Document:

Lee Severance

 

  
  
  THIS IS A LEGAL DOCUMENT. YOU ARE ENCOURAGED TO CONSULT WITH
  AN ATTORNEY BEFORE SIGNING THIS DOCUMENT.

  
 

SEVERANCE AGREEMENT AND RELEASE OF CLAIMS

This Severance Agreement and Release of Claims (the "Agreement") is
between Wild Oats Markets, Inc. ("Company") and James W. Lee
("Employee").

Agreement

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Employee hereby agree as follows:

1. Termination of Employment. Effective August 30, 2001 (the
"Effective Date"), Employee agrees that Employee's employment with
the Company is hereby terminated, and Employee further resigns from any and all
officer or director positions held by the Employee with the Company or any of
its subsidiaries, effective as of the Effective Date. The Company agrees that
the Employee's termination shall be treated as a resignation and retirement in
the event a current or prospective employer of the Employee requests a
reference.

2. Continuation of Salary and Benefits. (a) Salary Continuance.
Subject to Employee's compliance with the terms and conditions set forth in
this Agreement, Company agrees to pay the Employee a continuation of the
Employee's salary (the "Severance Pay") for a period of one year,
commencing on September 1, 2001 and ending on August 31, 2002 (the
"Severance Period"). The Severance Pay will be paid in equal payments
on the same payroll schedule under which the Company pays its employees. Subject
to Paragraph 3 below, the first payment will be made on the next regularly
scheduled pay day for the Company which occurs after August 30, 2001. Employee
to receive benefit payout on next regularly pay period following signing of
Agreement.

(b) Medical Benefits Continuance. The Company will continue medical
benefits for the Employee for the Severance Period, including medical, life
insurance, dental and vision plans, but excluding short and long term disability
benefits.

(c) Deferred Compensation Plan. Barring prohibitions imposed by the
Company's deferred compensation plan, the Company will allow the Employee to
maintain the balance of his deferred compensation plan account in the plan until
January 1, 2002, at which time the Company shall distribute the balance of the
account to the Employee. The Employee shall not be entitled to make further
contributions to such account after the Effective Date.
(d) Discount Card. The Employee will not be entitled to continued use
of the employee discount benefit.

(d)  Company Vehicle. The Employee will be entitled to the
continued use of the company vehicle currently in Employee's possession during
the Severance Period. The Company will continue to pay the cost to insure the
vehicle during the Severance Period.
(e)  Options. (i) Employee acknowledges that certain employees of
the Company (including Employee) are currently under a blackout and unable to
trade Company stock for an unspecified period of time (the "Blackout
Period"). The Company agrees to lift the Blackout Period for Employee on
November 15, 2001. Company further agrees to extend the period of time in which
Employee may exercise Employee's vested stock options to March 15, 2002 (the
"Option Expiration Date"). If such options are not exercised within
such time frame, all of Employee's vested stock options will expire on the
Option Expiration Date. Employee acknowledges that vesting of his stock options
ceased as of August 30, 2001.
3. Conditions to Commencement of Severance Pay. In order for the
Employee to receive the Severance Pay, the Employee must comply with all of the
following conditions. At the Company's election, failure to comply with any
condition will result in a delay in, or termination of, any right to receive
Severance Pay:

(a)  The Employee shall return, within 7 days after signing this
Agreement, all equipment, tools, phones, computers, keys and proprietary
information (including financials, price lists, vendor lists, manuals and
strategic planning documents), in Employee's possession, including the items
listed on Attachment A to this Agreement. Change to acknowledgement of all
equipment. All items shall be returned in accordance with the Equipment and
Credit Card Information Sheet enclosed with this Agreement. All computer
files must remain intact on all computer equipment returned.
(b)  If the Employee has a Company credit card, within 7 days after
the date the Employee signs this Agreement, the Employee must arrange for
payment of outstanding charges in accordance with the Equipment and Credit Card
Information Sheet enclosed.

Failure to comply with (a) or (b) may result in withholding or termination of
Severance Pay, or the Company may elect to deduct any unpaid bills, costs of
equipment, personal credit card charges or any business expenses for which
reports have not been submitted from the Employee's Severance Pay.

4. Conditions to Continued Receipt of Severance Pay. In order for the
Employee to continue to receive Severance Pay, the Employee MUST comply with the
following conditions during the Severance Period:

(a) The Employee will not disparage or otherwise discredit the Company orally
or in writing.

(b) The Employee will not solicit, for him/herself or on behalf of a third
party, either directly or indirectly, any currently employed employee of the
Company to leave the Company's employ.

