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EXHIBIT 10.35
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as of
October 15, 1996 (the "AGREEMENT"), is made by and among WILD OATS MARKETS,
INC., a Delaware corporation (the "COMPANY"), and the stockholders of the
Company listed on Exhibit A attached hereto.
RECITALS:
(A) Each of the Stockholders (as defined below) owns that
number of shares of the capital stock of the Company set forth opposite his or
her name on Exhibit A hereto.
(B) The Company and the Stockholders entered into the
Stockholders Agreement dated as of July 12, 1996 (the "Prior Agreement"),
pursuant to which the parties entered into certain understandings regarding the
transfer of Common Stock and Preferred Stock, the management of the Company and
other matters, as set forth therein.
(C) The Company and the Stockholders desire to enter into this
Agreement effective upon the closing of the Company's Public Offering (as
defined below) in order to reflect the conversion of the Preferred Stock, the
termination of certain provisions of the Prior Agreement and the adoption of
certain stockholder protection measures by the Company.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties contained herein, the parties agree as
follows:
1. CERTAIN DEFINITIONS. As used in this Agreement the following
terms shall have the meanings set forth below:
"COMMON STOCK" shall mean the 20,000,000 shares of Common Stock
of the Company, par value $.001 per share.
"CVCA" shall mean Chase Venture Capital Associates, L.P.
"EFFECTIVE DATE" shall mean the closing of the Public Offering.
"EQUITY SECURITIES" shall mean shares of, or securities
convertible into or exercisable or exchangeable for, any shares of, any class
of the Company's capital stock, including without limitation, its Common Stock
and Preferred Stock.
"PREFERRED STOCk" shall mean any preferred stock designated by
the Board of Directors.
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"PUBLIC OFFERING" shall mean the Company's sale of its Common
Stock in a bona fide, firm commitment underwriting pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended, where (i)
gross proceeds to the Company are not less than $20,000,000, and (ii) the
product of the price per share to the public of the Common Stock times the
number of shares of Common Stock outstanding immediately prior to the
consummation of the underwritten sale (including any shares of Common Stock
then issued or issuable upon conversion of the Preferred Stock) shall be not
less than $120,000,000.
"STOCKHOLDERS" shall mean any of the Stockholders listed on
Exhibit A hereto and their respective assignees and successors.
"VOTING STOCK" shall mean any class or classes of the capital
stock of the Company the holders of which are entitled to participate generally
in the election of directors of the Company, including, but not limited to, the
Common Stock and the Preferred Stock.
2. EFFECTIVENESS OF AGREEMENT; SUPERSEDES PRIOR STOCKHOLDERS
AGREEMENT. This Agreement shall be effective from and after the Effective Date
and shall supersede the Prior Agreement, which agreement is hereby terminated
without any liability to any party thereto and shall be of no further force or
effect. By executing this Agreement, each signatory consents to the
termination of such prior agreement, without liability to any party thereto, as
provided by this Section 2.
2A. RIGHT OF XXXXXXXXX AND XXXX TO PURCHASE XXXXX SHARES. In the
event of the death or disability (as such term is defined below) of Xxxx X.
Xxxxx, each of Xxxxxxx X. Xxxxxxxxx and Xxxxxxxxx X. Xxxx shall have the right
to purchase up to 50% (for a total of 100%) of the Equity Securities owned by
Xxxx X. Xxxxx at the date of this Agreement (the "XXXXX SHARES") at a purchase
price equal to the fair market value (as such term is defined below) of the
Xxxxx Shares on the date of such event. Such right to purchase shall be for a
period of 90 days after Xx. Xxxxxxxxx and Xx. Xxxx receive notice of the
occurrence of such event. The purchase price shall be payable in the form of a
check or note payable to the order of Xx. Xxxxx or his estate or heirs in the
event of his death. For purposes of this Section 2A, "DISABILITY" shall have
the meaning set forth in Section 22(e)(4) of the Internal Revenue Code, as
amended, and "FAIR MARKET VALUE" shall mean, if the shares are listed on a
national securities exchange or designated for trading on the Nasdaq National
Market, the closing sales price of the Common Stock on the date of such event
or, if the shares are traded on any over-the-counter market, the average of the
bid and asked prices of the Common Stock on the date of such event, or if the
Company's Common Stock is not publicly traded, the fair market value of the
Xxxxx Shares as determined by the Company's Board of Directors (excluding Xx.
Xxxxxxxxx and Xx. Xxxx if such persons are members of the Board of Directors at
the time of determination) in good faith, taking into account all factors which
they deem relevant.
