As Filed With The Securities And Exchange Commission On August 30, 1996
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------------------------------
WHOLE FOODS MARKET, INC.
(Exact name of issuer as specified in its charter)
Texas 74-1989366
(State of incorporation) (I.R.S. employer identification no.)
601 North Lamar
Suite 300
Austin, Texas
(Address of principal executive office)
78703
(Zip code)
Second Amended and Restated 1991 Stock Incentive Plan
of Fresh Fields Markets, Inc.
1994 Director Stock Option Plan of Fresh Fields Markets, Inc.
(Full title of the plans)
Glenda J. Flanagan
Vice President and Chief Financial Officer
Whole Foods Market, Inc.
601 North Lamar, Suite 300
Austin, Texas 78703
512-477-5566
(Name, address and telephone number, including area code,
of agent for service)
Bruce H. Hallett
Crouch & Hallett, L.L.P.
717 N. Harwood St.
Suite 1400
Dallas, Texas 75201
214-953-0053
--------------------------------------------
APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES PURSUANT TO THE PLAN: Sales
to the optionees of securities proposed to be registered hereunder will occur
from time to time after the effective date of this Registration Statement.
--------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Aggregate Amount of
to be Registered Registered Price Per Share Offering Price Registration Fee
- ------------------- ------------- ----------------- ----------------- -----------------
Common Stock,
no par value 542,212 Shs. $ 33.57 $ 18,202,057 $ 6,277
</TABLE>
* Estimated solely for purposes of calculating the registration fee, which has
been computed in accordance with Rule 457(h), based on the average of the high
and low prices reported on the Nasdaq National Market for the registrant's
securities on August 28, 1996.
<PAGE>
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed (i) through (iii) below are hereby incorporated by
reference into this Registration Statement. All documents subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (the "1934 Act") prior to filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents.
(i) The Company's latest annual report filed pursuant to Section 13 or
15(d) of the 1934 Act or the latest prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933 (the "1933 Act"), which contains, either
directly or by incorporation by reference, certified financial statements for
the Company's latest fiscal year for which such statements have been filed.
(ii) All other reports filed pursuant to Section 13(a) and 15(d) of the
1934 Act since the end of the fiscal year covered by the annual reports or the
prospectus referred to in (i) above.
(iii) The description of the Company's Common Stock which is contained in a
registration statement on Form 8-A filed under the 1934 Act, including any
amendment or report filed for the purpose of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Article 2.02-1 of the Texas Business Corporation Act provides generally and
in pertinent part that a Texas corporation may indemnify its directors and
officers against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by them in connection with any suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) if, in connection with the
matters in issue, they acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, in connection with any criminal suit or proceeding, if in connection with
the matters in issue, they had no reasonable cause to believe their conduct was
unlawful.
-1-
<PAGE>
The registrant's Restated Articles of Incorporation provide that no
director shall be liable to the registrant or its shareholders for monetary
damages for breach of fiduciary duty, provided that the liability of a director
is not limited (i) for any breach of the director's duty of loyalty to the
registrant or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) an act
related to an unlawful stock repurchase or repayment of a dividend, (iv) any
transaction from which such director derived an improper personal benefit or (v)
an act or omission for which the liability of a director is expressly provided
by law.
Article VII of the registrant's bylaws provides, in general, that the
registrant shall indemnify its directors and officers under the circumstances
defined under the Texas Business Corporation Act. The Company has obtained an
insurance policy insuring the directors and officers of the Company against
certain liabilities, if any, that arise in connection with the performance of
their duties on behalf of the Company and its subsidiaries.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4(a) Second Amended and Restated 1991 Stock Incentive Plan of Fresh
Fields Markets, Inc. with amendments thereto (1)
4(b) Form of Incentive Stock Option Agreements (1)
4(c) Form of Non-Qualified Stock Option Agreement (1)
4(d) 1994 Director Stock Option Plan with amendments thereto (1)
4(e) Form of director option agreement (1)
5 Opinion of Crouch & Hallett, L.L.P. (1)
23(a) Consent of KPMG Peat Marwick (1)
23(b) Consent of Crouch & Hallett, L.L.P. (included as part of Exhibit 5)
- ------------------
(1) Filed herewith.
ITEM 9. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes:
-2-
<PAGE>
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to (i)
included any prospectus required by section 10(a)(3) of the Securities Act
of 1933; (ii) reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and (iii) include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; and
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the certificate of incorporation or bylaws of the
registrant or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Austin and the State of Texas, on the 29th day of
August, 1996.
WHOLE FOODS MARKET, INC.
By /s/ Glenda J. Flanagan
Glenda J. Flanagan, Vice
President and Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on August 29, 1996.
Signature Title
/s/ John P. Mackey Chairman of the Board
John P. Mackey and Director
(Principal Executive Officer)
/s/ Glenda J. Flanagan Chief Financial Officer
Glenda J. Flanagan (Principal Financial Officer and
Accounting Officer)
/s/ Cristina G. Banks Director
Dr. Cristina G. Banks
/s/ John B. Elstrott Director
Dr. John B. Elstrott
/s/ Avram J. Goldberg Director
Avram J. Goldberg
II-1
<PAGE>
/s/ Fred "Chico" Lager Director
Fred "Chico" Lager
/s/ Linda A. Mason Director
Linda A. Mason
/s/ Ralph Z. Sorenson Director
Dr. Ralph Z. Sorenson
/s/ James P. Sud Director
James P. Sud
II-2
<PAGE>
INDEX TO EXHIBITS
4(a) Second Amended and Restated 1991 Stock Incentive Plan of Fresh
Fields Markets, Inc. (1)
4(b) Forms of Incentive Stock Option Agreements(1)
4(c) Form of Non-Qualified Stock Option Agreement (1)
4(d) 1994 Director Stock Option Plan, as amended (1)
4(e) Form of director option agreement (1)
5 Opinion of Crouch & Hallett, L.L.P.
23(a) Consent of KPMG Peat Marwick.
23(b) Consent of Crouch & Hallett, L.L.P. (included as part of Exhibit 5(a)).
- -------
(1) File herewith..
E-1
<PAGE>
EXHIBIT 4(a)
<PAGE>
FRESH FIELDS MARKETS, INC.
Second Amended and Restated
1991 Stock Incentive Plan
SECTION I. PURPOSE OF THE PLAN.
The purposes of this Fresh Fields Markets, Inc. 1991 Stock Incentive Plan
(the "1991 Plan") are (i) to provide long-term incentives to those employees of
the Corporation designated by the Committee (the "Employee Participants") of
Fresh Fields Markets, Inc. (the "Corporation") and its subsidiaries (if any),
and any other persons (the "Non-employee Participants") who are in a position to
contribute to the long-term success and growth of the Corporation and its
subsidiaries, (ii) to assist the Corporation in retaining and attracting
executives and employees with requisite experience and ability, and (iii) to
associate more closely the interests of such executives and employees with those
of the Corporation's stockholders.
SECTION II. DEFINITIONS.
"Code" is the Internal Revenue Code of 1986, as it may be amended from time
to time.
"Common Stock" is the $.01 par value common stock of the Corporation.
"Committee" is defined in Section III, paragraph (a).
"Corporation" is defined in Section I.
"Corporation ISOs" are all stock options (including 1991 Plan ISOs) which
(i) are Incentive Stock Options and (ii) are granted under any plans (including
this 1991 Plan) of the Corporation, a Parent Corporation or a Subsidiary
Corporation.
"Employee Participants" is defined in Section I.
"Fair Market Value" of any property is the value of the property as
reasonably determined by the Committee.
<PAGE>
"Incentive Stock Option" is a Stock Option which is treated as an incentive
stock option under Section 422 of the Code.
"1991 Plan" is defined in Section I.
"1991 Plan ISOs" are Stock Options which are Incentive Stock Options.
"Non-employee Participants" is defined in Section I.
"Non-Qualified Option" is a Stock Option which does not qualify as an
Incentive Stock Option or for which the Committee provides, in the terms of such
option and at the time such option is granted, that the option shall not be
treated as an Incentive Stock Option.
"Parent Corporation" has the meaning provided in Section 424(e) of the
Code.
"Participants" are all persons who are either Employee Participants or
Non-employee Participants.
"Permanent and Total Disability" has the meaning provided in Section
22(e)(3) of the Code.
"Restricted Stock" means shares of Common Stock issued or transferred to an
Employee Participant pursuant to Section V.
"Section 16 of the 1934 Act" means Section 16 of the Securities Exchange
Act of 1934, or any successor or similar provision.
"Stockholder Approval" means the affirmative vote of at least a majority of
the shares of Common Stock present and entitled to vote at a duly held meeting
of the stockholders of the Corporation, unless a greater vote is required by
state law, the Code, or the rules under Section 16 of the 1934 Act, in which
case such greater requirement shall apply. Stockholder approval may be obtained
by written consent or other means, to the extent permitted by Delaware law.
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<PAGE>
"Stock Options" are rights granted pursuant to this 1991 Plan to purchase
shares of Common Stock at a fixed price.
"Subsidiary Corporation" has the meaning provided in Section 424(f) of the
Code.
"Ten Percent Stockholder" means, with respect to a 1991 Plan ISO, any
person who directly or indirectly owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation or any
Parent Corporation or any Subsidiary Corporation at the time such 1991 Plan ISO
is granted.
SECTION III. ADMINISTRATION.
(a) The Committee. The Plan shall be administered by the Board of Directors
of the Corporation, or if the Board so determines, by a Committee designated by
the Board of Directors of the Corporation (the administering body is hereafter
referred to as the "Committee"). No person shall be eligible to be a member of
the Committee if that person's membership would prevent the Plan from complying
with Section 16 of the 1934 Act or rules adopted thereunder. The Committee, in
administering the Plan, shall have such authority as may from time to time be
determined by the Board.
