EX-10.1


   

  Exhibit 10.1

   

  January 25, 2022

   

  Nick Konat: 

  
Sprouts Farmers Market, Inc. is pleased to make you the following employment offer for the position of President & Chief Operating Officer. 

   

  		
	Position and Duties:
	President & Chief Operating Officer of Sprouts Farmers Market, Inc. (the “Company”) commencing at an agreed upon date once the offer is finalized.

	Base Salary:
	Your base salary will be $700,000 per annum, pro-rated for any partial year based on actual days of employment. 

	STIP:
	Commencing in 2022, you will be eligible for an annual cash bonus opportunity at a target of 100% of your base salary and a maximum of 300% of base salary, subject to the Company satisfying performance goals in accordance with the Company’s short-term incentive plan established by the Board of Directors. 

	LTIP:
	Commencing in March 2022, you will be eligible for annual equity grants pursuant to the Company’s long-term incentive program, with an annual grant value equal to 125% of your base salary, comprised of 50% performance share awards (“PSAs”) vesting on the third anniversary of the grant date based on achievement of performance goals to be established by the Board of Directors and 25% restricted stock units (“RSUs”) and 25% stock options, each vesting ratably over three years beginning on the first anniversary of the grant date. You will be eligible to earn up to 200% of the PSAs awarded depending on performance against such performance goals.
The actual number of RSUs and PSAs granted will be determined using the 20-day trailing average share price of the Company’s common stock on the respective grant dates. The actual number of stock options granted will be calculated using a Black-Scholes valuation for the Company’s common stock and shall have an exercise price equal to the market value on the grant date. The form of PSA, RSU and stock option agreements will be the most recent general forms filed with the SEC.

	Sign-On Awards:
	On your start date, you will receive a sign-on equity grant equal to $3,000,000 of RSUs, vesting at 75% on the two-year anniversary of the grant date, and the remaining 25% on the three-year anniversary of the grant date. In addition, you will receive a sign-on cash award equal to $650,000 which will be subject to repayment at 50% (net of your tax obligation on such amount) should you voluntarily resign as an employee of the Company or be terminated for Cause (as such term is defined in the Severance Plan defined below) prior to the first anniversary of your start date, and at 25% (net of your tax obligation on such amount) should you voluntarily resign as an employee the Company or be terminated for Cause between the first and second anniversary of your start date. 

	Severance
	You will be treated as an “Eligible Executive” under the Company’s Amended and Restated Executive Severance and Change in Control Plan, effective February 25, 2020 (the “Severance Plan”), as in effect on the date hereof as filed with the SEC as Exhibit 10.7 to the Company’s 2020 Form 10-K. Additionally, the second sentence in the definition of “Involuntary Termination” in the Severance Plan shall not apply to you. In addition, in the event of an “Involuntary Termination” as defined herein, any unvested RSUs from your $3,000,000 sign-on equity grant will vest immediately prior to such termination.

	Restrictive Covenants:
	Your employment is subject to your signing and complying with the terms of the Company’s Confidentiality, Non-Competition, and Non-Solicitation Agreement in the form filed with the SEC as Exhibit 10.6 to the Company’s 2020 Form 10-K.



   

  

   

  		
	Benefits:
	You will be eligible to participate in the Company’s 401(k) and other benefit plans for salaried employees, subject to the terms of those plans. Your paid time off will be subject to the Company’s flexible time off policy (i.e., the Company does not accrue vacation time for salaried employees who can take as much as needed and approved by his/her supervisor).

	Relocation:
	You will be required to relocate and reside in a reasonable proximity to our primary offices in Phoenix, Arizona.  The Company will reimburse you for up to $150,000 (grossed-up for taxes) in relocation expenses to cover home sale closing costs, transportation of goods, temporary housing, etc. This relocation reimbursement amount is subject to the same repayment terms as set forth under the Sign-On Awards section above. 



   

  On behalf of Jack Sinclair, and all of us at store support, welcome to the Sprouts team!

   

    

   

  Sincerely,

   

  /s/ Timmi Zalatoris

   

  Timmi Zalatoris

  SVP, Human Resources

    

   

    

   

    

  Nick Konat

   

  /s/ Nick Konat		

  Signed & dated

   

    

   

   

   

   

   

   

  Your employment is contingent upon successful completion of a background check. You understand that your employment with Sprouts is at-will and that either party can terminate the relationship at any time with or without cause and with or without notice. You further acknowledge that this offer letter does not represent an employment contract, express or implied, guaranteeing employment for any specific duration, nor does it guarantee any fixed terms and/or conditions of employment.