WFM Whole Foods Market, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant   ☒

Filed by a Party other than the Registrant   ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under § 240.14a-12

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Whole Foods Market, Inc.

(Name of Registrant as Specified in Its Charter)

   

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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(1)

Title of each class of securities to which transaction applies: Whole Foods Market, Inc. common stock, no par value.

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(2)

Aggregate number of securities to which transaction applies: The maximum number of shares of common stock to which this transaction applies is estimated to be 335,015,401, which consists of  (a) 320,092,231 shares of common stock outstanding; (b) 14,805,687 shares of common stock issuable pursuant to outstanding options with exercise prices below the per share merger consideration of  $42.00; (c) 15,750 shares of common stock issuable pursuant to outstanding stock appreciation rights with exercise prices below the per share merger consideration of  $42.00; and (d) 101,733 shares of common stock representing restricted stock and restricted stock units entitled to receive the per share merger consideration of  $42.00, in each case as of July 2, 2017.

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(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): Solely for the purpose of calculating the filing fee, the underlying value of the transaction was calculated based on the sum of  (a) the product of 320,092,231 shares of common stock and the per share merger consideration of  $42.00; (b) the product of  (i) 14,805,687 shares of common stock issuable upon exercise of options to purchase shares of common stock and (ii) the difference between $42.00 and the weighted average exercise price of such options of  $33.66; (c) the product of  (i) 15,750 shares of common stock issuable pursuant to stock appreciation rights and (ii) the difference between $42.00 and the weighted average exercise price of such stock appreciation rights of  $34.24; and (d) the product of 101,733 shares of common stock representing restricted stock and restricted stock units and the per share merger consideration of  $42.00.

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(4)

Proposed maximum aggregate value of transaction: $13,571,748,138

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(5)

Total fee paid: $1,572,966

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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(1)

Amount Previously Paid:

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(2)

Form, Schedule or Registration Statement No.:

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(3)

Filing Party:

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Date Filed:

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED JULY 7, 2017

[           ], 2017​

Dear Fellow Shareholders:

You are cordially invited to attend a special meeting of the shareholders of Whole Foods Market, Inc. (“Whole Foods Market” or the “Company”), which we will hold at [                  ], on [                  ], 2017, at [                  ] a.m. local time.

At the special meeting, our shareholders will be asked to consider and vote on a proposal to approve the merger agreement that we entered into on June 15, 2017 (the “merger agreement”), providing for the acquisition of the Company by Amazon.com, Inc. (“Amazon.com”). The acquisition will occur by means of a merger of a wholly owned subsidiary of Amazon.com with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Amazon.com. If the merger agreement is approved by our shareholders and the merger is completed, each share of our common stock will be converted into the right to receive $42.00 per share in cash.

The Whole Foods Market board of directors unanimously recommends that our shareholders vote “FOR” the proposal to approve the merger agreement.

The enclosed proxy statement describes the merger agreement, the merger and related matters, and attaches a copy of the merger agreement. We urge shareholders to read the entire proxy statement carefully, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important. The merger cannot be completed unless holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting vote in favor of the proposal to approve the merger agreement.

On behalf of the entire board of directors, I want to thank you for your continued support.

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger, the merger agreement or the other transactions contemplated thereby or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated [           ], 2017 and is first being mailed to shareholders on or about [           ], 2017.

WHOLE FOODS MARKET, INC.

The Whole Foods Market board of directors has unanimously determined that the merger is fair to, and in the best interests of, the Company and its shareholders, and unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Whole Foods Market board of directors unanimously recommends that the shareholders of Whole Foods Market vote (1) “FOR” the proposal to approve the merger agreement, (2) “FOR” the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, (3) “FOR” the proposal to approve an amendment to the Articles to set the number of authorized shares of our common stock at 600 million and (4) “FOR” the proposal to approve the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum. If you sign, date and return your proxy card without indicating how you wish to vote on a proposal, your proxy will be voted “FOR” each of the foregoing proposals in accordance with the recommendation of the Whole Foods Market board of directors.

Your vote is important, regardless of the number of shares of common stock you own. Please make sure your voice is heard in this important matter related to your investment. The approval of the merger agreement requires the affirmative vote of holders of a majority of the outstanding shares of common stock entitled to vote at the special meeting and is a condition to the completion of the merger. The approval of the amendment to the Articles requires the affirmative vote of holders of a majority of the outstanding shares of common stock entitled to vote at the special meeting. The approval of the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the approval of the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum, each requires the affirmative vote of a majority of the votes cast with respect to that proposal, but is not a condition to the completion of the merger.

Shareholders who do not vote in favor of the proposal to approve the merger agreement, and who object in writing to the merger prior to the special meeting and comply with all of the applicable requirements of Texas law, which are summarized in the section entitled “ Dissenters’ Rights of Whole Foods Market Shareholders ” in the accompanying proxy statement and reproduced in their entirety in Annex C, will be entitled to dissenters’ rights of appraisal to obtain the fair value of their shares of common stock of Whole Foods Market.

You may revoke your proxy at any time before the vote is taken at the special meeting. You may revoke your proxy by notifying the Company at Whole Foods Market, Inc., 550 Bowie Street, Austin, Texas 78703, Attention: Investor Relations Dept., or by submitting a new proxy by telephone, the Internet or mail, in each case, in accordance with the instructions on the enclosed proxy card and dated after the date of the proxy being revoked. In addition, you may revoke your proxy by attending the special meeting and voting in person; however, simply attending the special meeting will not cause your proxy to be revoked.

Before voting your shares, you should read the entire proxy statement carefully, including its annexes and the documents incorporated by reference in the proxy statement.

By Order of the Board of Directors,

[                  ]

Heather Stern
General Counsel, Global Vice President of Legal Affairs
Austin, Texas
[                  ]

TABLE OF CONTENTS

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ANNEX A

Agreement and Plan of Merger by and among Amazon.com, Inc., Walnut Merger Sub, Inc. and Whole Foods Market, Inc., dated as of June 15, 2017.

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ANNEX B

Opinion of Evercore Group L.L.C.

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ANNEX C

Dissenters’ Rights Provisions of the Texas Business Organizations Code.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting and the proposals to be voted on at the special meeting. These questions and answers may not address all of the questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully and in their entirety. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions under the section entitled “ Where You Can Find Additional Information.”

Q:

Why am I receiving this proxy statement?

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A:

On June 15, 2017, the Company entered into a merger agreement providing for Amazon.com to acquire the Company in a merger for a price of  $42.00 per share in cash, without interest. You are receiving this proxy statement in connection with the solicitation of proxies by the Whole Foods Market board of directors in favor of the proposal to approve the merger agreement and to approve the other related proposals to be voted on at the special meeting.

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Q:

When and where is the special meeting?

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The special meeting will be held at [    ], on [    ], 2017, at [    ] a.m. local time (including any adjournment or postponement thereof, the “special meeting”).

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Q:

Who is entitled to vote at the special meeting?

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Only holders of record of Whole Foods Market common stock as of the close of business on [    ], 2017, the record date for the special meeting, are entitled to receive these proxy materials and to vote their shares at the special meeting. Each share of Whole Foods Market common stock issued and outstanding as of the close of business on the record date will be entitled to one vote on each matter submitted to a vote at the special meeting.

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Q:

What matters will be voted on at the special meeting?

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You will be asked to consider and vote on the following proposals:

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to approve the merger agreement;

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to approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger;

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to approve an amendment to the Articles to set the number of authorized shares of our common stock at 600 million; and

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to approve the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum.

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Q:

How do I attend the special meeting?

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If you plan to attend the special meeting in person, you must provide proof of ownership of Whole Foods Market common stock as of the close of business on the record date, such as an account statement indicating ownership on that date, and a form of personal identification for admission to the meeting. If you hold your shares in “street name,” and you also wish to be able to vote at the meeting, you must obtain a legal proxy, executed in your favor, from your bank, broker or other nominee.

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If you anticipate needing assistance to participate in the meeting due to a disability, we would appreciate it if you would please notify us by [    ], 2017, so we may be better prepared to assist you. Please contact [    ] and provide information about the assistance you will need.

For safety and security reasons, Whole Foods Market will not allow anyone to bring large bags, briefcases or packages into the meeting room, or to record or photograph the meeting.

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Q:

How many shares are needed to constitute a quorum?

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A quorum will be present if holders of a majority of the voting power of the shares of capital stock of the Company issued and outstanding and entitled to vote at the special meeting are present in person or represented by proxy at the special meeting. If a quorum is not present at the special meeting, the special meeting may, and at the request of Amazon.com, will, be adjourned or postponed from time to time (subject to the terms of the merger agreement) until a quorum is obtained.

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As of the close of business on [    ], 2017, the record date for the special meeting, there were [    ] shares of common stock outstanding.

If you submit a proxy but fail to provide voting instructions or abstain on any of the proposals listed on the proxy card, your shares will be counted for the purpose of determining whether a quorum is present at the special meeting.

Q:

What vote of Whole Foods Market shareholders is required to approve the merger agreement?

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Approval of the merger agreement requires the vote of a majority of the shares of common stock outstanding at the close of business on the record date for the special meeting “ FOR ” the proposal to approve the merger agreement. A failure to vote your shares of common stock or an abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to approve the merger agreement. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, the failure to instruct your nominee will have the same effect as a vote “ AGAINST ” the proposal to approve the merger agreement.

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Q:

What vote of Whole Foods Market shareholders is required to approve the proposed amendment to the Articles to set the number of authorized shares of our common stock at 600 million?

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Approval of the Articles amendment requires the vote of a majority of the shares of common stock outstanding at the close of business on the record date for the special meeting “ FOR ” the proposal to approve the Articles amendment. An abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to approve the Articles amendment. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion.

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We have provided the New York Stock Exchange (the “NYSE”), in its capacity administering NYSE Rule 452 regulating broker member firms, with a copy of the text of the proposal set forth in the section entitled “ Vote on Amendment to the Amended and Restated Articles of Incorporation (Proposal 3) ” and have been advised by the NYSE that the proposal to approve the Articles amendment is a “routine” proposal. Therefore, if your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion. If your shares are held in “street name,” you should consult your broker, bank or other nominee regarding whether and how your shares will be voted on the proposal to approve the Articles amendment if you do not instruct the nominee how to vote your shares on the proposal.

Q:

What vote of Whole Foods Market shareholders is required to approve the remaining proposals to be voted upon at the special meeting?

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Each of the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum, requires the affirmative vote of a majority of the votes cast with respect to that proposal.

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An abstention with respect to either proposal, or a failure to vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf), will have no effect on these proposals (assuming, in the case of a failure to vote, that a quorum is present).

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Q:

How does the Whole Foods Market board of directors recommend that I vote?

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The Whole Foods Market board of directors unanimously recommends that Whole Foods Market shareholders vote:

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“ FOR ” the proposal to approve an amendment to the Articles to set the number of authorized shares of our common stock at 600 million; and

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“ FOR ” the proposal regarding adjournment of the special meeting.

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For a discussion of the factors that the Whole Foods Market board of directors considered in determining to recommend the approval of the merger agreement, please see the section entitled “ The Merger (Proposal 1) — Reasons for the Merger; Recommendation of the Whole Foods Market Board of Directors .” In addition, in considering the recommendation of the Whole Foods Market board of directors with respect to the merger agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of Company shareholders generally. For a discussion of these interests, please see the section entitled “ The Merger (Proposal 1) — Interests of the Company’s Directors and Executive Officers in the Merger .”

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How do Whole Foods Market’s directors and officers intend to vote?

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We currently expect that the Company’s directors and executive officers will vote their shares in favor of the proposal to approve the merger agreement, the proposal to approve the Articles amendment and the other proposals to be considered at the special meeting, although they have no obligation to do so.

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Q:

When is the merger expected to be completed?

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As of the date of the filing of this proxy statement, we expect to complete the merger during the second half of calendar year 2017. However, completion of the merger is subject to the satisfaction or waiver of the conditions to the completion of the merger, which are described in this proxy statement and include regulatory clearances, and it is possible that the merger will not be completed until a later time, or at all. There may be a substantial amount of time between the special meeting and the completion of the merger. After the requisite company vote is obtained, the Whole Foods Market board of directors will not have the right to terminate the merger agreement in order to accept any alternative acquisition proposal. We expect to complete the merger promptly after the requisite company vote is obtained and all required regulatory clearances have been received.

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Q:

What happens if the merger is not completed?

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If the merger agreement is not approved by the Company’s shareholders, or if the merger is not completed for any other reason, the Company’s shareholders will not receive any payment for their shares of common stock in connection with the merger. Instead, the Company will remain a public company, and shares of our common stock will continue to be registered under the Exchange Act, as well as listed and traded on the NASDAQ. In the event that either Whole Foods Market or Amazon.com terminates the merger agreement, then, in certain specified circumstances, Whole Foods Market may be required to pay Amazon.com a termination fee in an amount equal to $400 million. Furthermore, if the merger agreement is terminated by either Whole Foods Market or Amazon.com because the requisite company vote has not been obtained, Whole Foods Market will be required to pay to Amazon.com all of the reasonable and documented out-of-pocket expenses incurred by Amazon.com and Merger Sub in connection with the merger agreement and the transactions contemplated by the merger agreement in an amount not to exceed $25 million (which amount will be deducted from the amount of any termination fee owed or payable by the Company). See the section entitled “ The Merger Agreement — Company Termination Fee; Expense Reimbursement .”

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Q:

What do I need to do now? How do I vote my shares of common stock?

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We urge you to, and you should, read this entire proxy statement carefully, including its annexes and the documents incorporated by reference in this proxy statement, and to consider how the merger affects you. Your vote is important, regardless of the number of shares of common stock you own.

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Voting in Person

Shareholders of record will be able to vote in person at the special meeting. If you are not a shareholder of record, but instead hold your shares of common stock in “street name” through a broker, bank or other nominee, you must provide a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

It is not necessary to attend the special meeting in order to vote your shares. To ensure that your shares of common stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

Attending the meeting in person does not itself constitute a vote on any proposal.

Shares of Common Stock Held by Record Holder

You can also ensure that your shares are voted at the special meeting by submitting your proxy via:

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mail, by completing, signing and dating the enclosed proxy card and returning it in the enclosed postage-paid envelope;

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telephone, by viewing the proxy materials at www.ProxyVote.com and using a touch-tone phone and the toll-free number [    ]; or

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the Internet, at www.ProxyVote.com and the 12-digit control number on the enclosed proxy card.

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The telephone and Internet voting facilities for shareholders of record will close at 11:59 p.m. Eastern Time on [    ], 2017.

If you sign, date and return your proxy card without indicating how you wish to vote with respect to a proposal, your proxy will be voted “ FOR ” (1) the proposal to approve the merger agreement, (2) the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, (3) the proposal to approve the Articles amendment and (4) the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum.

We encourage you to vote by proxy even if you plan on attending the special meeting.

A failure to vote or an abstention will have the same effect as voting “ AGAINST ” the proposal to approve the merger agreement. An abstention will have the same effect as voting “ AGAINST ” the proposal to approve the Articles amendment. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion. A failure to vote or an abstention will have no effect on the other two proposals (assuming, in the case of a failure to vote, that a quorum is present).

Shares of Common Stock Held in “Street Name”

If you hold your shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares. Without those instructions, your shares will not be voted on any of the proposal to approve the merger agreement, the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger or the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time

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of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum. In addition, without those instructions, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion.

Q:

Can I revoke my proxy?

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Yes. You can revoke your proxy at any time before the vote is taken at the special meeting. If you are a shareholder of record, you may revoke your proxy by notifying the Company at Whole Foods Market, Inc., 550 Bowie Street, Austin, Texas 78703, Attention: Investor Relations Dept., or by submitting a new proxy by telephone, the Internet or mail, in each case, in accordance with the instructions on the enclosed proxy card and dated after the date of the proxy being revoked. In addition, you may revoke your proxy by attending the special meeting and voting in person; however, simply attending the special meeting will not cause your proxy to be revoked. Please note that if you hold your shares in “street name” and you have instructed a broker, bank or other nominee to vote your shares, you should instead follow the instructions received from your broker, bank or other nominee to revoke your prior voting instructions. If you hold your shares in “street name,” you may also revoke a prior proxy by voting in person at the special meeting if you obtain a proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

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Q:

What happens if I do not vote or if I abstain from voting on the proposals?

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The requisite number of shares to approve each of the proposal to approve the merger agreement and the proposal to approve the Articles amendment is based on the total number of shares of common stock outstanding on the record date, not just the shares that are voted. If you do not vote, or abstain from voting, on the proposal to approve the merger agreement, it will have the same effect as a vote “ AGAINST ” the proposal to approve the merger agreement. If you abstain from voting on the proposal to approve the Articles amendment, it will have the same effect as a vote “ AGAINST ” the proposal to approve the Articles amendment. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion.

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The requisite number of shares to approve the other two proposals is based on the total number of votes cast with respect to those proposals. If you do not vote or abstain from voting, it will have no effect on the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the proposal regarding adjournment of the special meeting (assuming, in the case of a failure to vote, that a quorum is present).

Q:

What will happen if the shareholders vote to approve the merger agreement but do not approve the Articles amendment?

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If the shareholders vote to approve the merger agreement but do not approve the Articles amendment, the Company and Amazon.com believe that the certificate of merger will be accepted by the Secretary of State of the State of Texas and that the merger will be completed. However, there is a risk that if the shareholders vote to approve the merger agreement but do not approve the Articles amendment, the closing of the merger may be delayed. Accordingly, to avoid any possibility of delay for this reason, the Whole Foods Market board of directors recommends that shareholders of the Company approve both the merger agreement and the Articles amendment.

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Q:

What will happen if shareholders do not approve the advisory (non-binding) proposal on certain compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger?

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The inclusion of this proposal is required by the rules of the U.S. Securities and Exchange Commission (“SEC”); however, the approval of this proposal is not a condition to the completion of the merger and the vote on this proposal is an advisory vote by shareholders and will not be binding on the Company or Amazon.com. If the merger agreement is approved by the Company’s shareholders and the merger is completed, the merger-related compensation may be paid to the Company’s named executive officers in accordance with the terms of their compensation agreements and arrangements even if shareholders fail to approve this proposal.

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Q:

Will my shares of common stock held in “street name” or another form of record ownership be combined for voting purposes with shares I hold of record?

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No. Because any shares of common stock you may hold in “street name” will be deemed to be held by a different shareholder (that is, your custodial bank, broker or other financial nominee) than any shares of common stock you hold of record, any shares of common stock held in “street name” will not be combined for voting purposes with shares of common stock you hold of record. Similarly, if you own shares of common stock in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for those shares of common stock because they are held in a different form of record ownership. Shares of common stock held by a corporation or business entity must be voted by an authorized officer of the entity. Please indicate title or authority when completing and signing the proxy card. Shares of common stock held in an individual retirement account must be voted under the rules governing the account. This means that, to ensure all your shares are voted at the special meeting, you should read carefully any proxy materials received and follow the instructions included therewith.

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Q:

What does it mean if I get more than one proxy card or voting instruction card?

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If your shares of common stock are registered differently or are held in more than one account, you will receive more than one proxy or voting instruction card. Please complete and return all of the proxy cards and voting instruction cards you receive (or submit each of your proxies by telephone or the Internet) to ensure that all of your shares of common stock are voted.

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Q:

What happens if I sell my shares of common stock before completion of the merger?

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In order to receive the merger consideration, you must hold your shares of common stock through completion of the merger. Consequently, if you transfer your shares of common stock before completion of the merger, you will have transferred your right to receive the merger consideration in the merger.

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The record date for shareholders entitled to vote at the special meeting is earlier than the completion of the merger. If you transfer your shares of common stock after the record date but before the closing of the merger, you will have the right to vote at the special meeting but not the right to receive the merger consideration.

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Should I send in my stock certificates or other evidence of ownership now?

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No. After the merger is completed, you will receive a letter of transmittal and related materials from the paying agent for the merger with detailed written instructions for exchanging your shares of common stock evidenced by stock certificates for the merger consideration. If your shares of common stock are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the merger consideration. Do not send in your stock certificates now.

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Q:

Am I entitled to exercise dissenters’ rights instead of receiving the per share merger consideration for my shares of common stock?

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Yes. Under Chapter 10, Subchapter H of the TBOC, shareholders who object in writing to the merger prior to the special meeting, vote against the merger at the special meeting in person or by proxy, and submit a written demand for appraisal after the special meeting will be entitled to dissenters’ rights of appraisal in connection with the merger, and if the merger is completed, obtain payment equal to the fair value of their shares of common stock instead of the per share merger consideration. The ultimate amount such shareholders receive in an appraisal proceeding may be less than, equal to or more than the amount they would have received under the merger agreement. These procedures are summarized in the section entitled “ Dissenters’ Rights of Whole Foods Market Shareholders .” In addition, the text of Chapter 10, Subchapter H of the TBOC is reproduced in its entirety as Annex C to this proxy statement. Failure to strictly comply with these provisions will result in the loss of dissenters’ rights.

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Q:

What is householding and how does it affect me?

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A:

The SEC permits companies to send a single set of proxy materials to any household at which two or more shareholders reside, unless contrary instructions have been received, but only if the company provides advance notice and follows certain procedures. In such cases, each shareholder continues to receive a separate notice of the meeting and proxy card. Certain brokerage firms may have instituted householding for beneficial owners of common stock held through brokerage firms. If your family has multiple accounts holding common stock, you may have already received householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of this proxy statement. The broker will arrange for delivery of a separate copy of this proxy statement promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.

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Q:

Where can I find more information about Whole Foods Market?

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A:

You can find more information about the Company from various sources described in the section entitled “ Where You Can Find Additional Information .”

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Q:

Who can help answer my other questions?

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A:

If you have more questions about the merger, or require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, please contact MacKenzie Partners, Inc. (“MacKenzie Partners”), which is acting as the proxy solicitation agent and information agent for the Company in connection with the merger, at the telephone numbers, email address or address below, or the Company at the telephone number or address listed below.

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MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
Toll Free: (800) 322-2885
or
Call Collect: (212) 929-5500
Email: proxy@mackenziepartners.com
 
or
 
Whole Foods Market, Inc.
550 Bowie Street
Austin, Texas 78703
Attention: Investor Relations Dept.
(512) 542-0204

If your broker, bank or other nominee holds your shares, you should also call your broker, bank or other nominee for additional information.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents incorporated by reference in this proxy statement, include forward-looking statements. Forward-looking statements include any statement that is not based on historical fact, including statements containing the words “believe,” “may,” “could,” “would,” “might,” “possible,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate” or “continue,” and similar expressions. All forward-looking statements are based on current expectations regarding important risk factors and should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. Whole Foods Market assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. In addition to other factors and matters contained in or incorporated by reference in this document, we believe the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

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the failure to obtain the requisite company vote;

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the possibility that the closing conditions to the merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval;

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delay in closing the transaction or the possibility that the transaction may not be completed;

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the occurrence of any event that could give rise to termination of the merger agreement;

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risks related to the disruption of the transaction to Whole Foods Market and its management;

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limitations placed on Whole Foods Market’s ability to operate its business under the merger agreement;

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the effect of announcement of the transaction on Whole Foods Market’s ability to retain and hire key personnel and maintain relationships with customers, suppliers, regulators and other third parties;

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the risk that shareholder litigation in connection with the merger may affect the timing or occurrence of the merger or result in significant costs of defense, indemnification and liability, and risks associated with other litigation relating to the Company’s business;

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risks relating to adverse outcomes in legal proceedings other than in connection with the merger;

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economic conditions that adversely impact consumer spending;

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risks relating to changes generally affecting the grocery industry (including the prepared foods business);

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disruption of the Company’s significant supplier relationships;

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disruption in the Company’s information systems;

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loss in consumer confidence in the safety and quality of certain food products;

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changes in the availability of quality natural and organic products;

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and other risks detailed in our filings with the SEC, including the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 25, 2016, and in the Company’s Quarterly Reports on Form 10-Q and other documents filed by Whole Foods Market with the SEC after the date thereof. See the section entitled “ Where You Can Find Additional Information .”

Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which speak only as of the date hereof. We cannot guarantee any future results, levels of activity, performance or achievements.

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THE COMPANIES

Whole Foods Market, Inc.

Whole Foods Market is a Texas corporation incorporated in 1978 and based in Austin, Texas. We completed our initial public offering in January 1992, and our common stock trades on the NASDAQ Global Select Market under the symbol “WFM.”

The Company opened the first Whole Foods Market store in 1980 and is currently the leading natural and organic foods supermarket, the first national “Certified Organic” grocer and uniquely positioned as America’s Healthiest Grocery Store™. Whole Foods Market is a mission-driven company that aims to set the standards of excellence in food retailing. Our motto — Whole Foods, Whole People, Whole Planet – emphasizes that our vision reaches far beyond food retailing. Our success is measured by customer satisfaction, team member happiness and excellence, return on invested capital, active environmental stewardship, service in our local and global communities and win-win supplier partnerships, among other things. Through our growth, we have had a significant and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance over the last 38 years.

Whole Foods Market has one operating segment, natural and organic foods supermarkets. In fiscal year 2016, Whole Foods Market had sales of approximately $16 billion. Whole Foods Market employed approximately 87,000 team members as of September 25, 2016.

The principal executive offices Whole Foods Market are located at 550 Bowie Street, Austin, Texas 78703, and its telephone number is 512-477-4455.

A detailed description of the Company’s business is contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016, which is incorporated by reference into this proxy statement. See the section entitled “ Where You Can Find Additional Information. ”

Amazon.com, Inc.

Amazon.com, Inc. was incorporated in 1994 in the state of Washington and reincorporated in 1996 in the state of Delaware. Its principal corporate offices are located in Seattle, Washington. It completed its initial public offering in May 1997 and its common stock is listed on the NASDAQ Global Select Market under the symbol “AMZN.”

Amazon.com opened its virtual doors on the World Wide Web in July 1995. It seeks to be Earth’s most customer-centric company. Amazon.com is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. In each of its segments, it serves its primary customer sets, consisting of consumers, sellers, developers, enterprises, and content creators. In addition, it provides services, such as advertising services and co-branded credit card agreements.

Amazon.com has organized its operations into three segments: North America, International and Amazon Web Services.

Amazon.com’s principal corporate offices are located at 410 Terry Avenue North, Seattle, Washington 98109-5210, and its telephone number is (206) 266-1000.

Walnut Merger Sub, Inc.

Merger Sub is a Texas corporation and an indirect wholly owned subsidiary of Amazon.com that will function as the merger subsidiary in the merger. Merger Sub has not carried on any activities on or prior to the date of this proxy statement except for activities incidental to its formation and activities in connection with the acquisition of Whole Foods Market by Amazon.com. Upon completion of the merger, Merger Sub will merge with and into Whole Foods Market and will cease to exist.

Merger Sub’s principal executive offices are located at 410 Terry Avenue North, Seattle, Washington 98109-5210, and its telephone number is (206) 266-1000.

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THE SPECIAL MEETING

We are furnishing this proxy statement to the Company’s shareholders as part of the solicitation of proxies by the Whole Foods Market board of directors for use at the special meeting or any adjournment or postponement thereof. This proxy statement provides the Company’s shareholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting or any adjournment or postponement thereof.

Date, Time and Place of the Special Meeting

This proxy statement is being furnished to our shareholders as part of the solicitation of proxies by the Whole Foods Market board of directors for use at the special meeting to be held at [                  ], on [                  ], 2017, at [                  ] a.m. local time, or at any adjournment or postponement thereof.

For information regarding attending the meeting, please see “ The Special Meeting — Voting; Proxies; Revocation — Attendance .”

Purposes of the Special Meeting

At the special meeting, Whole Foods Market shareholders will be asked to consider and vote on the following proposals:

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to approve the merger agreement, dated as of June 15, 2017, by and among Amazon.com, Merger Sub and the Company;

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to approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger, the value of which is disclosed in the table in the section of this proxy statement entitled “ The Merger (Proposal 1) — Interests of the Company’s Directors and Executive Officers in the Merger ”;

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to approve an amendment to the Articles to set the number of authorized shares of our common stock at 600 million; and

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to approve the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum.

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Our shareholders must approve the merger agreement for the merger to occur. If our shareholders fail to approve the merger agreement, the merger will not occur. A copy of the merger agreement is attached to this proxy statement as Annex A, and the material provisions of the merger agreement are described in the section entitled “ The Merger Agreement .”

The vote on executive compensation payable in connection with the merger is a vote separate and apart from the vote to approve the merger agreement. Accordingly, a shareholder may vote to approve the executive compensation and vote not to approve the merger agreement and vice versa. Because the vote on executive compensation is advisory in nature only, it will not be binding on either the Company or Amazon.com. Accordingly, if the merger agreement is approved by the Company’s shareholders and the merger is completed, the merger-related compensation may be paid to the Company’s executive officers even if the shareholders fail to approve the proposal.

The vote on the proposed amendment to the Articles to set the number of authorized shares of our common stock at 600 million is a vote separate and apart from the vote to approve the merger agreement, but is intended to avoid any delay in the filing acceptance of the certificate of merger. Accordingly, a shareholder may vote to approve the Articles amendment and vote not to approve the merger agreement and vice versa. The Articles amendment does not affect, and will not affect, the per share or aggregate merger consideration and has no other impact, and will have no other impact, on the merger.

Whole Foods Market does not expect a vote to be taken on any other matters at the special meeting or any adjournment or postponement thereof. If any other matters are properly presented at the special meeting or any adjournment or postponement thereof for consideration, however, the holders of the proxies will have discretion to vote on these matters in accordance with their best judgment.

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This proxy statement and the enclosed form of proxy are first being mailed to our shareholders on or about [                  ], 2017.

Record Date and Quorum

The holders of record of Whole Foods Market common stock as of the close of business on [                  ], 2017, the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. At the close of business on the record date, [                  ] shares of common stock were outstanding.

The presence at the special meeting, in person or represented by proxy, of the holders a majority of the voting power of the shares of capital stock of the Company issued and outstanding and entitled to vote at the special meeting at the close of business on the record date will constitute a quorum. Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting. However, if a new record date is set for an adjourned special meeting, then a new quorum will have to be established. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the special meeting.

Required Vote

Each share of common stock outstanding at the close of business on the record date is entitled to one vote on each of the proposals to be considered at the special meeting.

For the Company to complete the merger, Whole Foods Market shareholders holding a majority of the shares of common stock outstanding at the close of business on the record date must vote “ FOR ” the proposal to approve the merger agreement. A failure to vote your shares of common stock or an abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to approve the merger agreement.

Approval of the Articles amendment requires that Whole Foods Market shareholders holding a majority of the shares of common stock outstanding at the close of business on the record date vote “ FOR ” the proposal to approve the Articles amendment. An abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to approve the Articles amendment. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion.

Approval of each of the advisory (non-binding) proposal on certain compensation that may be paid or become payable to the Company’s named executive officers in connection with the merger and the adjournment proposal requires the affirmative vote of a majority of the votes cast with respect to those proposals by the holders of shares entitled to vote thereon, present in person or represented by proxy. An abstention with respect to either proposal, or a failure to vote your shares of common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf) will have no effect on these proposals (assuming, in the case of a failure to vote, that a quorum is present).

Voting by the Company’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of the Company were entitled to vote approximately [                  ] shares of common stock, or approximately [                  ]% of the shares of common stock issued and outstanding on that date. We currently expect that the Company’s directors and executive officers will vote their shares in favor of the proposal to approve the merger agreement and the other proposals to be considered at the special meeting, although they have no obligation to do so.

Voting; Proxies; Revocation

Attendance

All holders of shares of common stock as of the close of business on [                  ], 2017, the record date, including shareholders of record and beneficial owners of common stock registered in the “street name” of a broker, bank or other nominee, are invited to attend the special meeting.

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To attend the special meeting in person, you must provide proof of ownership of Whole Foods Market common stock as of the close of business on the record date, such as an account statement indicating ownership on that date, and a form of personal identification for admission to the meeting. If you hold your shares in “street name,” and you also wish to be able to vote at the meeting, you must obtain a legal proxy, executed in your favor, from your bank, broker or other nominee.

If you anticipate needing assistance to participate in the meeting due to a disability, we would appreciate it if you would please notify us by [                  ], 2017, so we may be better prepared to assist you. Please contact [                  ] and provide information about the assistance you will need.

For safety and security reasons, Whole Foods Market will not allow anyone to bring large bags, briefcases or packages into the meeting room, or to record or photograph the meeting.

Voting in Person

Shareholders of record will be able to vote in person at the special meeting. If you are not a shareholder of record, but instead hold your shares of common stock in “street name” through a broker, bank or other nominee, you must provide a legal proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting. Attending the meeting in person does not itself constitute a vote on any proposal.

Providing Voting Instructions by Proxy

To ensure that your shares of common stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

Shares of Common Stock Held by Record Holder

If you are a shareholder of record, you may provide voting instructions by proxy using one of the methods described below.

Submit a Proxy by Telephone or via the Internet .   This proxy statement is accompanied by a proxy card with instructions for submitting voting instructions. You may vote by telephone by calling the toll-free number or via the Internet by accessing the Internet address specified on the enclosed proxy card. Your shares of common stock will be voted as you direct in the same manner as if you had completed, signed, dated and returned your proxy card, as described below.

Submit a Proxy Card .   If you complete, sign, date and return the enclosed proxy card by mail so that it is received in time for the special meeting, your shares of common stock will be voted in the manner directed by you on your proxy card.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposal to approve the merger agreement, the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, the proposal to approve the Articles amendment and the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum. If you fail to return your proxy card and you are a holder of record on the record date, unless you attend the special meeting and vote in person, the effect will be that your shares of common stock will not be considered present at the special meeting for purposes of determining whether a quorum is present at the special meeting, will have the same effect as a vote “ AGAINST ” the proposal to approve the merger agreement and a vote “ AGAINST ” the proposal to approve the Articles amendment and, assuming a quorum is present, will not affect the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger, or the vote regarding the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum.

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Shares of Common Stock Held in “Street Name”

If your shares of common stock are held by a broker, bank or other nominee on your behalf in “street name,” your broker, bank or other nominee will send you instructions as to how to provide voting instructions for your shares. Many brokerage firms and banks have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by a voting instruction form.

In accordance with the rules of NASDAQ, brokers, banks and other nominees that hold shares of common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the proposal to approve the merger agreement, the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger or the adjournment of the special meeting, if necessary or appropriate, including to solicit additional proxies or in the absence of a quorum. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions with respect to these proposals from the beneficial owner of such shares, they may not vote such shares with respect to these proposals. Therefore, unless you attend the special meeting in person with a properly executed legal proxy from your broker, bank or other nominee, your failure to provide instructions to your broker, bank or other nominee will result in your shares of Whole Foods Market common stock not being voted on any of the proposal to approve the merger agreement, the advisory (non-binding) proposal to approve certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger or the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or in the absence of a quorum. If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion.

Revocation of Proxies

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it at any time before it is voted. If you are a shareholder of record, you may revoke your proxy at any time before the vote is taken at the special meeting by:

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submitting a new proxy dated after the date of the proxy being revoked, by using the telephone or Internet proxy submission procedures described above, or by completing, signing, dating and returning a new proxy card by mail to the Company, in each case, in accordance with the instructions on the enclosed proxy card;

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attending the special meeting and voting in person; or

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delivering a written notice of revocation dated after the date of the proxy being revoked by mail to the Company at Whole Foods Market, Inc., 550 Bowie Street, Austin, Texas 78703, Attention: Investor Relations Dept. in accordance with the instructions on the enclosed proxy card.

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Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the special meeting.

If you hold your shares in “street name” through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee in order to revoke your proxy or submit new voting instructions. If you hold your shares in “street name,” you may also revoke a prior proxy by voting in person at the special meeting if you obtain a proxy executed in your favor from your broker, bank or other nominee in order to be able to vote in person at the special meeting.

Abstentions

An abstention occurs when a shareholder attends a meeting, either in person or represented by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of common stock present or represented at the special meeting for purposes of determining whether a quorum has been achieved.

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Abstaining from voting will have the same effect as a vote “ AGAINST ” the proposal to approve the merger agreement and a vote “ AGAINST ” the proposal to approve the Articles amendment. The requisite number of shares to approve the other two proposals is based on the total number of votes cast with respect to those proposals. If you abstain from voting, it will have no effect on the advisory (non-binding) proposal on certain compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger or the proposal regarding adjournment of the special meeting.

Solicitation of Proxies

The Whole Foods Market board of directors is soliciting your proxy, and the Company will bear the cost of this solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of the Company’s outstanding common stock. The Company has retained MacKenzie Partners, a proxy solicitation firm, to assist the Whole Foods Market board of directors in the solicitation of proxies for the special meeting, and we expect to pay MacKenzie Partners approximately $75,000, plus reimbursement of out-of-pocket expenses. Proxies may be solicited by mail, personal interview, e-mail, telephone, or via the Internet by MacKenzie Partners or, without additional compensation, by certain of the Company’s directors, officers and employees.

Other Information

You should not return your stock certificate or send documents representing common stock with the proxy card. If the merger is completed, the paying agent for the merger will send you a letter of transmittal and related materials and instructions for exchanging your shares of common stock for the merger consideration.

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respectively, and otherwise updated the composition of the board of directors’ committees. In connection with its shareholder engagement and other governance efforts, the board of directors engaged Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) as legal advisor to the Company.

In order to more effectively discuss and oversee engagement with shareholders between regularly scheduled meetings of the board of directors and topics that could arise from such engagement, in March 2017 the Company formed an ad hoc committee of the board of directors (the “Ad Hoc Committee”) consisting of Dr. John Elstrott (then-Chair of the board of directors), John Mackey (the Company’s Chief Executive Officer), and the chairs of each of the Company’s standing committees, Gabrielle Sulzberger, Hass Hassan and Jonathan Seiffer, all independent directors (other than the CEO).

On April 10, 2017, JANA Partners (together with certain affiliates, consultants and potential director candidates they intended to sponsor) filed a Schedule 13D with the SEC disclosing that they had acquired approximately 8.8% of the Company’s outstanding common stock, and that JANA Partners intended, among other possible actions, to engage in active discussions with the Company’s board of directors and management regarding items highlighted in their Schedule 13D.

On April 17, 2017, following prior discussions by the board of directors and the Ad Hoc Committee, the board of directors appointed Evercore Group L.L.C. (“Evercore”) as the Company’s financial advisor. Later that day, the Ad Hoc Committee met telephonically to discuss with Wachtell Lipton the appointment of Evercore, anticipated actions by JANA Partners and potential Company responses, and ongoing board refreshment efforts.

On April 18, 2017, Mr. Mackey and Dr. Elstrott received a letter from an industry participant (“Company X”). The letter expressed a potential interest in exploring strategic opportunities and a partnership between Company X and the Company and stated a willingness to meet to discuss possible opportunities, but did not indicate a proposed transaction structure or potential valuation. Between April 20 and May 4, 2017, various representatives of the Company and/or Evercore received separate inquiries from four private equity firms indicating that, if the Company were to be interested in pursuing a leveraged buy-out, PIPE (private investment in public equity) or other transaction in light of JANA Partners’ activism, they might be interested in considering such a transaction, but none of these parties made any proposals for any such transaction following such inquiries.

During the week of April 17, 2017, Mr. Mackey and Ken Meyer, an Executive Vice President of Operations of the Company, and one of the Company’s outside consultants discussed a recent media report which said that Amazon.com may have previously considered acquiring the Company as part of its internal business development process. In the course of discussing potential compatibilities and the possibility of a transaction between the Company and Amazon.com, the consultant offered to make an introductory phone call to a contact at Amazon.com to inquire whether there might be an interest in having an exploratory meeting between the companies. Mr. Mackey and Mr. Meyer authorized the consultant to make that call, and on April 21, 2017, the consultant called Jay Carney, Amazon.com’s Senior Vice President of Corporate Affairs, to inquire whether representatives of Amazon.com would be interested in a meeting with representatives of the Company about a potential strategic transaction.

On April 24, 2017, the Ad Hoc Committee and the board of directors met telephonically to discuss, together with Wachtell Lipton and Evercore, the letter received from Company X and a meeting with JANA Partners scheduled to be held on April 26, 2017.

Also on April 24, 2017, the consultant spoke to Peter Krawiec, Amazon.com’s Vice President of Worldwide Corporate Development, who told the consultant that Amazon.com would be interested in an exploratory meeting between the parties.

On April 26, 2017, senior representatives of JANA Partners met in person at the Company’s head office in Austin, Texas with Dr. Elstrott, Mr. Mackey and other members of management of the Company. At that meeting, the JANA representatives presented their perspectives on the Company and demanded that the Company make certain changes to its board of directors and announce an exploration of strategic alternatives. During the period following the April 26, 2017 meeting and an April 27 call to Dr. Elstrott to outline various updated demands, a number of conversations and meetings were held with senior representatives of JANA Partners by Ms. Sulzberger and a representative of Wachtell Lipton. During these

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conversations and meetings JANA Partners made varying demands primarily concerning the composition of the Company’s board of directors. The Company expressed its willingness to interview the potential director candidates to be sponsored by JANA Partners in addition to the individuals who had been identified as part of the Company’s own board refreshment process.

On April 27, 2017, the Company and Amazon.com entered into a non-disclosure agreement.

On April 28, 2017, Mr. Meyer and Mr. Krawiec had a telephone discussion to set up a meeting to be held between the two companies. Also on April 28, 2017, the board of directors met in person at the Company’s head office in Austin, Texas, with Wachtell Lipton and Evercore in attendance at the meeting. The board of directors discussed, among other things, JANA Partners’ demands and anticipated potential actions, the Company’s long-term outlook, which management was in the process of updating at the prior direction of the board, board refreshment and governance matters, certain capital allocation changes under consideration, and the contact by Company X, as well as preliminary valuation perspectives and, as an analytical matter, the viability of a leveraged buy-out. At this meeting, Mr. Mackey informed the board of directors that he and members of the Company’s executive team planned to meet with members of Amazon.com’s management during the coming weekend to gauge their interest in a potential transaction.

On April 30, 2017, the respective CEOs of the Company and Amazon.com and other senior representatives of both companies met in Seattle, Washington. The parties discussed potential strategic opportunities between the two companies and areas of complementary capabilities. No proposal for a transaction was made, and valuation was not discussed at that meeting.

Between May 1 and May 4, 2017, the board of directors and the Ad Hoc Committee met several times with Wachtell Lipton and Evercore to discuss the demands and potential actions by JANA Partners and potential responses, the letter from Company X, the Company’s on-going efforts to recruit new independent directors to join the board of directors, management’s work on updating the Company’s long-term outlook, the Company’s ongoing search for a new Chief Financial Officer, and potential changes to the Company’s cash dividend and share repurchase policy.

On May 1, 2017, Dr. Elstrott, then-chair of the board of directors, and Mr. Mackey indicated to representatives of Company X that the Company would schedule an in-person meeting with them.

Between May 1 and May 8, 2017, members of the nominating and governance committee and other directors consulted with the third-party director search firm that had previously been retained and interviewed additional candidates to join the board of directors as independent directors (including all of the director candidates included in JANA Partners’ Schedule 13D filing).

On May 4, 2017, representatives of the Company and Amazon.com met at the Company’s head office in Austin, Texas for a full day in-person due diligence session.

On May 7, 2017, the board of directors met to discuss the potential board candidates, management’s ongoing work on the Company’s long-term outlook and the ongoing discussions with JANA Partners and to receive an update on Amazon.com. Also on May 7, 2017, the Company and Amazon.com entered into a supplement to their non-disclosure agreement. Following the execution of the supplement, there were several telephone discussions involving Mr. Meyer, Mr. Krawiec and Mr. Mackey regarding the Company’s operations, and Amazon.com requested that the Company provide Amazon.com with additional due diligence information.

On May 8, 2017, Ms. Sulzberger and a representative of Wachtell Lipton met in-person with senior representatives from JANA Partners, after JANA Partners agreed to certain confidentiality conditions, and informed JANA Partners of the Company’s imminent board refreshment and other initiatives (but not the preliminary discussions underway with Amazon.com). Ms. Sulzberger advised the representatives of JANA Partners that the board of directors was willing to nominate two of JANA Partners’ identified candidates to the board of directors as part of the Company’s own board refreshment plans if JANA Partners would agree to a standstill period of approximately 18 months to provide the Company time needed to pursue its new initiatives. Following the meeting, on May 9, 2017, a senior representative from JANA Partners called the Wachtell Lipton representative to advise that JANA Partners did not have an interest in entering into a settlement agreement with the Company at this time on the proposed terms if that settlement would include the standstill restrictions on JANA Partners’ conduct.

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Also on May 8, Dr. Elstrott received an email from a second industry participant (“Company Y”) inquiring whether the Company would be interested in having a conversation regarding a potential business relationship between the two companies.

On May 9, 2017, the board of directors met twice by telephone, together with Wachtell Lipton and Evercore. The board of directors approved, among other things, the hiring of Keith Manbeck as the Company’s Chief Financial Officer, the appointment of Ken Hicks, Joseph D. Mansueto, Sharon L. McCollam, Scott F. Powers and Ronald M. Shaich to the board of directors and accepted the resignations from the board of directors of Dr. Elstrott, Morris Siegel, Jonathan D. Sokoloff, Dr. Ralph Z. Sorenson and William A. Tindell, III, with both the appointments and the resignations effective as of May 10, 2017. At this time, the board of directors also appointed Ms. Sulzberger as the new Chair of the board of directors and Ms. Coe as the new Chair of the Nominating and Governance Committee, each effective May 10, 2017. The board of directors also discussed matters relating to JANA Partners, Company X, Company Y and Amazon.com. The Ad Hoc Committee also met the same day to discuss the next day’s announcements.

On May 10, 2017, the Company announced the board appointments and the resignations approved at the board of directors’ May 9, 2017 meeting, together with an updated business plan, an increase in its quarterly cash dividend to $0.18 per quarter and an expanded share repurchase authorization and its second quarter earnings results.

Over the course of May 13 to May 15, 2017, Ms. Sulzberger, Mr. Mackey and members of management, Wachtell Lipton and Evercore discussed with the members of the reconstituted board of directors and the Ad Hoc Committee the state of the Company and its business, investor feedback and outreach, and the contacts with Amazon.com, Company X, Company Y and by the private equity funds that had occurred prior to that date.

On May 16, 2017, a meeting with Company X was arranged. On May 18, 2017, Ms. Sulzberger and Mr. Mackey, together with representatives from Evercore, met in person with representatives from Company X. At the meeting, Company X made a presentation regarding its business and suggested that, if the Company were to be interested, they would be interested in pursuing a merger-of-equals transaction, which they believed would be potentially valued at $35.00 to $40.00 per share to the Company’s shareholders. No specificity was provided by Company X’s representatives concerning the potential transaction structure (except to say that it would require substantial borrowing and would almost certainly not be all cash but include a stock component) nor did Company X explain the rationale for the estimated valuation range they suggested. Ms. Sulzberger and Mr. Mackey responded that they would relay the contents of the conversation to the board of directors.

Also on May 18, 2017, Mr. Meyer and David Lannon, an Executive Vice President of Operations of the Company, had a telephone conversation with representatives from Company Y following up on their email to the Company. The Company Y representatives said that they had an interest in exploring a possible commercial relationship, such as a supply arrangement, between the two companies but did not discuss any possible merger or acquisition of the Company.

On May 19, 2017, the board of directors met with Wachtell Lipton and Evercore, including to consider the discussions with Amazon.com, Company X and Company Y and to reconstitute the Ad Hoc Committee to include as members newly appointed independent directors, to make clear that all directors were invited to participate in Ad Hoc Committee sessions as desired and to note that the Ad Hoc Committee would be expected to continue to convene regularly in between meetings of the Board as appropriate to facilitate discussion and oversight of matters related to shareholder engagement and third-party inquiries, with the Board continuing to make final determinations on such topics.

On May 22, 2017, Mr. Mackey provided an update to the Ad Hoc Committee on the status of discussions with Amazon.com, including that since the entry by the Company and Amazon.com into a supplement to the non-disclosure agreement on May 7, 2017, representatives of the Company had been responding to additional diligence requests from representatives of Amazon.com to facilitate their consideration of a potential transaction with the Company.

On May 23, 2017, the Company received a written offer from Amazon.com to acquire the Company for $41.00 per share of the Company’s common stock, subject to confirmatory due diligence, satisfactory

27

documentation and final board approval. In its letter, Amazon.com expressed its belief that the offer represented compelling and certain value for the Company’s shareholders, considered its interest in the Company to be highly sensitive, and said that it reserved the right to terminate discussions if there was any leak or rumor of its interest in acquiring the Company. The letter also indicated that Amazon.com viewed the proposed transaction as a strategic investment for Amazon.com.

On May 24, 2017, the board of directors met by telephone with Wachtell Lipton and Evercore and discussed the letter received from Amazon.com and the board’s plans to have an in-person board meeting the following week to review the offer in detail and consider certain financial analyses, potential alternatives and the Company’s long-term outlook and business plans, including the risks thereof.

On May 25, 2017, a representative of Goldman Sachs & Co. LLC (“Goldman Sachs”), financial advisor to Amazon.com, called representatives of Evercore to emphasize that Amazon.com was very sensitive with respect to confidentiality, not willing to engage in a multiparty sale process and had submitted what they believed to be a very strong proposal.

On May 26, 2017, the board of directors discussed the Company’s updated long-term outlook plan, and Evercore and Wachtell Lipton participated in the discussion.

On May 30, 2017, the board of directors held an in person meeting in New York with representatives from Wachtell Lipton and Evercore also in attendance. At the meeting, management and the board of directors discussed the Company’s long-term outlook, associated business plans, underlying assumptions and timelines and key risks that could affect the Company’s ability to achieve the long-term plan. The board also discussed the ongoing talks between the Company and Amazon.com, including the May 23, 2017 offer, and overtures made by other third parties, including Company X, Company Y and the four private equity firms that had previously contacted representatives of the Company and/or Evercore. The board of directors discussed these contacts and reaffirmed its previous consensus to not solicit proposals from the private equity firms, given concerns of the Company’s board of directors about leaks and the views of management and the perspective of Evercore that the price proposed by Amazon.com likely exceeded the price level that a private equity buyer could reasonably be expected to pay while achieving customary expected returns from such an investment. Evercore noted that Amazon.com had re-emphasized in multiple communications that Amazon.com would not be willing to further engage with the Company in the event of a rumor or leak of a potential transaction. At the meeting, Evercore reviewed with the board of directors certain financial analyses and valuation perspectives, and the board discussed the proposal received relative to the various alternatives available to the Company, the challenges and velocity of change in the industries in which the Company operates and the risks associated with the Company’s long term outlook. After a discussion of potential responses, the board of directors decided that making a counter proposal at a higher price was the most effective response and resolved to make a counter-proposal to Amazon.com at $45.00 per share. Later that day, representatives from Evercore, on behalf of the board of directors, communicated the $45.00 per share counter proposal to representatives from Goldman Sachs. The Goldman Sachs representatives expressed their disappointment at the price specified in the Company’s counter proposal as they had previously informed the Evercore representatives that Amazon.com believed that it had made a very strong bid.

On June 1, 2017, representatives from Evercore spoke with representatives from Goldman Sachs again regarding the spread between Amazon.com’s offer and the Company’s counter proposal. On the call, the representatives from Goldman Sachs communicated that Amazon.com was considering other opportunities instead of acquiring the Company and had been considering whether to respond to the Company’s $45.00 counter proposal at all or to pursue other opportunities. The representatives from Goldman Sachs then said that as a last stretch Amazon.com was willing to offer $42.00 per share but stressed several times that this was Amazon.com’s best and final offer. The representatives from Goldman Sachs also made it clear again to the representatives from Evercore that Amazon.com would disengage from its efforts to acquire the Company and pursue other alternatives and initiatives if the $42.00 per share price were not accepted and that Amazon.com expected that the Company would not approach other potential bidders while the Company was negotiating with Amazon.com (although they understood that the Company’s board of directors would have a customary fiduciary out in the merger agreement), and requested that the Company

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promptly give a yes or no response to the $42.00 offer. They signaled Amazon.com’s willingness to move forward on the transaction quickly if the Company responded favorably to the offer as well as Amazon.com’s resolve in discontinuing discussions with the Company if the Company did not find the revised offer to be attractive.

On June 1, 2017, the board of directors met, together with Wachtell Lipton and Evercore, to discuss negotiations with Amazon.com. Representatives from Evercore described the June 1, 2017 discussion with representatives from Goldman Sachs. Following discussion with Wachtell Lipton and Evercore, the board of directors unanimously authorized Evercore to inform Goldman Sachs that the Company was willing to move forward to negotiate a transaction at a $42.00 per share cash price.

On June 2, 2017, the Company received a written due diligence request list from Amazon.com, and representatives of Sullivan & Cromwell LLP (“Sullivan & Cromwell”), Amazon.com’s legal counsel, sent a draft merger agreement to representatives of Wachtell Lipton. Between June 2 and 4, 2017, the respective representatives of the Company and Amazon.com convened telephone calls to discuss initial confirmatory due diligence requests. On June 4, 2017, the Company began to make due diligence materials available to Amazon.com and Sullivan & Cromwell through a virtual data room.

Over the course of the next week and a half, the parties continued the confirmatory due diligence investigation, Wachtell Lipton and Sullivan & Cromwell continued to negotiate the terms of the merger agreement, and both the full board of directors and the Ad Hoc Committee met regularly with representatives of Wachtell Lipton and Evercore to discuss the status of negotiations with Amazon.com and the status of the draft merger agreement.

On June 12, 2017, representatives of Wachtell Lipton along with Ms. Sulzberger, Mr. Mackey, and Mr. Ronald Shaich (another independent director of the Company), participated in a conference call with members of Amazon.com’s senior business and legal team and representatives of Sullivan & Cromwell to resolve the major open issues on the draft merger agreement, including the amount and triggers for the termination fee and the regulatory efforts covenant. Following the above discussions and later in the day on June 12, 2017, executives of the companies had a meeting in Seattle, Washington to discuss operational and organizational matters.

On June 13 and 14, 2017, conversations took place among Hass Hassan, independent chair of the Compensation Committee of the board of directors, Mr. Krawiec, Ms. Flanagan and Mr. Mackey regarding certain employee benefits and compensation matters to be a part of the merger agreement.

On June 15, 2017, the board of directors met telephonically, together with members of management and Wachtell Lipton and Evercore, to discuss and review the draft merger agreement and to consider the proposed transaction. Representatives of Wachtell Lipton reviewed the duties of the directors and the terms of the draft merger agreement. Representatives of Evercore reviewed with the board of directors Evercore’s financial analyses of the consideration proposed in the merger. Evercore then rendered its oral opinion, which was subsequently confirmed in writing, to the board of directors that, as of that date, and based upon and subject to the factors, procedures, assumptions qualifications and limitations set forth in its opinion, the consideration of  $42.00 per share in cash to be paid in the merger was fair, from a financial point of view, to the holders of the Company’s common stock entitled to receive such consideration. Following extensive discussion, the board of directors unanimously determined that the merger was fair to, and in the best interests of, the Company and its shareholders, unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement and authorized the Company to enter into the merger agreement.

Following the board meeting, the parties completed the transaction documents. In the evening of June 15, 2017, the parties executed the merger agreement and in the morning of June 16, 2017, the Company and Amazon.com issued a press release announcing the transaction.

Reasons for the Merger; Recommendation of the Whole Foods Market Board of Directors

The Whole Foods Market board of directors unanimously recommends that Whole Foods Market shareholders vote “FOR” the proposal to approve the merger agreement with Amazon.com at the special meeting.

The Whole Foods Market board of directors, with the assistance of its financial and legal advisors, evaluated the merger agreement, the merger and the other transactions contemplated by the merger

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agreement, unanimously determined that the merger is fair to, and in the best interests of, the Company and its shareholders, unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement and authorized the Company to enter into the merger agreement. Accordingly, on June 15, 2017, the Whole Foods Market board of directors unanimously resolved to recommend that the shareholders of Whole Foods Market approve the merger agreement.

In the course of reaching its recommendation, the Whole Foods Market board of directors considered the following material factors relating to the merger agreement and the merger, each of which the board believes supported its decision:

•

Attractive Value .   The Whole Foods Market board of directors believed the $42.00 per share cash price provides shareholders with attractive value for their shares of Whole Foods Market common stock. The board of directors considered the current and historical market prices of Whole Foods Market common stock, including the market performance of the common stock in light of current industry conditions, and the fact that $42.00 per share in cash represented a substantial premium in reference to a variety of measurement dates ( e.g. , a premium of approximately 27% to the price of the Company’s common stock on June 15, 2017, the day before the announcement of the transaction, a premium of approximately 41% to the closing price of the Company’s common stock on March 31, 2017 before public activism and speculation about a possible transaction affected the Company’s stock price and a premium of approximately 34% to the twelve-month volume weighted average closing price of the Company’s common stock as of June 14, 2017), and strong transaction multiples ( e.g. , a value representing 10.6x Whole Foods Market’s EBITDA for the 12 months ending April 9, 2017).

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•

Best Alternative for Maximizing Shareholder Value.    The Whole Foods Market board of directors concluded that entering into the merger agreement with Amazon.com was more favorable to Whole Foods Market shareholders than the other alternatives reasonably available to Whole Foods Market, including the continued operation of Whole Foods Market on a standalone basis and the pursuit of other potential actionable strategic or financial transactions, in light of a number of factors, including:

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•

the board of directors’ assessment of Whole Foods Market’s business, assets and prospects, its competitive position and historical and projected financial performance. The board of directors considered the nature of the grocery industry and potential changes and developments in that industry, including the growing and intensifying challenges faced by industry participants and the attendant risks attributable to continuing as an independent public company. In this regard, the board of directors also noted that, in addition to prior industry trends and developments, a large, publicly traded grocery industry participant had in the early morning of June 15, 2017 publicly lowered its fiscal year 2017 net earnings guidance and noted the challenging operating environment and continued change in the competitive landscape in its earnings call;

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•

the board of directors’ assessment of the potential risks of the long-term plan the management of Whole Foods Market had recently developed and announced and the substantial investments and expenditures required to achieve the long-term plan. These risks included: the challenges in successfully executing, substantially simultaneously, the multiple initiatives included in the long-term plan ( e.g. , affinity programs, category management, technological enhancements, price reductions, and cost optimization, among other initiatives) and doing so by the targeted timeframes; the increasingly competitive nature of the grocery industry, including the presence of aggressive new entrants ( e.g. , non-traditional participants and overseas and domestic companies) and aggressive competition from current industry participants, some of which have greater financial resources and more advanced and developed technological capabilities than the Company; alternatives available to customers, including among others meal kits, fast casual restaurants, meal delivery, food halls and other options; deflationary price pressures which had affected and were expected to continue to affect the industry; significant macro-economic declines leading to sales and pricing

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challenges; increases in the offerings by other retailers of natural and organic products which could create supply shortages and limit the Company’s ability to source sufficient product for its stores; the risks that certain of the initiatives included in the long-term plan could adversely affect the Company’s culture, talent acquisition and retention and historical selection of products offered to customers by the Company and thus its ability to achieve desired outcomes.

•

the board of directors considered the potential rewards of the long-term plan, analyzing the value enhancement that could be achieved if the risks described above were to be overcome, but also recognized that substantial investments and expenditures would be required in connection with the long-term plan and believed that the short term focus of a number of its shareholders created significant risk that the time needed for successful implementation of the long-term plan and realization of the plan’s potential value would not be available;

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•

the strategic and financial alternatives reasonably available to Whole Foods Market in terms of possible business combinations with third parties other than Amazon.com, taking into account the financial capacity of potential alternative bidders, the evaluation provided by the board’s financial advisor and the directors’ assessment of such potential bidders;

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•

the board of directors’ belief that the risk of actively pursuing alternative transactions while it was in discussions and negotiations with Amazon.com considerably exceeded the board’s assessment of the potential benefits that might be achieved and risked jeopardizing the value to be delivered to shareholders through reaching a binding agreement with Amazon.com. Specifically, in addition to the value to be provided to shareholders in this transaction with Amazon.com and the other reasons discussed in this proxy statement, the board of directors believed to be highly credible the stated positions of Amazon.com during negotiations that the $42.00 per share merger consideration was the maximum amount that Amazon.com would offer to pay to acquire Whole Foods Market, that Amazon.com would disengage from its efforts to acquire Whole Foods Market and pursue other alternatives and initiatives if the $42.00 per share price were not accepted and that Amazon.com expected that Whole Foods Market would not approach other potential bidders while Whole Foods Market was negotiating with Amazon.com; further, as discussed below, the board of directors believed that the most effective approach for obtaining a superior transaction would be to enter into the attractive Amazon.com transaction to which any potential third party bidders could then react; and

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•

the board of directors’ belief that, if Amazon.com did not acquire Whole Foods Market, then it would likely have sought to acquire another industry participant. This development was not anticipated at the time the management of Whole Foods Market prepared and announced the new long-term plan.

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Opportunity to Receive Alternative Acquisition Proposals and to Terminate the Amazon.com Transaction in Order to Accept a Superior Proposal .   The board of directors considered the terms of the merger agreement relating to Whole Foods Market’s ability to respond to unsolicited acquisition proposals, and the other terms of the merger agreement, including:

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•

Whole Foods Market’s right, subject to certain conditions, to provide non-public information in response to, and to discuss and negotiate, certain unsolicited acquisition proposals made before Company shareholder approval of the Amazon.com transaction is obtained (see the section entitled “ The Merger Agreement — Acquisition Proposals; No Solicitation ”);

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•

the Whole Foods Market board of directors ability to terminate the merger agreement prior to obtaining Company shareholder approval of the Amazon.com transaction, in specified circumstances relating to a superior proposal, subject to payment of a termination fee which the Whole Foods Market board of directors believed to be reasonable under the circumstances and not an impediment to a competing transaction (see the sections entitled “ The Merger Agreement — Alternative Proposals; No Solicitation ,” “ The Merger Agreement — Termination ” and “ The Merger Agreement — Company Termination Fee; Expense Reimbursement ”); and

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•

the board of directors’ belief that (if a superior transaction were potentially available) the most effective approach to obtaining such a superior transaction would be to enter into the transaction with Amazon.com, which it considered to be attractive and which could have significant strategic implications for many companies.

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Certainty of Value .   The board of directors considered that the proposed merger consideration is all cash, thereby providing Whole Foods Market shareholders with certainty of value and liquidity for their shares, especially when viewed against the risks and uncertainties inherent in Whole Foods Market’s business, including risks associated with executing upon Whole Foods Market’s standalone and long-term growth strategies in light of competitive price pressure by Whole Foods Market’s existing competitors in the grocery industry, the potential impact of the entry of new competitors into the industry, the growing number and range of alternatives available to customers and other factors, including those noted above.

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Likelihood of Completion .   The board of directors considered the likelihood of completion of the merger to be a significant factor in support of the transaction, in light of, among other things:

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the limited overlaps between the businesses of Whole Foods Market and Amazon.com relative to those that could be present in transactions with certain industry participants;

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the absence of a financing condition in the merger agreement and the facts that Amazon.com has a substantial amount of cash and cash equivalents on its balance sheet and has entered into the commitment letter pursuant to which, subject to the terms and conditions set forth therein, the commitment parties have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $13.7 billion, to fund the consideration for the merger (see the section entitled “ The Merger (Proposal 1) — Financing ”); and

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the conditions to closing contained in the merger agreement, which the board of directors believed are reasonable and customary in number and scope, and which, in the case of the conditions related to the absence of material adverse changes between the announcement and closing of the transaction and the accuracy of Whole Foods Market’s representations and warranties, are generally qualified by a traditional public company “material adverse effect” standard (see the section entitled “ The Merger Agreement — Conditions to Completion of the Merger ”).

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Receipt of Fairness Opinion and Presentation from Evercore .   The board of directors considered the financial analysis presentation of Evercore and the opinion of Evercore to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Evercore as set forth in the opinion, the merger consideration of  $42.00 per share in cash to be received by the holders of shares of the Company’s common stock pursuant to the merger agreement was fair, from a financial point of view, to the holders of such shares. See “ The Merger (Proposal 1) — Opinion of Whole Foods Market’s Financial Advisor .”

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Continued Payment of Dividend .   The board of directors considered the merger agreement provision permitting Whole Foods Market to continue to pay quarterly cash dividends at the current payment rate of  $0.18 per fiscal quarter prior to closing.

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Long-term Interests of the Company .   The board of directors considered that, in addition to providing an attractive outcome for Whole Foods Market shareholders and the best alternative reasonably available for maximizing shareholder value, the transactions contemplated by the merger agreement with Amazon.com. also promote and advance the long-term interests of Whole Foods Market and its other stakeholders, including team members, customers, suppliers, the communities in which Whole Foods Market operates and the environment.

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In the course of reaching its recommendation, the Whole Foods Market board of directors also considered the risks and potentially negative factors relating to the merger agreement and the merger, including:

•

that Whole Foods Market shareholders will have no ongoing equity participation in Whole Foods Market following the merger, and that such shareholders will therefore cease to participate in the future earnings of growth that Whole Foods Market may achieve, or to benefit from increases, if any, in the value of the Company’s common stock as a result of the merger;

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as the transaction has a potential outside date as late as May 16, 2018, that Whole Foods Market shareholders could be asked to vote on approval of the merger agreement well in advance of the completion of the transaction, depending on when the transaction actually closes;

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the possibility that the merger is not completed as a result of failure to obtain required regulatory clearances or for other reasons; the risks and costs to Whole Foods Market if the merger is not completed; the potential uncertainty about the likelihood, timing or effects of completion of the merger, including uncertainty about the effect of the proposed merger on Whole Foods Market’s employees, potential and existing customers and suppliers and other parties, and that such uncertainty may impair Whole Foods Market’s ability to attract, retain and motivate key personnel and could cause third parties to seek to change or not enter into business relationships with Whole Foods Market; and the risk of management distraction as a result of the merger;

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the merger agreement’s restrictions on the conduct of Whole Foods Market’s business before completion of the merger, generally requiring Whole Foods Market to use reasonable best efforts to conduct its business in the ordinary course and prohibiting Whole Foods Market from taking specified actions, which may delay or prevent Whole Foods Market from undertaking unanticipated business opportunities that may arise pending completion of the merger (as more fully described in the section entitled “ The Merger Agreement — Conduct of Business Pending the Merger ”);

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the possibility that Whole Foods Market may be required under the terms of the merger agreement to pay a termination fee of  $400 million under certain circumstances or, if the merger agreement is terminated by either Whole Foods Market or Amazon.com because Whole Foods Market shareholders do not approve the merger agreement, to pay expenses incurred by Amazon.com and Merger Sub in an amount not to exceed $25 million (which amount would be deducted from the amount of any termination fee owed or payable by the Company) (as more fully described in the section entitled “ The Merger Agreement — Company Termination Fee; Expense Reimbursement ”); and

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that the receipt of cash by Whole Foods Market shareholders in exchange for their shares of common stock pursuant to the merger will generally be a taxable transaction to Whole Foods Market shareholders for U.S. federal income tax purposes (as more fully described in the section entitled “ Material U.S. Federal Income Tax Consequences of Merger ”).

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The foregoing discussion of the information and factors considered by the Whole Foods Market board of directors includes the material factors considered by the Whole Foods Market board of directors but does not necessarily include all of the factors considered by the Whole Foods Market board of directors. In view of the complexity and variety of factors considered in connection with its evaluation of the merger agreement and the merger, the Whole Foods Market board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Whole Foods Market board of directors unanimously resolved to recommend that the shareholders of Whole Foods Market approve the merger and the merger agreement based upon the totality of information it considered.

Certain Whole Foods Market Unaudited Prospective Financial Information

In connection with the merger, the Company’s management prepared a set of non-public, unaudited financial forecasts with respect to the Company’s business, as a standalone company, for fiscal years 2017 through 2021 (the “Whole Foods Market Projections”). The Whole Foods Market Projections were

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provided to the Company’s board of directors and the Company’s financial advisor in connection with their respective consideration and evaluation of the merger.

Whole Foods Market does not as a matter of course make public projections as to future performance for extended periods beyond one fiscal year due to, among other reasons, the inherent difficulty of accurately predicting financial performance for future periods and the uncertainty of underlying assumptions and estimates. However, Whole Foods Market is including in this proxy statement a summary of certain limited unaudited prospective financial information for Whole Foods Market on a standalone basis, without giving effect to the merger, to give Company shareholders access to certain nonpublic information provided to the Company’s board of directors, the Company’s financial advisor and Amazon.com for purposes of considering and evaluating the merger. The inclusion of the Whole Foods Market Projections should not be regarded as an indication that the Company, Amazon.com, Merger Sub or any of their respective boards of directors or representatives or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results or an accurate prediction of future results, and the Whole Foods Market Projections should not be relied on as such.

The Whole Foods Market Projections, and the underlying assumptions upon which the Whole Foods Market Projections were based, are subjective in many respects, and subject to different interpretations and potential revisions attributable to the nature of the grocery industry (including the prepared foods business), as well as actual experience and business developments. The Whole Foods Market Projections reflect numerous assumptions with respect to company performance, industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond the Company’s control. Multiple factors, including those described in the section entitled “ Cautionary Statement Concerning Forward-Looking Statements ,” could cause the Whole Foods Market Projections or the underlying assumptions to be inaccurate. As a result, there can be no assurance that the Whole Foods Market Projections will be realized or that actual results will not be significantly higher or lower than projected. Because the Whole Foods Market Projections cover multiple years, such information by its nature becomes less reliable with each successive year. The Whole Foods Market Projections do not take into account any circumstances or events occurring after the date on which they were prepared. Economic and business environments can and do change quickly, which adds an additional significant level of uncertainty as to whether the results portrayed in the Whole Foods Market Projections will be achieved. The inclusion of the Whole Foods Market Projections in this proxy statement does not constitute an admission or representation by Whole Foods Market or any other person that the information is material. The summary of the Whole Foods Market Projections is not provided to influence Company shareholders’ decisions regarding whether to vote for the merger proposal or any other proposal.

The Whole Foods Market Projections were not prepared with a view toward public disclosure or toward compliance with United States generally accepted accounting principles (“GAAP”), published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither Ernst & Young LLP (“Ernst & Young”), the Company’s independent registered public accounting firm, nor any other accounting firm, has examined, compiled or performed any procedures with respect to the Whole Foods Market Projections, and accordingly, Ernst & Young does not express an opinion or any other form of assurance with respect thereto. The Ernst & Young report incorporated by reference in this proxy statement relates to the Company’s historical financial information. It does not extend to the prospective financial information contained herein and should not be read to do so.

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The following is a summary of the Whole Foods Market Projections:

Summary of the Whole Foods Market Projections (1)
(dollars in millions)

(1)

On May 4, 2017, the Company provided Amazon.com with an earlier version of the Whole Foods Market Projections that reflected (a) the same Revenue estimates, except that 2017 estimated Revenue was $15,888 million; (b) EBITDA estimates of  $1,233 million, $1,370 million, $1,655 million, $1,814 million and $1,947 million in fiscal years 2017, 2018, 2019, 2020 and 2021, respectively; and (c) Free Cash Flow estimates of  $334 million, $440 million, $644 million, $738 million and $813 million in fiscal years 2017, 2018, 2019, 2020 and 2021, respectively. Such version was also provided to the Company’s board of directors.

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(2)

EBITDA is defined for purposes of the Whole Foods Market Projections as earnings before interest expense, investment and other income, income taxes and depreciation and amortization. This measure is different from measures determined in accordance with U.S. GAAP and may not be comparable to similar measures used by other companies and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flow or as a measure of liquidity. EBITDA in 2017 excludes one-time charges incurred for a severance payment and store and facility closures.

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(3)

Free Cash Flow is defined for purposes of the Whole Foods Market Projections as net cash provided by operating activities less capital expenditures.

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(4)

Estimates in 2018, a 53-week fiscal year, are presented on a 52-week basis.

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Set forth below is a reconciliation to U.S. GAAP of each of EBITDA and Free Cash Flow. Net Income and Net cash provided by operating activities are the U.S. GAAP financial measures that are most closely comparable to EBITDA and Free Cash Flow, respectively: [         ]

The Whole Foods Market Projections do not take into account the possible financial and other effects on the Company of the merger and do not attempt to predict or suggest future results of the combined company. The Whole Foods Market Projections do not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, whether any synergies are achieved by the combined company as a result of the merger, the effect on Whole Foods Market of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but that were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the Whole Foods Market Projections do not take into account the effect on Whole Foods Market of any possible failure of the merger to occur.

For the foregoing reasons, and considering that the special meeting will be held several months after the Whole Foods Market Projections were prepared, as well as the uncertainties inherent in any forecasting information, readers of this proxy statement are cautioned not to place unwarranted reliance on the Whole Foods Market Projections set forth above. No one has made or makes any representation to any shareholder regarding the information included in the Whole Foods Market Projections. Whole Foods Market urges all Company shareholders to review its most recent SEC filings for a description of its reported financial results. See the section entitled “ Where You Can Find Additional Information .”

In addition, the Whole Foods Market Projections have not been updated or revised to reflect information or results after the date the Whole Foods Market Projections were prepared or as of the date of this proxy statement, or to reflect financial targets issued by the Company after the date the Whole Foods Market Projections were prepared, and except as required by applicable securities laws, Whole Foods

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Market does not intend to update or otherwise revise the Whole Foods Market Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

Opinion of Whole Foods Market’s Financial Advisor

In connection with the merger, Whole Foods Market engaged Evercore to act as its financial advisor. On June 15, 2017, Evercore rendered its oral opinion, which was subsequently confirmed in writing, to the Whole Foods Market board of directors that, as of June 15, 2017 and based upon and subject to the factors, procedures, assumptions, qualifications and limitations set forth in its opinion, the merger consideration was fair, from a financial point of view, to the holders of Company common stock entitled to receive the merger consideration.

The full text of the written opinion of Evercore, dated as of June 15, 2017, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference in its entirety into this proxy statement. You are urged to read the opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Whole Foods Market board of directors in connection with its evaluation of the merger. The opinion does not constitute a recommendation to the Whole Foods Market board of directors, any shareholder of Whole Foods Market or any other persons in respect of the merger, including as to how any holder of Company common stock should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to Whole Foods Market, nor does it address the underlying business decision of Whole Foods Market to engage in the merger.

In connection with rendering its opinion, Evercore, among other things:

i.

reviewed certain publicly available business and financial information relating to Whole Foods Market that Evercore deemed to be relevant, including publicly available research analysts’ estimates;

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ii.

reviewed certain non-public historical financial statements and other non-public historical financial and operating data relating to Whole Foods Market prepared and furnished to Evercore by management of Whole Foods Market;

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iii.

reviewed certain non-public projected financial data relating to Whole Foods Market prepared and furnished to Evercore by management of Whole Foods Market;

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iv.

reviewed certain non-public historical and projected operating data relating to Whole Foods Market prepared and furnished to Evercore by management of Whole Foods Market;

​

v.

discussed the past and current operations, financial projections and current financial condition of Whole Foods Market with management of Whole Foods Market (including their views on the risks and uncertainties of achieving such projections);

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vi.

reviewed the reported prices and the historical trading activity of the Company common stock;

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vii.

compared the financial performance of Whole Foods Market and its stock market trading multiples with those of certain other publicly traded companies that Evercore deemed relevant;

​

viii.

compared the financial performance of Whole Foods Market and the valuation multiples relating to the merger with those of certain other transactions that Evercore deemed relevant;

​

ix.

reviewed a substantially final draft dated June 14, 2017 of the merger agreement; and

​

x.

performed such other analyses and examinations and considered such other factors that Evercore deemed appropriate.

​

For purposes of its analysis and opinion, Evercore assumed and relied upon, without undertaking any independent verification of, the accuracy and completeness of all of the information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, and Evercore assumed no liability therefor. Evercore assumed that the Whole Foods Market Projections were

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reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Whole Foods Market as to the future financial performance of Whole Foods Market. Evercore expresses no view as to any projected financial data relating to Whole Foods Market or the assumptions on which they are based.

For purposes of rendering its opinion, Evercore assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the merger agreement and that all conditions to the consummation of the merger will be satisfied without material waiver or modification thereof and that the final merger agreement will conform to the draft reviewed by Evercore. Evercore further assumed that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the merger will be obtained without any material delay, limitation, restriction or condition that would have an adverse effect on Whole Foods Market or the consummation of the merger or materially reduce the benefits to the holders of Company common stock of the merger.

Evercore neither made nor assumed any responsibility for making any independent valuation or appraisal of the assets or liabilities of Whole Foods Market, nor was Evercore furnished with any such appraisals, nor did Evercore evaluate the solvency or fair value of Whole Foods Market under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion is necessarily based upon information made available to Evercore as of June 15, 2017 and financial, economic, market and other conditions as they existed and as could be evaluated as of such date. It is understood that subsequent developments may affect Evercore’s opinion and that Evercore does not have any obligation to update, revise or reaffirm its opinion.

Evercore was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to the holders of Company common stock, from a financial point of view, of the merger consideration. Evercore does not express any view on, and its opinion does not address, the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other securities, creditors or other constituencies of Whole Foods Market, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Whole Foods Market, or any class of such persons, whether relative to the merger consideration or otherwise. Evercore assumed that any modification to the structure of the merger will not vary in any respect material to its analysis. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to Whole Foods Market, nor does it address the underlying business decision of Whole Foods Market to engage in the merger. Evercore’s opinion does not constitute a recommendation to the Whole Foods Market board of directors, any shareholder of Whole Foods Market or any other persons in respect of the merger, including as to how any holder of shares of Company common stock should vote or act in respect of Proposal 1. Evercore is not a legal, regulatory, accounting or tax expert and has assumed the accuracy and completeness of assessments by Whole Foods Market and its advisors with respect to legal, regulatory, accounting and tax matters.

Set forth below is a summary of the material financial analyses reviewed by Evercore with the Whole Foods Market board of directors on June 15, 2017 in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data that existed on or before June 14, 2017 (the last trading day prior to the delivery of Evercore’s opinion on June 15, 2017), and is not necessarily indicative of current market conditions.

The following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand the analyses, the tables must be read together with the full text of each summary. The tables are not intended to stand-alone and alone do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of such analyses.

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Although no grocer or merchandiser is directly comparable to Whole Foods Market, Evercore selected these companies because it believed that they had characteristics that were instructive for purposes of its analysis. For each of the companies identified above, Evercore calculated and compared various financial multiples and ratios based on financial data and closing stock prices as of June 14, 2017, which Evercore obtained from filings made with the SEC and from publicly available equity research analysts’ projections. The financial multiples and ratios of Whole Foods Market were based on publicly available equity research analysts’ projections and information from Whole Foods Market management.

Because no selected peer group company is exactly the same as Whole Foods Market, Evercore believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the public trading analysis. Accordingly, Evercore also made qualitative judgments concerning differences between the business, financial and operating characteristics and prospects of Whole Foods Market and the selected companies. Based upon these judgments, Evercore derived a range of multiples for the selected companies for each of calendar years 2017 and 2018 and applied such multiples to estimates prepared by the management of Whole Foods Market for calendar year 2017, which implied, in each case, a range of equity values per share of Company common stock.

Enterprise Value to EBITDA Analysis :   Evercore derived for the selected companies the enterprise value as a multiple of estimated 2017 earnings before interest, taxes, depreciation and amortization (“EBITDA”), and estimated 2018 EBITDA. Evercore used a reference range of 2017 estimated EBITDA multiples of 7.0x to 9.5x for the selected companies and applied this range of multiples to Whole Foods Market management’s estimated 2017 EBITDA, as adjusted for one-time charges, including a severance payment and store and facility closures (“Adjusted EBITDA”). Evercore used a reference range of 2018 estimated EBITDA multiples of 7.0x to 9.5x for the selected companies and applied this range of multiples to Whole Foods Market management’s estimates of 2018 EBITDA. The implied value ranges for shares of Company common stock on a fully diluted basis are set forth below:

Price to Earnings Per Share (EPS) Analysis :   Evercore derived and compared for the selected companies the equity market capitalization of such companies as a multiple of estimated 2017 earnings per share and estimated 2018 earnings per share. Evercore used a reference range of 2017 earnings per share multiples of 20.0x to 24.0x for the selected companies and applied this range of multiples to Whole Foods Market’s 2017 estimated earnings per share, as adjusted for after-tax one-time charges, including a severance payment and store and facility closures (“Adjusted EPS”). Evercore used a reference range of 2018 estimated earnings per share multiples of 20.0x to 24.0x for the selected companies and applied this range of multiples to Whole Foods Market’s 2018 estimated earnings per share. The implied value ranges for shares of Company common stock on a fully diluted basis are set forth below:

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*

Not publicly disclosed.

​

From the range of multiples from the precedent transactions, Evercore then selected a reference range of enterprise value to EBITDA multiples of 8.0x to 10.0x and applied these ranges of multiples to Whole Foods Market’s LTM EBITDA at the quarter ended April 9, 2017, adjusted for certain one-time charges, including a severance payment and store and facility closures (“LTM Adjusted EBITDA”), to calculate an implied value range for shares of Company common stock on a fully diluted basis as set forth below:

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No company or transaction utilized in the precedent transactions analysis is identical or directly comparable to Whole Foods Market or the merger. In evaluating the precedent transactions, Evercore made judgments and assumptions with regard to general business, market and financial conditions and other matters, which are beyond the control of Whole Foods Market, such as the impact of competition on the business of Whole Foods Market, or the industry generally, industry growth and the absence of any material adverse change in the financial condition of Whole Foods Market or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value of the transactions to which the merger is being compared.

Discounted Cash Flow Analysis

Evercore performed a discounted cash flow analysis, which is designed to estimate the value of a company by calculating the present value of estimated future cash flows of the company. Evercore calculated a range of equity values per share of Whole Foods Market based on a discounted cash flow analysis for the fiscal years 2017 through 2022. In preparing its analysis, Evercore relied on the Whole Foods Market Projections; in addition, for purposes of calculating terminal year cash flow, Evercore derived, and the Company confirmed the reasonableness of deriving, fiscal year 2022 EBITDA and unlevered free cash flow by increasing 2021 revenues by the same percentage as the percentage revenue growth from 2020 to 2021 and holding operating margins constant at 2021 levels (together with the Whole Foods Market Projections, the “Management Estimates”). For comparative purposes, Evercore also performed a discounted cash flow analysis based upon publicly available equity research analysts’ reports that provided projections through fiscal year 2021 and were published after May 10, 2017, and as to which Evercore similarly derived fiscal year 2022 financial metrics (“Public Equity Analysts’ Estimates”).

In arriving at the estimated equity values per share of Company common stock, Evercore estimated a range of terminal values in 2022 by applying to Whole Foods Market’s fiscal year 2022 estimated EBITDA, a multiple of Enterprise Value to EBITDA of 7.0x to 9.5x and by applying a perpetuity growth rate of 2.5% to 3.5%. Evercore then discounted Whole Foods Market’s projected, unlevered free cash flows, included in the Management Estimates and the Public Equity Analysts’ Estimates and the estimated terminal value for each scenario, in each case, to a present value using discount rates ranging from 7.0% to 9.0%. The discount rates were based on Evercore’s judgment of the estimated range of Whole Foods Market’s weighted average cost of capital. Evercore calculated unlevered free cash flow by first deriving net operating profit after tax by subtracting depreciation and amortization from EBITDA and assuming a 39.0% tax rate, then adjusting the result by adding back depreciation and amortization, subtracting capital expenditures and adjusting for changes in net working capital. Based on the foregoing analysis, the discounted cash flow analysis yielded the implied value ranges for Company common stock on a fully diluted basis as set forth below:

Other Reference Metrics

In addition, Evercore noted for the Whole Foods Market board of directors the following other reference metrics.

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Historical Share Price Performance

Evercore reviewed the share price performance of Company common stock for the period commencing June 14, 2016 and ending on June 14, 2017. In addition, Evercore compared the per share merger consideration to various market prices of Company common stock. Evercore observed that the closing price for Company common stock on April 7, 2017 (the last trading day prior to JANA Partners’ disclosure that it had acquired an 8.8% stake in Whole Foods Market) was $31.07 per share and the closing price for Company common stock on June 14, 2017 was $35.45 per share and compared these figures to the per share merger consideration of  $42.00 to be received by holders of Company common stock. Evercore also reviewed the share prices for Company common stock over the 52 weeks prior to and including June 14, 2017 and observed a range of  $27.96 to $37.03 per share, and noted that the closing price of Company common stock was $35.45 on June 14, 2017.

Evercore next compared the per share merger consideration of  $42.00 to be received by holders of Company common stock, with historical Whole Foods Market closing prices on certain dates and volume-weighted average sale prices (in each case, “VWAP”) during certain periods between June 14, 2016 and June 14, 2017. The following table presents the implied premium of the per share merger consideration to such market observed prices:

Equity Research Analyst Price Targets

Evercore reviewed selected public market trading price targets for Company common stock prepared and published by equity research analysts prior to June 14, 2017. These price targets reflect each analyst’s estimate of the future public market trading price of the Company common stock at the time the price target was published. Between April 10, 2017 (the first trading day after JANA Partners’ disclosure that it had acquired an 8.8% stake in Whole Foods Market) and May 10, 2017 (the last trading day prior to Whole Foods Market’s release of its second quarter earnings report), the range of selected equity analyst price targets for Company common stock was $20.00 to $42.00 per share, which Evercore discounted (at a cost of equity of 9.0% for a period of one year) to present values of  $18.35 to $38.53 per share. After May 10, 2017 and until June 14, 2017, the range of selected equity analyst price targets for Company common stock was $24.00 to $47.00 per share, which Evercore discounted (at a cost of equity of 9.0% for a period of one year) to present values of  $22.02 to $43.12 per share.

The public market trading price targets published by equity research analysts did not necessarily reflect current market trading prices for shares of Company common stock and these estimates were subject to uncertainties, including the future financial performance of Whole Foods Market and future financial market conditions.

Illustrative Leveraged Buyout Analysis

Evercore performed an illustrative leveraged buyout analysis based on a range of 4.5x to 5.5x leverage relative to estimated LTM Adjusted EBITDA. Evercore’s analysis assumed a sale of the Company at a price based on a multiple of estimated EBITDA for the twelve months ended September 30, 2022 of 10.6x and a required internal rate of return on investment ranging from 17.0% to 23.0%, which ranges were selected by

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Evercore based on its professional judgment. Using the Management Estimates of EBITDA for the twelve months ended September 30, 2022, Evercore calculated a purchase price per share of Company common stock ranging from $35.03 to $42.18. Using Public Equity Analysts’ Estimates of EBITDA for the twelve months ended September 30, 2022 and the same analysis, Evercore calculated a purchase price per share of Company common stock ranging from $28.60 to $34.10.

Illustrative DCF Sensitivity Analysis

At the request of the Whole Foods Market board of directors, Evercore prepared an additional analysis of discounted cash flows, illustrating sensitivity to both same store sales growth and EBITDA margin, by reflecting only fifty percent of the upside implied in the Management Estimates versus the Public Equity Analysts’ Estimates. This analysis resulted in a range of implied values per share of Company common stock on a fully diluted basis of  $32.51 to $45.07 (based upon terminal EBITDA multiple methodology) and $30.20 to $54.66 (based upon perpetuity growth rate methodology). In addition, at the request of the Whole Foods Market board of directors, Evercore also estimated the equity values per share of Company common stock implied by a reduced terminal EBITDA multiple of 6.0x and a reduced perpetuity growth rate of 1.5%, in each case under the three scenarios reviewed by Evercore. This reduced terminal EBITDA multiple resulted in implied equity values per share of Company common stock of $32.67 (Management Estimates), $25.05 (Public Equity Analysts’ Estimates) and $28.58 (Illustrative DCF Sensitivity). The reduced perpetuity growth rate resulted in implied equity values per share of Company common stock of  $31.77 (Management Estimates), $20.51 (Public Equity Analysts’ Estimates) and $26.59 (Illustrative DCF Sensitivity).

Miscellaneous

The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by Evercore. In connection with the review of the merger by the Whole Foods Market board of directors, Evercore performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, Evercore made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all the analyses. In addition, Evercore may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of Evercore with respect to the actual value of the shares of Company common stock. No company used in the above analyses as a comparison is directly comparable to Whole Foods Market. Further, Evercore’s analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies used, including judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of Whole Foods Market or its advisors. Subsequent to delivery of its fairness opinion, Evercore identified an immaterial revision to its calculations based on Whole Foods Market’s fully diluted share count, which Evercore has confirmed to the Whole Foods Market board of directors does not affect its fairness opinion.

Evercore prepared these analyses for the purpose of providing an opinion to the Whole Foods Market board of directors as to the fairness, from a financial point of view, of the merger consideration to the holders of Company common stock entitled to receive the merger consideration. These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by such estimates. Accordingly, estimates used in, and the results derived from, Evercore’s analyses are inherently subject to substantial uncertainty, and Evercore assumes no responsibility if future results are materially different from those forecasted in such estimates.

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The issuance of the fairness opinion was approved by an opinion committee of Evercore.

Pursuant to the terms of Evercore’s engagement letters with the Company, the Company has paid Evercore monthly retainer fees, agreed to certain fees in connection with potential acquisition proposals it may receive and other strategic shareholder advisory matters, and paid a fee of  $3 million upon delivery of Evercore’s opinion to the Whole Foods Market board of directors, regardless of the conclusion reached therein. The Company has also agreed to pay Evercore an additional transaction fee, based upon a percentage of the transaction value of the merger, estimated to be approximately $45 million, which is contingent upon the closing of the merger and against which the retainer fees, strategic shareholder advisory fees and opinion fee shall be credited. Whole Foods Market has agreed to reimburse Evercore for its reasonable and documented out of pocket expenses (including reasonable outside legal fees, expenses and disbursements) and to indemnify Evercore for certain potential liabilities arising out of its engagement.

Aside from its current engagement by Whole Foods Market, Evercore has not in the past two years provided financial advisory or investment banking services to Whole Foods Market for which Evercore has received compensation. Evercore has not in the past two years provided, and is not currently providing, financial advisory or investment banking services to Amazon.com for which Evercore has received compensation. In the future, Evercore may provide financial or other services to Whole Foods Market or Amazon.com, and in connection with any such services Evercore may receive compensation.

In the ordinary course of business, Evercore or its affiliates may actively trade the securities, or related derivative securities, or financial instruments of Whole Foods Market or Amazon.com and/or their respective affiliates, for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities or instruments.

Whole Foods Market engaged Evercore to act as a financial advisor based on Evercore’s qualifications, experience and reputation. Evercore is an internationally recognized investment banking firm and is regularly engaged in the valuation of businesses in connection with mergers and acquisitions, leveraged buyouts, competitive biddings, private placements and valuations for corporate and other purposes.

Financing

The merger is not conditioned upon receipt of financing by Amazon.com.

Amazon.com expects to finance the merger with debt financing, together with cash on hand. In connection with entering into the merger agreement, Amazon.com has entered into a commitment letter (the “commitment letter”), dated as of June 15, 2017, with Goldman Sachs Bank USA, Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, N.A. (collectively, and together with other financial institutions that from time to time provide commitments thereunder, the “commitment parties”), pursuant to which, subject to the terms and conditions set forth therein, the commitment parties have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $13.7 billion (the “bridge facility”), to fund the consideration for the merger. Availability of the bridge facility is subject to reduction in equivalent amounts upon the issuance or incurrence by Amazon.com or its subsidiaries of debt securities or other debt for borrowed money (or, in certain circumstances, the receipt of commitments therefor), upon the issuance by Amazon.com of equity interests, or upon the consummation of certain asset sales, in each case subject to certain limitations and exceptions. The funding of the bridge facility provided for in the commitment letter is contingent on the satisfaction of certain closing conditions, including (1) the execution and delivery of definitive documentation with respect to the bridge facility in accordance with the terms sets forth in the commitment letter and (2) the completion of the merger.

See the section entitled “ The Merger Agreement — Financing and Financing Cooperation .”

Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendations of the Whole Foods Market board of directors with respect to the merger, Company shareholders should be aware that the directors and executive officers of Whole Foods Market have certain interests, including financial interests, in the merger that may be different from, or in addition to, the interests of Company shareholders generally. The Whole Foods Market board of directors

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was aware of these interests and considered them, among other matters, in approving the merger agreement, and in making its recommendation that Company shareholders approve the merger agreement. See the section entitled “ The Merger (Proposal 1) — Background of the Merger ” and the section entitled “ The Merger (Proposal 1) — Reasons for the Merger; Recommendation of the Whole Foods Board of Directors .” These interests are described in more detail below, and certain of them are quantified in the narrative and the table below.

Treatment of Company Equity Awards

Stock Options .   At the effective time, each outstanding option to purchase shares of Company common stock, whether vested or unvested, will be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of  (1) the number of shares of Company common stock subject to the stock option immediately prior to the effective time multiplied by (2) the excess, if any, of the merger consideration over the exercise price per share of such stock option. Any stock option that has an exercise price per share that is greater than or equal to the merger consideration will be cancelled at the effective time for no consideration or payment.

Restricted Stock and Restricted Stock Unit Awards .   At the effective time, each outstanding restricted stock award and each outstanding restricted stock unit award in respect of Company common stock will fully vest and be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of  (1) the number of shares of Company common stock subject to such award multiplied by (2) the merger consideration.

Quantification of Payments .   For an estimate of the amounts that would be payable to each of the Company’s named executive officers on settlement of their unvested Company equity awards, see “—  Quantification of Payments and Benefits to the Company’s Named Executive Officers ” below. The estimated aggregate amount that would be payable to Whole Foods Market’s two executive officers who are not named executive officers in settlement of their unvested equity-based awards if the effective time occurred on June 30, 2017 is $906,884. We estimate that the aggregate amount that would be payable to the Company’s ten non-employee directors for their unvested Company equity-based awards if the effective time occurred on June 30, 2017 is $1,187,824.

Whole Foods Market Executive Retention Plan and Non-Compete Arrangement

Each of the Company’s executive officers (other than John Mackey, the Company’s Chief Executive Officer, Keith Manbeck, the Company’s Executive Vice President and Chief Financial Officer, and Walter E. Robb, IV, who resigned as Co-Chief Executive Officer of the Company effective as of December 31, 2016) participates in the Whole Foods Market Executive Retention Plan and Non-Compete Arrangement (the “Retention Plan”) that provides for certain employment protections for the two-year period following a change of control as well as severance benefits upon the executive officer’s termination of employment by the Company without cause, by the executive officer with good reason (as each such terms is defined in the Retention Plan), or due to the executive officer’s death or disability, in each case, within the two-year period commencing on a change of control (for each such executive officer, a “qualifying termination”). The merger will constitute a change of control for purposes of the Retention Plan.

Upon the closing of the merger and for a period of two years thereafter, each executive officer who participates in the Retention Plan would be entitled to certain employment protections including:

•

an annual base salary that is at least equal to twenty-six times the highest bi-weekly base salary rate applicable to the executive in the one-year period immediately preceding the month in which the merger occurs;

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•

an annual bonus calculated according to the formula used to calculate the executive’s last annual bonus paid prior to the merger (unless any comparable bonus under the Company’s successor plan would result in a higher payment to the executive);

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•

the right to participate in all long-term cash incentive, equity incentive, savings and retirement plans, practices, policies and programs applicable generally to similarly titled persons of the Company or affiliated companies, in each case, not less favorable, in the aggregate, than the most

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favorable of those provided by the Company and affiliated companies for such persons under such plans, practices, policies and programs as in effect prior to the merger or, if more favorable, those provided generally at any time after the date of the merger; and

•

the right to participate in the Company’s medical, dental, disability, life and other insurance programs, in each case not less favorable, in the aggregate, than the most favorable of those provided by the Company and affiliated companies for such persons under such programs as in effect prior to the merger or, if more favorable, those provided generally at any time after the date of the merger.

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Upon a qualifying termination, each executive officer who participates in the Retention Plan would be entitled to:

•

a lump sum cash payment equal to three times the sum of  (1) the executive officer’s annual base salary and (2) the average of the last three annual bonuses paid to the executive officer;

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•

a prorated bonus for the fiscal year in which the qualifying termination occurs;

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•

other than with respect to the stock options granted on May 13, 2016 and May 19, 2017, accelerated vesting of stock options (which will remain exercisable until the earlier of the fifth anniversary of the qualifying termination or the original expiration date of the stock option) and accelerated vesting of outstanding restricted stock awards and restricted stock unit awards;

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•

reimbursement for up to eighteen months of premiums paid by the executive officer for continued medical, dental, and vision coverage; and

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•

a designated non-compete payment, which amount will be paid in semiannual installments during the five-year period following the executive officer’s qualifying termination, subject to the executive officer’s continued compliance with the restrictive covenants set forth in the Retention Plan.

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Each of the Company’s executive officers who participates in the Retention Plan (other than Mr. Buechel) is fully vested in his or her non-compete payment under the Retention Plan, and therefore would receive his or her designated non-compete payment irrespective of the reason of termination (including upon a voluntary termination of employment by the executive officer without good reason) and irrespective of a change of control, subject in all cases to the executive officer’s continued compliance with the restrictive covenants set forth in the Retention Plan. For the value of such fully vested designated non-compete payments to the Company’s named executive officers who participate in the Retention Plan, see the Company’s Definitive Proxy Statement for the 2017 Annual Meeting, filed with the SEC on January 4, 2017 (the “Annual Proxy Statement”). For Mr. Buechel, the vesting of the unvested portion of his designated non-compete payment would accelerate upon his qualifying termination, with payment subject to his continued compliance with the restrictive covenants set forth in the Retention Plan. For the value of the designated non-compete payment for Mr. Buechel, see the Annual Proxy Statement.

Payments and benefits under the Retention Plan are subject to each participant’s execution and non-revocation of a general release of claims in favor of the Company. The Retention Plan also provides that payments and benefits payable to any participant in the Retention Plan will be reduced so that no portion of such payments and benefits are subject to the excise tax under Section 4999 of the Code, unless the participant would be better off on an after-tax basis receiving all such payments and benefits.

For an estimate of the value of the payments and benefits described above that would be payable to the Company’s named executive officers (other than Messrs. Mackey, Robb, and Manbeck) upon a qualifying termination in connection with the merger, see “—  Quantification of Payments and Benefits to the Company’s Named Executive Officers ” below. The estimated aggregate amount (excluding the value of accelerated vesting of unvested equity awards, which is described in “—  Treatment of Company Equity Awards ” above) that would be payable to the Company’s two executive officers who are not named executive officers under the Retention Plan if the merger were to be completed and they were to experience a qualifying termination on June 30, 2017 is $5,142,845.

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Change of Control Letter Agreement with Keith Manbeck

The Company is party to a change of control letter agreement with Mr. Manbeck, which provides for severance benefits upon Mr. Manbeck’s termination of employment by the Company without cause (as defined in the Retention Plan) or by Mr. Manbeck with good reason (as defined in the change of control letter agreement) on or following a change of control (which we refer to as a “qualifying termination” for Mr. Manbeck). The merger will constitute a change of control for purposes of the change of control letter agreement.

Upon a qualifying termination, Mr. Manbeck will be entitled to receive:

•

a lump sum cash payment of  $2 million;

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•

if such termination of employment occurs prior to the date on which the Company pays annual bonuses in respect of its 2017 fiscal year, an additional lump sum cash payment of  $975,000; if such termination of employment occurs on or after the date on which the Company pays annual bonuses in respect of its 2017 fiscal year but prior to the date on which the Company pays annual bonuses in respect of its 2018 fiscal year, an additional lump sum cash payment of  $650,000; and if such termination of employment occurs on or after the date on which the Company pays annual bonuses in respect of the 2018 fiscal year but prior to the date on which the Company pays annual bonuses in respect of the 2019 fiscal year, an additional lump sum cash payment of  $325,000;

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•

to the extent any portion of the restricted stock unit awards or stock options granted to Mr. Manbeck pursuant to his offer letter with the Company remains unvested as of such termination of employment, full accelerated vesting of such equity-based awards; and

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•

to the extent any portion of the $400,000 cash compensation payable under his offer letter with the Company in respect of forfeited equity awards of a prior employer remains unpaid as of such termination of employment, a lump sum cash payment equal to such unpaid portion.

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Payments and benefits under the change of control letter agreement are subject to Mr. Manbeck’s execution and non-revocation of a general release of claims in favor of the Company. Mr. Manbeck has also entered into a letter agreement with the Company that provides that payments and benefits payable to him will be reduced so that no portion of such payments and benefits are subject to the excise tax under Section 4999 of the Code, unless he would be better off on an after-tax basis receiving all such payments and benefits.

For an estimate of the value of the payments and benefits described above that would be payable to Mr. Manbeck upon a qualifying termination in connection with the merger, see “—  Quantification of Payments and Benefits to the Company’s Named Executive Officers ” below.

2017 Fiscal Year Annual Bonus

Under the merger agreement, Amazon.com has agreed that, if the closing occurs prior to the time that the Company has paid annual bonuses in respect of its 2017 fiscal year, then Amazon.com will (or will cause the surviving corporation and its subsidiaries to) pay such annual bonuses based on formulae previously established by the Company and in a manner consistent with the Company’s historical practices related to discretionary amounts.

New Arrangements with Whole Foods Market Executive Officers

In connection with negotiating the merger agreement, Amazon.com had preliminary discussions with certain of the Whole Foods Market executive officers regarding its desire to retain such officers following the closing. While Amazon.com may enter into new agreements with those individuals, at this time there is no assurance that those discussions will result in any new agreements with Amazon.com or, if so, what the terms and conditions of any such agreements would be.

Indemnification; Directors’ and Officers’ Insurance

Pursuant to the merger agreement, from and after the effective time, Amazon.com will indemnify certain persons, including Whole Foods Market’s directors and executive officers. In addition, for a period of not less than six years from the effective time, Amazon.com will maintain an insurance and

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indemnification policy for the benefit of certain persons, including Whole Foods Market’s directors and executive officers. For additional information, see the section entitled “ The Merger Agreement — Indemnification and Insurance .”

Quantification of Payments and Benefits to the Company’s Named Executive Officers

The table below sets forth the amount of payments and benefits that each of the Company’s named executive officers would receive in connection with the merger, assuming that the merger were consummated and each such executive officer experienced a qualifying termination on June 30, 2017. The amounts below are determined using the merger consideration per share of Company common stock of  $42.00, and are based on multiple assumptions that may or may not actually occur or be accurate on the relevant date, including the assumptions described in the footnotes to the table. As a result of the foregoing assumptions, the actual amounts, if any, to be received by a named executive officer may materially differ from the amounts set forth below. The table below does not include compensation that is contingent upon services provided to Amazon.com following the effective time, including under any employment arrangements that will become effective as of the closing of the merger.

(1)

The cash payments payable to Mr. Manbeck consist of  (a) a lump sum cash payment equal to $2 million; (b) an additional lump sum cash payment of  $975,000 in respect of his guaranteed bonus; and (c) $266,667 in cash compensation payable under his offer letter with the Company in respect of forfeited equity awards of a prior employer. The cash payments payable to each of Ms. Flanagan and Messrs. Gallo, Lannon, and Buechel under the Retention Plan consist of  (i) a severance payment in an amount equal to three times the sum of  (A) the named executive officer’s annual base salary and (B) the average of the last three annual bonuses paid to the named executive officer; (ii) a prorated bonus for the fiscal year in which the qualifying termination occurs; and (iii) in the case of Mr. Buechel, accelerated vesting of a portion of his designated non-compete payment, as set forth in the table below. Such payments do not include the value of vested non-compete payments under the Retention Plan as described in “—  Whole Foods Market Executive Retention Plan and Non-Compete Arrangement ” above. All such payments are “double-trigger” (i.e., payable upon a qualifying termination following the occurrence of a change of control). Set forth below are the separate values of each of the payments described above.

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(2)

As described above, all unvested Company equity-based awards held by the named executive officers will be settled in cash at the effective time (i.e., “single-trigger” vesting). Set forth below are the values of each type of unvested equity-based award that would be payable upon the effective time, based on the merger consideration per share of Company common stock of  $42.00 and less the applicable exercise price in the case of unvested stock options.

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(3)

The amount in the table equals the estimated value of medical, dental, and vision premium reimbursement for Ms. Flanagan and Messrs. Gallo, Lannon, and Buechel for 18 months following a qualifying termination. All such benefits are “double-trigger.”

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(4)

Mr. Robb resigned as Co-Chief Executive Officer of the Company effective as of December 31, 2016. He is not entitled to any compensatory payments in connection with the merger, other than the settlement of unvested stock options as indicated in the column headed “Equity.”

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Material U.S. Federal Income Tax Consequences of the Merger

The following is a general discussion of the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of common stock whose shares are exchanged for cash pursuant to the merger. This discussion does not address U.S. federal income tax consequences with respect to holders other than U.S. holders. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury Regulations promulgated thereunder, judicial opinions and administrative rulings and published positions of the Internal Revenue Service (the “IRS”), each as in effect as of the date hereof. These authorities are subject to change or differing interpretations, possibly on a retroactive basis, and any such change or interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion is for general information purposes only and does not purport to be a complete analysis of all potential tax consequences. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010, nor does it address any tax consequences arising under state, local or foreign tax laws or U.S. federal tax laws other than those pertaining to the U.S. federal income tax. This discussion is not binding on the IRS or the courts and, therefore, could be subject to challenge, which could be sustained. No ruling is intended to be sought from the IRS with respect to the merger.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of common stock that is for U.S. federal income tax purposes:

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a citizen or individual resident of the United States;

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a corporation, or other entity classified as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

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a trust if  (1) a court within the United States is able to exercise primary supervision over the trust’s administration, and one or more U.S. persons are authorized to control all substantial decisions of the trust or (2) such trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or

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an estate the income of which is subject to U.S. federal income tax regardless of its source.

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This discussion applies only to U.S. holders of shares of common stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that may be

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relevant to a U.S. holder in light of its particular circumstances, or that may apply to U.S. holders subject to special treatment under U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting, holders subject to the alternative minimum tax, U.S. holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, governmental agencies or instrumentalities, tax-qualified retirement plans, banks and other financial institutions, mutual funds, certain former citizens or former long-term residents of the United States, partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes), S corporations, or other pass-through entities or investors in such partnerships, S corporations or other pass-through entities, real estate investment trusts, regulated investment companies, U.S. holders who hold shares of common stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction, U.S. holders who will hold (actually or constructively) an equity interest in Amazon.com immediately after the merger, and U.S. holders who acquired their shares of common stock through the exercise of employee stock options or other compensation arrangements). This discussion also does not address the U.S. federal income tax consequences to holders of shares of common stock who exercise appraisal rights in connection with the merger under the TBOC.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partners and the activities of the partnership. If you are, for U.S. federal income tax purposes, a partner in a partnership holding shares of common stock, you should consult your tax advisor.

This summary of material U.S. federal income tax consequences is for general information purposes only and is not tax advice. Holders of common stock are urged to consult their own tax advisors to determine the particular tax consequences to them of the merger, including the applicability and effect of the alternative minimum tax, the unearned income Medicare contribution tax and any other U.S. federal, or state, local, foreign or other tax laws.

The receipt of cash by U.S. holders in exchange for shares of common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of common stock pursuant to the merger will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder’s adjusted tax basis in its shares of common stock.

Any such gain or loss will be long-term capital gain or loss if a U.S. holder’s holding period in the shares of common stock surrendered in the merger is greater than one year as of the date of the merger. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. holder acquired different blocks of common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of common stock.

Information Reporting and Backup Withholding

Payments made in exchange for shares of common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 28%). To avoid backup withholding, a non-corporate U.S. holder that does not otherwise establish an exemption should complete and return to the applicable withholding agent a properly completed and executed IRS Form W-9, certifying under penalties of perjury that such U.S. holder is a “United States person” (within the meaning of the Code), that the taxpayer identification number provided is correct, and that such U.S. holder is not subject to backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

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Regulatory Clearances

HSR Clearance.    Under the HSR Act and the rules promulgated thereunder, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division and the FTC and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or earlier termination of the applicable waiting period under the HSR Act. The merger may not be completed until the expiration of a 30 calendar day waiting period, which begins when Amazon.com and Whole Foods Market file Premerger Notification and Report Forms under the HSR Act with the Antitrust Division and the FTC, unless such waiting period is earlier terminated by the Antitrust Division and the FTC. Amazon.com and Whole Foods Market filed their Premerger Notification and Report Forms on June 23, 2017, in connection with the merger, and the waiting period will therefore expire at 11:59 p.m., Eastern Time, on July 24, 2017. If prior to the expiration or termination of the waiting period either the Antitrust Division or FTC issues a request for additional information or documentary material (a “second request”) from Amazon.com and Whole Foods Market, the waiting period with respect to the merger would be extended until the 30th calendar day following the date of the parties’ substantial compliance with the second request. After that time, absent the agreement of Amazon.com and Whole Foods Market, the acquisition can be blocked only by court order. The Antitrust Division and the FTC may terminate the applicable waiting period at any time before its expiration.

At any time before or after the expiration of the statutory waiting periods under the HSR Act, the Antitrust Division or the FTC may take action under the antitrust laws, including seeking to enjoin the completion of the merger, to rescind the merger or to conditionally permit completion of the merger subject to regulatory conditions or other remedies.

Canadian Competition Act Clearance.    Part IX of the Canadian Competition Act, including the regulations promulgated thereunder, requires that the parties to certain transactions that exceed the thresholds set out in sections 109 and 110 of the Canadian Competition Act provide the commissioner with pre-closing notification of the transaction. Completion of the merger is subject to the expiration or termination of the applicable waiting period under the Canadian Competition Act.

Under the Canadian Competition Act, the initial statutory waiting period ends 30 days after the day on which Amazon.com and Whole Foods Market submit their respective notifications unless terminated or waived earlier by the commissioner. Amazon.com and Whole Foods Market submitted their notifications pursuant to the Canadian Competition Act on June 29, 2017, in connection with the merger and the waiting period will therefore expire on July 31, 2017 unless terminated or waived earlier. If prior to the expiration or termination of the waiting period the commissioner issues a supplementary information request (“SIR”), the merger cannot be completed until 30 days after the parties comply with the SIR. The commissioner’s substantive assessment of a notifiable transaction may extend beyond the statutory waiting period, and the commissioner may seek an order from the Canadian Competition Tribunal before or after expiry of the statutory waiting period, and for up to one year following completion, to enjoin and/or prohibit all or part of a transaction.

