Exhibit 10.2

 

 

WHOLE FOODS

 

EXECUTIVE RETENTION PLAN

AND NON-COMPETE ARRANGEMENT

 

 

Effective May 20, 2010

 

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TABLE OF CONTENTS

 

WHOLE FOODS EXECUTIVE RETENTION PLAN AND NON-COMPETE ARRANGEMENT

 

ARTICLE I PREAMBLE AND PURPOSE

 

1

1.1

Preamble

 

1

1.2

Purpose

 

1

 

 

 

 

ARTICLE II DEFINITIONS AND CONSTRUCTION

 

2

2.1

Definitions

 

2

2.2

Construction

 

8

 

 

 

 

ARTICLE III NON-COMPETE BENEFITS

 

9

3.1

Non-Compete Benefits

 

9

3.2

Remedies for Violation of Restrictive Covenants

 

10

3.3

Death or Disability of Covered Executive

 

11

 

 

 

 

ARTICLE IV EMPLOYMENT AND BENEFITS AFTER A CHANGE IN CONTROL

 

12

4.1

COC Employment Period

 

12

4.2

Terms of Employment

 

12

4.3

Termination

 

15

4.4

Obligations of the Employer in Connection with a Change of Control

 

15

4.5

Death

 

16

4.6

Disability

 

17

4.7

Termination for Cause; Termination Other Than for Good Reason

 

17

4.8

Rabbi Trust

 

17

4.9

Legal Fees

 

18

4.10

Non-Exclusivity of Rights

 

18

 

 

 

 

ARTICLE V ADMINISTRATION

 

20

5.1

The Plan Administrator

 

20

5.2

Powers of Plan Administrator

 

20

5.3

Appointment of Daily Administrator

 

20

5.4

Duties of Daily Administrator

 

20

5.5

Indemnification of Plan Administrator and Daily Administrator

 

22

5.6

Claims for Benefits

 

22

5.7

Arbitration

 

23

5.8

Receipt and Release of Necessary Information

 

24

5.9

Overpayment and Underpayment of Benefits

 

25

5.10

No Mitigation

 

25

 

 

 

 

ARTICLE VI AMENDMENT AND TERMINATION OF THE PLAN

 

26

6.1

Continuation

 

26

6.2

Amendment of Plan

 

26

6.3

Termination of Plan

 

26

6.4

Termination of Affiliated Company’s Participation

 

26

6.5

409A Compliance

 

26

 

 

 

 

ARTICLE VII MISCELLANEOUS

 

28

7.1

No Reduction of Employer Rights

 

28

 

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7.2

Successor to the Company

 

28

7.3

Provisions Binding

 

28

7.4

Governing Law

 

28

7.5

Notice

 

28

7.6

Severability

 

29

7.7

Counterparts and Electronic Signatures

 

29

7.8

Withholding

 

29

7.9

No Waiver

 

29

 

II

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WHOLE FOODS EXECUTIVE RETENTION PLAN AND NON-COMPETE ARRANGEMENT

 

ARTICLE I
PREAMBLE AND PURPOSE

 

1.1                               Preamble.  Whole Foods Market, Inc., a Texas
Corporation (the “Company”) adopted the Whole Foods Executive Retention Plan
(the “Plan”) effective as of May 20, 2010, in order to induce its executives’,
and those of its Affiliated Companies, as defined in Article II, to enter into
certain non-competition arrangements, compliance with the confidentiality
provisions and restrictive covenants set forth in the Plan Agreements (as
defined below), and to provide protection to such executives in the event of a
Change of Control as defined in Article II.  By this instrument, the Company
desires to amend and restate the Plan effective May 20, 2010 to change the name
of the Plan to the “Whole Foods Executive Retention Plan and Non-Compete
Arrangement” and to clarify the conditions under which the Non-Compete Payment,
as defined in Article II, will be made.

 

The Company may adopt one or more domestic trusts to serve as a possible source
of funds for the payment of benefits under the Plan.

 

1.2                               Purpose.  Through the Plan, the Company
intends to permit the deferral of compensation and to provide additional
benefits to a select group of management or highly compensated employees of the
Company and its Affiliated Companies.  Accordingly, it is intended that the Plan
will not constitute a “qualified plan” subject to the limitations of section
401(a) of the Internal Revenue Code of 1986, as amended, nor will it constitute
a “funded plan,” for purposes of such requirements.  It also is intended that
the Plan will qualify as a “pension plan” within the meaning of section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that
is exempt from the participation and vesting requirements of Part 2 of Title I
of ERISA, the funding requirements of Part 3 of Title I of ERISA, and the
fiduciary requirements of Part 4 of Title I of ERISA by reason of the exclusions
afforded plans that are unfunded and maintained by an employer primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees.

 

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End of Article I

 

1

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ARTICLE II

DEFINITIONS AND CONSTRUCTION

 

2.1                               Definitions.  When a word or phrase appears in
this Plan with the initial letter capitalized, and the word or phrase does not
commence a sentence, the word or phrase will generally be a term defined in this
Section 2.1.  The following words and phrases with the initial letter
capitalized will have the meaning set forth in this Section 2.1, unless a
different meaning is required by the context in which the word or phrase is
used.

 

(a)                                  “Accrued Obligations” has the meaning set
forth in Section 4.4(a)(i)(A).

 

(b)                                 “Affiliated Company” means a corporation
that is a member of a controlled group of corporations (as defined in section
414(b) of the Code) that includes the Company, any trade or business (whether or
not incorporated) that is in common control (as defined in section 414(c) of the
Code) with the Company, or any entity that is a member of the same affiliated
service group (as defined in section 414(m) of the Code) as the Company.

 

(c)                                  “Annual Base Salary” has the meaning in
Section 4.2(b)(i).

 

(d)                                 “Annual Bonus” has the meaning in Section
4.2(b)(ii).

 

(e)                                  “Board” means the Board of Directors of the
Company.

 

(f)                                    “Cause” means:

 

(i)            the willful and continued failure of the Covered Executive to
perform substantially his or her duties with the Company or any Affiliated
Company (other than any such failure resulting from incapacity due to physical
or mental illness or following the Covered Executive’s delivery of a Notice of
Termination for Good Reason), after a written demand for substantial performance
is delivered to the Covered Executive by the Board or the Chief Executive
Officer of the Company that specifically identifies the manner in which the
Board or the Chief Executive Officer of the Company believes that the Covered
Executive has not substantially performed the Covered Executive’s duties, or

 

(ii)           the willful engaging by Covered Executive in illegal conduct or
gross misconduct that is materially and demonstrably injurious to the Company.

 

Provided however, for purposes of defining “Cause”, no act, or failure to act,
on the part of the Covered Executive will be considered “willful” unless it is
done, or omitted to be done, by the Covered Executive in bad faith or without
reasonable belief that the Covered Executive’s action or omission was in the
best interests of the Company.  Furthermore, any act, or failure to act, based
upon (A) authority given pursuant to a resolution duly adopted by the Board, or
if the Company is not the ultimate parent corporation of the Affiliated
Companies and is not publicly-traded, the board of directors of the ultimate
parent of the Company (the “Applicable Board”), (B) the instructions of the
Chief Executive Officer of the Company or a senior officer of the Company, or
(C) the advice of counsel for the

 

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Company will be conclusively presumed to be done, or omitted to be done, by the
Covered Executive in good faith and in the best interests of the Company.

 

Any termination by the Employer for Cause will be communicated by the Employer
through a Notice of Termination to the Covered Executive given in accordance
with Section 7.5.  The failure by the Employer to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of Cause will
not waive any right of the Employer hereunder or preclude the Employer from
asserting such fact or circumstance in enforcing the Employer’s rights hereunder

 

The cessation of employment of the Covered Executive will be deemed to be not
for Cause unless and until there has been delivered to the Covered Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Applicable Board (excluding the
Covered Executive, if the Covered Executive is a member of the Applicable Board)
at a meeting of the Applicable Board called and held for such purpose (after
reasonable notice is provided to the Covered Executive and the Covered Executive
is given an opportunity, together with counsel for the Covered Executive, to be
heard before the Applicable Board), finding that, in the good faith opinion of
the Applicable Board, the Covered Executive is guilty of the conduct described
in Section 2.1(f)(i) or (ii) of this definition of “Cause”, and specifying the
particulars thereof in detail.

 

(g)                                 “Change of Control” means the occurrence of
any of the following:

 

(i)                                     Any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a “Person”) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty
percent (20%) or more of either (A) the then-outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”), or (B) the combined
voting power of the then-outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this definition of Change
of Control, the following acquisitions will not constitute a Change of Control: 
(1) any acquisition directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliated Company, or (4) any
acquisition pursuant to a transaction that complies with paragraphs (1) (2) or
(3) of this definition;

 

(ii)                                  Individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board will be considered
as though such individual was a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial

 

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assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board;

 

(iii)                               Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar transaction involving the
Company or any of its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries (each, a
“Business Combination”), in each case unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than fifty percent
(50%) of the then-outstanding shares of common stock (or, for a non-corporate
entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors (or, for a non-corporate entity, equivalent governing body, as the
case may be), of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities, as the case
may be, (B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, twenty percent (20%) or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors (or, for a non-corporate entity, equivalent governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination; or

 

(iv)                              Approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company.

 

(h)                                 “Change of Control Period” means the period
commencing on the Effective Date and ending on the third anniversary of the date
of a Change of Control.

 

(i)                                     “COBRA” means the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended.

 

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(j)                                     “COC Effective Date” means the first
date during the Change of Control Period on which a Change of Control occurs. 
Notwithstanding anything in the Plan to the contrary, if a Change of Control
occurs and if the Covered Executive’s employment with the Employer is terminated
prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Covered Executive that such termination of employment (i)
was at the request of a third party that has taken steps reasonably calculated
to effect a Change of Control, or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then “COC Effective Date” means the date
immediately prior to the date of such termination of employment.

 

(k)                                  “COC Employment Period” means the period
commencing on the COC Effective Date and ending on the second anniversary of the
COC Effective Date.

 

(l)                                     “Code” means the Internal Revenue Code
of 1986, as amended from time to time.

 

(m)                               “Company” means Whole Foods Market, Inc., a
Texas Corporation.

 

(n)                                 “Compensation Committee” means the
Compensation Committee of the Board.

 

(o)                                 “Covered Executive” means any Executive of
the Employer who is designated as a Covered Executive by the Compensation
Committee.  A Covered Executive will not cease to be a Covered Executive by
reason of his or her transfer to comparable positions with the Affiliated
Companies and the Covered Executive will continue to participate in the Plan
pursuant to the terms hereof.

 

(p)                                 “Daily Administrator” means the individual
or entity appointed by the Plan Administrator to handle the day-to-day
administration of the Plan.  If the Plan Administrator does not appoint an
individual or entity to serve as the Daily Administrator, the Plan Administrator
will be the Daily Administrator.

 

(q)                                 “Date of Termination” means:

 

(i)            if the Covered Executive’s employment is terminated by the
Employer for Cause, or by the Covered Executive for Good Reason, the date of
receipt of the Notice of Termination or such later date specified in the Notice
of Termination, as the case may be,

 

(ii)           if the Covered Executive’s employment is terminated by the
Employer other than for Cause, the date on which the Employer notifies the
Covered Executive of such termination,

 

(iii)          if the Covered Executive resigns without Good Reason, the date on
which the Covered Executive notifies the Employer of such termination, and

 

(iv)          if the Covered Executive’s employment is deemed to be terminated
by reason of death, the date of death of Executive.

