8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OFTHE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 5, 2008

______________________________

Whole Foods Market, Inc.

(Exact name of registrant as specified in its charter)

Texas (State of incorporation) 0-19797 (Commission File Number) 74-1989366 (IRS Employer Identification Number)

550 Bowie Street

Austin, Texas 78703

(Address of principal executive offices)

Registrant's telephone number, including area code: (512) 477-4455

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the reporting obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act

o Soliciting material pursuant to Rule 14a-12 of the Exchange Act

o Pre-commencement communications pursuant to Rule 14d-2(b) Exchange Act

o Pre-commencement communications pursuant to Rule 13e-4(c) Exchange Act

Item 1.01. Entry into a Material Definitive Agreement

On November 5, 2008, the Company entered into a securities purchase agreement (the “Purchase Agreement”) to issue and sell shares of Series A 8.00% Redeemable Convertible Exchangeable Participating Preferred Stock, par value $0.01 per share (“Preferred Stock”), to Green Equity Investors V., L.P. and Green Equity Investors Side V, L.P. (the “Investors”), both affiliates of Leonard Green & Partners, L.P., for $425 million.

The Preferred Stock is convertible at the election of the holders into shares of the Company’s common stock (“Common Stock”) at an initial conversion price of $14.50 per share, provided that at no time may any holder of the Preferred Stock beneficially own more than 19.99% of the Company’s voting securities as a result of such conversion. The conversion rate is also subject to various anti-dilution adjustments described in the statement of designations that the Company intends to file with the Texas Secretary of State prior to issuance of the Preferred Stock (“Statement of Designations”). The Preferred Stock would represent an ownership interest, assuming conversion of the Preferred Stock to the Company’s Common Stock, of approximately 17% at this time.

The Preferred Stock has an 8% dividend, payable quarterly in cash or by increasing the liquidation preference of the Preferred Stock, at the option of the Company. After three years, the dividend will be reduced to (i) 6% if the Common Stock closes at or above $17.75 per share for at least 20 consecutive trading days, or (ii) 4% if the Common Stock closes at or above $23.13 per share for at least 20 consecutive trading days.

The Company may redeem the Preferred Stock after five years at a premium of 4%, declining ratably to par by the eighth year. In addition, at any time, the Company may, upon 30 days notice, redeem the Preferred Stock if the Common Stock closes at or above $28.50 per share for at least 20 consecutive trading days. The Company may also exchange the Preferred Stock into subordinated convertible notes having economic terms similar to the Preferred Stock under certain circumstances.

The holders of the Preferred Stock may require the Company to redeem their Preferred Stock, in whole or in part, at 101% of the liquidation preference upon the occurrence of certain fundamental changes to the Company, including a change of control and certain bankruptcy events. In addition, the holders of the Preferred Stock have the right to require the Company to redeem their Preferred Stock, in whole or in part, 12 years after its issuance. The Company has also granted the Investors certain preemptive rights, as delineated in the Purchase Agreement.

The holders of the Preferred Stock, voting as a separate class, will be entitled to elect two members of the board of directors of the Company. Accordingly, the Purchase Agreement contemplates that Jonathan D. Sokoloff and Jonathan A. Seiffer of Leonard Green & Partners, L.P. would join the board of directors of Whole Foods Market effective upon issuance of the Preferred Stock. The Preferred Stock, however, may elect only one member of the Company’s board of directors once the Preferred Stock represents less than 10% of the Company’s voting securities, which ability ceases once the Preferred Stock represents less than 7% of the Company’s voting securities. The Preferred Stock may also only appoint directors approved by the nominating committee of the Company’s board of directors, unless such individuals were partners of Leonard Green & Partners, L.P. at the time of the issuance of the Preferred Stock. Under the Purchase Agreement, the Investors are entitled to designate one member to each of the committees of the board of directors and to appoint directors for election to the board of directors once the ability to elect directors under the Statement of Designations ceases, in each case subject to certain limitations and ownership thresholds.