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3. GOVERNANCE.
(a) For a period of four years from and after the closing of
the Public Offering and provided CVCA shall hold not less than 4% of the shares
of the Common Stock (on a fully diluted basis), the Stockholders, other than
holders of Common Stock issued upon conversion of the Series D Preferred Stock,
each hereby agree, upon the request of CVCA, to take any and all action
reasonably requested (including, without limitation, voting their shares of
Voting Stock or shares of Voting Stock over which they exercise voting control
and executing and delivering written consents of stockholders, and calling
special stockholders' meetings) to cause a designee of CVCA to be elected to
the Board. So long as a designee of CVCA shall be a member of the Board, that
director shall also, if requested by CVCA, be designated as a member of each
committee of the Board including, without limitation, the Audit and
Compensation committees.
(b) The Company shall call, and use its best efforts to have,
regular Board meetings at least once every quarter. Meetings of the Board
shall not be held on less than two days written notice to the Directors unless
a shorter notice period is consented to in writing by a majority of the
Directors. All notices of a Board meeting shall include an agenda setting
forth in reasonable detail any and all matters to be officially acted upon at
such meeting, but such agenda shall not limit any matters that may be
officially acted upon at any such meeting. The non-employee directors shall be
entitled to receive reimbursement from the Company for all reasonable expenses
directly related to attendance at all board of directors or committee meetings.
(c) The Company shall cause the Board of Directors of any
subsidiary to include the same individuals as the Board.
(d) Until the closing of the Public Offering and for so long
as there continues to remain outstanding at least 25% of the shares of Common
Stock issued upon conversion of the Series A Preferred Stock, each Stockholder,
other than holders of Common Stock issued upon conversion of the Series D
Preferred Stock, agrees to vote to elect the representative designated by
Weston Presidio Offshore Capital C.V. as a member of the Board of Directors as
a member of the Compensation Committee and Audit Committee of the Board of
Directors.
4. POSITIVE COVENANTS. Unless otherwise consented to in writing by
a majority of the Board of Directors, the Company agrees as follows:
(a) The Company will promptly pay and discharge, or cause to
be paid and discharged, when due and payable, all lawful taxes, assessments,
and governmental charges or levies imposed upon the income, profits, property,
or business of the Company or any subsidiary; provided, however, that any such
tax, assessment, charge, or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if the
Company shall have set aside on its books adequate reserves with respect
thereof, and provided further, that the Company will pay all such taxes,
assessments, charges, or levies
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forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor. The Company will promptly pay or cause to
be paid when due, or in conformance with customary trade terms, all other
indebtedness incident to the operations of the Company;
(b) The Company will keep its properties and those of its
subsidiaries in good repair, working order, and condition, reasonable wear and
tear excepted, and from time to time make all necessary and proper repairs,
renewals, replacements, additions, and improvements thereto; and the Company
and its subsidiaries will at all times comply with the provisions of all
material leases to which any of them is a party or under which any of them
occupies property so as to prevent any material adverse effect to the business,
assets or property of the Company;
(c) The Company will keep true records and books of account in
which full, true, and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with GAAP
applied on a consistent basis;
(d) The Company and all its subsidiaries shall duly observe
and conform to all valid requirements of governmental authorities which are
material to the conduct of their businesses or to their property or assets;
(e) The Company shall maintain in full force and effect its
corporate existence, rights, and franchises and all material licenses and other
material rights to use processes, licenses, trademarks, trade names, or
copyrights owned or possessed by it or any subsidiary and deemed by the Company
to be necessary to the conduct of its business;
(f) The Company shall not grant any options exercisable for
Common Stock or any other capital shares of the Company to employees, officers
or directors of the Company or any of its subsidiaries except for Permitted
Options (as defined below) without the prior written consent of a majority of
the Board of Directors. For the purposes of this Section 4(f), "Permitted
Options" shall mean options exercisable for Common Stock, subject to adjustment
provided for herein, up to an aggregate of not more than 831,186 shares of
Common Stock, including options exercisable for 659,979 shares of Common Stock
outstanding as of the Effective Date and options exercisable for 171,207
available for grant. The Permitted Options available for grant shall be granted
pursuant to the terms of employee or director stock option plans approved in
writing by a majority of the directors. Such number of Permitted Options
available for grant may be increased, subject to the approval of the Board of
Directors, in an amount not to exceed 15% of the number of shares of the
Company's Common Stock outstanding, assuming the conversion or exercise of all
convertible or exercisable securities outstanding (as adjusted for any stock
split).
