INCENTIVE BONUS
AGREEMENT
This Incentive
Bonus Agreement (this “ Agreement ”) is made as
of February 20, 2007 by and between Wild Oats Markets, Inc., a
Delaware corporation (the “ Company ”), and
Gregory Mays (“ Executive ”).
WHEREAS ,
Executive currently serves as interim Chief Executive Office
(“CEO”) of the Company.
WHEREAS ,
the Company proposes to enter into an Agreement and Plan of Merger
with the corporation named on Schedule I hereto and such
corporation’s wholly-owned subsidiary (“ Merger
Sub ”) pursuant to which the Company is to be merged with
Merger Sub and as a result of such merger the shares of the
Company’s common stock are to be converted into the right to
receive an amount of cash set forth in such Agreement and Plan of
Merger, as it may be amended from time to time (such merger
transaction and any other business combination to which the Company
is a constituent party and pursuant to which the shares of common
stock of the Company are to be converted into the right to receive
cash, other property or the securities of another entity, or any
sale of all or substantially all of the Company’s assets are
referred to herein as a “ Company Sale Event ”);
and
WHEREAS ,
the Company wishes to provide a sale bonus to Executive and
additional incentives for Executive to remain an employee of the
Company through the effective date of the consummation of a Company
Sale Event (the “ Effective Date ”) and
thereafter should no Company Sale Event be consummated;
NOW,
THEREFORE , in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and Executive agree as
follows:
1.
Interim CEO Compensation . Executive shall be entitled to an
increase in his future compensation as interim CEO to be at a rate
of $100,000 per month, commencing February 1, 2007, in
addition to reimbursement of reasonable out-of-pocket expenses
incurred in the performance of his duties as interim CEO, including
reasonable travel and housing expenses in accordance with the
Company’s reimbursement policies as in effect from time to
time.
2. Sale
Bonus . The Company shall pay to Executive a sale bonus of
$750,000, less applicable withholding (the “ Sale
Bonus ”), payable at the close of a Company Sale
Event.
3. Grant
of RSUs . On or about October 26, 2006, the Company agreed
to grant Executive 20,000 fully vested restricted stock units
(“RSUs”) at a future date (the “ Initial
RSUs ”) and that, at such time as a new CEO were
appointed, the Board of Directors of the Company, at its
discretion, contemplated granting to Executive an additional 10,000
fully vested RSUs to Executive (the " Additional RSUs
”). The Company hereby grants the Initial RSUs to Executive,
which RSUs are fully vested. The Company hereby further grants the
Additional RSUs to Executive which RSUs shall vest on the earlier
to occur of (i) the consummation of a Company Sale Event or
(ii) the appointment of a New CEO (as defined below) in the
latter case following termination of the Agreement and Plan of
Merger, subject in each case to the provisions of Section 5
hereof. In addition, in order to in
