EXHIBIT
10.48


 


Option No.       000096


No. of Shares  300,000


 


WHOLESOME & HEARTY FOODS, INC.


NONQUALIFIED STOCK OPTION


AND


NONQUALIFIED STOCK OPTION AGREEMENT


 


                This Nonqualified Stock Option
(the “Option”) is granted pursuant to this Nonqualified Stock Option Agreement
(the “Agreement”) executed by and between Wholesome & Hearty Foods, Inc.,
an Oregon corporation (the “Company”), and Lyle G. Hubbard (the “Optionee”),
effective April 14, 1996.  This
Agreement and the Option evidenced hereby shall not be construed to be granted
under or subject in any way to the Company’s 1992 Amended and Restated
Combination Stock Option Plan (the “1992 Plan”).


 


NOW,
THEREFORE, THE COMPANY AND THE OPTIONEE COVENANT AND AGREE AS FOLLOWS:


 


                1.             Number of Shares Subject to Option and Option Price.  The Company hereby grants to the Optionee a
nonqualified stock option to purchase from the Company 300,000 shares of the no
par value common stock of the Company (the “Common Stock”) at an exercise price
of $8.69 per share (the “Option Price”). 
The Option is exercisable upon the terms and conditions contained
herein.


 


                2.             Additional Terms of the Option.  The Option shall have the following terms:


 


                                2.1           The effective date of the grant of
the Option shall be the date first set forth above.


 


                                2.2                                 The Option shall
vest as follows:


 


 


	
   

  	
   

  	
  Cumulative

  
	
  Date

  	
   

  	
  Shares

  
	
   

  	
   

  	
   

  
	
  April
  14, 1996

  	
   

  	
  60,000

  
	
   

  	
   

  	
   

  
	
  April
  14, 1997

  	
   

  	
  60,000

  
	
   

  	
   

  	
   

  
	
  April
  14, 1998

  	
   

  	
  60,000

  
	
   

  	
   

  	
   

  
	
  April
  14, 1999

  	
   

  	
  60,000

  
	
   

  	
   

  	
   

  
	
  April
  14, 2000

  	
   

  	
  60,000

  



 


 


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


                The foregoing vesting schedule
notwithstanding, this Option shall immediately vest as to any Option shares
that have not then become vested upon:


 


(i)            the termination of the employment of
the Optionee by the Company without Cause (as such term is defined in the
Employment Agreement, dated April 14, 1996, between the Company and Optionee),
or as a result of the Optionee’s death or disability; or


 


(ii)           a “Change in Control” of the Company,
which for the purposes hereof shall be deemed to have occurred upon the earlier
of:


 


(a)           the date that any “person” (as that
term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the “Act”)), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the company, becomes a
beneficial owner (within the meaning of Rule 13d-3 promulgated under the Act),
directly or indirectly, of securities of the Company representing 25% or more
of the combined voting power of the Company’s then outstanding securities; or


 


(b)           the date of any annual or special
meeting of stockholders at which a majority of the directors then elected are
not individuals nominated by the Company’s then incumbent Board; or


 


 


(c)           the date of approval by the
stockholders of the Company of a plan of merger or consolidation of the Company
in which such stockholders will not hold at least 75% of the combined voting
power of the resulting entity immediately following such merger or
consolidation, or the approval by the stockholders of the Company of a plan of
complete liquidation of the Company or an agreement for the sale of
substantially all of the Company’s assets.


 


2.3           The Option shall expire on the
earlier of April 13, 2006, or five years from the effective date of Optionee’s
termination of employment with the Company (the “Expiration Date”).


 


2.4
          To the extent vested, the Option
may be exercised in whole or in part at any time and from time to time prior to
the Expiration Date; provided, however, that in the event the
Optionee shall voluntarily terminate his employment with the Company prior to
April 14, 1997, this Option shall automatically terminate and any shares of
Common Stock acquired by the Optionee pursuant to the exercise of this Option
shall be sold back to the Company at the exercise price specified in Section 1
above.


 


2.5            The Option must be exercised, if at
all, as to a whole number of shares.


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


 


2.6            
The vesting of this Option shall cease and its exercise shall be limited
to that number of shares (including any and all shares that become vested on
the effective date of the Optionee’s termination of employment) that were
immediately exercisable by the Optionee as of the effective date of the
Optionee’s termination of employment with the Company.