 

Notwithstanding the foregoing, in no event will the Date of Termination with
respect to clauses (i), (ii) or (iii) occur until Executive experiences a
“separation

 

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from service” within the meaning of Section 409A of the Code, and
notwithstanding anything contained herein to the contrary, the date on which
such separation from service takes place will be the “Date of Termination.”

 

An Executive who transfers employment among the Affiliated Companies will not
incur a “separation from service” within the meaning of Section 409A of the
Code.

 

(r)                                    “Delayed Payment Date” means the first
business day after the date that is six (6) months following Executive’s
“separation from service” within the meaning of Section 409A of the Code.

 

(s)                                  “Disability” means the inability of the
Covered Executive to engage in any substantial gainful activity similar to his
or her current position by reason of a mental or physical impairment expected to
result in death or last for at least twelve (12) months, or the Covered
Executive, because of such a condition, is receiving income replacement benefits
for at least three months under an accident or health plan covering the
Employer’s employees.

 

(t)                                    “Effective Date” means May 20, 2010.

 

(u)                                 “Employer” means the Company and each
Affiliated Company that has adopted the Plan as a participating employer. 
Unless provided otherwise by the Compensation Committee or the Board, all
Affiliated Companies will be participating employers in the Plan.  Each such
Affiliated Company may evidence its adoption of the Plan either by a formal
action of its governing body or taking administrative actions with respect to
the Plan on behalf of its Covered Executives (e.g., communicating the terms of
the Plan, etc.).  An entity will cease to be a participating employer as of the
date such entity ceases to be an Affiliated Company.

 

(v)                                 “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time.

 

(w)                               “Executive” means each select member of
management or highly compensated employee receiving remuneration, or who is
entitled to remuneration, for services rendered to the Employer, in the legal
relationship of employer and employee.  The term “Executive” does not include a
consultant, independent contractor or leased employee even if such consultant,
leased employee or independent contractor is subsequently determined by the
Employer, the Internal Revenue Service, the Department of Labor or a court of
competent jurisdiction to be a common law employee of the Employer.

 

(x)                                   “Good Reason” means:

 

(i)            the assignment to the Covered Executive of any duties
inconsistent in any respect with the Covered Executive’s position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities, or any action by the Employer that results in a diminution in
such position, authority, duties or responsibilities (whether or not occurring
solely as a result of the Company’s ceasing to be a publicly traded entity),
excluding

 

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for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and that is remedied by the Employer promptly after receipt of notice
thereof given by the Covered Executive;

 

(ii)           after a COC Effective Date, any failure by the Employer to comply
with any of the provisions of Section 4.2(b), other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and that is
remedied by the Employer promptly after receipt of notice thereof given by the
Covered Executive;

 

(iii)          after a COC Effective Date the Employer’s requiring Executive (A)
to be based at any office or location other than as provided in Section
4.2(a)(i)(B), or (B) to be based at a location other than the principal
executive offices of the Employer if the Covered Executive was employed at such
location immediately preceding the COC Effective Date;

 

(iv)          after a COC Effective Date any purported termination by the
Employer of the Covered Executive’s employment otherwise than as expressly
permitted by this Plan; or

 

(v)           any other action or inaction that constitutes a material breach by
the Employer or a successor of this Plan, including any failure by the Employer
to comply with and satisfy Section 7.2.

 

For purposes of this definition, after a COC Effective Date any good faith
determination of Good Reason made by the Covered Executive will be conclusive;
furthermore, the Covered Executive’s mental or physical incapacity following the
occurrence of an event described above in clauses (i) through (v) will not
affect the Covered Executive’s ability to terminate employment for Good Reason
and the Covered Executive’s death following delivery of a Notice of Termination
for Good Reason will not affect the Covered Executive’s estate’s entitlement to
severance payments benefits provided hereunder upon a termination of employment
for Good Reason.

 

Any termination by the Covered Executive for Good Reason, will be communicated
by the Covered Executive through a Notice of Termination to the Employer given
in accordance with Section 7.5.  The failure by the Covered Executive to set
forth in the Notice of Termination any fact or circumstance that contributes to
a showing of Good Reason will not waive any right of the Covered Executive
hereunder or preclude the Covered Executive from asserting such fact or
circumstance in enforcing the Covered Executive’s rights hereunder.

 

(y)                                 “Interest” means the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code determined as of the Date of
Termination.

 

(z)                                   “Non-Compete Benefits” means the benefits
described in Article III of the Plan including, but not limited to, the
Non-Compete Payments described therein.

 

(aa)                            “Non-Compete Payment” and “Non-Compete Payments”
has the meaning assigned to each in Section 3.1(a) of the Plan.

 

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(bb)                          “Notice of Termination” means a written notice
that (i) indicates the specific termination provision in this Plan relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Covered
Executive’s employment under the provision so indicated, and (iii) if the Date
of Termination (as defined herein) is other than the date of receipt of such
notice, specifies the Date of Termination (which Date of Termination will be not
more than thirty (30) days after the giving of such notice).

 

(cc)                            “Plan Administrator” means the individual or
committee appointed by the Company to administer the Plan.  If the Company does
not appoint an individual or committee to serve as the Plan Administrator, the
Company will be the Plan Administrator.

 

(dd)                          “Plan” means the Whole Foods Executive Retention
Plan and Non-Compete Arrangement as set forth herein and as the same may be
amended from time to time.

 

(ee)                            “Plan Agreement” means the written agreement
between a Covered Executive and the Plan Administrator, on behalf of the
Employer substantially in the form attached hereto in Appendix A.  This form
Plan Agreement may differ with respect to a Covered Executive as determined by
the Compensation Committee in its sole and absolute discretion.  Each Plan
Agreement will form a part of the Plan with respect to the affected Covered
Executive.

 

(ff)                                “Plan Year” means the fiscal year of the
Plan, which will commence on January 1 each year and end on December 31 of such
year.  The initial Plan Year will be a short plan year beginning on May 20, 2010
and ending on December 31, 2010.

 

(gg)                          “Pro Rata Bonus” has the meaning assigned in
Section 4.4(a)(iii).

 

(hh)                          “Specified Employee” means a “specified employee”
within the meaning of section 409A of the Code (as determined in accordance with
the methodology established by the Employer as in effect on the Date of
Termination).

 

(ii)                                  “Trustee” means a nationally recognized
financial institution appointed by the Company to serve as trustee of the Trust.

 

(jj)                                  “Trust” means the “rabbi trust” to be
established by the Company pursuant to Section 4.8.

 

2.2                               Construction.  Headings and subheadings are
for the purpose of reference only and are not to be considered in the
construction of the Plan.  The pronouns “he,” “him” and “his” used in the Plan
will also refer to similar pronouns of the female gender unless otherwise
qualified by the context.

 

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End of Article II

 

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ARTICLE III
NON-COMPETE BENEFITS

 

3.1                               Non-Compete Benefits.  If at any time after
the earlier to occur of a Change of Control or March 1, 2012, the Covered
Executive’s employment is terminated either (i) by the Employer other than for
Cause, or (ii) except to the extent limited by the applicable Plan Agreement, by
the Covered Executive, then, subject to the Covered Executive’s compliance with
the confidentiality provisions and restrictive covenants in the Plan Agreement
and execution, within forty-five (45) days following the Date of Termination, of
the Waiver and Release, in the form substantially similar to the form attached
hereto as Exhibit A, in addition to the other rights set forth herein the
Covered Executive will be entitled to the following Non-Compete Benefits:

 

(a)                                  Non-Compete Payment.  To the extent not
limited below and to the extent the Covered Executive continues to comply with
the terms of the Plan and the applicable Plan Agreement, the Employer will make
up to ten (10) semi annual payments to the Covered Executive each in an amount
equal to the amount set forth in Section 1 of the Covered Executive’s Plan
Agreement divided by ten (10) (each a “Non-Compete Payment,” and together, the
“Non-Compete Payments”).  The first such Non-Compete Payment will be made on a
date which is six (6) months and one (1) day after the Date of Termination. 
Each of the additional Non-Compete Payments will be made six (6) months after
the date of the last such payment.  The Employer will withhold from any amounts
or benefits due to Executive under this Article III such United States federal,
state or local or foreign taxes as are required to be withheld pursuant to any
applicable law or regulation.

 

Notwithstanding the above, in the event the Covered Executive voluntarily leaves
the Employer’s employment before the Total Benefit Date (as defined in the
Covered Executive’s Plan Agreement) set forth in Section 1 of the Covered
Executive’s Plan Agreement, the amount, if any, paid to the Covered Executive
for each of the Non-Compete Payments will be adjusted as set forth below;
provided however, if Executive leaves the Employer’s employment with Good
Reason, no adjustment shall be made to reduce any such payment that becomes due;
otherwise, depending on the length of time preceding the Date of Termination the
Covered Executive has held his or her current position or one or more of several
other designated positions as set forth in Section 1 of the Covered Executive’s
Plan Agreement, the Non-Compete Payments will be adjusted as follows:

 

YEARS IN POSITION

 

ADJUSTMENT TO NON-COMPETE PAYMENT

Fewer than 11

 

reduced to zero

11 or greater but fewer than 12

 

20% of original amount will be paid

12 or greater but fewer than 13

 

40% of original amount will be paid

13 or greater but fewer than 14

 

60% of original amount will be paid

 

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14 or greater but fewer than 15

 

80% of original amount will be paid

15 or greater

 

No adjustment will be made

 

(b)                                 Equity Compensation.  Unless otherwise
specified in an applicable award agreement, all stock options that have been
granted to the Covered Executive by the Employer will become vested and
immediately exercisable, and will remain exercisable until the earlier of
(i) the fifth (5th) anniversary of the Date of Termination, or (ii) the original
expiration date of the applicable stock option (other than by reason of
termination of employment). Unless otherwise specified in an applicable award
agreement, all restricted stock, restricted stock units and other similar awards
will also immediately vest.

 

(c)                                  COBRA Coverage.  The Employer will
reimburse the Covered Executive on a monthly basis for COBRA premiums paid by
the Covered Executive for continuation of medical, dental and vision benefits
under the Company’s group health plans to the Covered Executive and his or her
eligible family members for a period commencing on the date the Covered
Executive’s group health coverage would otherwise terminate by reason of his or
her termination of employment and terminating on the earlier of (i) the
eighteenth (18th) month anniversary of the Date of Termination, or (ii) the
Covered Executive’s obtaining similar health benefit coverage, with no
pre-existing condition exclusions applicable to the Covered Executive after
taking into account the rules regarding creditable health coverage, via
employment with a new employer; provided, that the Covered Executive and/or his
eligible family members timely elect COBRA and provide evidence of the payment
of the monthly COBRA premium.  The Covered Executive will be obligated to notify
the Daily Administrator within thirty (30) days of the date he or she secures
similar health coverage, in which case the Employer’s obligation to reimburse
the Covered Executive for such COBRA premium payments will cease, but the
Covered Executive and/or his or her family members may, at their option, elect
to continue to receive continued medical, dental and vision benefits under the
Company’s group health plan pursuant to COBRA for the remainder of the
applicable COBRA continuation period at their own expense in accordance with the
eligibility requirements of COBRA.

