Sprouts Farmers Market, Inc. appointed Mr. Konat as new CEO

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Nicholas Konat as President and Chief Operating Officer

On February 24, 2022, Sprouts Farmers Market, Inc. (the "Company") announced the appointment of Nicholas Konat as its President and Chief Operating Officer, effective March 21, 2022. 

Mr. Konat, age 44, has been the Chief Merchandising Officer at Petco Health and Wellness Company, Inc. (NASDAQ: WOOF), a leading brand in the U.S. pet care industry, since October 2018. Mr. Konat joined Petco in September 2015 as Vice President of Brand, Product Innovation and Design before being promoted to Vice President of Private Brands and Merchandising in June 2017 and Senior Vice President - General Manager in January 2018. Prior to joining Petco, Mr. Konat served as Director of Food Merchandise Planning at Target Corporation (NYSE: TGT), capping a more than nine-year career at Target where he held a range of merchandising, planning and leadership roles across the food and fashion categories. Mr. Konat also spent six years with Accenture plc (NYSE: ACN), a multinational professional services company. Mr. Konat holds an honors bachelor's degree in political science and government from St. John's University.

The Company and Mr. Konat entered into an offer letter providing for the terms of Mr. Konat's employment with the Company (the "Offer Letter"). The Offer Letter provides for an annualized base salary of $700,000, a short-term incentive bonus potential targeted at 100% of Mr. Konat's base salary, participation in the Company's annual long-term equity incentive plan valued at 1.25 times Mr. Konat's base salary, and a one-time equity award grant of $3,000,000 comprised of RSUs vesting 75% on the second anniversary of the grant date and 25% on the third anniversary of the grant date pursuant to the terms of a restricted stock unit grant agreement. Mr. Konat will also receive a sign-on cash award of $650,000, will be an "eligible executive" under the Company's Amended & Restated Executive Severance and Change in Control Plan, dated February 25, 2020, subject to certain terms in the Offer Letter, will be eligible to participate in the Company's medical and other benefit plans generally available to the Company's executive officers and will receive reimbursement for up to $150,000 of relocation expenses. Mr. Konat also will become a party to the Company's Confidentiality, Non-Competition and Non-Solicitation Agreement applicable to executive officers.

The foregoing description of the Offer Letter and restricted stock unit grant agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Offer Letter and restricted stock unit grant agreement, filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

There is no arrangement or understanding pursuant to which Mr. Konat was appointed as President and Chief Executive Officer. There are no related party transactions between the Company and Mr. Konat that are reportable under Item 404(a) of Regulation S-K. 

On February 24, 2022, the Company issued a press release announcing Mr. Konat's appointment. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

Transition of Gil Phipps to Senior Marketing Advisor 

On February 18, 2022, the Company entered into a letter agreement with Gil Phipps (the "Letter Agreement"). Mr. Phipps will transition from his role as the Company's Senior Vice President - Chief Marketing Officer to the role of Senior Marketing Advisor through May 31, 2022 pursuant to the terms of the Letter Agreement and will perform duties as assigned to him by the Company's Chief Executive Officer. 

The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Letter Agreement, filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.