(g) The covenants set forth in this Section 4 shall be
assignable to a purchaser, assignee or transferee who purchases shares of
Preferred Stock from a Stockholder; provided, however, that if any Stockholder
shall distribute any shares of stock to its limited partners, such partners
shall appoint a single agent for purposes of receiving notices and
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giving consents hereunder and in that connection, shall execute and deliver an
irrevocable proxy to such agent. Notwithstanding this Section 4(g), CVCA's
right to designate a representative on the Board of Directors as set forth
herein shall not be assignable to purchasers, assignees or transferees of the
shares.
5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE OF DELAWARE AS APPLIED TO AGREEMENTS MADE AND TO BE
PERFORMED IN THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.
6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8. NOTICES. Any notice, request, instruction or other document to
be given hereunder by any party hereto to another party hereto shall be in
writing, shall be deemed to have been duly given or delivered when delivered
personally or telecopied (receipt confirmed, with a copy sent by reputable
overnight courier, or one business day after delivery to a reputable overnight
courier, postage prepaid, to the address of the party set forth below such
person's signature on this Agreement or to such address as the party to whom
notice is to be given may provide in a written notice to each of the other
parties to this Agreement, a copy of which written notice shall be on file with
the Secretary of the Company.
9. LEGEND.
(a) Each certificate representing shares of Common Stock
subject to this Agreement shall be endorsed with the following legends:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN STOCKHOLDERS AGREEMENT BY AND AMONG THE CORPORATION AND
CERTAIN HOLDERS OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
(b) Each party to this Agreement agrees that the Company may
instruct the transfer agent to impose transfer restrictions on the shares
represented by certificates bearing the legend referred to in this Section 9
above to enforce the provisions of this Agreement. The legend shall be removed
upon termination of this Agreement.
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10. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the holders of a majority of
each class or series, as applicable, of capital stock to be affected by such
amendment or waiver voting as separate classes or series, as applicable, and
any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any securities at the time outstanding (including
securities into which securities are convertible), each future holder of all
securities and the Company.
11. SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms to the fullest extent permitted by law.
12. FURTHER ASSURANCES. Each of the parties shall without further
consideration, use reasonable efforts to execute and deliver such additional
documents and take such other action as the other parties, or any of them may
reasonably request to carry out the intent of this Agreement and the
transactions contemplated hereby.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
all rights hereto shall inure to the benefit of the Company, its successors and
permitted assigns, and shall be binding upon and all rights hereto shall inure
to the benefit of the other parties hereto and their respective heirs,
successors and permitted assigns, including transferees of any shares of Common
Stock (including Common Stock issued upon conversion of Preferred Stock). Any
such transferee shall, upon the request of the Company, execute a written
acknowledgment of the foregoing.
14. ENTIRE AGREEMENT. This Agreement, together with the Series E
Stock Purchase Agreement and the Registration Rights Agreement dated as of July
12, 1996 and the Company's Amended and Restated Certificate of Incorporation,
embody the entire agreement and understanding of the parties hereto in respect
of the actions and transactions contemplated by this Agreement. There are no
restrictions, promises, inducements, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein or in
the Company's Amended and Restated Certificate of Incorporation.
15. SPECIFIC PERFORMANCE. Each of the Stockholders acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that the Stockholders will waive
the defense in any action for specific performance that a remedy at law would
be adequate and that the Stockholders, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel specific
performance of this Agreement in any action instituted in the Delaware Court of
Chancery or the United States District Court for the District of Colorado or,
in the event said Courts would not have jurisdiction for such action, in any
court of the United States or any state thereof having jurisdiction for such
action.
