Exhibit 10.1

 

SPROUTS FARMERS MARKET, INC.

RSU Agreement

 

Cover Sheet

 

Sprouts Farmers Market, Inc., a company organized under the laws of the State of
Delaware (“Company”), hereby grants an award of restricted stock units (“RSUs”)
to the individual named below.  The terms and conditions of the RSUs are set
forth in this cover sheet (“Cover Sheet”), in the attached RSU Agreement (the
“Agreement”) and in the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the
“Plan”).  All capitalized terms used but not defined in this Cover Sheet and the
Agreement will have the meanings ascribed to such terms in the Plan.  

 

Granted to:

Jack L. Sinclair

Grant Date:

June 24, 2019

Number of RSUs:

 

Vesting Schedule:

Shares

 

Vest Date

June 24, 2020

June 24, 2021

June 24, 2022

Delivery of Shares:

As and when the RSUs vest, a number of Shares equal to the number of RSUs so
vesting shall be delivered as soon as practicable thereafter in settlement of
such RSUs.

 

By signing this Cover Sheet, you agree to all of the terms and conditions
described in this Cover Sheet, in the Agreement and in the Plan.  If you do not
sign and return this Cover Sheet and the attached Irrevocable Standing Order to
Sell Shares within 60 days of the Grant Date, the Company will have the right to
rescind this award.

 

Signature:

 

 

Date:

 

 

 

SPROUTS FARMERS MARKET, INC.

 

By:

 

/s/ Steve Townsend

Name:

 

Steve Townsend

Title:

 

Chairman, Compensation Committee

 

 

Board of Directors, Sprouts Farmers Market

 

 

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SPROUTS FARMERS MARKET, INC.

2013 INCENTIVE PLAN

RSU AGREEMENT

 

Right to Shares

 

The award of RSUs represents your right to receive, and the Company’s obligation
to deliver, one Share per RSU, subject to the terms and conditions of this
Agreement, the Plan and the Cover Sheet.  

 

 

 

Vesting

 

The RSUs awarded to you will vest in accordance with the schedule set forth in
the Cover Sheet.

 

All RSUs will cease vesting as of the date your employment with the Company and
its Affiliates has terminated for any reason.

 

 

 

Delivery; Settlement

 

 

 

 

Change in Control

 

As and when RSUs vest, a number of Shares equal to the number of such RSUs shall
be delivered as soon as practicable thereafter in settlement of such RSUs, and
upon such delivery, you shall have no further rights with respect to those RSUs.

 

Notwithstanding the foregoing:

 

(A) if there occurs a Change in Control  (as defined in Exhibit A), and this
award does not continue or is not assumed by an acquiror on a substantially
equivalent basis, then all RSUs that have not yet vested shall vest immediately
prior to the Change in Control; and

 

(B) if there occurs a Change in Control, and this award continues or is assumed
by an acquiror on a substantially equivalent basis, and your employment is
terminated by the Company or an acquiror without Cause (as defined in Exhibit A)
or by you for Good Reason (as defined in Exhibit A), in each case within 24
months following the Change in Control, then all RSUs that have not yet vested
shall vest immediately on your date of termination.

 

 

 

Termination

 

Should your employment with the Company terminate pursuant to an “Involuntary
Termination”, as such term is defined in the Company’s Amended and Restated
Executive Severance and Change in Control Plan as in effect on the Grant Date
but without regard to prong (2) thereof, or by you for Good Reason, all RSUs
that have not yet vested shall vest immediately prior to such termination.

 

Should your employment with the Company and its Affiliates terminate for any
reason except pursuant to a Change in Control or Involuntary Termination or by
you for Good Reason as described above, all of your RSUs then outstanding will
terminate, and you will no longer have any right to receive any Shares in
respect of such RSUs.  The grant of RSUs does not confer upon you any right to
continued employment with the Company or interfere with the Company’s right to
terminate your employment at any time.

 

 

 

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Taxes

 

When Shares are delivered to you upon settlement of any of your RSUs, the
Company is required to withhold taxes pursuant to applicable law.  The
withholding obligation may be satisfied through a “sell to cover” whereby you
irrevocably direct a securities broker approved by the Company to sell a portion
of your Shares subject to the RSUs upon vesting and to deliver the sale proceeds
to the Company in payment of the applicable withholding taxes.  You agree to
provide these directions by signing and returning the Irrevocable Standing Order
to Sell Shares attached hereto, along with a signed copy of the Cover Sheet,
within 60 days of the Grant Date.

 

The number of Shares that the broker will sell will be based on an estimate made
by the broker of the Shares required to be sold to satisfy the withholding
taxes. You

agree that the proceeds received from the sale of Shares will be used to satisfy
the withholding taxes and, accordingly, you authorize the broker to pay such
proceeds to the Company for such purpose. To the extent that the proceeds
obtained by such sale exceed the amount necessary to satisfy the withholding
taxes, such excess proceeds shall be deposited into your brokerage account and
in the event of a shortfall, additional Shares may be sold and/or cash
withholding may be required from you. Any remaining Shares shall be deposited
into your brokerage account.

 

If there is not a market in the Shares or the Company determines in its sole
discretion that the sell to cover procedure is not advisable or sufficient, the
Company will have the right to make other arrangements to satisfy the
withholding taxes due upon issuance of the Shares with respect to the RSUs,
including, but not limited to, the right to deduct amounts from salary or
payments of any kind otherwise due to the Participant or withhold in Shares,
provided that the Company only withholds the amount of Shares necessary to
satisfy the statutory minimum withholding amount.  If such other arrangements
are made, your Irrevocable Standing Order to Sell Shares will be voided.

 

You represent to the Company that, as of the date you sign the Irrevocable
Standing Order to Sell Shares, you are not aware of any material nonpublic
information about the Company or the Shares. You and the Company have structured
this Agreement to constitute a “binding contract” relating to the sale of
Shares, consistent with the affirmative defense to liability under Section 10(b)
of the Exchange Act under Rule 10b5-1(c) issued under such Act.

 

 

 

Restrictions on

Resale and

Settlement

 

By signing this Agreement, you agree not to sell any Shares received upon
settlement of RSUs at a time when applicable laws, regulations or Company
policies prohibit a sale.  

 

The Company’s obligation to deliver Shares upon settlement of the RSUs shall be
subject to applicable laws, rules and regulations and also to such approvals by
governmental agencies as may be deemed appropriate to comply with relevant
securities laws and regulations.  

 

 

 

Transfer of RSUs

 

You cannot transfer or assign RSUs or your right to receive Shares upon
settlement of RSUs.  For instance, you may not sell RSUs or use them as security
for a loan.  If you attempt to do any of these things, your RSUs will
immediately become invalid.  

 

Regardless of any marital property settlement agreement, the Company or a
securities broker, as applicable, is not obligated to recognize your former
spouse’s interest in your RSUs in any way.

 

 

 

Stockholder Rights;

Dividend Equivalent

Rights

 

You, or your estate or heirs, have no rights as a stockholder of the Company in
respect of RSUs until Shares have been delivered in settlement of the RSUs.  No
adjustments are made for dividends or other rights if the applicable record date
occurs before Shares are delivered, except as described in the Plan.

 

However, to the extent you hold RSUs on the record date of any cash dividend on
Shares, you will be entitled to a payment in an amount, per RSU held, equal to
the amount of the cash dividend declared and paid in respect of one Share.  This
Dividend Equivalent Right will be included in your regular compensation for the
pay period during which the actual cash dividend is paid, and will be subject to
applicable withholding taxes.

 

 

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
Delaware.

 

 

 

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The Plan and Other

Agreements

 

The text of the Plan and any amendments thereto are incorporated in this
Agreement by reference.

 

This Agreement, the Cover Sheet and the Plan constitute the entire understanding
between you and the Company regarding the RSUs.  Any prior agreements,
commitments or negotiations concerning the RSUs are superseded.

 

By signing the Cover Sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan and evidence your acceptance of the
powers of the Committee of the Board of Directors of the Company that
administers the Plan.

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Exhibit A

Certain Definitions

 

“Affiliate” means, when used with reference to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, or owns greater than fifty
percent (50%) of the voting power in, the specified Person (the term “control”
for this purpose shall mean the ability, whether by the ownership of shares or
other equity interest, by contract or otherwise, to elect a majority of the
directors of a corporation, independently to select the managing partner of a
partnership or the managing member or the majority of the managers, as
applicable, of a limited liability company, or otherwise to have the power
independently to remove and then select a majority of those Persons exercising
governing authority over an entity, and control shall be conclusively presumed
in the case of the direct or indirect ownership of fifty percent (50%) or more
of the voting equity interests in the specified Person).

 

“Cause” shall have the meaning set forth in any effective employment agreement
between the Company or any of its Subsidiaries or Affiliates on the one hand,
and you on the other hand, or if no such employment agreement is in effect that
contains a definition of “Cause”, then Cause shall mean the occurrence of any
one or more of the following events: (i) a conviction of or pleading guilty to
(a) a felony, or (b) a misdemeanor that causes or is reasonably likely to cause
material harm to the business, financial condition or operating results of the
Company or any of its Affiliates; (ii) theft, embezzlement or fraud committed by
you in connection with the performance of your job duties; (iii) engaging in any
activity that gives rise to a material conflict with the Company or any of its
Affiliates; (iv) the misappropriation of any material business opportunity of
the Company or any of its Subsidiaries or Affiliates; (v) any material failure
to comply with, observe or carry out the rules, regulations, policies,
directions, codes of ethics and/or conduct and restrictions applicable to team
members generally or established or approved by the Board from time to time for
executive officers of the Company or any of its Subsidiaries or Affiliates,
including (without limitation), in any case, those regarding conflicts of
interest; and (vi) substance abuse or use of illegal drugs that materially
impairs the performance of your job duties or causes or is likely to cause
material harm to the business, financial condition or operating results of the
Company or any of its affiliates.  In order to terminate you for Cause, (I) the
Company must deliver a written notice of its intent to terminate you for Cause,
(II) you must be given a reasonable opportunity to cure any such acts or
omissions (if curable) that constitute “Cause” within 30 days after receipt of
such notice, and (III) you must have failed to timely cure any such acts or
omissions.

 

“Change in Control” shall mean:

 

 

(i)

any event occurs the result of which is that any “person,” as such term is used
in Sections 13(d) and 14(d) of the Exchange Act, becomes the “beneficial owner”,
as defined in Rules l3d-3 and l3d-5 under the Exchange Act directly or
indirectly, of more than  50% of the voting stock of the Company or any
successor company thereto, including, without limitation, through a merger or
consolidation or purchase of voting stock of the Company; provided that the
transfer of 100% of the voting stock of the Company to a Person that has an
ownership structure identical to that of the Company prior to such transfer,
such that the Company becomes a wholly owned subsidiary of such Person, shall
not be treated as a Change in Control;

 

(ii)

during any period of two (2) consecutive years, individuals who at the beginning
of such period constituted the Board, together with any new directors whose
election by such Board or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors of the Company
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved, cease
for any reason to constitute a majority of the Board then in office;

 

(iii)

the sale, lease, transfer, conveyance or other disposition, in one or a series
of related transactions other than a merger or consolidation, of all or
substantially all of the assets of the Company and its consolidated subsidiaries
taken as a whole to any Person or group of related Persons; or

 

(iv)

the adoption of a plan relating to the liquidation or dissolution of the
Company.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

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“Good Reason” shall have the meaning ascribed thereto in any effective
employment agreement between the Company or any of its Subsidiaries or
Affiliates on the one hand, and you on the other hand, or if no such employment
agreement is in effect that contains a definition of “Good Reason”, then Good
Reason shall mean the occurrence of any of the following: (i) material reduction
in your base salary or target annual bonus opportunity; (ii) adverse change in
your job title; provided, however, that a change in your duties or
responsibilities without a change in your job title shall not constitute “Good
Reason”; or (iii) a requirement that you work at any office or location more
than 50 miles from the location of the then current principal office of the
Company in Phoenix, Arizona (excluding normal travel responsibilities).  In
order for you to terminate employment for Good Reason, you must provide the
Company with at least 30 days’ prior written notice specifying in reasonable
detail the reason therefor, and the Company shall have a reasonable opportunity
to cure any such Good Reason within 15 days after receipt of such notice.  If
the Company is not seeking to cure, it shall not be obligated to allow you to
continue performing duties for the Company during the 15-day cure period and
may, in its sole discretion, accelerate such termination of employment to any
date during the 15-day cure period.  You may not terminate employment for Good
Reason regarding any act or omission of which you had actual notice for 90 days
or more prior to giving notice of termination for “Good Reason”.

 

“Person” means and includes any individual, partnership, joint venture,
corporation, limited liability company, estate, trust, or other entity.

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IRREVOCABLE STANDING ORDER TO SELL SHARES

 

I have been granted an award in respect of Performance Shares (“Performance
Shares”) by Sprouts Farmers Market, Inc. (the “Company”), which is evidenced by
a performance share award agreement between me and the Company (the “Agreement,”
copy attached).  Provided that I remain employed by the Company on the
applicable vesting date, the shares vest according to the provisions of the
Agreement.

 

I understand that on the Certification Date (as defined in the Agreement), the
Performance Shares will be deposited into my account at E*Trade or such other
broker the Company may engage at such time (the “Broker”) and that on the
applicable vesting date, I will recognize taxable ordinary income as a
result.  Pursuant to the terms of the Agreement and as a condition of my receipt
of the Shares, I understand and agree that, on the vesting date, I must sell a
number of shares sufficient to satisfy all withholding taxes applicable to that
ordinary income. Therefore, I hereby direct the Broker to sell, at the market
price and on the vesting date (or the first business day thereafter if the
vesting date should fall on a day when the market is closed), the number of
Shares that the Company informs the Broker is sufficient to satisfy the
applicable withholding taxes, which shall be calculated based on the closing
price of the Company’s ordinary shares on the last trading day before the
vesting date. I understand that the Broker will remit the proceeds to the
Company for payment of the withholding taxes.

 

I understand and agree that by signing below, I am making an Irrevocable
Standing Order to Sell Shares which will remain in effect until the vesting
date. I also agree that this Irrevocable Standing Order to Sell Shares is in
addition to and subject to the terms and conditions of any existing Account
Agreement that I have with the Broker.

 

 

 

Signature

 

 

Print Name

 

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