**WILD OATS MARKETS, INC.2006 EQUITY INCENTIVE PLAN**

**RESTRICTED STOCK UNIT AGREEMENT FOR DIRECTORS**

THIS RESTRICTED STOCK UNIT AGREEMENT (the "Agreement") made as of this ___day of ______, 20__, between Wild Oats Markets, Inc., a Delaware corporation (the"Company"), and (Name) (the "Grantee").

**RECITALS**

1. As of ____________ the Company grants (the "Grant") the Grantee RestrictedStock Units ("RSUs"), which are exchangeable for shares of Company common stock(the "Stock") under the Wild Oats Markets, Inc. 2006 Equity Incentive Plan (the"Plan") according to the Distribution Election, a form of which is attachedhereto, made by the Grantee and pursuant to this Agreement.

2. The Company and the Grantee wish to provide for the grant of the RSUs on the termsand conditions set forth below. RSUs shall only be available to non-employee members("Directors") of the Board of Directors (the "Board") of the Company.

**AGREEMENT**

1. **Grant of RSUs**.

(a) Pursuant to the Plan and subject to the terms and conditions of this Agreement, theCompany hereby grants to the Grantee ___ RSUs effective as of ______, 20__. The amount ofRSUs granted is based upon the following calculation (check all applicable):

___ Board meeting grant: $3,450 (115% of $3,000) divided by the fair market value("FMV") as determined below, of the Stock on the NASDAQ National Market.

___ Committee meeting grant: $2,300 (115% of $2,000) divided by the FMV of the Stock onthe NASDAQ National Market.

___ Annual service grant: 4,000 RSUs granted each year for service on the Board.

___ Other:______________________________________________________________

(b) For each Grant, the FMV of the Stock shall be determined with reference to theclosing price of the Stock as of last trading day prior to the last day of each boardmeeting. In the event a board meeting adjourns on a day during which the Stock is nottraded, FMV shall be determined with reference to the closing price of the Stock on thelast trading day immediately preceding the last day of the board meeting. In all otherevents, the FMV of the Stock shall be determined with reference to the closing price onthe day prior to the determination of FMV. 

(c) In the event the operation of this paragraph results in the vesting of fractionalshares, the number of Units Vested shall be rounded to the next whole Unit.

2. **Vesting**.

(a) All RSUs will be vested on the date of grant, other than those granted for annualservice on the Board, which shall vest on the date immediately preceding the next annualmeeting of stockholders. If the Grantee is not a Director on the date immediatelypreceding the next annual meeting of stockholders and the Grant is not otherwise vestedunder this Agreement, then the Grant shall be null and void. 

(b) **Reorganization and Change in Control**.

(i) **Full Vesting; Termination; Assumption or Substitution**. Uponthe occurrence of a Change in Control (as defined in Section 9(b) of the Plan), the Unitsshall become fully vested and payable regardless of whether all conditions for vestingrelating to length of service have been satisfied and without regard to any deferralelections. The Committee may also provide for the assumption or substitution of the Unitsby the surviving entity and make any other provision for the Units as the Committee deemsappropriate in its sole discretion.

(ii) **Assumption or Substitution**. The Company, or the successoror purchaser, as the case may be, may make adequate provision for the assumption of theUnits or the substitution of new Units for the outstanding Units on terms comparable tothe terms of this Agreement.

(c) All RSUs shall vest upon the death or Disability (as that term is defined inSection 22(e) of the Internal Revenue Code) of the Grantee.

3. **Payment for RSUs, Delivery of Stock Certificates**. When theRSUs become payable, the RSUs shall be settled in shares of Stock in accordance with theDistribution Election made by the Director prior to the first receipt of RSUs under thePlan (the "Payment Date").

Notwithstanding any distribution election by the Grantee, in the case of death orDisability, as that term is defined in paragraph 2(d) above, of the Grantee, the RSUsshall be payable within thirty (30) days following death or determination of Disability.In the event the 30th day falls on a day during which the Stock is not traded, paymentshall be made on the next trading day following the 30th day. Subject to the provisions ofSection 5 below, stock certificates (the "Certificates") evidencing the Stockshall be issued to the Grantee as of the Payment Date and registered in the Grantee's nameon the records of the Company. Subject to and conditioned on the satisfaction of anywithholding obligations, the Certificates shall be delivered to the Grantee as soon aspracticable after the Payment Date. Notwithstanding the foregoing, if, at the time thatpayment is due under this Section 3, the Company's deduction for compensation payable tothe Grantee is subject to the restrictions of Section 162(m) of the Internal Revenue Codeof 1986, as amended ("Section 162(m)"), payment shall not be made until theCompany's deduction for the compensation attributable to the payment is not limited bySection 162(m).

4. **Dividend Equivalents**. The Grantee shall be entitled toreceive cash payments (referred to as dividend equivalents) equal to any cash dividendsand other distributions paid in cash with respect to a corresponding number of shares ofStock.

5. **Adjustments to the Units**. The Units granted under thisAgreement shall be adjudicated under Section 11 of the Plan if necessary for changes inthe stock of the Company.

