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: |
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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: |
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| Date: |
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SPROUTS FARMERS MARKET, INC.
By: |
| /s/ Steve Townsend |
Name: |
| Steve Townsend |
Title: |
| Chairman, Compensation Committee |
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| Board of Directors, Sprouts Farmers Market |
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. |
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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. |
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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. |
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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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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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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.
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Signature |
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Print Name |
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