 

3.2                               Remedies for Violation of Restrictive
Covenants.  The Employer’s only remedies for the Covered Executive’s failure to
comply with the restrictive covenants set forth in Section 2(b)(i) of the Plan
Agreement (relating to the covenant not to compete) will be termination for
Cause, if applicable, and to cease to provide any and all Non-Compete Benefits
described in this Article III (including, without limitation, the Employer’s
ceasing to provide any and all Non-Compete Payments otherwise payable under
Section 3.1(a)). The Employer’s only remedies for the Covered Executive’s
failure to comply with the confidentiality provisions and the other restrictive
covenants in the Plan Agreement (i.e., the covenants other than the covenant not
to compete described in the preceding sentence) will be termination for Cause,
if applicable, the injunctive relief described in Section 5 of the Plan
Agreement, if applicable, and to cease to provide any and all Non-Compete
Benefits described in this Article III (including, without limitation, the
Employer’s ceasing to provide any and all Non-Compete Payments otherwise payable
under Section 3.1(a)).

 

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3.3                               Death or Disability of Covered Executive. 
Notwithstanding anything else in this Article III, in the event of Covered
Executive’s death or Disability, this Article III will be effective as of the
Effective Date (without giving effect to the March 1, 2012 delayed date), the
Waiver and Release will be deemed to have been signed by the Covered Executive
after a termination without Cause, the Covered Executive will be deemed to have
complied with the confidentiality provisions and restrictive covenants set forth
in the Plan Agreement and the Employer will make the associated payments
provided for in this Article III to the Covered Executive or his or her estate.

 

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End of Article III

 

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ARTICLE IV
EMPLOYMENT AND BENEFITS AFTER A CHANGE IN CONTROL

 

4.1                               COC Employment Period.  The Employer agrees to
continue to employ the Covered Executive, subject to the terms and conditions of
the Plan, for the COC Employment Period.  The COC Employment Period will
terminate upon Executive’s termination of employment for any reason; subject to
the terms of this Article IV.

 

4.2                               Terms of Employment.

 

(a)                                  Position and Duties.

 

(i)                                     Scope and Location. During the COC
Employment Period, (A) the Covered Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities will be at least commensurate in all respects with the most
significant of those held, exercised and assigned to the Covered Executive at
any time during the one hundred and twenty (120)-day period immediately
preceding the COC Effective Date, (B) the Covered Executive’s services will be
performed at the office where the Covered Executive was employed immediately
preceding the COC Effective Date or at any other location less than thirty-five
(35) miles from such office, and (C) the Covered Executive will not be required
to travel on Employer business to a substantially greater extent than required
during the one hundred and twenty (120)-day period immediately prior to the COC
Effective Date.

 

(ii)                                  Additional Positions.  During the COC
Employment Period, and excluding any periods of paid time off or sabbatical to
which the Covered Executive is entitled, the Covered Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Employer and, to the extent necessary to discharge the
responsibilities assigned to the Covered Executive hereunder, to use the Covered
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities.  During the COC Employment Period, it will not be a violation
of this Article IV for the Covered Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Covered Executive’s responsibilities as an Executive in
accordance with this Article IV.  It is expressly understood and agreed that, to
the extent that any such activities have been conducted by the Covered Executive
prior to the COC Effective Date, the continued conduct of such activities (or
the conduct of activities similar in nature and scope thereto) subsequent to the
COC Effective Date will not thereafter be deemed to interfere with the
performance of the Covered Executive’s responsibilities to the Employer.

 

(b)                                 Compensation.

 

(i)                                     Base Salary.  During the COC Employment
Period, the Covered Executive will receive an annual base salary (the “Annual
Base Salary”)

 

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at an annual rate at least equal to twenty-six (26) times the highest bi-weekly
base salary rate applicable to the Covered Executive by the Company and the
Affiliated Companies in respect of the one (1)-year period immediately preceding
the month in which the COC Effective Date occurs.  The Annual Base Salary will
be paid pursuant to the Employer’s normal payroll practices at such intervals as
the Employer pays Executive salaries generally.  During the COC Employment
Period, the Annual Base Salary will be reviewed at least annually, beginning no
more than 12 months after the last salary increase awarded to Executive prior to
the COC Effective Date.  Any increase in the Annual Base Salary will not serve
to limit or reduce any other obligation to the Covered Executive under this
Article IV.  The Annual Base Salary will not be reduced after any such increase
and the term “Annual Base Salary” will refer to the Annual Base Salary as so
increased.

 

(ii)                                  Annual Bonus.  In addition to the Annual
Base Salary, the Covered Executive will be awarded, for each fiscal year ending
during the COC Employment Period, an annual bonus (the “Annual Bonus”) in cash
according to the same formula used to calculate the Covered Executive’s last
bonus paid prior to the COC Effective Date.  Notwithstanding the prior sentence,
if any comparable bonus under the Employer’s successor bonus plan or arrangement
would result in a higher payment to the Covered Executive, the Covered Executive
will instead receive such bonus amount as her/his “Annual Bonus”.  Each such
Annual Bonus will be paid no later than two and a half months after the end of
the fiscal year for which the Annual Bonus is awarded and determined to be
payable, unless Executive elects to defer the receipt of such Annual Bonus
pursuant to an arrangement that meets the requirements of section 409A of the
Code.

 

(iii)                               Long-Term Cash and Equity Incentives,
Savings and Retirement Plans.  During the COC Employment Period, the Covered
Executive will be entitled to participate in all long-term cash incentive,
equity incentive, savings and retirement plans, practices, policies, and
programs applicable generally to other peer Executives, but in no event will
such plans, practices, policies and programs provide the Covered Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Employer to the Covered Executive under such plans, practices
(including without limitation, the Company’s annual stock option grant),
policies and programs as in effect at any time during the one hundred and twenty
(120)-day period immediately preceding the COC Effective Date or, if more
favorable to the Covered Executive, those provided generally at any time after
the COC Effective Date to other peer Executives.

 

(iv)                              Welfare Benefit Plans.  During the COC
Employment Period, the Covered Executive and/or the Covered Executive’s family,
as the case may be, will be eligible for participation in and will receive all
benefits under welfare

 

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benefit plans, practices, policies and programs provided by the Employer
(including, without limitation, medical, dental, vision, disability, employee
life, group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer Executives, but in no
event will such plans, practices, policies and programs provide the Covered
Executive with benefits that are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Covered Executive at any time during the one hundred and twenty (120)-day period
immediately preceding the COC Effective Date or, if more favorable to Executive,
those provided generally at any time after the COC Effective Date to other peer
Executives.

 

(v)                                 Expenses.  During the COC Employment Period,
the Covered Executive will be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Covered Executive in accordance with the
most favorable policies, practices and procedures of the Employer in effect for
Executive at any time during the one hundred and twenty (120)-day period
immediately preceding the COC Effective Date or, if more favorable to the
Covered Executive, as in effect generally at any time thereafter with respect to
other peer Executives.

 

(vi)                              Fringe Benefits.  During the COC Employment
Period, the Covered Executive will be entitled to fringe benefits in accordance
with the most favorable plans, practices, programs and policies of the Employer
in effect for the Covered Executive at any time during the one hundred and
twenty (120)-day period immediately preceding the COC Effective Date or, if more
favorable to the Covered Executive, as in effect generally at any time
thereafter with respect to other peer Executives.

 

(vii)                           Office and Support Staff.  During the COC
Employment Period, the Covered Executive will be entitled to an office or
offices of a size and with furnishings and other appointments, and to an
exclusive personal administrative assistant and other assistance, at least equal
to the most favorable of the foregoing provided to the Covered Executive by the
Employer at any time during the one hundred and twenty (120)-day period
immediately preceding the COC Effective Date or, if more favorable to the
Covered Executive, as provided generally at any time thereafter with respect to
other peer Executives. The Covered Executive will be entitled to pick his or her
own administrative assistant.

 

(viii)                        Paid Time Off.  During the COC Employment Period,
the Covered Executive will be entitled to paid vacation in accordance with the
most favorable plans, policies, programs and practices of the Employer as in
effect for the Covered Executive at any time during the one hundred and twenty
(120)-day period immediately preceding the COC Effective Date or, if more
favorable to the Covered Executive, as in effect generally at any time
thereafter with respect to other peer Executives.

 

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4.3                               Termination.

 

(a)                                  Death.  The Covered Executive’s employment
will terminate automatically if the Covered Executive dies during the COC
Employment Period.

 

(b)                                 Termination With or without Cause or by
Reason of Disability.  Subject to the other terms of the Plan (including,
without limitation, payment of certain amounts to the Covered Executive), the
Employer may terminate the Covered Executive’s employment during the COC
Employment Period with or without Cause.

 

4.4                               Obligations of the Employer in Connection with
a Change of Control.

 

(a)                                  Termination Payments.  If, during the COC
Employment Period the Employer terminates the Covered Executive’s employment
other than for Cause or Death, or the Covered Executive terminates employment
for Good Reason then the Covered Executive will be entitled to the following:

 

(i)                                     Cash Payments:  The Employer will pay to
the Covered Executive, in a lump sum in cash within thirty (30) days after the
Date of Termination, the aggregate of the following amounts:

 

(A)                              the sum of (1) the Covered Executive’s Annual
Base Salary through the Date of Termination to the extent not previously paid,
(2) the Covered Executive’s business expenses that are reimbursable pursuant to
Section 4.2(b) but have not been reimbursed by the Employer as of the Date of
Termination; (3) the Covered Executive’s Annual Bonus for the fiscal year
immediately preceding the fiscal year in which the Date of Termination occurs,
if such bonus has not been paid as of the Date of Termination; (4) any accrued
paid time off to the extent not theretofore paid (the sum of the amounts
described in subclauses (1), (2), (3) and (4), the “Accrued Obligations”)
provided, that notwithstanding the foregoing, if the Covered Executive has made
an irrevocable election under any deferred compensation arrangement subject to
section 409A of the Code to defer any portion of the annual bonus described in
clause (3) above, then for all purposes of this Article IV (including, without
limitation, Sections 4.5 through 4.7)), such deferral election, and the terms of
the applicable arrangement will apply to the same portion of the amount
described in such clause (3), and such portion will not be considered as part of
the “Accrued Obligations” but will instead be an “Other Benefit” (as defined in
Section 4.10 below;

 

(B)                                the amount equal to the product of (1) three,
and (2) the sum of (x) the Covered Executive’s Annual Base Salary and (y) the
average of the last three annual bonuses paid to the Covered Executive; and

 

(ii)                                  Non-Compete Benefits:  Subject to the
other terms of the Plan, including the requirement that Executive comply with
the restrictive covenants in

 

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the Plan Agreement and execute a Waiver and Release, the Employer will provide
the payments and benefits set forth in Article III.

 

Notwithstanding the foregoing provisions of Section 4.4(a)(i), in the event that
the Covered Executive is a Specified Employee, amounts that would otherwise be
payable and benefits that would otherwise be provided under
Section 4.4(a)(i) during the six (6)-month period immediately following the Date
of Termination (other than the Accrued Obligations) will instead be paid, with
Interest, on any delayed payment on the Delayed Payment Date; provided, however,
that if the Covered Executive dies following the Date of Termination but prior
to the Delayed Payment Date, such amounts will be paid to the personal
representative of the Covered Executive’s estate within thirty (30) days
following the Covered Executive’s death.

