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Item 9A. Controls and Procedures

2024-02-22 compared with 2023-03-02 · 61 added, 88 removed, 112 unchanged (57% of the section changed)

2 unchanged sentences

We maintain a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures under the Exchange Act as of January 1, 2023, the end of the period covered by this Annual Report on Form 10-K.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of January 1, 2023, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures under the Exchange Act as of December 31, 2023, the end of the period covered by this Annual Report on Form 10-K.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

2 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of January 1, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework).

Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of January 1, 2023.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, assessed the effectiveness of our internal control over financial reporting as of January 1, 2023, as stated in the firm’s report which is included with the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework).

Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2023.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, as stated in the firm’s report which is included with the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarterly period ended January 1, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarterly period ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Second Amended and Restated Bylaws

On February 28, 2023, our board adopted and approved the second amended and restated bylaws (the “Bylaws”), effective February 28, 2023, to:

Require any stockholder delivering a director nomination notice to comply with Rule 14a-19(a) under the Exchange Act, certify that such stockholder has met the requirements of Rule 14a-19(a) and deliver reasonable evidence of such compliance to the Company;

Require that the information provided in any director nomination notice or notice for any other business be updated and supplemented, if necessary, to be true and correct as of (i) the record date of the stockholder meeting and (ii) the date that is ten business days prior to the date of the stockholder meeting;

Require stockholders nominating director candidates and any proposed nominee, or stockholders proposing other business, to furnish any additional information as may be reasonably required for the Board’s review within ten business days after it has been requested by the Board;

Clarify that, if after a stockholder delivers a director nomination notice, such stockholder subsequently fails either (i) to comply with the requirements of Rule 14a-19 or (ii) provide satisfactory evidence of compliance to the Company, then such stockholder’s nomination(s) will be deemed null and void;

Require that a stockholder directly or indirectly soliciting proxies from other stockholders use a proxy card color other than white;

Reflect updates to requirements about adjournment procedures and stockholder lists at stockholder meetings, consistent with recent amendments to the Delaware General Corporation Law.

The foregoing description of the Bylaws does not purport to be complete and is qualified in its entirety by reference to the complete text of the Bylaws, filed as Exhibit 3.2 to this Annual Report on Form 10-K and incorporated herein by reference.

Annual Bonus Plan

On February 28, 2023, the Compensation Committee of our board (the “Compensation Committee”) approved the Sprouts Farmers Market, Inc.

Annual Bonus Plan (the “Cash Plan”).

The Cash Plan provides a means of rewarding employees designated as Participants with cash awards based on the performance of the Company and, where appropriate, a Participant’s personal performance (“Awards”).

A copy of the Cash Plan is being filed as Exhibit 10.12 to this Annual Report on Form 10-K, and the following summary is qualified in its entirety by the provisions of the Cash Plan.

Capitalized terms used without definition have the meanings set out in the Cash Plan.

The Cash Plan shall be administered by, for each Participant that is an executive officer, the Compensation Committee, and for other Participants, the Chief Executive Officer of the Company or other executive designated by the Chief Executive Officer (the “Administrator”).

The Administrator shall determine the Participants for each Performance Period, each Participant’s Target Award and the applicable Performance Goals.

Performance Periods under the Cash Plan shall be the fiscal year of the Company or any other period designated by the Administrator with respect to which an Award may be earned.

For any Performance Period, the Performance Goals selected by the Administrator may be goals of the Company or the Participant, measured either individually, alternatively or in any combination, and measured on an absolute basis or relative to one or more peer companies or indices or any combination thereof.

The criteria for the Performance Goals may include one or more of the criteria included in the Cash Plan or such other criteria selected by the Administrator.

A Participant will be eligible to earn an Award for a Performance Period based on his or her Target Award and the level of achievement of the Performance Goals;

provided that the Administrator may increase or decrease the amount payable pursuant to an Award in its sole discretion.

The Administrator shall determine achievement of the Performance Goals and the Award, if any, that will be paid by the Company to each Participant, as soon as practicable following the final determination of the Company’s financial results for the relevant Performance Period.

Payment of the Awards determined by the Administrator shall be made in or around March of the calendar year immediately following the last day of the relevant Performance Period.

The Administrator may permit a Participant to defer receipt of an Award, consistent with the applicable requirements of Section 409A of the Code.

No Participant shall have any right to receive payment of an Award under the Cash Plan for a Performance Period unless the Participant remains in the employ of the Company through the payment date for the Award unless otherwise determined by the Administrator.

The Cash Plan is an unfunded incentive compensation plan and has no set expiration date.

The Compensation Committee may amend or terminate the Cash Plan at any time.

During the fourth quarter of 2023, none of our directors or executive officers adopted or terminated a Rule 10b5-1 Trading Plan, or a “ non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

1 unchanged sentence

Directors, Executive Of ficers and Corporate Governance

The information required by this item will be contained in our definitive Proxy Statement to be filed with the SEC in connection with our 2023 Annual Meeting of Stockholders (referred to as the “Proxy Statement”), which is expected to be filed not later than 120 days after the end of our fiscal year ended January 1, 2023, and is incorporated herein by reference.

We have adopted a Code of Ethics –

Principal Executive Officer and Senior Financial Officers (referred to as the “Code”) that applies to our principal executive officer, principal financial officer and principal accounting officer and controller.

The information required by this item will be contained in our definitive Proxy Statement to be filed with the SEC in connection with our 2024 Annual Meeting of Stockholders (referred to as the “Proxy Statement”), which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2023, and is incorporated herein by reference.

We have adopted a Code of Ethics – Principal Executive Officer and Senior Financial Officers (referred to as the “Code”) that applies to our principal executive officer, principal financial officer and principal accounting officer and controller.

The Code is publicly available on our website at https://investors.sprouts.com/esg/governance-documents/ .

12 unchanged sentences

Financial Statements:

The information concerning our financial statements and Report of Independent Registered Public Accounting Firm required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10-K in Item 8, titled “Financial Statements and Supplementary Data.”

Financial Statement Schedules:

6 unchanged sentences

Description of Sprouts Farmers Market, Inc.

Securities (2)

Sprouts Farmers Market, Inc.

24 unchanged sentences

2013 Incentive Plan (13)

Offer Letter, dated August 31, 2021, from Sprouts Farmers Market, Inc.

to Lawrence “Chip”

Severance Agreement, dated September 19, 2021, by and between Sprouts Farmers Market, Inc.

and Lawrence “Chip”

Distribution Agreement, dated as of July 18, 2018, by and between SFM, LLC dba Sprouts Farmers Market and KeHE Distributors, LLC (14)

3 unchanged sentences

and Wells Fargo Securities, LLC as syndication agents, Truist Bank and PNC Bank, N.A.

as documentation agents, and BofA Securities, Inc., BMO Capital Markets Corp., JPMorgan Chase Bank, N.A.

as documentation agents, and BofA Securities, Inc., BMO Capital Markets

Corp., JPMorgan Chase Bank, N.A.

and Wells Fargo Securities, LLC as joint bookrunners and joint lead arrangers (16)

3 unchanged sentences

Offer Letter from Sprouts Farmers Market, Inc., to Nicholas Konat, dated January 25, 2022 (7)

Letter Agreement between Sprouts Farmers Market, Inc.

and Gil Phipps, dated February 18, 2022 (6)

Letter Agreement, dated May 25, 2022, by and between Sprouts Farmers Market and Gil Phipps (12)

Sprouts Farmers Market, Inc.

8 unchanged sentences

2022 Omnibus Incentive Compensation Plan (13)

2023 Form of Performance Share Agreement under Sprouts Farmers Market, Inc.

2022 Omnibus Incentive Compensation Plan (20)

Sprouts Farmers Market, Inc.

