Sprouts Farmers Market 2014 Annual Report Download - page 106

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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 per Share
The computation of net income per share is based on the number of weighted average shares
outstanding during the period. The computation of diluted net income per share includes the dilutive effect
of share equivalents consisting of incremental shares deemed outstanding from the assumed exercise of
options.
A reconciliation of the numerators and denominators of the basic and diluted net income per share
calculations is as follows (in thousands, except per share amounts):
Year Ended
December 28,
2014
December 29,
2013
December 30,
2012
Basic net income per share:
Net income ............................ $107,692 $ 51,326 $ 19,500
Weighted average shares outstanding ..... 149,751 134,622 119,427
Basic net income per share ........... $ 0.72 $ 0.38 $ 0.16
Diluted net income per share:
Net income ............................ $107,692 $ 51,326 $ 19,500
Weighted average shares outstanding ..... 149,751 134,622 119,427
Dilutive effect of equity-based awards:
Assumed exercise of options to purchase
shares .............................. 4,570 5,143 2,354
Restricted Stock Units (“RSU”) ............ 7 — —
Weighted average shares and
equivalent shares outstanding ....... 154,328 139,765 121,781
Diluted net income per share ......... $ 0.70 $ 0.37 $ 0.16
The computation of diluted earnings per share for the year ended December 28, 2014 does not
include 546,567 options as those options were antidilutive. The computation of diluted earnings per share
for the year ended December 29, 2013 includes all options as no options were antidilutive. The
computation of diluted earnings per share for the year ended December 30, 2012 does not include
1,674,112 options as those options would have been antidilutive.
23. Equity-Based Compensation
2013 Incentive Plan
The Company’s board of directors adopted, and its equity holders approved, the Sprouts Farmers
Market, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”). The 2013 Incentive Plan became effective
July 31, 2013 in connection with the Company’s IPO and replaced the 2011 Option Plan (as defined below)
(except with respect to outstanding options under the 2011 Option Plan). The 2013 Incentive Plan serves
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