As Filed With The Securities And Exchange Commission on September 16, 1997
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 N. Lamar Blvd., Suite 300
Austin, Texas 78703
(Address of principal executive office) (Zip code)
-----------------------------------------
Non-Qualified Stock Option Plan of Amrion, Inc.
1994 Non-Employee Director Stock Option Plan of Amrion, Inc.
(Full title of the plans)
Glenda J. Flanagan Bruce H. Hallett
Vice President and Chief Financial Officer Crouch & Hallett, L.L.P.
Whole Foods Market, Inc. 717 N. Harwood Street
601 N. Lamar Blvd. Suite 1400
Suite 300 Dallas, Texas 75201
Austin, Texas 78703 (214) 953-0053
(512) 477-5566
(Names, addresses and telephone numbers, including area codes,
of agents for service)
-----------------------------------------
APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES PURSUANT TO THE PLANS:
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>
<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 330,339 Shs. $34.19 $11,294,291 $3.423
</TABLE>
* Estimated solely for purposes of calculating the registration fee, which has
been computed in accordance with Rule 457(h), based on the average high and low
prices of the registrant's Common Stock on September 11, 1997, as reported on
the Nasdaq National Market System.
<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 registrant 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 registrant'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 under the Securities Act of 1933 (the "1933 Act"), which contains, either
directly or by incorporation by reference, certified financial statements for
the registrant'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 registrant'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 IX 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) Non-Qualified Stock Option Plan of Amrion, Inc.
4(b) Form of Non-Qualified Stock Option Agreement
4(c) 1994 Non-Employee Director Stock Option Plan of Amrion, Inc.
4(d) Form of Non-Employee Director Stock Option Agreement
5 Opinion of Crouch & Hallett, L.L.P.
23(a) Consent of KPMG Peat Marwick L.L.P.
23(b) Consent of Crouch & Hallett, L.L.P. (included as part of Exhibit 5)
All exhibits filed herewith.
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<PAGE>
Item 9. Undertakings.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement
to 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.
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<PAGE>
II-1
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 16th day
of September 1997.
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 September 16, 1997.
Signature Title
- --------- -----
Chairman of the Board
- ---------------------------- and Director
John P. Mackey (Principal Executive Officer)
/s/ Glenda J. Flanagan Chief Financial Officer
- ---------------------------- (Principal Financial Officer and Accounting
Glenda J. Flanagan Officer)
/s/ Dr. Cristina G. Banks Director
- ----------------------------
Dr. Cristina G. Banks
/s/ Dr. John B. Elstrott Director
- ----------------------------
Dr. John B. Elstrott
II-1
<PAGE>
/s/ Avram J. Goldberg Director
- ---------------------
Avram J. Goldberg
/s/ Fred "Chico" Larger Director
- -----------------------
Fred "Chico" Lager
Director
- -----------------------
Linda A. Mason
Director
- -------------------------
Dr. Ralph Z. Sorenson
Director
- -------------------------
David Dupree
II-2
<PAGE>
E-1
INDEX TO EXHIBITS
4(a) 1994 Non-Qualified Stock Option Plan of Amrion, Inc.
4(b) Form of Non-Qualified Stock Option Agreement
4(c) 1994 Non-Employee Director Stock Option Plan of Amrion, Inc.
4(d) Form of Non-Employee Director Stock Option Agreement
5 Opinion of Crouch & Hallett, L.L.P.
23(a) Consent of KPMG Peat Marwick L.L.P.
23(b) Consent of Crouch & Hallett, L.L.P. (included as part of
Exhibit 5).
All exhibits filed herewith.
AMRION, INC.
NON-QUALIFIED STOCK OPTION PLAN
Purposes of and Benefits Under the Plan. This Non-Qualified Stock
Option Plan (the "Plan") is intended to encourage stock ownership by employees,
officers and employee directors of AMRION, INC., its divisions, Subsidiary
corporations and Parent corporations (the "Corporation"), so that they may
acquire or increase their proprietary interest in the Corporation, to (i) induce
qualified persons to become employees, officers or employee directors of the
Corporation; (ii) reward employees and employee directors for past services to
the Corporation and (iii) encourage such persons to remain in the employ of or
associated with the Corporation and to put forth maximum efforts for the success
of the business of the Corporation.
Options granted by the Committee pursuant to this Plan shall constitute
"non-qualified stock options" ("Non-Qualified Stock Options").
1. Definitions.
-----------
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Code" means Internal Revenue Code of 1986, as amended from time to
time.
(c) "Committee" means the Compensation Committee appointed by the Board, if
one has been appointed. If no Committee has been appointed, the term "Committee"
shall mean the Board.
(d) "Common Stock" mean the Corporation's $.0011 par value common stock.
(e) "Disability" means a Recipient's inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 12 months, or such
other meaning ascribed in Section 22(e)(3) of the Code or any successor
provision. If the Recipient has a disability insurance policy, the term
"Disability" shall be as defined therein; provided that said definition is not
inconsistent with the meaning ascribed in Section 22(e)(3) of the Code or any
successor provision. If the Recipient has a disability insurance policy, the
<PAGE>
term "Disability" shall be as defined therein; provided that said definition is
not inconsistent with the meaning ascribed in Section 22 (e) (3) of the Code or
any successor provision.
(f)"Exchange Act" means Securities Exchange Act of 1934, as amended from
time to time.
(g) "Fair Market Value" per share as of a particular date means the average
of the last sale price of the Corporation's Common Stock for the ten days
preceding the date of grant as reported on a national securities exchange or on
the NASDAQ National Market System or, if the quotation for the last sale
reported is not available for the Corporation's Common Stock, the average of the
closing bid and asked prices of the Corporation's Common Stock for the ten days
preceding the date of grant as reported by NASDAQ or on the electronic bulletin
board or, if none, the National Quotation Bureau, Inc.'s "Pink Sheets" or, if
such quotations are unavailable, the value determined by the Committee Board in
accordance with its discretion in making a bona fide, good faith determination
of fair market value. Fair Market Value shall be determined without regard to
any restriction other than a restriction which, by its terms, never will lapse.
(h) "Option" means a Non-statutory Stock Option.
(i) "Option Price" means the purchase price of the shares of Common Stock
covered by an Option determined in accordance with Section 7(b) hereunder.
(j) "Parent" means any corporation which is a "parent corporation" as
defined in Section 424(e) of the Code, with respect to the Corporation.
(k) "Plan" means this 1994 Stock Option Plan.
(l) "Recipient" means any person granted an Option hereunder.
(m) "Securities Act" means the Securities Act of 1933, as amended from time
to time.
(n) "Subsidiary" means any corporation which is a "subsidiary corporation"
as defined in Section 424(f) of the Code, with respect to the Corporation.
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<PAGE>
2. Administration.
--------------
(a) The Plan shall be administered by the Committee. The Committee shall
have the authority in its discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically conferred under the Plan or necessary
or advisable in the administration of the Plan, including the authority to grant
Options; to determine the vesting schedules and other restrictions, if any,
relating to Options; to determine the Option Price; to determine the persons to
whom, and the time or times at which, Options shall be granted; to determine the
number of shares to be covered by each Option; to determine Fair Market Value
per share; to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
Option agreements (which need not be identical) entered into in connection with
Options granted under the Plan; and to make all other determinations deemed
necessary or advisable for the administration of the Plan. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan.
(b) Options granted under the Plan shall be evidenced by duly adopted
resolutions of the Committee included in the minutes of the meeting at which
they are adopted or in a unanimous written consent.