 

(iii)                               Pro Rata Bonus.  “Pro Rata Bonus” means an
amount equal to the product of (i) the Covered Executive’s annual bonus during
year in which the COC Effective Date occurs, if any, and (ii) a fraction, the
numerator of which is the number of days in such year through the Date of
Termination and the denominator of which is three hundred and sixty five (365). 
The Pro Rata Bonus will be paid at the same time and form specified in the
applicable annual incentive plan.  Notwithstanding the foregoing, in the event
that the successor to the Company by reason of the Change of Control fails to
assume the Company’s annual incentive plan in effect on the COC Effective Date,
and irrespective of whether Executive incurs a termination of employment, dies
or becomes Disabled, Executive will be entitled to receive a lump sum cash
payment in an amount equal to the target bonus specified in the Company’s annual
incentive plan, or if the plan does not specify a target, the amount which would
be payable based on the Company’s forecasted results for such period established
prior to the Change of Control (the “Target Bonus”), subject to applicable
withholding for income and employment taxes.  Such Target Bonus will be paid
within five (5) business days following the date of the Change of Control
provided that amounts payable under the annual incentive plan are exempt from
Section 409A of the Code by reason of the short-term deferral rule; otherwise,
the Target Bonus will be paid at the time such amount would have otherwise been
paid had the annual incentive plan remained in effect for the remainder of the
year in which occurs the COC Effective Date.

 

(iv)                              Other Benefits:  except as otherwise set forth
in the last sentence of Section 4.10, to the extent not theretofore paid or
provided, the Employer will timely pay or provide to Executive any Other
Benefits in accordance with the terms of the underlying plans or agreements.

 

4.5                               Death.  If the Covered Executive dies during
the COC Employment Period, the Employer will provide Executive’s estate or
beneficiaries with all payments due to the Covered Executive as though Executive
had left the employment of the Employer with Good Reason on the date of the
Covered Executive’s death (other than with respect to the application of the
Delayed Payment).  All such payments will be paid by the Employer to the Covered
Executive’s estate or beneficiary, as applicable, in a lump sum

 

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in cash within thirty (30) days of the date of the Covered Executive’s death
(the “deemed Date of Termination”).  With respect to the provision of the Other
Benefits, the term “Other Benefits” for the purposes of this Section 4.5 will
include, without limitation, and the Covered Executive’s estate and/or
beneficiaries will be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Employer to the estates and beneficiaries of
peer Executives under such plans, programs, practices and policies relating to
death benefits, if any, as in effect with respect to other peer Executives and
their beneficiaries at any time during the one hundred and twenty (120)-day
period immediately preceding the COC Effective Date or, if more favorable to the
Covered Executive’s estate and/or beneficiaries, as in effect on the date of the
Covered Executive’s death with respect to other peer Executives of the and their
beneficiaries.

 

4.6                               Disability.  If the Covered Executive’s
employment is terminated by the Employer during the COC Employment Period by
reason of the Covered Executive’s Disability, the Covered Executive will be
treated as though the Covered Executive had left the employment of the Employer
with Good Reason as of the Date of Termination.  Except as otherwise provided
herein, all payments will be paid by the Employer to the Covered Executive in
accordance with Section 4.4(a).  With respect to the provision of the Other
Benefits, the term “Other Benefits” for the purposes of this Section 4.6 will
include, and the Covered Executive will be entitled to receive (after the
Employer’s termination of the Covered Executive’s employment), disability and
other benefits at least equal to the most favorable of those generally provided
by the Employer to disabled Executives and/or their families in accordance with
such plans, programs, practices and policies relating to disability, if any, as
in effect generally with respect to other peer Executives and their families at
any time during the one hundred and twenty (120)-day period immediately
preceding the COC Effective Date or, if more favorable to the Covered Executive
and/or the Covered Executive’s family, as in effect at any time thereafter
generally with respect to other peer Executives and their families.

 

4.7                               Termination for Cause; Termination Other Than
for Good Reason.  If the Covered Executive’s employment is terminated for Cause
during the COC Employment Period, the Employer will provide the Covered
Executive with the Covered Executive’s Annual Base Salary through the Date of
Termination, payment for accrued but unused paid time off, and the timely
payment or delivery of the Other Benefits (disregarding the proviso set forth in
Section 4.4(a)(i)(A) regarding the deferral of the Annual Bonus), but no Pro
Rata Bonus will be paid to the Covered Executive and the Employer will have no
other severance obligations under Article IV of the Plan; provided however, the
Covered Executive may still receive any payment to which he or she is entitled
under another Article of the Plan.  If the Covered Executive voluntarily
terminates employment during the COC Employment Period, excluding a termination
for Good Reason, the Employer will provide to Executive the Accrued Obligations
and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits,
subject to the proviso set forth in Section 4.4(a)(i)(A) to the extent
applicable, and will have no other severance obligations under Article IV of the
Plan; provided however, that Covered Executive may still receive any payment to
which he or she is entitled under another Article of the Plan.  In such case,
all the Accrued Obligations will be paid to the Covered Executive in a lump sum
in cash within thirty (30) days of the Date of Termination and the Pro Rata
Bonus will be paid pursuant to the terms of Section 4.4(a)(iii).

 

4.8                               Rabbi Trust.  After any COC Effective Date, to
the extent the payments to be provided to Executive under Section 4.4(a)(i) are
not to be paid until the Delayed Payment Date

 

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and/or there are payments due under Section 3.1(a) then within five (5) business
days of Executive’s Date of Termination, the Company will deliver cash, in an
amount equal to the aggregate of the cash amounts due under Article III, which
is not immediately payable, and Article IV, which is payable on a Delayed
Payment Date (plus the estimated Interest), to a Trust to be held by the Trustee
pursuant to the terms of the Trust agreement entered into between the Company
and the Trustee prior to the COC Effective Date; provided, however, that the
Trust will not be funded if the funding thereof would result in taxable income
to Executive by reason of section 409A(b) of the Code; and provided, further, in
no event will any Trust assets at any time be located or transferred outside of
the United States, within the meaning of section 409A(b) of the Code.  Any fees
and expenses of the Trustee will be paid by the Company.  The Trustee may not be
removed by the Company during the five (5)-year period following the Change of
Control.

 

4.9                               Legal Fees.  At anytime after a COC Effective
date through the Covered Executive’s remaining lifetime (or, if longer, through
the 20th anniversary of the COC Effective Date), and regardless of whether or
not the Plan has been terminated, the Employer agrees to pay as incurred (within
ten (10) days following the Employer’s receipt of an invoice from the Covered
Executive) to the full extent permitted by law, all legal fees and expenses that
the Covered Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Employer, the Covered Executive or
others of the validity or enforceability of, or liability under, any provision
of the Plan, the Plan Agreement or the Waiver and Release, or any guarantee of
performance thereof (including, without limitation, as a result of any contest
by the Covered Executive about the amount of any payment pursuant to the Plan),
plus, in each case, Interest determined as of the date such legal fees and
expenses were incurred.  In order to comply with section 409A of the Code, in no
event will the payments by the Employer under this Section 4.9 be made later
than the end of the calendar year next following the calendar year in which such
fees and expenses were incurred, provided, that the Covered Executive submits an
invoice for such fees and expenses at least ten (10) days before the end of the
calendar year next following the calendar year in which such fees and expenses
were incurred.  The amount of such legal fees and expenses that the Employer is
obligated to pay in any given calendar year will not affect the legal fees and
expenses that the Employer is obligated to pay in any other calendar year, and
the Covered Executive’s right to have the Employer pay such legal fees and
expenses may not be liquidated or exchanged for any other benefit.

 

4.10                        Non-Exclusivity of Rights.  Nothing in the Plan will
prevent or limit the Covered Executive’s continuing or future participation in
any plan, program, policy or practice provided by the Employer and for which the
Covered Executive may qualify, nor will anything herein limit or otherwise
affect such rights as the Covered Executive may have under any other contract or
agreement with the Employer.  Amounts that are vested benefits or that the
Covered Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any other contract or agreement with the Employer at
or subsequent to the Date of Termination (“Other Benefits”) will be payable in
accordance with such plan, policy, practice or program or contract or agreement,
except as explicitly modified by the Plan.  Without limiting the generality of
the foregoing, the Covered Executive’s resignation under the Plan, with or
without Good Reason, will in no way affect Executive’s ability to terminate
employment by reason of Executive’s “retirement” under any compensation and
benefits plans, programs or arrangements of the Employer, including without
limitation any retirement or pension plans or arrangements

 

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or to be eligible to receive benefits under any compensation or benefit plans,
programs or arrangements of the Employer, including without limitation any
retirement or pension plan or arrangement of the Employer or substitute plans
adopted by the Company or its successors, and any termination which otherwise
qualifies as Good Reason will be treated as such even if it is also a
“retirement” for purposes of any such plan.  Notwithstanding the foregoing, if
Executive receives payments and benefits pursuant to Article IV, Executive will
not be entitled to any severance pay or benefits under any severance plan,
program or policy of the Employer, unless otherwise specifically provided
therein in a specific reference to the Plan; provided however, that the Covered
Executive will be entitled to receive Non-Compete Payments and the benefits set
forth in Article III, subject to applicable requirements.

 

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End of Article IV

 

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ARTICLE V
ADMINISTRATION

 

5.1                               The Plan Administrator.  The overall
administration of the Plan will be the responsibility of the Plan Administrator.

 

5.2                               Powers of Plan Administrator.  The Plan
Administrator will have sole and absolute discretion regarding the exercise of
its powers and duties under the Plan.  In order to effectuate the purposes of
the Plan, the Plan Administrator will have the following powers and duties:

 

(a)                                  To appoint the Daily Administrator;

 

(b)                                 To review and render decisions respecting a
denial of a claim for benefits under the Plan;

 

(c)                                  To construe the Plan and to make equitable
adjustments for any mistakes or errors made in the administration of the Plan;
and

 

(d)                                 To determine and resolve, in its sole and
absolute discretion, all questions relating to the administration of the Plan
and any trust established to secure the assets of the Plan:

 

(i)            when differences of opinion arise between the Company, an
Affiliate, the Daily Administrator, the trustee, a Covered Executive, or any of
them, and

 

(ii)           whenever it is deemed advisable to determine such questions in
order to promote the uniform and nondiscriminatory administration of the Plan
for the greatest benefit of all parties concerned.

 

The foregoing list of express powers is not intended to be either complete or
conclusive, and the Plan Administrator will, in addition, have such powers as it
may reasonably determine to be necessary or appropriate in the performance of
its powers and duties under the Plan.

 

5.3                               Appointment of Daily Administrator.  The Plan
Administrator will appoint the Daily Administrator, who will have the
responsibility and duty to administer the Plan on a daily basis.  The Plan
Administrator may remove the Daily Administrator with or without cause at any
time.  The Daily Administrator may resign upon written notice to the Plan
Administrator.

