Exhibit 99.1
PETSMART, INC.
RESTRICTED STOCK BONUS AGREEMENT
THIS RESTRICTED STOCK BONUS AGREEMENT (the "Agreement") is made as of
[_____________], 1998, by and between PETSMART, INC., a Delaware corporation
(the "Company"), and < FIRSTNAME > < LASTNAME > (the "Award Recipient").
WHEREAS, the Award Recipient is an employee of the Company and the Award
Recipient's continued service to the Company is considered by the Company to be
important for the Company's continued growth; and,
WHEREAS, in order to give the Award Recipient an opportunity to acquire an
equity interest in the Company as an incentive for the Award Recipient to
participate in the affairs of the Company, the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board") has approved
an award to the Award Recipient and the Award Recipient desires to accept this
award of shares of common stock of the Company (the "Common Stock") according to
the terms and conditions described herein.
THEREFORE, the Company and the Award Recipient agree as follows:
1. AWARD OF STOCK. In consideration for the Award Recipient's prior
services to the Company, the Company has decided to award to the Award Recipient
an aggregate of < SHARES > shares of Common Stock (the "Shares"). The Award
Recipient is not required to make any payment of cash or property as a condition
of receiving this award.
2. WITHHOLDING. By accepting this stock bonus, the Award Recipient
agrees that the Company may satisfy the Company's tax withholding obligation
arising by reason of: (1) the receipt of these shares, or (2) the lapse of any
substantial risk of forfeiture to which the shares are subject, at the time of
vesting, out of the Award Recipient's compensation from the Company, including
but not limited to Vested Shares (as defined in Section 5).
3. AGREEMENT NOT A SERVICE CONTRACT. This Agreement is not an employment
or service contract, and nothing in this Agreement shall be deemed to create in
any way whatsoever any obligation on the part of the Award Recipient to continue
in the employ of the Company or any affiliate of the Company, or of the Company
or any affiliate of the Company to continue the employment of Award Recipient.
4. REACQUISITION RIGHT. In the event of any voluntary or involuntary
termination of the Award Recipient's employment by or services to the Company
for any reason or no reason (including death or disability) before all of the
Shares are released from the Company's reacquisition right (see Section 5), the
Company, shall simultaneously with such termination automatically reacquire for
no consideration all of the Unvested Shares (as defined in Section 5), unless
the Company agrees to waive its reacquisition right as to some or all of the
Unvested Shares. Any such waiver shall be exercised by the Company by written
notice to the Award Recipient or the Award Recipient's representative (with a
copy to the Escrow Holder as defined in Section 7 below) and the Escrow Holder
may then release to Award Recipient the number of Shares not being reacquired by
the Company. If the Company does not waive its reacquisition
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right as to all of the Unvested Shares, then upon such termination, the
Escrow Holder shall transfer to the Company the number of shares being
reacquired by the Company.
5. RELEASE OF SHARES FROM REACQUISITION RIGHT.
(A) Shares subject to the Company's reacquisition right are Unvested
Shares. Shares that are no longer subject to the Company's reacquisition right
are Vested Shares. The Shares shall be released from the Company's
reacquisition right and shall become vested shares as follows. One hundred
percent (100%) of the Shares shall be released from the Company's reacquisition
right and become Vested Shares on April 3, 2003, provided that the Award
Recipient has been in continuous service whether as an employee, consultant or
member of the Board with Company or an affiliate of the Company from April 3,
1998 to April 3, 2003. Moreover, fifty percent (50%) of the Shares will be
released from the Company's reacquisition right and become Vested Shares on the
first day that the Shares may be freely traded in compliance with the Company's
stock trading window policy following the day that the closing price of the
Common Stock has reached sixteen dollars ($16.00) or higher for five (5)
consecutive trading days. The remaining fifty percent (50%) of the Shares will
be released from the Company's reacquisition right and become Vested Shares on
the first day that the Shares may be freely traded in compliance with the
Company's stock trading window policy following the day that the closing price
of the Common Stock has reached twenty-one dollars ($21.00) or higher for five
(5) consecutive trading days. The closing price for the Common Stock for a
given day is the price of the last sale for that day, or if no sale has
occurred, the last bid price for that day, as reported in THE WALL STREET
JOURNAL, or other source selected consistently by the Company.
(b) The Shares which have been released from the Company's
reacquisition right shall be delivered to the Award Recipient in the manner
provided for in the Joint Escrow Instructions attached hereto as Exhibit B.
6. RESTRICTIONS ON TRANSFER. Except for the escrow described in Xxxxxxx
0, xxxx of the Shares or any beneficial interest therein shall be sold,
transferred, encumbered or otherwise disposed of in any manner until the release
of such Shares from the Company's reacquisition right in accordance with the
provisions of this Agreement.
7. ESCROW OF SHARES. The Shares issued under this Agreement shall be
held for the Award Recipient by the Stock Plan Administration Manager of the
Company or other approved escrow agent selected by the Company (the "Escrow
Holder"). The Assignment Separate from Certificate executed by the Award
Recipient in blank in the form attached hereto as Exhibit A, shall be held
pursuant to the terms of the Joint Escrow Instructions attached hereto as
Exhibit B, the terms of which Joint Escrow Instructions are hereby incorporated
by reference. The Assignment Separate from Certificate facilitates the transfer
of shares to the Company in the event the Company exercises its reacquisition
right.