In addition, non-U.S. regulatory bodies and U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. Although neither Amazon.com nor Whole Foods Market believes that the merger will violate the antitrust laws, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

Delisting and Deregistration of Company Common Stock

If the merger is completed, the Company common stock will be delisted from the NASDAQ and deregistered under the Exchange Act.

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THE MERGER AGREEMENT

The following is a summary of the material provisions of the merger agreement, a copy of which is attached to this proxy statement as Annex A and which is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

The following summary of the merger agreement, and the copy of the merger agreement attached as Annex A to this proxy statement, are intended to provide information regarding the terms of the merger agreement and are not intended to provide any factual information about Whole Foods Market or to modify or supplement any factual disclosures about Whole Foods Market in its public reports filed with the SEC. In particular, the merger agreement and the related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to Whole Foods Market. The merger agreement contains representations and warranties by and covenants of Whole Foods Market, Amazon.com and Merger Sub, and they were made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations, qualifications and other particulars agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts or being made for other purposes, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in Whole Foods Market’s public disclosures. The representations, warranties and covenants in the merger agreement and any descriptions thereof should be read in conjunction with the disclosures in Whole Foods Market’s periodic and current reports, proxy statements and other documents filed with the SEC. See the section entitled ‘‘ Where You Can Find Additional Information .’’ Moreover, the description of the merger agreement below does not purport to describe all of the terms of such agreement and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Annex A and is incorporated herein by reference.

Additional information about Whole Foods Market may be found elsewhere in this proxy statement and Whole Foods Market’s other public filings. See the section entitled ‘‘ Where You Can Find Additional Information .’’

Structure of the Merger; Articles of Incorporation; Bylaws; Directors and Officers

At the effective time, Merger Sub will merge with and into Whole Foods Market, and the separate corporate existence of Merger Sub will cease. Whole Foods Market will be the surviving corporation in the merger and will continue its corporate existence as a Texas corporation and a wholly owned subsidiary of Amazon.com. The articles of incorporation of Whole Foods Market that are in effect immediately before the effective time will be amended and restated as of the effective time to be in the form attached as Exhibit A to the merger agreement, and as so amended will become the articles of incorporation of the surviving corporation. Except as to the name of the surviving company, which will be ‘‘Whole Foods Market, Inc.,’’ the bylaws of Merger Sub that are in effect immediately before the effective time will become the bylaws of the surviving corporation.

The individuals holding positions as directors of Merger Sub at the effective time will become the initial directors of the surviving corporation. The individuals holding positions as officers of Whole Foods Market at the effective time will become the initial officers of the surviving corporation.

When the Merger Becomes Effective

The closing of the merger will take place at 9:00 a.m., New York time, on the third business day following the day on which the last to be satisfied or waived of the conditions set forth in the merger

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agreement (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of those conditions) is satisfied or waived in accordance with the merger agreement, unless otherwise mutually agreed in writing between Whole Foods Market and Amazon.com. For purposes of the merger agreement, ‘‘business day’’ refers to any day ending at 11:59 p.m., New York time, other than a Saturday or Sunday, on which the Department of State of the State of Texas and banks in the County of New York, New York and in Travis County, Texas are open for general business.

On the closing date, Whole Foods Market and Amazon.com will file the certificate of merger with the Secretary of State of the State of Texas. The merger will become effective at the time when the certificate of merger has been duly filed with and accepted by the Secretary of State of the State of Texas, or at such later time as may be agreed by the parties in writing and specified in the certificate of merger.

As of the date of the filing of this proxy statement, we expect to complete the merger during the second half of calendar year 2017. However, completion of the merger is subject to the satisfaction or waiver of the conditions to the completion of the merger, which are described below and include regulatory clearances, and it is possible that the merger will not be completed until a later time, or at all. There may be a substantial amount of time between the special meeting and the completion of the merger. After the requisite company vote is obtained, the Whole Foods Market board of directors will not have the right to terminate the merger agreement in order to accept any alternative acquisition proposal. We expect to complete the merger promptly after the requisite company vote is obtained and all required regulatory clearances have been received.

Effect of the Merger on the Common Stock

At the effective time, each share of Company common stock issued and outstanding immediately before the effective time (other than (1) shares owned by Amazon.com, Merger Sub or any other wholly owned subsidiary of Amazon.com and shares owned by the Company or any wholly owned subsidiary of the Company, and in each case not held on behalf of third parties, (2) shares owned by shareholders of the Company who have complied with the applicable provisions of Chapter 10, Subchapter H of the TBOC prior to the effective time (the shares referred to in clause (2), ‘‘dissenting shares,’’ and the shares referred to in clauses (1) and (2), ‘‘excluded shares’’) and (3) the Company restricted stock awards (which will be converted as described below)) will be converted into the right to receive the merger consideration. The merger consideration will be $42.00 per share in cash, without interest. Amazon.com, Whole Foods Market, Merger Sub, the surviving corporation and the paying agent for the merger consideration will each be entitled to deduct and withhold any amounts due under applicable tax laws from the amounts that would otherwise be payable under the terms of the merger agreement.

At the effective time, each holder of dissenting shares will be entitled to receive payments in accordance with the provisions of Chapter 10, Subchapter H of the TBOC, unless and until such holder fails to comply with the provisions of Chapter 10, Subchapter H of the TBOC or effectively withdraws or otherwise loses such holder’s rights to receive payment under Chapter 10, Subchapter H of the TBOC. If any such holder fails to comply with the provisions of Chapter 10, Subchapter H of the TBOC or effectively withdraws or loses such right, such dissenting shares will be treated as if they had been converted at the effective time into the right to receive the merger consideration.

At the effective time, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the effective time will be converted into one share of common stock, par value $0.01 per share, of the surviving corporation.

Withholding Rights

Amazon.com, Whole Foods Market, Merger Sub, the surviving corporation and the paying agent for the merger consideration will each be entitled to deduct and withhold any amounts due under applicable tax laws from the amounts that would otherwise be payable under the terms of the merger agreement, and any such withheld amounts that are timely paid to the appropriate taxing authorities will be treated as having been paid to the person from whom such amounts were originally deducted and withheld.

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Treatment of Company Equity Awards

Stock Options and Stock Appreciation Rights .   At the effective time, each outstanding option to purchase shares of Company common stock and each outstanding stock appreciation right in respect of Company common stock, whether vested or unvested, will be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of  (i) the number of shares of Company common stock subject to the stock option or stock appreciation right immediately prior to the effective time multiplied by (ii) the excess, if any, of the merger consideration over the exercise price per share of such stock option or stock appreciation right. Any stock option or stock appreciation right that has an exercise price per share that is greater than or equal to the merger consideration will be cancelled at the effective time for no consideration or payment.

Restricted Stock and Restricted Stock Unit Awards .   At the effective time, each outstanding restricted stock award and each outstanding restricted stock unit award in respect of Company common stock will be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of  (i) the number of shares of Company common stock subject to such award multiplied by (ii) the merger consideration.

Payment for Common Stock in the Merger

At or prior to the effective time, Amazon.com or Merger Sub will deposit, or cause to be deposited, with a paying agent cash sufficient to pay the aggregate merger consideration (other than in respect of excluded shares). Promptly (and no later than the third business day) after the effective time, the surviving corporation will cause the paying agent to mail to each holder of record of shares of Company common stock (other than excluded shares) (1) a notice of the effectiveness of the merger, (2) a letter of transmittal and (3) instructions for effecting the surrender of certificates or book-entry shares to the paying agent in exchange for payment of the merger consideration. Upon surrender to the paying agent of certificates or book-entry shares, as applicable, together with, in the case of share certificates, the letter of transmittal, duly completed and validly executed, or, in the case of book-entry shares, receipt of an ‘‘agent’s message’’ by the paying agent, and such other documents as may be reasonably required, the holder of such certificates or book-entry shares will be entitled to receive payment of the merger consideration which the holder is entitled to pursuant to the merger agreement (after giving effect to any required tax withholding).

Representations and Warranties

The merger agreement contains representations and warranties of Whole Foods Market, subject to certain exceptions in the merger agreement, in the company disclosure schedule delivered in connection with the merger agreement and in certain of Whole Foods Market’s public filings, as to, among other things:

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organization, good standing and qualification to do business;

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capital structure;

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corporate authority and approvals relating to the execution, delivery and performance of the merger agreement;

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governmental filings and the absence of certain violations;

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the reports, forms, documents and financial statements required to be filed with the SEC, and the establishment and maintenance of certain disclosure controls and procedures and internal control over financial reporting;

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the absence of certain changes, including that there has not been a material adverse effect with respect to Whole Foods Market, from and after September 26, 2016;

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the absence of certain actions, including civil, criminal or administrative actions, claims, arbitrations, investigations or other proceedings;

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the absence of undisclosed liabilities;

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employee benefit plans and other agreements, plans and policies with or concerning employees;

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•

compliance with applicable laws and permits;

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material contracts;

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suppliers;

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real property matters;

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takeover statutes;

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environmental matters;

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tax returns, filings and other tax matters;

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employee relations, labor matters and compliance with labor, employment and occupational safety and laws;

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intellectual property, information technology assets and data security;

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insurance policies;

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compliance with the provisions of anti-bribery, anti-corruption and anti-money laundering laws;

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quality and safety of products; and

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broker’s and finder’s fees.

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The merger agreement also contains representations and warranties of Amazon.com and Merger Sub, subject to certain exceptions in the merger agreement, as to, among other things:

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organization, good standing and qualification to do business;

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corporate authority and approvals relating to the execution, delivery and performance of the merger agreement;

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governmental filings and the absence of certain violations;

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the absence of certain actions, including civil, criminal or administrative actions, claims, arbitrations, investigations or other proceedings;

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the sufficiency of the funds available to Amazon.com and Merger Sub to pay the merger consideration and the other amounts payable under the merger agreement;

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the ownership and operations of Merger Sub;

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the lack of ownership of shares of Company common stock and the lack of  ‘‘affiliated shareholder’’ status with respect to the Company under the TBOC; and

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broker’s and finder’s fees.

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Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a ‘‘material adverse effect’’ qualification, as discussed below.

For purposes of the merger agreement, a ‘‘material adverse effect’’ means any change, effect, event, occurrence or development that is materially adverse effect to the financial condition, business or results of operations of Whole Foods Market and its subsidiaries, taken as a whole. However, no change, effect, event, occurrence or development to the extent resulting from the following will constitute or be taken into account in determining whether there is a material adverse effect:

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changes in the economy or financial, debt, credit or securities markets or capital market conditions generally, including changes in interest or exchange rates, in the United States, United Kingdom or Canada;

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changes generally affecting the grocery industry (including the prepared foods business) in the United States, United Kingdom or Canada;

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changes or proposed changes in GAAP or other accounting standards or interpretations thereof or in any law, or interpretations thereof;

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•

changes in any political conditions, acts of war (whether or not declared), hostilities, military actions or acts of terrorism, or any escalation or worsening of the foregoing;

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acts of God (including storms, earthquakes, tsunamis, tornados, hurricanes, pandemics, floods or other natural disasters);

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a decline in the price or trading volume of Whole Foods Market’s common stock on the NASDAQ or any other securities market or in the trading price of any other securities of Whole Foods Market or any of its subsidiaries or any change in the ratings or ratings outlook for Whole Foods Market or any of its subsidiaries (provided that this exception will not prevent or otherwise affect a determination that any change, effect, event, occurrence or development underlying such decline, if not otherwise excluded, has resulted in a material adverse effect);

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any failure by Whole Foods Market to meet any internal or published projections, forecasts, estimates or predictions of revenues, earnings, cash flow or cash position or other financial, accounting or operating measures or metrics for any period (provided that this exception will not prevent or otherwise affect a determination that any change, effect, occurrence or development underlying such failure, if not otherwise excluded, has resulted in a material adverse effect);

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the effect of seasonal changes on the results of operations, business or financial condition of Whole Foods Market;

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the announcement or existence of the merger agreement or the merger, including any impact on relationships with employees, customers, suppliers and distributors or other persons to the extent resulting from such announcement or existence (provided that this exception will not apply to references to ‘‘material adverse effect’’ in the representations and warranties as to governmental filings and the absence of certain violations);

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the commencement or pendency of any litigation alleging breach of fiduciary duty or similar claim or violation of law relating to the merger agreement or the merger or the other transactions contemplated thereby; and

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the failure on the part of Whole Foods Market or any of its subsidiaries to take any action as a result of the restrictions on interim operations set forth in the merger agreement if Whole Foods Market in good faith requested in writing that Amazon.com consent to such action and Amazon.com unreasonably withheld its consent to such requested action after Whole Foods Market informed Amazon.com in writing that it believed the withholding of consent by Amazon.com to be unreasonable.

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However, with respect to the matters described in the foregoing first, second, third, fourth, fifth and eighth bullet points above, such change, effect, occurrence or development may be taken into account to the extent that it has a disproportionate adverse effect on Whole Foods Market and its subsidiaries as compared to other companies operating in the grocery industry (including the prepared foods business).

Conduct of Business Pending the Merger

The merger agreement provides that, after June 15, 2017 and prior to the effective time, except as required by the merger agreement, as required by applicable law, with the prior written approval of Amazon.com (which may not be unreasonably withheld, delayed or conditioned) or as set forth in the disclosure schedule to the merger agreement, Whole Foods Market will, and will cause its subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use its and their reasonable best efforts to preserve their business organizations intact (including the service of key employees) and maintain existing relations with key distributors, suppliers and other persons with whom Whole Foods Market and its subsidiaries have significant relationships, and will not and will cause its subsidiaries not to, take any of the following actions:

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(1) adopt or submit to shareholder approval any change in the articles of incorporation or bylaws of the Company or (2) adopt any change in the comparable organizational document of any subsidiary of the Company that, in the case of clause (2), would adversely affect or delay the completion of the merger or the other transactions contemplated by the merger agreement;

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(1) merge or consolidate the Company or any of its subsidiaries with any other person, except for any such transaction between or among any of its subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its subsidiaries taken as a whole that would be adverse to Amazon.com or any of its subsidiaries, or (2) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its subsidiaries that would be adverse to Amazon.com or any of its subsidiaries;

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acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (1) acquisitions of inventory, supplies and similar materials in the ordinary course of business consistent with past practice, (2) pursuant to contracts in effect on June 15, 2017 disclosed in unredacted form to Amazon.com prior to June 15, 2017, (3) in accordance with the Company’s capital expenditure budget made available to Amazon.com on or prior to June 15, 2017 or (4) any other acquisitions for consideration not in excess of  $5 million in the aggregate;

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issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or lien against, or otherwise enter into any contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (1) any such transaction among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries that would not be adverse to Amazon.com or any of its subsidiaries or (2) any issuance, sale, grant or transfer of shares of Company common stock pursuant to (x) the exercise or settlement of Company options or Company RSU awards outstanding as of June 15, 2017 or granted after such date not in violation of the merger agreement or (y) the grant of Company restricted share awards after June 15, 2017 not in violation of the merger agreement;

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make any loans, advances or capital contributions to any person, other than (1) to the Company or any of its wholly owned subsidiaries, (2) pursuant to any contract that provides for or relates to a material partnership, joint venture, collaboration or similar material arrangement with a third party, (3) extensions of credit terms to customers or vendors in the ordinary course of business and (4) customary loans or advances to employees in the ordinary course of business in amounts not to exceed $10 million in the aggregate at any time;

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declare, set aside, make or pay any dividend or other distribution with respect to any of its capital stock, except for (1) dividends or other distributions paid by any wholly owned subsidiary of the Company to the Company or to any other wholly owned subsidiary of the Company and (2) regular quarterly dividends to shareholders of the Company by the Company in an amount not to exceed $0.18 per share, in each case declared and paid at such times as is consistent with historical practice over the most recent fiscal year ended prior to June 15, 2017;

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reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except for (1) any such transaction by a wholly owned subsidiary of the Company that would not be adverse to Amazon.com or any of its subsidiaries and (2) acquisitions of shares of Company common stock in satisfaction of withholding obligations in respect of Company options, Company restricted share awards or Company RSU awards or payment of the exercise price in respect of Company options, in each case, outstanding as of June 15, 2017 pursuant to its terms or granted after such date not in violation of the merger agreement;

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create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its subsidiaries, except (1) indebtedness for borrowed money in an amount not to exceed $10 million in the aggregate that is (x) on terms not materially less favorable in the aggregate than the Company’s existing indebtedness or (y) prepayable at any time at par (plus customary floating rate breakage costs, if applicable), (2) guarantees of indebtedness of the Company or any of its wholly owned subsidiaries, (3) intercompany indebtedness between or among the Company and/or any of its wholly owned subsidiaries and (4) in connection with the financing of accounts payable in the ordinary course of business consistent with past practice;

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other than in accordance with the Company’s capital expenditure budget made available to Amazon.com prior to June 15, 2017, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $1 million individually or $10 million in the aggregate;

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other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted under any other interim operating covenant, (1) enter into any contract that would have been a material contract (as that term is defined in the merger agreement) had it been entered into prior to June 15, 2017 or (2) amend or modify in any material respect or assign (other than assignments between or among the Company and/or any of its subsidiaries that would not be adverse to Amazon.com or any of its subsidiaries) or terminate any material contract, other than expirations of any such material contract in accordance with its terms (provided, however, that in no event may the Company enter into any contract with any of certain restrictive provisions specified in the merger agreement, except, in each case, as would not be adverse to Amazon.com or any of its subsidiaries following the effective time other than in any de minimis respect);

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make any material changes with respect to financial accounting policies or procedures, except as required by law, proposed law or GAAP or statutory or regulatory accounting rules or interpretations or by any governmental authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization);

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settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of taxes), for an amount in excess of  $2 million individually or $25 million in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any governmental authority that would restrict the future activity or conduct of Amazon.com, the Company or any of their respective subsidiaries or a finding or admission of a violation of law or violation of the rights of any person other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company’s SEC reports filed prior to June 15, 2017 for an amount not in excess of the amount so reflected or reserved;

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(1) make or change any material tax election, other than consistent with past practice, (2) change any entity classification for federal income tax purposes of any material subsidiary, (3) create an entity outside of the United States that is (x) a direct subsidiary of the Company or any of its domestic subsidiaries and (y) treated as a ‘‘disregarded entity’’ or partnership for U.S. federal income tax purposes, or knowingly create a permanent establishment of the Company or any domestic subsidiary outside the United States, (4) file any material amended tax return, (5) adopt any material accounting method for taxes, other than consistent with past practice, or change any material accounting method for taxes, (6) settle or compromise any tax claim for an amount in excess of  $2 million individually or $25 million in the aggregate, other than with respect to settlements or compromises of any tax claim for an amount that does not exceed the amount disclosed, reflected or reserved in accordance with GAAP in the Company SEC reports filed prior

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to June 15, 2017, (7) surrender any material claim for a refund of taxes, (8) enter into any closing agreement relating to a material amount of taxes or (9) other than in the ordinary course of business, consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment;

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transfer, sell, lease, license, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any lien upon, any assets of the Company or any of its subsidiaries, including capital stock of any of its subsidiaries, except for sales in the ordinary course of business consistent with past practice and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets having a value not in excess of  $1 million individually or $10 million in the aggregate;

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except as required by any Company benefit plan in effect as of June 15, 2017 or adopted or entered into in accordance with the merger agreement, (1) terminate, adopt, establish, enter into, amend or renew any Company benefit plan, other than amendments that do not materially increase benefits or result in materially increased administrative costs; (2) increase in any manner the compensation, benefits, severance or termination pay of any of the current or former (x) directors, (y) executive officers or (z) employees or consultants who are natural persons of the Company or its subsidiaries with target total annual cash compensation opportunities (i.e., base pay or base rate and short term cash incentive target amounts) in excess of  $300,000; (3) increase in any manner the compensation, benefits, severance or termination pay of any employees or consultants who are natural persons of the Company or its subsidiaries with target total annual cash compensation opportunities at or below $300,000, other than in the ordinary course of business consistent with past practice; provided, that (x) any such increase in bonus or incentive payment corresponds to a routine annual salary or base pay increase implemented in the ordinary course of business consistent with past practice or (y) any such bonus (or increase in bonus) or similar incentive payment is awarded in recognition of the recipient’s performance in the ordinary course of business consistent with past practice; (4) pay any bonus or incentive compensation under any Company benefit plan, other than payments based on actual performance for completed performance periods; (5) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Company benefit plan; (6) grant any new severance, change in control, retention benefit or any other similar award (other than pursuant to arrangements entered into with newly hired and promoted employees in the ordinary course of business consistent with past practice (provided, that, in each case, such arrangement is in all material respects in the form that has been provided to Amazon.com as of June 15, 2017) and for separation agreements entered into with terminated employees who are not executive officers in the ordinary course of business consistent with past practice); (7) take any action to accelerate the payment of, or to fund or secure the payment, of any amounts under any Company benefit plan; (8) hire any (x) consultant who is a natural person with aggregate annual fees in excess of $300,000, (y) executive officer or (z) employee who, upon commencement of employment would be designated as a ‘‘Level 8’’ employee or above, except, in the case of clause (z), employees who are hired in the ordinary course of business to fill positions that are open as of June 15, 2017 or that become open subsequent to such date as a result of a current employee’s departure; provided, that such new hire’s compensation and benefits package is comparable to that which the Company has historically made available to employees in similar positions, taking into account reasonable modifications for competitive market arrangements; (9) promote any executive officer of the Company or promote any employee to an executive officer position; (10) become a party to, establish, adopt, materially amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization; or (11) terminate without cause the employment of any executive officer of the Company; or

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agree, authorize or commit to take any of the foregoing actions.

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Whole Foods Market also has agreed that, prior to making any broad-based written (or prepared oral) communications to the officers or employees of the Company or any of its subsidiaries pertaining to compensation or benefit entitlements to be provided following the closing date, the Company will provide

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Amazon.com with a copy of the intended communication (including, in the case of any such oral communications, copies of scripts, talking points or other similar materials), Amazon.com will have a reasonable period of time to review and comment on the communication, and Amazon.com and the Company will cooperate in providing any such communication.

In addition, Amazon.com has agreed that, after June 15, 2017 and prior to the effective time, Amazon.com and its subsidiaries will not (1) acquire control (it being understood for this purpose that obtaining the right to a board seat of a third party shall be deemed control), or (2) enter into an agreement, arrangement or understanding to acquire control, of a third party in North America that is in the grocery industry and operates physical retail stores if  (x) such acquisition of control or (y) entry into such agreement, arrangement or understanding, in the applicable case, would reasonably be expected to prevent, materially impair or materially delay the completion of the merger.

Access

Subject to certain exceptions and limitations and solely for purposes of furthering the merger and the other transactions contemplated by the merger agreement or integration planning relating thereto, Whole Foods Market and Amazon.com are required to, and required to cause their respective subsidiaries to, furnish the other with reasonable information concerning itself, its subsidiaries, directors, officers and shareholders and other matters as may be reasonably necessary or advisable in connection with this proxy statement or any other statement, filing, notice or application made by or on behalf of Whole Foods Market, Amazon.com or any of their respective subsidiaries to any third party and/or any governmental authority in connection with the merger and the transactions contemplated by the merger agreement. In addition, subject to certain exceptions and limitations, Whole Foods Market is required to, and is required to cause its subsidiaries to, afford officers and other authorized representatives of Amazon.com reasonable access to Whole Foods Market’s and its subsidiaries’ officers, employees, agents, contracts, books and records, stores, offices, systems, distribution facilities and other facilities, and other reasonable information concerning its business, properties and personnel as may reasonably be requested by Amazon.com. However, Whole Foods Market and Amazon.com are not required to permit access, or to disclose or otherwise make available information, that would (1) unreasonably disrupt its or its subsidiaries’ operations, (2) result in the disclosure of trade secrets of third parties or violate the terms of confidentiality provisions in any agreement with a third party entered into prior to June 15, 2017 or any applicable law or duty, (3) result in the disclosure of any information referencing the valuation of Whole Foods Market and its subsidiaries conducted in connection with the approval of the merger agreement or (4) reasonably be expected to cause the loss or waiver of the protection of any attorney-client privilege, attorney work product or other relevant legal privilege.

Acquisition Proposals; No Solicitation

Except as permitted by the merger agreement, the Company must not, and must cause its subsidiaries and its and its subsidiaries’ directors and officers not to, and must instruct and use its reasonable best efforts to cause its and its subsidiaries’ employees, investment bankers, attorneys, accountants and other advisors or representatives not to, directly or indirectly:

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initiate, solicit, propose, knowingly encourage or knowingly facilitate any inquiry, proposal, indication of interest or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal (as defined below);

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engage in, continue or otherwise participate in any discussions or negotiations relating to any acquisition proposal or any inquiry, proposal, indication of interest or offer that would reasonably be expected to lead to an acquisition proposal (other than to state the extent to which those discussions are prohibited by the terms of the merger agreement);

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provide any non-public information to any person in connection with any acquisition proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an acquisition proposal; or

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other than as required by the directors’ fiduciary duties, waive, terminate, modify or fail to enforce any ‘‘standstill” or confidentiality obligation of any person (other than any party to the merger agreement) with respect to the Company or any of its subsidiaries entered into in connection with an acquisition proposal.

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Pursuant to the merger agreement, an ‘‘acquisition proposal’’ means any proposal, indication of interest or offer involving any person or group (other than Amazon.com or its subsidiaries) relating to:

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a merger, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving the Company;

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any acquisition by any person or group resulting in, or any proposal, indication of interest or offer that, if consummated, would result in any person or group becoming the beneficial owner of, directly or indirectly, in one or a series of related transactions, 15% or more of the total voting power or of any class of equity securities of the Company or assets representing 15% or more of the consolidated net revenues, net income or total assets (including equity securities of any of the Company’s subsidiaries and equity securities of any other entity) of the Company; or

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any combination of the foregoing.

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Existing Discussions or Negotiations

Pursuant to the merger agreement, Whole Foods Market has agreed to, and to cause its subsidiaries and financial advisors to, and to use its reasonable best efforts to cause its other representatives to, immediately cease and cause to be terminated any discussions and negotiations with any person conducted before June 15, 2017 with respect to any acquisition proposal or proposal or transaction that could reasonably be expected to lead to an acquisition proposal. Whole Foods Market has agreed to, within 24 hours after execution of the merger agreement, deliver a written notice to each such person providing only that the Company is ending all discussions and negotiations with such person with respect to any acquisition proposal or proposal or transaction that could reasonably be expected to lead to an acquisition proposal, which notice also will request the prompt return or destruction of all confidential information concerning Whole Foods Market and any of its subsidiaries. Whole Foods Market has also agreed to immediately terminate all physical and electronic data access previously granted to such persons.

Notwithstanding anything to the contrary contained in the merger agreement, Whole Foods Market will be permitted to terminate, amend, modify, waive or fail to enforce any provision of any confidentiality, ‘‘standstill’’ or similar obligation of any person if the Whole Foods Market board of directors determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be inconsistent with the directors’ fiduciary duties under applicable law.

