Exhibit 10.1

SPROUTS FARMERS MARKET, INC.

5455 East High Street, Suite 111

Phoenix, Arizona 85054

August 6, 2015

J. Douglas Sanders

c/o Sprouts Farmers Market, Inc.

5455 East High Street, Suite 111

Phoenix, Arizona 85054

Re: Employment Transition

Dear Doug:

This will confirm our discussions regarding changes to your employment status
with Sprouts Farmers Market, Inc. (the “Company”). All of these changes will be
effective August 6, 2015 (the “Effective Date”).

 

  1. Change in Position/Title. On the Effective Date, you agree that you will no
longer serve as President and Chief Executive Officer of the Company. The Board
of Directors (the “Board”) has appointed you as Executive Chairman. As Executive
Chairman, you will have the powers and duties as may be assigned to you from
time to time by the Board.

 

  2. Compensation.

 

  a. For the remainder of 2015, you will continue to receive fees of $560,000
per annum (the “Fees”), payable in accordance with the Company’s normal payroll
practices. In the event you discontinue service as Executive Chairman for any
reason, you will be entitled to receive the Fees for the two-year period
thereafter, payable in accordance with the Company’s normal payroll procedures.

 

  b. For so long as you serve on the Board, and for the two-year period
thereafter, the Company will continue to provide health coverage to you and your
immediate family under the benefit plans that are made available to Company
employees.

 

  c. You remain eligible for a bonus for the 2015 fiscal year in accordance with
the terms of the Company’s cash bonus program approved by the Compensation
Committee of the Board in Februrary 2015; provided that you continue to serve as
Executive Chairman of the Company through December 31, 2015. You shall not be
entitled to an annual bonus in respect of any fiscal year after 2015.

 

  d. In the event you discontinue service as Executive Chairman for any reason,
you will also be entitled to an amount equal to the sum of the actual annual
bonus payments you received for each of the 2013 and 2014 fiscal years, payable
in accordance with the Company’s normal payroll procedures.

 

  e.

In the event you discontinue service as Executive Chairman for any reason prior
to the end of the 2015 fiscal year, you will also be eligible to receive an
annual bonus for the 2015 fiscal year, pro-rated from the first day of the 2015
fiscal year through

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  the date on which you ceased to serve as Executive Chairman, payable in
accordance with the Company’s normal payroll procedures.

 

  f. For so long as you remain a member of the Board, your employment will be
treated as continuing for purposes of determining vesting, and with respect to
stock options, exercisability, of any outstanding equity awards granted to you
prior to the Effective Date.

 

  3. Release. You agree that any continued payments or benefits beyond the date
that you no longer serve as Executive Chairman will be subject to your execution
and non-revocation of a customary release of the Company and its affiliates,
officers, directors, stockholders, employees, agents, insurers, representatives
and successors from and against any and all claims that you may have. The
Company will present such release within 10 business days following your
cessation as Executive Chairman, and you will have 21 days to consider whether
or not to sign it, and, assuming you do, an additional 7 days to revoke it. If
the period during which you may consider and revoke the release spans two
calendar years, any payment otherwise payable to you during that period will be
made in the later calendar year.

 

  4. Employment Agreement. The employment agreement between you and the Company
dated April 18, 2011, as amended by Amendment No. 1 dated August 23, 2012 and
Amendment No. 2 dated April 29, 2015 (as amended, the “Employment Agreement”)
shall be terminated as of the Effective Date, and you will no longer be deemed
an employee or officer of the Company. Except as provided in Paragraph 2(c)
above, neither you nor the Company will have any further obligation under the
Employment Agreement following the Effective Date, including but not limited to
severance compensation, provided that your obligations under Sections 5, 6.1 and
6.5, and the Company’s obligations under Section 6.1, will continue in force, as
will the procedural provisions of Section 6 that relate to such sections, and
the provisions of all such sections are hereby incorporated herein. You will,
however, be entitled to receive any unpaid base salary, vested amounts under the
Company’s 401(k) plan, and reimbursement for unreimbursed business expenses, in
each case accrued or incurred in respect of your employment prior to the
Effective Date.

 

  5. Confidentiality, Work Product and Non-Competition and Non-Solicitation. You
hereby reaffirm your agreement to abide by the terms of the Confidentiality,
Non-Competition, and Non-Solicitation Agreement dated as of August 5, 2015.

 

  6. Entire Agreement. Upon the Effective Date, this letter supersedes all
previous and contemporaneous communications, agreements and understandings
between you, on the one hand, and the Company or any of its affiliates, on the
other hand, whether written or oral, including but not limited to the Employment
Agreement, and constitutes the sole and entire agreement between you and the
Company pertaining to the subject matter hereof.

 

  7. Governing Law. This letter will be governed by and construed in accordance
with the laws of the State of Arizona, without regard to principles of conflict
of laws.

 

  8. Counterparts. This letter may be executed in one or more counterparts, all
of which will be considered one and the same agreement, and will become a
binding agreement when one or more counterparts have been signed by each party
and delivered to the other party.

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Sincerely,

 

SPROUTS FARMERS MARKET, INC. By:  

/s/ Steven Townsend

Name:   Steven Townsend Title:   Chairman of the Compensation Committee of the
Board of Directors Agreed to and Accepted by:

/s/ J. Douglas Sanders

J. Douglas Sanders Date: August 6, 2015