 

5.4                               Duties of Daily Administrator.  The Daily
Administrator will have sole and absolute discretion regarding the exercise of
its powers and duties under the Plan.  The Daily Administrator will have the
following powers and duties:

 

(a)                                  To enter into, on behalf of the Employer, a
Plan Agreement with an Executive who is deemed a Covered Executive;

 

(b)                                 To direct the administration of the Plan in
accordance with the provisions herein set forth;

 

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(c)                                  To adopt rules of procedure and regulations
necessary for the administration of the Plan, provided such rules are not in
consistent with the terms of the Plan;

 

(d)                                 To determine all questions with regard to
rights of Covered Executives and beneficiaries under the Plan including, but not
limited to, questions involving eligibility of an Executive to participate in
the Plan and the amount of a Covered Executive’s benefits;

 

(e)                                  To make all final determinations and
computations concerning the benefits to which the Covered Executive or his
estate is entitled under the Plan;

 

(f)                                    To enforce the terms of the Plan and any
rules and regulations adopted by the Plan Administrator;

 

(g)                                 To review and render decisions respecting a
claim for a benefit under the Plan;

 

(h)                                 To furnish the Employer with information
that the Employer may require for tax or other purposes;

 

(i)                                     To engage the service of counsel (who
may, if appropriate, be counsel for the Employer), actuaries, and agents whom it
may deem advisable to assist it with the performance of its duties;

 

(j)                                     To prescribe procedures to be followed
by Covered Executives in obtaining benefits;

 

(k)                                  To receive from the Employer and from
Covered Executives such information as is necessary for the proper
administration of the Plan;

 

(l)                                     To create and maintain such records and
forms as are required for the efficient administration of the Plan;

 

(m)                               To make all initial determinations and
computations concerning the benefits to which any Covered Executive is entitled
under the Plan;

 

(n)                                 To give the trustee of any trust established
to serve as a source of funds under the Plan specific directions in writing with
respect to:

 

(i)            making distribution payments, giving the names of the payees,
specifying the amounts to be paid and the time or times when payments will be
made; and

 

(ii)           making any other payments which the trustee is not by the terms
of the trust agreement authorized to make without a direction in writing by the
Daily Administrator;

 

(o)                                 To comply with all applicable lawful
reporting and disclosure requirements of ERISA;

 

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(p)                                 To comply (or transfer responsibility for
compliance to the trustee) with all applicable federal income tax withholding
requirements for benefit distributions; and

 

(q)                                 To construe the Plan, in its sole and
absolute discretion, and make equitable adjustments for any errors made in the
administration of the Plan.

 

The foregoing list of express duties is not intended to be either complete or
conclusive, and the Daily Administrator will, in addition, exercise such other
powers and perform such other duties as it may deem necessary, desirable,
advisable or proper for the supervision and administration of the Plan.

 

5.5                               Indemnification of Plan Administrator and
Daily Administrator.  To the extent not covered by insurance, or if there is a
failure to provide full insurance coverage for any reason, and to the extent
permissible under corporate by-laws and other applicable laws and regulations,
the Employer agrees to hold harmless and indemnify the Plan Administrator and
Daily Administrator against any and all claims and causes of action by or on
behalf of any and all parties whomsoever, and all losses therefrom, including,
without limitation, costs of defense and reasonable attorneys’ fees, based upon
or arising out of any act or omission relating to or in connection with the Plan
other than losses resulting from the Plan Administrator’s or any such person’s
commission of fraud or willful misconduct.

 

5.6                               Claims for Benefits.

 

(a)                                  Initial Claim.  In the event that a Covered
Executive or his estate (a “claimant”) claims to be eligible for benefits, or
claims any rights under the Plan or seeks to challenge the validity or terms of
the Waiver and Release described in Section 3.1, such claimant must complete and
submit such claim forms and supporting documentation as will be required by the
Daily Administrator, in its sole and absolute discretion.  Likewise, any
claimant who feels unfairly treated as a result of the administration of the
Plan, must file a written claim, setting forth the basis of the claim, with the
Daily Administrator.  In connection with the determination of a claim, or in
connection with review of a denied claim, the claimant may examine the Plan, and
any other pertinent documents generally available to Covered Executives that are
specifically related to the claim.

 

A written notice of the disposition of any such claim will be furnished to the
claimant within ninety (90) days after the claim is filed with the Daily
Administrator.  Such notice will refer, if appropriate, to pertinent provisions
of the Plan, will set forth in writing the reasons for denial of the claim if a
claim is denied (including references to any pertinent provisions of the Plan)
and, where appropriate, will describe any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary.  If the claim is denied, in whole or in
part, the claimant will also be notified of the Plan’s claim review procedure
and the time limits applicable to such procedure, including the claimant’s right
to arbitration following an adverse benefit determination on review as provided
below.  All benefits provided in the Plan as a result of the disposition of a
claim will be paid as soon as practicable following receipt of proof of
entitlement, if requested.

 

22

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(b)                                 Request for Review.  Within ninety (90) days
after receiving written notice of the Daily Administrator’s disposition of the
claim, the claimant may file with the Plan Administrator a written request for
review of his claim.  In connection with the request for review, the claimant
will be entitled to be represented by counsel and will be given, upon request
and free of charge, reasonable access to all pertinent documents for the
preparation of his claim.  If the claimant does not file a written request for
review within ninety (90) days after receiving written notice of the Daily
Administrator’s disposition of the claim, the claimant will be deemed to have
accepted the Daily Administrator’s written disposition, unless the claimant was
physically or mentally incapacitated so as to be unable to request review within
the ninety (90) day period.

 

(c)                                  Decision on Review.  After receipt by the
Plan Administrator of a written application for review of his claim, the Plan
Administrator will review the claim taking into account all comments, documents,
records and other information submitted by the claimant regarding the claim
without regard to whether such information was considered in the initial benefit
determination.  The Plan Administrator will notify the claimant of its decision
by delivery or by certified or registered mail to his last known address.

 

A decision on review of the claim will be made by the Plan Administrator at its
next meeting following receipt of the written request for review.  If no meeting
of the Plan Administrator is scheduled within forty-five (45) days of receipt of
the written request for review, then the Plan Administrator will hold a special
meeting to review such written request for review within such forty-five (45)
day period.  If special circumstances require an extension of the forty-five
(45) day period, the Plan Administrator will so notify the claimant and a
decision will be rendered within ninety (90) days of receipt of the request for
review.  In any event, if a claim is not determined by the Plan Administrator
within ninety (90) days of receipt of written submission for review, it will be
deemed to be denied.

 

The decision of the Plan Administrator will be provided to the claimant as soon
as possible but no later than five (5) days after the benefit determination is
made.  The decision will be in writing and will include the specific reasons for
the decision presented in a manner calculated to be understood by the claimant
and will contain references to all relevant Plan provisions on which the
decision was based.  Such decision will also advise the claimant that he may
receive upon request, and free of charge, reasonable access to and copies of all
documents, records and other information relevant to his claim and will inform
the claimant of his right to arbitration in the case of an adverse decision
regarding his appeal.  The decision of the Plan Administrator will be final and
conclusive.

 

5.7                               Arbitration.  In the event the claims review
procedure described in Section 5.6 of the Plan does not result in an outcome
thought by the claimant to be in accordance with the Plan document, he may
appeal such decision prior to a Change of Control to a third party neutral
arbitrator.  These arbitration provisions as a final dispute resolution
mechanism will be elective on the part of the Covered Executive on and after a
Change of Control (i.e, the Covered Executive may pursue legal action in a court
of law in lieu of an appeal to any arbitrator).  The claimant must appeal to an
arbitrator (or pursue legal action in a court of law) within sixty (60) days
after receiving the Plan Administrator’s denial or deemed denial of his request
for review and before bringing suit in court.  The

 

23

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arbitration will be conducted pursuant to the American Arbitration Association
(“AAA”) Rules on Employee Benefit Claims.

 

The arbitrator will be mutually selected by the claimant and the Plan
Administrator from a list of arbitrators who are experienced in nonqualified
deferred compensation plan benefit matters that is provided by the AAA.  If the
parties are unable to agree on the selection of an arbitrator within ten days of
receiving the list from the AAA, the AAA will appoint an arbitrator.  The
arbitrator’s review will be limited to interpretation of the Plan document in
the context of the particular facts involved.  The claimant, the Plan
Administrator and the Employer agree to accept the award of the arbitrator as
binding, and all exercises of power by the arbitrator hereunder will be final,
conclusive and binding on all interested parties, unless found by a court of
competent jurisdiction, in a final judgment that is no longer subject to review
or appeal, to be arbitrary and capricious.  The claimant, Plan Administrator and
the Employer agree that the venue for the arbitration will be in Austin, Texas. 
The costs of arbitration will be paid by the Employer and all legal fees and
expenses reasonably incurred by the claimant will be reimbursed pursuant to
Section 4.9 (or if inapplicable, such fees and expenses will be incurred by the
claimant except to the extent the arbitrator may require the Employer to
reimburse the claimant for all or a portion of such amounts).

 

The following discovery may be conducted by the parties: interrogatories,
demands to produce documents, requests for admissions and oral depositions.  The
arbitrator will resolve any discovery disputes by such pre-hearing conferences
as may be needed.  The Employer, Plan Administrator and claimant agree that the
arbitrator will have the power of subpoena process as provided by law. 
Disagreements concerning the scope of depositions or document production, its
reasonableness and enforcement of discovery requests will be subject to
agreement by the Employer and the claimant or will be resolved by the
arbitrator.  All discovery requests will be subject to the proprietary rights
and rights of privilege and other protections granted by applicable law to the
Employer and the claimant and the arbitrator will adopt procedures to protect
such rights.  With respect to any dispute, the Employer, Plan Administrator and
the claimant agree that all discovery activities will be expressly limited to
matters directly relevant to the dispute and the arbitrator will be required to
fully enforce this requirement.

 

The arbitrator will have no power to add to, subtract from, or modify any of the
terms of the Plan, or to change or add to any benefits provided by the Plan, or
to waive or fail to apply any requirements of eligibility for a benefit under
the Plan.  Nonetheless, the arbitrator will have absolute discretion in the
exercise of its powers in the Plan.  Arbitration decisions will not establish
binding precedent with respect to the administration or operation of the Plan.

 

5.8                               Receipt and Release of Necessary Information. 
In implementing the terms of the Plan, the Plan Administrator and Daily
Administrator, as applicable, may, without the consent of or notice to any
person, release to or obtain from any other insuring entity or other
organization or person any information, with respect to any person, which the
Plan Administrator or Daily Administrator deems to be necessary for such
purposes.  Any Covered Executive or estate claiming benefits under the Plan will
furnish to the Plan Administrator or Daily Administrator, as applicable, such
information as may be necessary to determine eligibility for and amount of
benefit, as a condition of claiming and receiving such benefit.

 

24

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5.9                               Overpayment and Underpayment of Benefits.  The
Daily Administrator may adopt, in its sole and absolute discretion, whatever
rules, procedures and accounting practices are appropriate in providing for the
collection of any overpayment of benefits.  If a Covered Executive or his estate
receives an underpayment of benefits, the Daily Administrator will direct that
payment be made as soon as practicable to make up for the underpayment.  If an
overpayment is made to a Covered Executive or his estate, for whatever reason,
the Daily Administrator may, in its sole and absolute discretion, withhold
payment of any further benefits under the Plan until the overpayment has been
collected or may require repayment of benefits paid under the Plan without
regard to further benefits to which the Covered Executive or his estate may be
entitled.

 

5.10                        No Mitigation.  The Employer’s obligation to make
the payments provided for under the Plan and otherwise to perform its
obligations hereunder will not be affected by any set-off, counterclaim,
recoupment, defense, or other claim, right or action that the Employer may have
against the Covered Executive or others.  In no event will the Covered Executive
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to Executive under any of the provisions of
the Plan, and except as specifically provided in Section 3.1(c) regarding COBRA
coverage, such amounts will not be reduced whether or not the Covered Executive
obtains other employment.

