shall be entitled to no further payments or
benefits with respect thereto.

 

SECTION 5. Voting Rights; Dividend Equivalents. Prior to the date on which your
rights with respect to an Option have become vested and you exercise your right
to purchase the Share underlying such Option, you shall not be entitled to
exercise any voting rights with respect to such Share and shall not be entitled
to receive dividends or other distributions with respect thereto.

 

SECTION 6. Non-Transferability of Options. Unless otherwise provided by the
Committee in its discretion, Options may not be sold, assigned, alienated,
transferred, pledged, attached or otherwise encumbered except as provided in
Section 9(c) of the Plan. Any purported sale, assignment, alienation, transfer,
pledge, attachment or other encumbrance of an Option in violation of the
provisions of this Section 6 and Section 9(c) of the Plan shall be void.

 

SECTION 7. Withholding, Consents and Legends. (a) Withholding. The delivery of
Shares pursuant to Section 3(f) of this Award Agreement is conditioned on
satisfaction of any applicable withholding taxes in accordance with Section 9(l)
of the Plan. In the event that there is withholding tax liability in connection
with the exercise of the Options, you may satisfy, in whole or in part, any
withholding tax liability at the minimum statutory rate by having the Company
withhold from the Shares you would be entitled to receive upon exercise of the
Options a number of Shares having a Fair Market Value equal to such withholding
tax liability.

 

(b) Consents. Your rights in respect of the Options are conditioned on the
receipt to the full satisfaction of the Committee of any required consents that
the Committee may determine to be necessary or advisable (including your
consenting to the Company’s supplying to any third-party recordkeeper of the
Plan such personal information as the Committee deems advisable to administer
the Plan).

 

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(c) Legends. The Company may affix to certificates for Shares issued pursuant to
this Award Agreement any legend that the Committee determines to be necessary or
advisable (including to reflect any restrictions to which you may be subject
under any applicable securities laws). The Company may advise the transfer agent
to place a stop order against any legended Shares.

 

SECTION 8. Recoupment. You acknowledge that the Company has adopted The Fresh
Market, Inc.’s Compensation Recoupment Policy (the “Recoupment Policy”). You
acknowledge and agree that you have either received a copy of the Recoupment
Policy in effect as of the date of this Award Agreement or, if you have not
received a copy, that you have the ability to request and receive a copy of the
Recoupment Policy prior to accepting this Award Agreement. You acknowledge and
agree that the Recoupment Policy is subject to change after the Grant Date as
required by applicable law, and that this Award, the Options, and the shares or
other property, including cash proceeds therefrom, may, as a result of such
change, be subject to the Recoupment Policy.

 

SECTION 9. Successors and Assigns of the Company. The terms and conditions of
this Award Agreement shall be binding upon and shall inure to the benefit of the
Company and its successors and assigns.

 

SECTION 10. Committee Discretion. The Committee shall have discretion with
respect to any actions to be taken or determinations to be made in connection
with this Award Agreement, and its determinations shall be final, binding and
conclusive.

 

SECTION 11. Dispute Resolution. (a) In General. All disputes, controversies and
claims arising between you and the Company concerning the subject matter of this
Award Agreement or the Plan shall be settled by arbitration in accordance with
the rules and procedures of the American Arbitration Association in effect at
the time that the arbitration begins, to the extent not inconsistent with this
Award Agreement or the Plan. The location of the arbitration shall be
Greensboro, North Carolina or such other place as the parties to the dispute may
mutually agree. In rendering any award or ruling, the arbitrator or arbitrators
shall determine the rights and obligations of the parties according to the
substantive and procedural laws of the State of Delaware. The arbitration shall
be conducted by an arbitrator selected in accordance with the aforesaid
arbitration procedures. Any arbitration pursuant to this Section 11(a) shall be
final and binding on the parties, and judgment upon any award rendered in such
arbitration may be entered in any court, Federal or state, having jurisdiction.
The parties to any dispute shall each pay their own costs and expenses
(including arbitration fees and attorneys’ fees) incurred in connection with
arbitration proceedings and the fees of the arbitrator shall be paid in equal
amounts by the parties. Nothing in this Section 11(a) shall preclude you or the
Company from seeking temporary injunctive relief from any Federal or state court
located within the County of Guilford, North Carolina in connection with or as a
supplement to an arbitration hereunder.

 

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(b) Waiver of Jury Trial. You and the Company hereby waive, to the fullest
extent permitted by applicable law, any right either of you may have to a trial
by jury in respect to any litigation directly or indirectly arising out of,
under or in connection with this Award Agreement or the Plan.

 

(c) Confidentiality. You hereby agree to keep confidential the existence of, and
any information concerning, a dispute described in this Section 11, except that
you may disclose information concerning such dispute to the court that is
considering such dispute or to your legal counsel (provided that such counsel
agrees not to disclose any such information other than as necessary to the
prosecution or defense of the dispute).

 

SECTION 12. Notice. All notices or other communications required or permitted
under the terms of this Award Agreement shall be made in writing and all such
notices or communications shall be deemed to have been duly given when delivered
or (unless otherwise specified) mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company:           The Fresh Market, Inc.
628 Green Valley Road, Suite 500
Greensboro, North Carolina 27408  

Attention: General Counsel   If to you: To your address as most recently
supplied to the Company and set forth in the Company’s records  

 

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

 

SECTION 13. Governing Law. This Award Agreement shall be deemed to be made in
the State of Delaware, and the validity, construction and effect of this Award
Agreement in all respects shall be determined in accordance with the laws of the
State of Delaware, without giving effect to the conflict of law principles
thereof.

 

SECTION 14. Headings and Construction. Headings are given to the Sections and
subsections of this Award Agreement solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of this Award Agreement or any provision
thereof. Whenever the words “include”, “includes” or “including” are used in
this Award Agreement, they shall be deemed to be followed by the words “but not
limited to”. The term “or” is not exclusive.

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SECTION 15. Amendment of this Award Agreement. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate this Award Agreement prospectively or retroactively;
provided, however, that any such waiver, amendment, alteration, suspension,
discontinuance, cancelation or termination that would materially and adversely
impair your rights hereunder shall not to that extent be effective without your
consent (it being understood, notwithstanding the foregoing proviso, that this
Award Agreement and the Options shall be subject to the provisions of Section
4(b) of the Plan).

 

SECTION 16. Counterparts. This Award Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have duly executed this Award Agreement as of
the date first written above.

 

THE FRESH MARKET, INC.,   By       Name:                Title:            [NAME]
           

 

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