(c) The Committee shall endeavor to administer the Plan and grant Options
hereunder in a manner that is compatible with the obligations of persons subject
to Section 16 of the Exchange Act ("Section 16 Persons"), however compliance
with Section 16 is a personal responsibility of each Section 16 person and is
not the responsibility of the Corporation or the Committee, or any person
thereof. None of the Committee, the Board or the Corporation shall assume any
legal responsibility for a Recipient's compliance with his obligations under
Section 16 of the Exchange Act. Any Option granted hereunder which would subject
or subjects the Recipient to liability under Section 16(b) of the Exchange Act
is void ab initio as if it had never been granted.
-3-
<PAGE>
(d) No member of the Committee or the Board shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Option
granted hereunder.
3. Eligibility.
------------
(a) Subject to certain limitations hereinafter set forth, Options may be
granted to employees, officers and employee directors of the Corporation. In
determining the persons to whom Options shall be granted and the number of
shares to be covered by each Option, the Committee shall take into account the
duties of the respective persons, their present and potential contributions to
the success of the Corporation and such other factors as the Committee shall
deem relevant to accomplish the purposes of the Plan.
(b) A Recipient shall be eligible to receive more than one grant of an
Option during the term of the Plan, on the terms and subject to the restrictions
herein set forth.
4. Stock Reserved.
---------------
(a) The stock subject to Options hereunder shall be shares of Common Stock.
Such shares, in whole or in part, may be authorized but unissued shares or
shares that shall have been or that may be reacquired by the Corporation. The
aggregate number of shares of Common Stock as to which Options may be granted
from time to time under the Plan (the "Available Shares") initially shall not
exceed 511,000 shares. The number of Available Shares shall be subject to
adjustment as provided in Section 7(h) hereof.
(b) If any outstanding Option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares of Common Stock
allocable to the unexercised portion of such Option shall become available for
subsequent grants of Options under the Plan unless the Plan shall have been
terminated.
5. Grant of Options under Plan.
-----------------------------
Options shall be granted under the Plan at the discretion of the Committee in
accordance with the provisions of Section 7 hereof.
6. Terms and Conditions of Options.
--------------------------------
Each Option granted pursuant to the Plan shall be evidenced by a written
Option agreement between the Corporation and the Recipient, which agreement
substantially shall be in the form of Exhibit A hereto as modified from time to
time by the Committee in its discretion, and which shall comply with and be
subject to the following terms and conditions:
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<PAGE>
(a) Number of Shares.
-----------------
Each Option agreement shall state the number of shares of Common Stock
covered by the Option.
(b) Option Price.
-------------
Each Option agreement shall state the Option Price, which shall be
determined by the Committee subject only to the following restrictions:
(1) Option granted under the Plan shall be at a price no less than 80%
of the Fair Market Value per share on the date of grant of the
Non-statutory Stock Option.
(2) The Option Price shall be subject to adjustment as provided in
Section 7(h) hereof.
(c) Term of Option.
---------------
Each Option agreement shall state the period during and times at which the
Option shall be exercisable; provided, however:
(1) The date on which the Committee adopts a resolution expressly
granting an Option shall be considered the day on which such Option is
granted, unless a future date is specified in the resolution; provided,
however, the Recipient shall have no rights under the grant until the
Recipient has executed an Option agreement with respect to such Option.
(2) The exercise period shall not exceed ten years from the date of
grant of the Option.
(3) The Committee shall have the authority to accelerate or extend the
exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. No exercise
period may be extended to increase the term of the Option beyond ten years
from the date of the grant.
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<PAGE>
(4) The exercise period shall be subject to earlier termination as
provided in Sections 7(e) and 7(f) hereof and, furthermore, shall be
terminated upon surrender of the Option by the holder thereof if such
surrender has been authorized in advance by the Committee.
(d) Method of Exercise and Medium and Time of Payment.
--------------------------------------------------
(1) An Option may be exercised as to any or all whole shares of
Common Stock as to which it then is exercisable.
(2) Each exercise of an Option granted hereunder, whether in
whole or in part, shall be by written notice to the secretary of the
Corporation designating the number of shares as to which the Option is
being exercised, and shall be accompanied by payment in full of the
Option Price for the number of shares so designated, together with any
written statements required by any applicable securities laws.
(3) The Option Price shall be paid in cash or shares of Common
Stock having a Fair Market Value equal to such Option Price or in a
combination of cash and shares and, subject to approval of the
Committee, may be effected in whole or in part with monies received
from the Corporation at the time of exercise as a compensatory cash
payment.
(4) Applicable withholding taxes shall be paid in the manner
specified by Section 9 hereof.
(e) Termination.
------------
Except as provided herein, an Option may not be exercised unless the
Recipient then is an employee, officer or employee director of the Corporation
or a Subsidiary of or Parent to the Corporation, and unless the Recipient has
remained continuously as an employee, officer or employee director of the
Corporation since the date of grant of the Option.
(1) If the Recipient ceases to be an employee, officer or
employee director of the Corporation or a Subsidiary or Parent to the
Corporation (other than by reason of death, Disability or retirement),
other than for cause, all Options theretofore granted to such
Recipient but not theretofore exercised shall terminate three months
after the date the Recipient ceased to be an employee, officer or
employee director of the Corporation.
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<PAGE>
(2) Nothing in the Plan or in any Option granted hereunder shall
confer upon an individual any right to continue in the employ of or
other relationship with the Corporation or interfere in any way with
the right of the Corporation to terminate such employment or other
relationship between the individual and the Corporation.
(f) Death, Disability or Retirement of Recipient.
-----------------------------------------------------------
If a Recipient shall die while an employee, officer or employee director of the
Corporation, or if the Recipient's employment, officer or employee director
status, shall terminate by reason of Disability or retirement, all Options
theretofore granted to such Recipient, whether or not otherwise exercisable,
unless earlier terminated in accordance with their terms, may be exercised by
the Recipient or by the Recipient's estate or by a person who acquired the right
to exercise such Options by bequest or inheritance or otherwise by reason of the
death or Disability of the Recipient, at any time within one year after the date
of death, Disability or retirement of the Recipient.
(g) Transferability Restriction.
----------------------------
(1) Options granted under the Plan shall not be transferable other
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, or the rules thereunder.
Options may be exercised, during the lifetime of the Recipient, only by the
Recipient and thereafter only by his legal representative.
(2) Any attempted sale, pledge, assignment, hypothecation or other
transfer of an Option contrary to the provisions hereof and the levy of any
execution, attachment or similar process upon an Option shall be null and
void and without force or effect and shall result in a termination of the
Option.
-7-
<PAGE>
(3)(A) As a condition to the transfer of any shares of Common Stock
issued upon exercise of an Option granted under this Plan, the Corporation
may require an opinion of counsel, satisfactory to the Corporation, to the
effect that such transfer will not be in violation of the Securities Act or
any other applicable securities laws or that such transfer has been
registered under federal and all applicable state securities laws. (B)
Further, the Corporation shall be authorized to refrain from delivering or
transferring shares of Common Stock issued under this Plan until the
Committee determines that such delivery or transfer will not violate
applicable securities laws and the Recipient has tendered to the
Corporation any federal, state or local tax owed by the Recipient as a
result of exercising the Option or disposing of any Common Stock when the
Corporation has a legal liability to satisfy such tax. (C) The Corporation
shall not be liable for damages due to delay in the delivery or issuance of
any stock certificate for any reason whatsoever, including, but not limited
to, a delay caused by listing requirements of any securities exchange or
any registration requirements under the Securities Act, the Exchange Act,
or under any other state or federal law, rule or regulation. (D) The
Corporation is under no obligation to take any action or incur any expense
in order to register or qualify the delivery or transfer of shares of
Common Stock under applicable securities laws or to perfect any exemption
from such registration or qualification. (E) Furthermore, the Corporation
will not be liable to any Recipient for failure to deliver or transfer
shares of Common Stock if such failure is based upon the provisions of this
paragraph.
