EMPLOYMENT AGREEMENT

 

         EMPLOYMENT AGREEMENT by and between Wild Oats Markets, Inc. (the

"Company"), a Delaware corporation with its principal place of business at 3375

Mitchell Lane, Boulder, CO 80301, and Perry D. Odak of Brockie Mansion, 900

Brockie Lane, York, Pennsylvania 17403 (the "Executive"), dated March 6, 2001.

 

 

         WHEREAS, the Executive is possessed of certain experience and expertise

that qualify him to provide the direction and leadership required by the

Company; and

 

         WHEREAS, subject to the terms and conditions hereinafter set forth, the

Company wishes to retain the Executive as its Chief Executive Officer and

President and the Executive wishes to accept such retention;

 

         NOW, THEREFORE, in consideration of the foregoing premises and the

mutual promises, terms, provisions and conditions set forth in this Agreement,

the parties hereby agree:

 

         1.       Employment.  Subject  to the  terms  and  conditions  set

forth in this Agreement, the Company hereby offers and the Executive hereby

accepts employment as the Chief Executive Officer and President of the Company,

commencing on March 19, 2001 (the "Effective Date").

 

 

         2. Term. Subject to earlier termination as hereinafter provided, the

Executive's retention under this Agreement shall be for a term of five years

commencing on the Effective Date. The term of this Agreement, as from time to

time extended or renewed, is hereinafter referred to as "the Term of this

Agreement" or "the Term hereof." This Agreement shall continue on a year-to-year

basis beyond the end of the fifth year (or a later year if this Agreement has

renewed), unless the Company notifies the Executive in writing not less than

nine (9) months prior to the end of the fifth year (or applicable later year)

that the Company does not wish to renew the Agreement. The Company's decision

not to renew this Agreement shall not be treated as a termination of the

Executive by the Company for purposes of this Agreement.

 

         3.       Capacity and Performance.

 

         (a)      During the Term hereof, the Executive shall serve the

Company as its Chief Executive Officer and President.

 

         (b) During the Term hereof, the Executive shall serve the Company on a

full-time basis and shall have the leadership of and be responsible to the Board

of Directors for all operations of the Company and shall have all powers and

duties consistent with such position, in accordance with the Bylaws of the

Company. It is understood that for the Term hereof, the Executive shall also

have certain authorities and obligations designated by the Board of Directors

and set forth in Exhibit A to this Agreement (the "Statement of Authority"). The

Statement of Authority is incorporated herein by reference and shall remain in

effect unless modified or terminated by mutual written agreement during the Term

hereof.

 

         (c) During the Term hereof, the Executive shall devote his full

business time (other than vacations) and his best efforts, business judgment,

skill and knowledge exclusively (except as provided below) to the advancement of

the business and interests of the Company and to the discharge of his duties and

responsibilities hereunder. The Executive shall not engage in any other business

activity or serve in any industry, trade, governmental position or as a director

of any other business or organization during the Term of this Agreement, except

as may be approved by a committee of the Board consisting of three outside

directors. The Company encourages participation by the Executive in community

and charitable activities, but said committee shall have the right to approve or

disapprove the Executive's participation in such activities if, in the judgment

of said committee, such participation may conflict with the Company's interests

or with the Executive's duties or responsibilities or the time required for the

discharge of those duties and responsibilities. The Executive has previously

delivered a letter containing a true and correct list of all directorships or

other participation in committees, consulting or other business activities which

the Executive has or intends to maintain during the Term, which have been

approved by said committee of the Board.

 

         (d) The Executive shall be appointed to the Board of Directors by the

present Board of Directors as soon as practicable. The Company agrees to propose

and recommend to the shareholders of the Company at each appropriate Annual

Meeting of such shareholders during the Term hereof the election or re-election

of the Executive as a member of the Board. The Executive shall also lead the

effort on behalf of the Company to identify candidates to fill any vacancies on

the Board of Directors.

 

         4.       Payments and Benefits.  As payment for all services  performed

by the Executive under and during the Term hereof and subject to performance of

the Executive's duties and the obligations pursuant to this Agreement:

 

         (a) Base Amount. During the Term hereof, the Company shall pay the

Executive a base amount at the rate of Five Hundred Thousand Dollars ($500,000)

per annum, payable in accordance with the Company's regular payroll practice,

subject to increase from time to time by the Board, in its sole discretion. Such

base amount, as from time to time in effect, is hereinafter referred to as the

"Base Amount. The Base Amount shall be reviewed at least annually by the

Company's Compensation Committee.

 

         (b) Incentive Compensation. In addition to the Base Amount, the Company

shall pay the Executive as incentive compensation ("Incentive Compensation") in

respect of each fiscal year (or portion thereof) of the Company during the Term

hereof, 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

Executive or for senior management. The determination as to the amounts of any

awards available to the Executive under these programs shall be reviewed at

least annually by the Company's Compensation Committee to ensure that such

amounts are competitive with awards granted to similarly situated executives of

publicly held companies comparable to the Company. 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 continuous employment of the Company throughout such

twelve (12) month period or is terminated by the Company other than for Cause

(or he terminates for Good Reason) during such period.

 

         The Company shall consider whether to pay a pro rata portion of any

Incentive Bonus otherwise payable to the Executive for a fiscal year if the

Executive's employment is terminated by reason of death or disability or by the

Company other than for Cause during such fiscal year. The Executive shall

consider in good faith waiving all or a portion of the Incentive Compensation

otherwise payable to him for the first twelve (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 this

Agreement.

 

         (c)      Restricted Stock.

 

         (1) The Executive shall be given the opportunity to purchase from the

Company on the date hereof that number of shares of the Company's Common Stock,

par value $0.001 per share ("Stock"), equal to five percent (5%) of the number

of shares of Common Stock outstanding (on a fully diluted basis) upon the date

of purchase (after taking into account the shares sold to the Executive), at a

per share price equal to the closing market price on NASDAQ on the effective

date of the purchase. The purchase by the Executive shall be financed by the

Company and evidenced by a full recourse promissory note of the Executive in

favor of the Company. The purchase of the shares, including the financing, shall

be in accordance with and subject to the terms and conditions set forth in a

Restricted Stock Purchase Agreement (the "Purchase Agreement") by and between

the Executive and the Company, substantially in the form (including the exhibits

thereto) attached to this Agreement as Exhibit B.

