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 initial public offering 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 as the umbrella plan for the Company’s share-based and cash-based incentive compensation programs for its directors, officers and other team members. Awards granted under these plans include RSUs, PSAs, and RSAs. On May 1, 2015, the Company’s stockholders approved the material terms of the performance goals under the 2013 Incentive Plan for purposes of Section 162(m) of the Internal Revenue Code.

During the thirty-nine weeks ended September 29, 2019, the Company granted the following share-based compensation awards under the 2013 Incentive Plan:

Grant Date	RSUs		PSAs		Options
March 2019		386,115		95,768		53,866
May 2019		45,682		2,999		-
June 2019		177,975		75,000		-
August 2019		12,313		-		-
Total		622,085		173,767		53,866
Weighted-average grant date fair value	$	21.62	$	21.16	$	7.63
Weighted-average exercise price		—		—	$	23.12

The aggregate number of shares of common stock that may be issued to team members and directors under the 2013 Incentive Plan may not exceed 10,089,072. Shares subject to awards granted under the 2013 Incentive Plan which are subsequently forfeited, expire unexercised or are otherwise not issued will not be treated as having been issued for purposes of the share limitation. As of September 29, 2019, there were 1,645,626 stock awards outstanding and 5,839,056 shares remaining available for issuance under the 2013 Incentive Plan

In May 2011, the Company adopted the Sprouts Farmers Markets, LLC Option Plan (the “2011 Option Plan”) to provide team members or directors of the Company with options to acquire shares of the Company. The Company had authorized 12,100,000 shares for issuance under the 2011 Option Plan. Options may no longer be issued under the 2011 Option Plan. As of September 29, 2019, there were 50,000 options outstanding under the 2011 Option Plan.

The Company uses the Black-Scholes option pricing model to estimate the fair value of options at grant date. Options vest in accordance with the terms set forth in the grant letter.

Time-based options granted prior to fiscal year 2016 generally vested ratably over a period of 12 quarters (three years), and time-based options granted after 2016 vest annually over a period of three years.

The fair value of RSUs is based on the closing price of the Company’s common stock on the grant date. RSUs generally vest annually over a period of two or three years from the grant date.

PSAs granted in fiscal year 2016 are restricted shares that were subject to the Company achieving certain earnings before interest and taxes (“EBIT”) performance targets on an annual and cumulative basis over a three-year performance period, as well as additional time-vesting conditions. The performance conditions with respect to the EBIT targets were deemed to not have been met, and all relevant PSAs have forfeited.

PSAs granted in March 2017 were subject to the Company achieving certain earnings per share performance targets during fiscal year 2017. The criteria was based on a range of performance targets in which grantees could earn between 10% and 150% of the base number of awards granted. The performance conditions with respect to fiscal year 2017 earnings per share were deemed to have been met, and the PSAs vested 50% on the second anniversary of the grant date (March 2019) and will vest 50% on the third anniversary of the grant date (March 2020). During the thirty-nine weeks ended September 29, 2019, 106,360 of the 2017 PSAs were vested.

PSAs granted in March 2018 are subject to the Company achieving certain EBIT performance targets for the 2020 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 2021).

PSAs granted in 2019 are subject to the Company achieving certain EBIT performance targets for the 2021 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 in March 2022.

The fair value of RSAs is based on the closing price of the Company’s common stock on the grant date. Outstanding RSA grants vest annually over three years.

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:

	Thirteen weeks ended						Thirty-nine weeks ended
	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018
Share-based compensation expense before income taxes	$	2,710		$	3,043		$	6,901		$	11,673
Income tax benefit		(697	)		(782	)		(1,647	)		(3,000	)
Net share-based compensation expense	$	2,013		$	2,261		$	5,254		$	8,673

The following share-based awards were outstanding as of September 29, 2019 and September 30, 2018:

	As of
	September 29, 2019		September 30, 2018
	(in thousands)
Options
Vested		578		1,816
Unvested		64		98
RSUs		774		694
PSAs		225		366
RSAs		55		182

As of September 29, 2019, total unrecognized compensation expense and remaining weighted average recognition period related to outstanding share-based awards was as follows:

	Unrecognized compensation expense		Remaining weighted average recognition period
Options	$	389		2.4
RSUs		13,015		2.0
PSAs		3,042		1.9
RSAs		426		0.4
Total unrecognized compensation expense at September 29, 2019	$	16,872

During the thirty-nine weeks ended September 29, 2019 and September 30, 2018, the Company received $4.5 million and $21.1 million, respectively, in cash proceeds from the exercise of options.