Under the Statement of Designations, the Preferred Stock will vote together with the Common Stock on an as-converted basis, but no holder of Preferred Stock may vote more than the equivalent of 19.99% of the Company’s voting securities. The Preferred Stock also has the right to veto certain actions of the Company that might dilute, or alter the rights of, the Preferred Stock.

The transaction is expected to close in early December 2008, subject to the receipt of customary regulatory approvals, including pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, delivery of customary certificates and legal opinions and execution of a registration rights agreement obligating the Company to file a shelf registration statement covering the potential resale of the Preferred Stock and Common Stock issuable upon conversion thereof. 

Item 3.02. Unregistered Sales of Equity Securities.

(a)See Item 1.01 above for information regarding the Company’s agreement to sell shares of Preferred Stock. These shares, when issued, will be issued without registration under the Securities Act of 1933, as amended (“Securities Act”), in reliance on the exemption from registration provided under Regulation D of the Securities Act. The Preferred Stock will be sold without underwriting discounts and commissions.

Item 3.03. Material Modifications to Rights of Security Holders.

(b)See Item 1.01 above for information regarding the Company’s agreement to sell shares of Preferred Stock.

Item 8.01. Other Events.

On November 5, 2008, the Company issued a press release regarding the issuance and sale of the Preferred Stock. A copy of this press release is attached as Exhibit 99.1 to this report.

The Company has also posted on its corporate website a summary of the terms of the Preferred Stock. A copy of this summary is attached as Exhibit 99.2 to this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following are filed as exhibits to this report.

99.1 Press release dated November 5, 2008.

99.2 Summary term sheet

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WHOLE FOODS MARKET, INC.
Date: November 6, 2008	By:	/s/ Glenda Chamberlain
		Glenda Chamberlain
		Executive Vice President and Chief Financial Officer

EX-99.1

 Exhibit 99.1

For Immediate Release Contact: Cindy McCann VP of Investor Relations 512.542.0204

Whole Foods Market Announces $425 million Equity Investment

by Leonard Green & Partners, L.P.

Austin, TX - November 5, 2008 - Whole Foods Market, Inc. (NASDAQ: WFMI) announced today an agreement to sell Series A Preferred Stock due 2020 to Green Equity Investors V, L.P., an affiliate of Leonard Green & Partners, L.P. for $425 million. This amount equates to an ownership interest, assuming conversion of the preferred stock to common stock, of approximately 17% at this time.

“We are pleased that Leonard Green & Partners, L.P., one of the most experienced and successful investors in the retail industry, has decided to make such a significant investment in Whole Foods Market. We view it as a strong vote of confidence in our business model and our long-term growth prospects, despite the current economic environment,” said John Mackey, chairman, chief executive officer, and co-founder of Whole Foods Market. “This investment, combined with our strong cash flow from operations, gives us the financial flexibility to manage through these difficult economic times while continuing to prudently invest in our long-term growth.”

“Whole Foods Market is an exceptional company that has revolutionized how consumers shop for natural and organic products,” said Jonathan Sokoloff, Managing Partner of Leonard Green & Partners, L.P. “We are pleased to make this investment and look forward to a partnership with the board and management team to drive long-term growth, profitability and value for all shareholders.”

The preferred stock has an 8% dividend, payable quarterly in cash or by increasing the liquidation preference, at the option of the Company, and will be convertible, under certain circumstances, to common stock at an initial conversion price of $14.50 per share. This represents a premium of approximately 32% to yesterday’s closing sale price of Whole Foods Market’s common stock of $10.99. After three years, the dividend will be reduced to: (i) 6% if the common stock closes at or above $17.75 per share for at least 20 consecutive trading days, or (ii) 4% if the common stock closes at or above $23.13 per share for at least 20 consecutive trading days.