 

 

         (2) For purposes of this Agreement, the calculation of the number of

shares of Stock outstanding on a "fully diluted basis" shall be made by assuming

that shares of Stock subject to options having an exercise price of $12 or less

are outstanding, and that shares of Stock subject to options having an exercise

price of more than $12 are not outstanding.

 

         (3) The terms of the Purchase Agreement shall control in the event of

any ambiguity between the Purchase Agreement and this Agreement.

 

 

         (d) Stock Options. 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 during the two hundred seventy (270) day period following the date of

this Agreement, 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. For purposes of this Subsection (d), a

capital raising transaction does not include issuances of Stock or options to

acquire Stock to employees or other service providers in connection with the

performance of services. Any options granted pursuant to this provision shall be

subject to the terms of the Company's Equity Incentive Plan and an incentive

stock option agreement to be entered into between the Company and the Executive

pursuant thereto, the terms of which shall control, provided they are consistent

with the following provisions of this Subsection (d). Such agreement shall

provide that the options have an exercise price equal to their fair market value

at the date of grant (as determined under the Equity Incentive Plan) and a term

of ten years, and become vested and exercisable over four years at the rate of

2.0833% per month following the date of grant provided the Executive has

remained in the continuous employment of the Company pursuant to this Agreement.

The vesting and exercisability of the options shall be subject to acceleration

under the same conditions that apply to the vesting of the Restricted Shares.

Any unexercised options shall terminate upon the Executive's termination of

employment for any reason; provided, however, that any options that are vested

and exercisable upon the Executive's termination shall remain exercisable for

ninety (90) days if termination is by the Company other than for Cause or by the

Executive for Good Reason, or for twelve (12) months if the Employee's

termination is by reason of death or disability (but not longer than the

remaining term of the option). The other terms of the options shall be no less

advantageous to the Executive than currently in place for executive employees

generally.

 

         (e) Supplemental Bonus. Provided the Executive has remained in the

continuous employment of the Company pursuant to this Agreement, the Executive

shall become entitled to (and shall vest in the right to receive) a cash bonus

if (i) the fair market value of the Stock, as measured by the closing stock

price on NASDAQ for the preceding 120 consecutive trading days, shall equal at

least $30 per share during the Term hereof, or (ii) a Change in Control of the

Company occurs during the Term hereof and the fair market value of the Stock, as

measured by the closing stock price on NASDAQ immediately prior to the Change in

Control, shall equal at least $20 per share. The amount of the cash bonus shall

equal $ 9,221,955.82, plus an amount equal to the interest that would accrue

thereon from the date hereof to the date of payment, at 7.5% per annum,

compounded semi-annually. The cash bonus shall be paid by the Company as soon as

reasonably practicable following the occurrence of the event described in clause

(i) or (ii) of this Subsection (e). The Company shall make appropriate

adjustments to the per share prices referred to in this Subsection (e) and the

number and exercise price of option shares referred to in Subsection (d) above

to reflect any stock dividend, extraordinary dividend payable in a form other

than stock, spin-off, stock split, reverse stock split, recapitalization, or

similar transaction affecting the Company's outstanding securities that is

effected without receipt of consideration.

 

         (f) Employee Benefit Plans. During the Term hereof, Executive (and his

family) shall be entitled to participate in the Company's welfare and retirement

plans, including the Company's group health, life, disability, and 401(k) plan,

from time to time in effect for executives of the Company generally, except to

the extent such plans are profit sharing or bonus plans or stock plans or are in

a category of benefit otherwise provided to the Executive under this Agreement.

The Executive shall also be entitled to defer up to $30,000 of salary and/or

incentive compensation otherwise payable to the Executive for the calendar year

2001, in accordance with and subject to the terms of the Company's Deferred

Compensation Plan. The Company may amend, terminate or add to its employee

benefit plans at any time as it, in its sole judgment, determines to be

appropriate.

 

         (g) Business Expenses. The Company shall pay or reimburse the Executive

for all reasonable business expenses of the Executive incurred during the Term

hereof in the performance of his duties and responsibilities hereunder,

including reasonable expenses relating to his transportation between the

Company's headquarters in Colorado and a temporary office to be maintained by

the Executive in Pennsylvania, subject to such reasonable substantiation and

documentation as may be specified by the Company from time to time. The

Executive shall be entitled to the use of an automobile (and operating expenses)

on terms to be mutually agreed upon between the Executive and the Compensation

Committee of the Board of Directors.

 

         (h) Relocation. The Company shall reimburse the Executive for the

reasonable costs incurred by him in relocating to a home in Colorado (not to

exceed $25,000). The Company shall assist the Executive in arranging for the

sale of his residence in York, Pennsylvania. The Executive agrees to provide the

Company with all consents, disclosures, representations and authorizations

reasonably required to enable the Company to arrange for the sale of the

residence on the Executive's behalf, to list the residence for sale for an

amount not in excess of 110% of its appraised value (determined as provided

below), and to otherwise cooperate with the Company to facilitate the sale of

the residence. In the event that a sale of the Executive's residence to a third

party is not completed with four (4) months after the Effective Date, the

Company (or a third party retained by the Company) shall offer to purchase the

Executive's residence for an amount equal to the fair market value of the

residence as of the Effective Date, or, if less, the fair market value of the

house as of the date thirty days prior to the date upon which the Company is

obligated to purchase the house pursuant to this provision. In each case, fair

market value shall be determined on the basis of an independent appraisal

obtained by the Company. However, if the Executive obtains an independent

appraisal from a party reasonably acceptable to the Company that is within 5% of

the appraised amount obtained by the Company, the fair market value shall be

deemed to equal the average of the two amounts. If the Executive's appraised

amount exceeds the Company's appraised amount by more than 5%, the Company shall

obtain a third appraisal from a party reasonably acceptable to the Executive,

and the fair market value shall be deemed the average of the three appraised

amounts.

 

         (i)      Legal Fees.  The Company shall reimburse the Executive for

reasonable  legal fees incurred by the Executive in the negotiation and

execution of this Agreement.

 

         (j)      Signing  Bonus.  The  Company  shall  pay the  Executive  a

one-time  signing  bonus of  $20,000 following the Effective Date of the

Agreement.