(h) Effect of Certain Changes.
--------------------------
(1) If there is any change in the number of shares of Common
Stock through the declaration of stock dividends, or through a
recapitalization resulting in stock splits, or combinations or
exchanges of such shares, the number of shares of Common Stock
available for Options and the number of such shares covered by
outstanding Options, and the exercise price per share of the
outstanding Options, shall be proportionately adjusted by the
Committee to reflect any increase or decrease in the number of issued
shares of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation of
the Corporation, or any corporate separation or division, including,
but not limited to, split-up, split-off or spin-off, or a merger or
consolidation of the Corporation with another corporation, the
Committee may provide that the holder of each Option then exercisable
shall have the right to exercise such Option (at its then current
Option Price) solely for the kind and amount of shares of stock and
other securities, property, cash or any combination thereof receivable
upon such dissolution, liquidation, corporate separation or division,
or merger or consolidation by a holder of the number of shares of
Common Stock for which such Option might have been exercised
immediately prior to such dissolution, liquidation, or corporate
separation or division, or merger or consolidation; or in the
alternative the Committee may provide that each Option granted under
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<PAGE>
the Plan shall terminate as of a date fixed by the Committee;
provided, however, that not less than 30 days' written notice of the
date so fixed shall be given to each Recipient, who shall have the
right, during the period of 30 days preceding such termination, to
exercise the Option as to all or any part of the shares of Common
Stock covered thereby, including shares as to which such Option would
not otherwise be exercisable.
(3) Paragraph (2) of this Section 7(h) shall not apply to a
merger or consolidation in which the Corporation is the surviving
corporation and shares of Common Stock are not converted into or
exchanged for stock, securities of any other corporation, cash or any
other thing of value. Notwithstanding the preceding sentence, in case
of any consolidation or merger of another corporation into the
Corporation in which the Corporation is the surviving corporation and
in which there is a reclassification or change (including a change to
the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par
value, or as a result of a subdivision or combination, but including
any change in such shares into two or more classes or series of
shares), the Committee may provide that the holder of each Option then
exercisable shall have the right to exercise such Option solely for
the kind and amount of shares of stock and other securities (including
those of any new direct or indirect Parent of the Corporation),
property, cash or any combination thereof receivable upon such
reclassification, change, consolidation or merger by the holder of the
number of shares of Common Stock for which such Option might have been
exercised.
(4) If there is a change in the Common Stock of the Corporation
as presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from
any such change shall be deemed to be the Common Stock within the
meaning of the Plan.
(5) To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be made by
the Committee, whose determination in that respect shall be final,
binding and conclusive.
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<PAGE>
(6) Notwithstanding any other provision of this Section 7, no
adjustment required by this Section 7 shall be made if the effect of
such adjustment is less than ten percent of the current Option Price
or number shares subject to Options granted under this Plan. Such
adjustment shall only be made when the cumulative effect of all such
adjustments shall be equal to or greater than ten percent of the
current Option Price or number of shares subject to Options granted
under this Plan.
(7) Except as expressly provided in this Section 7(h), the
Recipient shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, merger, or consolidation or spin-off of assets or stock
of another corporation; and any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of
any class, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock
subject to the Option. The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or part of its business
or assets.
(i) Rights as Shareholder - Non-Distributive Intent.
------------------------------------------------
(1) Neither a person to whom an Option is granted, nor such person's
legal representative, heir, legatee or distributee, shall be deemed to be
the holder of, or to have any rights of a holder with respect to, any
shares subject to such Option until after the Option is exercised and the
shares are issued to the person exercising such Option.
(2) Upon exercise of an Option at a time when there is no registration
statement in effect under the Securities Act relating to the shares
issuable upon exercise, shares may be issued to the Recipient only if the
Recipient represents and warrants in writing to the Corporation that the
shares purchased are being acquired for investment and not with a view to
the distribution thereof and provides the Corporation with sufficient
information to establish an exemption from the registration requirements of
the Securities Act. A form of subscription agreement is attached hereto as
Exhibit B.
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<PAGE>
(3) No shares shall be issued upon the exercise of an Option unless
and until there shall have been compliance with any then applicable
requirements of the Securities and Exchange Commission, or any other
regulatory agencies having jurisdiction over the Corporation.
(4) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 7(h)
hereof.
(j) Other Provisions.
-----------------
Option agreements evidencing Options granted under the Plan shall contain
such other provisions, including, without limitation, the imposition of
restrictions upon the exercise of an Option.
7. Acceleration of Exercisability of Options upon Change in Control.
-----------------------------------------------------------------
(a) Upon a Hostile Change in Control of the Corporation, all Options
theretofore granted under the Plan and not previously exercisable shall become
fully exercisable to the same extent and in the same manner as if they had
become exercisable by passage of time in accordance with the terms of the
Option.
(b) For purposes of Section 8 (a), a "Hostile Change in Control" of the
Corporation shall mean the commencement of a tender offer or exchange offer
(other than an offer by the Corporation) which by its terms could result in the
acquisition by an entity, person or group of 15% or more of the Corporation's
Common Stock, provided such tender offer is not recommended for acceptance to
the shareholders of the Corporation by the Corporation's Board of Directors.
(c) The Committee, at its discretion, may provide that Options granted
under the Plan shall become exercisable in full upon the occurrence of events
other than a Hostile Change in Control as provided by Section 8(a) hereof
("Accelerating Events"); provided, however, that the Accelerating Events comply,
and are no more permissive than the following provision: In the event of any
merger or consolidation in which the Corporation is not the surviving
corporation or any sale or transfer by the Corporation of all or substantially
all of its assets or any tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group of all or a majority of the then
outstanding voting securities of the Corporation, all Options granted under the
-11-
<PAGE>
Plan shall become exercisable in full, notwithstanding any other provision of
the Plan or of any outstanding Options granted thereunder, including provisions
providing for staggered vesting of options, on and after (i) the fifteenth day
prior to the effective date of such merger, consolidation, sale, transfer or
acquisition or (ii) the date of commencement of such tender offer or exchange
offer, as the case may be. Notwithstanding the foregoing, in no event shall any
Option be exercisable after the date of termination of the exercise period of
such Option specified in Section 7(c).
(d) The Change of Control provision for each Option granted shall be
contained in the written Option Agreement evidencing the Option.
8. Agreement by Recipient Regarding Taxes.
--------------------------------------
(a) Each Recipient agrees that upon exercise of an Option granted under
this Plan, in addition to the payment of the Exercise Price as provided in
Section 7(d) hereof, the Recipient shall pay in cash to the Corporation, an
amount sufficient to allow the Corporation to pay federal, state and local taxes
of any kind required by law to be withheld upon the exercise of such Option from
any payment of any kind otherwise due to the Recipient.
(b) Each Option Recipient must acknowledge the possible availability of an
election under Section 83(b) of the Code, or any successor provision.
9. Term of Plan.
-------------
Options may be granted under this Plan from time to time within a period of
five years from the date the Plan is adopted by the Board.
10. Amendment and Termination of the Plan.
---------------------------------------
The Committee at any time and from time to time may suspend, terminate,
modify or amend the Plan. Except as provided in Section 7 hereof, no suspension,
termination, modification or amendment of the Plan may adversely affect any
Option previously granted, unless the written consent of the Recipient is
obtained.
