x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended July 1, 2012; or |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________. |
Texas | 74-1989366 | |
(State of | (IRS employer | |
incorporation) | identification no.) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) |
Exhibit 10.1 | Form of Executive Retention Plan and Non-Compete Arrangement by and between the executive leadership team of the Registrant and the Registrant (2) |
Exhibit 31.1 | Certification of Co-Chief Executive Officer Pursuant to 17 CFR 240.13a -14(a) (1) |
Exhibit 31.2 | Certification of Co-Chief Executive Officer Pursuant to 17 CFR 240.13a - 14(a) (1) |
Exhibit 31.3 | Certification of Chief Financial Officer Pursuant to 17 CFR 240.13a - 14(a) (1) |
Exhibit 31.4 | Certification of Co-Chief Executive Officer Pursuant to 17 CFR 240.13a -14(a) (2) |
Exhibit 31.5 | Certification of Co-Chief Executive Officer Pursuant to 17 CFR 240.13a - 14(a) (2) |
Exhibit 31.6 | Certification of Chief Financial Officer Pursuant to 17 CFR 240.13a - 14(a) (2) |
Exhibit 32.1 | Certification of Co-Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 (1) |
Exhibit 32.2 | Certification of Co-Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 (1) |
Exhibit 32.3 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 (1) |
Exhibit 101 | The following financial information from the Company’s Quarterly Report on Form 10-Q, for the quarterly period ended July 1, 2012, formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows, (v) Notes to Consolidated Financial Statements (1) |
(1) | Filed as an exhibit to Registrant’s Form 10-Q for the quarterly period ended July 1, 2012 filed August 3, 2012 and incorporated herein by reference. |
(2) | Filed herewith. |
WHOLE FOODS MARKET, INC. | ||||
Date: | August 10, 2012 | By: | /s/ Glenda Flanagan | |
Glenda Flanagan | ||||
Executive Vice President and Chief Financial Officer | ||||
(Duly authorized officer and principal financial officer) |
WHOLE FOODS EXECUTIVE RETENTION PLAN AND NON-COMPETE ARRANGEMENT Effective May 20, 2010 |
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Whole Foods Executive Retention Plan | (i) |
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Whole Foods Executive Retention Plan | (ii) |
1.1 | Preamble. Whole Foods Market, Inc., a Texas Corporation (the "Company") adopted the Whole Foods Executive Retention Plan (the "Plan") effective as of May 20, 2010, in order to induce its executives’, and those of its Affiliated Companies, as defined in Article II, to enter into certain non-competition arrangements and comply with the confidentiality provisions and restrictive covenants set forth in the Plan Agreements (as defined below), and to provide protection to such executives in the event of a Change of Control as defined in Article II. The Company later amended and restated the Plan to change the name of the Plan to the “Whole Foods Executive Retention Plan and Non-Compete Arrangement” and to clarify the conditions under which the Non-Compete Payment, as defined in Article II, will be made. By this instrument, the Company desires to amend and restate the Plan to provide a minimum Negotiated Benefit relating to the Non-Compete Payment for Covered Executives whose Plan Agreement includes Negotiated Benefits and, for the same group of Covered Executives, to make inapplicable the provision for adjustment to the Non-Compete Payment based on the length of time the Covered Executive has held his or her current position or another designated position. |
1.2 | Purpose. Through the Plan, the Company intends to permit the deferral of compensation and to provide additional benefits to a select group of management or highly compensated employees of the Company and its Affiliated Companies. Accordingly, it is intended that the Plan will not constitute a "qualified plan" subject to the limitations of section 401(a) of the Internal Revenue Code of 1986, as amended, nor will it constitute a "funded plan," for purposes of such requirements. It also is intended that the Plan will qualify as a "pension plan" within the meaning of section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") that is exempt from the participation and vesting requirements of Part 2 of Title I of ERISA, the funding requirements of Part 3 of Title I of ERISA, and the fiduciary requirements of Part 4 of Title I of ERISA by reason of the exclusions afforded plans that are unfunded and maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. |
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2.1 | Definitions. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase will generally be a term defined in this Section 2.1. The following words and phrases with the initial letter capitalized will have the meaning set forth in this Section 2.1, unless a different meaning is required by the context in which the word or phrase is used. |
(a) | "Accrued Obligations" has the meaning set forth in Section 4.4(a)(i)(A). |
(b) | "Affiliated Company" means a corporation that is a member of a controlled group of corporations (as defined in section 414(b) of the Code) that includes the Company, any trade or business (whether or not incorporated) that is in common control (as defined in section 414(c) of the Code) with the Company, or any entity that is a member of the same affiliated service group (as defined in section 414(m) of the Code) as the Company. |
(c) | "Annual Base Salary" has the meaning in Section 4.2(b)(i). |
(d) | "Annual Bonus" has the meaning in Section 4.2(b)(ii). |
(e) | "Board" means the Board of Directors of the Company. |
(f) | "Cause" means: |
(i) | the willful and continued failure of the Covered Executive to perform substantially his or her duties with the Company or any Affiliated Company (other than any such failure resulting from incapacity due to physical or mental illness or following the Covered Executive’s delivery of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to the Covered Executive by the Board or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or the Chief Executive Officer of the Company believes that the Covered Executive has not substantially performed the Covered Executive’s duties, or |
(ii) | the willful engaging by Covered Executive in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. |
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(g) | "Change of Control" means the occurrence of any of the following: |
(i) | Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") becomes the beneficial owner (within the meaning of Rule 13d‑3 promulgated under the Exchange Act) of twenty percent (20%) or more of either (A) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock"), or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that, for purposes of this definition of Change of Control, the following acquisitions will not constitute a Change of Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliated Company, or (4) any acquisition pursuant to a transaction that complies with paragraphs (1) (2) or (3) of this definition; |
(ii) | Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election |
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(iii) | Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a "Business Combination"), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body, as the case may be), of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, twenty percent (20%) or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or |
(iv) | Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. |
(h) | "Change of Control Period" means the period commencing on the Effective Date and ending on the third anniversary of the date of a Change of Control. |
(i) | "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. |
(j) | "COC Effective Date" means the first date during the Change of Control Period on which a Change of Control occurs. Notwithstanding anything in the Plan to the |