 

         5.       Termination of Employment  and Severance  Benefits.

Notwithstanding  the provisions of Section 2 hereof, the Executive's employment

hereunder shall terminate prior to the expiration of the Term hereof under the

following circumstances:

 

         (a) Death. In the event of the Executive's death during the Term

hereof, the Company shall pay to the Executive's designated beneficiary or, if

no beneficiary has been designated by the Executive, to his estate, any earned

and unpaid Base Amount that is earned but unpaid, and reimbursement of business

expenses accrued prior to the date of death.

 

         (b)      Disability.

 

         (1) The Company may terminate the Executive's employment hereunder,

upon thirty (30) days written notice to the Executive, in the event that the

Executive becomes disabled during his employment hereunder through any illness,

injury, accident or condition of either a physical or psychological nature and,

as a result, is unable to perform substantially all of his duties and

responsibilities hereunder for ninety (90) consecutive days during any period of

three hundred and sixty-five (365) consecutive calendar days.

 

         (2) The Board may designate another employee to act in the Executive's

place during any period of the Executive's disability prior to termination as

provided in Section 5(b)(1) above. Notwithstanding any such designation, the

Executive shall continue to receive from the Company (or under the Company's

disability plan) the Base Amount in accordance with Section 4(a) and benefits in

accordance with the other provisions of Section 4, to the extent permitted by

the then-current terms of the applicable benefit plans until the termination of

his employment.

 

 

         (3) The Executive shall be entitled to participate in the Company's

long-term disability plan during the Term hereof, to the same extent as other

employees. No finding of disability under this Section 5(b) shall be made in

respect of any cause or condition which has not been approved as a full

disability under the applicable plan (or, prior to the Executive's

participation, would not be approved as a full disability thereunder).

 

         (4) If any question shall arise as to whether during any period the

Executive is disabled through any illness, injury, accident or condition of

either a physical or psychological nature so as to be unable to perform

substantially all of his duties and responsibilities hereunder, the Executive

may, and at the request of the Company shall, submit to a medical examination by

a physician selected by the Company, to whom the Executive or his duly appointed

guardian has no reasonable objection, to determine whether the Executive is so

disabled and such determination shall for the purposes of this Agreement be

conclusive of the issue. If such question shall arise and the Executive shall

fail to submit to such medical examination, the Company's determination of the

issue shall be binding on the Executive.

 

         (c)      By the Company for Cause.

 

         (1) The Company may terminate the Executive's employment hereunder for

Cause ("Cause") any time upon written notice to the Executive setting forth in

reasonable detail the nature of such Cause. The following, as determined by the

Board in its reasonable judgment, shall each constitute Cause for termination:

 

 

          (i) a material breach of this Agreement by Executive (not otherwise

          listed in (ii) through (ix) below, for which no cure period shall be

          provided unless otherwise specified) which is not cured within thirty

          (30) days after written notice to Executive from the Compensation

          Committee;

 

 

          (ii) Executive's willful and repeated failure to comply with the

          lawful directives of the Board or the Company's Certificate of

          Incorporation or By-laws;

 

          (iii) gross negligence or willful misconduct by Executive in the

          performance of his duties hereunder;

 

          (iv) the commission by Executive of an act (including, but not limited

          to, a felony or a crime involving moral turpitude) causing material

          harm to the standing and reputation of the Company or its

          Subsidiaries, as determined in good faith by the Board;

 

          (v) misappropriation, breach of trust or fraudulent conduct by

          Executive with respect to the assets or operations of the Company or

          any of its Subsidiaries;

 

 

          (vi) the use by Executive of alcohol or drugs (not including the

          medicinal use of drugs in accordance with the prescription of a

          physician to treat disease, heal or relieve pain) to an extent that,

          in the good faith determination of the Board, materially interferes

          with the performance by Executive of his responsibilities under this

          Agreement and which continues after notice from the Board;

 

 

          (vii) the repeated threat of Executive to cause, or the actual

          occurrence of, damage to the relations of the Company or any of its

          Subsidiaries with customers, suppliers, lenders, advisors or employees

          which damage is materially adverse to the business or operations of

          the Company or any of its Subsidiaries, and which threat is not

          terminated or which damage is not cured following ten (10) days

          written notice from the Board (provided, however, that the utilization

          by the Executive of the dispute resolution procedures in this

          Agreement shall not, by itself, constitute a violation of this

          provision);

 

          (viii) unauthorized absence from work (unless resulting from

          Executive's disability) which continues after notice from the Board

          and materially interferes with the performance by Executive of his

          responsibilities under this Agreement; or

 

          (ix) deliberate or intentional violation of applicable laws, rules or

          regulations relating to the Company or its business, including

          violation of employment discrimination or harassment laws, rules or

          regulations.

 

         (2) For purposes of Section 5(c), no act, or failure to act, shall be

"willful" unless done, or omitted to be done, without reasonable belief that the

action or omission was in the best interests of the Company.

 

 

         (3) Notwithstanding the foregoing, the Executive shall not be deemed to

have been terminated for Cause unless and until there shall have been delivered

to him a notice of termination, and such termination shall have been approved by

the vote of two-thirds of the members of the Board of Directors (not including

the Executive) at a meeting of the Board (after reasonable notice to the

Executive and an opportunity for him, together with counsel, to be heard before

the Board of Directors) finding that, in the good faith opinion of the Board of

Directors, the above standard of termination for Cause was met in such case.

Effective upon a termination for Cause, the Executive shall be deemed to have

resigned as a member of the Board of Directors.

 

 

         (4) Upon the giving of notice of termination of the Executive's

employment hereunder for Cause following the determination of the Board under

the preceding subsection (3), the Company shall have no further obligation or

liability to the Executive, other than for any Base Amount earned and unpaid at

the date of termination, and payments or reimbursement of business expenses

accrued prior to the date of termination.

 

 

         (d) By the Company Other than for Cause. The Company may terminate the

Executive's employment hereunder other than for Cause at any time upon notice to

the Executive, provided that the Board of Directors determines, upon vote of

two-thirds its members (not including the Executive) after consultation with the

Executive and after setting forth the reasons for the Board's actions, that

retention of the Executive as the Chief Executive Officer would no longer be in

the best interests of the Company. In the event of such termination during the

first nine (9) months of the Term hereof, the Company shall continue to pay the

Executive the Base Amount at the rate in effect on the date of termination for

twenty-four (24) months. In the event of such termination during the last

fifty-one (51) months of the Term hereof, the Company shall continue to pay the

Executive the Base Amount at the rate in effect on the date of termination for

thirty-six (36) months. Subject to any employee contribution applicable to the

Executive on the date of termination, the Company shall continue to contribute,

for the period during which the Base Amount is continued hereunder, to the cost

of the Executive's participation (including his family) in the Company's group

medical and hospitalization insurance plans and group life insurance plan,

provided that the Executive is entitled to continue such participation under

applicable law and plan terms; and provided, further, that if the Executive is

not so entitled to continue, the Company shall reimburse the Executive (subject

to any employee contribution applicable to the Executive on the date of

termination) for the cost of obtaining such coverage. Except as otherwise

required under applicable law, continuation of such participation shall

terminate on the date the Executive becomes eligible to receive comparable

coverage under the plans of a subsequent employer.