 

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End of Article V

 

25

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ARTICLE VI
AMENDMENT AND TERMINATION OF THE PLAN

 

6.1                               Continuation.  The Company currently intends
to continue the Plan indefinitely. However, if the Plan is discontinued, the
Company assumes no contractual obligation beyond the obligations due to each
Executive under the Plan and their respective Plan Agreements which were
executed prior to such discontinuance.

 

6.2                               Amendment of Plan.  The Company, through an
action of the Board reserves the right in its sole and absolute discretion to
amend the Plan in any respect at any time; provided, however, that except as
required to comply with section 409A of the Code or other applicable law, no
amendment to the Plan will be made that reduces or diminishes the rights of any
Covered Executive as set forth in the Covered Executive’s Plan Agreement without
the Covered Executive’s written consent.  In the event of a Change of Control,
no amendment may be made to the Plan within twenty four (24) months following a
Change of Control without the consent of the affected Covered Executives.

 

6.3                               Termination of Plan.  The Company, through an
action of the Board, may terminate or suspend the Plan in whole or in part at
any time subject to the same rules regarding the amendment of the Plan in
Section 6.2 (i.e., no Covered Executive’s Plan Agreement may be terminated
without the Covered Executive’s written consent and the Plan may not be
terminated within twenty four (24) months following a Change of Control without
the consent of the affected Covered Executives).

 

6.4                               Termination of Affiliated Company’s
Participation.  The Company may terminate an Affiliated Company’s participation
in the Plan at any time by an action of the Compensation Committee and providing
written notice to the Affiliated Company; provided, however, no such termination
shall be allowed to negatively impact a Covered Executive’s rights to the
benefits described in the Plan and the Covered Executive’s Plan Agreement that
is in effect at the time of such termination.  The effective date of any such
termination will be the later of the date specified in the notice of the
termination of participation or the date on which the Daily Administrator can
administratively implement such termination.

 

6.5                               409A Compliance.  The Plan is intended to
comply with the requirements of section 409A of the Code or an exemption or
exclusion therefrom and will in all respects be administered in accordance with
section 409A of the Code.  In the event that the Company determines that a
provision of the Plan does not comply with section 409A of the Code, the Company
may modify the Plan, in the least restrictive manner necessary and without any
diminution in the value of the payments to the Covered Executive, in order to
cause the provisions of the Plan to comply with the requirements of section 409A
of the Code, so as to avoid the imposition of taxes and penalties on the Covered
Executive pursuant to section 409A of the Code. Based on existing guidance under
section 409A of the Code, the Company believes and intends that the Non-Compete
Payment under Section 3.1(a) and the Change of Control payment under Section
4.4(a)(i)(B) constitute separate amounts of deferred compensation under Section
409A of the Code and, as such, they may each have a separate time and form of
payment under Treasury Regulation §1.409A-3(c).  However, in the event that
subsequent guidance issued under section 409A indicates that this is not the
case and the Non-Compete Payment and the Change of Control payment under Section
4.4(a)(i)(B) must

 

26

--------------------------------------------------------------------------------

 

be treated as a single payment, the Change of Control payment will be paid at
the same time and in the same form as the Non-Compete Payment.

 

--------------------------------------------------------------------------------

End of Article VI

 

27

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ARTICLE VII
MISCELLANEOUS

 

7.1                               No Reduction of Employer Rights.  Except as
provided in Article IV, nothing contained in the Plan will be construed as a
contract of employment between the Employer and a Covered Executive, or as a
right of any Covered Executive to continue in the employment of the Employer, or
as a limitation of the right of the Employer to discharge any of its Covered
Executives, with or without cause.

 

7.2                               Successor to the Company.  The Company will
require any successor or assign (whether direct or indirect, by purchase,
exchange, lease, merger, consolidation, or otherwise) to all or substantially
all of the property and assets of the Company and its Affiliated Companies taken
as a whole, to expressly assume the Plan and to agree to perform under the Plan
in the same manner and to the same extent that the Company and its Affiliated
Companies would be required to perform it if no such succession had taken place.

 

7.3                               Provisions Binding.  All of the provisions of
the Plan will be binding upon the Company and its Affiliated Companies and any
successor to the Company or any such Affiliated Company.  Likewise, the
provisions of the Plan will be binding upon all persons who will be entitled to
any benefit hereunder, their heirs and personal representatives.

 

7.4                               Governing Law.  Except to the extent
pre-empted by ERISA or other applicable federal law, the Plan will be governed
by and construed in accordance with the laws of the State of Texas, without
reference to principles of conflict of laws.

 

7.5                               Notice.  All notices and other communications
under the Plan must be in writing and given by hand delivery to the other party
or by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

(a)                                  Covered Executive.  For notice to the
Covered Executive:

 

At the most recent address on file at the Employer.

 

(b)                                 For the Company and Administrators:  For
notice to the Company, Plan Administrator or Daily Administrator:

 

Whole Foods Market, Inc.

550 Bowie St.

Austin, TX 78703

 

Notice to the Company should be directed to the attention of the General
Counsel.

 

(c)                                  Alternate Address.  If either party
provides written notice to the other in accordance with this Section 7.5, of an
alternate address, such address will be used instead of the addresses specified
in clauses (a) or (b).

 

(d)                                 Effective Date.  Notice and communications
will be effective when actually received by the addressee.

 

28

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7.6                               Severability.  The invalidity or
unenforceability of any provision of the Plan will not affect the validity or
enforceability of any other provision of the Plan.

 

7.7                               Counterparts and Electronic Signatures.  Each
Plan Agreement may be executed in several counterparts, all of which taken
together shall constitute one single agreement.  Signatures may be made and
delivered electronically.

 

7.8                               Withholding.  The Company may withhold from
any amounts payable under the Plan such United States federal, state or local or
foreign taxes as will be required to be withheld pursuant to any applicable law
or regulation.

 

7.9                               No Waiver.  The Covered Executive’s or the
Employer’s failure to insist upon strict compliance with any provision of the
Plan or the failure to assert any right the Covered Executive or the Employer
have hereunder, including, without limitation, the right of the Covered
Executive to terminate employment for Good Reason, will not be deemed to be a
waiver of such provision or right or any other provision or right of the Plan.

 

--------------------------------------------------------------------------------

End of Article VII

 

29

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IN WITNESS WHEREOF, this Whole Foods Executive Retention Plan and Non-Compete
Arrangement has been executed on this       day of                         ,
2010, effective as of May 20, 2010, except as specifically provided otherwise
herein.

 

 

 

WHOLE FOODS MARKET, INC.

 

 

 

 

 

By:

 

 

 

John P. Mackey

 

 

Co-Chief Executive Officer

 

30

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APPENDIX A

 

PLAN AGREEMENTS

 

Section 2.1(ee) of the Whole Foods Executive Retention Plan and Non-Compete
Arrangement (the “Plan”) provides that each Covered Executive will enter into an
Plan Agreement which sets forth the terms and conditions of his benefits under
the Plan and a form copy of such agreement will be attached to the Plan as
Appendix A.

 

A-1

--------------------------------------------------------------------------------

 

WHOLE FOODS EXECUTIVE RETENTION PLAN

AND NON-COMPETE ARRANGEMENT AGREEMENT

 

THIS EXECUTIVE RETENTION PLAN AND NON-COMPETE ARRANGEMENT AGREEMENT (“Plan
Agreement”) is made as of           20    by and between the Plan Administrator
of the Whole Foods Executive Retention Plan and Non-Compete Arrangement (the
“Plan”) on behalf of Whole Foods Market Services, Inc. (the “Employer”), and
                                  (the “Covered Executive”).  This Plan
Agreement supersedes and replaces any existing agreement entered into between
the Employer and the Covered Executive under the Plan and any existing
severance, change in control or similar agreement in effect between the Employer
and the Covered Executive and represents the entire agreement of the parties
concerning the subject matter herein.  Capitalized terms used in this Plan
Agreement that are not defined herein will have the meaning set forth in the
Plan.

 

1.                                      Non-Compete Benefits.

 

(a)                                  Non-Compete Payment.  The amount of the
total of all Non-Compete Payments payable to the Covered Executive under
Section 3.1(a) of the Plan will equal up to
                                         ($            )(so long as the Covered
Executive complies with the terms of this Plan Agreement); provided, this amount
will be adjusted to reflect the increase, if any, in the Consumer Price Index
(as defined below) that has occurred during the period beginning on the date of
this Plan Agreement and ending as of the close of the month immediately
preceding the month in which the Covered Executive’s employment is terminated in
accordance with Section 3.1(a) of the Plan; [and further provided, that the
amount of the Non-Compete Payment payable upon a voluntary termination of
employment for a reason other than Good Reason, Disability or death will be
subject to Section 1(d) of this Plan Agreement]*.

 

For the avoidance of doubt, on the date of this Plan Agreement, the Company and
the Covered Executive agree that the Covered Executive has continuously served
in one or more of the positions referenced in Section 3.1(a) of the Plan from
            ; therefore, for any Date of Termination occurring on or after [15
Years following start date] (the “Total Benefit Date”), no adjustments to any
Non-Compete Payment otherwise due shall be made pursuant to the terms of the
table in Section 3.1(a) of the Plan.

 

For purposes of Section 1 of this Plan Agreement, the term “Consumer Price
Index” means the Consumer Price Index for all Urban Consumers published by the
United States Bureau of Labor Statistics, or the supplement or successor thereto
if publication of such index should be discontinued.

 

(b)                                 Equity Compensation.  [Subject to the
provisions of Section 1(d) of this Plan Agreement,]* applicable equity
compensation granted to the Covered Executive shall be vested and be exercisable
pursuant to the provisions of Section 3.1(b) of

 

--------------------------------------------------------------------------------

[*These provisions apply only to the Company’s Co-Chief Executive Officers
(other than John Mackey), Chief Financial Officer and the two other most highly
compensated executive officers of the Company for fiscal 2009.

 

A-2

--------------------------------------------------------------------------------

 

the Plan (so long as the Covered Executive complies with the terms of this Plan
Agreement).

 

(c)                                  COBRA Coverage.  [Subject to the provisions
of Section 1(d) of this Plan Agreement,]* the Covered Executive shall be
entitled to reimbursement of COBRA premiums pursuant to the provisions of
Section 3.1(c) of the Plan (so long as the Covered Executive complies with the
terms of this Plan Agreement).

 

(d)                                 [Voluntary Termination of Employment.  In
the event that the Covered Executive voluntarily terminates employment with the
Company for a reason other than Good Reason, Disability or death, the
Non-Compete Benefits otherwise due and payable shall not be due and payable in
connection with such termination, and instead the benefits payable, if any, will
consist of those benefits described in Sections 1(a), 1(b) and 1(c) of this Plan
Agreement but in such amounts as are negotiated between either one of the two
Co-Chief Executive Officers of the Company and the Covered Executive and
documented in a signed writing (the “Negotiated Benefits” which benefits will be
deemed to be Non-Compete Benefits described herein); provided, however that for
purposes of such negotiation the benefits cannot exceed the maximum provided for
in the case of a termination for “Good Reason” under Sections 1(a), 1(b) and
1(c) of this Plan Agreement.  Notwithstanding the foregoing, if either of the
two Co-Chief Executive Officers of the Company as of the date of this Agreement
are involuntarily terminated or if both of the Co-Chief Executive Officers die
and/or otherwise terminate employment with the Company within forty-five (45)
days of each other (including the situations in which: both die; each person’s
employment is terminated, and one person dies and the other person’s employment
is terminated) and the Covered Executive terminates employment with the Company
after the occurrence of the applicable event(s), the Negotiated Benefits will
not be payable and the amount of Non-Compete Benefits determined under
Section 1(a), (b) and (c) of this Plan Agreement, without regard to this
Section 1(d), shall be payable to the Covered Executive.]* [In the event that
the Covered Executive voluntarily terminates employment with the Company for a
reason other than Good Reason, Disability or death, the Non-Compete Benefits
otherwise due and payable shall not be due and payable in connection with such
termination, and instead the benefits payable, if any, will consist of those
benefits described in Sections 1(a), 1(b) and 1(c) of this Plan Agreement but in
such amounts as are negotiated between the other Co-Chief Executive Officer of
the Company and the Covered Executive (the “Negotiated Benefits” which benefits
will be deemed to be Non-Compete Benefits described herein); provided, however,
that for purposes of such negotiation the benefits cannot exceed the maximum
provided for in the case of a termination for “Good Reason” under Sections 1(a),
1(b) and 1(c) of this Plan Agreement.  Notwithstanding the foregoing, if the
other of the two Co-Chief Executive Officers of the Company as of the date of
this Agreement dies or terminates employment with the Company for any reason and
the Covered Executive terminates his employment with the Company after the
occurrence of such event, Negotiated Benefits will not be

 

--------------------------------------------------------------------------------

[*These provisions apply only to the Company’s Co-Chief Executive Officers
(other than John Mackey), Chief Financial Officer and the two other most highly
compensated executive officers of the Company for fiscal 2009.

 

A-3

--------------------------------------------------------------------------------

 

payable and the amount of Non-Compete Benefits determined under Section 1(a),
(b) and (c) of this Plan Agreement, without regard to this Section 1(d), shall
be payable to the Covered Executive.]#

 

2.                                      Confidentiality and Restrictive
Covenants.  As a condition of receiving the Non-Compete Benefits under
Article III of the Plan, as set forth in Section 1 of this Plan Agreement
[including the Negotiated Benefits that may be payable in the event of the
Covered Executive’s voluntary termination of employment]*, the Covered Executive
agrees to comply with the following confidentiality provisions and restrictive
covenants:

 

(a)                                  Confidentiality Provisions.

 

(i)                                     Definition of Confidential Information.
“Confidential Information” means the existence this Plan Agreement, including
all its material terms.  “Confidential Information” also means any information
or material (A) generated or collected by, or utilized in the operations of, the
Employer that relates to the actual or anticipated business or research and
development conducted by or on behalf of the Employer, or (B) suggested by or
resulting from any task assigned to the Covered Executive or work performed by
the Covered Executive for or on behalf of the Employer, including, for example
and without limitation, information and materials relating or pertaining to the
Employer’s financial performance, financial statements and reports, financial
projections, accounting methods and information, business plans, strategic
plans, plans regarding the Employer’s future growth, development and projects,
marketing plans and strategies, sales methods and strategies, products, pricing
strategies, price lists, vendor lists, vendor information (including, without
limitation, their history of dealings with the Employer), employee files,
employee compensation, skills, performance and qualifications of the Employer’s
personnel, trade secrets, inventions (whether patented or unpatented),
copyrights, service marks, know-how, computer programs, computer code and
related documentation, processes, methods, formulas, research, development,
licenses, permits, and compilations of any of the foregoing information relating
to the actual or anticipated business of the Employer.  Confidential Information
does not include information that properly and lawfully has become generally
known to the public other than as a result of any act or omission by any Covered
Executive.

 

Confidential Information also includes information that belongs to the
Employer’s vendors and customers and is not generally known to the public.  This
includes information that could be used by clients’ competitors to gain an
advantage in the market; client’s marketing plans, business plans, customer
lists/data, organizational structure, pricing, financial data, budgeting and
reporting.

 

--------------------------------------------------------------------------------

[*These provisions apply only to the Company’s Co-Chief Executive Officers
(other than John Mackey), Chief Financial Officer and the two other most highly
compensated executive officers of the Company for fiscal 2009.

 

#These provisions apply only to the Company’s Co-Chief Executive Officers (other
than John Mackey).]

 

A-4

--------------------------------------------------------------------------------

 

(ii)                                  Promise to Provide Confidential
Information.  The Employer promises that it will, throughout the course of the
Covered Executive’s employment with the Employer, provide the Covered Executive
with Confidential Information.  The Covered Executive acknowledges that the
Employer has invested substantial time, money and effort in developing its
Confidential Information, that this Confidential Information is a valuable,
special and unique asset of the Employer, that the Employer would sustain great
loss if such information were improperly used or disclosed, and that the
protection and maintenance of the Employer’s Confidential Information constitute
legitimate interests to be protected by the Company by the covenants set forth
in this Section 2.2.

 

(iii)                               Nondisclosure of Confidential Information. 
During the Covered Executive’s employment with the Employer and at any time
thereafter, the Covered Executive will preserve in strictest confidence, and
will not disclose, copy or take away, either directly or indirectly, or use for
the Covered Executive’s own benefit or the benefit of any third party, any
Confidential Information of the Employer or any confidential or proprietary
information or material received by the Employer from third parties, except as
required in the ordinary course of the Covered Executive’s employment for the
benefit of the Employer.  With respect to other employees of any Employer or its
affiliates (including all parent companies and all wholly or partially owned
subsidiaries), unless approved by a member of the Employer’s Executive Team, the
Covered Executive agrees that he/she will only discuss this Plan Agreement with
the following persons: any Executive Team Member, the Senior Global Vice
President and/or the General Counsel or another attorney for the Employer. 
Notwithstanding the above, the Covered Executive has the right to discuss the
terms of this Plan Agreement with outside legal counsel, accountants and other
persons who are not employed with an Employer entity and who have a need to know
in order to assist the Covered Executive with the enforcement and/or protection
of any legal right.

 

(iv)                              Return of Confidential Information.  At the
end of the Covered Executive’s employment with the Employer, the Covered
Executive agrees to search for and return to the Employer all property belonging
to the Employer including any documents, records, electronic data, and tangible
items and materials containing or embodying any Employer information or Employer
Confidential Information—whether such information was prepared by the Covered
Executive or by others, and whether such information exists as hard copy or in
electronic form on a Employer-issued computer device, a personal computer device
or any other electronic device.  All documents, records, computer programs,
electronic data, and tangible items and materials containing or embodying any
Confidential Information, including all copies thereof, whether prepared by the
Covered Executive or by others, will immediately be returned to the Employer
upon termination of the Covered Executive’s employment with the Employer
(voluntary or otherwise), or at any time upon the Employer’s request.  The
Covered Executive understands and agrees that the Covered Executive’s obligation
to maintain the

 

A-5

--------------------------------------------------------------------------------

 

confidentiality of Confidential Information remains even after the Covered
Executive’s employment with the Employer ends and continues for so long as such
Confidential Information remains not generally known to the public through no
fault or breach of this Plan Agreement by the Covered Executive. 
Notwithstanding the above, the Covered Executive has the right to keep a copy of
the Plan Agreement.

 

(b)                                 Restricted Covenants.  In consideration of
the Employer’s promise to provide Confidential Information and other good and
valuable consideration, the receipt and sufficiency thereof is hereby
acknowledged, the Covered Executive agrees as follows:

 

(i)                                     Covenant Not to Compete.  During the
Covered Executive’s employment with the Employer or its affiliates, including
all parent companies and all wholly or partially owned subsidiaries
(collectively, the “Employer Entities” for purposes of this Section 2(b)(i)),
other than with respect to the Employer Entities, the Covered Executive will
refrain from participating in, providing services to, planning or organizing any
business that is in the business of retail food service, retail grocery sales or
retail grocery distribution.  During the Covered Executive’s employment and, in
the event the Covered Executive is eligible for and elects to receive the
Non-Compete Benefits payable pursuant to Article III, for a period of five
(5) years following the termination of the Covered Executive’s employment (such
additional period, the “Restricted Period”), the Covered Executive will not, in
any geographic region in which any of the Employer Entities then does business,
directly or indirectly, perform management level services for, consult with or
sit on the board of directors (or similar body)  of any business competitive
with the Employer Entities including any company in the business of retail food
service, retail grocery sales or retail grocery distribution.

 

(ii)                                  Nonsolicitation of Team Members.  During
the Covered Executive’s employment and, in the event the Covered Executive is
eligible for and elects to receive the Non-Compete Benefits payable pursuant to
Article III, the Restricted Period, the Covered Executive will not, on the
Covered Executive’s own behalf or on behalf of any other person, have any
contact with a person who is, during such time frame, an employee of a Employer
entity, for the purpose of discussing that person’s leaving such employment. 
The Covered Executive will not, during the Restricted Period, in any other
manner attempt, directly or indirectly, attempt to hire any employee of an
Employer entity or to influence, induce or encourage any employee of an Employer
entity to leave the employment of the Employer.

 

(iii)                               Nondisparagement. The Covered Executive
agrees that the Covered Executive will not disparage the Employer or one or more
of its affiliates (including any parent companies and any wholly or partially
owned subsidiaries), the Board, the Employer’s executives, the Employer’s
employees and the Employer’s products or services during the term of this Plan
Agreement and thereafter.  For purposes of this Plan Agreement, disparagement
does not include (A) compliance with legal

 

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process or subpoenas to the extent only truthful statements are rendered in such
compliance attempt, (B) statements in response to an inquiry from a court or
regulatory body, or (C) statements or comments in rebuttal of media stories or
alleged media stories.

 

(iv)                              Termination and Forfeiture.  If during the
Covered Executive’s employment with the Employer, the Covered Executive
materially violates any of the covenants and restrictions contained in this Plan
Agreement, such action may be grounds for the termination of the Covered
Executive’s employment for Cause.  If the Covered Executive is eligible for and
elects to receive the Non-Compete Benefits payable pursuant to Article III of
the Plan and during the Restricted Period the Covered Executive violates any of
the covenants and restrictions contained in this Plan Agreement, the Covered
Executive will forfeit the right to any and all future Non-Compete Benefits. 
The provisions of this Plan Agreement are in addition to any forfeiture
provisions of other Employer plans, programs or agreements applicable to the
Covered Executive. The Covered Executive specifically recognizes and affirms
that the restrictive covenants set forth in this Plan Agreement are a material
part of this Plan Agreement without which the Employer would not have entered
into this Plan Agreement.