(c) The Employee will not discuss the terms of this Agreement with any third
party other than the Employee's spouse, family or legal or financial advisors.
In the event the Employee is required by law to discuss or disclose any of the
terms, the Employee must provide the Company with prompt written notice prior to
disclosure to the third party to allow the Company sufficient time to contest
the pending disclosure.

5.  Company Obligations. The Company agrees that (a) the following
officers of the Company, Perry Odak, Bruce Bowman, Steve Kaczynski, Freya Brier,
Terry Maloy and Peter Williams (the "OCEO") will not disparage or
otherwise discredit the Employee orally or in writing, and (b) the OCEO will not
discuss the terms of this Agreement with any third party other than the Company's
legal or financial advisors or as may be necessary. Employee acknowledges that
the Company may be required to file a copy of this Agreement as an exhibit to
its public filings under the laws, rules and regulations of the Securities and
Exchange Commission.6. Rehire. The Employee agrees that the Employee shall not apply for
rehire by the Company, and the Company's refusal to hire shall not be deemed
to be discriminatory conduct on the part of the Company.

7. Confidentiality. The Employee acknowledges that he/she has been
provided with, and has created for the Company, certain confidential
information, both written and oral, including, but not limited to, trade secrets
and other information related to the Company's practices in marketing,
pricing, operations, advertising, promotions, merchandising, selling and
distributing, price lists, vendor lists, customer lists, know-how, strategic
planning and financial information, collectively referred to herein as
"Confidential Information", by the Company. The Employee agrees that
the Employee will not disclose such information, orally or in writing, to any
third party except to the extent such disclosure is required by law, in which
case the Employee will provide the Company with prompt written notice of the
disclosure request to allow the Company sufficient time to contest the pending
disclosure.

8. Release of Claims. By signing this Agreement without revocation,
the Employee and his/her heirs and assigns hereby agree to release and
forever discharge the Company, its officers, directors, employees, agents
and representatives from any and all actions, causes of action, suits, damages
and claims, whether known or unknown, which the Employee ever had, now has, or
may have against the Company for any matter relating to his/her employment or
termination from employment to the date hereof. The Employee also agrees that
he/she is legally waiving and releasing any rights the Employee may have had on
or before the date of this Agreement regarding his/her employment and
termination from employment with the Company, including those rights relating to
age, gender, race, disability or religion, under the numerous laws and
regulations regulating employment, including, without limitation, the Age
Discrimination in Employment Act of 1967, the Civil Rights Acts of 1866, 1871,
1964 and 1991; the Employee Retirement Income Security Act; the Equal Pay Act;
the Fair Labor Standards Act; the National Labor Relations Act; the Occupational
Safety and Health Act; the Older Workers Benefit Protection Act of 1990; the
Consolidated Omnibus Budget Reconciliation Act; the Rehabilitation Act of 1973;
the Colorado Anti-Discrimination in Employment Act or any similar act of any
other state; the Family Medical Leave Act, as well as other statutes and laws
that may apply. Notwithstanding the foregoing, the Employee does not waive any
rights conferred by statute to elect COBRA benefits or to apply and receive
unemployment benefits. The Employee represents that the Employee has not filed
any claims with any governmental agencies or any civil suits relating to his/her
employment with the Company or his/her termination of employment with the
Company.

9. Non-Competition. (a) Restrictions. In consideration for the
severance specified above, during the Severance Period, the Employee will not
directly or indirectly, on the Employee's own account or as an employee,
consultant, partner, owner, officer, director or stockholder of any other firm,
partnership or corporation, conduct, engage in, be connected with, have any
interest in or aid or assist Whole Foods Markets, Inc., or its affiliates or
subsidiaries or any other natural foods grocery chain which is a competitor of
the Company, or its affiliates or subsidiaries, nor will the Employee in any way
directly or indirectly, solicit, divert, take away or interfere with any of the
business customers, trade or personnel of the Employer; nor will the Employee
interfere with the suppliers, manufacturers, distributors, wholesalers or other
such companies with which the Employer transacts business; provided, however,
nothing contained herein shall prevent the Employee from engaging in employment
with a conventional grocery chain, so long as Employee is not involved in the
natural foods operations of such conventional operator, or prevent Employee from
owning shares of stock of any such type of corporation, the shares of which are
publicly traded on a nationally recognized stock exchange.

(b) Geographic Limitation. The geographic limitation
within which the Employee shall not compete as set forth in paragraph (a) of
this covenant not to compete is within the continental United States or such
lesser geographic area deemed enforceable by a court of competent jurisdiction.