 

 

         (e) By the Executive for Good Reason in the Absence of Cause. The

Executive may terminate his employment hereunder for Good Reason ("Good

Reason"), upon notice to the Company setting forth in reasonable detail the

nature of such Good Reason, and the Company's failure to remedy such matter

within thirty (30) days after receipt of such notice. The following shall

constitute Good Reason for termination by the Executive:

 

         (1)      Failure of the Company to continue the Executive in the

position of Chief Executive Officer;

 

         (2) Failure of the Company to propose or recommend the Executive, or

failure by the shareholders of the Company to elect the Executive, to the Board

of Directors as contemplated by Section 3(d) above;

 

         (3)      Material  diminution  in the  nature  or scope of the

Executive's  responsibilities,  duties  or authority (including those set forth

in the Statement of Authority);

 

         (4) Failure of the Company to provide the Executive the Base Amounts

and benefits in accordance with the terms of Section 4 or to observe any other

material provision of this Agreement; or

 

         (5)      A Change in Control of the Company.

 

A termination by the Executive for Good Reason, and in the absence of

circumstances that would entitle the Company to terminate the Executive for

Cause, shall be treated as a termination of the Executive by the Company other

than for Cause, and the Company shall continue to pay or provide the Base Amount

and other benefits in the same manner and to the same extent as provided under

Section 5(d) above for a termination other than for Cause.

 

         6.       Effect of Termination.

 

         (a) Except for benefits expressly continued pursuant to Section 5,

benefits shall terminate pursuant to the terms of the applicable benefit plans

based on the date of termination of the Executive's employment without regard to

any continuation of Base Amounts to the Executive following such date of

termination, and the Executive's entitlement to benefits accrued as of the date

of termination of the Executive's employment for any reason shall be determined

under the terms of the applicable benefit plan.

 

         (b) The provisions of this Agreement shall survive any termination if

so provided herein or if necessary or desirable fully to accomplish the purposes

of such provision, including without limitation the obligations of the Executive

under Sections 7, 8 and 9 hereof and all indemnifications provided for in this

Agreement (including Sections 12 and 15). The obligation of the Company to make

payments to or on behalf of the Executive under Sections 5(d) and 5(e) hereof is

expressly conditioned upon the Executive's continued full performance of

obligations under Sections 7, 8 and 9 hereof, and the Executive's execution and

delivery of a general release in such form as the Company shall require. The

Executive agrees that, except as expressly provided in Section 5 with respect to

continuation of the Base Amount as expressly provided, no compensation is earned

after termination of employment of the Executive for any reason, including as a

result of the non-renewal of this Agreement.

 

         7.       Confidential Information.

 

         (a) The Executive acknowledges that the Company and its Subsidiaries

continually develop Confidential Information, as defined in Section 14 hereof,

that the Executive may develop Confidential Information for the Company or its

Subsidiaries and that the Executive may learn of Confidential Information during

the course of his employment under this Agreement. The Executive will comply

with the policies and procedures of the Company and its Subsidiaries for

protecting Confidential Information and shall never disclose to any person

(except as required by applicable law or legal process or for the proper

performance of his duties and responsibilities to the Company and its

Subsidiaries, or in connection with any litigation between the Company and the

Executive (provided that the Company shall be afforded a reasonable opportunity

in each case to obtain a protective order)), or use for his own benefit or gain,

any Confidential Information obtained by the Executive incident to his

employment or other association with the Company or any of its Subsidiaries. The

Executive understands that this restriction shall continue to apply after his

employment terminates, regardless of the reason for such termination.

 

         (b) All documents, records, tapes and other media of every kind and

description relating to the business, present or otherwise, of the Company or

its Subsidiaries and any copies, in whole or in part, thereof (the "Documents"),

whether or not prepared by the Executive, shall be the sole and exclusive

property of the Company and its Subsidiaries. The Executive shall safeguard all

Documents and shall surrender to the Company at the time his employment

terminates, or at such earlier time or times as the Board or its designee may

specify, all Documents then in the Executive's possession or control.

 

         8.       Assignment of Rights to Intellectual Property.

 

         The Executive shall promptly and fully disclose all Intellectual

Property (as defined in Section 14 hereof) to the Company. The Executive hereby

assigns and agrees to assign to the Company (or as otherwise directed by the

Company) the Executive's full right, title and interest in and to all

Intellectual Property. The Executive agrees to execute any and all applications

for domestic and foreign patents, copyrights or other proprietary rights and to

do such other acts (including without limitation the execution and delivery of

instruments of further assurance or confirmation) requested by the Company to

assign such Intellectual Property to the Company and to permit the Company to

enforce any patents, copyrights or other proprietary rights to such Intellectual

Property. The Executive will not charge the Company for time spent in complying

with these obligations. All copyrightable works that the Executive creates shall

be considered "work made for hire".

 

         9.       Restricted Activities.

 

         The Executive agrees that restrictions on his activities during and

after his employment are necessary to protect the goodwill, Confidential

Information and other legitimate interests of the Company and its Subsidiaries,

and that the agreed restrictions set forth below will not deprive the Executive

of the ability to earn a livelihood:

 

         (a) While the Executive is in the employment of the Company and, after

his employment terminates, for the greater of two years or the period during

which severance payments of the Base Amount are being made (the "Non-Competition

Period"), the Executive shall not, directly or indirectly, whether as owner,

partner, investor, consultant, agent, employee, co-venturer or otherwise,

compete with the business of the Company or any of its Subsidiaries within any

state within the United States, or within any province or other geographic

division within any foreign country in which the Company operates retail stores

or wholesale distribution outlets or warehouses at the date of termination of

employment, or in which the Company has commenced negotiations for or entered

into obligations relating to the opening of a retail store or wholesale

distribution outlet or warehouse to be opened within the period of this

covenant, or undertake any planning for any business competitive with the

Company or any of its Subsidiaries. Specifically, but without limiting the

foregoing, the Executive agrees not to engage in any manner in any activity that

is directly or indirectly competitive with the business of the Company or any of

its Subsidiaries as conducted or which has been proposed by management within

six months prior to termination of the Executive's employment. Restricted

activity also includes without limitation accepting employment or a consulting

position with any person who is, or at any time within twelve (12) months prior

to termination of the Executive's employment has been, a supplier, licensee or

vendor of the Company or any of its Subsidiaries. For the purposes of this

Section 9, the business of the Company and its Subsidiaries shall mean retail or

wholesale operations for the sale of groceries and ancillary Products, such as

health and beauty aids, vitamins and supplements.