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(k) | "COC Employment Period" means the period commencing on the COC Effective Date and ending on the second anniversary of the COC Effective Date. |
(l) | "Code" means the Internal Revenue Code of 1986, as amended from time to time. |
(m) | "Company" means Whole Foods Market, Inc., a Texas Corporation. |
(n) | "Compensation Committee" means the Compensation Committee of the Board. |
(o) | "Covered Executive" means any Executive of the Employer who is designated as a Covered Executive by the Compensation Committee. A Covered Executive will not cease to be a Covered Executive by reason of his or her transfer to comparable positions with the Affiliated Companies and the Covered Executive will continue to participate in the Plan pursuant to the terms hereof. |
(p) | "Daily Administrator" means the individual or entity appointed by the Plan Administrator to handle the day-to-day administration of the Plan. If the Plan Administrator does not appoint an individual or entity to serve as the Daily Administrator, the Plan Administrator will be the Daily Administrator. |
(q) | "Date of Termination" means the date Executive experiences a "separation from service" within the meaning of Section 409A of the Code. An Executive who transfers employment among the Affiliated Companies will not incur a “separation from service” within the meaning of Section 409A of the Code. |
(r) | "Delayed Payment Date" means the first business day after the date that is six (6) months following Executive’s "separation from service" within the meaning of Section 409A of the Code. |
(s) | "Disability" means the inability of the Covered Executive to engage in any substantial gainful activity similar to his or her current position by reason of a mental or physical impairment expected to result in death or last for at least twelve (12) months, or the Covered Executive, because of such a condition, is receiving income replacement benefits for at least three months under an accident or health plan covering the Employer’s employees. |
(t) | "Effective Date" means May 20, 2010. |
(u) | "Employer" means the Company and each Affiliated Company that has adopted the Plan as a participating employer. Unless provided otherwise by the Compensation Committee or the Board, all Affiliated Companies will be participating employers in the Plan. Each such Affiliated Company may evidence its adoption |
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(v) | "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. |
(w) | "Executive" means each select member of management or highly compensated employee receiving remuneration, or who is entitled to remuneration, for services rendered to the Employer, in the legal relationship of employer and employee. The term "Executive" does not include a consultant, independent contractor or leased employee even if such consultant, leased employee or independent contractor is subsequently determined by the Employer, the Internal Revenue Service, the Department of Labor or a court of competent jurisdiction to be a common law employee of the Employer. |
(x) | "Good Reason" means: |
(i) | the assignment to the Covered Executive of any duties inconsistent in any respect with the Covered Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any action by the Employer that results in a diminution in such position, authority, duties or responsibilities (whether or not occurring solely as a result of the Company’s ceasing to be a publicly traded entity), excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Employer promptly after receipt of notice thereof given by the Covered Executive; |
(ii) | after a COC Effective Date, any failure by the Employer to comply with any of the provisions of Section 4.2(b), other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and that is remedied by the Employer promptly after receipt of notice thereof given by the Covered Executive; |
(iii) | after a COC Effective Date the Employer’s requiring Executive (A) to be based at any office or location other than as provided in Section 4.2(a)(i)(B), or (B) to be based at a location other than the principal executive offices of the Employer if the Covered Executive was employed at such location immediately preceding the COC Effective Date; |
(iv) | after a COC Effective Date any purported termination by the Employer of the Covered Executive’s employment otherwise than as expressly permitted by this Plan; or |
(v) | any other action or inaction that constitutes a material breach by the Employer or a successor of this Plan, including any failure by the Employer to comply with and satisfy Section 7.2. |
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(y) | "Interest" means the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code determined as of the Date of Termination. |
(z) | "Non-Compete Benefits" means the benefits described in Article III of the Plan including, but not limited to, the Non-Compete Payments described therein. |
(aa) | "Non-Compete Payment" and "Non-Compete Payments" has the meaning assigned to each in Section 3.1(a) of the Plan. |
(bb) | "Notice of Termination" means a written notice that (i) indicates the specific termination provision in this Plan relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Covered Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination will be not more than thirty (30) days after the giving of such notice). |
(cc) | "Plan Administrator" means the individual or committee appointed by the Company to administer the Plan. If the Company does not appoint an individual or committee to serve as the Plan Administrator, the Company will be the Plan Administrator. |
(dd) | "Plan" means the Whole Foods Executive Retention Plan and Non-Compete Arrangement as set forth herein and as the same may be amended from time to time. |
(ee) | "Plan Agreement" means the written agreement between a Covered Executive and the Plan Administrator, on behalf of the Employer substantially in the form attached hereto in Appendix A. This form Plan Agreement may differ with respect to a Covered Executive as determined by the Compensation Committee in its sole and absolute discretion. Each Plan Agreement will form a part of the Plan with respect to the affected Covered Executive. |
(ff) | "Plan Year" means the fiscal year of the Plan, which will commence on January 1 |
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(gg) | "Pro Rata Bonus" has the meaning assigned in Section 4.4(a)(iii). |
(hh) | "Specified Employee" means a "specified employee" within the meaning of section 409A of the Code (as determined in accordance with the methodology established by the Employer as in effect on the Date of Termination). |
(ii) | "Trustee" means a nationally recognized financial institution appointed by the Company to serve as trustee of the Trust. |
(jj) | "Trust" means the "rabbi trust" to be established by the Company pursuant to Section 4.8. |
2.2 | Construction. Headings and subheadings are for the purpose of reference only and are not to be considered in the construction of the Plan. The pronouns "he," "him" and "his" used in the Plan will also refer to similar pronouns of the female gender unless otherwise qualified by the context. |
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3.1 | Non-Compete Benefits. If at any time the Covered Executive’s employment is terminated either by the Employer other than for Cause or by the Covered Executive, then, except as otherwise provided below or in the Covered Executive’s Plan Agreement, the Covered Executive will be entitled to the following Non-Compete Benefits in addition to the other rights set forth herein: |
(a) | Non-Compete Payment. To the extent not limited below or in the Covered Executive’s Plan Agreement and to the extent the Covered Executive continues to comply with the terms of the Plan and the applicable Plan Agreement, the Employer will make up to ten (10) semi annual payments to the Covered Executive each in an amount equal to the amount set forth in Section 1 of the Covered Executive’s Plan Agreement divided by ten (10) (each a "Non-Compete Payment," and together, the "Non-Compete Payments"). The first such Non-Compete Payment will be made on a date which is six (6) months and one (1) day after the Date of Termination. Each of the additional Non-Compete Payments will be made six (6) months after the date of the last such payment. The Employer will withhold from any amounts or benefits due to Executive under this Article III such United States federal, state or local or foreign taxes as are required to be withheld pursuant to any applicable law or regulation. |
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Years in Position | Adjustment to Non-Compete Payment |
Fewer than 11 | reduced to zero |
11 or greater but fewer than 12 | 20% of original amount will be paid |
12 or greater but fewer than 13 | 40% of original amount will be paid |
13 or greater but fewer than 14 | 60% of original amount will be paid |
14 or greater but fewer than 15 | 80% of original amount will be paid |
15 or greater | No adjustment will be made |
(b) | Equity Compensation. Unless otherwise specified in an applicable award agreement or the Covered Executive’s Plan Agreement, all stock options that have been granted to the Covered Executive by the Employer will become vested and immediately exercisable, and will remain exercisable until the earlier of (i) the fifth (5th) anniversary of the Date of Termination, or (ii) the original expiration date of the applicable stock option (other than by reason of termination of employment). Unless otherwise specified in an applicable award agreement or the Covered Executive’s Plan Agreement, all restricted stock, restricted stock units and other similar awards will also immediately vest. |
(c) | COBRA Coverage. Unless otherwise specified in the Covered Executive’s Plan Agreement, the Employer will reimburse the Covered Executive on a monthly basis for COBRA premiums paid by the Covered Executive for continuation of medical, dental and vision benefits under the Company’s group health plans to the Covered Executive and his or her eligible family members for a period commencing on the date the Covered Executive’s group health coverage would otherwise terminate by reason of his or her termination of employment and terminating on the earlier of (i) the eighteenth (18th) month anniversary of the Date of Termination, or (ii) the Covered Executive’s obtaining similar health benefit coverage, with no pre-existing condition exclusions applicable to the Covered Executive after taking into account the rules regarding creditable health coverage, via employment with a new employer; provided, that the Covered Executive and/or his eligible family members timely elect COBRA and provide evidence of the payment of the monthly COBRA premium. The Covered Executive will be obligated to notify the Daily Administrator within thirty (30) days of the date he or she secures similar health coverage, in which case the Employer’s obligation to reimburse the Covered Executive for such COBRA premium payments will cease, but the Covered Executive and/or his or her family members may, at their option, elect to continue to receive continued medical, dental and vision benefits under the Company’s group health plan pursuant to COBRA for the remainder of the applicable COBRA continuation period at their own expense in accordance with the eligibility requirements of COBRA. |
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3.2 | Remedies for Violation of Restrictive Covenants. The Employer’s only remedies for the Covered Executive’s failure to comply with the restrictive covenants set forth in Section 2(b)(i) of the Plan Agreement (relating to the covenant not to compete) will be termination for Cause, if applicable, and to cease to provide any and all Non-Compete Benefits described in this Article III (including, without limitation, the Employer’s ceasing to provide any and all Non-Compete Payments otherwise payable under Section 3.1(a)). The Employer’s only remedies for the Covered Executive’s failure to comply with the confidentiality provisions and the other restrictive covenants in the Plan Agreement (i.e., the covenants other than the covenant not to compete described in the preceding sentence) will be termination for Cause, if applicable, the injunctive relief described in Section 5 of the Plan Agreement, if applicable, and to cease to provide any and all Non-Compete Benefits described in this Article III (including, without limitation, the Employer’s ceasing to provide any and all Non-Compete Payments otherwise payable under Section 3.1(a)). |
3.3 | Death or Disability of Covered Executive. Notwithstanding anything else in this Article III, in the event of Covered Executive’s death or Disability, this Article III will be effective as of the Effective Date (without giving effect to the March 1, 2012 delayed date), the Waiver and Release will be deemed to have been signed by the Covered Executive after a termination without Cause, the Covered Executive will be deemed to have complied with the confidentiality provisions and restrictive covenants set forth in the Plan Agreement and the Employer will make the associated payments provided for in this Article III to the Covered Executive or his or her estate. |
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4.1 | COC Employment Period. The Employer agrees to continue to employ the Covered Executive, subject to the terms and conditions of the Plan, for the COC Employment Period. The COC Employment Period will terminate upon Executive’s termination of employment for any reason; subject to the terms of this Article IV. |
4.2 | Terms of Employment. |
(a) | Position and Duties. |
(i) | Scope and Location. During the COC Employment Period, (A) the Covered Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities will be at least commensurate in all respects with the most significant of those held, exercised and assigned to the Covered Executive at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date, (B) the Covered Executive’s services will be performed at the office where the Covered Executive was employed immediately preceding the COC Effective Date or at any other location less than thirty-five (35) miles from such office, and (C) the Covered Executive will not be required to travel on Employer business to a substantially greater extent than required during the one hundred and twenty (120)-day period immediately prior to the COC Effective Date. |
(ii) | Additional Positions. During the COC Employment Period, and excluding any periods of paid time off or sabbatical to which the Covered Executive is entitled, the Covered Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Employer and, to the extent necessary to discharge the responsibilities assigned to the Covered Executive hereunder, to use the Covered Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the COC Employment Period, it will not be a violation of this Article IV for the Covered Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Covered Executive’s responsibilities as an Executive in accordance with this Article IV. It is expressly understood and agreed that, to the extent that any such activities have been conducted by the Covered Executive prior to the COC Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the COC Effective Date will not thereafter be deemed to interfere with the performance of the Covered Executive’s responsibilities to the Employer. |
(b) | Compensation. |