(c) Acknowledgments. The Employee hereby acknowledges
that the terms of this covenant not to compete is a minimum period of time and
that the area of restriction is reasonable and necessary in order to protect the
Employer.

(d) Remedies. The Employee further agrees that damages cannot
reasonably compensate the Employer in the event of a violation of this covenant
and that it would be difficult to ascertain the lost profits which would be
suffered and that, by reason thereof, injunctive relief would be essential for
the protection of the Employer. Accordingly, the Employee hereby agrees and
consents that in the event of any such breach or violation, the Employer may
obtain such injunctive relief in order to prevent a continued violation of the
terms of this Agreement. The Employee, therefore, agrees that the Employer may
obtain a temporary restraining order and temporary and permanent injunctions
against the Employee from any court of competent jurisdiction in the State of
Colorado without necessity of the posting of a bond or other security. The
foregoing shall not limit the Employer in the pursuit of other remedies it may
have, including damages.

10. Cooperation. (a) The Employee agrees to cooperate with the
Company, as requested, to effect a transition of his/her responsibilities and
job-related information and to ensure that the Company is aware of all matters
being handled by the Employee.

(b) The Employee agrees, upon reasonable notice, to furnish information and
assistance to the Company as may be required in connection with any legal or
quasi-legal proceeding, including any external or internal investigation,
involving the Company, its subsidiaries or affiliates, or in which any of them
is, or may become, a party. After the Severance Period, or if during Severance
Period the assistance is for a period longer than 10 days, the Company will pay
the Employee for the time spent in providing assistance with proceedings for a
reasonable consulting fee not to exceed the Employee's effective hourly wage
on the Effective Date.

11. Miscellaneous. (a) This Agreement will be interpreted, construed
and governed by the laws of the State of Colorado, and the Employee agrees to
accept jurisdiction and venue for any claims or actions in Boulder County,
Colorado. (b) If any provision or clause of this Agreement is held to be invalid
by a court of competent jurisdiction, the invalid provision will be severed from
this Agreement, but such invalidity will not affect the validity or
enforceability of any other provision, and the balance of the Agreement will
remain in full force and effect.  (c) In the event of death
by the Employee during the Severance Period, the right to receive Severance Pay,
but not medical insurance coverage, will inure to the benefit of the Employee's
heirs, successors or assigns. (d) The Employee agrees and acknowledges that if
the Employee breaches any portion of this Agreement, the Company has a right to
offset amounts due to the Company against Severance Pay or terminate any further
Severance Pay. (e) The Employee acknowledges that the damages the Company may
suffer for breach of this Agreement may be irreparable, and in any event would
be difficult, if not impossible, to ascertain, and agrees that the Company will
have the right to an injunction or other available equitable relief in any court
of competent jurisdiction, enjoining any threatened or actual breach. The
existence of a right to an injunction or other available equitable relief will
not preclude the Company from pursuing any other rights and remedies at law or
in equity which it may have, including the right to seek recovery of damages.
The Employee hereby waives the claim or defense that the Company has an adequate
remedy at law or has not been or is not being irreparably injured by the breach
of the Agreement, and also waives any requirement that a bond be posted in order
to bring an action for injunctive relief or declaratory judgment.

10. Expiration of Offer; Right to Revoke Agreement. (a) The
Employee has 21 days from the day the Employee receives this Agreement to decide
whether or not to sign it. The Employee acknowledges receipt of this Agreement
on November 7, 2001. The Employee may waive some or all of the 21-day period.
This offer will expire if the Agreement is not signed and postmarked within 21
days (November 28, 2001).

(b) If the Employee signs the Agreement, he/she has 7 days after
signing this Agreement to revoke it for any reason. This Agreement will not
be effective or enforceable until 7 days after the date the Employee signs it.
Severance Pay will not be paid until the next pay period after the expiration of
the 7-day period. Revocation must be in writing and hand-delivered or mailed to
the Company, postmarked within the 7-day period, and addressed to: Angie
Suarez, Wild Oats Markets, Inc., 3375 Mitchell Lane, Boulder, CO 80301.

The Employee hereby acknowledges that the Employee has been advised in
writing to consult with an attorney before signing this Agreement and the
Employee has either consulted with an attorney before signing this Agreement or
the Employee has willingly and knowingly waived his/her right to speak with an
attorney prior to signing this Agreement. The Employee fully understands this
Agreement and agrees to its terms.