 

         (b) The Executive further agrees that during the Non-Competition Period

or in connection with the Executive's termination of employment, the Executive

will not, either directly or through any agent or employee, Solicit any employee

of the Company or any of its Subsidiaries to terminate his or her relationship

with the Company or any of its Subsidiaries or to apply for or accept employment

with any enterprise competitive with the business of the Company, or Solicit any

customer, supplier, licensee or vendor of the Company or any of its Subsidiaries

to terminate or materially modify its relationship with them, or, in the case of

a customer, to conduct with any person any business or activity which such

customer conducts or could conduct with the Company or any of its Subsidiaries.

 

         (c) The provisions of this Section 9 shall not be deemed to preclude

the Executive from employment or engagement during the Non-Competition Period

following termination of employment hereunder (i) in a business engaged in

retail sales, provided such employment or engagement does not otherwise violate

the provisions of this Section 9, or (ii) by a corporation, some of the

activities of which are competitive with the business of the Company, if the

Executive's activities do not relate to such competitive business, and nothing

contained in this Section 9 shall be deemed to prohibit the Executive, during

the Non-Competition Period following termination of employment hereunder, from

acquiring or holding, solely as an investment, publicly traded securities of any

competitor corporation so long as such securities do not, in the aggregate,

constitute more than 3% of the outstanding voting securities of such

corporation.

 

         (d) Without limiting the foregoing, it is understood that the Company

shall not be obligated to continue to make the payments specified in Sections

5(d) and 5(e) in the event of a material breach by the Executive of the

provisions of Sections 7, 8 or 9 of this Agreement, which breach continues

without having been cured within 15 days after written notice to the Executive

specifying the breach in reasonable detail.

 

         10.      Enforcement of Covenants.

 

         The Executive acknowledges that he has carefully read and considered

all the terms and conditions of this Agreement, including the restraints imposed

upon him pursuant to Sections 7, 8 and 9 hereof. The Executive agrees that said

restraints are necessary for the reasonable and proper protection of the Company

and its Subsidiaries and that each and every one of the restraints is reasonable

in respect to subject matter, length of time and geographic area. The Executive

further acknowledges that, were he to breach any of the covenants contained in

Sections 7, 8 or 9 hereof, the damage to the Company would be irreparable. The

Executive therefore agrees that the Company, in addition to any other remedies

available to it, shall be entitled to seek preliminary and permanent injunctive

relief against any breach or threatened breach by the Executive of any of said

covenants, without having to post bond. The parties further agree that, in the

event that any provision of Section 7, 8 or 9 hereof shall be determined by any

court of competent jurisdiction to be unenforceable by reason of its being

extended over too great a time, too large a geographic area or too great a range

of activities, such provision shall be deemed to be modified to permit its

enforcement to the maximum extent permitted by law.

 

         11.      Conflicting Agreements.

 

         The Executive hereby represents and warrants that the execution of this

Agreement and the performance of his obligations hereunder will not breach or be

in conflict with any other agreement to which the Executive is a party or is

bound and that the Executive is not now subject to any covenants against

competition or similar covenants that would affect the performance of his

obligations hereunder. The Executive will not disclose to or use on behalf of

the Company any proprietary information of a third party without such party's

consent.

 

         12.      Indemnification.

 

         The Company shall indemnify, defend and hold harmless the Executive to

the extent provided for Company executive officers in its then current

Certificate of Incorporation or By-Laws, and in any event shall indemnify the

Executive to the fullest extent permitted under the Delaware Corporation Law,

including an undertaking to advance litigation expenses. The Executive agrees

promptly to notify the Company of any actual or threatened claim arising out of

or as a result of his employment with the Company. The Company agrees to

maintain Directors and Officers Liability Insurance for the benefit of

Executive, together with all other officers and directors, covering claims made

with respect to occurrences during the Term of this Agreement and having

coverage and policy limits no less favorable to directors and officers than

those in effect at the Effective Date.

 

         13.      No Duty to Mitigate.

 

         Following a termination of employment, the Executive shall not be

obligated to seek other employment or take any other action by way of mitigation

of the amounts payable to the Executive under any of the provisions of this

Agreement and such amounts shall not be reduced whether or not the Executive

obtains other employment.

 

         14.      Definitions.

 

         Words or phrases which are initially capitalized or are within

quotation marks shall have the meanings provided in Section 14 and as provided

elsewhere herein. For purposes of this Agreement, the following definitions

apply:

 

 

         (a) A "Change in Control" shall be deemed to have occurred if during

the Term hereof (a) any "person" (as such term is used in Sections 13(d) and

14(d) of the Securities Exchange Act of 1934) is or becomes the "beneficial

owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of

securities of the Company representing 50% or more of the combined voting power

of the Company's then outstanding securities in the election of directors; (b)

the Company is a party to a merger, consolidation, sale of assets or other

reorganization, or a proxy contest, as a consequence of which members of the

Board of Directors in office immediately prior to such transaction or event

constitute less than a majority of the Board of Directors thereafter, or (c)

during any period of twelve consecutive months, individuals who at the beginning

of such period constituted the Board of Directors (including for this purpose

any new director whose election or nomination for election by the Company's

stockholders was approved by a vote of at least two-thirds of the directors then

still in office who were directors at the beginning of such period) cease for

any reason to constitute at least a majority of the Board of Directors.

Notwithstanding the foregoing provisions of this Section 14(a), a "Change in

Control" will not be deemed to have occurred solely because of (i) the

acquisition of securities of the Company (or any reporting requirement under the

Act relating thereto) by an employee benefit plan maintained by the Company for

the benefit of employees or an acquisition by J.P. Morgan Partners LLC (formerly

known as Chase Capital), an investor group that the Executive brings in as part

of the proposed capital raising transaction, Michael C. Gilliland, Elizabeth C.