 

(v)                                 Representations. The Covered Executive has
carefully read and considered the provisions of Paragraphs 2(b)(i) through (iv)
of this Plan Agreement and agrees that the restrictions set forth therein,
including, but not limited to, the time period and geographic area of the
restrictions and the scope of activities restricted are fair and reasonable and
are supported by sufficient and valid consideration, and that these restrictions
do not impose any greater restraint than is necessary to protect the goodwill
and other legitimate business interests of the Employer, its officers,
directors, shareholders and other employees. The Covered Executive acknowledge
that the covenants and agreements in Paragraphs 2(b)(i) through (iv) of this
Plan Agreement are ancillary to and a part of an otherwise enforceable agreement
entered into at the time these covenants are made, namely, the agreement
concerning provision and confidentiality of Confidential Information. The
Covered Executive acknowledges that the Covered Executive’s agreement to be
bound by the restrictive covenants set forth in Paragraphs 2(b)(i) through (iv)
of this Plan Agreement is a concurrent and material inducement for the Employer
(A) to enter into the ancillary terms of this Plan Agreement, (B) to continue
the Covered Executive’s employment, and (C) to provide the Covered Executive
with the promises and consideration set forth in this Plan Agreement.  The
Covered Executive agrees that each ancillary agreement set forth in this Plan
Agreement, is otherwise enforceable and independently sufficient to support all
of the protective covenants in Paragraphs 2(b)(i) through (iv) of this Plan
Agreement. The Covered Executive acknowledges that these restrictions will not
prevent the Covered Executive from obtaining gainful employment in the Covered
Executive’s occupation or field of expertise or cause the Covered Executive
undue hardship and that there are numerous other employment

 

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and business opportunities available to the Covered Executive that are not
affected by these restrictions.

 

(vi)                              Reformation.  Should an arbitrator or court
determine that the scope of any of the covenants contained in Paragraphs 2(b)(i)
through (iv) of this Plan Agreement exceed the maximum restrictiveness such
arbitrator or court deems reasonable and enforceable, the parties intend that
the arbitrator or court should reform, modify and enforce the provision to such
narrower scope as it determines to be reasonable and enforceable.  Any reduction
in the Restricted Period will concomitantly reduce the obligation to provide the
Non-Compete Benefits to the duration of the revised Restricted Period.

 

(vii)                           Election.  If at any time the Covered Executive
elects not to receive the Non-Compete Benefits, then the Employer agrees it will
not enforce this Paragraph 2(b) during the portion of the Restriction Period
occurring after such election in exchange for the Covered Executive’s commitment
to not seek any or addition, as applicable, Non-Compete Benefits, including,
without limitation, any additional Non-Compete Payment.

 

3.                                      Change in Control Benefits.  In the
event of a Change of Control, the Covered Executive will also be entitled to the
rights and benefits set forth in Article IV of the Plan, as in effect on the
date of this Plan Agreement, including the termination payment described in
Section 4.4(a) and subject to the Covered Executive’s satisfaction of the terms
and conditions that are required to receive such benefits.

 

4.                                      Dispute Resolution.  Any dispute or
claim for benefits under the Plan must be resolved through the claims procedure
set forth in Article V of the Plan which procedure, prior to a Change of Control
culminates in binding arbitration, if elected by the Covered Executive.  By
accepting the benefits provided under the Plan, the Covered Executive hereby
agrees to binding arbitration as the final means of dispute resolution (if the
Covered Executive elects to pursue binding obligation) with respect to the Plan
prior to a Change of Control.

 

5.                                      Injunctive Relief.  Notwithstanding
anything contained in the Plan or Section 4 to the contrary, if the Covered
Executive breaches, or threatens to commit a breach of, any of the restrictive
covenants of Section 2(b) of this Plan Agreement (other than the restrictive
covenants set forth in Section 2(b)(i)), the Company will also have the right
and remedy to seek from any court of competent jurisdiction specific performance
of such provisions or injunctive relief against any act which would violate any
of Section 2(b) of this Plan Agreement, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable injury to the
Company.  The Company and the Covered Executive (a) agree that any suit, action
or legal proceeding permitted by this Section 5 may be brought in the courts of
record of the State of Texas in Travis County or the court of the United States,
Western District of Texas; (b) consent to the jurisdiction of each such court in
any suit, action or proceeding permitted by this Section; and (c) waive any
objection that they may have to the laying of venue of any such suit, action or
proceeding permitted by this Section 5 in any of such courts.

 

6.                                      Plan Incorporated by Reference. The Plan
is hereby incorporated into and made a part of this Plan Agreement as though set
forth in full herein.  The parties will be bound by

 

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and have the benefit of each and every provision of the Plan, as amended from
time to time.

 

7.                                      Amendment.  This Plan Agreement may be
amended at any time by the mutual agreement of the parties; provided, that no
such amendment will be effective unless evidenced by a written instrument
executed by both the Employer and the Covered Executive.

 

IN WITNESS WHEREOF, the parties hereto have entered into this Plan Agreement on
           , 20   .

 

 

COVERED EXECUTIVE

 

PLAN ADMINISTRATOR

 

 

 

 

 

WHOLE FOODS MARKET, INC.

 

 

 

By:

 

 

By:

 

Name:

 

 

 

John P. Mackey

Title:

 

 

 

Co-Chief Executive Officer

 

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EXHIBIT A

 

WAIVER AND RELEASE

 

In exchange for the payment to me of the Non-Compete Benefits described in
Article III of the Whole Foods Executive Retention Plan and Non-Compete
Arrangement (the “Plan”), the terms of which I understand are incorporated
herein by reference, which Non-Compete Benefits are in addition to any
remuneration or benefits to which I am already entitled, I agree to the
following restrictive covenants and to waive all of my claims against and
release (a) Whole Foods Market, Inc. and its predecessors, successors and
assigns (collectively referred to as “WFMI”), (b) all of the affiliates
(including all parent companies and all wholly or partially owned subsidiaries)
of WFMI and their directors, officers, employees, agents, insurers,
predecessors, successors and assigns (collectively referred to as the
“Affiliates”), and (c) WFMI and its Affiliates’ (collectively referred to as the
“Company”) employee benefit plans and the fiduciaries and agents of said plans
(collectively referred to as the “Benefit Plans”) from any and all claims,
demands, actions, liabilities and damages arising out of or relating in any way
to my employment with or separation from employment with the Company other than
amounts due pursuant to Section 4.4 of the Plan and rights and benefits I am
entitled to under the Benefit Plans.  (WFMI, its Affiliates and the Benefit
Plans are sometimes hereinafter collectively referred to as the “Released
Parties”).

 

I understand that signing this Waiver and Release is an important legal act.  I
acknowledge that I am hereby advised in writing to consult an attorney before
signing this Waiver and Release.  I understand that, in order to be eligible for
the Non-Compete Payment, I must sign (and return to the Company) this Waiver and
Release.  I acknowledge that I have been given at least [21] days to consider
whether to accept the Non-Compete Payment and therefore execute this Waiver and
Release.

 

In exchange for the payment to me of the Non-Compete Benefits, (i) I agree not
to pursue a legal claim in any local, state and/or federal court regarding or
relating in any way to my employment with or separation from employment with the
Company, and (ii) I knowingly and voluntarily waive all claims and release the
Released Parties from any and all claims, demands, actions, liabilities, and
damages, whether known or unknown, arising out of or relating in any way to my
employment with or separation from employment with the Company, except to the
extent that my rights are vested under the terms of any employee benefit plans
sponsored by the Company (including, without limitation, the Plan and any
related agreements thereunder) and except with respect to such rights or claims
as may arise after the date this Waiver and Release is executed.

 

This Waiver and Release includes, but is not limited to, claims and causes of
action under:  Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended, including the Older
Workers Benefit Protection Act of 1990; the Civil Rights Act of 1866, as
amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of
1990; the Workers Adjustment and Retraining Notification Act of 1988; the
Pregnancy Discrimination Act of 1978; the Employee Retirement Income Security
Act of 1974, as amended; the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended; the Family and Medical Leave Act of 1993; the Fair Labor
Standards Act; the Occupational Safety and Health Act; the Texas Labor Code
§21.001 et. seq.; the Texas Labor Code; claims in connection with workers’
compensation, retaliation or “whistle blower” statutes; and/or contract, tort,
defamation, slander, wrongful termination or any other state or federal
regulatory, statutory

 

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or common law.  Notwithstanding the above, I further acknowledge that I am not
waiving and am not being required to waive any right that cannot be waived under
law (including, without limitation, the right to file an administrative charge
or participate in an administrative investigation or proceeding); provided that
I disclaim and waive any right to share or participate in any monetary award
resulting from the prosecution of such charge or investigation or proceeding.

 

Further, I expressly represent that no promise or agreement which is not
expressed in this Waiver and Release has been made to me in executing this
Waiver and Release, and that I am relying on my own judgment in executing this
Waiver and Release, and that I am not relying on any statement or representation
of the Company or any of its agents.  I agree that this Waiver and Release is
valid, fair, adequate and reasonable, is with my full knowledge and consent, was
not procured through fraud, duress or mistake and has not had the effect of
misleading, misinforming or failing to inform me.  I acknowledge and agree that
the Company will withhold minimum amount of any taxes required by federal or
state law from the Non-Compete Benefits otherwise payable to me.

 

Notwithstanding the foregoing, I do not release and expressly retain (A) all
rights to indemnity, contribution, and a defense, and directors and officers and
other liability coverage and third party insurance coverage that I may have
under any statute, the bylaws of the Company or by other agreement; and (B) the
right to any, unpaid reasonable business expenses and any accrued benefits
payable under any Company welfare plan or tax-qualified plan.

 

I acknowledge that payment of the Non-Compete Benefits is not an admission by
any one or more of the Released Parties that they engaged in any wrongful or
unlawful act or that they violated any federal or state law or regulation.  I
acknowledge that the Company has not promised me continued employment or
represented to me that I will be rehired in the future.  I acknowledge that my
employer and I contemplate an unequivocal, complete and final dissolution of my
employment relationship.  I acknowledge that this Waiver and Release does not
create any right on my part to be rehired by the Company, and I hereby waive any
right to future employment by the Company.

 

I understand that for a period of seven (7) calendar days following the date
that I sign this Waiver and Release, I may revoke my acceptance of this Waiver
and Release, provided that my written statement of revocation is received on or
before that seventh day by [Name and/or Title], [address], facsimile number:
                    , in which case the Waiver and Release will not become
effective.  If I timely revoke my acceptance of this Waiver and Release, the
Company will have no obligation to provide the Non-Compete Benefits to me.  I
understand that failure to revoke my acceptance of the offer within seven (7)
calendar days from the date I sign this Waiver and Release will result in this
Waiver and Release being permanent and irrevocable.

 

Should any of the provisions set forth in this Waiver and Release be determined
to be invalid by a court, agency or other tribunal of competent jurisdiction, it
is agreed that such determination will not affect the enforceability of other
provisions of this Waiver and Release.  I acknowledge that this Waiver and
Release sets forth the entire understanding and agreement between me and the
Company concerning the subject matter of this Waiver and Release and supersede
any prior or contemporaneous oral and/or written agreements or representations,
if any, between me and the Company.

 

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I acknowledge that I have read this Waiver and Release have had an opportunity
to ask questions and have it explained to me, I am signing this Waiver and
Release knowingly and voluntarily and with the advice of any attorney I have
retained to advise me with respect to it, and that I understand that this Waiver
and Release will have the effect of knowingly and voluntarily waiving any action
I might pursue, including breach of contract, personal injury, retaliation,
discrimination on the basis of race, age, sex, national origin, or disability
and any other claims arising prior to the date of this Waiver and Release.

 

I represent that I am not aware of any claim by me other than the claims that
are released in this Waiver and Release.  By execution of this document, I do
not waive or release or otherwise relinquish any legal rights I may have which
are attributable to or arise out of acts, omissions, or events of the Company
which occur after the date of the execution of this Waiver and Release.

 

 

 

 

Covered Executive’s Signature

 

 

 

 

 

 

 

Covered Executive’s Printed Name

 

 

 

 

 

 

 

Covered Executive’s Signature Date

 

 

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