COMPANY:                                      
EMPLOYEE:

Wild Oats Markets, Inc.       Agreed to and signed, this
14th day of November, 2001

 

By:  /s/ Freya R.
Brier            
/s/ James W. Lee

                                       Signature

 

 

 

ATTACHMENT A

 

TO SEVERANCE AGREEMENT AND RELEASE OF CLAIMS

 

.

 

Name: Jim W. Lee

Address:

Weeks of Severance: 52 weeks

Equipment:

Cell Phone: Returned

Pager: Returned

Laptop: N/A

Camera: N/A

Co. Credit Card: Returned

Keys: Returned

Discount Card: ReturnedNON-OFFICER/NON-DIRECTOR PLAN

WILD OATS MARKETS, INC.

2001 NON-OFFICER/NON-DIRECTOR

 

STOCK OPTION PLAN

 

 

1. PURPOSES

(a) The purpose of the Plan is to provide a means by which selected
Non-Officer, Non-Director Employees may be given an opportunity to benefit from
increases in value of the common stock of the Company ("Common Stock")
through the granting of Nonstatutory Stock Options.

(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees of the Company and its Affiliates, to secure and
retain the services of new Employees and to provide incentives for such persons
to exert maximum efforts for the success of the Company and its Affiliates.

(c) The Company intends that the Stock Awards issued under the Plan shall be
Nonstatutory Options granted pursuant to Section 6 hereof. All Options shall be
designated Nonstatutory Stock Options at the time of grant, and in such form as
issued pursuant to Section 6, and a separate certificate or certificates will be
issued for shares purchased on exercise of each type of Option.

 

2. DEFINITIONS

(a) "AFFILIATE" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.

(b) "BOARD" means the Board of Directors of the Company.

(c) "CODE" means the complete Internal Revenue Code, as amended.

(d) "COMMITTEE" means a Committee appointed by the Board in
accordance with subsection 3(c) of the Plan.

(e) "COMPANY" means Wild Oats Markets, Inc. a Delaware corporation.

(f) "CONTINUOUS STATUS AS AN EMPLOYEE" means the employment is not
interrupted or terminated. The Board, in its sole discretion, may determine
whether Continuous Status as an Employee shall be considered interrupted in the
case of: (i) any leave of absence approved by the Board, including sick leave,
military leave, or any other personal leave; or (ii) transfers between locations
of the Company or between the Company, Affiliates or their successors.

(g) "DIRECTOR" means a member of the Board.

(h) "EMPLOYEE" means any person, excluding Officers and Directors,
employed by the Company or any Affiliate of the Company.

(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

(j) "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock of the Company determined as follows:

  
    (1) If the Common Stock is listed on any established stock exchange, or
    traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
    Market Value of a share of Common Stock shall be the closing sales price for
    such stock (or the closing bid, if no sales were reported) as quoted on such
    exchange or market (or the exchange or market with the greatest volume of
    trading in Common Stock) on the last market trading day prior to the day of
    determination, as reported in the Wall Street Journal or such other source
    as the Board deems reliable;

    (2) In the absence of such markets for the Common Stock, the Fair Market
    Value shall be determined in good faith by the Board.

  

(k) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an incentive stock option under Section 422 of the Code and the
regulations thereunder.

(l) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

(m) "OPTION" means a stock option granted pursuant to the Plan.

(n) "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms and conditions
of the Plan.

(o) "OPTIONEE" means a person to whom an Option is granted pursuant
to the Plan.

(p) "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within
the meaning of Treasury regulations promulgated under Section 162(m) of the
Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits
under a tax qualified pension plan), was not an officer of the Company or an
"affiliated corporation" at any time, and is not currently receiving
direct or indirect remuneration from the Company or an "affiliated
corporation" for services in any capacity other than as a Director, or (ii)
is otherwise considered an "outside director" for purposes of Section
162(m) of the Code.

(q) "PLAN" means this Wild Oats Markets, Inc. 2001
Non-Officer/Non-Director Stock Option Plan.

(r) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(s) "STOCK AWARD" means any right granted under the Plan.

(t) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

 

3. ADMINISTRATION

(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).

(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

  
    (1) To determine from time to time which of the persons eligible under
    the Plan shall be granted Stock Awards; when and how each Stock Award shall
    be granted; the provisions of each Stock Award granted (which need not be
    identical), including the time or times when a person shall be permitted to
    receive stock pursuant to a Stock Award and the number of shares with
    respect to which a Stock Award shall be granted to each such person.