Cook or the Executive or their affiliates" or "associates" (as such terms are

defined in Rule 12b-2 under the Act) or members of their families (or trusts for

their benefit) or charitable trusts established by any of them or other related

management group.

 

         (b) "Confidential Information" means any and all information of the

Company and its Subsidiaries that is not generally known by others with whom

they compete or do business, or with whom they plan to compete or do business

and any and all information not readily available to the public, which, if

disclosed by the Company or its Subsidiaries could reasonably be of benefit to

such person or business in competing with or doing business with the Company.

Confidential Information includes without limitation such information relating

to (1) the development, research, testing, manufacturing, store operational

processes, marketing and financial activities, including costs, profits and

sales, of the Company and its Subsidiaries, (2) the Products and all formulas

therefor, (3) the costs, sources of supply, financial performance and strategic

plans of the Company and its Subsidiaries, (4) the identity and special needs of

the customers and suppliers of the Company and its Subsidiaries and (5) the

people and organizations with whom the Company and its Subsidiaries have

business relationships and those relationships. Confidential Information also

includes comparable information that the Company or any of its Subsidiaries have

received belonging to others or which was received by the Company or any of its

Subsidiaries with an agreement by the Company that it would not be disclosed.

Confidential Information does not include information which (i) is or becomes

available to the public generally (other than as a result of a disclosure by the

Executive), (ii) was within the Executive's possession prior to the date hereof

or prior to its being furnished to the Executive by or on behalf of the Company,

provided that the source of such information was not bound by a confidentiality

agreement with or other contractual, legal or fiduciary obligation of

confidentiality to the Company or any other party with respect to such

information, (iii) becomes available to the Executive on a non-confidential

basis from a source other than the Company, provided that such source is not

bound by a confidentiality agreement with or other contractual, legal or

fiduciary obligation of confidentiality to the Company or any other party with

respect to such information, or (iv) was independently developed the Executive

without reference to the Confidential Information.

 

         (d) "Intellectual Property" means inventions, discoveries,

developments, methods, processes, formulas, compositions, works, concepts and

ideas (whether or not patentable or copyrightable or constituting trade secrets)

conceived, made, created, developed or reduced to practice by the Executive

(whether alone or with others, whether or not during normal business hours or on

or off Company premises) during the Executive's service that relate to the

Products of the Company or any of its Subsidiaries.

 

         (e) "Products" mean all products planned, researched, developed,

tested, manufactured, sold, licensed, leased or otherwise distributed or put

into use by the Company or any of its Subsidiaries, together with all services

provided to third parties or planned by the Company or any of its Subsidiaries,

during the Executive's service; as used herein, "planned" refers to a Product or

service which the Company has decided to introduce within six months from the

date as of which such term is applied.

 

         (f) "Subsidiary" of an entity means any corporation or other business

organization of which the securities having a majority of the normal voting

power in electing the board of directors or similar governing body of such

entity are, at the time of determination, owned by such entity directly or

indirectly through one or more subsidiaries.

 

         (g) "Solicit" means any direct or indirect communication of any kind

whatsoever, regardless of by whom initiated, inviting, advising, encouraging or

requesting any person or entity, in any manner, with respect to any action.

 

         15.      Withholding.

 

         The Executive agrees that all payments made by the Company under this

Agreement shall be reduced by any tax or other amounts required to be withheld

by the Company under applicable law.

 

         16.      Assignment.

 

         Neither the Company nor the Executive may make any assignment of this

Agreement or any interest herein, by operation of law or otherwise, without the

prior written consent of the other; provided, however, that, in the event that

the Company shall hereafter effect a reorganization, consolidate with, or merge

into, any other person or transfer all or substantially all of its properties or

assets to any other person, the Company shall require such person or the

resulting entity to assume expressly and agree to perform this Agreement in the

same manner and to the same extent that the Company would be required to perform

it. This Agreement shall inure to the benefit of and be binding upon the Company

and the Executive, their respective successors, executors, administrators, heirs

and permitted assigns.

 

         17.      Severability.

 

         If any portion or provision of this Agreement shall to any extent be

declared illegal or unenforceable by a court of competent jurisdiction, then the

remainder of this Agreement, or the application of such portion or provision in

circumstances other than those as to which it is so declared illegal or

unenforceable, shall not be affected thereby, and each portion and provision of

this Agreement shall be valid and enforceable to the fullest extent permitted by

law.

 

         18.      Waiver.

 

         No waiver of any provision hereof shall be effective unless made in

writing and signed by the waiving party. The failure of either party to require

the performance of any term or obligation of this Agreement, or the waiver by

either party of any breach of this Agreement, shall not prevent any subsequent

enforcement of such term or obligation or be deemed a waiver of any subsequent

breach.

 

         19.      Notices.

 

         Any and all notices, requests, demands and other communications

provided for by this Agreement shall be in writing and shall be effective when

delivered in person or deposited in the United States mail, postage prepaid,

registered or certified; provided that, if the receiving party consents in

advance, a notice may be given by telecopy or by such other electronic

transmission mechanism as may be available to the parties. Notice shall be

addressed to the Executive at his last known address on the books of the Company

or, in the case of the Company, at its principal executive office, attention,

Board of Directors, with a copy to General Counsel, or to such other address as

either party may specify by notice to the other.

 

         20.      Entire Agreement.

 

         This Agreement (including any letters or agreements referred to herein

or attached as exhibits hereto) constitutes the entire agreement between the

parties and supersedes all prior communications, representations and

understandings, whether written or oral and whether express or implied, with

respect to the terms and conditions of the Executive's employment.

 

         21.      Amendment.

 

         This Agreement may be amended or rescinded only by a written instrument

signed by the Executive and by a expressly authorized officer of the Company

making specific reference to this Agreement.

 

         22.      Governing Law, Arbitration and Consent to Jurisdiction.

 

         (a) This Agreement shall be construed and enforced under and be

governed in all respects by the laws of the State of Colorado, without regard to

the conflict of laws principles thereof.