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(i) | Base Salary. During the COC Employment Period, the Covered Executive will receive an annual base salary (the "Annual Base Salary") at an annual rate at least equal to twenty-six (26) times the highest bi-weekly base salary rate applicable to the Covered Executive by the Company and the Affiliated Companies in respect of the one (1)-year period immediately preceding the month in which the COC Effective Date occurs. The Annual Base Salary will be paid pursuant to the Employer’s normal payroll practices at such intervals as the Employer pays Executive salaries generally. During the COC Employment Period, the Annual Base Salary will be reviewed at least annually, beginning no more than 12 months after the last salary increase awarded to Executive prior to the COC Effective Date. Any increase in the Annual Base Salary will not serve to limit or reduce any other obligation to the Covered Executive under this Article IV. The Annual Base Salary will not be reduced after any such increase and the term "Annual Base Salary" will refer to the Annual Base Salary as so increased. |
(ii) | Annual Bonus. In addition to the Annual Base Salary, the Covered Executive will be awarded, for each fiscal year ending during the COC Employment Period, an annual bonus (the "Annual Bonus") in cash according to the same formula used to calculate the Covered Executive’s last bonus paid prior to the COC Effective Date. Notwithstanding the prior sentence, if any comparable bonus under the Employer’s successor bonus plan or arrangement would result in a higher payment to the Covered Executive, the Covered Executive will instead receive such bonus amount as her/his "Annual Bonus". Each such Annual Bonus will be paid no later than two and a half months after the end of the fiscal year for which the Annual Bonus is awarded and determined to be payable, unless Executive elects to defer the receipt of such Annual Bonus pursuant to an arrangement that meets the requirements of section 409A of the Code. |
(iii) | Long-Term Cash and Equity Incentives, Savings and Retirement Plans. During the COC Employment Period, the Covered Executive will be entitled to participate in all long-term cash incentive, equity incentive, savings and retirement plans, practices, policies, and programs applicable generally to other peer Executives, but in no event will such plans, practices, policies and programs provide the Covered Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Employer to the Covered Executive under such plans, practices (including without limitation, the Company’s annual stock option grant), policies and programs as in effect at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date or, if more favorable to the Covered Executive, those provided generally at any time after the COC Effective Date to other peer Executives. |
(iv) | Welfare Benefit Plans. During the COC Employment Period, the Covered Executive and/or the Covered Executive’s family, as the case may be, will |
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(v) | Expenses. During the COC Employment Period, the Covered Executive will be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Covered Executive in accordance with the most favorable policies, practices and procedures of the Employer in effect for Executive at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date or, if more favorable to the Covered Executive, as in effect generally at any time thereafter with respect to other peer Executives. |
(vi) | Fringe Benefits. During the COC Employment Period, the Covered Executive will be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Employer in effect for the Covered Executive at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date or, if more favorable to the Covered Executive, as in effect generally at any time thereafter with respect to other peer Executives. |
(vii) | Office and Support Staff. During the COC Employment Period, the Covered Executive will be entitled to an office or offices of a size and with furnishings and other appointments, and to an exclusive personal administrative assistant and other assistance, at least equal to the most favorable of the foregoing provided to the Covered Executive by the Employer at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date or, if more favorable to the Covered Executive, as provided generally at any time thereafter with respect to other peer Executives. The Covered Executive will be entitled to pick his or her own administrative assistant. |
(viii) | Paid Time Off. During the COC Employment Period, the Covered Executive will be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Employer as in effect for the Covered Executive at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date or, if more favorable to the Covered Executive, as in effect generally at any time thereafter with respect to other peer Executives. |
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4.3 | Termination. |
(a) | Death. The Covered Executive’s employment will terminate automatically if the Covered Executive dies during the COC Employment Period. |
(b) | Termination With or without Cause or by Reason of Disability. Subject to the other terms of the Plan (including, without limitation, payment of certain amounts to the Covered Executive), the Employer may terminate the Covered Executive’s employment during the COC Employment Period with or without Cause. |
4.4 | Obligations of the Employer in Connection with a Change of Control. |
(a) | Termination Payments. If, during the COC Employment Period the Employer terminates the Covered Executive’s employment other than for Cause or Death, or the Covered Executive terminates employment for Good Reason then the Covered Executive will be entitled to the following: |
(iii) | Cash Payments: The Employer will pay to the Covered Executive, in a lump sum in cash within thirty (30) days after the Date of Termination, the aggregate of the following amounts: |
(A) | the sum of (1) the Covered Executive’s Annual Base Salary through the Date of Termination to the extent not previously paid, (2) the Covered Executive’s business expenses that are reimbursable pursuant to Section 4.2(b) but have not been reimbursed by the Employer as of the Date of Termination; (3) the Covered Executive’s Annual Bonus for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs, if such bonus has not been paid as of the Date of Termination; (4) any accrued paid time off to the extent not theretofore paid (the sum of the amounts described in subclauses (1), (2), (3) and (4), the "Accrued Obligations") provided, that notwithstanding the foregoing, if the Covered Executive has made an irrevocable election under any deferred compensation arrangement subject to section 409A of the Code to defer any portion of the annual bonus described in clause (3) above, then for all purposes of this Article IV (including, without limitation, Sections 4.5 through 4.7)), such deferral election, and the terms of the applicable arrangement will apply to the same portion of the amount described in such clause (3), and such portion will not be considered as part of the "Accrued Obligations" but will instead be an "Other Benefit" (as defined in Section 4.10 below; |
(B) | the amount equal to the product of (1) three, and (2) the sum of (x) the Covered Executive’s Annual Base Salary and (y) the average of the last three annual bonuses paid to the Covered Executive; and |
(iv) | Non-Compete Benefits: Subject to the other terms of the Plan, including the requirement that Executive comply with the restrictive covenants in the Plan Agreement and execute a Waiver and Release, the Employer will provide the payments and benefits set forth in Article III. |