 


                3.             Exercise of the Option; Delivery of Certificates.


 


                                3.1           The Option may be exercised only in
accordance with the terms and conditions of 
Section 2 above and by:


 


                                                                                3.1.1        delivery to the Company of a form of
Intent to Exercise (attached hereto as Exhibit A) and a form of Exercise
Request (attached hereto as Exhibit B) specifying the number of shares of
Common Stock for which the exercise is to be effective;


 


                                                                                3.1.2        tendering full payment of the Option
Price for such shares either by Optionee or Optionee’s designated broker; and


 


                                                                                3.1.3        tendering to the Company either by
Optionee or Optionee’s designated broker, or otherwise making arrangements
satisfactory to the Company, of any amounts that the Company determines must be
withheld for federal and state tax purposes as the result of the exercise of
the Option and the issuance of shares hereunder.


 


                                3.2           Payment of the Option Price and tax
withholding amounts shall be made:


 


                                                                                3.2.1        In lawful money of the United States in
cash or by certified or cashier’s check;


 


                                                                                3.2.2        Through delivery by the Optionee or
withholding by the Company, as designated by the Optionee, of shares of the
Company’s Common Stock having a fair market value as of the date of exercise
equal to the Option Price plus the amounts that the Company determines must be
withheld from the Optionee for federal and state tax purposes in connection
with exercise of the Option; or


 


                                                3.2.3        By a combination of Sections 3.2.1 and
3.2.2 above.


 


                                3.3           Within a reasonable time after its
receipt of the Optionee’s form of Intent to Exercise and form of Exercise
Request, the Company shall deliver to the Optionee or Optionee’s designated
broker a certificate or letter of electronic transfer instructions (“DWAC’’)
for the shares of Common Stock for which exercise of the Option was effective.


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


 


                4.             Transferability of the Option.


 


                                4.1           Except as otherwise provided in this
Section 4, no Option shall be transferred to or exercised by any person other
than the Optionee to whom such Option was originally granted.


 


                                4.2           In the event of the Optionee’s death,
any Options held by the Optionee shall pass to the person or persons entitled
thereto pursuant to the will of the Optionee or the applicable laws of descent
and distribution (such person or persons are sometimes herein referred to collectively
as the “Qualified Successor” of the Optionee), and shall be exercisable in full
by the Qualified Successor in accordance with the terms of this Agreement.


 


                                4.3           In the event a guardian (the
“Guardian”) is appointed for the Optionee due to the Optionee’s disability, as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the “Code”), the Option shall be exercisable by the Guardian until the earlier
of the Expiration Date or one (1) year following (i) the date of termination of
employment of the Optionee if the Optionee was employed by the Company or a
subsidiary of the Company when such disability arose or (ii) the date of
appointment of the Guardian if the Optionee was not employed by the Company or
a subsidiary of the Company when such disability arose.


 


                                4.4           If the Optionee has become disabled,
as defined in Section 22(e)(3) of the Code, and thereafter dies before the
Option terminates, the Option shall pass to the Qualified Successor of the
Optionee, and shall be exercisable by the Qualified Successor until the
expiration of the period specified in Section 4.3 above.


 


                                4.5           In the event that a qualified
domestic relations order, as defined by Section 414(p) of the Code or Title I
of the Employee Retirement Income Security Act or the rules thereunder,
mandates the transfer of the Option, the Option shall pass to the person or
persons entitled thereto pursuant to the order (“Domestic Relations
Successor”), and shall be exercisable by such person or persons in accordance
with the terms of the Agreement. 
Hereinafter, all references to a Qualified Successor shall include a
Domestic Relations Successor.


 


                5.             Adjustments to Option.


 


                                5.1           If there is a material alteration in
the capital structure of the Company on account of a reorganization, merger,
recapitalization, exchange of shares, stock split, reverse stock split, stock
dividend, or otherwise, the Executive Personnel and Compensation Committee of
the Board of Directors (the “Committee”) shall make such adjustments to this Agreement
and to the Option as the Committee determines to be appropriate and equitable
under the circumstances.  Such
adjustments may include, without limitation, (a) a change in the number or kind
of shares of stock of the Company covered by the Option and (b) a change in the
Option Price payable per share; provided, however, that the aggregate
Option Price applicable to the unexercised portion of the Option shall not be
altered, it being intended that any adjustments shall apply only to the price
per share and the number of shares subject to the Option.  For purposes of this Section 5.1, neither
(i) the issuance of additional shares of stock of the Company in exchange for
adequate consideration (including services), nor (ii) the conversion of
preferred shares of the Company or any other instrument convertible into Common
Stock, shall be deemed material alterations of the capital structure of the
Company.