 

         (b) The parties hereby agree that, in order to obtain prompt and

expeditious resolution of any disputes under this Agreement, each claim, dispute

or controversy of whatever nature, arising out of, in connection with, or in

relation to the interpretation, performance or breach of this Agreement (or any

other agreement contemplated by or related to this Agreement or any other

agreement between the Company and Executive), including without limitation, any

claim based on contract, tort or statute, or the arbitrability of any claim

hereunder (a "Claim"), shall be settled, at the request of any party to this

Agreement, by final and binding arbitration conducted in Denver, Colorado. All

such Claims shall be settled by one arbitrator in accordance with the Commercial

Arbitration Rules then in effect of the American Arbitration Association. Such

arbitrator shall be provided through the CFR Institute for Dispute Resolution

("CFR") by mutual agreement of the parties, provided that, absent such

agreement, the arbitrator shall be appointed by CFR. In either event, such

arbitrator may not have any pre-existing, direct or indirect relationship with

any party to the dispute. Each party hereto expressly consents to, and waives

any future objection to, such forum and arbitration rules. Judgment upon any

award may be entered by any state or federal court having jurisdiction thereof.

Except as required by law (including, without limitation, the rules and

regulations of the Securities and Exchange Commission and the NASDAQ Stock

Market, if applicable), neither party nor the arbitrator shall disclose the

existence, content, or results of any arbitration hereunder without the prior

written consent of all parties. Except as provided herein, the Federal

Arbitration Act shall govern the interpretation, enforcement and all proceedings

pursuant to this Section.

 

         (c) Adherence to this dispute resolution process shall not limit the

right of the Company or Executive to obtain any provisional remedy, including

without limitation, injunctive or similar relief set forth in Section 10 from

any court of competent jurisdiction as may be necessary to protect their

respective rights and interests pending arbitration. Notwithstanding the

foregoing sentence, this dispute resolution procedure is intended to be the

exclusive method of resolving any Claims arising out of or relating to this

Agreement.

 

         (d) The arbitration procedures shall follow the substantive law of the

State of Colorado, including the provisions of statutory law dealing with

arbitration, as it may exist at the time of the demand for arbitration, insofar

as said provisions are not in conflict with this Agreement and specifically

excepting therefrom sections of any such statute dealing with discovery and

sections requiring notice of the hearing date by registered or certified mail.

 

         (e) To the extent a dispute is not to be arbitrated in accordance with

the foregoing, each of the Company and the Executive (1) irrevocably submits to

the jurisdiction of the United States District Court for the District of

Colorado and to the jurisdiction of the state courts of the State of Colorado

for the purpose of any suit or other proceeding arising out of or based upon

this Agreement or the subject matter hereof and agrees that any such proceeding

shall be brought or maintained only in such court, and (2) waives, to the extent

not prohibited by applicable law and agrees not to assert in any such

proceedings, any claim that it is not subject personally to the jurisdiction of

the above-named courts, that he or it is immune from extraterritorial injunctive

relief or other injunctive relief, that any such proceeding brought or

maintained in a court provided for above may not be properly brought or

maintained in such court, should be transferred to some other court or should be

stayed or dismissed by reason of the pendency of some other proceeding in some

other court, or that this Agreement or the subject matter hereof may not be

enforced in or by such court.

 

 

         IN WITNESS WHEREOF, this 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.

 

 

----------------------                          By:

Perry D. Odak                                       ---------------------------

                                                    Name:

                                                    Title:

 

<PAGE>

 

 

                                                                       Exhibit A

 

 

                             Statement of Authority

 

 

         The Board of Directors of the Company acknowledges that, in connection

with the Company's engagement of the Chief Executive Officer to accomplish

certain objectives on behalf of the Company and its shareholders, the Chief

Executive Officer will require certain authorities to conduct business on behalf

of the Company. The purpose of this Statement of Authority is to specify the

authorities of the Chief Executive Officer, subject to the Board's reservation

of authority to limit or revoke such authority to the extent necessary to comply

with the Board's responsibilities under applicable law, including the Company's

Certificate of Incorporation and By-Laws ("Applicable Law").

 

A.   The Chief Executive Officer shall have authority with respect to the

     following matters with the required written concurrence of the Chief

     Financial Officer:

 

         1.    Capital expenditures within the capital budget up to $1,000,000

               per project (or up to $3,000,000 per new store if approved by the

               Real Estate Committee); provided, that the total value of capital

               expenditures does not exceed the amount authorized in the budget.

 

         2.    Capital expenditures not in the capital budget up to $350,000 per

               project, but not over $750,000 in the aggregate. In no event will

               total capital expenditures exceed the total value of capital

               expenditures authorized in the capital budget.

 

         3.    Disposal or encumbrance of assets with a book or fair market

               value of no more than $150,000 per transaction.

 

         4.    Operating leases (within any operating lease budget, if

               applicable) up to a total commitment of $500,000 per transaction.

 

         5.    Operating leases not in operating lease budget, with a total

               commitment of $150,000 per year in total commitment per lease

               with a term not to exceed five years, but not over $450,000

               annually in the aggregate.

 

         6.    Administration of the details of the Company's compensation

               program (applying its general compensation philosophy as

               previously developed) for all employees (other than those at or

               above the level of officer or any other employees with annual

               compensation in excess of $200,000).

 

         7.    Administration of the employee benefits program, including

               approval of changes with an aggregate annual cost up to $300,000.

 

         8.      a. Execution of contracts within the ordinary course with an

                    individual value of up to $500,000 that do not require

                    special approval under Section B.1 below.

 

                 b. Other non-ordinary payments in an amount up to $150,000 that

                    also do not require special approval under Section B.1

                    below.

 

         9.    Primary responsibility for negotiation of financing transaction

               involving investment of approximately $35-$50 million of new

               equity in the Company.

 

               Notwithstanding the foregoing, the authorities described in this

               Section A will be subject to Board approval (i) to the extent

               specifically covered in Section B below, (ii) to the extent that

               the exercise of the authority directly affects the Chief

               Executive Officer personally (other than where the Chief

               Executive Officer is affected only incidentally by a decision

               affecting all employees generally), or (iii) to the extent that

               Board approval is required under Applicable Law.

 

B.   The Board of Directors of the Company retains authority with regard to the

     following matters:

 

 

         1.    Any transaction involving:

 

                  a. The sale or encumbrance of assets with a book value over

                     $150,000.

 

                  b. The sale of stock or assets of a subsidiary.

 

                  c. The acquisition of stock or assets of another company.