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(v) | Pro Rata Bonus. “Pro Rata Bonus” means an amount equal to the product of (i) the Covered Executive’s annual bonus during year in which the COC Effective Date occurs, if any, and (ii) a fraction, the numerator of which is the number of days in such year through the Date of Termination and the denominator of which is three hundred and sixty five (365). The Pro Rata Bonus will be paid at the same time and form specified in the applicable annual incentive plan. Notwithstanding the foregoing, in the event that the successor to the Company by reason of the Change of Control fails to assume the Company’s annual incentive plan in effect on the COC Effective Date, and irrespective of whether Executive incurs a termination of employment, dies or becomes Disabled, Executive will be entitled to receive a lump sum cash payment in an amount equal to the target bonus specified in the Company’s annual incentive plan, or if the plan does not specify a target, the amount which would be payable based on the Company’s forecasted results for such period established prior to the Change of Control (the "Target Bonus"), subject to applicable withholding for income and employment taxes. Such Target Bonus will be paid within five (5) business days following the date of the Change of Control provided that amounts payable under the annual incentive plan are exempt from Section 409A of the Code by reason of the short-term deferral rule; otherwise, the Target Bonus will be paid at the time such amount would have otherwise been paid had the annual incentive plan remained in effect for the remainder of the year in which occurs the COC Effective Date. |
(vi) | Other Benefits: except as otherwise set forth in the last sentence of Section 4.10, to the extent not theretofore paid or provided, the Employer will timely pay or provide to Executive any Other Benefits in accordance with the terms of the underlying plans or agreements. |
4.5 | Death. If the Covered Executive dies during the COC Employment Period, the Employer will provide Executive’s estate or beneficiaries with all payments due to the Covered Executive as though Executive had left the employment of the Employer with Good Reason on the date of the Covered Executive’s death (other than with respect to the application of the Delayed Payment). All such payments will be paid by the Employer to the Covered Executive’s estate or beneficiary, as applicable, in a lump sum in cash within thirty (30) days of the date of the Covered Executive’s death (the "deemed Date of Termination"). With respect to the provision of the Other Benefits, the term "Other Benefits" for the purposes of this Section 4.5 will include, without limitation, and the Covered Executive’s estate and/ |
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4.6 | Disability. If the Covered Executive’s employment is terminated by the Employer during the COC Employment Period by reason of the Covered Executive’s Disability, the Covered Executive will be treated as though the Covered Executive had left the employment of the Employer with Good Reason as of the Date of Termination. Except as otherwise provided herein, all payments will be paid by the Employer to the Covered Executive in accordance with Section 4.4(a). With respect to the provision of the Other Benefits, the term "Other Benefits" for the purposes of this Section 4.6 will include, and the Covered Executive will be entitled to receive (after the Employer’s termination of the Covered Executive’s employment), disability and other benefits at least equal to the most favorable of those generally provided by the Employer to disabled Executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer Executives and their families at any time during the one hundred and twenty (120)-day period immediately preceding the COC Effective Date or, if more favorable to the Covered Executive and/or the Covered Executive’s family, as in effect at any time thereafter generally with respect to other peer Executives and their families. |
4.7 | Termination for Cause; Termination Other Than for Good Reason. If the Covered Executive’s employment is terminated for Cause during the COC Employment Period, the Employer will provide the Covered Executive with the Covered Executive’s Annual Base Salary through the Date of Termination, payment for accrued but unused paid time off, and the timely payment or delivery of the Other Benefits (disregarding the proviso set forth in Section 4.4(a)(i)(A) regarding the deferral of the Annual Bonus), but no Pro Rata Bonus will be paid to the Covered Executive and the Employer will have no other severance obligations under Article IV of the Plan; provided however, the Covered Executive may still receive any payment to which he or she is entitled under another Article of the Plan. If the Covered Executive voluntarily terminates employment during the COC Employment Period, excluding a termination for Good Reason, the Employer will provide to Executive the Accrued Obligations and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits, subject to the proviso set forth in Section 4.4(a)(i)(A) to the extent applicable, and will have no other severance obligations under Article IV of the Plan; provided however, that Covered Executive may still receive any payment to which he or she is entitled under another Article of the Plan. In such case, all the Accrued Obligations will be paid to the Covered Executive in a lump sum in cash within thirty (30) days of the Date of Termination and the Pro Rata Bonus will be paid pursuant to the terms of Section 4.4(a)(iii). |
4.8 | Rabbi Trust. After any COC Effective Date, to the extent the payments to be provided to Executive under Section 4.4(a)(i) are not to be paid until the Delayed Payment Date and/or there are payments due under Section 3.1(a) then within five (5) business days of Executive’s Date of Termination, the Company will deliver cash, in an amount equal to the |
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4.9 | Legal Fees. At anytime after a COC Effective date through the Covered Executive’s remaining lifetime (or, if longer, through the 20th anniversary of the COC Effective Date), and regardless of whether or not the Plan has been terminated, the Employer agrees to pay as incurred (within ten (10) days following the Employer’s receipt of an invoice from the Covered Executive) to the full extent permitted by law, all legal fees and expenses that the Covered Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Employer, the Covered Executive or others of the validity or enforceability of, or liability under, any provision of the Plan, the Plan Agreement or the Waiver and Release, or any guarantee of performance thereof (including, without limitation, as a result of any contest by the Covered Executive about the amount of any payment pursuant to the Plan), plus, in each case, Interest determined as of the date such legal fees and expenses were incurred. In order to comply with section 409A of the Code, in no event will the payments by the Employer under this Section 4.9 be made later than the end of the calendar year next following the calendar year in which such fees and expenses were incurred, provided, that the Covered Executive submits an invoice for such fees and expenses at least ten (10) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred. The amount of such legal fees and expenses that the Employer is obligated to pay in any given calendar year will not affect the legal fees and expenses that the Employer is obligated to pay in any other calendar year, and the Covered Executive’s right to have the Employer pay such legal fees and expenses may not be liquidated or exchanged for any other benefit. |