6. **Withholding**. Upon the award, vesting, and/or payment of anynumber of the Units, the Grantee shall make appropriate arrangements with the Company tomake payment to the Company of the amount required to be withheld under applicablefederal, state, local, and other tax laws (collectively, "Withholding Taxes").The Grantee may elect to pay such Withholding Taxes in cash by delivering to the Company acheck payable to the order of the Company. If the Withholding Taxes arise on or after thedate the Units become payable, the Grantee may, in addition to the methods described inthe preceding sentence, elect to pay such Withholding Taxes (a) by selling a portion ofthe Stock then payable under this Agreement if otherwise permitted by this Agreement or(b) as permitted by Section 11(d) of the Plan and as otherwise permitted by thisAgreement, by having the Company withhold from the shares otherwise payable anddeliverable to the Grantee a number of shares having a Fair Market Value equal to theamount of the minimum required Withholding Taxes, or such lesser amount as the Grantee mayelect. In such case, the value of the shares to be withheld shall be based on the FairMarket Value of the shares on the date the amount of Withholding Taxes is determined (the"Tax Date"). The Grantee must make an irrevocable election of the manner ofpayment of the Withholding Taxes no later that fourteen (14) calendar days prior to theTax Date; provided however, if the Grantee is subject to Section 16(b) of the SecuritiesExchange Act of 1934, the election shall be made in accordance with the requirements ofRule 16b-3. If, on and after the time the Units become payable, the Grantee has not madearrangements satisfactory to the Company to pay the Withholding Taxes, the Company shallwithhold from the shares, a number of shares having a Fair Market Value equal to theamount required to pay the Withholding Taxes. The value of the shares to be withheld shallbe based on the Fair Market Value of the shares on the Tax Date. The Company shall notdeliver any shares of Stock unless and until the Grantee has delivered to the Company, orhas made arrangements satisfactory to the Company to provide fully for, the requiredWithholding Taxes. The amount of cash dividend equivalents pursuant to Section 5 shall besubject to Withholding Taxes applicable to wages.

7. **Restriction on Transferability**. Units, whether or notvested, may not be sold, assigned, transferred by gift or otherwise, pledged orhypothecated, or otherwise disposed of, by operation of law or otherwise at any time. Anyattempt to do so shall be null and void.

8. **No Rights as a Stockholder**. The Grantee shall have no votingor any other rights as a stockholder of the Company with respect to the RSUs. Upon paymentof the RSUs and the transfer of shares of Stock to the Grantee, the Grantee shall have allof the rights of a stockholder of the Company. The Grantee's right to receive Stock underthis Agreement shall be no greater than the right of any unsecured general creditor of theCompany.

9. **Miscellaneous**.

(a) **Notices**. Any notice required or permitted to be given underthis Agreement shall be in writing and shall be given by first class registered orcertified mail, postage prepaid, or by personal delivery to the appropriate party,addressed:

(i) If to the Company, to Wild Oats Markets, Inc., Attention: Corporate Secretary, 3375Mitchell Lane, Boulder, CO 80301-2294, or at such other address as may have been furnishedto the Grantee in writing by the Company; or

(ii) If to the Grantee, to the Grantee at Wild Oats Markets, Inc., Attention: CorporateSecretary, 3375 Mitchell Lane, Boulder, CO 80301-2294, or at other address as may havebeen furnished to the Company by the Grantee.

Any such notice shall be deemed to have been given as of the second day after depositin the United States mails, postage prepaid, properly addressed as set forth above, in thecase of mailed notice, or as of the date delivered in the case of personal delivery.

(b) **Amendment**. Except as provided herein, this Agreement maynot be amended or otherwise modified unless evidenced in writing and signed by the Companyand the Grantee. Notwithstanding the foregoing, this Agreement may be amended in the solediscretion of the Committee by a writing that states specifically that it is amending thisAgreement if a copy of the amendment is delivered to the Grantee; provided, however, thatno amendment may adversely affect the rights of the Grantee without the Grantee's writtenconsent. Without limiting the foregoing, the Committee reserves the right to change, bywritten notice to the Grantee, the provisions of the Units in any way that it may deemnecessary or advisable to implement the purposes of the grant and this Agreement as aresult of any change in applicable laws and regulations or any future law, regulation,ruling, or judicial decision, provided that any such change shall be applicable only tosuch Units that are then subject to the restrictions provided in this Agreement.

(c) **Defined Terms**. Capitalized terms shall have the meaning setforth in the Plan or herein, as the case may be.

(d) **Construction; Severabilit**y. The section headings containedherein are for reference purposes only and shall not in any way affect the meaning orinterpretation of this Agreement. The invalidity or unenforceability of any provision ofthis Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement, and each other provision of this Agreement shall be severable andenforceable to the extent permitted by law.

(e) **Waiver**. Any provision contained in this Agreement may bewaived, either generally or in any particular instance, by the Committee appointed underthe Plan, but only to the extent permitted under the Plan.

(f) **Binding Effect**. This Agreement shall be binding upon andinure to the benefit of the Company and the Grantee and their respective heirs, executors,administrators, legal representatives, successors and assigns.

(g) **Rights to Employment**. Nothing contained in this Agreementshall be construed as giving the Grantee any right to be retained in the employ of theCompany and this Agreement is limited solely to governing the rights and obligations ofthe Grantee with respect to the Units.

(h) **Governing Law**. This Agreement shall be governed by andconstrued in accordance with the laws of the State of Delaware.

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

Wild Oats Markets, Inc. 

By: 

 

GRANTEEPLEASE SIGN BELOW: 

Print Name: 

Address: