In March 2022, the Company’s board of directors adopted the Sprouts Farmers Market, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Incentive Plan”), which became effective May 25, 2022, upon approval by the Company’s stockholders. The 2022 Incentive Plan provides team members of the Company, certain consultants and advisors who perform services for the Company, and non-employee members of the Company's board of directors with the opportunity to receive grants of equity awards, including stock options, RSUs, PSAs, and other stock-based awards. The 2022 Incentive Plan replaced the 2013 Incentive Plan (as described below).


Grant Date	RSUs		PSAs		Options
March 19, 2024	272,855		103,584		135,783
June 4, 2024	1,538		—		—
September 4, 2024	15,024		—		—
Total	289,417		103,584		135,783
Weighted-average grant date fair value	$	63.14	$	61.15	$	23.50
Weighted-average exercise price	—		—		$	61.15


Grant Date	RSUs		PSAs		Options
March 14, 2023	491,729		172,059		221,085
May 1, 2023	2,931		—		—
June 7, 2023	1,271		—		—
September 5, 2023	6,408		—		—
September 11, 2023	10,204		—		—
October 30, 2023	1,512		—		—
Total	514,055		172,059		221,085
Weighted-average grant date fair value	$	33.21	$	32.95	$	12.63
Weighted-average exercise price	—		—		$	32.95

The aggregate number of shares of common stock that may be issued to team members and directors under the 2022 Incentive Plan may not exceed 6,600,000, subject to the following adjustments. If any awards granted under the 2022 Incentive Plan, terminate, expire, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid in shares, the shares will again be available for purposes of the 2022 Incentive Plan. In addition, the number of shares subject to outstanding awards under the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”) that terminate, expire, are paid in cash, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested, or paid in shares under the 2013 Incentive Plan after the effective date of the 2022 Incentive Plan will be available for issuance

under the 2022 Incentive Plan. As of December 29, 2024, there were 1,064,137 stock awards outstanding and 5,589,778 shares remaining available for issuance under the 2022 Incentive Plan.

Prior to the adoption of the 2022 Incentive Plan, the 2013 Incentive Plan served as the umbrella plan for the Company’s share-based and cash-based incentive compensation programs for its directors, officers and other team members. Upon stockholder approval of the 2022 Incentive Plan on May 25, 2022, no further awards will be granted under the 2013 Incentive Plan, but awards outstanding under the 2013 Incentive Plan will remain outstanding in accordance with their terms and the terms of the 2013 Incentive Plan.

The RSUs generally vest either one-third each year for three years or one-half each year for two years for team members. RSUs granted to independent members of the Company’s board of directors cliff vest in one year. The options expire seven years from grant date. The PSAs are described below.

Outstanding options only become immediately vested in the event of a change in control (as defined in the applicable team member award agreement) if the grants are not continued or assumed by the acquirer on a substantially equivalent basis. If the options and awards continue or are assumed on a substantially equivalent basis, but employment is terminated by the Company or an acquirer without cause or by the team member for good reason (as such terms are defined in the applicable team member award agreement) within 24 months following the change in control, such options or awards will become immediately vested upon such termination. Under all other scenarios, the awards continue to vest per the schedule outlined in the applicable award agreement.

The estimated weighted average fair values of options granted during 2024, 2023 and 2022 were $23.50, $12.63 and $10.58, respectively, and were calculated using the following assumptions in the table below:


	2024		2023		2022
Dividend yield	0.00	%	0.00	%	0.00	%
Expected volatility	38.41	%	39.48	%	36.59	%
Risk free interest rate	4.31	%	3.78	%	2.12	%
Expected term, in years	4.50		4.50		4.50

The grant date weighted average fair value of the 0.3 million options issued but not vested as of December 29, 2024 was $16.90. The grant date weighted average fair value of the 0.4 million options issued but not vested as of December 31, 2023 was $10.84. The grant date weighted average fair value of the 1.0 million options issued but not vested as of January 1, 2023 was $6.66.


	Year Ended
	December 29, 2024		December 31, 2023		January 1, 2023
Grant date weighted average fair value of options granted	$	23.50	$	12.63	$	10.58
Grant date weighted average fair value of options forfeited	$	11.87	$	10.98	$	8.66

Expected volatility for option grants and modifications are calculated based upon the Company’s historical volatility data over a time frame consistent with the expected life of the awards. The expected term is estimated based on the expected period that the options are anticipated to be outstanding after initial grant until

exercise or expiration based upon various factors including the contractual terms of the awards and vesting schedules. The expected risk-free rate is based on the U.S. Treasury yield curve rates in effect at the time of the grant using the term most consistent with the expected life of the award. Dividend yield was estimated at zero as the Company does not anticipate making regular future distributions to stockholders. The total intrinsic value of options exercised was $12.2 million for each of fiscal 2024 and 2023 and $1.8 million for fiscal 2022.


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2023	854,375	$	25.70
Granted	135,783	61.15
Forfeited	(16,060)	32.41
Exercised	(210,312)	23.25			$	12,219
Outstanding at December 29, 2024	763,786	32.54		4.17	$	72,378
Exercisable—December 29, 2024	446,479	23.86		3.26	$	46,186
Vested/Expected to vest—December 29, 2024	763,786	$	32.54	4.17	$	72,378

Outstanding RSUs only become immediately vested in the event of a change in control (as defined in the applicable team member award agreement) if the awards are not continued or assumed by the acquirer on a substantially equivalent basis. If the awards continue or are assumed on a substantially equivalent basis, but employment is terminated by the Company or an acquirer without cause or by the team member for good reason (as such terms are defined in the applicable team member award agreement) within 24 months following the change in control, such awards will become immediately vested upon such termination. Under all other scenarios, the awards continue to vest per the schedule outlined in the applicable award agreement.

The fair value for restricted stock units is calculated based on the closing stock price on the date of grant. The total grant date fair value of RSUs vested during 2024, 2023 and 2022 was $15.2 million, $13.3 million and $9.2 million, respectively.


	Number of RSUs	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	868,196	$	31.79
Awarded	289,417	63.14
Vested	(488,798)	31.11
Forfeited	(58,400)	40.76
Outstanding at December 29, 2024	610,415	$	46.33

PSAs granted in 2020 were subject to the Company achieving certain earnings before taxes (“EBT”) performance targets for the 2022 fiscal year. The criteria was based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. The performance conditions with respect to fiscal year 2022 EBT were deemed to have been met, and the PSAs vested at the maximum pay out level on the third anniversary of the grant date (March 2023). During the year ended December 31, 2023, 268,699 of the 2020 PSAs vested. There were no outstanding 2020 PSAs as of December 29, 2024.

PSAs granted in 2021 are subject to the Company achieving certain EBIT performance targets for the 2023 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. The performance conditions with respect to 2023 EBIT were deemed not to have been met. Accordingly, no performance shares vested on the third anniversary of the grant date (March 2024). There were no outstanding 2021 PSAs as of December 29, 2024.

PSAs granted in 2022 are subject to the Company achieving certain EBIT performance targets for the 2024 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. Subsequent to December 29, 2024, the performance conditions with respect to 2024 EBIT were deemed to have been met, and PSAs will vest at 150% payout level on the third anniversary of the grant date (March 2025).

PSAs granted in 2023 are subject to the Company achieving certain EBIT performance targets for the 2025 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2026).

PSAs granted in 2024 are subject to the Company achieving certain EBIT performance targets for the 2026 fiscal year. The criteria is based on a range of performance targets in which grantees may earn 0% to 200% of the base number of awards granted. If performance conditions are met, the applicable number of performance shares will vest on the third anniversary of the grant date (March 2027).

The PSAs only become immediately vested in the event of a change in control (as defined in the applicable team member award agreement) if the awards are not continued or assumed by the acquirer on a substantially equivalent basis. If the awards continue or are assumed on a substantially equivalent basis, but employment is terminated by the Company or an acquirer without cause or by the team member for good reason (as such terms are defined in the applicable team member award agreement) within 24 months following the change in control, such awards will become immediately vested upon such termination. Under all other scenarios, the awards continue to vest per the schedule outlined in the applicable team member award agreement.

The total grant date fair value of PSAs granted during 2024 was $6.3 million. No PSAs vested during 2024. The total grant date fair value of performance shares forfeited and not earned during 2024 was $4.2 million. The total grant date fair value of the 0.4 million PSAs issued but not released as of December 29, 2024 was $14.9 million.

The total grant date fair value of PSAs granted during 2023 was $5.7 million. The total grant date fair value of PSAs vested during 2023 was $4.5 million. The total grant date fair value of performance shares forfeited or not earned during 2023 was $1.1 million. The total grant date fair value of the 0.4 million PSAs issued but not released as of December 31, 2023 was $12.9 million.

The total grant date fair value of PSAs granted during 2022 was $5.1 million. The total grant date fair value of PSAs vested during 2022 was $4.1 million. The total grant date fair value of performance shares forfeited or not earned during 2022 was $0.8 million. The total grant date fair value of the 0.5 million PSAs issued but not released as of January 1, 2023 was $11.1 million.


	Number of PSAs	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	436,510	$	29.66
Awarded	103,584	61.15
Vested	—	—
Forfeited	(24,242)	25.53
PSAs earned	—	—
PSAs not earned	(145,574)	24.42
Outstanding at December 29, 2024	370,278	$	40.37

The Company presents share-based compensation expense in Selling, general and administrative expenses on the Company’s consolidated statements of income. The amount recognized was as follows:


	Year Ended
	December 29, 2024		December 31, 2023		January 1, 2023
Share-based compensation expense	$	28,417	$	18,898	$	16,603
Income tax benefit	(3,647)		(3,007)		(2,495)
Net share-based compensation expense	$	24,770	$	15,891	$	14,108


	Unrecognized compensation expense		Remaining weighted average recognition period
Options	$	3,424	1.5
RSUs	17,302		1.4
PSAs	13,568		1.2
Total unrecognized compensation expense at December 29, 2024	$	34,294