Receipt of Acquisition Proposals

Notwithstanding certain provisions of the merger agreement described above, prior to the time the requisite company vote is obtained, if Whole Foods Market receives a bona fide written acquisition proposal not solicited in violation of the Company’s non-solicitation obligations under the merger agreement, and if the Whole Foods Market board of directors determines in good faith after consultation with outside legal counsel, that (1) based on the information then available and after consultation with its outside financial advisors, the acquisition proposal constitutes or could reasonably be expected to result in a superior proposal (as defined below) or a transaction that is more favorable to the Company’s shareholders from a financial point of view than the merger and that could reasonably be expected to be completed, taking into account any regulatory, financing or approval requirements and any other aspects considered relevant by the Whole Foods Market board of directors, and (2) the failure to take the applicable action would be inconsistent with the directors’ fiduciary duties under applicable law, then Whole Foods Market may:

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provide information (including non-public information) to the person making the acquisition proposal; provided that in the event the information has not previously been made available to Amazon.com, Whole Foods Market must promptly (and, in any event, within 24 hours) provide the information to Amazon.com, and that, prior to furnishing the information, Whole Foods Market must receive from the person making the acquisition proposal an executed confidentiality agreement with terms not less restrictive in the aggregate to the other party than the terms in the confidentiality agreement between Whole Foods Market and Amazon.com are on Amazon.com; provided that the Company will not enter into any confidentiality agreement with any person subsequent to June 15, 2017 that prohibits the Company from providing any information to Amazon.com in accordance with the merger agreement or otherwise prohibits the Company from

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complying with its obligations under the merger agreement; provided, further, that the Company will not provide information to any person pursuant to any confidentiality agreement entered into prior to June 15, 2017 unless such person agrees prior to receipt of the information to waive any provision that would prohibit the Company from providing any information to Amazon.com in accordance with the merger agreement or otherwise would prohibit the Company from complying with its obligations under the merger agreement; and

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engage in or participate in discussions and/or negotiations with that person regarding the acquisition proposal.

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Pursuant to the merger agreement, a ‘‘superior proposal’’ means a bona fide written acquisition proposal that did not result from a breach of Whole Foods Market’s non-solicitation obligations under the merger agreement and that would result in any person or group becoming the beneficial owner of, directly or indirectly, more than 50% of the total voting power of any class of equity securities of the Company or assets representing more than 50% of the consolidated net revenues, net income or total assets (including equity securities of the Company’s subsidiaries and equity securities of any other entity) of the Company, that the Whole Foods Market board of directors has determined in good faith, after consultation with its outside legal counsel and its outside financial advisor, taking into account all legal, financial, financing and regulatory aspects of the acquisition proposal, the identity of the person(s) making the proposal and the likelihood of the proposal being completed in accordance with its terms and all other matters that the Whole Foods Market board of directors considers appropriate, that, if completed, would result in a transaction (1) more favorable to Whole Foods Market’s shareholders from a financial point of view than the merger and (2) that is reasonably likely to be completed, taking into account any regulatory, financing or approval requirements and any other aspects considered relevant by the Whole Foods Market board of directors (after taking into account any binding revisions to the terms of the merger agreement proposed by Amazon.com as described in the section entitled ‘‘— Change of Board Recommendation; Alternative Acquisition Agreement ’’).

Whole Foods Market must promptly (and, in any event, within 24 hours) give written notice to Amazon.com if Whole Foods Market or any of its subsidiaries receives (1) any inquiry, proposal, indication of interest or offer with respect to an acquisition proposal, (2) any request by any person or group for information in connection with or with respect to any acquisition proposal or (3) any request by any person or group for discussions or negotiations, or to initiate or continue discussions or negotiations, with respect to an acquisition proposal, setting forth in the notice the name of the person or group and the material terms and conditions of any such acquisition proposal (including, if applicable, complete copies of any written request, inquiry, proposal, indication of interest or offer, including proposed agreements and any other written communications) and thereafter must keep Amazon.com reasonably informed, on a reasonably current basis (and, in any event, within 24 hours), of changes in the status and terms of any such proposal or offer (including any amendments thereto) and any changes to the status of any such discussions or negotiations.

Change of Board Recommendation; Alternative Acquisition Agreement

The Whole Foods Market board of directors has unanimously recommended that Whole Foods Market shareholders vote ‘‘ FOR ’’ the proposal to approve the merger agreement. The merger agreement permits the Whole Foods Market board of directors to effect a change of recommendation (as defined below) only in certain limited circumstances, as described below.

Except as expressly permitted by the merger agreement, neither the Whole Foods Market board of directors nor any committee thereof may:

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withdraw or fail to make when required by the merger agreement (or publicly propose or publicly resolve to withdraw or fail to make when required by the merger agreement) the company recommendation with respect to the merger;

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qualify or modify (or publicly propose or publicly resolve to qualify or modify) the company recommendation with respect to the merger in a manner adverse to Amazon.com;

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approve or recommend, or publicly declare advisable, any acquisition proposal;

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fail to include the company recommendation in this proxy statement;

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if any acquisition proposal that is structured as a tender offer or exchange offer for outstanding shares of Company common stock is commenced pursuant to Rule 14d-2 of the Exchange Act, fail to recommend against acceptance of the offer by the Company’s shareholders prior to the earlier of  (1) the date of the meeting of the holders of Whole Foods Market common stock to consider and vote upon the approval of the merger agreement and (2) 11 business days (which for this purpose will be used as the term is used in Rule 14d-9 of the Exchange Act) after commencement of the tender offer or exchange offer;

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approve or recommend, or publicly declare advisable or publicly propose to enter into, any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement, collaboration agreement or other agreement with respect to, or that is intended or would reasonably be expected to lead to, any acquisition proposal (other than a confidentiality agreement as described in the section entitled ‘‘— Acquisition Proposals; No Solicitation — Receipt of Acquisition Proposals ’’ relating to any acquisition proposal) (referred to in this proxy statement as an ‘‘alternative acquisition agreement’’); or

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cause or permit Whole Foods Market to enter into an alternative acquisition agreement.

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The actions described in all of the bullet points above other than the last bullet point are referred to in this proxy statement as a ‘‘change of recommendation.’’

However, before the requisite company vote is obtained, the Whole Foods Market board of directors may effect a change of recommendation and/or terminate the merger agreement in response to a superior proposal, in each case if the Whole Foods Market board of directors has determined in good faith, after consultation with its outside financial advisors and its outside legal counsel, that an acquisition proposal constitutes a superior proposal and the failure to do so would be inconsistent with the directors’ fiduciary duties under applicable law. Before effecting a change of recommendation or terminating the merger agreement in response to a superior proposal, (1) Whole Foods Market must have given Amazon.com at least five business days’ prior written notice of its intention to do so, (2) Whole Foods Market must have afforded Amazon.com the opportunity to negotiate in good faith with Whole Foods Market to enable Amazon.com to propose in writing a binding offer to make revisions to the terms of the merger agreement and (3) at the end of the notice period, the Whole Foods Market board of directors must have considered in good faith the binding written offer and any other information it deems appropriate, and must have determined in good faith, after consultation with its outside legal counsel and its outside financial advisors, that the superior proposal continues to constitute a superior proposal if the changes proposed in the binding offer by Amazon.com were to be given effect.

In addition, before the requisite company vote is obtained, the Whole Foods Market board of directors may effect a change of recommendation in response to an intervening event if the Whole Foods Market board of directors has determined in good faith, after consultation with its outside financial advisors and its outside legal counsel, that the failure to do so would be inconsistent with the directors’ fiduciary duties under applicable law. Before effecting a change of recommendation in response to an intervening event, (1) Whole Foods Market must have given Amazon.com at least five business days’ prior written notice of its intention to do so, (2) Whole Foods Market must have afforded Amazon.com the opportunity to negotiate in good faith with Whole Foods Market to enable Amazon.com to propose in writing a binding offer to make revisions to the terms of the merger agreement and (3) at the end of the notice period, the Whole Foods Market board of directors must have considered in good faith the binding written offer and any other information it deems appropriate, and must have determined in good faith, after consultation with its outside legal counsel and its outside financial advisors, that the failure to effect a change of recommendation would still be inconsistent with its fiduciary duties under applicable law if the changes proposed in the binding offer by Amazon.com were to be given effect. Under the merger agreement, an ‘‘intervening event’’ means a change, effect, event, circumstance or development that was not known by Whole Foods Market or the Whole Foods Market board of directors as of June 15, 2017; provided that in no event will any of the following constitute or be deemed to be an intervening event: (x) the receipt, existence or terms of an acquisition proposal that could constitute a superior proposal, or any related

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matter, or (y) changes in the stock price of the Company (provided that any underlying cause of changes in stock price may be taken into account for purposes of determining whether an intervening event has occurred); provided, further, that an acquisition proposal that resulted from a breach of the Company’s non-solicitation obligations under the merger agreement may not be the basis for an intervening event.

In the event of any modification to the financial terms or any other material terms of any acquisition proposal, Whole Foods Market must satisfy the notice requirement described above with a new written notice to Amazon.com, and comply with the negotiation requirements described above, provided that the subsequent notice period (and any subsequent notice period thereafter) will be two business days instead of five business days.

The merger agreement does not prohibit Whole Foods Market or the Whole Foods Market board of directors from taking and disclosing to the shareholders of Whole Foods Market a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or making any disclosure to the shareholders of Whole Foods Market that is required by applicable law. Any ‘‘stop, look and listen’’ or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act will not be deemed to be a change of recommendation; provided that any such disclosure that has the substantive effect of withdrawing, modifying or qualifying in any manner adverse to the company recommendation will be deemed to be a change of recommendation unless the Whole Foods Market board of directors expressly publicly reaffirms the company recommendation in such communication without any qualification.

For purposes of the obligations of the parties described in this section, the parties have agreed that, as between themselves, Texas law relating to the fiduciary duties of directors will be deemed to be the same as Delaware law.

Whole Foods Market Shareholders’ Meeting

Whole Foods Market has agreed to take all action necessary to convene a meeting of the holders of Whole Foods Market common stock (which meeting, together with any adjournment or postponement, is referred to in this proxy statement as the ‘‘Whole Foods Market shareholders’ meeting’’) as promptly as reasonably practicable after the date the SEC staff advises that it has no further comments on this proxy statement and that Whole Foods Market may commence mailing this proxy statement to its shareholders, to consider and vote upon the approval of the merger agreement and to cause such vote to be taken. Whole Foods Market is not permitted to postpone or adjourn the Whole Foods Market shareholders’ meeting, except to the extent advised by counsel to be necessary to comply with law, and except that Whole Foods Market may adjourn, recess or postpone, and at the request of Amazon.com, it will adjourn, recess or postpone, the Whole Foods Market shareholders’ meeting for a reasonable period to solicit additional proxies, if Whole Foods Market or Amazon.com, respectively, reasonably believes there will be insufficient shares of Whole Foods Market common stock represented to constitute a quorum necessary to conduct the business of the Whole Foods Market shareholders’ meeting or to obtain the requisite company vote. However, unless agreed in writing by Whole Foods Market and Amazon.com, all such adjournments, recesses or postponements will be for periods of no more than ten business days each. In addition, Whole Foods Market may adjourn, recess or postpone the Whole Foods Market shareholders’ meeting to the extent necessary to ensure that any required supplement or amendment to this proxy statement is provided to Whole Foods Market shareholders for the amount of time required by law in advance of the Whole Foods Market shareholders’ meeting. Subject to Whole Foods Market’s rights to effect a change of recommendation in response to an intervening event or a superior proposal and to terminate the merger agreement in response to a superior proposal, as described in the section entitled ‘‘—  Change of Board Recommendation; Alternative Acquisition Agreement ,’’ the Whole Foods Market board of directors must include the company recommendation in this proxy statement and must take all lawful action to obtain the requisite company vote.

Whole Foods Market has agreed to provide Amazon.com with the written voting reports it receives concerning proxy solicitation results on a timely basis and to use its reasonable best efforts to give written notice to Amazon.com one business day prior to the Whole Foods Market shareholders’ meeting and on the day of, but prior to, the Whole Foods Market shareholders’ meeting of the status of the requisite company vote.

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Financing and Financing Cooperation

The merger is not conditioned upon receipt of financing by Amazon.com.

Amazon.com expects to finance the merger with debt financing, together with cash on hand. In connection with entering into the merger agreement, Amazon.com has entered into a commitment letter (the ‘‘commitment letter’’), dated as of June 15, 2017, with Goldman Sachs Bank USA, Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, N.A. (collectively, and together with other financial institutions that from time to time provide commitments thereunder, the ‘‘commitment parties’’), pursuant to which, subject to the terms and conditions set forth therein, the commitment parties have committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $13.7 billion (the ‘‘bridge facility’’), to fund the consideration for the merger. Availability of the bridge facility is subject to reduction in equivalent amounts upon the issuance or incurrence by Amazon.com or its subsidiaries of debt securities or other debt for borrowed money (or, in certain circumstances, the receipt of commitments therefor), upon the issuance by Amazon.com of equity interests, or upon the consummation of certain asset sales, in each case subject to certain limitations and exceptions. The funding of the bridge facility provided for in the commitment letter is contingent on the satisfaction of certain closing conditions, including (1) the execution and delivery of definitive documentation with respect to the bridge facility in accordance with the terms sets forth in the commitment letter and (2) the completion of the merger.

Prior to the closing, Whole Foods Market must use commercially reasonable efforts to, and must cause each of its subsidiaries to use commercially reasonable efforts to, and must use commercially reasonable efforts to cause its and their representatives (including their auditors) to use commercially reasonable efforts to, cooperate with Amazon.com as necessary, to the extent reasonably requested in writing by Amazon.com, in connection with the offering, arrangement, issuance or sale of any senior notes, term loans, bridge loans, or any combination thereof, of Amazon.com in connection with the transactions contemplated by the merger agreement (the ‘‘debt financing’’), including using commercially reasonable efforts to:

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comment on (and to the extent reasonably requested by Amazon.com and reasonably available to Whole Foods Market, provide information and materials to be used in the preparation of) customary confidential offering memoranda, prospectuses or similar offering documents, customary rating agency presentations and customary lender presentations, in each case for the debt financing;

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to the extent reasonably available to Whole Foods Market at such time, furnish Amazon.com for filing with the SEC, if required, and for inclusion in any prospectus or prospectus supplement or offering memorandum with financial and other pertinent historical information regarding Whole Foods Market as may be reasonably requested by Amazon.com, including, to the extent so available: (1) audited financial statements of Whole Foods Market for each of the three fiscal years ending more than 60 days prior to the closing date; (2) unaudited financial statements for any quarterly interim period or periods of Whole Foods Market (other than the fourth quarter of any fiscal year) ending after the date of the most recently ended fiscal year for which financial statements have been delivered pursuant to the foregoing clause (1) and more than 40 days prior to the closing date, together with unaudited financial statements for the corresponding period of the prior year; and (3) all other historical financial data regarding Whole Foods Market reasonably required and requested in writing by Amazon.com (and reasonably available to Whole Foods Market) to permit Amazon.com to prepare customary pro forma financial statements, and in the case of clauses (1) and (2) meeting the requirements of Rule 3-05 of Regulation S-X under the U.S. Securities Act of 1933, as amended;

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(1) cause Whole Foods Market’s independent accountants to consent to the inclusion of their audit reports with respect to the financial statements furnished pursuant to the foregoing bullet point and the applicable audited annual financial statements of Whole Foods Market in any registration statement of Amazon.com filed with the SEC, if any, relating to the debt financing and (2) cause such independent accountants to provide customary comfort letters in connection

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with any debt offering comprising a part of the debt financing to the applicable underwriters, initial purchasers or placement agents thereof in each case, on customary terms and consistent with the customary practice of such independent accountants; and

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cooperate reasonably with customary due diligence of the sources of the debt financing.

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In addition, Whole Foods Market must use its commercially reasonable efforts to assist in facilitating the payoff and termination by Amazon.com of Whole Foods Market’s exiting credit agreement (the ‘‘debt payoff’’), and to assist in delivering the documentation required by the terms of Whole Foods Market’s indenture for its 5.2% senior notes due 2025 in connection with the merger (the ‘‘notes assumption’’).

Notwithstanding the foregoing, neither Whole Foods Market nor any of its subsidiaries will be required to take or permit the taking of any action in connection with the debt financing, the debt payoff, or the notes assumption that:

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would unreasonably interfere with the ongoing business or operations of Whole Foods Market and/or its subsidiaries;

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would require Whole Foods Market, its subsidiaries or any persons who are directors of Whole Foods Market or its subsidiaries to pass resolutions or consents to approve or authorize the execution of the debt financing, the debt payoff, or the notes assumption or execute or deliver any certificate, document, instrument or agreement or agree to any change or modification of any existing certificate, document, instrument or agreement;

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would cause any representation or warranty in the merger agreement to be breached by Whole Foods Market or any of its subsidiaries;

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would require Whole Foods Market or any of its subsidiaries to pay any commitment or other similar fee or incur any other expense, liability or obligation in connection with the debt financing, the debt payoff, or the notes assumption prior to the closing or have any obligation of Whole Foods Market or any of its subsidiaries under any agreement, certificate, document or instrument be effective until the closing;

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could reasonably be expected to cause any director, officer or employee or shareholder of Whole Foods Market or any of its subsidiaries to incur any personal liability;

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could reasonably be expected to conflict with the organizational documents of Whole Foods Market or its subsidiaries or any laws;

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could reasonably be expected to result in a material violation or breach of, or a default (with or without notice, lapse of time, or both) under, any contract to which Whole Foods Market or any of its subsidiaries is a party;

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provide access to or disclose information that Whole Foods Market or any of its subsidiaries determines would jeopardize any attorney-client privilege of Whole Foods Market or any of its subsidiaries;

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prepare any financial statements or information that are not available to it and prepared in the ordinary course of its financial reporting practice;

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require Whole Foods Market or any of its subsidiaries to enter into any instrument or agreement with respect to the debt financing, the debt payoff, or the notes assumption that is effective prior to the occurrence of the closing or that would be effective if the closing does not occur;

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prepare any projections or pro forma financial statements; or

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deliver or cause to be delivered any opinion of counsel in connection with the debt financing, the debt payoff, or the notes assumption.

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Nothing contained in the merger agreement will require Whole Foods Market or any of its subsidiaries, prior to the closing, to be an issuer or other obligor with respect to the debt financing.

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Amazon.com will indemnify and hold harmless Whole Foods Market and each of its subsidiaries and their respective representatives from and against any and all liabilities, losses, damages, claims, costs, expenses (including reasonable attorney’s fees), interest, awards, judgments and penalties suffered or incurred in connection with the debt financing, the debt payoff, or the notes assumption (other than arising from fraud on the part of Whole Foods Market or its subsidiaries), whether or not the merger is consummated or the merger agreement is terminated. Amazon.com will, promptly upon request by Whole Foods Market, reimburse Whole Foods Market for all reasonable out-of-pocket costs (including reasonable attorneys’ fees) incurred by Whole Foods Market or its subsidiaries in connection with the debt financing, the debt payoff, or the notes assumption, whether or not the merger is consummated or the merger agreement is terminated.

In no event will the receipt or availability of any funds or financing (including the debt financing) by Amazon.com, Merger Sub or any of their respective affiliates or any other financing be a condition to any of the obligations of Amazon.com or Merger Sub under the merger agreement.

Employee Matters

The merger agreement provides that Amazon.com will provide or cause to be provided to each employee of Whole Foods Market who continues to be employed after the effective time compensation and benefits for a period of one year following the effective time on the following terms:

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Base Compensation :   a base salary or base wage that is no less favorable than the base salary or base wage provided by Whole Foods Market to each such continuing employee immediately prior to the effective time;

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Annual Incentives :   target annual cash bonus opportunities that are no less favorable than the target annual cash bonus opportunities provided by Whole Foods Market to each such continuing employee immediately prior to the effective time;

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Other Compensation and Benefits :   other compensation (excluding equity and long-term cash incentive compensation) and employee benefits that are no less favorable in the aggregate than those provided by Whole Foods Market to each such continuing employee immediately prior to the effective time; and

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Severance :   severance benefits that are no less favorable than the severance benefits provided by Whole Foods Market to each such continuing employee immediately prior to the effective time.

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The merger agreement provides that Amazon.com will cause (or, with respect to employees outside of the United States, use commercially reasonable efforts to cause) (1) any pre-existing conditions or limitations and eligibility waiting periods under any of its group health plans to be waived with respect to the continuing Whole Foods Market employees and their eligible dependents, (2) the amount of eligible expenses incurred by each continuing Whole Foods Market employee and his or her eligible dependents that were credited to deductible and maximum out-of-pocket co-insurance requirements under the Whole Foods Market benefit plans to be credited for purposes of satisfying the deductible and maximum out-of-pocket co-insurance requirements under the corresponding Amazon.com benefit plans and (3) any of the employee benefit plans of Amazon.com and its subsidiaries in which the continuing Whole Foods Market employees are entitled to participate to take into account for purposes of eligibility, vesting and benefit accrual thereunder (except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or retiree medical benefits or to the extent that its application would result in a duplication of benefits) and each continuing Whole Foods Market employee’s years of service with Whole Foods Market and its subsidiaries before the effective time, to the same extent such service was credited under a comparable Whole Foods Market benefit plan.

In addition, if the closing occurs prior to the time that Whole Foods Market has paid annual bonuses in respect of its 2017 fiscal year, then Amazon.com will, or will cause the surviving corporation and its subsidiaries to, pay such annual bonuses based on formulae previously established by Whole Foods Market and in a manner consistent with Whole Foods Market’s historical practices related to discretionary amounts.

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Efforts to Complete the Merger

General

Subject to the terms of the merger agreement, Whole Foods Market, Amazon.com and Merger Sub have agreed to use reasonable best efforts to:

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complete the transactions contemplated by the merger agreement as promptly as reasonably practicable (and in any event no later than the outside date);

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obtain from any governmental authority any consents, licenses, permits, waivers, approvals, authorizations, clearances or orders that are necessary, proper or advisable to be obtained by Amazon.com or Whole Foods Market or any of their respective subsidiaries in order to complete the transactions contemplated by the merger agreement and to enable Whole Foods Market to conduct its operations in the ordinary course of business consistent with past practice after the effective time, including with respect to any liquor or alcohol license of Whole Foods Market or any of its subsidiaries;

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resolve any objections and avoid any proceeding by any governmental authority, in connection with the authorization, execution and delivery of the merger agreement and the completion of the transactions contemplated by the merger agreement;

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contest and defend any lawsuits or other proceedings, whether judicial or administrative, challenging the merger agreement or the completion of the transactions contemplated by the merger agreement in accordance with the terms of the merger agreement, including seeking to have any stay, temporary restraining order, injunction or judgment entered by any court or other governmental authority vacated, lifted, overturned or reversed;

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as promptly as reasonably practicable, and in any event within ten business days after June 15, 2017 (unless otherwise agreed by the parties to the merger agreement), make all necessary filings and submissions under the HSR Act and the Canadian Competition Act and thereafter supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to any law; and

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as promptly as reasonably practicable make any other required registrations, declarations, submissions and filings with respect to the transactions contemplated by the merger agreement required under the Exchange Act, any other applicable federal or state securities laws and any other applicable law.

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Exchange of Information, Participation and Strategy

The parties have agreed to give (or to cause their respective subsidiaries to give) any notices to third parties, and to use, and to cause their respective subsidiaries to use, reasonable best efforts to obtain any third party consents that are necessary, proper or advisable to complete the transactions contemplated by the merger agreement; provided, however, that the parties will coordinate and cooperate in determining whether any actions, consents, approvals or waivers are required to be obtained from parties to any contracts of Whole Foods Market or any of its subsidiaries in connection with the completion of the transactions contemplated by the merger agreement and seeking any such actions, consents, approvals or waivers.

The parties have also agreed to reasonably cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property taxes, as well as any transfer, gains, sales, use, recording, registration and any similar taxes that become payable in connection with the transactions contemplated by the merger agreement, and the parties have agreed to reasonably cooperate in minimizing the amount of such taxes.

Without limiting the generality of the foregoing, each party to the merger agreement has agreed to:

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give the other parties prompt notice of the making or commencement of any request or proceeding by or before any governmental authority with respect to the transactions contemplated by the merger agreement;

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keep the other parties informed as to the status of any such request or proceeding;

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to the extent practicable, give the other parties notice and an opportunity to participate in any communication made to the FTC, the DOJ, the Canadian Competition Bureau or any other governmental authority regarding the transactions contemplated by the merger agreement; and

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promptly notify the other parties of the substance of any communication from the FTC, the DOJ, the Canadian Competition Bureau or any other governmental authority regarding the transactions contemplated by the merger agreement.

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Subject to applicable laws relating to the exchange of information, Amazon.com will have the right to devise and implement the strategy and timing for obtaining any clearances required under any antitrust law in connection with the merger, provided that the strategy will be designed to obtain clearances as promptly as reasonably practicable and in no event later than the outside date.

In addition, Amazon.com and Whole Foods Market will have the right to review in advance and, to the extent reasonably practicable, each will consult with the other on and consider in good faith the views of the other in connection with, all of the information relating to Amazon.com or Whole Foods Market, as the case may be, and any of their respective subsidiaries, that appears in any filing made with, or written materials submitted or communications made to, any third party and/or any governmental authority in connection with the transactions contemplated by the merger agreement.

Except as may be prohibited by any governmental authority or by any applicable law, each party will permit authorized representatives of the other parties to be present at each meeting, conference or telephone call and to have access to and be consulted in connection with any document, opinion or proposal made or submitted to any governmental authority in connection with such request or proceeding.

Other Commitments

The merger agreement provides that nothing contained in the merger agreement will require, or be construed to require:

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Amazon.com or any of its subsidiaries to take or refrain from taking any action (including any divestiture, holding separate any business or assets or other similar action) or to agree to any restriction or condition, in each case, with respect to any assets, operations, business or the conduct of business of Amazon.com or any of its subsidiaries (not including for this purpose the surviving corporation and its subsidiaries);

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Amazon.com, Whole Foods Market or any of their respective subsidiaries to take or refrain from taking any action or to agree to any restriction or condition with respect to any assets, operations, business or the conduct of business of Whole Foods Market and its subsidiaries; or

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Whole Foods Market or any of its subsidiaries to take any other action, except, in the case of this bullet point, as agreed by the parties in connection with the merger agreement.

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In addition, Whole Foods Market and its subsidiaries will not (1) be required to take or agree to take any actions described in the second and third bullet points above unless such requirement, condition, understanding, agreement or order is binding on or otherwise applicable to Whole Foods Market only from and after the effective time in the event that the closing occurs or (2) agree to any actions, restrictions or conditions with respect to obtaining any consents, registrations, approvals, permits, expirations of waiting periods or authorizations in connection with the merger and the other transactions contemplated by the merger agreement without the prior written consent of Amazon.com (which may be withheld in the sole discretion of Amazon.com).

In the event that any action set forth in the first, second or third bullet point above is proposed by or acceptable to a governmental authority, Amazon.com will have the sole right to determine the manner in which to implement the requirement of such governmental authority.

Indemnification and Insurance

Indemnification

The merger agreement provides that after the effective time, Amazon.com will, and will cause the surviving corporation to, indemnify and hold harmless the individuals who on or prior to the effective time

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were officers or directors of Whole Foods Market or its subsidiaries or were serving at the request of Whole Foods Market as an officer, director, member, trustee or fiduciary of any other corporation, partnership or joint venture, trust, employee benefit plan or other enterprise with respect to all acts or omissions by them in their capacities as such or taken at the request of Whole Foods Market or any of its subsidiaries at any time prior to the effective time to the fullest extent permitted by applicable law (including with respect to advancement of expenses and attorneys’ fees and advancing such expenses and fees without requiring any preliminary determination of entitlement subject to such individual’s affirmation or undertaking if required under the TBOC).

Amazon.com and Merger Sub have agreed that all rights to exculpation or indemnification for acts or omissions occurring prior to the effective time existing as of June 15, 2017 in favor of the current and former directors and officers of Whole Foods Market or any of its subsidiaries or any of their predecessors and the heirs, executors, trustees, fiduciaries and administrators of such officer or director, as provided in Whole Foods Market’s or each of its subsidiaries’ respective articles of incorporation or bylaws (or similar organizational documents) or in any agreement, will survive the merger and the transactions contemplated by the merger agreement and will continue in full force and effect in accordance with their terms. The merger agreement provides that after the effective time, Amazon.com and the surviving corporation will (and Amazon.com will cause the surviving corporation to) fulfill and honor such obligations to the maximum extent that Whole Foods Market or the applicable subsidiary would have been permitted to fulfill and honor them by applicable law.

