Sprouts Farmers Market 2013 Annual Report Download - page 131

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Table of Contents
not issued will not be treated as having been issued for purposes of the share limitation. As of December 29, 2013, 9,681,960
shares of common stock are reserved for issuance under the 2013 Incentive Plan.
2011 Option Plan
In May 2011, the Company adopted the Sprouts Farmers Markets, LLC Option Plan (the “2011 Option Plan”) to provide team
members or directors of the Company with options to acquire shares of the Company (“options”). The Company had authorized
12,100,000 shares for issuance under the 2011 Option Plan. Options may no longer be issued under the 2011 Option Plan.
During 2013, the Company awarded 209,000 options to team members under the 2011 Option Plan at exercise prices of
$9.15 and grant date fair values of $2.33 to $3.10.
Prior to the IPO options were granted to certain team members at a price determined by the Board in its sole discretion. The
maximum contractual term for such options was seven years. The options vest in accordance with the terms set forth in the grant
letter and vary depending on if they are time-based or performance-based. Time-based options generally vest ratably over a period
of 12 quarters (three years) and performance-based options vest over a period of three years based on financial performance
targets set for each year. Vesting schedules of future grants may differ. In the event of a change in control as defined in the 2013
Incentive Plan and 2011 Option Plan, all options become immediately vested and exercisable.
Shares issued for option exercises are newly issued shares.
The estimated fair values of options granted during 2013, 2012 and 2011 range from $1.07 to $5.92, and were calculated
using the following assumptions:
The grant date weighted average fair value of the 2.7 million options issued but not vested as of December 29, 2013 was
$2.09. The grant date weighted average fair value of the 5.8 million options issued but not vested as of December 30, 2012 was
$1.45. The grant date weighted average fair value of the 6.9 million options issued but not vested as of January 1, 2012 was $1.14.
The following table summarizes grant date weighted average fair value of options granted and options forfeited:
126
2013
2012
2011
Dividend yield
0.00%
0.00%
0.00%
Expected volatility
31.03% to 37.38%
32.36% to 38.59%
38.58% to 41.18%
Risk free interest rate
0.56% to 1.36%
0.40% to 0.77%
0.57% to 1.88%
Expected term, in years
4.00 to 5.00
3.75 to 5.00
3.63 to 4.83
Year Ended
December 29,
2013
December 30,
2012
January 1,
2012
Grant date weighted average fair value of
options granted $
4.27
$
1.99
$
1.12
Grant date weighted average fair value of
options forfeited
$
1.85
$
1.17
$
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