(b) Applicable Law. This 1991 Plan, and all Stock Options and awards of
Restricted Stock, shall be governed by the law of the State of Delaware.
SECTION IV. TERMS OF STOCK OPTIONS.
(a) Agreements. Stock Options shall be evidenced by a written agreement
between the Corporation and the Participant awarded the Stock Option (an "Option
Agreement"). Said Option Agreement shall be in such form, and contain such terms
and conditions (not inconsistent with this 1991 Plan) as the Board of Directors
or the Committee may determine. If the Stock Option described therein is not
intended to be an Incentive Stock Option, but otherwise qualifies as an
Incentive Stock Option, such Option Agreement shall include the
3
<PAGE>
following, or a similar, statement: "This stock option is not intended to be an
Incentive Stock Option, as the term is described in Section 422 of the Internal
Revenue Code of 1986, as amended."
(b) Term. Stock Options shall be for such periods as may be determined by
the Committee, provided that in the case of 1991 Plan ISOs, the term of any such
1991 Plan ISO shall not extend beyond three months after the time the
Participant ceases to be an employee of the Corporation. Notwithstanding the
foregoing, the Committee may provide in a 1991 Plan ISO that, in the event of
the Permanent and Total Disability or death of the Participant, the 1991 Plan
ISO may be exercised by the Participant or his estate (if applicable) for a
period of up to one year after the date of such Permanent and Total Disability
or death. In no event may a 1991 Plan ISO be exercisable (including provisions,
if any, for exercise in installments) subsequent to ten years after the date of
grant, or, in the case of 1991 Plan ISOs granted to Ten Percent Stockholders,
more than five years after the date of grant.
(c) Purchase Price. The purchase price of shares purchased pursuant to any
Stock Option shall be determined by the Committee, and shall be paid by the
Participant in full upon exercise, (a) in cash or, (b) as the Committee, in its
sole discretion, may permit, by delivery of (i) shares of Common Stock (valued
at their Fair Market Value on the date of such exercise), (ii) any other
property (valued at its Fair Market Value on the date of such exercise), or
(iii) any combination of cash, stock and any such other property.
Notwithstanding the foregoing, the Committee may establish cashless exercise
procedures which provide for the exercise of an Option and sale of the
underlying Share by a designated broker and delivery of the Shares by the
Company to such broker. In no event will the purchase price of Common Stock be
less than the par value of the Common Stock. Furthermore, the purchase price of
Common Stock subject to a 1991 Plan ISO shall not be
4
<PAGE>
less than the Fair Market Value of the Common Stock on the date of the issuance
of the 1991 Plan ISO, provided that in the case of 1991 Plan ISOs granted to Ten
Percent Stockholders, the purchase price shall not be less than 110% of the Fair
Market Value of the Common Stock on the date of grant of the 1991 Plan ISO.
(d) Further Restrictions as to Incentive Stock Options. To the extent that
the aggregate Fair Market Value of Common Stock with respect to which
Corporation ISOs (determined without regard to this section) are exercisable for
the first time by any Employee Participant during any calendar year exceeds
$100,000, such Corporation ISOs shall be treated as options which are not
Incentive Stock Options. For the purpose of this limitation, options shall be
taken into account in the order granted, and the Committee may designate that
portion of any Corporation ISO that shall be treated as not an Incentive Stock
Option in the event that the provisions of this paragraph apply to a portion of
any option, unless otherwise required by the Code or regulations of the Internal
Revenue Service. The foregoing designation may be made at such time as the
Committee considers appropriate, including to the extent permitted under the
Code and the regulations thereunder after the grant of the Stock Option or at
the time of its exercise. For the purpose of this Section IV, Fair Market Value
shall be determined as of the time the option with respect to such stock is
granted.
(e) Restrictions. At the discretion of the Committee, the Common Stock
issued pursuant to the Stock Options granted hereunder may be subject to
restrictions on vesting or transferability.
5
<PAGE>
SECTION V. AWARDS OF RESTRICTED STOCK
(a) Grant. The Committee may grant awards to Participants of Restricted
Stock, which shall be evidenced by a written agreement (a "Restricted Stock
Agreement") between the Corporation and the Participant. Each Restricted Stock
Agreement shall contain such restrictions, terms and conditions as the Committee
may, in its discretion, determine and (without limiting the generality of the
foregoing) such Restricted Stock Agreements may require that an appropriate
legend be placed on share certificates. Awards of Restricted Stock shall be
subject to the terms and provisions set forth below in this Section V.
(b) Rights of Participant. Shares of Restricted Stock granted pursuant to
an award hereunder shall be issued in the name of the Participant as soon as
reasonably practicable after the award is granted provided that the Participant
has executed a Restricted Stock Agreement evidencing the award, the appropriate
blank stock powers and, in the discretion of the Committee, an escrow agreement
and any other documents which the Committee may require as a condition to the
issuance of such shares. If a Participant shall fail to execute the Restricted
Stock Agreement evidencing a Restricted Stock award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow agreement and any
other documents which the Committee may require within the time period
prescribed by the Committee at the time the award is granted, the award shall be
null and void. At the discretion of the Committee, shares issued in connection
with a Restricted Stock award shall be deposited together with the stock powers
with an escrow agent (which may be the Corporation) designated by the Committee.
Unless the Committee determines otherwise and as set forth in the Restricted
Stock Agreement, upon delivery of the shares to the escrow agent, the
Participant shall have all of the rights of a stockholder
6
<PAGE>
with respect to such shares, including the right to vote the shares and to
receive all dividends or other distributions paid or made with respect to the
shares.
(c) Non-transferability. Until all restrictions upon the shares of
Restricted Stock awarded to a Participant shall have lapsed in the manner set
forth in subsection (d) and the applicable Restricted Stock Agreement, such
shares shall not be sold, transferred or otherwise disposed of and shall not be
pledged or otherwise hypothecated, nor shall they be delivered to the
Participant.
(d) Lapse of Restrictions. Restrictions upon shares of Restricted Stock
awarded hereunder shall lapse, and any shares in respect of which the
restrictions have not lapsed shall be forfeited, at such time or times and on
such terms and conditions as the Committee may determine, which restrictions and
forfeiture provisions shall be set forth in the Restricted Stock Agreement
evidencing the award.
(e) Treatment of Dividends. At the time an award of shares of Restricted
Stock is granted, the Committee may, in its discretion, determine that the
payment to the Participant of dividends, or a specified portion thereof,
declared or paid on such shares by the Corporation shall be (i) deferred until
the lapsing of the restrictions imposed upon such shares and (ii) held by the
Corporation for the account of the Participant until such time. In the event
that dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in shares of Common Stock (which shall be held as
additional shares of Restricted Stock) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends in respect of shares of Restricted Stock (whether
held in cash or as additional shares of Restricted Stock), together
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<PAGE>
with interest accrued thereon, if any, shall be made upon the lapsing of
restrictions imposed on the shares in respect of which the deferred dividends
were paid, and any dividends deferred (together with any interest accrued
thereon) in respect of any shares of Restricted Stock shall be forfeited upon
the forfeiture of such shares.
(f) Delivery of Shares. Upon the lapse of the restrictions on shares of
Restricted Stock, the Committee shall cause a stock certificate to be delivered
to the Participant with respect to such shares.
SECTION VI. MISCELLANEOUS
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or
foreign laws, the Corporation may be required to collect income or other taxes
upon the grant or exercise of a Stock Option or an award or vesting of
Restricted Stock. The Corporation may require, as a condition to the issuance or
transfer of any shares hereunder in connection with the exercise of a Stock
Option or an award or vesting of Restricted Stock, or demand, at such other time
as it may consider appropriate, that the Participant pay the Corporation the
amount of any taxes which the Corporation may determine is required to be
withheld or collected, and the Participant shall comply with the requirement or
demand of the Corporation. In its discretion, the Corporation may withhold
shares to be received upon exercise of a Stock Option or in connection with an
award or vesting of Restricted Stock if it deems this an appropriate method for
withholding or collecting taxes.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of a
Stock Option or award of Restricted Stock, the Participant or other holder of
the Stock Option or an award of Restricted Stock shall make such representations
and furnish such information as may, in the opinion of counsel for the
Corporation, be appropriate to permit the Corporation to issue or transfer stock
in compliance with the provisions of applicable federal and/or state
8
<PAGE>
securities laws. The Corporation, in its discretion, may postpone the issuance
and delivery of shares of Common Stock upon any exercise of an Option or an
award or vesting of Restricted Stock until completion of such registration or
other qualification of such shares under any federal or state laws, or stock
exchange listing, as the Corporation may consider appropriate. Furthermore, the
Corporation is not obligated to register or qualify the shares of Common Stock
to be issued upon exercise of a Stock Option or an award or vesting of
Restricted Stock under federal and/or state securities laws (or to register or
qualify them at any time thereafter), and it may refuse to issue such shares if,
in its sole discretion, registration or exemption from registration is not
practical or available. The Corporation may require that prior to the issuance
or transfer of shares of Common Stock upon exercise of a Stock Option or an
award or vesting of Restricted Stock, the Participant enter into a written
agreement to comply with any restrictions on subsequent disposition that the
Corporation deems necessary or advisable under any applicable federal and/or
state securities laws. Certificates of Common Stock issued hereunder may bear a
legend reflecting such restrictions.
(c) Right to Stock Option or Restricted Stock. No employee of the
Corporation or any other person shall have any claim or right to be a
Participant in this 1991 Plan or to be granted a Stock Option or awarded
Restricted Stock hereunder. Neither this 1991 Plan nor any action taken
hereunder shall be construed as giving any person any right to be retained in
the employ of the Corporation. Nothing contained hereunder shall be construed as
giving any person any equity or interest of any kind in any assets of the
Corporation or creating a trust of any kind or a fiduciary relationship of any
kind between the Corporation and any such person. As to any claim for any unpaid
amounts under this 1991 Plan, any person having a claim for payments shall be an
unsecured creditor.
