Sprouts Farmers Market 2013 Annual Report Download - page 129

Table of Contents
The payment was made first from retained earnings to date as of the payment date, and payment in excess of retained
earnings was made from additional paid-in capital.
As of December 29, 2013, 147,616,560 shares of common stock have been issued by the Company, 38.2% of which is held
by the Apollo Funds. As of December 29, 2013, 9,681,960 shares of common stock are reserved for issuance under the Sprouts
Farmers Market, Inc. 2013 Incentive Plan (see Note 23, “Equity-Based Compensation”). During 2013, options were exercised in
exchange for the issuance of 1,194,999 shares of common stock and the Company repurchased 12,375 of the shares of common
stock issued in one exercise. During 2012, options were exercised in exchange for the issuance of 189,585 shares of common
stock and subsequently, the Company repurchased 24,585 of the shares of common stock.
Equity prior to April 18, 2011 represents the consolidated net assets of Henry’s, which reflected S&F’s consolidated
investment in Henry’s. Activity in the consolidated statement of stockholders’ equity prior to April 18, 2011 is summarized in Note
19, “Related-Party Transactions.”
Weighted average shares outstanding for periods prior to the Henry’s Transaction assume the same shares outstanding as
immediately after the transaction per accounting guidance.
During 2012, 62,271 of the Company’s shares that were previously held in escrow pursuant to indemnification arrangements
set forth in agreements entered into in connection with the Sunflower Transaction were forfeited pursuant to the terms of such
agreements and redistributed to certain Company equity holders in accordance with the terms of such agreements and the
Company’s LLC Agreement.
During 2013, the Company received $0.2 million from certain officers as the return of deemed profits on the purchase of stock
in our IPO and the subsequent sale of our stock within six months. These proceeds are included in “Issuance of shares in IPO, net
of issuance costs” in the consolidated statements of stockholders’ equity and in “Proceeds from the issuance of shares” in the
consolidated statements of cash flows.
Preferred Stock
The Company’s board of directors is authorized, subject to limitations prescribed by Delaware law, to issue up to 10,000,000
shares of the Company’s preferred stock in one or more series, to establish from time to time the number of shares to be included
in each series, to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications,
limitations, or restrictions, in each case without further action by the Company’s stockholders. The Company’s board of directors
can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that
series then outstanding. The Company’s board of directors may authorize the issuance of preferred stock with voting or conversion
rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred
stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things,
have the effect of delaying, deferring, or preventing a change in control of the Company and might adversely affect the market price
of the Company’s common stock and the voting and other rights of the holders of the Company’
s common stock. The Company has
no current plan to issue any shares of preferred stock.
22. Net Income (Loss) per Share
The computation of net income (loss) per share is based on the number of weighted average shares outstanding during the
period. The computation of diluted net income (loss) per share includes the dilutive effect of share equivalents consisting of
incremental shares deemed outstanding from the assumed exercise of options.
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