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


 


5.2  Subject to the giving of notice pursuant to Section
5.3, the Option granted shall terminate upon the earlier of the occurrence of
(a) the dissolution or liquidation of the Company; (b) a reorganization,
merger, or consolidation of the Company with one or more corporations as a
result of which, immediately following such reorganization, merger or
consolidation, the shareholders of the Company as a group will hold less than a
majority of the outstanding capital stock of the surviving corporation,
including such reorganizations, mergers or consolidations where the Company
will not be the surviving corporation; (c) the sale of all or substantially all
of the assets of the Company; or (d) upon the occurrence of an event whereby
any person or entity, including any “beneficial owner” as defined or used in
Section 13(d)(3) of the Exchange Act, acquires Common Stock representing fifty
percent (50%) or more of the combined voting power of the voting securities of
the Company (collectively the “Terminating Events” and individually a
“Terminating Event”).


 


5.3           The Company shall give notice to the
Optionee or, if applicable, the Qualified Successor or Guardian of the
Optionee, not less than thirty (30) days prior to the consummation of a
Terminating Event, whereupon the Optionee or the Optionee’s Qualified Successor
or Guardian, as applicable, shall have the right for a period of thirty (30)
days following the notice (or until the Expiration Date, if earlier), to
exercise in full or in part the Option, without regard to any contingent
vesting provision to which the Option may have otherwise been subject, pursuant
to Section 2.2 above.  Any portion of
the Option not exercised as of the expiration of this thirty (30) day period
shall immediately terminate without any further action by the Company.


 


                                5.4           Adjustments and determinations under
this Section 5 shall be made by the Committee (upon the advice of counsel),
whose decisions as to what adjustments or determinations shall be made, and the
extent thereof, shall be final, binding, and conclusive.


 


                6.             Conditions Upon Issuance of Shares.


 


                                6.1           Shares shall not be issued pursuant
to the exercise of the Option unless the exercise of the Option and the
issuance and delivery of the shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended (the “Securities Act”), the Exchange Act, all applicable
state securities laws, and the rules and regulations promulgated thereunder,
and the requirements of any stock exchange or automated quotation system upon
which the shares may then be listed or otherwise traded, and such compliance
has been confirmed by counsel for the Company.


 


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


 


                                6.2           The Company’s inability to obtain
authority from any regulatory body having jurisdiction over the issuance and
delivery of the shares pursuant to the exercise of the Option, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any shares of Common Stock hereunder, shall relieve the Company of any
liability with respect to the failure to issue or sell such shares.


 


                7.             Warranties and Representations of the Optionee.  By executing this Agreement, the Optionee
accepts the Option and agrees to be bound by all of the terms of this
Agreement.  In addition, the Optionee
acknowledges that exercise of the Option and the sale of the shares of Common
Stock acquired upon exercise thereof may have tax implications as to which the
Optionee should seek the advice of his or her own tax counselor or advisor.


 


                8.             Indemnification by the Optionee.  The Optionee agrees to indemnify and hold
the Company harmless from any loss or damage, including attorney’s fees or
other legal expenses, incurred in the defense or payment of any claim against
the Company resulting from a breach by the Optionee of the representations,
warranties or provisions contained in this Agreement.


 


                9.             No Right to Continued Relationship.  Nothing herein shall confer upon the
Optionee the right to continue as an officer, employee or consultant of or with
the Company, or affect any right, which the Company may have to terminate its
relationship with the Optionee.


 


                10.           Rights as Shareholders.  The Optionee shall have no rights as a shareholder of the Company
on account of the Option or on account of shares of Common Stock subject hereto
until such time as the Company shall have issued and delivered stock
certificates or DWAC to the Optionee.


 


                11.           Further Assurances.  From time to time and upon request by the Company, the Optionee
agrees to execute such additional documents as the Company may reasonably
require in order to effect the purposes of this Agreement.


 


                12.           Binding Effect. 
This Agreement shall be binding upon the Optionee and the Optionee’s
heirs, successors and assigns, including the Qualified Successor of the
Optionee (as that term is defined in Section 4.2 of this Agreement).


 


                13.           Waivers/Modifications.  No waivers, alterations or modifications of this Agreement shall
be valid unless in writing and duly executed by the party against whom
enforcement of such waiver, alteration or modification is sought.  The failure of any party to enforce any of
its rights against the other party for breach of any of the terms of this
Agreement shall not be construed as a waiver of such rights as to any continued
or subsequent breach.


 


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


                14.           Governing Law. 
This Agreement shall be construed, administered and enforced in
accordance with the laws of the United States, to the extent applicable hereto,
as well as the laws of the State of Oregon.


 


                                IN WITNESS
WHEREOF, the parties have executed this Agreement as of the day and year first
above written.