9
<PAGE>
(d) Indemnity. Neither the Board of Directors nor the Committee, nor any
members of either, nor any employees of the Corporation or any parent,
subsidiary, or other affiliate, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with their responsibilities with respect to this 1991 Plan, and the Corporation
hereby agrees to indemnify the members of the Board of Directors, the members of
the Committee, and the employees of the Corporation and its parent or
subsidiaries in respect of any claim, loss, damage, or expense (including
reasonable counsel fees) arising from any such act, omission, interpretation,
construction or determination to the full extent permitted by law.
(e) Participation by Foreigners. Without amending this 1991 Plan, except to
the extent required by the Code in the case of Incentive Stock Options, the
Committee may modify grants made to Participants who are foreign nationals or
employed outside the United States so as to recognize differences in local law,
tax policy, or custom.
SECTION VII. AMENDMENT AND TERMINATION
The Board of Directors of the Corporation may at any time, and from time to
time, amend, suspend or terminate this 1991 Plan in whole or in part; provided,
that neither the Board of Directors nor the Committee may amend or modify the
definition of Employee Participants, materially increase the benefits accruing
to Participants, increase the number of shares of Common Stock reserved for
purposes of this 1991 Plan, extend the term of this 1991 Plan, materially modify
the requirements to be a Participant in this 1991 Plan, or otherwise modify the
1991 Plan in any way or manner requiring the approval of the Stockholders under
the Code or Section 16 of the 1934 Act, or rules and regulations thereunder,
without Stockholder Approval and compliance with any applicable law, rules, or
regulations. Except as provided herein, no amendment, suspension or termination
of this
10
<PAGE>
1991 Plan may, without such Participant's consent, affect the rights hereunder
of a Participant to whom a Stock Option or an award of Restricted Stock has been
granted. The Committee is specifically authorized to convert, in its discretion,
the unexercised portion of any 1991 Plan ISO granted to an Employee Participant
to a Non-Qualified Option at any time prior to the exercise, in full, of such
1991 Plan ISO.
SECTION VIII. ADJUSTMENTS UPON CHANGES IN STOCK
If there shall be any increase or decrease in the number of shares of
Common Stock, or any change in the Common Stock or exchange of Common Stock for
a different number or kind of shares or other securities of the Company by
reason of reclassification, merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure of the Corporation (a "Change in Capitalization"), appropriate
adjustments may be made by the Board of Directors of the Corporation (or if the
Corporation is not the surviving corporation in any such transaction, the Board
of Directors of the surviving corporation) in the aggregate number and kind of
shares subject to this 1991 Plan, and the number and kind of shares and the
price per share subject to outstanding Stock Options; provided, that such
adjustment does not affect the qualification of any 1991 Plan ISO as an
Incentive Stock Option. In connection with the foregoing, the Board of Directors
may issue new Stock Options in exchange for outstanding Stock Options.
SECTION IX. SHARES OF STOCK SUBJECT TO THE PLAN
The number of shares of Common Stock that may be the subject of awards
under this 1991 Plan shall not exceed an aggregate of 1,000,000 shares. Shares
to be delivered under this 1991 Plan may be either authorized but unissued
shares of Common Stock or treasury shares. Any shares subject to a Stock Option
hereunder which for any reason expires unexercised, shares reacquired by the
Corporation because restrictions thereon do not lapse,
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<PAGE>
shares returned because payment is made hereunder in stock of equivalent value
rather than in cash, and/or shares reacquired from a recipient for any other
reason shall, at such time, no longer count towards the aggregate number of
shares which have been the subject of Stock Options issued hereunder, and such
number of shares shall be subject to further awards under this 1991 Plan;
provided, that the total number of shares then eligible for award under this
1991 Plan may not exceed the total specified in the first sentence of this
Section IX.
SECTION X. EFFECTIVE DATE AND TERM OF THIS PLAN
The effective date of the Plan shall be the date of its adoption by the
Board (the "Effective Date"), subject only to the approval, within twelve (12)
months of the adoption of the Plan by the Board, by the affirmative vote of the
holders of a majority of the securities of the Company present, or represented,
and entitled to vote at a meeting of stockholders duly held or to act by written
consent, in either case in accordance with the applicable laws of the State of
Delaware. Awards under this 1991 Plan may be made during the period of ten years
commencing on the Effective Date. The period during which a Stock Option may be
exercised or an award of Restricted Stock may be outstanding may extend beyond
that time as provided herein.
12
<PAGE>
AMENDMENT NO. 1
TO
FRESH FIELDS MARKETS, INC.
SECOND AMENDED AND RESTATED
1991 STOCK INCENTIVE PLAN
WHEREAS, Fresh Fields Markets, Inc. (the "Company") has enacted and
maintained the Fresh Fields Markets, Inc. Second Amended and Restated 1991 Stock
Incentive Plan (the "Plan"), dated as of May 11, 1994;
WHEREAS, the Plan permits the grant of Incentive Stock Options,
Non-Qualified Options and Restricted Stock (all as defined in the Plan);
WHEREAS, the Board of Directors now desires to amend the Plan to increase
the number of shares authorized to be issued thereunder and to address other
issues; and
WHEREAS, Section VII of the Plan authorizes the Board of Directors to amend
the Plan in such a manner, subject to the approval of the Company's
stockholders;
NOW THEREFORE, the Plan hereby is amended as follows:
1. Section I(i) of the Plan is amended to read in its entirety as
follows:
"(i) to provide long-term incentives in the form of Incentive
Stock Options, Non-Qualified Options and Restricted Stock to
those employees of the Corporation designated by the Committee
(the "Employee Participants") of Fresh Fields Markets, Inc. (The
"Corporation") and its subsidiaries (if any), and any other
persons (the "Non-employee Participants") who are in a position
to contribute to the long-term success and growth of the
Corporation and its subsidiaries,"
2. Section VII of the Plan is amended by increasing the number of
shares of Common Stock authorized for issuance in accordance with
the terms of the Plan from 1,000,000 shares to 1,500,000 shares.
3. This Amendment No. 1 shall be effective on October 5, 1994,
subject to the approval of the Company's shareholders in
accordance with the Plan.
IN WITNESS WHEREOF, the Company has caused this Amendment No. 1 to be
executed by its President this _____ day of October, 1994.
<PAGE>
FRESH FIELDS MARKETS, INC.
By: _____________________________
Name:
Title: President
<PAGE>
AMENDMENT NO. 2
TO
FRESH FIELDS MARKETS, INC.
SECOND AMENDED AND RESTATED
1991 STOCK INCENTIVE PLAN
WHEREAS, Fresh Fields Markets, Inc. (the "Company") has enacted and
maintained the Fresh Fields Markets, Inc. Second Amended and Restated 1991 Stock
Incentive Plan (the "Plan"), dated as of May 11, 1994;
WHEREAS, the Board of Directors now desires to amend the Plan, for among
other reasons, to increase the number of shares authorized to be issued
thereunder; and
WHEREAS, Section VII of the Plan authorizes the Board of Directors to amend
the Plan in such a manner, subject to the approval of the Company's
stockholders;
NOW THEREFORE, the Plan hereby is amended as follows:
1. The first sentence of Section IV(a) of the Plan is amended to
read in its entirety as follows: Stock Options shall be
evidenced, in the Committee's sole discretion, by (i) a written
agreement between the Corporation and the Participant to whom the
Stock Option is awarded, or (ii) other appropriate means ("Option
Agreement").
2. Section VII of the Plan is amended by increasing the number of
shares of Common Stock authorized for issuance in accordance with
the terms of the Plan from 1,500,000 shares to 3,000,000 shares.
3. This Amendment No. 2 shall be effective on April 25, 1995,
subject to the approval of the Company's shareholders in
accordance with the Plan.
IN WITNESS WHEREOF, the Company has caused this Amendment No. 2 to be
executed by its President this 25th day of April, 1995.
FRESH FIELDS MARKETS, INC.
By: _____________________________
Name: Mark S. Ordan
Title: President
<PAGE>
EXHIBIT 4(b)
<PAGE>
FRESH FIELDS MARKETS, INC.
1994 DIRECTOR STOCK OPTION PLAN
(As Adopted May 11, 1994)
<PAGE>
FRESH FIELDS MARKETS, INC.
1994 DIRECTOR STOCK OPTION PLAN
1. Purpose.
The purpose of this Plan is to assist Fresh Fields Markets, Inc., a
Delaware corporation (the "Company"), in attracting and retaining directors
of exceptional ability by providing them an opportunity to acquire shares
of the Company's Shares, thereby encouraging them to devote their abilities
and service to the success of the Company's business enterprise.
2. Definitions.
For purposes of the Plan:
2.1 "Agreement" means the written agreement between the Company and
an Optionee evidencing the grant of an Option and setting forth
the terms and conditions thereof.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Cause" means the commission of an act of fraud or intentional
misrepresentation or an act of embezzlement, misappropriation or
conversion of assets or opportunities of the Company.
2.4 "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a
change in value) in the Shares or exchange of Shares for a
different number or kind of shares or other securities of the
Company, by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend,
stock split or reverse stock split, cash dividend, property
dividend, combination or exchange of shares, repurchase of
shares, or other change in the corporate structure or otherwise.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
2.6 "Committee" means the Compensation Committee of the Board.
2.7 "Company" means Fresh Fields Markets, Inc.
2.8 "Eligible Director" means each member of the Board of the Company
who is not and has never been an employee of the Company or any
of its subsidiaries.
2.9 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE>
- 2 -
2.10 "Fair Market Value" on any date means the average of the high and
low sales prices of the Shares on such date on the principal
national securities exchange on which such Shares are listed or
admitted to trading, or if such Shares are not so listed or
admitted to trading, the arithmetic mean of the per Share closing
bid price and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers
Automated Quotation System or such other market in which such
prices are regularly quoted, or, if there have been no published
bid or asked quotations with respect to Shares on such date, the
Fair Market Value shall be the value established by the Board in
good faith from time to time.