In addition, for a period of six years following the effective time, the merger agreement provides that Amazon.com will, and will cause the surviving corporation and its subsidiaries to, cause the articles of incorporation and bylaws (and other similar organizational documents) of the surviving corporation and its subsidiaries to contain provisions with respect to indemnification and exculpation that are at least as favorable as the indemnification and exculpation provisions contained in the articles of incorporation and bylaws (or similar organizational documents) of Whole Foods Market and its subsidiaries immediately prior to the effective time, and during such six-year period, such provisions may not be amended, repealed or otherwise modified in any respect, except as required by applicable law.

Insurance

In addition, Whole Foods Market will obtain, or Amazon.com will cause the surviving corporation to obtain, for a period of six years from and after the effective time, ‘‘tail’’ insurance policies for the extension of  (1) the directors’ and officers’ liability coverage of Whole Foods Market’s existing directors’ and officers’ insurance policies and (2) Whole Foods Market’s existing fiduciary liability insurance policies, with terms, conditions, retentions and limits of liability that are at least as favorable to the insured parties as Whole Foods Market’s existing policies with respect to matters existing or occurring at or prior to the effective time, subject to certain qualifications and provided that in no event will the annual cost of such insurance coverage exceed during such period 300% of the current aggregate annual premium paid by Whole Foods Market for such purpose and, if the cost of the insurance coverage exceeds such amount, the surviving corporation will obtain a policy with the greatest coverage available for a cost not exceeding such amount.

Coordination on Litigation

Each of Amazon.com and Whole Foods Market have agreed to promptly notify the other of any shareholder litigation against it or any of its representatives arising out of or relating to the merger agreement, the merger or the other transactions contemplated by the merger agreement and will keep the other reasonably informed regarding any such shareholder litigation. Until the termination of the merger agreement in accordance with its terms, Whole Foods Market will provide Amazon.com an opportunity to review and to propose comments to all filings or written responses to be made by Whole Foods Market in connection with any shareholder litigation against Whole Foods Market and its directors relating to any transaction contemplated by the merger agreement, and Whole Foods Market will give reasonable and good faith consideration to any comments proposed by Amazon.com. In no event will Whole Foods Market enter into, agree to or disclose any settlement with respect to such shareholder litigation without the consent of Amazon.com, such consent not to be unreasonably withheld, delayed or conditioned. Amazon.com and Whole Foods Market will notify each other promptly of the commencement of any shareholder litigation of which it has received notice.

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Other Covenants and Agreements

The merger agreement also contains additional covenants, including covenants relating to (1) the filing of this proxy statement, (2) the delisting and deregistration of the Whole Foods Market common stock, (3) public announcements with respect to the transactions contemplated by the merger agreement, (4) other actions related to takeover statutes and reporting requirements under Section 16 of the Exchange Act, (5) resignations, effective as of the effective time, of the directors of Whole Foods Market and/or the officers and directors of any of its subsidiaries (to the extent requested by Amazon.com), (6) acquisition by Amazon.com and Merger Sub of shares of Whole Foods Market common stock and (7) further actions set forth in the company disclosure schedule delivered in connection with the merger.

Conditions to Completion of the Merger

Each party’s obligation to complete the merger is subject to the satisfaction or waiver at or prior to the closing of the following conditions:

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the approval of the merger agreement by holders of a majority of the outstanding shares of Whole Foods Market common stock entitled to vote at the close of business on the record date for the special meeting;

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the expiration or earlier termination of the waiting periods applicable to the completion of the merger under the HSR Act and the Canadian Competition Act; and

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no law, order or injunction having been enacted, issued, promulgated, enforced or entered after June 15, 2017 by a court or other governmental authority of competent jurisdiction is in effect that enjoins or otherwise prohibits the completion of the merger.

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The respective obligations of Amazon.com and Merger Sub to complete the merger are subject to the satisfaction or waiver by Amazon.com at or prior to the closing of the following additional conditions:

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the accuracy of the representations and warranties of Whole Foods Market as of June 15, 2017 and as of the closing date (except for any representations and warranties made as of a particular date or period, which representations and warranties must be true and correct only as of that date or period), generally subject to a ‘‘material adverse effect’’ or other qualification provided in the merger agreement;

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the performance by Whole Foods Market in all material respects of all obligations required to be performed by it under the merger agreement at or prior to the closing date; and

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the receipt by Amazon.com and Merger Sub at closing of a certificate signed on behalf of Whole Foods Market by the Chief Executive Officer or Chief Financial Officer of Whole Foods Market certifying that the conditions set forth in the two preceding bullet points are satisfied.

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The obligation of Whole Foods Market to complete the merger is subject to the satisfaction or waiver by Whole Foods Market at or prior to the closing of the following additional conditions:

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the accuracy of the representations and warranties of Amazon.com and Merger Sub as of June 15, 2017 and as of the closing date (except for any representations and warranties made as of a particular date or period, which representations and warranties must be true and correct only as of that date or period) in all material respects;

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the performance by each of Amazon.com and Merger Sub in all material respects of all obligations required to be performed by it under the merger agreement at or prior to the closing date; and

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the receipt by Whole Foods Market at closing of a certificate signed on behalf of Amazon.com and Merger Sub by an executive officer of Amazon.com certifying that the conditions set forth in the two preceding bullet points are satisfied.

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Termination

The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time in the following circumstances:

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by the mutual written consent of Whole Foods Market and Amazon.com;

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by either Whole Foods Market or Amazon.com, if:

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the merger has not been completed by February 15, 2018 (the ‘‘outside date,’’ as it may be extended as described below), provided that if the closing has not occurred prior to February 15, 2018 and all of the conditions to closing, other than the condition relating to competition law approvals or the condition relating to the absence of a law, order or injunction prohibiting the merger (as it relates to the HSR Act or any antitrust law), have been satisfied or are capable of being satisfied on February 15, 2018, then the outside date may be extended on one occasion by either Amazon.com or Whole Foods Market for a period of 90 days by written notice to the other party, and the date, as so extended, will be the outside date (provided that the right to terminate the merger agreement described in this bullet point will not be available to any party that has breached in any material respect its obligations under the merger agreement in any manner that has caused the failure of a condition to the completion of the merger); or

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the requisite company vote has not been obtained and a vote has been taken on the matter at the Whole Foods Market shareholders’ meeting (and the meeting has concluded); or

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a law, order or injunction by a court or other governmental authority of competent jurisdiction has been enacted, issued, promulgated, enforced or entered permanently restraining, enjoining or otherwise prohibiting the completion of the merger, and has become final and non-appealable; or

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by Whole Foods Market, if:

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Amazon.com or Merger Sub has breached any of its representations, warranties, covenants or agreements, or there is any inaccuracy in any of its representations or warranties, in either case which (1) would result in a failure of a condition to the obligation of Whole Foods Market to complete the merger and (2) is either not curable prior to the outside date or is not cured within the earlier of  (x) 30 days following the giving of notice thereof by Whole Foods Market to Amazon.com and (y) three business days prior to the outside date; or

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prior to the time the requisite company vote is obtained, Whole Foods Market terminates the merger agreement in connection with entering into an alternative acquisition agreement providing for a superior proposal in accordance with the terms described in the section entitled ‘‘— Acquisition Proposals; No Solicitation ’’ and, prior to or concurrently with the termination, pays to Amazon.com the company termination fee (as defined below); or

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by Amazon.com, if:

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Whole Foods Market has breached any of its representations, warranties, covenants or agreements, or there is any inaccuracy in any of its representations or warranties, in either case which (1) would result in a failure of a condition to the obligations of Amazon.com and Merger Sub to complete the merger and (2) is either not curable prior to the outside date or is not cured within the earlier of  (x) 30 days following the giving of notice thereof by Amazon.com to Whole Foods Market and (y) three business days prior to the outside date; or

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prior to the time the requisite company vote is obtained, the Whole Foods Market board of directors (1) has made a change of recommendation or (2) at any time following receipt of an acquisition proposal that has not been withdrawn, has failed to reaffirm its approval or recommendation of the merger agreement and the merger within ten business days after receipt of any written request to do so from Amazon.com (provided that Amazon.com may not provide such a written request more than once for each acquisition proposal).

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Company Termination Fee; Expense Reimbursement

Whole Foods Market will be required to pay Amazon.com a termination fee in an amount equal to $400 million (the ‘‘company termination fee’’) in the following circumstances:

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if the merger agreement is terminated by Amazon.com because the Whole Foods Market board of directors has made a change of recommendation;

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if the merger agreement is terminated by Whole Foods Market in order to enter into an alternative acquisition agreement providing for a superior proposal in accordance with the terms described in the section entitled ‘‘— Acquisition Proposals; No Solicitation ’’; or

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if each of the following three conditions is satisfied:

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(1)

the merger agreement is terminated by (A) either Whole Foods Market or Amazon.com because the requisite company vote has not been obtained or (B) Amazon.com as a result of a material breach by Whole Foods Market of its covenants and agreements under the merger agreement and, at the time of the termination, the requisite company vote has not been obtained;

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(2)

a bona fide acquisition proposal is made publicly to Whole Foods Market or any of its subsidiaries or otherwise becomes publicly known, or any person publicly announces an intention (whether or not conditional) to make an acquisition proposal that is not withdrawn without qualification prior to, in the case of clause (1)(A), the earlier of  (x) five days prior to the Whole Foods Market’s shareholders meeting (as such meeting may have been adjourned or postponed in accordance with the merger agreement) or (y) termination of the merger agreement; and

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(3)

within 12 months after the termination, Whole Foods Market or any of its subsidiaries enters into a definitive agreement providing for, or consummates or, in the case of an acquisition proposal that is a tender offer, approves or recommends to the shareholders of Whole Foods Market, an acquisition proposal, provided that, for purposes of the provision referred to in this bullet point, the references to ‘‘15%’’ in the definition of  ‘‘acquisition proposal’’ are deemed to be references to ‘‘50%’’ and, as to any acquisition proposal relating to a merger, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving the Company, any such acquisition proposal results in a change of control of at least 50% of the stock or assets of Whole Foods Market.

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In no event will more than one company termination fee be payable under the merger agreement.

If the merger agreement is terminated by either Whole Foods Market or Amazon.com because the requisite company vote has not been obtained, Whole Foods Market will be required to pay to Amazon.com all of the reasonable and documented out-of-pocket expenses incurred by Amazon.com and Merger Sub in connection with the merger agreement and the transactions contemplated by the merger agreement, in an amount not to exceed $25 million (the ‘‘expense reimbursement’’). To the extent any portion of the expense reimbursement is paid by Whole Foods Market to Amazon.com, that amount paid will be deducted from the amount of any company termination fee owed or payable.

Limitation on Remedies

In the event of termination of the merger agreement and the abandonment of the merger in accordance with the provisions described in the section entitled ‘‘— Termination ,’’ the merger agreement will become void and of no effect with no liability to any person on the part of Whole Foods Market, Amazon.com or Merger Sub (or of any of its representatives or affiliates), except that the confidentiality agreement between Whole Foods Market and Amazon.com and certain sections of the merger agreement, including sections relating to termination fees and expenses, will survive termination. However, termination of the merger agreement will not relieve any party of any liability or damages to the other party resulting from any willful and material breach (as that term is defined in the merger agreement) of its obligations set forth in the merger agreement.

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The parties have agreed that the payment of the company termination fee will be the sole and exclusive remedy available to Amazon.com and Merger Sub with respect to the merger agreement in the event any such payment becomes due and payable and is paid, and, upon payment of the company termination fee, Whole Foods Market (and its affiliates and its and their respective directors, officers, employees, stockholders and representatives) will have no further liability to Amazon.com and Merger Sub under the merger agreement; provided that in the event that a company termination fee becomes due and is paid pursuant to the provisions described in the section entitled ‘‘— Company Termination Fee; Expense Reimbursement ,’’ Amazon.com will have the right to refund the company termination fee in its entirety within five business days after the payment of the company termination fee by Whole Foods Market, and if Amazon.com does so refund the company termination fee in its entirety to Whole Foods Market within such five business day period, Whole Foods Market will not be relieved or released from any liabilities or damages arising out of its willful and material breach of the merger agreement and Amazon.com and Merger Sub will be entitled to all remedies available as contemplated by the last sentence of the foregoing paragraph.

Expenses

Except as otherwise provided in the merger agreement, including as described in the sections entitled ‘‘— Financing and Financing Cooperation ’’ and ‘‘— Company Termination Fee; Expense Reimbursement ,’’ whether or not the merger is completed, all costs and expenses incurred in connection with the preparation, negotiation, execution and performance of the merger agreement and the merger and the other transactions contemplated by the merger agreement, including all fees and expenses of representatives, will be paid by the party incurring such expense.

Amendment and Modification

Subject to the provisions of applicable law, at any time prior to the effective time, the merger agreement may be amended, modified or waived if the amendment, modification or waiver is in writing and signed, in the case of an amendment or modification by Amazon.com, Merger Sub and Whole Foods Market, or in the case of a waiver, by the party against whom the waiver is to be effective, except that after the receipt of the requisite company vote, no amendment may be made which by applicable law requires further approval by the holders of Whole Foods Market common stock without obtaining that further approval. Notwithstanding the foregoing, no amendments or modifications to the provisions to which the financing sources are expressly made third party beneficiaries under the terms of the merger agreement will be permitted in a manner adverse to any financing source without the prior written consent of such financing source. As used in the merger agreement, ‘‘financing sources’’ means any agent, arranger, lender or other entity that has committed to provide or arrange, or has entered into definitive agreements related to, the debt financing, or any of such person’s affiliates or its or their respective officers, directors, employees, partners, trustees, shareholders, controlling persons, agents, representatives, successors or assigns.

Jurisdiction; Specific Enforcement

Under the merger agreement, each of the parties has agreed that it will not bring any claim, action or proceeding against any other parties relating to the merger agreement or the transactions contemplated by the merger agreement in any court other than (1) the Delaware Court of Chancery in and for New Castle County, (2) in the event (but only in the event) that such court does not have subject matter jurisdiction over such suit, action or other proceeding, the Delaware Superior Court, (3) in the event (but only in the event) such courts identified in clauses (1) or (2) do not have subject matter jurisdiction over such suit, action or other proceeding, the United States District Court for the District of Delaware or (4) in the event (but only in the event) such courts identified in clauses (1), (2) and (3) do not have subject matter jurisdiction over such suit, action or other proceeding, any other Delaware state court, in the event any dispute between the parties (whether in contract, tort or otherwise) arises out of the merger agreement or the transactions contemplated by the merger agreement.

Each of the parties has agreed that if for any reason any of the provisions of the merger agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or damage would be caused for which money damages would not be an adequate remedy.

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Accordingly, in addition to any other available remedies a party may have in equity or at law, each party will be entitled to enforce specifically the terms and provisions of the merger agreement and to obtain an injunction restraining any breach or violation or threatened breach or violation of the provisions of the merger agreement. Pursuant to the merger agreement, in the event that any action or proceeding is brought in equity to enforce the provisions of the merger agreement, no party will allege or assert, and each party has waived the defense, that there is an adequate remedy at law.

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VOTE ON AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION (PROPOSAL 3)

The Whole Foods Market board of directors has adopted and unanimously recommends that the shareholders of the Company approve a resolution to amend Article IV, Section A of our Amended and Restated Articles of Incorporation (the “Articles”) to set the number of authorized shares of our common stock at 600 million (the “Articles amendment”). The Articles amendment would replace the second sentence of Article IV, Section A of the Articles with the following sentence: “The aggregate number of shares of Common Stock authorized to be issued is 600,000,000 shares with no par value.”

Purpose of the Proposed Amendment

The purpose of the Articles amendment is to eliminate any possibility that there may be a delay in the filing acceptance of a certificate of merger with respect to the merger (the “certificate of merger”) with the Secretary of State of the State of Texas, as a result of an allegation made by a purported shareholder of the Company (the “purported Shareholder”) regarding the number of shares of common stock authorized under the Articles. The Articles amendment does not affect, and will not affect, the per share or aggregate merger consideration and has no other impact, and will have no other impact, on the merger.

Background

At the annual meeting of shareholders of the Company held on September 15, 2015 (the “September 2015 Meeting”), the Whole Foods Market board of directors sought shareholder approval of an amendment to the Articles to increase the number of authorized shares of the Company’s common stock from 600 million to 1.2 billion (the “2015 Amendment”). As explained in the Company’s proxy statement dated as of July 30, 2015, the 2015 Amendment was proposed to give us greater flexibility in considering and planning for future corporate needs, including potential strategic transactions.

For the September 2015 Meeting, the Company had engaged (1) an independent third-party inspector of election, Carl T. Hagberg and Associates, to judge voting and be responsible for determining whether or not a quorum was present and (2) a third-party tabulator, Broadridge Financial Services, Inc., to tabulate votes cast by proxy or in person at the meeting. Based on reports received from the third-party tabulator and the independent inspector of election, the Company announced on September 15, 2015 that the proposal to approve the 2015 Amendment was approved. On the same day, a Certificate of Amendment to the Articles was filed with and accepted by the Office of the Secretary of State of the State of Texas to reflect this change.

On March 20, 2017, the Whole Foods Market board of directors received a letter on behalf of the purported Shareholder asserting that votes were tabulated in contravention of the Company’s 2015 proxy statement regarding how votes would be counted if shareholders failed to instruct their broker on how to vote their shares with respect to the 2015 Amendment and asserting, as a result, that the 2015 Amendment was not properly approved. The purported Shareholder asked that the Whole Foods Market board of directors (1) either deem the 2015 Amendment “ineffective” or seek a “proper stockholder approval” of the 2015 Amendment and (2) institute new internal controls.

As of the close of business on [    ], 2017, the Company has [    ] shares of common stock outstanding. The Company has never exceeded, and has no current plans to exceed, the pre-September 2015 Meeting share limit of 600 million (and will not in any event exceed that limit if the merger is completed).

The Whole Foods Market board of directors has begun its review of the matter raised by the purported Shareholder but has not yet reached a final conclusion as to the merits of the purported Shareholder’s allegations. Regardless of the merits of the purported Shareholder’s allegations, the Whole Foods Market board of directors believes that there would be no basis for the Office of the Secretary of State of the State of Texas to delay or reject the filing of the certificate of merger because, among other reasons, the number of shares outstanding is and will be at the closing of the merger substantially less than the number of shares authorized even prior to the 2015 Amendment. The number of shares authorized does not affect the per share or aggregate merger consideration. The merger consideration is being paid in relation to the shares issued and outstanding as of the effective time of the merger.

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Nevertheless, to avoid any possibility that there may be a delay in the filing acceptance of the certificate of merger, the Company agreed with Amazon.com in connection with the merger to submit and recommend the Articles amendment to the Company’s shareholders and, upon such approval, to file a Certificate of Amendment to the Articles reflecting the Articles amendment in advance of filing the certificate of merger.

Accordingly, the Whole Foods Market board of directors recommends that the shareholders of the Company vote “FOR” a proposal to set the number of authorized shares of our common stock at 600 million (i.e., the pre-September 2015 Meeting amount).

Possible Effects of the Amendment

If the Articles amendment is approved, except as may be required by law or NASDAQ rules, no further shareholder approval would be required prior to the issuance of up to 600 million shares. Current shareholders of the Company have no preemptive or similar rights, which means that current shareholders do not have a prior right to purchase any new issue of common stock in order to maintain their proportionate ownership. As noted, the amendment setting the number of authorized shares of our common stock at 600 million will not affect the per share or aggregate merger consideration.

Approval of this proposal requires the affirmative vote of a majority of the shares of common stock outstanding at the close of business on the record date for the special meeting. If the proposal is approved, the Company will have the authority to file a Certificate of Amendment to the Articles with the Office of the Secretary of State of the State of Texas and the Certificate of Amendment will become effective upon the filing of the Certificate of Amendment with the Secretary of State of the State of Texas, which filing is expected to occur promptly after the special meeting approving this proposal.

We have provided the NYSE with a copy of the text of this proposal and have been advised by the NYSE that the proposal to approve the Articles amendment is a “routine” proposal. Therefore, if your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, your nominee may vote your shares on the proposal to approve the Articles amendment in its discretion. If your shares are held in “street name,” you should consult your broker, bank or other nominee regarding whether and how your shares will be voted on the proposal to approve the Articles amendment if you do not instruct the nominee how to vote your shares on the proposal.

The Whole Foods Market board of directors unanimously recommends that the shareholders of Whole Foods Market vote “FOR” the proposal to amend the Articles to set the number of authorized shares of Whole Foods Market common stock at 600 million.

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The closing sale price of our common stock on June 15, 2017, which was the last trading day prior to the announcement of the proposed acquisition by Amazon.com of Whole Foods Market, was $33.06 per share. On [    ], 2017, the most recent practicable date before the filing of this proxy statement, the closing price for our common stock was $[    ] per share. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

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(3)

Based upon the report on Form 13G/A, filed with the Securities and Exchange Commission on January 26, 2017. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. The Form 13G/A reported sole voting power over 21,829,346 shares, shared voting power over no shares, sole dispositive power over 24,826,158 shares and shared dispositive power over no shares.

​

(4)

Includes 94,850 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days.

​

(5)

Includes 146,429 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days. Includes 20,000 shares beneficially owned by a family limited partnership for which Ms. Flanagan disclaims beneficial ownership.

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(6)

Includes 182,429 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days.

​

(7)

Includes 30,127 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days.

​

(8)

Includes 30,127 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days.

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(9)

Includes 139,298 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days.

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(10)

Includes 0 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days. Includes 100,000 shares beneficially owned by Mr. Mackey’s spouse for which Mr. Mackey disclaims beneficial ownership.

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(11)

Includes 253,757 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days. Includes an aggregate of 14,921 shares of Common Stock subject to pledge, all of which Mr. Robb pledged prior to the adoption of our current policy on hedging and pledging Company stock in accordance with the terms and conditions of a brokerage firm’s customary margin account requirements.

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(12)

Includes 21,127 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days, which amount includes 4,500 exercisable stock options held by Mr. Seiffer for the benefit of Leonard Green & Partners, L.P. (“LGP LP”). LGP LP separately holds a total of 2,280 shares of stock and 18,000 exercisable stock options in respect of Mr. Seiffer’s service on our Board. These shares of stock and stock options held by LGP LP might be considered beneficially owned by Mr. Seiffer and are included in the table.

​

(13)

Includes 30,127 shares of common stock issuable upon exercise of outstanding stock options and any shares of which this individual has the right to acquire beneficial ownership within 60 days.

​

(14)

Amount shown includes 1,225,018 shares of common stock issuable upon exercise of outstanding stock options and any shares of which the individuals have the right to acquire beneficial ownership within 60 days.

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DISSENTERS’ RIGHTS OF WHOLE FOODS MARKET SHAREHOLDERS

General .   If you hold one or more shares of common stock, you are entitled to dissenters’ rights under Texas law and have the right to dissent from the merger and have the appraised fair value of your shares of common stock paid to you in cash. The ultimate amount any dissenting shareholders receive in an appraisal proceeding may be less than, equal to or more than the amount they would have received under the merger agreement. If you are contemplating exercising your right to dissent, we urge you to read carefully the provisions of Chapter 10, Subchapter H of the TBOC, which are attached to this proxy statement as Annex C, and consult with your legal counsel before electing or attempting to exercise these rights. The following summary describes the steps you must take if you want to exercise your right to dissent. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Chapter 10, Subchapter H of the TBOC. You should read this summary and the full text of the law carefully.

How to Exercise and Perfect Your Right to Dissent .   To be eligible to exercise your right to dissent to the merger:

•

prior to the special meeting, you must deliver to the Company written notice of your objection to the merger that (1) states that you will exercise your right to dissent if the proposal to approve the merger agreement is approved and the merger is completed and (2) provides an address to which the Company may send a notice to you if the merger is completed;

​

•

you must vote your shares of common stock “against” the approval of the proposal to approve the merger agreement, either by proxy or in person, at the special meeting;

​

•

you must provide to the Company, not later than the 20th day after the Company sends you notice that the merger was completed, your written demand for payment that states (1) the number of shares of common stock you own, (2) your estimate of the fair value of such stock and (3) an address to which a notice relating to the dissent and appraisal procedures may be sent to you;

​

•

you must submit to the Company, not later than the 20th day after you deliver to the Company your written demand for payment described in the preceding bullet point, (1) if your shares are certificated, your certificates representing the shares, or (2) if your shares are uncertificated, signed assignments of the ownership interests in the shares; and

​

•

you must continuously hold your shares of common stock from the record date through the completion of the merger.

​

If you intend to dissent from the merger, you must send written notice (by mail, hand-delivery, courier or electronic transmission), addressed to the Company’s President and Secretary, to:

Whole Foods Market, Inc.
550 Bowie Street
Austin, Texas 78703
Attention: Corporate Secretary
Email: [    ]

If you fail to vote your shares of common stock at the special meeting against the proposal to approve the merger agreement, or otherwise fail to comply with any of these conditions and the merger is completed, you will lose your right to dissent from the merger and will instead receive the per share merger consideration. If you comply with the items set forth in the first two bullet points above and the merger is completed, the Company will send you a written notice advising you that the merger has been completed. The Company must deliver this notice to you within 10 days after the merger is completed. A proxy card which is signed and does not contain voting instructions will, unless revoked, be voted “ FOR ” the proposal to approve the merger agreement, will constitute a waiver of your dissenters’ rights, and will nullify any previous written demand for appraisal.

Your Demand for Payment and Delivery of Share Certificates .   If you wish to dissent from the merger and receive the fair value of your shares of common stock in cash, you must, within 20 days after the date the notice of completion of the merger was delivered or mailed to you by the Company, send a written demand to the Company for payment of the fair value of your shares of common stock that complies with

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the applicable statutory requirements. The fair value of your shares of common stock will be the value of the shares on the day immediately preceding the date of completion of the merger, excluding any appreciation or depreciation in anticipation of the merger. Additionally, within 20 days after the date on which your written demand for payment of the fair value of your shares is delivered to the Company, you must submit to the Company any certificates representing your shares for purposes of making a notation on such certificates that a demand for payment of fair value for your shares has been made under Chapter 10, Subchapter H of the TBOC. All such certificates must be submitted to the Company at the address below. Your written demand and any notices to the Company must be sent (by mail, hand-delivery, courier or electronic transmission), addressed to the Company’s President and Secretary, to:

Whole Foods Market, Inc.
550 Bowie Street
Austin, Texas 78703
Attention: Corporate Secretary
Email: [   ]

Your written demand must state how many shares of common stock you own and your estimate of the fair value of your shares of common stock. If you fail to send your written demand to the Company within 20 days after the date the notice of completion of the merger was delivered or mailed to you by the Company, you will be bound by the merger and you will not be entitled to receive a cash payment representing the fair value of your shares of common stock. Instead, you will receive the per share merger consideration. The failure to submit your share certificates will have the effect, at the option of the Company, of terminating your rights of dissent and appraisal unless a court, for good cause shown, directs otherwise.

Actions of the Company Upon Receipt of Your Demand for Payment .   Within 20 days after the Company receives your demand for payment and your estimate of the fair value of your shares of common stock, the Company must send you written notice stating whether or not it accepts your estimate of the fair value of your shares.

If the Company’s written notice accepts your estimate, the Company will pay the amount of your estimate of fair value within 90 days after the merger is completed. The Company will make this payment to you only if you have surrendered the share certificates, duly endorsed for transfer to the Company, or the signed assignments of ownership in non-certificated shares, as applicable, representing your shares of common stock.

If the Company’s written notice does not accept your estimate, the notice will provide the Company’s estimate of the fair value of your shares and an offer to pay that amount to you within 120 days after the merger is completed. To accept the Company’s offer, you must provide notice of your acceptance to the Company within 90 days after the merger is completed, and your failure to do so within that 90-day period will constitute rejection by you of the Company’s offer.