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(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
WILD OATS MARKETS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx,
Chief Executive Officer
Address: 0000 Xxxxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
THE STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxxxx X. Xxxx
----------------------------------------
Xxxxxxxxx X. Xxxx
/s/ Xxxx X. Xxxxx
----------------------------------------
Xxxx X. Xxxxx
/s/ X.X. Xxxxxx
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X.X. Xxxxxx
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CHASE VENTURE CAPITAL ASSOCIATES, L.P.,
a California Limited Partnership
By: Chase Capital Partners, a New York
general partnership
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
General Partner
Address 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Copy to:
Address: CVP Management Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxxxx, XX 00000
Telecopy (000) 000-0000
WESTON PRESIDIO OFFSHORE CAPITAL C.V.,
a Netherlands Antilles Limited
Partnership
By: Weston Presidio Capital Management
L.P., a Delaware Limited
Partnership
By: /s/ Xxxxx X. XxXxxxx
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Xxxxx X. XxXxxxx,
General Partner
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
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FRONTENAC VI LIMITED PARTNERSHIP
By: Frontenac Company
By: /s/ X. Xxxxx Xxxxxxx
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X. Xxxxx Xxxxxxx
Address: 000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
XXXXXXXXXX ASSOCIATES, 1992 L.P.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Managing Partner
Address: 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
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Xxxxxx Xxxxxx Xxxxx
----------------------------------------
Xxxxx Xxx Xxxxx
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Xxxxx Xxxxx
THE XXXX XXX XXXXXXXXXX 1996 TRUST
By:
-----------------------------------
Trustee
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THE XXXXX XXXXXX XXXXXX 1996 TRUST
By:
-----------------------------------
Trustee
THE XXXXX XXXXXX XXXXXX 1996 TRUST
By:
-----------------------------------
Trustee
THE XXXXXX XXXXXXX MAYBER 1996 TRUST
By:
-----------------------------------
Trustee
----------------------------------------
Xxxxx Xxxx Xxxxxxx
----------------------------------------
Xxxxxx Xxx Xxxxxx
THE XXXXXXXXX/XXXX FAMILY INVESTMENTS,
L.P.
By:
-----------------------------------
Title:
THE IAN XXXXXXX XXXXXXXXX 1993 TRUST
By:
-----------------------------------
Trustee
----------------------------------------
Xxxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxxxx as Cusotdian for Xxx
Xxxxxxxxx until the age of 21
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Xxxxxxx Xxxxxxxxx as custodian for Xxx
Xxxxxxxxx until the age of 00
XXX XXXXXX XXXXXXXXX XXXXXXXXX 0000 TRUST
By:
-----------------------------------
Trustee
----------------------------------------
Xxxxxxx Xxxxxxxxx
----------------------------------------
Xxxx Xxxxx Xxxx, Sr.
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WILD OATS INVESTORS FUND, G.P.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxxx
Administrative Partner
WILD OATS INVESTORS FUND II, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxxx
Administrative Partner
NATIONAL CITY CAPITAL CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxx
Managing Director
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EXHIBIT A
COMMON
STOCKHOLDER STOCK
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Xxxxxxx X. Xxxxxxxxx 279,022
Xxxxxxxxx Xxxx 279,022
Xxxx X. Xxxxx 339,077
Xxxxxxx Xxxxxxx 32,191
Xxxxx Xxxxxxxxxxx 4,296
Xxxxx Xxxxxxxx 2,865
Xxx Xxxxx 1,053
Xxxx Xxxxxx 802
Xxx Xxxxxx 201
X.X. Xxxxxx 50,684
Weston Presidio Offshore Capital, C.V. 303,0121
Chase Venture Capital Associates, L.P. 703,1782
Wild Oats Investors Fund, G.P. 31,741
Wild Oats Investors Fund II, LLC 28,773
Xxxxxxxxxx Associates, 1992 L.P. 8,7813
National City Capital Corporation 7,494
Frontenac VI Limited Partnership 237,209
Xxxxxx Xxxxxx Xxxxx 337
Xxxxx Xxx Xxxxx 337
Xxxxx Xxxxx 1,011
The Xxxx Xxx Xxxxxxxxxx 1996 Trust 337
The Xxxxx Xxxxxx Xxxxxx 1996 Trust 337
The Xxxxxx Xxxxxxx Mayber 1996 Trust 337
Xxxxx Xxxx Xxxxxxx 236
Xxxxxx Xxx Xxxxxx 236
The Xxxxxxxx/Xxxx Family Investments, L.P. 337,552
Ian Xxxxxxx Xxxxxxxxx 3,868
Xxxxxxx Xxxxxxxxx 674
Xxxxxx Xxxxxxxxx 674
Xxxxxxx Xxxxxxxxx as Custodian for Xxx Xxxxxxxxx 674
until the age of 21
Xxxxxxx Xxxxxxxxx as Custodian for Xxx Xxxxxxxxx 674
until the age of 21
Stella Xxxxxxxxx Xxxxxxxxx 3,868
Xxxxxxx Xxxxxxxxx 500
Xxxx Xxxxx Xxxx, Sr. 500
__________________________________
(1) Includes an unexercised warrant to purchase such shares with exercise
prices of $17.50 to $18.75.
(2) Includes 31,658 shares owned by Wild Oats Investors GP, for which
Chase Capital Partners holds the proxy.
(3) Consists of 3,792 shares of Series C Preferred Stock held by
Xxxxxxxxxx and an unexercised warrant to purchase 1,976 shares of Series C
Preferred Stock at an exercise price of $37.91.