2.11 "Initial Public Offering" means the consummation of the first
public offering of Shares pursuant to a registration statement
filed with, and declared effective by, the Securities and
Exchange Commission.
2.12 "Option" means an option to purchase Shares which is granted
under the Plan and is subject to the terms set forth herein.
2.13 "Optionee" means a person to whom an Option has been granted
under the Plan.
2.14 "Plan" means the Fresh Fields Markets, Inc. 1994 Director Stock
Option Plan.
2.15 "Shares" means the common stock, par value $.01 per share, of the
Company.
3. Administration.
The Plan shall be administered by the Committee. The Committee, in
administering the Plan, shall have such authority as may from time to time
be determined by the Board.
4. Stock Subject to the Plan.
4.1 The maximum number of Shares that may be made the subject of
Options granted under the Plan is 100,000. Upon a Change in
Capitalization, the maximum number of Shares shall be adjusted in
number and kind pursuant to Section 6. The Company shall reserve
for the purposes of the Plan, out of its authorized but unissued
Shares or out of Shares held in the Company's treasury, or partly
out of each, such number of Shares as shall be determined by the
Board.
4.2 Upon the granting of an Option, the number of Shares available
under Section 4.1 for the granting of further Options shall be
reduced by the number of Shares in respect of which the Option is
granted.
<PAGE>
- 3 -
4.3 Whenever any outstanding Option or portion thereof expires, is
canceled or is otherwise terminated for any reason without having
been exercised or payment having been made in respect of the
entire Option, the Shares allocable to the expired, canceled or
otherwise terminated portion of the Option may again be the
subject of Options granted hereunder.
5. Option Grants.
5.1 Grant of Options. Subject to there being Shares available
pursuant to Section 4.1, (i) on the effective date of the Plan
each then Eligible Director shall be granted an Option to
purchase 7,500 Shares, except that Howard Shultz and David Fuente
each shall be granted an Option to purchase 20,000 Shares and
(ii) each person who becomes an Eligible Director thereafter, as
of the date he or she first becomes an Eligible Director, shall
be granted an Option to purchase 7,500 Shares.
5.2 Purchase Price. The per Share purchase price under each Option
shall be the Fair Market Value of a Share on the date the Option
is granted.
5.3 Vesting. Each Option granted under the Plan shall become vested
and exercisable with respect to 25% of the Shares covered thereby
on each of the second, third, fourth and fifth anniversaries of
the date of grant so that such Options are 100% vested and
exercisable on the fifth anniversary of their grant. To the
extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the Option expires.
5.4 Duration. Options granted hereunder shall be for a term ending on
the date ten (10) years from the date of grant (the "Expiration
Date"), provided, that if an Optionee's service as a director of
the Company terminates for any reason (a "Termination"), the
Option, to the extent not vested and exercisable on the date of
the Termination, shall automatically terminate and the Option, to
the extent vested and exercisable on the date of Termination
shall be exercisable only until the earlier of the Expiration
Date, or
(i) in the case of Termination by reason of death, one (1) year
after Termination, at which point the Option shall
terminate;
(ii) in the case of any other Termination other than for Cause,
three (3) months after the termination, at which point the
Option shall terminate; and
(iii)in the case of Termination for Cause, on the date of
Termination, at which point the Option shall terminate.
5.5 Non-transferability. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than by
will or the laws of descent and distribution, and an Option may
be exercised during the lifetime of such Optionee only by the
Optionee or his or her guardian or legal representative. The
terms of such Option shall be
<PAGE>
- 4 -
final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
5.6 Method of Exercise. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the
Secretary of the Company at the Company's principal executive
office, specifying the number of Shares to be purchased and
accompanied by payment therefor and otherwise in accordance with
the Agreement pursuant to which the Option was granted. The
purchase price for any Shares purchased pursuant to the exercise
of an Option shall be paid in full upon such exercise by any one
of the following methods: (i) cash, (ii) transferring Shares to
the Company having a Fair Market Value equal to the exercise
price or (iii) a combination of the foregoing. Notwithstanding
the foregoing, the Committee may establish cashless exercise
procedures which provide for the exercise of an Option and sale
of the underlying Shares by a designated broker and delivery of
the Shares by the Company to such broker. Any Shares transferred
to the Company as payment of the purchase price under an Option
shall be valued at their Fair Market Value on the day preceding
the date of exercise of such Option. If requested by the
Committee, the Optionee shall deliver the Agreement evidencing
the Option to the Secretary of the Company who shall endorse
thereon a notation of such exercise and return such Agreement to
the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of
Shares that may be purchased upon exercise shall be rounded to
the nearest number of whole Shares.
5.7 Rights of Optionees. No Optionee shall be deemed for any purpose
to be the owner of any Shares subject to any Option unless and
until (i) the Option shall have been exercised pursuant to the
terms thereof, (ii) the Company shall have issued and delivered
the Shares to the Optionee, (iii) the Optionee's name shall have
been entered as a stockholder of record on the books of the
Company, and (iv) the Optionee shall have delivered all documents
required by the Committee in its sole discretion, including an
executed stockholder's agreement. Thereupon, the Optionee shall
have full voting, dividend and other ownership rights with
respect to such Shares, subject to such terms and conditions
(including repurchase rights in favor of the Company) as may be
set forth in the applicable Agreement.
6. Adjustment Upon Changes in Capitalization.
(a) Subject to Section 7 hereof, in the event of a Change in
Capitalization, the Committee shall conclusively determine
the appropriate adjustments, if any, to the (i) maximum
number and class of Shares or other stock or securities with
respect to which Options may be granted under the Plan, (ii)
number of Shares with respect to which Options are to be
granted to any Eligible Director during the term of the Plan
pursuant to Section 5.1, and (iii) the number and class of
Shares or other stock or securities which are subject to
outstanding Options granted under the Plan, and the purchase
price therefor, if applicable.
(b) Subject to Section 7 hereof, if, by reason of a Change in
Capitalization, an Optionee shall be entitled to exercise an
Option with respect to, new,
<PAGE>
- 5 -
additional or different shares of stock or securities, such
new, additional or different shares shall thereupon be
subject to all of the terms, conditions and restrictions
which were applicable to the Shares subject to the Option
prior to such Change in Capitalization.
7. Effect of Certain Transactions.
Except as otherwise provided in an Agreement, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation
of the Company (a "Transaction"), the Plan and the Options issued hereunder
shall continue in effect in accordance with their respective terms and each
Optionee shall be entitled to receive, in respect of each Share subject to
any outstanding Option upon exercise of the Option, the same number and
kind of stock, securities, cash, property, or other consideration that each
holder of a Share was entitled to receive in the Transaction in respect of
a Share; provided, however, that such stock, securities, cash, property, or
other consideration shall remain subject to all of the terms, conditions
and restrictions which were applicable to the Options prior to such
Transaction.
8. Termination and Amendment of the Plan.
The Plan shall terminate on the day preceding the tenth anniversary of
the date of its adoption by the Board and no Option may be granted
thereafter. The Board may sooner terminate the Plan and the Board may at
any time and from time to time amend, modify or suspend the Plan; provided,
however, that:
(a) No such amendment, modification, suspension or
termination shall impair or adversely alter any Options
theretofore granted under the Plan, except with the
consent of the Optionee, nor shall any amendment,
modification, suspension or termination deprive any
Optionee of any Shares which he or she may have
acquired through or as a result of the Plan;
(b) To the extent necessary under Section 16(b) of the
Exchange Act and the rules and regulations promulgated
thereunder or other applicable law, no amendment shall
be effective unless approved by the stockholders of the
Company in accordance with applicable law and
regulations; and
(c) The provisions of Section 5 shall not be amended more
often than once every six (6) months, other than to
comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or
the rules and regulations promulgated thereunder.
9. Regulations and Other Approvals; Governing Law.
9.1 Except as to matters of federal law, this Plan and the rights of
all persons claiming hereunder shall be construed and determined
in accordance with the laws of the State of Delaware without
giving effect to conflicts of law principles. Nothing in the Plan
<PAGE>
- 6 -
shall be construed to give any person any rights whatsoever with
respect to Shares, except as specifically provided in the Plan.
9.2 Following an Initial Public Offering, the Plan is intended to
comply with Rule 16b-3 promulgated under the Exchange Act and the
Committee shall interpret and administer the provisions of the
Plan or any Agreement in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and
shall not affect the validity of the Plan.
9.3 The Board from time to time may make such changes to the Plan as
may be necessary or appropriate to comply with the rules and
regulations of any government authority.
9.4 The obligation of the Company to sell or deliver Shares with
respect to Options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee. Each Option is subject to the
requirement that, if at any time the Committee determines, in its
discretion, that the listing, registration or qualification of
Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with,
the grant of an Option or the issuance of Shares, no Options
shall be granted or payment made or Shares issued, in whole or in
part, unless listing, registration, qualification, consent or
approval has been effected or obtained free of any conditions as
acceptable to the Committee.
9.5 Notwithstanding anything contained in the Plan or any Agreement
to the contrary, in the event that the disposition of Shares
acquired pursuant to the Plan is not covered by a then current
registration statement under the Securities Act of 1933, as
amended, and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent
required by the Securities Act of 1933, as amended, and Rule 144
or other regulations thereunder. The Committee may require any
individual receiving Shares pursuant to an Option granted under
the Plan, as a condition precedent to receipt of such Shares, to
represent and warrant to the Company in writing that the Shares
acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other
than pursuant to an effective registration thereof under said Act
or pursuant to an exemption applicable under the Securities Act
of 1933, as amended, or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall
be appropriately amended to reflect their status as restricted
securities as aforesaid.