-12-
<PAGE>
11. Assumption.
-----------
Subject to Section 7, the terms and conditions of any outstanding Options
granted pursuant to this Plan shall be assumed by, be binding upon and shall
inure to the benefit of any successor corporation to the Corporation and
continue to be governed by, to the extent applicable, the terms and conditions
of this Plan. Such successor corporation may but shall not be obligated to
assume this Plan.
12. Termination of Right of Action.
------------------------------
Every right of action arising out of or in connection with the Plan by or
on behalf of the Corporation, or by any shareholder of the Corporation against
any past, present or future member of the Board, or against any employee, or by
an employee (past, present or future) against the Corporation, irrespective of
the place where an action may be brought and of the place of residence of any
such shareholder, director or employee, will cease and be barred by the
expiration of three years from the date of the act or omission in respect of
which such right of action is alleged to have risen or such shorter period as
may be provided by law.
13. Adoption and Effective Date.
----------------------------
(a) This Plan was approved by the Board of Directors of the Corporation on
December 29, 1994. This Plan is effective as of such date subject to approval by
the Company's shareholders.
AMRION, INC.
By
--------------------------
Mark S. Crossen, President
-13-
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
STOCK OPTION AGREEMENT made as of this ___ day of _______, 199__, between
AMRION, INC., a Colorado corporation (the "Corporation"), and ________________
(the "Recipient").
In accordance with its 1994 Non-Qualified Stock Option Plan (the "Plan"), a
copy of which is attached and is incorporated herein by reference, the
Corporation desires, in connection with the services of the Recipient, to
provide the Recipient with an opportunity to acquire $.0011 par value common
stock ("Common Stock") of the Corporation on favorable terms and thereby
increase the Recipient's proprietary interest in the Corporation and as
incentive to put forth maximum efforts for the success of the business of the
Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation and
the Recipient agree as follows:
Confirmation of Grant of Option. Pursuant to a determination of the
Compensation Committee of the Board of Directors of the Corporation (the
"Committee") (if such a Committee has been appointed) or in the absence of a
Committee, by the Board of Directors of the Corporation (the "Board) made on
_______, ___ 1994 (the "Date of Grant"), the Corporation, subject to the terms
of the Plan and of this Agreement, confirms that the Recipient has been
irrevocably granted on the Date of Grant, as a matter of separate inducement and
agreement, and in addition to and not in lieu of salary or other compensation
for services, a Non-statutory Stock Option pursuant to Section 7 of the Plan
(the "Option") to purchase an aggregate of ______ shares of Common Stock on the
terms and conditions herein set forth, subject to adjustment as provided in
Paragraph 8 hereof.
1. Option Price.
-------------
The Option Price of shares of Common Stock covered by the Option will be
$_____ per share (the "Option Price") subject to adjustment as provided in
Paragraph 7(h) hereof.
<PAGE>
2. Exercise of Option and Vesting Provisions.
------------------------------------------
Except as otherwise provided in Section 7 of the Plan and subject to the
vesting schedule attached to this Agreement as Schedule "A, " the Option may be
exercised in whole or in part at any time during the term of the Option,
provided, however, no Option shall be exercisable after the expiration of the
term thereof, and no Option shall be exercisable unless the holder shall at the
time of exercise have been an employee, officer or employee director of the
Corporation for a period of at least three months.
The Option may be exercised, as provided in this Paragraph 3, by notice and
payment to the Corporation as provided in Paragraph 9 hereof and Section 7(d) of
the Plan.
3. Term of Option.
---------------
The term of the Option will be through __________, ____, subject to earlier
termination or cancellation as provided in this Agreement. Except as otherwise
provided in Paragraphs 8 and 9 hereof, the Option will not be exercisable unless
the Recipient shall, at the time of exercise, be an employee, officer or
employee director of the Corporation.
The holder of the Option will not have any rights to dividends or any other
rights of a shareholder with respect to any shares of Common Stock subject to
the Option until such shares shall have been issued (as evidenced by the
appropriate transfer agent of the Corporation) upon purchase of such shares
through exercise of the Option.
4. Change in Control.
-----------------
(a) Upon a Hostile Change in Control of the Corporation, as defined in the
Plan, all Options theretofore granted under the Plan and not previously
exercisable shall become fully exercisable to the same extent and in the same
manner as if they had become exercisable by passage of time in accordance with
the terms of the Option.
5. Transferability Restriction.
----------------------------
The Option may not be assigned, transferred or otherwise disposed of, or
pledged or hypothecated in any way (whether by operation of law or otherwise)
except in strict compliance with Section 7(g) of the Plan. Any assignment,
transfer, pledge, hypothecation or other disposition of the Option or any
attempt to make any such levy of execution, attachment or other process will
cause the Option to terminate immediately upon the happening of any such event,
provided, however, that any such termination of the Option under the foregoing
provisions of this Paragraph 5 will not prejudice any rights or remedies which
the Corporation may have under this Agreement or otherwise.
<PAGE>
6. Exercise Upon Termination.
----------------------------
The Recipient's rights to exercise this Option upon termination of
employment or cessation as an officer or employee director shall be as set forth
in Section 6(e) of the Plan.
7. Death, Disability or Retirement of Recipient.
---------------------------------------------
The Recipient's rights to exercise this Option upon the death, Disability
or retirement of the Recipient shall be as set forth in Section 6(f) of the
Plan.
8. Adjustments.
------------
The Option shall be subject to adjustment upon the occurrence of certain
events as set forth in Section 6(h) of the Plan.
9. No Registration Obligation.
---------------------------
The Recipient understands that the Option is not registered under the
Securities Act of 1933, as amended (the "Securities Act") and the Corporation
has no obligation to register under the Securities Act the Option or any of the
shares of Common Stock subject to and issuable upon the exercise of the Option.
The Recipient represents that the Option is being acquired by him and that such
shares of Common Stock will be acquired by him for investment and all
certificates for the shares issued upon exercise of the Option will bear the
following legend unless such shares are registered under the Securities Act
prior to their issuance:
The shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Securities Act"), and are
"restricted securities" as that term is defined in Rule 144 under the
Securities Act. The shares may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act, the availability of which is to
be established to the satisfaction of the Company.
The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the Recipient and the Corporation
are able to establish the existence of an exemption from registration under the
Securities Act and applicable state laws.
<PAGE>
10. Notices.
-------
Each notice relating to this Agreement will be in writing
and delivered in person or by certified mail to the proper address. Notices to
the Corporation shall be addressed to the Corporation c/o Jeffrey S. Williams,
Secretary, at 6565 Odell Place, Boulder, Colorado 80301-3330. Notices to the
Recipient or other person or persons then entitled to exercise the Option shall
be addressed to the Recipient or such other person or persons at the Recipient's
address below specified. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given pursuant to
this Paragraph 10.
11. Agreement by Recipient Regarding Taxes.
---------------------------------------
(a) The Recipient agrees that upon exercise of an Option, in addition to
the payment of the Exercise Price as provided in Section 7(d) of the Plan, the
Recipient shall pay in cash to the Corporation, an amount sufficient to allow
the Corporation to pay federal, state and local taxes of any kind required by
law to be withheld upon the exercise of such Option from any payment of any kind
otherwise due to the Recipient.
(b) The Recipient acknowledges the possible availability of an election
under Section 83(b) of the Code and agrees to give the Corporation prompt
written notice of any election made by such person under Section 83(b) of the
Code, or any similar provision thereof.
12. Section 16 Compliance.
----------------------
The Recipient acknowledges that it is solely responsible for filing all
reports that may be required under Section 16 of the Securities Exchange Act of
1934, and that the filing of such reports is not the responsibility of the
Corporation or the Committee, or any person thereof.