Whole Foods Market may redeem the preferred stock after five years at a premium of 4%, declining ratably to par by the eighth year. In addition, at any time, Whole Foods Market may, upon 30 days notice, redeem the preferred stock if the common stock closes at or above $28.50 per share for at least 20 consecutive trading days. Whole Foods Market may also convert the preferred stock into subordinated convertible notes having economic terms similar to the preferred stock under certain circumstances.

The transaction is expected to close within thirty days, subject to the receipt of customary regulatory approvals. 

In connection with the preferred stock investment, Jonathan D. Sokoloff and Jonathan A. Seiffer of Leonard Green & Partners, L.P. intend to join the board of directors of Whole Foods Market.

Goldman, Sachs & Co. served as financial advisor and Dechert LLP served as legal advisor to Whole Foods Market in this transaction. Latham & Watkins LLP served as legal advisor to Leonard Green & Partners, L.P.

About Whole Foods Market

Founded in 1980 in Austin, Texas, Whole Foods Market (www.wholefoodsmarket.com) is the world’s leading natural and organic foods supermarket and America’s first national certified organic grocer. In fiscal year 2008, the Company had sales of approximately $8 billion and currently has 278 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs more than 50,000 Team Members and has been ranked for eleven consecutive years as one of the “100 Best Companies to Work For” in America by FORTUNE magazine.

About Leonard Green & Partners, L.P.

Leonard Green & Partners, L.P. is a private investment firm established in 1989 which manages approximately $9 billion of equity capital. The firm’s investments are focused primarily on North American companies in a range of industries including retail, consumer products, distribution, media, business services and healthcare. Significant investments include The Brickman Group, The Container Store, David’s Bridal, Jetro Cash and Carry, Neiman Marcus Group, Petco Animal Supplies, The Sports Authority, The Tire Rack and Tourneau.

Forward-looking statements

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995.  Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties, which could cause our actual results to differ materially from those described in the forward-looking statements.  These risks include but are not limited to general business conditions, the successful integration of acquired businesses into our operations, changes in overall economic conditions that impact consumer spending, including fuel prices and housing market trends, the impact of competition, changes in the Company’s access to available capital, the successful resolution of ongoing FTC matters, and other risks detailed from time to time in the SEC reports of Whole Foods Market, including Whole Foods Market’s report on Form 10-K for the fiscal year ended September 30, 2007.  Whole Foods Market undertakes no obligation to update forward-looking statements. 

The shares of Series A Preferred Stock have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Company will host a conference call today to discuss this announcement in conjunction with its earnings announcement at 4:00 p.m. CT.  The dial-in number is 1-800-862-9098, and the conference ID is “Whole Foods.”  A simultaneous audio webcast will be available at www.wholefoodsmarket.com.

EX-99.2

Exhibit 99.2

Series A Preferred Stock

Summary of Terms

Issuance Date	nTBD
Purchaser	nGreen Equity Investors V, L.P., an affiliate of Leonard Green & Partners, L.P.
Amount	n$425 million
Security	nSeries A Preferred Stock
Dividend Rate	n8% per annum quarterly dividends payable either in cash or PIK, payable quarterly nAfter the third anniversary, 6% if stock price exceeds $17.75 for 20 consecutive trading days nAfter the third anniversary, 4% if stock price exceeds $23.12 for 20 consecutive trading days
Conversion	nConverts to common stock at $14.50 per share 32% premium to closing price of $10.99 on November 4, 2008
Redemption Date	n12 years from date of issuance
Mandatory Redemption	nRedeemable if stock price exceeds $28.50 for 20 consecutive trading days
Call Protection	nNon-call for 5 years nCallable on or after Year 5 at 104%, on or after Year 6 at 102.7%, on or after Year 7 at 101.3%, and on or after Year 8 at 100%
Board Representation	nPurchaser entitled to appoint two members to the Board of Directors, under specified conditions
Placement Fee	n1.5%
Other	nTransfer restriction for 3 years nCustomary anti-dilution protections nIssuer’s option to exchange into convertible debt, under specified conditions nRegistration rights nPreemptive rights nInformation rights

The shares of Series A Preferred Stock have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.