10. Effective Date. The effective date of the Plan shall be the date
of its adoption by the Board, subject only to the approval,
within twelve (12) months of the adoption of the Plan by the
Board, by the affirmative vote of the holders of a majority of
the securities of the Company present, or represented, and
entitled to vote at a meeting of stockholders duly
<PAGE>
- 7 -
held or to act by written consent, in either case in accordance
with the applicable laws of the State of Delaware.
<PAGE>
FRESH FIELDS MARKETS, INC.
INCENTIVE STOCK OPTION AGREEMENT
Incentive Stock Option Agreement (the "Option") made effective as of the
____ day of __________, 199___, between Fresh Fields Markets, Inc. (the
"Corporation"), and ______________________________ (the "Employee"), an employee
of the Corporation, a Parent or a Subsidiary, pursuant to the Corporation's
Second Amended and Restated 1991 Stock Incentive Plan, as amended to date and as
it may be further amended from time to time (the "1991 Plan").
W I T N E S S E T H:
WHEREAS, the 1991 Plan provides for the issuance of Stock Options,
including Stock Options intended to qualify as "Incentive Stock Options," as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and
WHEREAS, the Corporation and the Employee desire to enter into an agreement
whereby the Corporation will grant the Employee an option to purchase shares of
the Common Stock, and this Option is intended to qualify as an Incentive Stock
Option;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Corporation and the Employee
agree as follows:
1. Grant of Option
Pursuant to the terms and conditions of the 1991 Plan and this Option, the
Corporation hereby grants to the Employee an Option to purchase, as provided in
Section 3 hereof, all or any part of a total of ___________ shares of Common
Stock (the "Option Shares"). This Option is expressly subject to all of the
terms and conditions contained in this Option and in the 1991 Plan, which is
hereby incorporated herein by reference. All capitalized terms not defined in
this Option have the meanings specified in the 1991 Plan.
2. Purchase Price
The price at which the Option Shares may be purchased shall be [_____] per
share (the "Option Exercise Price"). This price is not less than the Fair Market
Value of the Common Stock on the date of this Option.
3. Exercise of Option
(a) Subject to the provisions of Sections 3(b), 3(c) and 4, and the right
of the Corporation to accelerate the date upon which any or all of
this Option becomes exercisable, the Employee shall be entitled to
exercise this Option with respect to the percentage of the Option
Shares as follows:
<PAGE>
- 2 -
Percentage of
Years Elapsed From the Total Option
Date of This Option Shares Purchasable
2 or more, but not more than 10 25%
3 or more, but not more than 10 50%
4 or more, but not more than 10 75%
5 or more, but not more than 10 100%
(b) The Employee shall not be entitled to exercise this Option under the
provisions of this Section 3, in whole or in part, before the
occurrence of both of the following events: (i) consummation of the
first public offering of shares of the Corporation's Common Stock by
the Corporation pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission (the
"Initial Public Offering"); and (ii) registration of the Option Shares
under the Securities Act of 1933. the Securities Exchange Act of 1934
and state securities laws.
(c) Notwithstanding any provision of this Option to the contrary, in no
event may this Option be exercised after 10 years from the date of
this Option (the "Expiration Date").
4. Termination of Employment; Demotion
(a) If the Employee ceases to be employed by the Corporation, a Parent, or
a Subsidiary (a "Termination"), then this Option may be exercised only
as to the Option Shares with respect to which the Employee could have
exercised this Option on the date of Termination, and which Option
Shares have not been previously purchased (and the Option with respect
to all remaining Option Shares shall terminate immediately upon the
Termination), until the earlier of the Expiration Date, or:
(i) in the case of Termination by reason of death or Permanent and
Total Disability, one year after termination of employment, after
which time this Option shall terminate entirely;
(ii) in the case of any other Termination, other than Termination for
cause, three months after the termination of employment, after
which time this Option shall terminate entirely;
(iii)unless the Committee (as that term is defined in Section III(a)
of the Plan) determines otherwise, in the case of Termination for
cause, on the date of Termination, after which time this Option
shall terminate entirely.
(b) In the event the Employee takes an approved leave of absence from the
Corporation which exceeds six consecutive months in duration, whether
such leave of absence is paid or unpaid, this Option shall be treated
as if the Employee had terminated his employment for reasons other
than for cause under Section 4(a)(ii) as of the first day of the leave
of absence;
<PAGE>
- 3 -
provided, however, that in the case of an approved leave of absence
for a period consisting of six consecutive months or less, any portion
of this Option which becomes exercisable during such leave of absence
may not be exercised by the Employee until he returns to employment
with the Corporation for a period of such number of consecutive days
equal to the number of days constituting his leave of absence (or such
lesser number as the Committee may approve); and further, provided,
however, that the Committee, in its sole discretion, may treat an
approved leave of absence of more than six consecutive months as not
constituting a Termination other than for cause with respect to all or
a portion of the Option Shares subject to this Option.
(c) In the event the Employee is demoted, the Committee, in its sole
discretion, may terminate this Option in whole or in part, and if it
is terminated in part, it shall determine the extent to which, if any,
the remaining Option Shares have become exercisable pursuant to
Section 3 and the time or times at which any portion of this Option
which is then unexercisable will become exercisable.
5. Nontransferability; Persons Able to Exercise
This Option may not be transferred other than by will or the laws of
descent and distribution. During the life of the Employee, only the Employee may
exercise this Option. If the Employee dies while still employed by the
Corporation, or within the periods specified in Section 4(a)(i) or (ii), this
Option may be exercised by his executors, administrators, legatees or
distributees, provided that such person or persons comply with the provisions of
this Option applicable to the Employee.
6. Method of Exercising Option
The Option may be exercised, in whole or in part, by written notice to the
Corporation, containing an executed Notice of Exercise in the form of Attachment
A, provided that the Corporation, in its discretion, may modify or augment these
requirements as provided in Section 10 of this Option, or where appropriate
because a person other than the Employee is exercising the Option pursuant to
Section 5. The written notice specified in this Section 6 must be accompanied by
payment of the Option Exercise Price for the shares being purchased. Payment
shall be made in cash, unless the Corporation, in its sole discretion,
authorizes payment to be made in shares of the Corporation's Common Stock
(valued at its Fair Market Value as most recently determined by the Committee
(or, in its absence, the Board) for purposes of the Plan prior to the date of
exercise) or a combination of such shares and cash. As soon as practical after
receipt of this notice and payment, and subject to Section 10, the Corporation
shall deliver a certificate or certificates representing the purchased Option
Shares registered in the name of the person or persons exercising this Option.
In the event this Option is exercised by any person other than the Employee, the
notice shall be accompanied by appropriate proof of the right of such person to
exercise this Option. All Option Shares purchased upon the exercise of this
Option and payment of the full Option Exercise Price will be fully paid and
nonassessable.
<PAGE>
- 4 -
7. Stock Adjustments
If there shall be any Change in Capitalization, appropriate adjustments in
the total number and kind of shares subject to this Option and the Option
Exercise Price, consistent with the requirements of the Code to insure that this
Option will qualify as an Incentive Stock Option, shall be made by the
Corporation as provided in the 1991 Plan.
8. No Rights Other than Those Expressly Created
Neither this Option nor any action taken hereunder shall be construed as
(i) giving the Employee any right to be retained in the employ of, or continue
to be affiliated with, the Corporation, (ii) giving the Employee any equity or
interest of any kind in any assets of the Corporation, or (iii) creating a trust
of any kind or a fiduciary relationship of any kind between the Employee and the
Corporation. As to any claim for any unpaid amounts under this Option, any
person having a claim for payments shall be an unsecured creditor. The Employee
shall not have any of the rights of a stockholder with respect to any Option
Shares until such time as this Option has been exercised and Option Shares have
been issued.
9. Exercise for Cash
If the Employee desires to exercise this Option in respect of any Option
Shares, in accordance with Section 4 after his Termination, the Corporation, in
lieu of issuing shares of Common Stock, may elect to make a cash payment to the
Employee in respect of each such Option Share equal to the excess of the per
share Fair Market Value as most recently determined by the Committee (or, in its
absence, the Board) for purposes of the Plan over the Option Exercise Price.
Such payment shall be in full satisfaction of the Corporation's obligations
under this Option in respect of such Option Shares.
10. Compliance with Laws
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or
foreign laws, the Corporation may be required to collect or withhold
income or other taxes from Employee upon the grant of this Option, the
exercise of this Option, or at some other time. The Corporation may
require, as a condition to the exercise of this Option or the issuance
of Option Shares pursuant thereto, or demand, at such other time as it
may consider appropriate, that the Employee pay the Corporation the
amount of any taxes which the Corporation may determine is required to
be collected or withheld, and the Employee shall comply with the
requirement or demand of the Corporation.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of this
Option, the Employee shall make such representations and furnish such
information as may, in the opinion of counsel for the Corporation, be
appropriate to permit the Corporation to issue or transfer the Option
Shares in compliance with the provisions of applicable federal and/or
state securities laws. The Corporation, in its discretion, may
postpone the issuance and delivery of Option Shares upon any exercise
of this Option until completion of such registration or other
<PAGE>
- 5 -
qualification of such shares under any federal or state laws, or stock
exchange listing, as the Corporation may consider appropriate.
Furthermore, the Corporation is not obligated to register or qualify
the shares of Common Stock to be issued upon exercise of this Option
under federal and/or state securities laws (or to register or qualify
them at any time thereafter, and it may refuse to issue such shares
if, in its sole discretion, registration or exemption from
registration is not practical or available. The Corporation may
require that prior to the issuance or transfer of Option Shares upon
exercise of this Option, the Employee enter into a written agreement
to comply with any restrictions on subsequent disposition that the
Corporation deems necessary or advisable under any applicable federal
and/or state securities laws. Certificates of Common Stock issued
hereunder may bear a legend reflecting such restrictions.