13. Approval of Counsel.
-------------------
The exercise of the Option and the issuance and delivery of shares of
Common Stock pursuant thereto shall be subject to approval by the Corporation's
counsel of all legal matters in connection therewith, including compliance with
the requirements of the Securities Act, the Securities Exchange Act of 1934, as
amended, applicable state securities laws, the rules and regulations thereunder,
and the requirements of any national securities exchange upon which the Common
Stock then may be listed.
14. Benefits of Agreement.
----------------------
This Agreement will inure to the benefit of and be binding upon each
successor and assign of the Corporation. All obligations imposed upon the
Recipient and all rights granted to the Corporation under this Agreement will be
binding upon the Recipient's heirs, legal representatives and successors.
<PAGE>
15. Governmental and Other Regulations.
-----------------------------------
The exercise of the Option and the Corporation's obligation to sell and
deliver shares upon the exercise of rights to purchase shares is subject to all
applicable federal and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency which may, in the opinion of counsel
for the Corporation, be required.
16. Incorporation of the Plan.
--------------------------
The Plan is attached hereto and incorporated herein by reference. In the
event that any provision in this Agreement conflicts with a provision in the
Plan, the Plan shall govern. All capitalized terms not otherwise defined herein
shall be as defined in the Plan.
Executed in the name and on behalf of the Corporation by one of its duly
authorized officers and by the Recipient all as of the date first above written.
AMRION, INC.
By______________________________
Name__________________________
Title_________________________
The undersigned Recipient understands the terms of this Option
Agreement and the attached Plan and hereby agrees to comply therewith.
Date __________ ___, 19__ _______________________________
Recipient: ____________________
Tax ID Number:_________________
Address: _____________________
_______________________________
_______________________________
3
<PAGE>
AMRION, INC.
------------
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
--------------------------------------------
Purpose; Restrictions on Amount Available Under the Plan.
-------------------------------------------------------------
This 1994 Formula Stock Option Plan (the "Plan") is intended to encourage stock
ownership by directors of AMRION, INC. (the "Corporation") who are not employees
of the Corporation and, therefore, are precluded from participation in the
Corporation's Non-Qualified Stock Option Plan (the "Non-Qualified Plan") and
thereby to induce qualified persons to be willing to serve in such capacity. It
is intended that options granted under this Plan shall constitute "non-qualified
stock options" ("Options").
1. Definitions.
-----------
As used in this Plan, the following words and phrases shall have the meanings
indicated:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Code" means Internal Revenue Code of 1986, as amended from time to
time.
(c) "Committee" means the Compensation Committee appointed by the Board, if
one has been appointed. If no Committee has been appointed, the term "Committee"
shall mean the Board.
(d) "Common Stock" mean the Corporation's $.0011 par value common stock.
(e) "Disability" means a Recipient's inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 12 months, or such
other meaning ascribed in Section 22(e)(3) of the Code or any successor
provision. If the Recipient has a disability insurance policy, the term
"Disability" shall be as defined therein; provided that said definition is not
inconsistent with the meaning ascribed in Section 22(e)(3) of the Code or any
successor provision.
<PAGE>
(f) "Exchange Act" means Securities Exchange Act of 1934, as amended from
time to time.
(g) "Fair Market Value" per share as of a particular date means the average
of the last sale price of the Corporation's Common Stock for the ten days
preceding the date of grant as reported on a national securities exchange or on
the NASDAQ National Market System or, if the quotation for the last sale
reported is not available for the Corporation's Common Stock, the average of the
closing bid and asked prices of the Corporation's Common Stock for the ten days
preceding the date of grant as reported by NASDAQ or on the electronic bulletin
board or, if none, the National Quotation Bureau, Inc.'s "Pink Sheets" or, if
such quotations are unavailable, the value determined by the Committee Board in
accordance with its discretion in making a bona fide, good faith determination
of fair market value. Fair Market Value shall be determined without regard to
any restriction other than a restriction which, by its terms, never will lapse.
(h) "Option" means a Non-statutory Stock Option.
(i) "Option Price" means the purchase price of the shares of Common Stock
covered by an Option determined in accordance with Section 6(b) hereunder.
(j) "Parent" means any corporation which is a "parent corporation" as
defined in Section 424(e) of the Code, with respect to the Corporation.
(k) "Plan" means this 1994 Stock Option Plan.
(l) "Recipient" means any person granted an Option hereunder.
(m) "Securities Act" means the Securities Act of 1933, as amended from time
to time.
(n) "Subsidiary" means any corporation which is a "subsidiary corporation"
as defined in Section 424(f) of the Code, with respect to the Corporation.
2. Administration.
---------------
(a) The Plan shall be administered by the Committee, but this Plan is
intended to be a "formula plan" as that term is defined in Rule 16b-3 under the
2
<PAGE>
Securities Exchange Act of 1934, as amended (the "1934 Act"). It is intended,
therefore, that Options granted hereunder qualify as exempt purchases under Rule
16b-3 of the 1934 Act.
(b) The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including (without limitation) the authority to: determine who qualifies
for the receipt of Options; to determine the purchase price of the shares of
Common Stock covered by each Option pursuant to the formula (the "Option
Price"); to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan provided such actions are consistent with this
Plan; to determine the terms and provisions of the Option agreements (which need
not be identical) entered into in connection with Options granted under the
Plan; and to make all other determinations deemed necessary or advisable for the
administration of the Plan.
The Committee may delegate to one or more of its members or to one or
more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan.
(c) Because this Plan is intended to be a formula plan, Options granted
under the Plan need not be evidenced by duly adopted resolutions of the
Committee.
(d) The Committee shall endeavor to administer the Plan and grant Options
hereunder in a manner that is compatible with the obligations of persons subject
to Section 16 of the Exchange Act ("Section 16 Persons"), however compliance
with Section 16 is a personal responsibility of each Section 16 person and is
not the responsibility of the Corporation or the Committee, or any person
thereof. None of the Committee, the Board or the Corporation shall assume any
legal responsibility for a Recipient's compliance with his obligations under
Section 16 of the Exchange Act. Any Option granted hereunder which would subject
or subjects the Recipient to liability under Section 16(b) of the Exchange Act
is void ab initio as if it had never been granted.
3
<PAGE>
(e) No member of the Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Option granted
hereunder.
3. Eligibility.
------------
Only directors of the Corporation who are not employees of the Corporation are
eligible to receive Options granted pursuant hereto. A Recipient shall be
eligible to receive more than one grant of an Option during the term of the
Plan, on the terms and subject to the restrictions herein set forth.
4. Stock Reserved.
---------------
(a) The stock subject to Options hereunder shall be shares of Common Stock.
Such shares, in whole or in part, may be authorized but unissued shares or
shares that shall have been or that may be reacquired by the Corporation. The
aggregate number of shares of Common Stock as to which Options may be granted
from time to time under the Plan shall not exceed 70,000. The limitation
established by the preceding sentences shall be subject to adjustment as
provided in Section 6(g) hereof.
(b) If any outstanding Option under the Plan for any reason expires or is
terminated without having been exercised in full the shares of Common Stock
allocable to the unexercised portion of such Option shall become available for
subsequent grants of Options under the Plan, unless the Plan shall have been
terminated.
5. Terms and Conditions of Options.
---------------------------------
Each Option granted pursuant to the Plan shall be evidenced by a written Option
agreement between the Corporation and the Recipient, which agreement
substantially shall be in the form of Exhibit "A" attached hereto as modified
from time to time by the Committee in its discretion, and which shall comply
with and be subject to the following terms and conditions:
(a) Grant.
------
On December 31, 1994, and on December 31st of each succeeding year during the
term of this Plan, each director of the Corporation who is not an employee of
the Corporation shall be automatically granted an Option to acquire the number
of shares of Common Stock at the Option Price described in paragraph 6 (b) and
corresponding to the table below:
4
<PAGE>
Grant Option Schedule:
Year 1994 1995 1996 1997 1998
Number of Options 3,000 3,000 3,000 3,000 3,000
The Options will be exercisable for five years from the date of the grant, and
subject to the other terms and conditions hereof.
(b) Option Price.
-------------
Options granted under this Plan will have an Option Price equal to the average
of the Fair Market Value of the Common Stock for the ten trading days
immediately preceding the date of grant. The Option Price shall be subject to
adjustment as provided in Section 6(g) hereof.
(c) Method of Exercise and Medium and Time of Payment.
--------------------------------------------------
(1) An Option may be exercised as to any or all whole shares of Common
Stock as to which it then is exercisable.
(2) Each exercise of an Option granted hereunder, whether in whole or
in part, shall be by written notice to the secretary of the Corporation
designating the number of shares as to which the Option is being exercised,
and shall be accompanied by payment in full of the Option Price for the
number of shares so designated, together with any written statements
required by any applicable securities laws.
(3) The Option Price shall be paid in cash or shares of Common Stock
having a Fair Market Value equal to such Option Price or in a combination
of cash and shares and, subject to approval of the Committee, may be
effected in whole or in part with monies received from the Corporation at
the time of exercise as a compensatory cash payment.
(4) Applicable withholding taxes shall be paid in the manner specified
by Section 9 hereof.
(d) Termination.
------------
Except as provided herein, an Option may not be exercised unless the Recipient
then is an employee, officer or director of the Corporation or a Subsidiary of
or Parent to the Corporation, and unless the Recipient has remained continuously
as an employee, officer or director of the Corporation since the date of grant
of the Option.
(1) If the Recipient ceases to be an employee, officer or director of
the Corporation or a Subsidiary or Parent to the Corporation (other than by
5
<PAGE>
reason of death, Disability or retirement), other than for cause, all
Options theretofore granted to such Recipient but not theretofore exercised
shall terminate three months after the date the Recipient ceased to be an
employee, officer or director of the Corporation.
(2) Nothing in the Plan or in any Option granted hereunder shall
confer upon an individual any right to continue in the employ of or other
relationship with the Corporation or interfere in any way with the right of
the Corporation to terminate such employment or other relationship between
the individual and the Corporation.
(e) Death, Disability or Retirement of Recipient.
----------------------------------------------
If a Recipient shall die while an employee, officer or director of the
Corporation, or if the Recipient's employment, officer or director status, shall
terminate by reason of Disability or retirement, all Options theretofore granted
to such Recipient, whether or not otherwise exercisable, unless earlier
terminated in accordance with their terms, may be exercised by the Recipient or
by the Recipient's estate or by a person who acquired the right to exercise such
Options by bequest or inheritance or otherwise by reason of the death or
Disability of the Recipient, at any time within one year after the date of
death, Disability or retirement of the Recipient.
(f) Transferability Restriction.
-----------------------------
(1) Options granted under the Plan shall not be transferable other
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, or the rules thereunder.
Options may be exercised, during the lifetime of the Recipient, only by the
Recipient and thereafter only by his legal representative.
(2) Any attempted sale, pledge, assignment, hypothecation or other
transfer of an Option contrary to the provisions hereof and the levy of any
execution, attachment or similar process upon an Option shall be null and
void and without force or effect and shall result in a termination of the
Option.
6
<PAGE>
(3)(A) As a condition to the transfer of any shares of Common Stock
issued upon exercise of an Option granted under this Plan, the Corporation
may require an opinion of counsel, satisfactory to the Corporation, to the
effect that such transfer will not be in violation of the Securities Act or
any other applicable securities laws or that such transfer has been
registered under federal and all applicable state securities laws. (B)
Further, the Corporation shall be authorized to refrain from delivering or
transferring shares of Common Stock issued under this Plan until the
Committee determines that such delivery or transfer will not violate
applicable securities laws and the Recipient has tendered to the
Corporation any federal, state or local tax owed by the Recipient as a
result of exercising the Option or disposing of any Common Stock when the
Corporation has a legal liability to satisfy such tax. (C) The Corporation
shall not be liable for damages due to delay in the delivery or issuance of
any stock certificate for any reason whatsoever, including, but not limited
to, a delay caused by listing requirements of any securities exchange or
any registration requirements under the Securities Act, the Exchange Act,
or under any other state or federal law, rule or regulation. (D) The
Corporation is under no obligation to take any action or incur any expense
in order to register or qualify the delivery or transfer of shares of
Common Stock under applicable securities laws or to perfect any exemption
from such registration or qualification. (E) Furthermore, the Corporation
will not be liable to any Recipient for failure to deliver or transfer
shares of Common Stock if such failure is based upon the provisions of this
paragraph.
(g) Effect of Certain Changes.
--------------------------
(1) If there is any change in the number of shares of Common Stock
through the declaration of stock dividends, or through a recapitalization
resulting in stock splits, or combinations or exchanges of such shares, the
number of shares of Common Stock available for Options and the number of
such shares covered by outstanding Options, and the exercise price per
share of the outstanding Options, shall be proportionately adjusted by the
Committee to reflect any increase or decrease in the number of issued
shares of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division, including, but not
limited to, split-up, split-off or spin-off, or a merger or consolidation
of the Corporation with another corporation, the Committee may provide that
the holder of each Option then exercisable shall have the right to exercise
7
<PAGE>
such Option (at its then current Option Price) solely for the kind and
amount of shares of stock and other securities, property, cash or any
combination thereof receivable upon such dissolution, liquidation,
corporate separation or division, or merger or consolidation by a holder of
the number of shares of Common Stock for which such Option might have been
exercised immediately prior to such dissolution, liquidation, or corporate
separation or division, or merger or consolidation; or in the alternative
the Committee may provide that each Option granted under the Plan shall
terminate as of a date fixed by the Committee; provided, however, that not
less than 30 days' written notice of the date so fixed shall be given to
each Recipient, who shall have the right, during the period of 30 days
preceding such termination, to exercise the Option as to all or any part of
the shares of Common Stock covered thereby, including shares as to which
such Option would not otherwise be exercisable.
(3) Paragraph (2) of this Section 6(g) shall not apply to a merger or
consolidation in which the Corporation is the surviving corporation and
shares of Common Stock are not converted into or exchanged for stock,
securities of any other corporation, cash or any other thing of value.
Notwithstanding the preceding sentence, in case of any consolidation or
merger of another corporation into the Corporation in which the Corporation
is the surviving corporation and in which there is a reclassification or
change (including a change to the right to receive cash or other property)
of the shares of Common Stock (other than a change in par value, or from
par value to no par value, or as a result of a subdivision or combination,
but including any change in such shares into two or more classes or series
of shares), the Committee may provide that the holder of each Option then
exercisable shall have the right to exercise such Option solely for the
kind and amount of shares of stock and other securities (including those of
any new direct or indirect Parent of the Corporation), property, cash or
any combination thereof receivable upon such reclassification, change,
consolidation or merger by the holder of the number of shares of Common
Stock for which such Option might have been exercised.
(4) If there is a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the Common Stock within the meaning of
the Plan.
8
<PAGE>
(5) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
(6) Notwithstanding any other provision of this Section 6, no
adjustment required by this Section 6 shall be made if the effect of such
adjustment is less than ten percent of the current Option Price or number
shares subject to Options granted under this Plan. Such adjustment shall
only be made when the cumulative effect of all such adjustments shall be
equal to or greater than ten percent of the current Option Price or number
of shares subject to Options granted under this Plan.