4.10 | Non-Exclusivity of Rights. Nothing in the Plan will prevent or limit the Covered Executive’s continuing or future participation in any plan, program, policy or practice provided by the Employer and for which the Covered Executive may qualify, nor will anything herein limit or otherwise affect such rights as the Covered Executive may have under any other contract or agreement with the Employer. Amounts that are vested benefits or that the Covered Executive is otherwise entitled to receive under any plan, policy, practice or program of or any other contract or agreement with the Employer at or subsequent to the Date of Termination ("Other Benefits") will be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by the Plan. Without limiting the generality of the foregoing, the Covered Executive’s resignation under the Plan, with or without Good Reason, will in no way affect Executive’s ability to terminate employment by reason of Executive’s "retirement" under any compensation and benefits plans, programs or arrangements of the Employer, including without limitation any retirement or pension plans or arrangements or to be eligible to receive benefits under any compensation or benefit plans, programs or arrangements of the Employer, including without limitation any retirement or pension plan or arrangement of the Employer or |
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5.1 | The Plan Administrator. The overall administration of the Plan will be the responsibility of the Plan Administrator. |
5.2 | Powers of Plan Administrator. The Plan Administrator will have sole and absolute discretion regarding the exercise of its powers and duties under the Plan. In order to effectuate the purposes of the Plan, the Plan Administrator will have the following powers and duties: |
(c) | To appoint the Daily Administrator; |
(d) | To review and render decisions respecting a denial of a claim for benefits under the Plan; |
(e) | To construe the Plan and to make equitable adjustments for any mistakes or errors made in the administration of the Plan; and |
(f) | To determine and resolve, in its sole and absolute discretion, all questions relating to the administration of the Plan and any trust established to secure the assets of the Plan: |
(i) | when differences of opinion arise between the Company, an Affiliate, the Daily Administrator, the trustee, a Covered Executive, or any of them, and |
(ii) | whenever it is deemed advisable to determine such questions in order to promote the uniform and nondiscriminatory administration of the Plan for the greatest benefit of all parties concerned. |
5.3 | Appointment of Daily Administrator. The Plan Administrator will appoint the Daily Administrator, who will have the responsibility and duty to administer the Plan on a daily basis. The Plan Administrator may remove the Daily Administrator with or without cause at any time. The Daily Administrator may resign upon written notice to the Plan Administrator. |
5.4 | Duties of Daily Administrator. The Daily Administrator will have sole and absolute discretion regarding the exercise of its powers and duties under the Plan. The Daily Administrator will have the following powers and duties: |
(a) | To enter into, on behalf of the Employer, a Plan Agreement with an Executive who is deemed a Covered Executive; |
(b) | To direct the administration of the Plan in accordance with the provisions herein set forth; |
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(c) | To adopt rules of procedure and regulations necessary for the administration of the Plan, provided such rules are not in consistent with the terms of the Plan; |
(d) | To determine all questions with regard to rights of Covered Executives and beneficiaries under the Plan including, but not limited to, questions involving eligibility of an Executive to participate in the Plan and the amount of a Covered Executive's benefits; |
(e) | To make all final determinations and computations concerning the benefits to which the Covered Executive or his estate is entitled under the Plan; |
(f) | To enforce the terms of the Plan and any rules and regulations adopted by the Plan Administrator; |
(g) | To review and render decisions respecting a claim for a benefit under the Plan; |
(h) | To furnish the Employer with information that the Employer may require for tax or other purposes; |
(i) | To engage the service of counsel (who may, if appropriate, be counsel for the Employer), actuaries, and agents whom it may deem advisable to assist it with the performance of its duties; |
(j) | To prescribe procedures to be followed by Covered Executives in obtaining benefits; |
(k) | To receive from the Employer and from Covered Executives such information as is necessary for the proper administration of the Plan; |
(l) | To create and maintain such records and forms as are required for the efficient administration of the Plan; |
(m) | To make all initial determinations and computations concerning the benefits to which any Covered Executive is entitled under the Plan; |
(n) | To give the trustee of any trust established to serve as a source of funds under the Plan specific directions in writing with respect to: |
(i) | making distribution payments, giving the names of the payees, specifying the amounts to be paid and the time or times when payments will be made; and |
(ii) | making any other payments which the trustee is not by the terms of the trust agreement authorized to make without a direction in writing by the Daily Administrator; |
(o) | To comply with all applicable lawful reporting and disclosure requirements of ERISA; |
(p) | To comply (or transfer responsibility for compliance to the trustee) with all applicable federal income tax withholding requirements for benefit distributions; and |
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(q) | To construe the Plan, in its sole and absolute discretion, and make equitable adjustments for any errors made in the administration of the Plan. |
5.5 | Indemnification of Plan Administrator and Daily Administrator. To the extent not covered by insurance, or if there is a failure to provide full insurance coverage for any reason, and to the extent permissible under corporate by-laws and other applicable laws and regulations, the Employer agrees to hold harmless and indemnify the Plan Administrator and Daily Administrator against any and all claims and causes of action by or on behalf of any and all parties whomsoever, and all losses therefrom, including, without limitation, costs of defense and reasonable attorneys' fees, based upon or arising out of any act or omission relating to or in connection with the Plan other than losses resulting from the Plan Administrator's or any such person's commission of fraud or willful misconduct. |
5.6 | Claims for Benefits. |
(a) | Initial Claim. In the event that a Covered Executive or his estate (a "claimant") claims to be eligible for benefits, or claims any rights under the Plan or seeks to challenge the validity or terms of the Waiver and Release described in Section 3.1, such claimant must complete and submit such claim forms and supporting documentation as will be required by the Daily Administrator, in its sole and absolute discretion. Likewise, any claimant who feels unfairly treated as a result of the administration of the Plan, must file a written claim, setting forth the basis of the claim, with the Daily Administrator. In connection with the determination of a claim, or in connection with review of a denied claim, the claimant may examine the Plan, and any other pertinent documents generally available to Covered Executives that are specifically related to the claim. |
(b) | Request for Review. Within ninety (90) days after receiving written notice of the Daily Administrator's disposition of the claim, the claimant may file with the Plan Administrator a written request for review of his claim. In connection with the request |
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(c) | Decision on Review. After receipt by the Plan Administrator of a written application for review of his claim, the Plan Administrator will review the claim taking into account all comments, documents, records and other information submitted by the claimant regarding the claim without regard to whether such information was considered in the initial benefit determination. The Plan Administrator will notify the claimant of its decision by delivery or by certified or registered mail to his last known address. |
