Sprouts Farmers Market 2013 Annual Report Download - page 82

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Table of Contents
We granted equity awards between May 2, 2011 and December 29, 2013, as follows:
The following factors were considered in our determination of the fair value of the common shares underlying our equity
awards at each grant date:
May 2, 2011 : We issued options to team members on May 2, 2011 and based the equity value on the equity value
determined by an arm’s-length third-party negotiation in the Henry’s Transaction, which closed April 18, 2011. This valuation
reflects the proximity of the grant date to the Henry’s Transaction and lack of synergies achieved to date resulting from the
combination or other significant changes in our business that would cause an increase in the fair value of our equity.
September 25, 2011 : We determined there was no change in the fair value of our equity from April 17, 2011 using the same
factors described above for the May 2, 2011 grant.
July-August 2012 : This valuation of the equity underlying these awards reflects the synergies achieved following the
combination of Henry’s and Sprouts Arizona and our growth. Additionally, this valuation also is consistent with the equity value
reached in an arm’s length third-party negotiation in the Sunflower Transaction, which closed May 29, 2012.
October 31, 2012 : We based the value of our equity underlying these awards using the same factors described above for the
July-August 2012 grants.
December 21, 2012
: We granted 258,500 options to team members on December 21, 2012. Significant factors in determining
the fair value of our common equity underlying these awards were the following:
As a result of these factors, we determined an increase in the valuation of our common equity was justified. In order to
estimate the fair value of our common equity underlying the December 21, 2012
77
Grant Date
Number of Options
Granted
Fair Value of
Equity Per
Share/Exercise
Price
Option
Fair Value
Aggregate
Fair Value
May 2, 2011
9,368,040
$
3.33
$
1.07 to $1.19
$
10,557,850
September 25, 2011
772,200
$
3.33
$
1.03 to $1.15
$
849,303
July-August 2012
2,141,700
$
6.01
$
1.68 to $2.00
$
4,032,117
October 31, 2012
209,000
$
6.01
$
1.66 to $1.88
$
391,243
December 21, 2012
258,500
$
9.15
$
2.40 to $3.09
$
727,423
January-March 2013
66,000
$
9.15
$
2.36 to $3.10
$
180,812
April-June 2013
143,000
$
9.15
$
2.33 to $3.06
$
381,547
August 1, 2013
407,112
$
18.00
$
4.65 to $5.92
$
2,070,471
• Successful re-branding and integration of Henry’s, Sprouts Arizona and Sunflower operations achieved by the end of
fiscal 2012;
•
Our operating and financial performance and forecasts as a combined company;
• New store openings and planned openings;
•
Market valuations of comparable publicly traded grocers;
• The applicability of a discount to reflect a lack of marketability for our equity;
• General capital market conditions in the U.S.; and
•
Our view that an initial public offering was feasible by the end of fiscal 2013.