Exhibit 10.4
UNITED NATURAL FOODS, INC.
FORM OF
NON-STATUTORY STOCK OPTION AGREEMENT
1. Grant of Option. United Natural Foods, Inc., a Delaware corporation
(the "Company"), hereby grants to _________ (the "Grantee") an option, pursuant
to the Company's 2002 Stock Incentive Plan (the "Plan"), to purchase an
aggregate of _______ shares of Common Stock, par value $0.01 per share ("Common
Stock"), of the Company at a price of $________ per share, purchasable as set
forth in and subject to the terms and conditions of this option and the Plan.
Except in the preceding sentence and where the context otherwise requires, the
term "Company" shall include the parent and all present and future subsidiaries
of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the "Code").
2. Non-Statutory Stock Option. This option is not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
(a) Vesting Schedule. Except as otherwise provided in this
Agreement, this option may be exercised prior to the tenth anniversary of the
date of grant (hereinafter the "Expiration Date") in installments as to not more
than the number of shares set forth in the table below during the respective
installment periods set forth in the table below.
Number of
Shares as to which
Exercise Period Option is Exercisable
--------------- ---------------------
The right of exercise shall be cumulative so that if the option is not exercised
to the maximum extent permissible during any exercise period, it shall be
exercisable, in whole or in part, with respect to all shares not so purchased at
any time prior to the Expiration Date or the earlier termination of this option.
This option may not be exercised at any time on or after the Expiration Date,
except as otherwise provided in Sections 3(d) and (e) below.
(b) Exercise Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Grantee's delivery of written
notice of exercise to the Treasurer of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4. Such exercise shall
be effective upon receipt by the Treasurer of the Company of such written notice
together with the required payment. The Grantee may purchase less than the
number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.
(c) Continuous Employment Required. Except as otherwise provided in
this Section 3, this option may not be exercised unless the Grantee, at the time
he or she exercises this option, is, and has been at all times since the date of
grant of this option, an employee of the Company. For all purposes of this
option, (i) "employment" shall be defined in accordance with the provisions of
Section 1.421-7(h) of the Income Tax Regulations or any successor regulations,
and (ii) if this option shall be assumed or a new option substituted therefor in
a transaction to which Section 424(a) of the Code applies, employment by such
assuming or substituting corporation (hereinafter called the "Successor
Corporation") shall be considered for all purposes of this option to be
employment by the Company.
(d) Exercise Period Upon Termination of Employment. If the Grantee
ceases to be employed by the Company for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
90 days after such cessation (but in no event after the Expiration Date);
provided that this option shall be exercisable only to the extent that the
Grantee was entitled to exercise this option on the date of such cessation.
Notwithstanding the foregoing, if the Grantee, prior to the Expiration Date,
materially violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Grantee and the Company, the right to exercise this option
shall terminate immediately upon written notice to the Grantee from the Company
describing such violation.
(e) Exercise Period Upon Death or Disability. If the Grantee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Expiration Date while he or she is an employee of the Company, or if the
Grantee dies within 90 days after the Grantee ceases to be an employee of the
Company (other than as the result of a discharge for "cause" as specified in
paragraph (f) below), this option shall be exercisable, within the period of one
year following the date of death or disability of the Grantee (but in no event
after the Expiration Date), by the Grantee or by the person to whom this option
is transferred by will or the laws of descent and distribution, provided that
this option shall be exercisable only to the extent that this option was
exercisable by the Grantee on the date of his or her death or disability. Except
as otherwise indicated by the context, the term "Grantee", as used in this
option, shall be deemed to include the estate of the Grantee or any person who
acquires the right to exercise this option by bequest or inheritance or
otherwise by reason of the death of the Grantee.
(f) Discharge for Cause. If the Grantee, prior to the Expiration
Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon such cessation of
employment. "Cause" shall mean willful misconduct in connection with the
Grantee's employment or willful failure to perform his or her employment
responsibilities in the best interests of the Company (including, without
limitation, breach by the Grantee of any provision of any employment,
nondisclosure, non-competition or other similar agreement between the Grantee
and the Company), as determined by the Company, which determination shall be
conclusive. The Grantee shall be considered to have been discharged "for cause"
if the Company determines, within 30 days after the Grantee's resignation, that
discharge for cause was warranted.
(g) Termination of Employment After a Change in Control.
Notwithstanding the provisions of paragraphs (d), (e) and (f) above, if, within
three months after the Company obtains actual knowledge that a Change in Control
(as defined in the Plan) has occurred, the Grantee's employment with the Company
ceases for any reason, the Grantee may exercise this option in full,
notwithstanding any limitation on the exercise of this option, at any time
within three months after such cessation of employment.
4. Payment of Purchase Price. The payment of the purchase price for shares
of Common Stock purchased upon exercise of this option shall be made in
accordance with Section 10 of the Plan.
5. Delivery of Shares; Compliance With Securities Laws, Etc.
(a) General. The Company shall, upon payment of the option price for
the number of shares purchased and paid for, make prompt delivery of such shares
to the Grantee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
(b) Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification or disclosure, or to satisfy such other condition.
6. Nontransferability of Option. This option is personal and no rights
granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) nor shall any such rights be
subject to execution, attachment or similar process, other than in accordance
with the terms of the Plan. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions of the Plan, or upon the levy of any attachment or similar
process upon this option or such rights, this option and such rights shall, at
the election of the Company, become null and void.
7. No Special Employment Rights. Nothing contained in the Plan or this
option shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Grantee for the period within
which this option may be exercised.
8. Rights as a Stockholder. The Grantee shall have no rights as a
stockholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Grantee. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
9. Withholding Taxes. The Company's obligation to deliver shares upon the
exercise of this option shall be subject to the Grantee's satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements.
10. Limitations on Disposition of Incentive Stock Option Shares. It is
understood and intended that this option shall qualify as an "incentive stock
option" as defined in Section 422 of the Code. Accordingly, the Grantee
understands that in order to obtain the benefits of an incentive stock option
under Section 421 of the Code, no sale or other disposition may be made of any
shares acquired upon exercise of the option within one year after the day of the
transfer of such shares to him, nor within two years after the grant of the
option. If the Grantee intends to dispose, or does dispose (whether by sale,
exchange, gift, transfer or otherwise), of any such shares within said periods,
he or she will notify the Company in writing within ten days after such
disposition.
11. Miscellaneous.
(a) Except as provided herein, this option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Grantee.
(b) All notices under this option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in writing by either of the
parties to one another.
(c) This option shall be governed by and construed in accordance
with the laws of the State of Connecticut.
[Signature Page Follows]
Date of Grant: ___________
UNITED NATURAL FOODS, INC.
By: ___________________________
Xxxxxx X. Xxxxxxxx
Chair of the Board and Chief Executive Officer
000 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Grantee's Acceptance:
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 2002 Stock Incentive Plan.
GRANTEE:
___________________________
Address: ___________________________
___________________________