5.7 | Arbitration. In the event the claims review procedure described in Section 5.6 of the Plan does not result in an outcome thought by the claimant to be in accordance with the Plan document, he may appeal such decision prior to a Change of Control to a third party neutral arbitrator. These arbitration provisions as a final dispute resolution mechanism will be elective on the part of the Covered Executive on and after a Change of Control (i.e, the Covered Executive may pursue legal action in a court of law in lieu of an appeal to any arbitrator). The claimant must appeal to an arbitrator (or pursue legal action in a court of law) within sixty (60) days after receiving the Plan Administrator's denial or deemed denial of his request for review and before bringing suit in court. The arbitration will be conducted pursuant to the American Arbitration Association ("AAA") Rules on Employee Benefit Claims. |
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5.8 | Receipt and Release of Necessary Information. In implementing the terms of the Plan, the Plan Administrator and Daily Administrator, as applicable, may, without the consent of or notice to any person, release to or obtain from any other insuring entity or other organization or person any information, with respect to any person, which the Plan Administrator or Daily Administrator deems to be necessary for such purposes. Any Covered Executive or estate claiming benefits under the Plan will furnish to the Plan Administrator or Daily Administrator, as applicable, such information as may be necessary to determine eligibility for and amount of benefit, as a condition of claiming and receiving such benefit. |
5.9 | Overpayment and Underpayment of Benefits. The Daily Administrator may adopt, in its sole and absolute discretion, whatever rules, procedures and accounting practices are appropriate in providing for the collection of any overpayment of benefits. If a Covered |
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5.10 | No Mitigation. The Employer’s obligation to make the payments provided for under the Plan and otherwise to perform its obligations hereunder will not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right or action that the Employer may have against the Covered Executive or others. In no event will the Covered Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of the Plan, and except as specifically provided in Section 3.1(c) regarding COBRA coverage, such amounts will not be reduced whether or not the Covered Executive obtains other employment. |
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6.1 | Continuation. The Company currently intends to continue the Plan indefinitely. However, if the Plan is discontinued, the Company assumes no contractual obligation beyond the obligations due to each Executive under the Plan and their respective Plan Agreements which were executed prior to such discontinuance. |
6.2 | Amendment of Plan. The Company, through an action of the Board reserves the right in its sole and absolute discretion to amend the Plan in any respect at any time; provided, however, that except as required to comply with section 409A of the Code or other applicable law, no amendment to the Plan will be made that reduces or diminishes the rights of any Covered Executive as set forth in the Covered Executive’s Plan Agreement without the Covered Executive’s written consent. In the event of a Change of Control, no amendment may be made to the Plan within twenty four (24) months following a Change of Control without the consent of the affected Covered Executives. |
6.3 | Termination of Plan. The Company, through an action of the Board, may terminate or suspend the Plan in whole or in part at any time subject to the same rules regarding the amendment of the Plan in Section 6.2 (i.e., no Covered Executive’s Plan Agreement may be terminated without the Covered Executive’s written consent and the Plan may not be terminated within twenty four (24) months following a Change of Control without the consent of the affected Covered Executives). |
6.4 | Termination of Affiliated Company's Participation. The Company may terminate an Affiliated Company's participation in the Plan at any time by an action of the Compensation Committee and providing written notice to the Affiliated Company; provided, however, no such termination shall be allowed to negatively impact a Covered Executive’s rights to the benefits described in the Plan and the Covered Executive’s Plan Agreement that is in effect at the time of such termination. The effective date of any such termination will be the later of the date specified in the notice of the termination of participation or the date on which the Daily Administrator can administratively implement such termination. |
6.5 | 409A Compliance. The Plan is intended to comply with the requirements of section 409A of the Code or an exemption or exclusion therefrom and will in all respects be administered in accordance with section 409A of the Code. In the event that the Company determines that a provision of the Plan does not comply with section 409A of the Code, the Company may modify the Plan, in the least restrictive manner necessary and without any diminution in the value of the payments to the Covered Executive, in order to cause the provisions of the Plan to comply with the requirements of section 409A of the Code, so as to avoid the imposition of taxes and penalties on the Covered Executive pursuant to section 409A of the Code. Based on existing guidance under section 409A of the Code, the Company believes and intends that the Non-Compete Payment under Section 3.1(a) and the Change of Control payment under Section 4.4(a)(i)(B) constitute separate amounts of deferred compensation under Section 409A of the Code and, as such, they may each have a separate time and form of payment under Treasury Regulation §1.409A-3(c). However, in the event that subsequent guidance issued under section 409A indicates that this is not the case and the Non-Compete Payment and the Change of Control payment under Section 4.4(a)(i)(B) must be treated as a single payment, the Change of Control payment will be paid at the |
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7.1 | No Reduction of Employer Rights. Except as provided in Article IV, nothing contained in the Plan will be construed as a contract of employment between the Employer and a Covered Executive, or as a right of any Covered Executive to continue in the employment of the Employer, or as a limitation of the right of the Employer to discharge any of its Covered Executives, with or without cause. |
7.2 | Successor to the Company. The Company will require any successor or assign (whether direct or indirect, by purchase, exchange, lease, merger, consolidation, or otherwise) to all or substantially all of the property and assets of the Company and its Affiliated Companies taken as a whole, to expressly assume the Plan and to agree to perform under the Plan in the same manner and to the same extent that the Company and its Affiliated Companies would be required to perform it if no such succession had taken place. |
7.3 | Provisions Binding. All of the provisions of the Plan will be binding upon the Company and its Affiliated Companies and any successor to the Company or any such Affiliated Company. Likewise, the provisions of the Plan will be binding upon all persons who will be entitled to any benefit hereunder, their heirs and personal representatives. |
7.4 | Governing Law. Except to the extent pre-empted by ERISA or other applicable federal law, the Plan will be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflict of laws. |
7.5 | Notice. All notices and other communications under the Plan must be in writing and given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: |
(a) | Covered Executive. For notice to the Covered Executive: |
(b) | For the Company and Administrators: For notice to the Company, Plan Administrator or Daily Administrator: |