 


	
  WHOLESOME
  & HEARTY FOODS, INC.:

  	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By
  

  	
  /s/
  E. Kay Stepp

  	
   

  	
  By

  	
  /s/
  Lyle G. Hubbard

  
	
   

  	
  E.
  Kay Stepp

  	
   

  	
   

  	
  Lyle
  G. Hubbard

  
	
   

  	
  Chairman
  of the Board

  	
   

  	
   

  	
   

  



 


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


Exhibit A


 


Directions to Administrator


please send this form with your


“Exercise Request”


 


if you are exercising your options and
SELLING your stock, complete this section:


	
  Withholding

  	
   

  	
  o

  	
   This option
  is non-qualified:
  I understand that taxes 

  must be withheld at specific percentages

  
	
  Broker
  To:

   

  	
   

  	
  o

  	
   Mail net
  proceeds

  
	
   

  	
   

  	
  o

  	
   Hold net
  proceeds in brokerage account

  



 


 


if you are exercising your options and
HOLDING the stock, complete this section


	
  I wish
  to hold my stock in certificate form:

  	
   

  	
  o

  	
  Name & address as they should appear on
  certificate:

   

  (certificates
  will be mailed to Optionee)

  
	
   

  	
   

  	
   

  	
   

  
	
  I wish
  to hold my stock in my brokerage account

  	
   

  	
  o

  	
  (shares
  will be held electronically for future sale)

  



 


 


ALL Optionees: please complete this sectio


 


 


	
  Employee
  Information

  	
   

  	
  US Tax ID number (if applicable)

  	
   

  	
   

  
	
   

  	
   

  	
  Phone Number (required)

  	
   

  	
  Extension

  
	
   

  	
   

  	
  Email Address

  	
   

  	
   

  
	
   

  	
   

  	
  Broker Name

  	
   

  	
   

  
	
   

  	
   

  	
  Broker Phone Number

  	
   

  	
   

  
	
   

  	
   

  	
  Account Number

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT

















 


Exhibit B


 


Nonqualified Stock Option Exercise Request


Wholesome & Hearty Foods, Inc.


 


I am exercising my Nonqualified Stock Option to purchase
shares as indicated below of Wholesome & Hearty Foods, Inc., Common Stock
pursuant to my Nonqualified Stock Option Agreement, Option No. ____.  Wholesome & Hearty Foods, Inc. will
instruct the transfer agent to deliver my stock to my broker.  It is my desire to employ the services of my
broker for my option exercise as indicated below.


 


Broker:  Piper
Jaffray, Inc. (or other designated broker) will make payment for the exercise
price and all applicable taxes, and in conjunction I direct that you
electronically transfer the shares to them registered in the name of Piper
Jaffray (or other designated broker) for account of the undersigned.  I hereby grant to Piper Jaffray (or other
designated broker) a power coupled with an interest to effect the intent of
this request.


 


Method
of Exercise:


o  Same Day Sale  I wish to sell all my shares being exercised today at o
the market price upon approval and acceptance of my application OR
o  at
a limit
price of $______.


 


o  Partial Same Day Sale 
I wish to sell a portion of my shares being exercised today at the then
market price and o hold the remaining shares in my account OR
o issue a certificate for the remaining
shares in my name.  I understand the
normal margin requirements apply.


 


o  Exercise and Hold 
I wish to hold all shares in my account and will direct the sale at a
later time.  I understand the normal
margin requirements apply.


 


	
  Grant number

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total due

  
	
  or date

  	
   

  	
  Number of shares

  	
   

  	
  Option price/share

  	
   

  	
  Wholesome & Hearty

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Foods, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  (not applicable) 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


I
understand that once these instructions have been completed, acceptance
granted, and funds forwarded to Wholesome & Hearty Foods, Inc., no changes
can be made regardless of market conditions. 
By signing below, I authorize Wholesome & Hearty Foods, Inc. to act
on my behalf in instructing Piper Jaffray (or other designated broker) to
effect the intent of my directions to exercise my Wholesome & Hearty Foods,
Inc.  stock options and/or sell my
Wholesome & Hearty Foods, Inc. stock.


 


Employee Signature:


Employee’s (printed) Name:




Employee Social Security
Number:





 


to be completed by administrator:


In connection with the above stock option exercise for                                 shares of Wholesome & Hearty Foods, Inc.
Common Stock, this is inform you that this transaction is being exercised under
a Nonqualified Stock Option Agreement and that the above person is subject to
Rule 144.  Our transfer agent will be
instructed to deliver the above-mentioned shares in the name of Piper Jaffray (or other
designated broker) pursuant to the form of Intent to Exercise.


 


For
Wholesome & Hearty Foods, Inc.:


Stock Option Administrator:


 


 


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NONQUALIFIED STOCK OPTION AGREEMENT