Document:

Odak Second Amendment

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

 

 

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT by and between
Wild Oats Markets, Inc. (the "Company") and Perry D. Odak (the
"Executive") is dated June 19, 2002.

 

RECITALS

 

A. The Executive and the Company entered into an Employment
Agreement dated March 6, 2001 (the "Employment Agreement"); and

 

B. Under Section 4(b) of the Employment Agreement, the
Company shall pay the Executive as Incentive Compensation in respect to each
fiscal year (or a portion thereof) of the Company during the Term, an amount
determined in accordance with any bonus or short term incentive compensation
program (which may be based upon achieving certain specified performance
criteria) which may be established by the Board either for the Executive or for
senior management;

 

C. Section 4(b) of the Employment Agreement further provides
for the Executive's good faith consideration of waiving all or a portion of
the Incentive Compensation otherwise payable to him for the first 12 months of
service to the extent that the Company incurs a loss in connection with its
obligation to arrange for the purchase of the Executive's house under Section
4(h) of the Employment Agreement;

 

D. The parties have agreed to an extension of the date on
which the Incentive Compensation shall be paid in order to provide for
sufficient time to determine whether the Company will incur a loss in connection
with the Company's obligation to purchase the Executive's house for purposes
of Section 4(b) of the Agreement; and

 

E. The Board of Directors and the Executive have agreed that
the first Incentive Compensation payment date shall be as provided below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises
and the mutual promises, terms, provisions and conditions set forth in this
Second Amendment to Employment Agreement, the parties hereby agree:

 

  
    1. Amendment to Section 4(b) - Incentive
    Compensation. The last sentence in the first full paragraph is deleted
    and replaced with the following:

     

    "The amount of Incentive Compensation to be paid by
    the Company to the Executive for the first twelve (12) months of service
    during the Term hereof shall not be less than Two Hundred Fifty Thousand
    Dollars ($250,000), which amount shall be paid only if the Executive remains
    in the employment of the Company on October 20, 2002 or is terminated by the
    Company other than for Cause (or he terminates for Good Reason) during such
    period."

     

     

    2. The following sentence is added at the end of Section
    4(b) of the Employment Agreement:

     

    "The Incentive Compensation payment to the Executive
    for the first 12 months of service during the Term shall be due on or before
    October 2, 2002, in order to provide sufficient time for the Executive to
    evaluate whether the Company has incurred a loss in connection with the
    Company's obligation to purchase the Executive's house."

     

    
     

    
    3. Confirmation. In all other respects, the terms
    of the Employment Agreement are hereby confirmed.

     

     

  

IN WITNESS WHEREOF, this Second Amendment to Employment
Agreement has been executed by the Company, by its duly authorized officer, and
by the Executive, as of the date first above written.

  

	

THE EXECUTIVE

    	

 WILD OATS MARKETS, INC.

    
	

/s/ Perry D. Odak

    	

 By:  /s/ Freya Brier

    
	

Perry D. Odak	Name: Freya Brier

    
		

                Title: V.P., LegalODAK THIRD AMENDMENT

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT by and between
Wild Oats Markets, Inc. (the "Company") and Perry D. Odak (the
"Executive") is dated August 12, 2002.

RECITALS

A. The Executive and the Company entered into an Employment
Agreement dated March 6, 2001 (the "Employment Agreement");

B. Under Section 4(d) of the Employment Agreement, in the
event of the issuance by the Company of additional securities as part of a
capital raising transaction (the "Issuance") during the 270 days
following the date of the Employment Agreement, the Company shall automatically
grant to the Executive on the date of the Issuance (provided he has become an
employee and remained in the continuous employment of the Company), options to
acquire such additional number of shares of common stock sufficient to maintain
the Executive's percentage interest as of such date (if such options were
exercised) at five percent (5%) of the sum of (i) the number of shares of common
stock outstanding (on a fully diluted basis) upon the date of the Executive's
purchase (after taking into account the shares sold to the Executive) plus (ii)
the number of shares issued pursuant to such capital raising transaction plus
the number of shares subject to such options; provided, however, that the
Executive shall not be granted options to acquire more than 300,000 shares in
the aggregate pursuant to this provision;

C. In May 2002, the Company's Board of Directors agreed to
amend the Employment Agreement to extend through December 2002 the period during
which the Issuance will entitle Mr. Odak to receive up to 300,000 stock options
exercisable for the Company's common stock, to allow Mr. Odak to maintain his
5% equity ownership in the Company; and