 

                  d. Loans in excess of $30,000 made outside the ordinary course

                     of business not to exceed $150,000 outstanding at any time.

 

                  e. A single purchase of inventory in excess of $5 million or

                     any opening of letters of credit in excess of $2 million

                     (individually or in the aggregate).

 

                  f. Transactions with any parties related to any officer of the

                     Company.

 

                  g. The sale or purchase of the Company's capital stock.

 

                  h. The declaration and payment of dividends.

 

                  i. The approval of any other contract (including all real

                     property leases, joint venture, partnership or similar

                     contracts with vendors) with a value in excess of $250,000

                     per year or any other non-ordinary course payment or

                     purchase orders (including the settlement of litigation

                     claims involving payments by the Company) in excess of

                     $150,000.

 

         2.    All matters not specified in Section A above which require

               approval of the Board of Directors under Applicable Law,

               including the approval of the above specification of authorities.

 

C.   The Chief Executive Officer will cause to be provided to the Board a

     comprehensive review of the following matters on a regular basis, or more

     often if issues create the need:

 

         1.    As soon as practical:

 

                  a. Status of material tax matters as they arise.

 

                  b. Status of material legal matters as they arise.

 

                  c. Any material change in vendor relations.

 

                  d. Any material change in the operating or financial

                     performance of the Company.

 

                  e. Any contact made by potential  buyers who may be interested

                     in  purchasing  the Company and/or its assets.

 

                  f. Notices of default or acceleration under loan agreements,

                     notes or significant contract.

 

         2.       Monthly:

 

                  a. Financial and operating results, including management's

                     analysis in writing.

 

                  b. Update/reconciliation of actual vs. budgeted capital

                     expenditures.

 

         3.       Quarterly:

 

                  a. Status of legal matters.

 

                  b. Competition update.

 

                  c. Information systems

 

                  d. Report on all banking relationships.

 

         4.       Annually:

 

                  a. Independent accountant management letters.

 

                  b. Other tax matters.

 

                  c. Officers salary, bonus and wages adjustment and/or

                     recommendations.

 

                  d. Property/casualty and employee benefit insurance programs.

 

                  e. Advertising and public relations programs.

 

                  f. Officer performance appraisals.

 

                  g. Union relationships.

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

 

 

 

 

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT by and between Wild Oats Markets, Inc. (the "Company") and Perry D. Odak (the "Executive") is dated December 28, 2001.

 

 

 

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 First 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 June 20, 2002 or is terminated by the Company other than for Cause (or he terminates for Good Reason) during such period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 June 20, 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.

 

 

 

 

 

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

 

 

 

 

 

IN WITNESS WHEREOF, this First 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/ 

  Name: Freya R. Brier

  Title: V.P., Legal

 

 

Exhibit 10.1

SIXTH AMENDMENT TO EMPLOYMENT AGREEMENT

     THIS SIXTH AMENDMENT TO EMPLOYMENT AGREEMENT (this “Sixth Amendment”), dated as of August 14, 2006, is by and between Wild Oats Markets, Inc. (the “Company”) and Perry D. Odak (the “Executive”).

RECITALS

     A. The Executive and the Company entered into an Employment Agreement, dated as of March 6, 2001, as amended by a First Amendment to Employment Agreement, dated as of December 28, 2001, a Second Amendment to Employment Agreement, dated as of June 19, 2002, a Third Amendment to Employment Agreement, dated as of August 12, 2002, and a Fourth Amendment to Employment Agreement, dated as of May 10, 2005 and a Fifth Amendment to Employment Agreement, dated as of June 16, 2006 (collectively referred to herein as the “Employment Agreement”).

     B. The parties intend to enter into good faith negotiations to enter into mutually satisfactory modifications to the Employment Agreement.

     C. The Company has the right to give notice of non-renewal of the Employment Agreement prior to August 15, 2006, and has asked the Executive to agree to extend this notice deadline, to provide additional time for their negotiations.

     D. The Executive has agreed to the Company’s request for an extension of the notice deadline on the terms and conditions set forth below.

AGREEMENT

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

     1. Amendments to the Employment Agreement.

          (a) Term of the Employment Agreement. Section 2 of the Employment Agreement is hereby amended by deleting the penultimate sentence thereof, and replacing it with the following:

     “This Agreement shall continue on a year-to-year basis beyond the end of the fifth year (or a later year if the Agreement has renewed), unless the Company notifies the Executive in writing that the Company does not wish to renew the Agreement. With respect to the year ending March 19, 2007, any such notice of non-renewal must be given by no later than October 16, 2006 (the period between June 19, 2006 and October 16, 2006 being referred to as the “Extended Notice Period”), and with respect to any future years after March 19, 2007, any such notice of non-renewal must be given by no later than nine months prior to the end of the applicable year.”

          (b) Termination of Employment by the Executive for Good Reason. Sections 5(e)(6) and (7) of the Employment Agreement is amended to read as follows:

 


 

     ”(6) In the event that the Company shall, in bad faith, fail to engage in negotiations during the Extended Notice Period regarding a new employment agreement or modifications to the Agreement (for example, the conducting of parallel negotiations with third parties with respect to Executive’s positions or the refusal by the Company to negotiate with Executive shall be deemed to be in “bad faith” but the inability or failure by the parties to agree on mutually satisfactory terms shall not in and of itself constitute “Good Reason” hereunder); or

     (7) During the Extended Notice Period, providing the Executive with a notice of non-renewal pursuant to Section 2 of this Agreement prior to October 13, 2006.”

     2. Defined Terms. All terms which are capitalized but are not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.

     3. Inconsistent Provisions. All provisions of the Employment Agreement which have not been amended by this Sixth Amendment shall remain in full force and effect. However, to the extent that there is any inconsistency between the provisions of the Employment Agreement and this Sixth Amendment, the provisions of this Sixth Amendment shall control and be binding.

     4. Counterparts. This Sixth Amendment may be executed in one or more counterparts, all of which taken together shall constitute a single instrument. Execution and delivery may be by facsimile transmission.

 


 

     IN WITNESS WHEREOF, this Sixth 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.

 

 

 

 

 

 

 

WILD OATS MARKETS, INC.

 

THE EXECUTIVE

 

 

 

 

 

 

 

By:

 

/s/ Freya R. Brier

 

/s/ Perry D. Odak

 

 

 

 

 

Name:

 

Freya R. Brier

 

Name:

 

Perry D. Odak

Title:

 

Executive Officer