Severance Agreement and Release of Claims - Wild Oats Markets Inc. and Mary Beth Lewis
THIS IS A LEGAL DOCUMENT. YOU ARE ENCOURAGED TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS DOCUMENT.
SEVERANCE AND RELEASE OF CLAIMS
This Severance Agreement and Release of Claims (the "Agreement") is between Wild Oats Markets, Inc. ("Company") and Mary Beth Lewis ("Employee").
or good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee hereby agree as follows:
(a) Salary Continuance. Subject to Employee's compliance with the terms and conditions set forth in this Agreement, Company agrees to pay the Employee a continuation of the Employee's salary (the "Severance Pay") equivalent to one year's salary at the Employee's rate of pay on the Effective Date. Payment shall be an amount equal to Employee's rate of pay on the Effective Date for the period July 21, 2001 to July 19, 2002, to be paid in equal biweekly installments on the same payroll schedule under which the Company pays its employees, commencing the next pay date following the execution of the Agreement. The period from July 20, 2001 until July 19, 2002 shall be the "Severance Period".
(b) Medical and Other Benefits Continuance. The Company will not continue medical or other benefits for the Employee, except as specifically provided herein, and the Employee shall not be entitled to participate in any benefit plans provided by the Company, except as specifically provided herein.
(c) Deferred Compensation Plan. Barring prohibitions imposed by the Company's deferred compensation plan, the Company will allow the Employee to maintain the balance of her deferred compensation plan account in the plan until January 1, 2003, at which time the Company shall distribute the balance of the account to the Employee. The Employee shall not be entitle to make any further contributions to such account after the Effective Date. The Employee acknowledges that all sums remaining in the deferred compensation plan are not insured, and are considered as general funds of the Company for creditor purposes.
(d) Discount Card. Assuming the Employee complies with the other terms and conditions of this Agreement, the Employee shall be entitled to the reasonable use of the discount provided from time to time to active employees of the Company for the Severance Period. In the event that Employee violates the terms of this Agreement or the Company discontinues the discount benefit, the discount shall immediately terminate.
(e) Options. Employee acknowledges that Employee's stock options exercisable for common stock of the Company terminated effective July 20, 2001. As additional consideration for this Agreement and Release, Employee shall be granted a stock appreciation right. Within 14 days following execution of this Agreement, Employee shall receive a cash payment from the Company equal to the difference between (1) the strike price of Employee's fully vested stock options on July 20, 2001 (to the extend such strike price is lower than the closing price of the Company's common stock on the NASDAQ National Market on July 20, 2001, and (2) the closing price of the Company's common stock on the NASDAQ National Market on July 20, 2001, plus (3) an amount required to gross up that portion of the foregoing payment related to incentive stock options (as opposed to nonqualified stock options) to compensate Employee for the difference between the capital gains tax rate and the Employee's effective tax rate (39.1% for 2001). The Employee's vested options as of July 20, 2001, and the strike prices therefor, are shown on Attachment 1 hereto.
3. Conditions to Commencement of Severance Pay. In order for the Employee to receive the Severance Pay, the Employee must comply with all of the following conditions. At the Company's election, failure to comply with any condition will result in a delay in, or termination of, any right to receive Severance Pay:
(a) The Employee shall return, within 7 days after signing this Agreement, all equipment, tools, phones, computers, keys and proprietary information (including financials, price lists, vendor lists, manuals and strategic planning documents), in Employee's possession. All computer files must remain intact on all computer equipment returned. The Company agrees to transfer ownership to Employee of the laptop computer used by the Employee (other than the Zip drive) during the course of her employment.
(b) If the Employee has a Company credit card, within 7 days after the date the Employee signs this Agreement, the Employee must arrange for payment of outstanding charges.
To the best of Company's knowledge, Employee has complied with the provisions in Sections 3(a) and 3(b); however, such does not constitute a waiver of any breach that becomes known at a later date. Failure to comply with (a) or (b) may result in withholding or termination of Severance Pay, or the Company may elect to deduct any unpaid bills, costs of equipment, personal credit card charges or any business expenses for which reports have not been submitted from the Employee's Severance Pay.
4. Conditions to Continued Receipt of Severance Pay. In order for the Employee to continue to receive Severance Pay, the Employee MUST comply with the following conditions during the Severance Period:
(a) The Employee will not disparage or otherwise discredit the Company orally or in writing. For purposes of this paragraph (a), any factually accurate testimony, whether orally or in writing, given by the Employee as required by law under oath shall not be considered to disparage or otherwise discredit the Company. The Company agrees that Perry Odak and Freya Brier, acting as Company officers, will not disparage or discredit the Employee orally or in writing to any third party. For purposes of the obligations of the Company, "disparagement" or "discredit" shall not include any factually accurate statement or any disclosure required to be made to any governmental or quasi-governmental agency, or any disclosure made in the course of any pending or threatened litigation, mediation, arbitration or agency action.
(b) The Employee will not solicit, for him/herself or on behalf of a third party, either directly or indirectly, any employee of the Company then currently employed to leave the Company's employ.
(c) The Employee will not discuss the terms of this Agreement with any third party other than the Employee's spouse, family or legal or financial advisors; provided, however, that if the Company files this Agreement as an exhibit to any public filing, unless the Company obtains confidentiality treatment for the Agreement as filed, the Employee shall be released from the foregoing obligation. In the event the Employee is required by law to discuss or disclose any of the terms, the Employee must provide the Company with prompt written notice prior to disclosure to the third party to allow the Company sufficient time (not less than one-half of the time required for a response thereunder, with a minimum of 5 business days) to contest the pending disclosure.
(b) The Employee agrees, upon reasonable notice, to furnish information and assistance to the Company as may be required in connection with any governmental, legal or quasi-legal proceeding, including any external or internal investigation, involving the Company, its subsidiaries or affiliates, or in which any of them is, or may become, a party. After the Severance Period, or if during the Severance Period the assistance is for a period longer than 40 hours, the Company will pay the Employee for the time spent in providing the assistance with proceedings for a reasonable consulting fee not to exceed the Employee's effective hourly wage on the Effective Date. The Company will reimburse Employee for any reasonable out-of-pocket expenses requested by the Company and incurred in providing assistance to the Company.
The Employee hereby acknowledges that the Employee has been advised in writing to consult with an attorney before signing this Agreement and the Employee has either consulted with an attorney before signing this Agreement or the Employee has willingly and knowingly waived his/her right to speak with an attorney prior to signing this Agreement. The Employee fully understands this Agreement and agrees to its terms.
Wild Oats Markets, Inc. Agreed to and signed, this 4th day of August , 2001
By: /s/ Freya R. Brier /s/ Mary Beth Lewis
V.P., Legal Signature