(c) General. No Option Shares shall be issued upon exercise of this Option
unless and until the Corporation is satisfied, in its sole discretion,
that there has been compliance with all legal requirements applicable
to the issuance of such Option Shares
11. Resale Restriction
Employee or his transferee agrees, in connection with an Initial Public
Offering, not to sell, make any short sale of, loan, hypothecate, pledge, grant
any option for the purchase of or otherwise dispose of any shares of Common
Stock purchased pursuant to this Option without the prior written consent of the
Corporation or its underwriters, for such period of time from the effective date
of the applicable registration statement as may be set by the Corporation or
such underwriters.
12. Miscellaneous
(a) Discretion of the Committee. Unless otherwise explicitly provided
herein, the Committee, as defined in the Plan, shall make all
determinations required to be made hereunder, including determinations
required to be made by the Corporation, and shall interpret all
provisions of this Option, as it deems necessary or desirable, in its
sole and unfettered discretion. Such determinations and
interpretations shall be binding and conclusive to the Corporation and
the Employee.
(b) $100.000 Limitation. As provided in Section IV(d) of the Plan, if the
aggregate Fair Market Value of Common Stock with respect to which
Corporation ISOs (determined without regard to Section IV(d) of the
Plan) are exercisable for the first time by the Employee during any
calendar year exceeds $100,000, a portion of such Corporation ISOs
(which may include this Option) shall be treated as options which are
not Incentive Stock Options. For purposes of this limitation, (i)
options shall be taken into account in the order granted, and (ii) the
Committee may designate that portion of any Corporation ISO (including
this Option) that shall be treated as not an Incentive Stock Option if
the provisions of this paragraph apply to a portion of any option,
unless another treatment is required by the Code or regulations of the
Internal Revenue Service. The foregoing designation may be made at
such time as the Committee considers appropriate, including after the
issuance of this Option or at the time of
<PAGE>
- 6 -
its exercise. For the purpose of this section, Fair Market Value shall
be determined as of the time the option with respect to such stock is
granted.
(c) Reservation of Shares. During the term of this Option, the Corporation
shall at all times reserve and keep available shares of Common Stock
sufficient to satisfy the requirements of this Option.
(d) Amendments. This Option may only be modified or amended by a writing
signed by both parties.
(e) Notices. Any notices required to be given under this Option shall be
sufficient if in writing and if sent by certified mail, return receipt
requested, and addressed as follows:
if to the Corporation:
Fresh Fields Markets, Inc.
4948 Boiling Brook Parkway
Rockville, Maryland 20852
if to the Employee:
[ ]
or to such other address as either party may designate under the provisions
hereof.
(f) Successors and Assigns. The rights and obligations of the Corporation
under this Option shall inure to the benefit of and be binding upon
the successors and assigns of the Corporation.
(g) Applicable Law. All rights and obligations under this Option shall be
governed by the laws of the State of Delaware.
(h) Paragraph Headings. The paragraph headings used in this Option are for
convenience or reference, and are not to be construed as part of this
Option.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
<PAGE>
- 7 -
IN WITNESS WHEREOF, the parties have executed this Option as an instrument
under seal effective as of the date written on the first page of this Option.
FRESH FIELDS MARKETS, INC.
By: ________________________________
Mark S. Ordan, President
<PAGE>
ATTACHMENT A
NOTICE OF EXERCISE
Fresh Fields Markets, Inc.
4948 Boiling Brook Parkway
Rockville, Maryland 20852
Attention: Treasurer
Gentlemen:
Pursuant to our Incentive Stock Option Agreement dated as of
_______________, I hereby elect to exercise this Option to the extent indicated:
_______________________________________________________________________________
Number of Shares Per Share Total
Which I Elect to Purchase x Price = Price
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Enclosed with this Notice of Exercise is full payment of the total price of
the shares described above in the form of a check in the amount of $_________
payable to the order of the Corporation, and, if and to the extent the Committee
has so authorized, shares of Common Stock of the Corporation properly endorsed
and having a Fair Market Value equal to $__________.
Kindly issue a certificate or certificates to me representing the shares of
Common Stock which I am acquiring by this exercise, and deliver it to the
address provided below.
Executed as of this ______ date of _______________, 199__.
Very truly yours,
____________________________________
[Name]
_______________________________________________________________________________
Address
<PAGE>
EXHIBIT 4(c)
<PAGE>
FRESH FIELDS MARKETS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Non-Qualified Stock Option Agreement (the "Option") made effective as of
the ____ day of ______________, 199__ between Fresh Fields Markets, Inc. (the
"Corporation"), and _______________________ (the "Employee"), an employee of the
Corporation, a Parent or a Subsidiary, pursuant to the Corporation's Second
Amended and Restated 1991 Stock Incentive Plan, as amended to date and as it may
be further amended from time to time (the "1991 Plan").
W I T N E S S E T H:
WHEREAS, the 1991 Plan provides for the issuance of Stock Options,
including Stock Options which do not qualify as "Incentive Stock Options," as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and
WHEREAS, the Corporation and the Employee desire to enter into an agreement
whereby the Corporation will grant the Employee an option to purchase shares of
the Common Stock, and this Option is not intended to qualify as an Incentive
Stock Option;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Corporation and the Employee
agree as follows:
1. Grant of Option
Pursuant to the terms and conditions of the 1991 Plan and this Option, the
Corporation hereby grants to the Employee an Option to purchase, as provided in
Section 3 hereof, all or any part of a total of _______ shares of Common Stock
(the "Option Shares"). This Option is expressly subject to all of the terms and
conditions contained in this Option and in the 1991 Plan, which is hereby
incorporated herein by reference. This Option is not intended to be an Incentive
Stock Option, as the term is described in Section 422 of the Internal Revenue
Code of 1986, as amended. All capitalized terms not deemed in this Option have
the meanings specified in the 1991 Plan.
2. Purchase Price
The price at which the Option Shares may be purchased shall be $_______ per
share (the "Option Exercise Price").
3. Exercise of Option
Subject to the provisions of Section 4 and the right of the Corporation to
accelerate the date upon which any or all of this Option becomes exercisable,
the Employee shall be entitled to exercise this Option, in whole or in part, one
year after the date hereof upon the occurrence of both of the following events:
(i) consummation of the first public offering of shares of the Corporation's
Common Stock by the Corporation pursuant to a registration statement filed with,
and declared effective by, the Securities and Exchange Commission (the "Initial
Public Offering"); and (ii) registration of the Option Shares under the
Securities Act of 1933, the
<PAGE>
- 2 -
Securities Exchange Act of 1934 and state securities laws. Notwithstanding any
provision of this Option to the contrary, in no event may this Option be
exercised after 10 years from the date of this Option (the "Expiration Date").
4. Termination of Employment; Demotion
(a) If the Employee ceases to be employed by the Corporation, a
Parent, or a Subsidiary (a "Termination"), then this Option may
be exercised only as to the Option Shares with respect to which
the Employee could have exercised this Option on the date of
Termination, and which Option Shares have not been previously
purchased (and the Option with respect to all remaining Option
Shares shall terminate immediately upon the Termination), until
the earlier of the Expiration Date, or:
(i) in the case of Termination by reason of death or Permanent
and Total Disability, one year after termination of
employment, after which time this Option shall terminate
entirely;
(ii) in the case of any other Termination, other than Termination
for cause, three months after the termination of employment,
after which time this Option shall terminate entirely;
(iii)unless the Committee (as that term is defined in Section
III(a) of the Plan) determines otherwise, in the case of
Termination for cause, on the date of Termination, after
which time this Option shall terminate entirely.
(b) In the event the Employee takes an approved leave of absence from
the Corporation which exceeds six consecutive months in duration,
whether such leave of absence is paid or unpaid, this Option
shall be treated as if the Employee had terminated his employment
for reasons other than for cause under Section 4(a)(ii) as of the
first day of the leave of absence; provided, however, that in the
case of an approved leave of absence for a period consisting of
six consecutive months or less, any portion of this Option which
becomes exercisable during such leave of absence may not be
exercised by the Employee until he returns to employment with the
Corporation for a period of such number of consecutive days equal
to the number of days constituting his leave of absence (or such
lesser number as the Committee may approve); and further,
provided, however, that the Committee, in its sole discretion,
may treat an approved leave of absence of more than six
consecutive months as not constituting a Termination other than
for cause with respect to all or a portion of the Option Shares
subject to this Option.
(c) In the event the Employee is demoted, the Committee, in its sole
discretion, may terminate this Option in whole or in part, and if
it is terminated in part, it shall determine the extent to which,
if any, the remaining Option Shares have become exercisable
pursuant to Section 3 and the time or times at which any portion
of this Option which is then unexercisable will become
exercisable.
<PAGE>
- 3 -
5. Nontransferability; Persons Able to Exercise
This Option may not be transferred other than by will or the laws of
descent and distribution. During the life of the Employee, only the Employee may
exercise this Option. If the Employee dies while still employed by the
Corporation, or within the periods specified in Section 4(a)(i) or (ii), this
Option may be exercised by his executors, administrators, legatees or
distributees, provided that such person or persons comply with the provisions of
this Option applicable to the Employee.
6. Method of Exercising Option
The Option may be exercised, in whole or in part, by written notice to the
Corporation, containing an executed Notice of Exercise in the form of Attachment
A, provided that the Corporation, in its discretion, may modify or augment these
requirements as provided in Section 10 of this Option, or where appropriate
because a person other than the Employee is exercising the Option pursuant to
Section 5. The written notice specified in this Section 6 must be accompanied by
payment of the Option Exercise Price for the shares being purchased. Payment
shall be made in cash, unless the Corporation, in its sole discretion,
authorizes payment to be made in shares of the Corporation's Common Stock
(valued at its Fair Market Value as most recently determined by the Committee
(or, in its absence, the Board) for purposes of the Plan prior to the date of
exercise) or a combination of such shares and cash. As soon as practical after
receipt of this notice and payment, and subject to Section 10, the Corporation
shall deliver a certificate or certificates representing the purchased Option
Shares registered in the name of the person or persons exercising this Option.