Payment of the Fair Value of Your Shares of Common Stock Upon Agreement of an Estimate .   If you and the Company reach an agreement on the fair value of your shares of common stock within 90 days after the merger is completed, the Company must pay you the agreed amount within 120 days after the merger is completed, if you have surrendered to the Company the duly endorsed share certificates or the signed assignments of ownership in non-certificated shares, as applicable, representing your shares of common stock.

Commencement of Legal Proceedings if a Demand for Payment Remains Unsettled .   If you and the Company have not reached an agreement as to the fair value of your shares of common stock within 90 days after the merger is completed, you or the Company may, within 60 days after the expiration of that 90-day period, commence proceedings in Travis County, Texas, asking the court to determine the fair value of your shares of common stock. The Company has no obligation to file such a petition in the event there are dissenting shareholders and the Company and such dissenting shareholders are unable to reach an agreement as to the fair value of the shares. If court proceedings are initiated, the court will determine if you have complied with the dissent provisions of the TBOC and if you have become entitled to a valuation of and payment for your shares of common stock. The court will appoint one or more qualified persons to

83

act as appraisers to determine the fair value of your shares. The appraisers will determine the fair value of your shares and will report this value to the court. The court will consider the report, and both you and the Company may address the court about the report. The court will determine the fair value of your shares and direct the Company to pay that amount, plus interest, which will begin to accrue 91 days after the merger is completed. If any shareholder files a petition with the court requesting a finding and determination of the fair value of its shares, then within 10 days of receipt of service of such petition by the Company, the Company must file with the court a list containing the names and addresses of all shareholders who have demanded payment for fair value of their shares and with whom agreements as to the fair value of their shares have not been reached by the Company.

Rights as a Shareholder .   If you have made a written demand on the Company for payment of the fair value of your shares of common stock, you will not thereafter be entitled to vote or exercise any other rights as a shareholder except the right to receive payment for your shares as described herein and the right to maintain an appropriate action to obtain relief on the ground that the merger would be or was fraudulent. In the absence of fraud in the merger, your right under the dissent provisions described herein is the exclusive remedy for the recovery of the value of your shares or money damages with respect to the merger.

Withdrawal of Demand .   If you have made a written demand on the Company for payment of the fair value of your common stock, you may unilaterally withdraw such demand at any time before payment for your shares has been made or before a petition has been filed with a court for determination of the fair value of your shares. However, if either payment of the fair value of your common stock has been made by the Company or a petition has been filed with a court for determination of the fair value of your shares, you may not withdraw your demand on the Company for payment of fair value without the Company’s consent. If you withdraw your demand, your rights to dissent are terminated, or you are otherwise unsuccessful in asserting your dissenters’ rights, you will be bound by the terms of the merger and your status as a shareholder will be restored without prejudice to any corporate proceedings, dividends or distributions which may have occurred during the interim.

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MULTIPLE SHAREHOLDERS SHARING ONE ADDRESS

In accordance with Rule 14a-3(e)(1) under the Exchange Act, one proxy statement will be delivered to two or more shareholders who share an address, unless the Company has received contrary instructions from one or more of the shareholders. Each shareholder will receive a separate proxy card. The Company will deliver promptly upon written or oral request a separate copy of the proxy statement to a shareholder at a shared address to which a single copy of the proxy statement was delivered. Requests for additional copies of the proxy statement should be directed to the Company at Whole Foods Market, Inc., 550 Bowie Street, Austin, Texas 78703, Attention: Investor Relations Dept. or by calling (512) 542-0204. In addition, shareholders who share a single address, but receive multiple copies of the proxy statement, may request that in the future they receive a single copy by contacting the Company at the address and phone number set forth in the prior sentence.

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, proxy statements or other information that we file with the SEC at the following location of the SEC:

Public Reference Room
100 F Street, N.E.
Washington, D.C. 20549

Please call the SEC at 1-800-SEC-0330 for further information regarding the public reference room. You may also obtain copies of this information by mail from the Public Reference Section of the SEC at its address above, at prescribed rates. The Company’s public filings are also available to the public from document retrieval services and the Internet website maintained by the SEC at www.sec.gov.

The Company will make available a copy of its public reports, without charge, on its website at www.Whole Foods Market.com/investors/ as soon as reasonably practicable after the Company files the reports electronically with the SEC. In addition, you may obtain a copy of the reports, without charge, by contacting the Company at Whole Foods Market, Inc., 550 Bowie Street, Austin, Texas 78703, Attention: Investor Relations Dept., or by calling (512) 542-0204. Each request must set forth a good faith representation that, as of the close of business on record date, the person making the request was a beneficial owner of Company common stock entitled to vote at the special meeting. In order to ensure timely delivery of the documents before the special meeting, any request should be made promptly to the Company.

The SEC allows us to “incorporate by reference” into this proxy statement documents we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this proxy statement, and later information that we file with the SEC will update and supersede that information. Information in documents that is deemed, in accordance with SEC rules, to be furnished and not filed will not be deemed to be incorporated by reference into this proxy statement. We incorporate by reference the documents listed below and any documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement, and before the date of the special meeting:

•

Whole Foods Market’s Annual Report on Form 10-K for the fiscal year ended September 25, 2016;

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•

Whole Foods Market’s Definitive Proxy Statement for the 2017 Annual Meeting; and

​

•

Whole Foods Market’s Current Reports on Form 8-K, in each case to the extent filed and not furnished with the SEC on February 8, 2017, February 17, 2017, March 13, 2017, May 10, 2017, May 16, 2017, June 8, 2017, June 16, 2017 and July 5, 2017.

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ANNEX A​

AGREEMENT AND PLAN OF MERGER

by and among

AMAZON.COM, INC.,

WALNUT MERGER SUB, INC.

and

WHOLE FOODS MARKET, INC.

Dated as of June 15, 2017

TABLE OF CONTENTS

A-i

A-ii

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of June 15, 2017, is by and among Amazon.com, Inc., a Delaware corporation (“ Parent ”), Walnut Merger Sub, Inc., a Texas corporation and a wholly-owned Subsidiary of Parent (“ Merger Sub ”), and Whole Foods Market, Inc., a Texas corporation (the “ Company ,” with the Company and Merger Sub sometimes being hereinafter collectively referred to as the “ Constituent Corporations ”).

RECITALS

WHEREAS, the parties intend that, on the terms and subject to the conditions set forth in this Agreement, Merger Sub shall merge with and into the Company (the “ Merger ”), with the Company surviving the Merger, pursuant to and in accordance with the provisions of the Texas Business Organizations Code (the “ TBOC ”);

WHEREAS, the board of directors of Parent has unanimously approved and declared advisable this Agreement and the transactions contemplated hereby;

WHEREAS, the board of directors of Merger Sub has unanimously approved this Agreement in accordance with the TBOC and unanimously recommended that this Agreement be approved by the sole shareholder of Merger Sub;

WHEREAS, the board of directors of the Company (the “ Company Board ”) has unanimously approved this Agreement in accordance with the TBOC and unanimously recommended that this Agreement be approved by the holders of shares of common stock, no par value, of the Company (the “ Shares ”); and

WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with this Agreement and to set forth certain conditions to the Merger.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements set forth in this Agreement, the parties agree as follows:

Article I

The Merger; Closing; Effective Time

1.1.    The Merger .   Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company in accordance with the provisions of the TBOC and the separate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”) and, following the Merger, shall be a wholly-owned Subsidiary of Parent, and the separate existence of the Company, with all of its rights, title and interests to all real estate and other property owned by Merger Sub and the Company, subject to any existing liens or other encumbrances on the property, shall continue unaffected by the Merger, except as set forth in this Agreement. The Merger shall have the effects specified in this Agreement and in the TBOC.

1.2.    Closing .   Unless otherwise mutually agreed in writing between the Company and Parent, the closing of the Merger (the “ Closing ”) shall take place at the offices of Sullivan & Cromwell LLP, 125 Broad Street, New York, New York 10004, at 9:00 a.m. (New York time) on the third Business Day (the “ Closing Date ”) following the day on which the last to be satisfied or waived of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) shall be satisfied or waived in accordance with this Agreement. For purposes of this Agreement, the term “ Business Day ” means any day ending at 11:59 p.m. (New York time) (other than a Saturday or Sunday) on which the Department of State of the State of Texas and banks in the County of New York, New York and in Travis County, Texas are open for general business.

1.3.    Effective Time .   As soon as practicable following, and on the date of, the Closing, the Company and Parent will cause the Merger to be consummated by filing all necessary documentation, including a Certificate of Merger (the “ Certificate of Merger ”), with the Secretary of State of the State of Texas as

A-1

provided in the relevant provisions of the TBOC. The Merger shall become effective at the time when the Certificate of Merger has been duly filed with and accepted by the Secretary of State of the State of Texas or at such later time as may be agreed by the parties in writing and specified in the Certificate of Merger (the “ Effective Time ”).

Article II

Articles of Incorporation and Bylaws
of the Surviving Corporation

2.1.    Articles of Incorporation of the Surviving Corporation .   At the Effective Time, the articles of incorporation of the Company as in effect immediately prior to the Effective Time shall be amended and restated in their entirety as of the Effective Time to be in the form set forth in Exhibit A to this Agreement, and as so amended shall be the articles of incorporation of the Surviving Corporation (the “ Charter ”) until thereafter amended as provided therein or as provided by applicable Law.

2.2.    Bylaws of the Surviving Corporation .   The parties hereto shall take all actions necessary so that the bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation (the “ Bylaws ”) until thereafter amended as provided therein or as provided by applicable Law.

Article III

Directors and Officers of the Surviving Corporation

3.1.    Directors of the Surviving Corporation .   The parties hereto shall take all actions necessary so that the directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the TBOC, the Charter and the Bylaws.

3.2.    Officers of the Surviving Corporation .   The parties hereto shall take all actions necessary so that the officers of the Company at the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the TBOC, the Charter and the Bylaws.

Article IV

Effect of the Merger on Capital Stock;
Exchange of Share Certificates

4.1.    Effect on Capital Stock .   At the Effective Time, as a result of the Merger and without any action on the part of the holder of any capital stock of the Company:

(a)

Merger Consideration .   Each Share issued and outstanding immediately prior to the Effective Time (other than (i) Shares owned by Parent, Merger Sub or any other direct or indirect wholly-owned Subsidiary of Parent and Shares owned by the Company or any direct or indirect wholly-owned Subsidiary of the Company, and in each case not held on behalf of third parties, (ii) Shares that are owned by shareholders of the Company who have complied with the applicable provisions of Chapter 10, Subchapter H of the TBOC prior to the Effective Time (the Shares referred to in clause (ii), “ Dissenting Shares ,” and the Shares referred to in clauses (i) and (ii), “ Excluded Shares ”) and (iii) the Company Restricted Share Awards (which shall be converted pursuant to Section 4.3(b) )) shall be converted into the right to receive $42.00 per Share in cash, without interest (the “ Merger Consideration ”). At the Effective Time, all of the Shares converted into the right to receive the Merger Consideration pursuant to this Section 4.1(a) shall cease to be outstanding, shall be cancelled and shall cease to exist as of the Effective Time, and each certificate formerly representing any of the Shares (other than Excluded Shares) (each, a “ Share Certificate ”) and each book-entry account formerly representing any non-certificated Shares

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A-2

(other than Excluded Shares) (each, a “ Book-Entry Share ”) shall thereafter represent only the right to receive the Merger Consideration, without interest.

(b)

Cancellation of Dissenting Shares .   Each Dissenting Share shall, as a result of the Merger and without any action on the part of the holder of such Dissenting Share, cease to be outstanding, be cancelled without payment of any consideration therefor and shall cease to exist, subject to any rights the holder thereof may have pursuant to Section 4.2(g) and the TBOC.

​

(c)

Merger Sub .   Each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock, par value $0.01 per share, of the Surviving Corporation.

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4.2.    Exchange of Share Certificates and Book Entry Shares .

(a)

Appointment of Paying Agent .   Prior to the Effective Time, Parent and Merger Sub shall appoint a bank or trust company reasonably acceptable to the Company to serve as the paying agent (the “ Paying Agent ”) and shall enter into an agreement reasonably acceptable to the Company relating to the Paying Agent’s responsibilities with respect to this Agreement.

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(b)

Deposit of Merger Consideration .   At or prior to the Effective Time, Parent or Merger Sub shall deposit, or cause to be deposited, with the Paying Agent, cash in U.S. Dollars sufficient to pay the aggregate Merger Consideration (other than in respect of Excluded Shares) under Section 4.1(a) (such cash being hereinafter referred to as the “ Payment Fund ”). The Payment Fund shall not be used for any purpose other than a purpose expressly provided for in this Agreement. Pending its disbursement in accordance with this Section 4.2 , the Payment Fund shall be invested by the Paying Agent, if so directed by Parent or Merger Sub. Any such investment, if made, must be made in (i) short-term direct obligations of the United States of America, (ii) short-term obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, (iii) short-term commercial paper rated the highest quality by either Moody’s Investors Service, Inc. or Standard and Poor’s Ratings Services or (iv) certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion. Parent shall or shall cause the Surviving Corporation to promptly replace or restore the cash in the Payment Fund so as to ensure that the Payment Fund is at all times maintained at a level sufficient for the Paying Agent to make all payments of Merger Consideration in accordance herewith. No investment losses resulting from investment of the funds deposited with the Paying Agent shall diminish the rights of any holder of Shares to receive the Merger Consideration as provided herein. Payments to holders in respect of Company Options, Company Restricted Share Awards, Company RSU Awards and Company SARs shall be paid through the Company’s or the Surviving Corporation’s applicable payroll procedures following the Effective Time at such time as such awards are payable.

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(c)

Procedures for Surrender .

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(i)

Promptly after the Effective Time (and in any event within three Business Days thereafter), the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of Shares (other than Excluded Shares) (A) a notice advising such holders of the effectiveness of the Merger, (B) a letter of transmittal specifying that delivery shall be effected, and risk of loss and title shall pass, only upon delivery of the Share Certificates (or affidavits of loss in lieu of the Share Certificates as provided in Section 4.2(f) ) or transfer of the Book-Entry Shares to the Paying Agent (including customary provisions with respect to delivery of an “agent’s message” with respect to Book-Entry Shares), such materials to be in such form and have such other provisions as Parent desires with approval of the Company (such approval not to be unreasonably withheld, conditioned or delayed) (the “ Letter of Transmittal ”), and (C) instructions for effecting the surrender of the Share Certificates (or affidavits of loss in lieu of the Share Certificates as provided in Section 4.2(f) ) or the Book-Entry Shares to the Paying Agent in exchange for payment of the aggregate Merger Consideration to which such holders are entitled pursuant to the terms of this Agreement.

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(ii)

Upon surrender to the Paying Agent of Share Certificates (or affidavits of loss in lieu of the Share Certificates as provided in Section 4.2(f) ) or Book-Entry Shares, together with, in the case of Share Certificates, the Letter of Transmittal, duly completed and validly executed in accordance with the instructions thereto, or, in the case of Book-Entry Shares held through The Depositary Trust Company, receipt of an “agent’s message” by the Paying Agent, and such other documents as may be reasonably required, the holder of such Share Certificates or Book-Entry Shares shall be entitled to receive in exchange therefor, and the Paying Agent shall be required to deliver to each such holder, a check in the amount (after giving effect to any required Tax withholdings as provided in Section 4.2(h) ) of cash that such holder has the right to receive pursuant to Section 4.1(a) .

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(iii)

No interest will be paid or accrued on any amount payable upon surrender of any Shares.

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(iv)

In the event of a transfer of ownership of certificated Shares (other than Excluded Shares) that is not registered in the transfer records of the Company, a check for any cash to be paid upon due surrender of the Share Certificates may be issued to such transferee if the Share Certificates formerly representing such Shares are presented to the Paying Agent, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable stock transfer Taxes have been paid or are not applicable, in each case, in form and substance reasonably satisfactory to the Paying Agent. Payment of the Merger Consideration with respect to Book-Entry Shares shall only be made to the Person in whose name such Book-Entry Shares are registered in the stock transfer books of the Company.

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(d)

Transfers .   From and after the Effective Time, there shall be no transfers on the stock transfer books of the Company of the Shares that were outstanding immediately prior to the Effective Time.

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(e)

Termination of Payment Fund .   Any portion of the Payment Fund (including the proceeds of any investments of the Payment Fund) that remains unclaimed by, or otherwise undistributed to, the holders of Share Certificates and Book-Entry Shares by the one year anniversary of the Effective Time shall be delivered to the Surviving Corporation. Any holder of Shares (other than Excluded Shares) who has not theretofore complied with this Article IV shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration (after giving effect to any required Tax withholdings as provided in Section 4.2(h) ) upon delivery of the Share Certificates (or affidavits of loss in lieu of the Share Certificates as provided in Section 4.2(f) ) or transfer of the Book-Entry Shares, without any interest thereon. Notwithstanding the foregoing, none of the Surviving Corporation, Parent, the Paying Agent or any other Person shall be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws. To the fullest extent permitted by Law, immediately prior to the date any Merger Consideration would otherwise escheat to or become the property of any Governmental Authority, such Merger Consideration shall become the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto. For the purposes of this Agreement, the term “ Person ” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Authority or other entity of any kind or nature.

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(f)

Lost, Stolen or Destroyed Share Certificates .   In the event any Share Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Share Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond sufficient to indemnify Parent and the Surviving Corporation against any claim that may be made against Parent or the Surviving Corporation with respect to such Share Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Share Certificate a check in the amount (after giving effect to any required Tax withholdings as provided in Section 4.2(h) ) equal to the number of Shares (other than Excluded Shares) represented by such lost, stolen or destroyed Share Certificate multiplied by the Merger Consideration.

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(g)

Dissenting Shares .   Notwithstanding any provision of this Agreement to the contrary, Dissenting Shares shall not be converted into the right to receive the Merger Consideration and holders of such Dissenting Shares shall be entitled to receive payments in accordance with the provisions of Chapter 10, Subchapter H of the TBOC, unless and until such Person fails to comply with the provisions of Chapter 10, Subchapter H of the TBOC or effectively withdraws or otherwise loses such Person’s rights to receive payment under Chapter 10, Subchapter H of the TBOC. If any such Person fails to comply with the provisions of Chapter 10, Subchapter H of the TBOC or effectively withdraws or loses such right, such Dissenting Shares shall thereupon be treated as if they had been converted at the Effective Time into the right to receive the Merger Consideration. The Company shall give Parent notice of any written demands for appraisal of Shares promptly after receipt by the Company, and shall give Parent the opportunity to devise and implement strategy for, and participate in, all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, schedule any meeting or make any payment with respect to any such demands for appraisal or offer to settle or settle any such demands.

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(h)

Withholding Rights .   Each of Parent, the Company, Merger Sub, the Surviving Corporation and the Paying Agent, as applicable, shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “ Code ”), or any other applicable federal, state, local or foreign Tax Law. To the extent that amounts are so withheld and timely remitted by Parent, the Company, Merger Sub, the Surviving Corporation or the Paying Agent, as applicable, to the applicable Governmental Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

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4.3.    Treatment of Stock-Based Awards; ESPP .

(a)

Treatment of Company Options .   At the Effective Time, each outstanding option to purchase Shares (a “ Company Option ”) granted under the Stock Plan, whether vested or unvested, shall, automatically and without any action on the part of the holder thereof, fully vest and shall be cancelled and converted into the right to receive (without interest), as soon as reasonably practicable following the Effective Time, an amount in cash equal to the product of  (i) the number of Shares subject to the Company Option immediately prior to the Effective Time multiplied by (ii) the excess, if any, of  (A) the Merger Consideration over (B) the exercise price per Share of such Company Option. Any Company Option that has an exercise price per Share that is greater than or equal to the Merger Consideration shall be cancelled at the Effective Time for no consideration or payment.

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(b)

Treatment of Company Restricted Share Awards .   At the Effective Time, each outstanding restricted stock award (a “ Company Restricted Share Award ”) granted under the Stock Plan, shall, automatically and without any required action on the part of the holder thereof, fully vest and shall be cancelled and converted into the right to receive (without interest), as soon as reasonably practicable following the Effective Time, an amount in cash equal to (i) the number of Shares subject to such Company Restricted Share Award multiplied by (ii) the Merger Consideration.

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(c)

Treatment of Company Restricted Stock Unit Awards .   At the Effective Time, each outstanding restricted stock unit award (a “ Company RSU Award ”) granted under the Stock Plan, shall, automatically and without any required action on the part of the holder thereof, fully vest and shall be cancelled and converted into the right to receive (without interest), as soon as reasonably practicable following the Effective Time, an amount in cash equal to (i) the number of Shares subject to such Company RSU Award multiplied by (ii) the Merger Consideration; provided , that, with respect to any Company RSU Awards that constitute nonqualified deferred compensation subject to Section 409A of the Code and that are not permitted to be paid at the Effective Time without triggering a Tax or penalty under Section 409A of the Code, such

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payment shall be made at the earliest time permitted under the Stock Plan and applicable award agreement that will not trigger a Tax or penalty under Section 409A of the Code.

(d)

Treatment of Company Stock Appreciation Rights .   At the Effective Time, each outstanding cash-settled stock appreciation right in respect of Shares (a “ Company SAR ”), whether vested or unvested, shall, automatically and without any action on the part of the holder thereof, fully vest and shall be cancelled and converted into the right to receive (without interest), as soon as reasonably practicable following the Effective Time, an amount in cash equal to the product of (i) the number of Shares subject to the Company SAR immediately prior to the Effective Time multiplied by (ii) the excess, if any, of  (A) the Merger Consideration over (B) the exercise price per Share of such Company SAR. Any Company SAR that has an exercise price per Share that is greater than or equal to the Merger Consideration shall be cancelled at the Effective Time for no consideration or payment.

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(e)

Employee Stock Purchase Plan .   As soon as reasonably practicable following the date of this Agreement and in any event prior to the Effective Time, the Company shall take all actions (including obtaining any necessary determinations and/or resolutions of the Company Board or a duly authorized committee thereof and, if appropriate, amending the terms of the Company’s 2007 Team Member Stock Purchase Plan (the “ ESPP ”)) that may be necessary or required under the ESPP and applicable Laws to ensure that (A) except for the three-month offering period under the ESPP that commenced on April 1, 2017 (the “ Final Offering ”), no offering period shall be authorized or commenced on or after the date of this Agreement, (B) the Final Offering shall end on a date no later than the Business Day immediately preceding the Closing Date (the later of the date the Final Offering ends and the Business Day immediately preceding the Closing Date, the “ ESPP Termination Date ”), (C) each ESPP participant’s accumulated contributions under the ESPP shall be used to purchase Shares in accordance with the ESPP as of the end of the Final Offering, with any remaining contributions returned to the participant (without interest) as soon as administratively practicable thereafter, (D) the applicable purchase price for Shares shall not be decreased below the levels set forth in the ESPP as of the date of this Agreement and (E) the ESPP shall terminate in its entirety upon the ESPP Termination Date and no further rights shall be granted or exercised under the ESPP thereafter other than in accordance with the preceding clause (C).

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(f)

Corporate Actions .   At or prior to the Effective Time, the Company, the Company Board and the compensation committee of the Company Board, as applicable, shall adopt any resolutions and take any actions that are necessary to (i) effectuate the treatment of the Company Options, Company Restricted Share Awards, Company RSU Awards, Company SARs and the ESPP pursuant to Sections 4.3(a) through Section 4.3(e) and (ii) cause the Stock Plan to terminate at or prior to the Effective Time, subject to Parent’s obligations under this Section 4.3 . The Company shall take all actions necessary to ensure that, from and after the Effective Time, neither Parent nor the Surviving Corporation will be required to deliver Shares or other capital stock of the Company to any Person pursuant to or in settlement of Company Options, Company Restricted Share Awards, Company RSU Awards or Company SARs. The Surviving Corporation shall, subject to Section 4.2(h) , pay through its payroll systems the amounts due pursuant to Section 4.3(a) , Section 4.3(b) , Section 4.3(c) and Section 4.3(d) .

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(g)

Future Grants of Equity Awards .   Notwithstanding anything in Section 4.3(a) , Section 4.3(b) , and Section 4.3(c) to the contrary, but subject to Section 6.1 , to the extent the terms of any Company Option, Company Restricted Share Award or Company RSU Award granted on or after the date of this Agreement and not in violation of this Agreement expressly provide for treatment in connection with the occurrence of the Effective Time that is different from the treatment prescribed by Section 4.3(a) , Section 4.3(b) and Section 4.3(c) , the terms of such Company Option, Company Restricted Share Award or Company RSU Award shall control (and Section 4.3(a) , Section 4.3(b) and Section 4.3(c) shall not apply).

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4.4.    Adjustments to Prevent Dilution .   Notwithstanding anything in this Agreement to the contrary, if, from the date of this Agreement to the earlier of the Effective Time and termination of this Agreement in accordance with Article VIII , the number of Shares or securities convertible or exchangeable into or

A-6

exercisable for Shares shall have been changed into a different number of Shares or securities, or a different class, by reason of any reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization or other similar transaction, the Merger Consideration shall be equitably adjusted to provide the holders of Shares, Company Options, Company Restricted Share Awards, Company RSU Awards and Company SARs the same economic effect as contemplated by this Agreement prior to such event; provided , that nothing in this Section 4.4 shall be construed to permit the Company or any Subsidiary of the Company to take any action otherwise prohibited by the terms of this Agreement.

Article V

Representations and Warranties

5.1.    Representations and Warranties of the Company .   Except as set forth in the Company Reports filed by the Company with the SEC since September 26, 2016 and publicly available prior to the date of this Agreement (excluding, in each case, any disclosures set forth in any risk factor or “forward-looking statements” section to the extent they are cautionary, predictive or forward-looking in nature) or in the disclosure schedule delivered to Parent and Merger Sub by the Company immediately prior to the execution of this Agreement (the “ Company Disclosure Schedule ”) (it being agreed that disclosure of any item in any section or subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection to the extent (and only to the extent) that the relevance of such item is reasonably apparent on the face of such disclosure), the Company hereby represents and warrants to Parent and Merger Sub that:

(a)

Organization, Good Standing and Qualification .   The Company is a legal entity duly incorporated, validly existing and in good standing under the Laws of the State of Texas and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. The Company is qualified to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect or prevent or materially delay the ability of the Company to consummate the Merger by the Outside Date. Each of the Company’s Subsidiaries is a legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize such concept or a similar concept) under the Laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity (with respect to jurisdictions that recognize such concept or a similar concept) in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so organized, existing, qualified or in good standing, or to have such power or authority, would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect or prevent or materially delay the ability of the Company to consummate the Merger by the Outside Date. The Company has made available to Parent prior to the date of this Agreement true, correct and complete copies of the Company’s and its material Subsidiaries’ articles of incorporation and bylaws or comparable governing documents, each as amended to the date of this Agreement, and each as so disclosed is in full force and effect.

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As used in this Agreement: (i) the term “ Subsidiary ” means, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries and (ii) the term “ Material Adverse Effect ” means any change, effect, event, occurrence or development that is materially adverse to the financial condition, business or results of operations of the Company and its Subsidiaries, taken as a whole; provided , that no change, effect, event, occurrence or development to the extent resulting from the following shall constitute or be taken into account in determining whether there is a Material Adverse Effect:

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(A)

changes in the economy or financial, debt, credit or securities markets or capital market conditions generally, including changes in interest or exchange rates, in the United States, United Kingdom or Canada;

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(B)

changes generally affecting the grocery industry (including the prepared foods business) in the United States, United Kingdom or Canada;

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(C)

changes or proposed changes in United States generally accepted accounting principles (“ U.S. GAAP ”) or other accounting standards or interpretations thereof or in any Law, or interpretations thereof;