Annual Bonus Plan (2)

Offer Letter from Sprouts Farmers Market, Inc.

to Curtis Valentine, signed October 27, 2023 (21)

List of subsidiaries

6 unchanged sentences

Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Sprouts Farmers Market, Inc.

Compensation Recoupment Policy adopted November 15, 2023

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents

Cover Page Interactive Data File (embedded within the Inline XBRL document)

2 unchanged sentences

(1) Filed as an exhibit to Amendment No.

4 to the Registrant’s Registration Statement on Form S-1 (File No.

333-188493) filed with the SEC on July 29, 2013, and incorporated herein by reference.

(2) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 5, 2015, and incorporated herein by reference.

(3) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 7, 2015, and incorporated herein by reference.

(4) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 1, 2019, and incorporated herein by reference.

(5) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021, and incorporated herein by reference.

(6) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on February 24, 2022, and incorporated herein by reference

(7) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 3, 2018, and incorporated herein by reference.

(8) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 2, 2019, and incorporated herein by reference.

(9) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 5, 2020, and incorporated herein by reference.

(10) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2021, and incorporated herein by reference.

(11) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 4, 2022, and incorporated herein by reference.

(12) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 27, 2022, and incorporated herein by reference.

(13) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on August 31, 2021, and incorporated herein by reference.

(14) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q/A filed with the SEC on April 1, 2019, and incorporated herein by reference.

(15) Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (File No.

(2) Filed as an exhibit to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 2, 2023, and incorporated herein by reference.

(3) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 5, 2015, and incorporated herein by reference.

(4) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 7, 2015, and incorporated herein by reference.

(5) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 1, 2019, and incorporated herein by reference.

(6) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021, and incorporated herein by reference.

(7) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on February 24, 2022, and incorporated herein by reference

(8) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 3, 2018, and incorporated herein by reference.

(9) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 2, 2019, and incorporated herein by reference.

(10) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 5, 2020, and incorporated herein by reference.

(11) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2021, and incorporated herein by reference.

(12) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 4, 2022, and incorporated herein by reference.

(13) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 27, 2022, and incorporated herein by reference.

(14) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q/A filed with the SEC on April 1, 2019, and incorporated herein by reference.

(15) Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (File No.

333-188493) filed with the SEC on May 9, 2013, and incorporated herein by reference.

(16) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on March 25, 2022, and incorporated herein by reference.

(17) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015, and incorporated herein by reference.

(18) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2020, and incorporated herein by reference.

(19) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016, and incorporated herein by reference.

(16) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on March 25, 2022, and incorporated herein by reference.

(17) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 6, 2015, and incorporated herein by reference.

(18) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on February 28, 2020, and incorporated herein by reference.

(19) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016, and incorporated herein by reference.

(20) Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 1, 2023, and incorporated herein by reference.

(21) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on October 31, 2023, and incorporated herein by reference.

Form 10-K Summary

1 unchanged sentence

SPROUTS FARMERS MARKET, INC.

March 2, 2023

/s/ Lawrence P.

February 22, 2024

/s/ Curtis Valentine

Curtis Valentine

Chief Financial Officer

2 unchanged sentences

(Principal Executive Officer)

March 2, 2023

/s/ Lawrence P.

Chief Financial Officer (Principal Financial Officer)

March 2, 2023

Vice President, Controller (Principal Accounting Officer)

March 2, 2023

February 22, 2024

/s/ Curtis Valentine

Curtis Valentine

Chief Financial Officer

(Principal Financial Officer)

February 22, 2024

Vice President, Controller

(Principal Accounting Officer)

February 22, 2024

/s/ Joseph Fortunato

1 unchanged sentence

Chairman of the Board

March 2, 2023

February 22, 2024

/s/ Kristen E.

March 2, 2023

February 22, 2024

/s/ Terri Funk Graham

Terri Funk Graham

March 2, 2023

February 22, 2024

/s/ Joseph D.

O’Leary

March 2, 2023

February 22, 2024

/s/ Douglas G.

March 2, 2023

February 22, 2024

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures