Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of March 2, 1998 between Wild Oats Markets,
Inc., a Delaware corporation (the "Company") and Xxxx Xxxxx ("Executive").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE 1. EMPLOYMENT
1.1 Employment. The Company agrees to employ Executive, and Executive
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hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and
terminating as provided in Section 1.4 (the "Employment Period").
1.2 Positions and Duties.
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(a) During the Employment Period, Executive shall serve as Vice President
of Marketing and Purchasing of the Company at its Headquarters in Boulder,
Colorado, under the supervision and direction of the Company's Chief Executive
Officer, President and Board of Directors (the "Board").
(b) Executive shall carry out the customary functions of his position as
determined by the Company, and perform such tasks and responsibilities as
requested by the CEO, president or Board.
(c) Executive shall devote his best efforts and full business time and
attention (except for permitted vacation periods and periods of illness or other
incapacity as provided for herein) to the business and affairs of the Company
and its subsidiaries. Executive shall perform his duties and responsibilities
to the best of his abilities in a diligent, trustworthy, businesslike and
efficient manner.
1.3 Salary, Bonus, Options and Benefits.
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(a) During the Employment Period, Executive's base salary (the "Base
Salary") shall initially be $125,000.00 per annum, which salary shall be payable
in regular installments in accordance with the Company's general payroll
practices as in place from time to time. Any adjustment in Executive's
compensation shall be determined by the Compensation Committee of the Board (the
"Compensation Committee") in its sole discretion.
(b) Executive also shall be entitled to participate in an annual bonus plan
under which Executive shall receive a bonus of up to 50% of his base salary
based upon achieving performance objectives to be mutually agreed upon by
Executive and the President or the Board. The bonus payment, if any, shall be
paid within 90 days after the end of the first 12 months of the Executive's
employment with the Company.
(c) During the Employment Period, Executive shall be entitled to
participate in all of the Company's employee benefit programs for which senior
executive employees of the Company are generally eligible as in effect from time
to time. Executive shall be entitled to four weeks of paid vacation per year in
accordance with the Company's policies. Any payments of benefits payable to
Executive hereunder in respect of any calendar year during which Executive is
employed by the Company for less than the entire such year shall, unless
otherwise provided in the applicable plan or arrangement or required by
applicable law, be prorated in accordance with the number of days in such
calendar year during which Executive is employed.
(d) All payments of compensation hereunder shall be subject to federal,
state and other withholding taxes as required by applicable law and the
Company's general payroll policies as in effect from time to time.
(e) Executive shall be entitled to reimbursement for moving costs of up to
$25,000 for actual expenses incurred by Executive in moving from his current
residence to Colorado, along with up to not more than 6 months of actual housing
costs for temporary housing. The amount of monthly housing costs shall
be approved in advance by the Vice President of Human Resources. The Company
will also reimburse the Executive for the actual costs of travel once each month
to California, for a period equal to the shorter of six months or the date upon
which the Executive's family relocates to Colorado.
(f) The Executive shall be granted stock options pursuant to the Company's
1996 Equity Incentive Plan for 5,000 shares of the Company's common stock. The
options shall vest over a five year period and shall expire 10 years after the
date of grant, unless earlier terminated under the terms of such options. The
options shall be subject to approval by the Board and if so approved shall be
granted on the last day of the first fiscal quarter of 1998. The exercise price
shall be equal to the closing price of the Company's common stock on the NASDAQ
National Market system on the date of grant. After one year, assuming the
Executive achieves the performance objectives set by the President or the Board,
as determined by the Board or the President, the Executive will be eligible for
an additional grant of options exercisable for up to 2,500 shares of the
Company's common stock.. The options shall be subject to the terms and
conditions set forth in the Stock Option agreement to be provided to the
Executive at the time of grant, and the terms of the 1996 Equity Incentive Plan.
1.4 Term. (a) The Employment Period shall commence on the date hereof
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and end on the first anniversary hereof (the "Initial Employment Period"),
subject to earlier termination (1) by reason of Executive's death or disability
(as defined below), (2) for Cause (as defined herein), (3) without Cause, or (4)
by written resignation of the Executive.
(b) If the Employment Period is terminated by reason of Executive's
termination without Cause, Executive shall be entitled to receive his then
effective Base Salary for the remainder of the term of his initial Employment
Period, plus an additional twelve months. Such amounts shall be payable in equal
biweekly installments over a period of 12 months plus the number of months
remaining in his initial Employment Period from the date of termination of
employment. Notwithstanding anything to the contrary herein, in the event of
renewal of the Executive's term of employment after the initial 12 months of
employment hereunder, this provision shall not apply, and Executive shall not be
entitled to any severance payments for a termination without Cause after such 12
month period.
(c) Except as expressly set forth in this Section 1.4, all
compensation and other benefits shall cease to accrue upon termination of
employment.
1.5 Renewal Options. The Employment Period shall automatically renew for
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successive one (1) year terms unless terminated by Company or Executive upon
ninety (90) days written notice prior to such renewal period, or terminated by
the Company at any time during any term with or without Cause.
1.6 Confidential Information; Company Property. Executive acknowledges
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that the information, observations and data obtained by him while employed by
the Company and its subsidiaries concerning the business or affairs of the
Company, its subsidiaries and any predecessor to the business of the Company
that are not generally available to the public other than as a result of breach
of this Agreement by Executive ("Confidential Information") are the property of
the Company and its subsidiaries. Executive agrees that he shall not disclose
to any unauthorized person or use for his own account any Confidential
Information without the prior written consent of the Company unless, and in such
case only to the extent that, such matters become generally known to and
available for use by the public other than as a result of Executive's acts or
omissions to act. Notwithstanding the foregoing, in the event Executive becomes
legally compelled to disclose Confidential Information pursuant to judicial or
administrative subpoena or process or other legal obligation, Executive may make
such disclosure only to the extent required, in the opinion of counsel for
Executive, to comply with such subpoena, process or other obligation. Executive
shall, as promptly as possible and in any event prior to the making of such
disclosure, notify the Company of any such subpoena, process or obligation and
shall cooperate with the Company in seeking a protective order or other means of
protecting the confidentiality of the Company Information. Executive shall
deliver to the Company at the termination of the Employment Period, or at any
time the Company may reasonably request, all memoranda, notes, plans, records,
reports, computer tapes and software and other documents and data (and copies
thereof) containing, relating to, or derived from the Confidential Information
or the business of the Company or its subsidiaries which he may then possess or
have under his control. Executive agrees that he will not retain after the
termination of the
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Employment Period any copies of any Confidential Information including, without
limitation, any software, documents or other materials originating with and/or
belonging to the Company or any Subsidiary of the Company.
1.7 Non-Compete; Non-Solicitation.
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(a) Executive acknowledges that in the course of his employment with the
Company he will become familiar with the Company's trade secrets and with other
confidential information concerning the Company and its predecessors and that
his services have been and will be of special, unique and extraordinary value to
the Company. Executive agrees that, during the period in which Executive is
receiving compensation hereunder and for a period of three (3) years following
termination of Executive's employment with the Company for any reason (the "Non-
Compete Period"), he shall not directly or indirectly own, manage, control,
participate in, consult with, render services for, or in any manner engage in
any supermarket, food store or retailer of health and beauty aids with retail
locations located within a ten (10) mile radius of any store operated (defined
herein as current stores or stores for which leases have been signed as of the
date of termination) by the Company or its subsidiaries as of the date of
termination of Executive's employment with the Company. Nothing herein shall
prohibit Executive from being a passive owner of not more than 1% of the
outstanding stock of another corporation, so long as Executive has no active
participation in the management or the business of such corporation.
(b) During the Non-Compete Period, Executive shall not directly or
indirectly (1) induce or attempt to induce any employee of the Company or any
Subsidiary of the Company to leave the employ of the Company or such Subsidiary,
or in any way interfere with the relationship between the Company or any such
Subsidiary and any employee thereof; (2) induce or attempt to induce any
customer, supplier, licensee or other business relationship of the Company or
any Subsidiary of the Company to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any such
Subsidiary; or (3) make an oral or written disparaging statement, comment or
remark about the Company or any of its Subsidiaries to any employee, customer,
supplier, licensee or other business relationship of the Company or any of its
Subsidiaries or to or for the intended use of any member of the press.
(c) Such Non-Compete Period shall terminate immediately at such time as the
Company and its Subsidiaries no longer operate supermarkets or food stores.
1.8 Employment-At-Will. It is understood and agreed that this Agreement
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constitutes employment-at-will and that notwithstanding (i) any general or
specific policies (whether written or oral) of the Company relating to the
employment or termination of its employees, (ii) any statements made to
Executive, whether made orally or contained in any document, pertaining to
Employee's relationship with the Company, or (iii) assignment of Cause by the
Company, the Company reserves the right to terminate the employment of Executive
by the Company in which event Executive's sole remedy shall be to receive
certain payments and other benefits upon the terms and subject to the conditions
provided for herein.
1.9 Resignations upon Termination. Upon termination of the Executive,
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Executive shall be deemed to have resigned from all offices and directorships,
if any, then held with the Company or any of its Subsidiaries or other
affiliates.
ARTICLE 2. REPRESENTATIONS
AND WARRANTIES
2.1 Representations and Warranties of Executive. Executive represents and
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warrants to the Company that:
(a) this Agreement constitutes the legal, valid and binding obligation of
Executive, enforceable in accordance with the terms, and the execution, delivery
and performance of this Agreement by Executive does not and will not conflict
with, violate or cause a breach of or default under any agreement, contract or
instrument, order, judgment or decree to which Executive is a party or by which
he is bound, and
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(b) Executive is not a party to or bound by any employment agreement or
non-compete agreement with any other person or entity.
2.2 Representations and Warranties of the Company. The Company hereby
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represents and warrants to Executive that:
(a) the execution, delivery and performance of this Agreement by the
Company does not and will not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
Company is a party or by which it is bound, and
(b) upon the execution and delivery of this Agreement by Executive, this
Agreement shall be the valid and binding obligation of the Company enforceable
in accordance with its terms.
ARTICLE 3. DEFINITIONS
As used in this Agreement, the following terms shall have the definitions
set forth below:
(a) For purposes of the foregoing, "cause" shall mean (1) a material breach
by the Executive of the Executive's obligations of confidentiality or loyalty;
(2) the Executive's willful and repeated failure to comply with the lawful
directives of the President, Chief Executive Officer or Board of Directors of
The Company; (3) negligence or willful misconduct by the Executive in the
performance of the Executive's duties to The Company; (4) the commission by the
Executive of an act (including, but not limited to, a felony or a crime
involving moral turpitude) causing material harm to the standing and reputation
of the Company, as determined in good faith by the Board; (5) misappropriation,
breach of trust or fraudulent conduct by the Executive with respect to the
assets or operations of The Company or any of its subsidiaries; (6) the
continued use by the Executive of alcohol or drugs to an extent that, in the
good faith determination of the President, Chief Executive Officer or Board,
materially interferes with the performance by the Executive of the Executive
employment responsibilities; (7) the repeated threat by the Executive to cause,
or the actual occurrence of, damage to the relations of the Company or any of
its subsidiaries with customers, suppliers, lenders, advisors or employees which
damage is materially adverse to the business or operations of the Company or any
of its subsidiaries; or (8) continued unauthorized absence from work.
Termination without cause shall not include termination by voluntary
resignation, death or disability, and no severance amounts shall be payable upon
the occurrence of any of the foregoing.
(b) "Disability" shall mean Executive's inability to substantially perform
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his normal duties hereunder for one month or more during any twelve (12) month
period determined in good faith by the Board.
(c) "Subsidiary" of an entity shall mean any corporation or other business
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organization of which the securities have a majority of the normal voting power
in electing the board of directors or similar governing body of such entity are,
at the time of determination, owned by such entity directly or indirectly
through one or more subsidiaries.
ARTICLE 4. GENERAL PROVISIONS
4.1 Enforcement. It is the express intention of the parties that this
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Agreement be enforced to the fullest extent permitted by applicable law in order
to give full effect to the agreements reached herein. Accordingly, if at the
time of enforcement of Sections 1.6 or 1.7 a court holds that the restrictions
stated herein are unreasonable under the circumstances then existing, the
parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area. Because Executive's services are unique and because Executive
has access to Confidential Information, the parties hereto agree that money
damages would be an inadequate remedy for any breach of this Agreement. In the
event of a breach or threatened breach of this Agreement, the Company, its
subsidiaries and their respective successors or assigns may, in addition to
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
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relief in order to enforce, or prevent any violation of, the provisions hereof
(without posting a bond or other security).
4.2 Survival. Sections 1.6 and 1.7 and this Article 4 shall survive and
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continue in full force and effect in accordance with their terms notwithstanding
any termination of the Employment Period.
4.3 Notices. All notices or other communications to be given or delivered
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under or by reason of the provisions of this Agreement will be in writing and
will be deemed to have been given when delivered personally, one (1) business
day following when sent via a nationally recognized overnight courier, or when
sent via facsimile confirmed in writing to the recipient. Such notices and
other communications will be sent to the addresses indicated below:
To the Company:
Wild Oats Markets, Inc.
0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attention: President
To Executive:
Xxxx Xxxxx
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
4.4 Severability. Whenever possible, each provision of this Agreement
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will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
4.5 Entire Agreement. This Agreement and those documents expressly
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referred to herein embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
4.6 Amendments and Waivers. Any provision of this Agreement may be
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amended or waived only with the prior written consent of the Company and
Executive.
4.7 Governing Law. This Agreement shall be governed by and construed in
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accordance with the domestic laws of the State of Colorado without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Colorado or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Colorado.
4.8 Counterparts. This Agreement may be executed by the parties hereto in
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separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall togethis constitute one and the same
instrument.
4.9 Headings. The headings contained in this Agreement are for reference
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purposes only and shall not affect in any way the meaning or interpretation of
this Agreement or of any term or provision hereof.
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4.10 Conflict. In the event of any conflict between the provisions of
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this Agreement and the policies and practices of the Company, the provisions of
this Agreement shall govern.
4.11 Negotiation of Agreement. Each of the parties acknowledge that it
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has been represented by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement and that it has
executed the same with consent and upon the advice of said independent counsel.
Each party of its counsel cooperated in the drafting and preparation of this
Agreement and the documents referred to herein, and any and all drafts relating
thereto shall be deemed the work product of the parties and may not be construed
against any party by reason of its preparation. Accordingly, any rule of law,
or any legal decision that would require interpretation of any ambiguities in
this Agreement against the party that drafted it, is of no application and is
hereby expressly waived.
4.12 Parties in Interest;Assignment. This Agreement shall inure to the
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benefit of and be binding upon the parties hereto and their respective permitted
successors, assigns, heirs, and/or personal representatives, except that neither
this Agreement nor any interest herein shall be assigned or assignable by
operation of law or otherwise, by Executive without the prior written consent of
the Company, which such consent the Company may grant or withhold in its sole
discretion. The Company may, without the consent of Executive, assign this
Agreement or any interest herein, by operation of law or otherwise, to (i) any
successor to all or substantially all of its stock, assets or business by
dissolution, merger, consolidation, transfer or assets, or otherwise, or (ii)
any direct or indirect Subsidiary, affiliate or division of the Company or of
any such successor referred in (a) hereof. Nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the parties and their
respective successors and permitted assigns any rights or remedies under or by
reason of this Agreement.
4.13 Dispute Resolution Process. The parties hereby agree that, in order
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to obtain prompt and expeditious resolution of any disputes under this
Agreement, each claim, dispute or controversy of whatever nature, arising out
of, in connection with, or in relation to the interpretation, performance or
breach of this Agreement (or any other agreement contemplated by or related to
this Agreement or any other agreement between the Company and Executive),
including without limitation, any claim based on contract, tort or statute, or
the arbitrability of any claim hereunder (a "Claim"), shall be settled, at the
request of any part of this Agreement, by final and binding arbitration
conducted in Denver, Colorado. All such Claims shall be settled by one
arbitrator in accordance with the Commercial Arbitration Rules then in effect of
the American Arbitration Association. Such arbitrator shall be provided through
the CFR Institute for Dispute Resolution ("CFR") by mutual agreement of the
parties, provided that, absent such agreement, the arbitrator shall be appointed
by CFR. In eithis event, such arbitrator may not have any pre-existing, direct
or indirect relationship with any party to the dispute. Each party hereto
expressly consents to, and waives any future objection to, such forum and
arbitration rules. Judgment upon any award may be entered by any state or
federal court having jurisdiction thereof. Except as required by law
(including, without limitation, the rules and regulations of the Securities and
Exchange Commission and the Nasdaq Stock Market, if applicable), neither party
nor the arbitrator shall disclose the existence, content, or results of any
arbitration hereunder without the prior written consent of all parties. Except
as provided herein, the Federal Arbitration Act shall govern the interpretation,
enforcement and all proceedings pursuant to this Section.
Adherence to this dispute resolution process shall not limit the right of
the Company or Executive to obtain any provisional remedy, including without
limitation, injunctive or similar relief set forth in Section 4.1 from any court
of competent jurisdiction as may be necessary to protect their respective rights
and interests pending arbitration. Notwithstanding the foregoing sentence, this
dispute resolution procedure is intended to be the exclusive method of resolving
any Claims arising out of or relating to this Agreement.
The arbitration procedures shall follow the substantive law of the State of
Colorado, including the provisions of statutory law dealing with arbitration, as
it may exist at the time of the demand for arbitration, insofar as said
provisions are not in conflict with this Agreement and specifically excepting
therefrom sections of any such statute dealing with discovery and sections
requiring notice of the hearing date by registered or certified mail.
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4.14 Full Understanding. Executive represents and agrees that he fully
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understands his right to discuss all aspects of this Agreement with his private
attorney, and that to the extent, if any, that he desired, he availed himself of
such right. Executive further represents that he has carefully read and fully
understands all of the provisions of this Agreement (including the non-compete
provisions of Section 1.7), that he is competent to execute this Agreement, that
his agreement to execute this Agreement has not been obtatined by any duress and
that he freely and voluntarily enters into it, and that he has read this
document in its entirety and fully understands the meaning, intent and
consequences of this document.
IN WITNESS WHISEOF, this Agreement has been signed and sealed the day first
above written.
COMPANY:
WILD OATS MARKETS, INC.
By /s/ Xxxxx Xxx
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EXECUTIVE:
By /s/ Xxxx Xxxxx
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Xxxx Xxxxx
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