(c) | Alternate Address. If either party provides written notice to the other in accordance with this Section 7.5, of an alternate address, such address will be used instead of the addresses specified in clauses (a) or (b). |
(d) | Effective Date. Notice and communications will be effective when actually received by the addressee. |
7.6 | Severability. The invalidity or unenforceability of any provision of the Plan will not affect |
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7.7 | Counterparts and Electronic Signatures. Each Plan Agreement may be executed in several counterparts, all of which taken together shall constitute one single agreement. Signatures may be made and delivered electronically. |
7.8 | Withholding. The Company may withhold from any amounts payable under the Plan such United States federal, state or local or foreign taxes as will be required to be withheld pursuant to any applicable law or regulation. |
7.9 | No Waiver. The Covered Executive’s or the Employer’s failure to insist upon strict compliance with any provision of the Plan or the failure to assert any right the Covered Executive or the Employer have hereunder, including, without limitation, the right of the Covered Executive to terminate employment for Good Reason, will not be deemed to be a waiver of such provision or right or any other provision or right of the Plan. |
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1. | Non-Compete Benefits. |
(a) | Non-Compete Payment. The amount of the total of all Non-Compete Payments payable to the Covered Executive under Section 3.1(a) of the Plan will equal up to ______________________ ($________)(so long as the Covered Executive complies with the terms of this Plan Agreement); provided, this amount will be adjusted to reflect the increase, if any, in the Consumer Price Index (as defined below) that has occurred during the period beginning on the date of this Plan Agreement and ending as of the close of the month immediately preceding the month in which the Covered Executive’s employment is terminated in accordance with Section 3.1(a) of the Plan; [and further provided, that the amount of the Non-Compete Payment payable upon a voluntary termination of employment for a reason other than Good Reason, Disability or death will be subject to Section 1(d) of this Plan Agreement]*. |
(b) | Equity Compensation. [Subject to the provisions of Section 1(d) of this Plan Agreement, ]* applicable equity compensation granted to the Covered Executive |
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(c) | COBRA Coverage. [Subject to the provisions of Section 1(d) of this Plan Agreement,]* the Covered Executive shall be entitled to reimbursement of COBRA premiums pursuant to the provisions of Section 3.1(c) of the Plan (so long as the Covered Executive complies with the terms of this Plan Agreement). |
(d) | [Voluntary Termination of Employment. In the event that the Covered Executive voluntarily terminates employment with the Company for a reason other than Good Reason, Disability or death, the Non-Compete Benefits otherwise due and payable shall not be due and payable in connection with such termination, and instead the benefits payable, if any, will consist of those benefits described in Sections 1(a), 1(b) and 1(c) of this Plan Agreement but in such amounts as are negotiated between either one of the two Co-Chief Executive Officers of the Company (or the Chief Executive Officer of the Company, if the Company has only one Chief Executive Officer at such time) and the Covered Executive and documented in a signed writing (the “Negotiated Benefits” which benefits will be deemed to be Non-Compete Benefits described herein); provided, however that for purposes of such negotiation the benefits cannot exceed the maximum provided for in the case of a termination for “Good Reason” under Sections 1(a), 1(b) and 1(c) of this Plan Agreement. |
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2. | Confidentiality and Restrictive Covenants. As a condition of receiving the Non-Compete Benefits under Article III of the Plan, as set forth in Section 1 of this Plan Agreement [including the Negotiated Benefits that may be payable in the event of the Covered Executive’s voluntary termination of employment]*, the Covered Executive agrees to comply with the following confidentiality provisions and restrictive covenants: |
(a) | Confidentiality Provisions. |
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(b) | Restricted Covenants. In consideration of the Employer’s promise to provide Confidential Information and other good and valuable consideration, the receipt and sufficiency thereof is hereby acknowledged, the Covered Executive agrees as follows: |
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3. | Change in Control Benefits. In the event of a Change of Control, the Covered Executive will also be entitled to the rights and benefits set forth in Article IV of the Plan, as in effect on the date of this Plan Agreement, including the termination payment described in Section 4.4(a) and subject to the Covered Executive’s satisfaction of the terms and conditions that are required to receive such benefits. |
4. | Dispute Resolution. Any dispute or claim for benefits under the Plan must be resolved through the claims procedure set forth in Article V of the Plan which procedure, prior to a Change of Control culminates in binding arbitration, if elected by the Covered Executive. By accepting the benefits provided under the Plan, the Covered Executive hereby agrees to binding arbitration as the final means of dispute resolution (if the Covered Executive elects to pursue binding obligation) with respect to the Plan prior to a Change of Control. |
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5. | Injunctive Relief. Notwithstanding anything contained in the Plan or Section 4 to the contrary, if the Covered Executive breaches, or threatens to commit a breach of, any of the restrictive covenants of Section 2(b) of this Plan Agreement (other than the restrictive covenants set forth in Section 2(b)(i)), the Company will also have the right and remedy to seek from any court of competent jurisdiction specific performance of such provisions or injunctive relief against any act which would violate any of Section 2(b) of this Plan Agreement, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company. The Company and the Covered Executive (a) agree that any suit, action or legal proceeding permitted by this Section 5 may be brought in the courts of record of the State of Texas in Travis County or the court of the United States, Western District of Texas; (b) consent to the jurisdiction of each such court in any suit, action or proceeding permitted by this Section; and (c) waive any objection that they may have to the laying of venue of any such suit, action or proceeding permitted by this Section 5 in any of such courts. |
6. | Plan Incorporated by Reference. The Plan is hereby incorporated into and made a part of this Plan Agreement as though set forth in full herein. The parties will be bound by and have the benefit of each and every provision of the Plan, as amended from time to time. |
7. | Amendment. This Plan Agreement may be amended at any time by the mutual agreement of the parties; provided, that no such amendment will be effective unless evidenced by a written instrument executed by both the Employer and the Covered Executive. |
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Covered Executive’s Signature |
Covered Executive’s Printed Name |
Covered Executive’s Signature Date |
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Date: August 10, 2012 | |
/s/John Mackey | |
John Mackey | |
Co-Chief Executive Officer |
Date: August 10, 2012 | |
/s/Walter Robb | |
Walter Robb | |
Co-Chief Executive Officer |
Date: August 10, 2012 | |
/s/Glenda Flanagan | |
Glenda Flanagan | |
Chief Financial Officer |
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