In the event this Option is exercised by any person other than the Employee, the
notice shall be accompanied by appropriate proof of the right of such person to
exercise this Option. All Option Shares purchased upon the exercise of this
Option and payment of the full Option Exercise Price will be fully paid and
nonassessable.
7. Stock Adjustments
If there shall be any Change in Capitalization, appropriate adjustments in
the total number and kind of shares subject to this Option and the Option
Exercise Price shall be made by the Corporation as provided in the 1991 Plan.
8. No Rights Other Than Those Expressly Created
Neither this Option nor any action taken hereunder shall be construed as
(i) giving the Employee any right to be retained in the employ of, or continue
to be affiliated with, the Corporation, (ii) giving the Employee any equity or
interest of any kind in any assets of the Corporation, or (iii) creating a trust
of any kind or a fiduciary relationship of any kind between the Employee and the
Corporation. As to any claim for any unpaid amounts under this Option, any
person having a claim for payments shall be an unsecured creditor. The Employee
shall not have any of the rights of a stockholder with respect to any Option
Shares until such time as this Option has been exercised and Option Shares have
been issued.
<PAGE>
- 4 -
9. Exercise for Cash
If the Employee desires to exercise this Option in respect of any Option
Shares, in accordance with Section 4 after his Termination, the Corporation, in
lieu of issuing shares of Common Stock, may elect to make a cash payment to the
Employee in respect of each such Option Share equal to the excess of the per
share Fair Market Value as most recently determined by the Committee (or, in its
absence, the Board) for purposes of the Plan over the Option Exercise Price.
Such payment shall be in full satisfaction of the Corporation's obligations
under this Option in respect of such Option Shares.
10. Compliance with Laws
(a) Withholding of Taxes. Pursuant to applicable federal, state,
local or foreign laws, the Corporation may be required to collect
or withhold income or other taxes from Employee upon the grant of
this Option, the exercise of this Option, or at some other time.
The Corporation may require, as a condition to the exercise of
this Option or the issuance of Option Shares pursuant thereto, or
demand, at such other time as it may consider appropriate, that
the Employee pay the Corporation the amount of any taxes which
the Corporation may determine is required to be collected or
withheld, and the Employee shall comply with the requirement or
demand of the Corporation.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of
this Option, the Employee shall make such representations and
furnish such information as may, in the opinion of counsel for
the Corporation, be appropriate to permit the Corporation to
issue or transfer the Option Shares in compliance with the
provisions of applicable federal and/or state securities laws.
The Corporation, in its discretion, may postpone the issuance and
delivery of Option Shares upon any exercise of this Option until
completion of such registration or other qualification of such
shares under any federal or state laws, or stock exchange
listing, as the Corporation may consider appropriate.
Furthermore, the Corporation is not obligated to register or
qualify the shares of Common Stock to be issued upon exercise of
this Option under federal and/or state securities laws (or to
register or qualify them at any time thereafter, and it may
refuse to issue such shares if, in its sole discretion,
registration or exemption from registration is not practical or
available. The Corporation may require that prior to the issuance
or transfer of Option Shares upon exercise of this Option, the
Employee enter into a written agreement to comply with any
restrictions on subsequent disposition that the Corporation deems
necessary or advisable under any applicable federal and/or state
securities laws. Certificates of Common Stock issued hereunder
may bear a legend reflecting such restrictions.
(c) General. No Option Shares shall be issued upon exercise of this
Option unless and until the Corporation is satisfied, in its sole
discretion, that there has been compliance with all legal
requirements applicable to the issuance of such Option Share.
11. Resale Restriction
Employee or his transferee agrees, in connection with an Initial Public
Offering, not to sell, make any short sale of, loan, hypothecate, pledge, grant
any option for the purchase of or
<PAGE>
- 5 -
otherwise dispose of any shares of Common Stock purchased pursuant to this
Option without the prior written consent of the Corporation or its underwriters,
for such period of time from the effective date of the applicable registration
statement as may be set by the Corporation or such underwriters.
12. Miscellaneous
(a) Discretion of the Committee. Unless otherwise explicitly provided
herein, the Committee, as defined in the Plan, shall make all
determinations required to be made hereunder, including
determinations required to be made by the Corporation, and shall
interpret all provisions of this Option, as it deems necessary or
desirable, in its sole and unfettered discretion. Such
determinations and interpretations shall be binding and
conclusive to the Corporation and the Employee.
(b) Reservation of Shares. During the term of this Option, the
Corporation shall at all times reserve and keep available shares
of Common Stock sufficient to satisfy the requirements of this
Option.
(c) Amendments. This Option may only be modified or amended by a
writing signed by both parties.
(d) Notices. Any notices required to be given under this Option shall
be sufficient if in writing and if sent by certified mail, return
receipt requested, and addressed as follows:
if to the Corporation:
Fresh Fields Markets, Inc.
4948 Boiling Brook Parkway
Rockville, Maryland 20852
if to the Employee:
[ ]
or to such other address as either party may designate under the
provisions hereof.
(e) Successors and Assigns. The rights and obligations of the
Corporation under this Option shall inure to the benefit of and
be binding upon the successors and assigns of the Corporation.
(f) Applicable Law. All rights and obligations under this Option
shall be governed by the laws of the State of Delaware.
(g) Paragraph Headings. The paragraph headings used in this Option
are for convenience or reference, and are not to be construed as
part of this Option.
<PAGE>
- 6 -
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Option as an instrument
under seal effective as of the date written on the first page of this Option.
FRESH FIELDS MARKETS, INC.
By:_________________________________
Mark S. Ordan, President
<PAGE>
ATTACHMENT A
NOTICE OF EXERCISE
Fresh Fields Markets, Inc.
4948 Boiling Brook Parkway
Rockville, Maryland 20852
Attention: Treasurer
Gentlemen:
Pursuant to our Non-Qualified Stock Option Agreement dated as of
________________, I hereby elect to exercise this Option to the extent
indicated:
_______________________________________________________________________________
Number of Shares Per Share Total
Which I Elect to Purchase x Price = Price
Enclosed with this Notice of Exercise is full payment of the total price of
the shares described above in the form of a check in the amount of $_______
payable to the order of the Corporation, and, if and to the extent the Committee
has so authorized, shares of Common Stock of the Corporation properly endorsed
and having a Fair Market Value equal to $____________.
Kindly issue a certificate or certificates to me representing the shares of
Common Stock which I am acquiring by this exercise, and deliver it to the
address provided below.
Executed as of this _____ date of _____________, 199_.
Very truly yours,
____________________________________
[Name]
_______________________________________________________________________________
Address
<PAGE>
EXHIBIT 4(d)
<PAGE>
AMENDMENT NO. 1
TO
FRESH FIELDS MARKETS, INC.
1994 DIRECTOR STOCK OPTION PLAN
WHEREAS, the Fresh Fields Markets, Inc. 1994 Director Stock Option Plan
(the "Plan") was approved as of May 11, 1994;
WHEREAS, the Board of Directors proposes to amend the Plan to change the
vesting period of options granted under the Plan in order to vest one hundred
percent of options granted thereunder two years from the grant date;
WHEREAS, Section 8 of the Plan authorizes the Board of Directors to amend
the Plan in such a manner, subject to the approval of the Company's
stockholders;
NOW THEREFORE, the Plan hereby is amended as follows:
1. Section 5.3 of the Plan is amended to read in its entirety as
follows:
5.3. Vesting. Each Option granted under the Plan shall become vested
and exercisable with respect to 100% of the Shares covered thereby on the
second anniversary of the date of the grant.
2. This Amendment No. 1 shall be effective on January 26, 1995 with
respect to any prior or future grant of options under the Plan, subject to
the approval of the Company's stockholders in accordance with the Plan.
<PAGE>
EXHIBIT 4(e)
<PAGE>
FRESH FIELDS MARKETS, INC.
DIRECTOR STOCK OPTION AGREEMENT
Director Stock Option Agreement (the "Option") made effective as of the
_______ day of ________________, 199___, between Fresh Fields Markets, Inc. (the
"Company"), and (the "Director"), a director of the Company, pursuant to the
Company's 1994 / Director Stock Option Plan (the "Plan").
W I T N E S S E T H:
WHEREAS, the Plan provides for the granting of Options to Directors; and
WHEREAS, the Company and the Director desire to enter into an agreement
evidencing the grant of an Option to the Director pursuant to the Plan;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Director agree
as follows:
1. Grant of Option
Pursuant to the terms and conditions of the Plan and this Option, the
Company hereby grants to the Director ah Option to purchase, as provided in
Section 3 hereof, all or any part of a total of ____________ Shares (the "Option
Shares"). This Option is expressly subject to all of the terms and conditions
contained in this Option and in the Plan, which is hereby incorporated herein by
reference. All capitalized terms not defined in this Option have the meanings
specified in the Plan.
2. Purchase Price
The price at which the Option Shares may be purchased shall be
$_____________ (the "Option Exercise Price").
3. Exercise of Option
Subject to the provisions of Section 4, the Director shall be entitled to
exercise this Option with respect to a percentage of the Option Shares as
follows:
Percentage
Years Elapsed From the of Total Option
Date of This Option Shares Purchasable
------------------- ------------------
2 or more, but not more than 10 25%
3 or more, but not more than 10 50%
4 or more, but not more than 10 75%
5 or more, but not more than 10 100%
<PAGE>
- 2 -
Notwithstanding any provision of this Option to the contrary, in no event may
this Option be exercised after 10 years from the date of this Option (the
"Expiration Date").
4. Termination of Directorship
If the Director ceases to serve as a director of the Company, (a
"Termination"), then this Option may be exercised only as to the Option Shares
with respect to which the Director could have exercised this Option on the date
of Termination and which Option Shares have not been previously purchased (and
the Option with respect to all remaining Option Shares shall terminate
immediately upon the Termination), until the earlier of the Expiration Date, or:
(i) in the case of Termination by reason of death, one year after the
Termination, at which point the Option shall terminate;
(ii) in the case of any other Termination, other than for Cause, three
months after the Termination, at which point the Option shall
terminate;
(iii)in the case of Termination for Cause, on the date of
Termination, at which point the Option shall terminate.
5. Nontransferability; Persons Able to Exercise
This Option may not be transferred other than by will or the laws of
descent and distribution. During the life of the Director, only the Director may
exercise this Option. If the Director dies while still serving as a Director of
the Company, or within the period specified in Section 4(ii), this Option may be
exercised by his executors, administrators, legatees or distributees, provided
that such person or persons comply with the provisions of this Option applicable
to the Director.
6. Method of Exercising Option
The Option may be exercised, in whole or in part, by written notice to the
Company, containing an executed Notice of Exercise in the form of Attachment A,
provided that the Company may modify or augment these requirements where
appropriate because a person other than the Director is exercising the Option
pursuant to Section 5. The written notice specified in this Section 6 must be
accompanied by payment of the Option Exercise Price for the Option Shares being
purchased. Payment shall be made in cash, Shares (valued at their Fair Market
Value which, if the Shares are not then publicly traded, shall be the Fair
Market Value as most recently established for purposes of the Company's 1991
Stock Incentive Plan) or a combination thereof. As soon as practical after
receipt of this notice and payment, and subject to Sections 9 and 10, the
Company shall deliver a certificate or certificates representing the purchased
Option Shares registered in the name of the person or persons exercising this
Option. In the event this Option is exercised by any person other than the
Director, the notice shall be
<PAGE>
- 3 -
accompanied by appropriate proof of the right of such person to exercise this
Option. All Option Shares purchased upon the exercise of this Option and payment
of the full Option Exercise Price will be fully paid and nonassessable.
7. Stock Adjustments
If there shall be any Change in Capitalization, appropriate adjustments in
the total number and kind of shares subject to this Option and the Option
Exercise Price shall be made by the Company as provided in the Plan.
8. No Rights Other than Those Expressly Created
Neither this Option nor any action taken hereunder shall be construed as
(i) giving the Director any right to be retained in the service of, or continue
to be affiliated with, the Company, (ii) giving the Director any equity or
interest of any kind in any assets of the Company, or (iii) creating a trust of
any kind or a fiduciary relationship of any kind between the Director and the
Company. As to any claim for any unpaid amounts under this Option, any person
having a claim for payments shall be an unsecured creditor. The Director shall
not have any of the rights of a stockholder with respect to any Option Shares
until such time as this Option has been exercised and Option Shares have been
issued.
9. Repurchase Rights
(a) In the event the Director ceases to serve as a director of the
Company for any reason, the Company shall have the right to
purchase, from the Director or any person to whom the Director
has sold or otherwise transferred his interest (the Director and
any such transferee collectively hereinafter referred to as a
"Holder"), any and all shares of Common Stock issued hereunder
upon exercise of this Option. This repurchase right shall be
exercisable by the Company by a delivery of a repurchase notice
(a "Notice") to the Holder at any time prior to an Initial Public
Offering. The price payable to the Holder by the Company in
connection with the Company's purchase of any Shares pursuant to
this Section 9 shall be the Fair Market Value of the shares of
Common Stock as most recently determined by the Committee (or, in
its absence, the Board) for purposes of the Plan or the Company's
Second Amended and Restated 1991 Stock Incentive Plan prior to
the date of delivery of the Notice. The closing on the repurchase
of Shares by the Company shall occur within sixty (60) days after
the date of delivery of the Notice.
(b) If, in accordance with Section 4, the Director desires to
exercise this Option in respect of any Option Shares after his
Termination, the Company, in lieu of issuing Shares, may elect to
make a cash payment to the Director in respect of each such
Option Share equal to the excess of the per share Fair Market
Value (as described in Subsection 9(a) above) over the Option
Exercise Price. Such payment shall be in full satisfaction of the
Company's obligations under this Option in respect of such Option
Shares.
<PAGE>
- 4 -
(c) Each stock certificate issued upon exercise of this Option prior
to an Initial Public Offering shall bear a legend in
substantially the following form:
This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including rights of repurchase)
contained in the Fresh Fields Markets, Inc. 1994 Director Stock Option
Plan (the "Plan") and a Director Stock Option Agreement (the
"Agreement") between the registered owner of the shares represented
hereby and Fresh Fields Markets, Inc. Release from such terms and
conditions shall be made only in accordance with the provisions of the
Plan and the Agreement, copies of which are on file in the office of
the Secretary of Fresh Fields Markets, Inc.
10. Compliance with Laws
(a) Securities Law Compliance. Upon exercise (or partial exercise) of
this Option, the Director shall make such representations and
furnish such information as may, in the opinion of counsel for
the Company, be appropriate to permit the Company to issue or
transfer the Option Shares in compliance with the provisions of
applicable federal and/or state securities laws. The Company, in
its discretion, may postpone the issuance and delivery of Option
Shares upon any exercise of this Option until completion of such
registration or other qualification of such shares under any
federal or state laws, or stock exchange listing, as the Company
may consider appropriate. Furthermore, the Company is not
obligated to register or qualify the Shares to be issued upon
exercise of this Option under federal and/or state securities
laws (or to register or qualify them at any time thereafter), and
it may refuse to issue such Shares if, in its sole discretion,
registration or exemption from registration is not practical or
available. The Company may require that prior to the issuance or
transfer of Option Shares upon exercise of this Option, the
Director enter into a written agreement to comply with any
restrictions on subsequent disposition that the Company deems
necessary or advisable under any applicable federal and/or state
securities laws. Certificates issued hereunder may bear a legend
reflecting such restrictions.
(b) General. No Option Shares shall be issued upon exercise of this
Option unless and until the Company is satisfied, in its sole
discretion, that there has been compliance with all legal
requirements applicable to the issuance of such Option Shares.
11. Miscellaneous
(a) Reservation of Shares. During the term of this Option, the
Company shall at all times reserve and keep available Shares
sufficient to satisfy the requirements of this Option.
(b) Amendments. This Option may only be modified or amended by a
writing signed by both parties.
<PAGE>
- 5 -
(c) Notices. Any notices required to be given under this Option shall
be sufficient if in writing and if sent by certified mail, return
receipt requested, and addressed as follows:
if to the Company:
Fresh Fields Markets, Inc.
4948 Boiling Brook Parkway
Rockville, Maryland 20852
if to the Director:
[ ]
or to such other address as either party may designate under the
provisions hereof.
(d) Successors and Assigns. The rights and obligations of the Company
under this Option shall inure to the benefit of and be binding
upon the successors and assigns of the Company.
(e) Applicable Law. All rights and obligations under this Option
shall be governed by the laws of the State of Delaware.
(f) Paragraph Headings. The paragraph headings used in this Option
are for convenience or reference, and are not to be construed as
part of this Option.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Option as an instrument
under seal effective as of the date written on the first page of this Option.
FRESH FIELDS MARKETS, INC.
By: ________________________________
Mark S. Ordan, President
DIRECTOR:
____________________________________
<PAGE>
ATTACHMENT A
NOTICE OF EXERCISE
Fresh Fields Markets, Inc.
4948 Boiling Brook Parkway
Rockville, Maryland 20852
Attention: Treasurer
Gentlemen:
Pursuant to our Director Stock Option Agreement dated as of , I hereby
elect to exercise this Option to the extent indicated:
_______________________________________________________________________________
Number of Shares Per Share Total
Which I Elect to Purchase x Price = Price
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Enclosed with this Notice of Exercise is full payment of the total price of
the Shares described above in the form of a check in the amount of $ payable to
the order of the Company, and/or Shares properly endorsed and having a Fair
Market Value equal to $ .
Kindly issue a certificate or certificates to me representing the Shares
which I am acquiring by this exercise, and deliver it to the address provided
below.
Executed as of this ______ date of _____________________, 199_.
Very truly yours,
____________________________________
[Name]
_______________________________________________________________________________
Address
<PAGE>
EXHIBIT 5
<PAGE>
Crouch & Hallett
A Registered Limited Liability Partnership
ATTORNEYS AND COUNSELORS
717 N HARWOOD
SUITE 1400
DALLAS, TEXAS 75201
Writer's Direct Dial Number Telecopy: 214-953-3154
(214) 953-0053
August 30, 1996
Whole Foods Market, Inc.
601 North Lamar
Suite 300
Austin, Texas 78703
Gentlemen:
We have served as counsel for Whole Foods Market, Inc., a Texas corporation
(the "Company"), in connection with the Registration Statement on Form S-8
covering the sale of a maximum of 542,212 shares (the "Shares") of Common Stock,
no par value, of the Company. The Shares are to be issued upon the exercise of
options granted under the stock option plans of Fresh Fields Markets, Inc., a
wholly owned subsidiary of the Company, described in the Registration Statement.
We have examined such documents and questions of law as we have deemed
necessary to render the opinion expressed below. Based upon the foregoing, we
are of the opinion that the Shares, when issued and delivered, are duly and
validly issued, fully paid and non-assessable.
We consent to the use of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
/s/ Crouch & Hallett, L.L.P.
Crouch & Hallett, L.L.P.
<PAGE>
EXHIBIT 23(a)
<PAGE>
INDEPENDANT AUDITORS' CONSENT
_______________________________________________________________________________
The Board of Directors
Whole Foods Market, Inc.:
We consent to the use of our report incorporated herein by reference.
/s/ KPMG Peat Marwick, L.L.P.
KPMG Peat Marwick, L.L.P.
Austin, Texas
August 29, 1996