    (2) To construe and interpret the Plan and Stock Awards granted under it,
    and to establish, amend and revoke rules and regulations for its
    administration. The Board, in the exercise of this power, may correct any
    defect, omission or inconsistency in the Plan or in any Stock Award
    Agreement, in a manner and to the extent it shall deem necessary or
    expedient to make the Plan fully effective.

    (3) To amend the Plan or a Stock Award as provided in Section 12.

    (4) Generally, to exercise such powers and to perform such acts as the
    Board deems necessary or expedient to promote the best interests of the
    Company which are not in conflict with the provisions of the Plan.

  

(c) The Board may delegate administration of the Plan to a committee or
committees ("Committee") of one or more members of the Board. In the
discretion of the Board, a Committee may consist solely of two or more Outside
Directors, in accordance with Code Section 162(m), or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board (and
references in this Plan to the Board shall thereafter be to the Committee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan.

 

4. SHARES SUBJECT TO THE PLAN

(a) Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate 486,000 shares of the Common Stock. If any Stock
Award shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the stock not acquired under such Stock
Award shall revert to and again become available for issuance under the Plan.

(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

 

5. ELIGIBILITY

No Officer or Director shall be eligible to receive any Stock Award under
this Plan. Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, no person shall be eligible to be granted Options covering
more than 50,000 shares of the Common Stock in any calendar year.

 

6. OPTION PROVISIONS

Each Option shall be in such form and shall contain such terms and conditions
as the Board shall deem appropriate. The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

(a) TERM. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.

(b) PRICE. The exercise price of each Nonstatutory Stock Option shall be not
less than eighty-five percent (85%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted.

(c) CONSIDERATION. The purchase price of stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations,
either (i) in cash at the time the Option is exercised, or (ii) at the
discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other Common Stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other Common Stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d), or (C) in any other form of legal
consideration that may be acceptable to the Board.

In the case of any deferred payment arrangement, interest shall be payable at
least annually and shall be charged at the minimum rate of interest necessary to
avoid the treatment as interest, under any applicable provisions of the Code, of
any amounts other than amounts stated to be interest under the deferred payment
arrangement.

(d) TRANSFERABILITY. A Nonstatutory Stock Option shall not be transferable
except by will, by the laws of descent and distribution or pursuant to a
domestic relations order satisfying the requirements of Rule 16b-3 and shall be
exercisable during the lifetime of the person to whom the Option is granted only
by such person or any transferee pursuant to a domestic relations order.
Notwithstanding the foregoing, the person to whom the Option is granted may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionee, shall
thereafter be entitled to exercise the Option.

(e) VESTING. The total number of shares of stock subject to an Option may,
but need not, be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that from time to time during each of
such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.

(f) TERMINATION OF EMPLOYMENT. In the event an Optionee's Continuous Status
as an Employee terminates (other than upon the Optionee's death or disability),
the Optionee may exercise his or her Option (to the extent that the Optionee was
entitled to exercise it at the date of termination) but only within such period
of time ending on the earlier of (i) the date thirty (30) days after the
termination of the Optionee's Continuous Status as an Employee (or such longer
or shorter period specified in the Option Agreement), or (ii) the expiration of
the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionee does not exercise his or her Option within the time
specified in the Option Agreement, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
under the Plan.

An Optionee's Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionee's Continuous Status as an
Employee (other than upon the Optionee's death or disability) would result in
liability under Section 16(b) of the Exchange Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in the Option Agreement, or (ii) the tenth (10th) day after the last date
on which such exercise would result in such liability under Section 16(b) of the
Exchange Act. Finally, an Optionee's Option Agreement may also provide that if
the exercise of the Option following the termination of the Optionee's
Continuous Status as an Employee (other than upon the Optionee's death or
disability) would be prohibited at any time solely because the issuance of
shares would violate the registration requirements under the Act, then the
Option shall terminate on the earlier of (i) the expiration of the term of the
Option set forth in the first paragraph of this subsection 6(f), or (ii) the
expiration of a period of thirty (30) days after the termination of the
Optionee's Continuous Status as an Employee during which the exercise of the
Option would not be in violation of such registration requirements.

(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status as
an Employee terminates as a result of the Optionee's disability, the Optionee
may exercise his or her Option (to the extent that the Optionee was entitled to
exercise it at the date of termination), but only within such period of time
ending on the earlier of (i) the date six (6) months following such termination
(or such longer or shorter period specified in the Option Agreement), or (ii)
the expiration of the term of the Option as set forth in the Option Agreement.
If, at the date of termination, the Optionee is not entitled to exercise his or
her entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the shares covered by
such Option shall revert to and again become available for issuance under the
Plan.

(h) DEATH OF OPTIONEE. In the event of the death of an Optionee during, or
within a period specified in the Option after the termination of, the Optionee's
Continuous Status as an Employee, the Option may be exercised (to the extent the
Optionee was entitled to exercise the Option at the date of death) by the
Optionee's estate, by a person who acquired the right to exercise the Option by
bequest or inheritance or by a person designated to exercise the option upon the
Optionee's death pursuant to subsection 6(d), but only within the period ending
on the earlier of (i) the date twelve (12) months following the date of death
(or such longer or shorter period specified in the Option Agreement), or (ii)
the expiration of the term of such Option as set forth in the Option Agreement.
If, at the time of death, the Optionee was not entitled to exercise his or her
entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under the Plan. If,
after death, the Option is not exercised within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.

(i) EARLY EXERCISE. The Option may, but need not, include a provision whereby
the Optionee may elect at any time while an Employee to exercise the Option as
to any part or all of the shares subject to the Option prior to the full vesting
of the Option. Any unvested shares so purchased may be subject to a repurchase
right in favor of the Company or to any other restriction the Board determines
to be appropriate.

(j) RE-LOAD OPTIONS. Without in any way limiting the authority of the Board
or Committee to make or not to make grants of Options hereunder, the Board or
Committee shall have the authority (but not an obligation) to include as part of
any Option Agreement a provision entitling the Optionee to a further Option (a
"Re-Load Option") in the event the Optionee exercises the Option
evidenced by the Option agreement, in whole or in part, by surrendering other
shares of Common Stock in accordance with this Plan and the terms and conditions
of the Option Agreement. Any such Re-Load Option (i) shall be for a number of
shares equal to the number of shares surrendered as part or all of the exercise
price of such Option; (ii) shall have an expiration date which is the same as
the expiration date of the Option the exercise of which gave rise to such
Re-Load Option; and (iii) shall have an exercise price which is equal to one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Re-Load Option on the date of exercise of the original Option.

There shall be no Re-Load Options on a Re-Load Option. Any such Re-Load
Option shall be subject to the availability of sufficient shares under
subsection 4(a) and shall be subject to such other terms and conditions as the
Board or Committee may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options.

 

7. CANCELLATION AND RE-GRANT OF OPTIONS

(a) The Board or the Committee shall have the authority to effect, at any
time and from time to time, (i) the repricing of any outstanding Options under
the Plan and/or (ii) with the consent of any adversely affected holders of
Options, the cancellation of any outstanding Options under the Plan and the
grant in substitution therefor of new Options under the Plan covering the same
or different numbers of shares of stock, but having an exercise price per share
not less than eighty-five percent (85%) of the Fair Market Value for a
Nonstatutory Stock Option.

(b) Shares subject to an Option canceled under this Section 7 shall continue
to be counted against the maximum award of Options permitted to be granted
pursuant to Section 5 of the Plan. The repricing of an Option under this Section
7, resulting in a reduction of the exercise price, shall be deemed to be a
cancellation of the original Option and the grant of a substitute Option; in the
event of such repricing, both the original and the substituted Options shall be
counted against the maximum awards of Options permitted to be granted pursuant
to Section 5 of the Plan.

 

8. COVENANTS OF THE COMPANY

(a) During the terms of the Stock Awards, the Company shall keep available at
all times the number of shares of stock required to satisfy such Stock Awards.

(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares under Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
of 1933, as amended (the "Securities Act") either the Plan, any Stock
Award or any stock issued or issuable pursuant to any such Stock Award. If,
after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such Stock Awards unless and until such authority is obtained.

 

9. USE OF PROCEEDS FROM STOCK

Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.

 

10. MISCELLANEOUS

(a) The Board shall have the power to accelerate the time at which a Stock
Award may first be exercised or the time during which a Stock Award or any part
thereof will vest pursuant to subsection 6(e), notwithstanding the provisions in
the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.

(b) No Employee or any person to whom a Stock Award is transferred in
accordance with the Plan shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such Stock Award
unless and until such person has satisfied all requirements for exercise of the
Stock Award pursuant to its terms.

(c) Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee or other holder of Stock Awards
any right to continue in the employ of the Company or any Affiliate, or shall
affect the right of the Company or any Affiliate to terminate the employment of
any Employee with or without notice and with or without cause.

(d) The Company may require any person to whom a Stock Award is granted, or
any person to whom a Stock Award is transferred in accordance with the Plan, as
a condition of exercising or acquiring stock under any Stock Award, (1) to give
written assurances satisfactory to the Company as to such person's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Stock Award; and (2) to give written assurances
satisfactory to the Company stating that such person is acquiring the stock
subject to the Stock Award for such person's own account and not with any
present intention of selling or otherwise distributing the stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise or acquisition
of stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (ii) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

(e) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the Common Stock otherwise issuable to the participant
as a result of the exercise or acquisition of stock under the Stock Award; or
(3) delivering to the Company owned and unencumbered shares of the Common Stock
of the Company.

 

11. ADJUSTMENTS UPON CHANGES IN STOCK

(a) If any change is made in the stock subject to the Plan, or subject to any
Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan pursuant to subsection 4(a) and the maximum
number of shares subject to award to any person during any calendar year
pursuant to Section 5, and the outstanding Stock Awards will be appropriately
adjusted in the class(es) and number of shares and price per share of stock
subject to such outstanding Stock Awards. Such adjustments shall be made by the
Board or the Committee, the determination of which shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a "transaction not involving the receipt of consideration
by the Company".)

(b) In the event of: (1) a dissolution, liquidation or sale of substantially
all of the assets of the Company; (2) a merger or consolidation in which the
Company is not the surviving corporation; or (3) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, then to the extent permitted by applicable law: (i) any surviving
corporation or an Affiliate of such surviving corporation shall assume any Stock
Awards outstanding under the Plan or shall substitute similar Stock Awards for
those outstanding under the Plan, or (ii) such Stock Awards shall continue in
full force and effect. In the event any surviving corporation and its Affiliates
refuse to assume or continue such Stock Awards, or to substitute similar options
for those outstanding under the Plan, then, with respect to Stock Awards held by
persons then performing services as Employees, the time during which such Stock
Awards may be exercised shall be accelerated and the Stock Awards terminated if
not exercised prior to such event.

 

12. AMENDMENT OF THE PLAN AND STOCK AWARDS

(a) The Board at any time, and from time to time, may amend the Plan;
provided that no such amendment shall allow for the issuance of Stock Awards
hereunder to any Officer or Director when permitted under Nasdaq guidelines for
plans not approved by the Company's shareholders.

(b) It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide eligible Employees
with the maximum benefits provided or to be provided under the provisions of the
Code.

(c) Rights and obligations under any Stock Award granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

(d) The Board at any time, and from time to time, may amend the terms of any
one or more Stock Award; provided, however, that the rights and obligations
under any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

 

13. TERMINATION OR SUSPENSION OF THE PLAN

(a) The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate 15 years from the date the Plan is adopted
by the Board. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.

(b) Rights and obligations under any Stock Award granted while the Plan is in
effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the Stock Award was granted.

 

14. EFFECTIVE DATE OF PLAN.

The Plan shall become effective on October 1, 2001.

 

 

WILD OATS MARKETS, INC.

NON-QUALIFIED STOCK OPTION

 

___________________________________,Optionee:

 

Wild Oats Markets, Inc. (the "Company"), pursuant to its 2001
Non-Officer / Non-Director Stock Option Plan (the "Plan"), has this
day granted to you, the optionee named above, an option to purchase shares of
the common stock of the Company ("Common Stock"). This option is not
intended to qualify and will not be treated as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").

The details of your option are as follows:

1. (a) The total number of shares of Common Stock subject to this option is
____________________________

(a) Subject to the conditions stated herein, this option shall be exercisable
with respect to each installment shown below on or after the date of vesting
applicable to such installment; provided, however, that should Optionee's
employment terminate for "cause" this option shall be terminated and
canceled immediately and shall not be exercisable for any number of shares. For
purposes of this option, "cause" shall mean misconduct including, but
not limited to, criminal acts involving moral turpitude or dishonesty.

  
    NUMBER OF SHARES (INSTALLMENT)

    DATE OF EARLIEST EXERCISE (VESTING)

  

2. (a) The exercise price of this option is ___________________ ($_______)
per share, being not less than eighty five percent (85%) of the fair market
value of the Common Stock on the date of grant of this option.

(a) Payment of the exercise price per share is due in full in cash (including
check) upon exercise of all or any part of each installment which has become
exercisable by you.

(b) Notwithstanding the foregoing, this option may be exercised pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
which results in the receipt of cash (or check) by the Company prior to the
issuance of Common Stock.

3. This option may not be exercised for any number of shares which would
require the issuance of anything other than whole shares.

4. Notwithstanding anything to the contrary contained herein, this option may
not be exercised unless the shares issuable upon exercise of this option are
then registered under the Act or, if such shares are not then so registered, the
Company has determined that such exercise and issuance would be exempt from the
registration requirements of the Act.