(7) Except as expressly provided in this Section 6(g), the Recipient
shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or
by reason of any dissolution, liquidation, merger, or consolidation or
spin-off of assets or stock of another corporation; and any issue by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to the Option. The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or part of its business or
assets.
(h) Rights as Shareholder - Non-Distributive Intent.
------------------------------------------------
(1) Neither a person to whom an Option is granted, nor such
person's legal representative, heir, legatee or distributee, shall be
deemed to be the holder of, or to have any rights of a holder with
respect to, any shares subject to such Option until after the Option
is exercised and the shares are issued to the person exercising such
Option.
(2) Upon exercise of an Option at a time when there is no
registration statement in effect under the Securities Act relating to
the shares issuable upon exercise, shares may be issued to the
Recipient only if the Recipient represents and warrants in writing to
9
<PAGE>
the Corporation that the shares purchased are being acquired for
investment and not with a view to the distribution thereof and
provides the Corporation with sufficient information to establish an
exemption from the registration requirements of the Securities Act. A
form of subscription agreement is attached hereto as Exhibit B.
(3) No shares shall be issued upon the exercise of an Option
unless and until there shall have been compliance with any then
applicable requirements of the Securities and Exchange Commission, or
any other regulatory agencies having jurisdiction over the
Corporation.
(4) No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution or other rights for which the record date is prior to the
date such stock certificate is issued, except as provided in Section
6(g) hereof.
(i) Other Provisions.
-----------------
Option agreements evidencing Options granted under the Plan shall contain such
other provisions, including, without limitation, the imposition of restrictions
upon the exercise of an Option.
6. Agreement by Recipient Regarding Taxes.
---------------------------------------
(a) Each Recipient agrees that upon exercise of an Option granted under
this Plan, in addition to the payment of the Exercise Price as provided in
Section 6(c) hereof, the Recipient shall pay in cash to the Corporation, an
amount sufficient to allow the Corporation to pay federal, state and local taxes
of any kind required by law to be withheld upon the exercise of such Option from
any payment of any kind otherwise due to the Recipient.
(b) Each Option Recipient must acknowledge the possible availability of an
election under Section 83(b) of the Code, or any successor provision.
7. Term of Plan.
-------------
Options may be granted pursuant to the Plan from time to time within a period of
ten years from the date the Plan is adopted by the Board.
10
<PAGE>
8. Amendment and Termination of the Plan.
--------------------------------------
(a) (i) The Committee at any time and from time to time may terminate,
modify or amend the Plan;
(ii) provided, however, that any amendment that would: (A) materially
increase the number of securities issuable under the Plan to persons who
are subject to Section 16(a) of the 1934 Act; or (B) grant eligibility to a
class of persons who are subject to Section 16(a) of the 1934 Act not
included within the terms of the Plan prior to the amendment; (C)
materially increase the benefits accruing under the Plan to persons who are
subject to Section 16(a) of the 1934 Act; or (D) require shareholder
approval under applicable state law, the rules and regulations of any
national securities exchange on which the Corporation's securities then may
be listed, the Internal Revenue Code or any other applicable law, shall be
subject to the approval of the shareholders of the Corporation as provided
in Section 10 hereof;
(iii) provided further that any such increase or modification that may
result from adjustments authorized by Section 6(g) hereof or which are
required for compliance with the 1934 Act, the Internal Revenue Code, the
Employee Retirement Income Security Act of 1974, their rules or other laws
or judicial order, shall not require approval of shareholders.
(b) Except as provided in Section 6 hereof, no termination, modification or
amendment of the Plan may adversely affect any Option previously granted, unless
the written consent of the Recipient is obtained.
9. Approval of Shareholders.
--------------------------
The Plan shall take effect upon its adoption by the Board but shall be subject
to approval at a duly called and held meeting of shareholders in conformance
with the vote required by the Corporation's charter documents, resolution of the
Board, any other applicable law and the rules and regulations thereunder, or the
rules and regulations of any national securities exchange upon which the
Corporation's Common Stock is listed and traded, each to the extent applicable.
No Option granted prior to the approval of this Plan by the shareholders of the
Corporation shall be effective until after such approval has been obtained.
10. Assumption.
-----------
Subject to Section 6, the terms and conditions of any outstanding Options
granted pursuant to this Plan shall be assumed by, be binding upon and shall
inure to the benefit of any successor corporation to the Corporation and
11
<PAGE>
continue to be governed by, to the extent applicable, the terms and conditions
of this Plan. Such successor corporation may but shall not be obligated to
assume this Plan.
11. Termination of Right of Action.
-------------------------------
Every right of action arising out of or in connection with the Plan by or on
behalf of the Corporation, or by any shareholder of the Corporation against any
past, present or future member of the Board, or against any employee, or by an
employee (past, present or future) against the Corporation, irrespective of the
place where an action may be brought and of the place of residence of any such
shareholder, director or employee, will cease and be barred by the expiration of
three years from the date of the act or omission in respect of which such right
of action is alleged to have risen or such shorter period as may be provided by
law.
12. Adoption and Effective Date.
----------------------------
(a) This Plan was approved by the Board of Directors of the Corporation on
December 30, 1994. This Plan is effective as of such date subject to approval by
the Company's shareholders.
(b) This Plan was approved by the shareholders of the Corporation at a
meeting on ___________ ___, 1995.
AMRION, INC.
By_______________________________
Mark S. Crossen, President
12
STOCK OPTION AGREEMENT
----------------------
STOCK OPTION AGREEMENT made as of this ___ day of ______, 199_, between
AMRION, INC., a Colorado corporation (the "Corporation"), and ______________
(the "Recipient").
In accordance with its 1994 Non-Employee Director Stock Option Plan (the
"Plan") as adopted by the Board of Directors of the Corporation on December 30,
1994, the Corporation desires, in connection with the services of the Recipient,
to provide the Recipient with an opportunity to acquire $.0011 par value common
stock (the "Common Stock") of the Corporation on favorable terms and thereby
increase the Recipient's proprietary interest in the continued progress and
success of the business of the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth and other good and valuable consideration, the Corporation and
the Recipient agree as follows:
Confirmation of Grant of Option.
-------------------------------
Pursuant to the requirements of the Plan (but subject to shareholder approval of
the Plan as required by Securities and Exchange Commission Rule 16b-3), and
effective December 31, 199__ (the "Date of Grant"), the Corporation, subject to
the terms of the Plan and of this Agreement, confirms that the Recipient has
been irrevocably granted on the Date of Grant, as a matter of separate
inducement and agreement, and in addition to and not in lieu of salary or other
compensation for services, a Non-Qualified Stock Option (the "Option") to
purchase an aggregate of 2,000 shares of Common Stock on the terms and
conditions herein set forth, subject to adjustment as provided in Section 8
hereof.
1. Option Price.
--------------
The purchase price of shares of Common Stock covered by the Option will be
$_____ per share (the "Option Price") subject to adjustment as provided in
Section 8 hereof.
2. Exercise of Option.
------------------
Except as otherwise provided in Section 6 of the Plan, the Option may be
exercised in whole or part at any time during the term of the Option, provided,
however, no Option shall be exercisable after the expiration of the term
thereof, and no Option shall be exercisable unless the holder shall at the time
of exercise have been an employee or director of the Corporation for a period of
at least three months.
<PAGE>
The Option may be exercised, as provided in this Paragraph 3, by notice and
payment to the Corporation as provided in Paragraph 10 hereof and Section 6(c)
of the Plan.
3. Term of Option.
---------------
The term of the Option will be through December 31, 199__, subject to earlier
termination or cancellation as provided in this Agreement. Except as otherwise
provided in Paragraph 7 hereof, the Option will not be exercisable unless the
Recipient shall, at the time of exercise, be an employee or director of the
Corporation.
The holder of the Option will not have any rights to dividends or any other
rights of a shareholder with respect to any shares of Common Stock subject to
the Option until such shares shall have been issued (as evidenced by the
appropriate transfer agent of the Corporation) upon purchase of such shares
through exercise of the Option.
4. Transferability Restriction.
----------------------------
The Option may not be assigned, transferred or otherwise disposed of, or pledged
or hypothecated in any way (whether by operation of law or otherwise) except in
strict compliance with Section ___ of the Plan. Any assignment, transfer,
pledge, hypothecation or other disposition of the Option or any attempt to make
any such levy of execution, attachment or other process will cause the Option to
terminate immediately upon the happening of any such event, provided, however,
that any such termination of the Option under the foregoing provisions of this
Paragraph 5 will not prejudice any rights or remedies which the Corporation may
have under this Agreement or otherwise.
5. Exercise Upon Termination.
----------------------------
The Recipient's rights to exercise this Option upon termination of employment or
cessation as a director shall be as set forth in Section 6(d) of the Plan.
6. Death, Disability or Retirement of Recipient.
---------------------------------------------
The Recipient's rights to exercise this Option upon the death, disability or
retirement of the Recipient shall be as set forth in Section 6(e) of the Plan.
7 . Adjustments.
------------
The Option shall be subject to adjustment upon the occurrence of certain events
as set forth in Section 6(g) of the Plan.
<PAGE>
8. No Registration Obligation.
---------------------------
The Recipient understands that the Option is not registered under the Securities
Act of 1933, as amended (the "Securities Act") and the Corporation has no
obligation to register under the Securities Act the Option or any of the shares
of Common Stock subject to and issuable upon the exercise of the Option. The
Recipient represents that the Option is being acquired by him and that such
shares of Common Stock will be acquired by him for investment and all
certificates for the shares issued upon exercise of the Option will bear the
following legend unless such shares are registered under the Securities Act
prior to their issuance:
The shares represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Securities Act"), and are
"restricted securities" as that term is defined in Rule 144 under the
Securities Act. The shares may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act, the availability of which is to
be established to the satisfaction of the Company.
The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the Recipient and the Corporation
are able to establish the existence of an exemption from registration under the
Securities Act and applicable state laws.
9. Notices.
--------
Each notice relating to this Agreement will be in writing and delivered in
person or by certified mail to the proper address. Notices to the Corporation
shall be addressed to the Corporation c/o Jeffrey S. Williams, Secretary, at
6565 Odell Place, Boulder, Colorado 80301-3330. Notices to the Recipient or
other person or persons then entitled to exercise the Option shall be addressed
to the Recipient or such other person or persons at the Recipient's address
below specified. Anyone to whom a notice may be given under this Agreement may
designate a new address by notice to that effect given pursuant to this
Paragraph 10.
10. Agreement by Recipient Regarding Taxes.
---------------------------------------
(a) The Recipient agrees that upon exercise of an Option, in addition to
the payment of the Exercise Price as provided in Section 6(c) of the Plan, the
Recipient shall pay in cash to the Corporation, an amount sufficient to allow
the Corporation to pay federal, state and local taxes of any kind required by
law to be withheld upon the exercise of such Option from any payment of any kind
otherwise due to the Recipient.
<PAGE>
(b) The Recipient acknowledges the possible availability of an election
under Section 83(b) of the Code and agrees to give the Corporation prompt
written notice of any election made by such person under Section 83(b) of the
Code, or any similar provision thereof.
11. Section 16 Compliance.
----------------------
The Recipient acknowledges that it is solely responsible for filing all reports
that may be required under Section 16 of the Securities Exchange Act of 1934,
and that the filing of such reports is not the responsibility of the Corporation
or the Committee, or any person thereof.
12. Approval of Counsel.
--------------------
The exercise of the Option and the issuance and delivery of shares of Common
Stock pursuant thereto shall be subject to approval by the Corporation's counsel
of all legal matters in connection therewith, including compliance with the
requirements of the Securities Act, the Securities Exchange Act of 1934, as
amended, applicable state securities laws, the rules and regulations thereunder,
and the requirements of any national securities exchange upon which the Common
Stock then may be listed.
13. Benefits of Agreement.
----------------------
This Agreement will inure to the benefit of and be binding upon each successor
and assign of the Corporation. All obligations imposed upon the Recipient and
all rights granted to the Corporation under this Agreement will be binding upon
the Recipient's heirs, legal representatives and successors.
14. Governmental and Other Regulations.
-----------------------------------
The exercise of the Option and the Corporation's obligation to sell and deliver
shares upon the exercise of rights to purchase shares is subject to all
applicable federal and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency which may, in the opinion of counsel
for the Corporation, be required.
15. Incorporation of the Plan.
--------------------------
The Plan is attached hereto and incorporated herein by reference. In the event
that any provision in this Agreement conflicts with a provision in the Plan, the
Plan shall govern. All capitalized terms not otherwise defined herein shall be
as defined in the Plan.
16. Termination of Option Without Shareholder Approval.
----------------------------------------------------
This Option shall not be effective, and shall terminate, unless the Plan has
been approved by the shareholders of the Corporation on or before June 30, 1994.
If the shareholders of the Corporation do not approve the Plan on or before such
date, this Agreement shall terminate and be of no further force or effect, and
the Option shall be deemed never to have been issued.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its President or a Vice President and the Recipient has
executed this Agreement all as of the date first above written.
AMRION, INC.
By___________________________
Mark S. Crossen, President
The undersigned Recipient understands the terms of this Option
Agreement and the attached Plan and hereby agrees to comply therewith.
Date ______________, 199__ ________________________________
Recipient: _____________________
Tax ID Number:__________________
Address: ______________________
________________________________
________________________________
<PAGE>
[Letterhead of
Crouch & Hallett]
A REGISTERED LIMITED LIABILITY PARTNERSHIP
ATTORNEYS AND COUNSELORS
717 N. HARWOOD
SUITE 1400
DALLAS, TEXAS 75201
E-MAIL ADDRESS: [email protected]
214-953-0053
September 16, 1997
Whole Foods Market, Inc.
601 N. 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 of Form S-8 (the
"Registration Statement") filed under the Securities Act of 1933, as amended,
covering the issuance of 330,339 shares (the "Shares") of Common Stock, no par
value, of the Company to be issued in connection with the Non-Qualified Stock
Option Plan for Amrion, Inc. and the 1994 Non-Employee Director Stock Option
Plan for Amrion, Inc.
We have examined such documents and questions of law as we have deemed
necessary to render the opinion expressed herein. Based upon the foregoing, we
are of the opinion that the Shares, when issued and delivered, will be duly and
validly issued and outstanding, 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 and Hallett
----------------------
<PAGE>
Exhibit 23(a)
-------------
INDEPENDENT AUDITORS' CONSENT
- ------------------------------------------------------------------------------
The Board of Directors
Whole Foods Market, Inc.:
We consent to incorporation by reference in this Form S-8 of Whole Foods Market,
Inc. of our report dated November 15, 1996, relating to the consolidated balance
sheets of Whole Foods Market, Inc. and subsidiaries as of September 29, 1996 and
September 24, 1995, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the fiscal years in the three
fiscal-year period ended September 29, 1996, which report appears in the
September 29, 1996 annual report on Form 10-K of Whole Foods Market, Inc.
Austin, Texas
September 16, 1997