D. The Executive and the Company desire to provide for the
grant of options to other officers of the Company.

 

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises
and the mutual promises, terms, provisions and conditions set forth in this
Third Amendment to Employment Agreement, the parties hereby agree:

1. Amendment to Section 4(d) - Stock Options. The
first sentence is deleted and replaced with the following:

  "If, by reason of the issuance by the Company of
  additional shares of Stock pursuant to a capital raising transaction at any
  time or times prior to January 1, 2003, the number of Shares purchased by the
  Executive pursuant to the Purchase Agreement represents less than five percent
  (5%) of the sum of (i) the number of shares of Stock outstanding (on a fully
  diluted basis) upon the date of the Executive's purchase (after taking into
  account the shares sold to the Executive) plus (ii) the number of shares
  issued pursuant to such capital raising transaction, the Company shall
  automatically grant to the Executive, on the date of issuance of the Stock in
  the capital raising transaction (provided he has become an employee and
  remained in the continuous employment of the Company), options to acquire such
  additional number of shares of Stock sufficient to maintain the Executive's
  percentage interest as of such date (if such options were exercised) at five
  percent (5%) of the sum of (i) and (ii) plus the number of shares subject to
  such options; provided, however, that the Executive shall not be granted
  options to acquire more than 300,000 shares in the aggregate pursuant to this
  provision."

2. The following sentence is added at the end of Section 4(d)
of the Employment Agreement:

  "Notwithstanding anything in this Section 4(d) to the
  contrary, the Company shall be deemed to have satisfied its obligations under
  this Section 4(d) with respect to the number of options represented by the
  Antidilution Options, as defined below (but in no event with respect to
  options to purchase more than 70,000 Shares), if the Company satisfies each of
  the conditions set forth below:

  
    (1) the Company grants, to employees of the Company
    (other than the Executive), options (the "Employee Options") to
    acquire shares of Stock on the same date it would have been required to
    grant options to the Executive under this Section 4(d) but for the
    application of this sentence;

    (2) the Employee Options (a) have an exercise price equal
    to the fair market value of a share of Stock as of the date of grant (as
    determined under the Company's 1996 Equity Incentive Plan (the
    "Incentive Plan")), (b) have a term of 10 years, (c) become vested
    and exercisable over four (4) years at the rate of 2.0833% per month
    following the date of grant provided the optionee has remained in the
    continuous employee of the Company and subject to acceleration under the
    same conditions that apply to the vesting of the Restricted Shares, (d)
    terminate upon the optionee's termination of employment for any reason,
    except that any Employee Options that are vested and exercisable upon the
    optionee's termination of employment shall terminate six (6) months
    following the optionee's termination of employment as a result of the
    optionee's disability, twelve (12) months following the optionee's
    termination of employment by reason of death and thirty (30) days (but in no
    event later than the remaining term of the Employee Option) following the
    optionee's termination of employment for any other reason other than cause,
    as such is defined in the Incentive Plan and attachments thereto, in which
    event the Employee Options shall terminate upon termination of employment
    and (e) are otherwise subject to the terms of the Incentive Plan;

    (3) the Company grants to the Executive options (the
    "Antidilution Options") to purchase one half (1/2) of the number
    of Shares subject to the Employee Options; and

    (4) the terms of the Antidilution Options comply with the
    provisions of this Section 4(d), determined without regard to this sentence,
    except that (a) the Antidilution Options become exercisable on the date on
    which they otherwise would have become exercisable in accordance with this
    Section 4(d); provided that the number of Antidilution Options that have
    become exercisable may not exceed one half (1/2) of the number of Employee
    Options that have expired or been forfeited, in either case, without having
    been exercised and (b) the Antidilution Options expire on the date on which
    they otherwise would have expired in accordance with this Section 4(d);
    provided that on each date on which one or more Employee Options are
    exercised a number of Antidilution Options equal to one-half (1/2) of the
    number of Employee Options so exercised shall immediately expire."

  

3. Confirmation. In all other respects, the terms of
the Employment Agreement are hereby confirmed.

IN WITNESS WHEREOF, this Third Amendment to Employment
Agreement has been executed by the Company, by its duly authorized officer, and
by the Executive, as of the date first above written.

	THE EXECUTIVE	 WILD OATS MARKETS, INC.
	/s/ Perry D. Odak	By:   Freya Brier
	Perry D. Odak	Name:  Freya Brier, 
		Title:  V.P., Legal

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