5. The term of this option commences on the date hereof and, unless sooner
terminated as set forth below or in the Plan, terminates ten (10) years from the
date of grant. In no event may this option be exercised on or after the date on
which it terminates. This option shall terminate prior to the expiration of its
term as follows: Thirty (30) days after the termination of your employment with
the Company for any reason or for no reason unless;

(a) such termination of employment is due to your permanent and total
disability (within the meaning of Section 422(c)(6) of the Code), in which event
the option shall terminate on the earlier of the termination date set forth
above or six (6) months following such termination of employment; or

(b) such termination of employment is due to your death, in which event the
option shall terminate on the earlier of the termination date set forth above or
twelve (12) months after your death; or

(c) during any part of such thirty (30) days period the option is not
exercisable solely because of the condition set forth in paragraph 4 above, in
which event the option shall not terminate until the earlier of the termination
date set forth above or until it shall have been exercisable for an aggregate
period of thirty (30) days after the termination of employment.

However, this option may be exercised on or after the termination of
employment only as to that number of vested shares as to which it was
exercisable on the date of termination of employment under the provisions of
paragraphs 1 and 3 of this option; provided however, that if your employment is
terminated prior to the First Exercise Date (as defined in subparagraph 3(a)
hereof), subject to paragraph 1 hereof, the date of your termination of
employment shall be deemed the First Exercise Date.

6. (a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to the Plan.

  
    
      
        
          
            (i) By exercising this option you agree that the Company may
            require you to enter an arrangement providing for the payment by you
            to the Company of any tax withholding obligation of the Company
            arising by reason of (1) the exercise of this option; (2) the lapse
            of any substantial risk of forfeiture to which the shares are
            subject at the time of exercise; or (3) the disposition of shares
            acquired upon such exercise.

          

        

      

    

  

7. This option is not transferable, except by will or by the laws of descent
and distribution, and is exercisable during your life only by you.

8. Any notices provided for in this option shall be given in writing and
shall be deemed effectively given upon receipt or, in the case of notices
delivered by the Company to you, five (5) days after deposit in the United
States mail, postage prepaid, addressed to you at the address specified below or
at such other address as you hereafter designate by written notice to the
Company.

9. If the partners hereto shall have any conflict regarding the terms of this
option, the interpretation of the Company's Compensation Committee shall
prevail.

Dated the ______ day of _________________, 20___.

Very truly yours,

WILD OATS MARKETS, INC.

 

By ___________________________________

Duly authorized on behalf of the Board of Directors

The undersigned:

(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and

(b) Acknowledges that as of the date of grant of this option, it sets forth
the entire understanding between the undersigned optionee and the Company and
its affiliates regarding the acquisition of stock in the Company and supersedes
all prior oral and written agreements on that subject with the exception of the
following agreements only:

NONE _____________________

  
    (Initial)

  

OTHER __________________________________________________________

__________________________________________________________

__________________________________________________________

 

  
    ___________________________________________________

    Optionee

     

    Address: ___________________________________________

    
      
        ___________________________________________

         

      

    

  

ATTACHMENTS:

2001Non- Officer/Non-Director Stock Option Plan

Notice of Exercise

 

NOTICE OF EXERCISE

 

 

Date of Exercise

Wild Oats Markets, Inc.

3375 Mitchell Lane

Boulder, CO 80301

Ladies and Gentlemen:

This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.

 

 

Type of option (check
one)            
Incentive                
Nonstatutory

Stock option dated:

Number of shares as to which

option is exercised:

Certificates to be issued in

name of: _____________________

Total exercise price: $

Cash payment delivered herewith: $

 

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the 2001 Non-Officer / Non-Director Stock
Option Plan, (ii) to provide for the payment by me to you (in the manner
designated by you) of your withholding obligation, if any, relating to the
exercise of this option, and (iii) if this exercise related to an incentive
stock option, to notify you in writing within fifteen (15) days after the date
of any disposition of any of the shares of Common Stock issued upon exercise of
this option that occurs within two (2) years after the date of grant of this
option or within one (1) year after such shares of Common Stock are issued upon
exercise of this option.

I hereby make the following certifications and representations with respect
to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon
exercise of the Option as set forth above:

I acknowledge that all certificates representing any of the Shares subject to
the provisions of the Option shall have endorsed thereon appropriate legends
reflecting the foregoing limitations, as well as any legends reflecting
restrictions pursuant to the Company's Articles of Incorporation, Bylaws and/or
applicable securities laws.

Very truly yours,

_________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}]]