8. ADJUSTMENT FOR STOCK SPLIT. If any change is made in the stock
subject to this Agreement (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
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consideration by the Company), the Shares subject to this Agreement will be
appropriately adjusted in the class(es) and maximum number of shares in the same
manner as all other shares of the Company's then outstanding Common Stock. Such
adjustments shall be made by the Board, the determination of which shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company.")
9. TAX CONSEQUENCES. The Award Recipient has reviewed with the Award
Recipient's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Award Recipient is relying solely on such advisors and not on
any statements or representations of the Company or any of its agent. The Award
Recipient understands that the Award Recipient (and not the Company) shall be
responsible for the Award Recipient's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
The Award Recipient understands that Section 83 of the Internal Revenue Code of
1986, as amended (the "Code"), taxes as ordinary income to the Award Recipient
the fair market value of the Shares as of the date any restrictions on the
Shares lapse (that is, as of the date on which part or all of the shares vest).
In this context, "restriction" includes the right of the Company to reacquire
the Shares pursuant to its reacquisition right. In the event the Company has
registered under the Exchange Act, "restriction" with respect to officers,
directors and 10% shareholders also means the period after the acquisition of
the Shares during which such officers, directors and 10% shareholders could be
subject to suit under Section 16(b) of the Exchange Act. The Award Recipient
understands that the Award Recipient may elect to be taxed on the fair market
value of the Shares at the time the Shares are awarded rather than when and as
the Company's reacquisition right or Section 16(b) period expires by filing an
election under Section 83(b) of the Code with the Internal Revenue Service (the
"IRS") within thirty (30) days from the date of transfer.
The Award Recipient acknowledges that it is the Award Recipient's sole
responsibility and not the Company's to file timely the election under Section
83(b) of the Code, even if the Award Recipient requests the Company or its
representatives to make this filing on the Award Recipient's behalf. The Award
Recipient further acknowledges that the Award Recipient is aware that should the
Award Recipient file an election under Section 83(b) of the Code and then
subsequently forfeit the Shares, the Award Recipient will not be able to report
as a loss the value of any Shares forfeited and will not get a refund of any of
the tax paid.
10. GENERAL PROVISIONS.
(a) The rights and benefits of the Company under this Agreement shall
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the Award
Recipient under this Agreement may only be assigned with the prior written
consent of the Company.
(b) The Board or the Committee at any time, and from time to time,
may amend the terms of this Agreement; provided, however, that the Award
Recipient's rights under this Agreement shall not be impaired and any
obligations shall not be increased by any such
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amendment unless (i) the Company requests the consent of Award Recipient and
(ii) the Award Recipient consents in writing.
(c) The Award Recipient shall be deemed to be the holder of, and to
have all of the rights of a holder with respect to, any Shares subject to this
Agreement (including the right to vote the Shares and to receive dividends, if
any). The Award Recipient's rights in these Shares, however, are subject to the
terms of this Agreement, including the Company's reacquisition right.
(d) Any notice, demand or request required or permitted to be given
by either the Company or the Award Recipient pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally, when transmitted via facsimile, when transmitted via electronic mail
(with acknowledgment requested) or deposited in the U.S. Mail, First Class, with
postage prepaid, and addressed to the parties at the addresses of the parties
set forth at the end of this Agreement or such other address as a party may
request by notifying the other in writing.
(e) Either party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent that party thereafter from enforcing each
and every other provision of this Agreement. The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party's right
to assert all other legal remedies available to it under the circumstances.
(f) The Award Recipient agrees upon request to execute any further
documents or instruments necessary or desirable in the sole determination of the
Company to carry out the purposes or intent of this Agreement.
(g) THE AWARD RECIPIENT ACKNOWLEDGES AND AGREES THAT (WITH THE
EXCEPTION OF THE ACCELERATION PROVISION OUTLINED IN SECTION 5 HEREOF) THE
VESTING OF SHARES PURSUANT TO SECTION 5 HEREOF IS EARNED ONLY BY THE CONTINUOUS
SERVICE OF THE AWARD RECIPIENT WITH THE COMPANY OR AN AFFILIATE OF THE COMPANY
AT THE WILL OF THE COMPANY OR AN AFFILIATE OF THE COMPANY (AND NOT THROUGH THE
ACT OF BEING HIRED OR HAVING BEEN AWARDED SHARES HEREUNDER).
(h) The Award Recipient has reviewed this Agreement in its entirety,
has had an opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of this Agreement.
4.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first set forth above.
PETSMART, INC. AWARD RECIPIENT
By:______________________________ _____________________________________
Title:___________________________ < FIRSTNAME > < LASTNAME >
Address: 00000 Xxxxx 00xx Xxxxxx Address: < ADDRESS >
Xxxxxxx, XX 00000 < CITY > < STATE > < POSTALCODE >
Attachments:
Exhibit A - Assignment Separate from Certificate
Exhibit B - Joint Escrow Instructions
5.
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Bonus
Agreement (the "Agreement") dated as _____________, 1998, < FIRSTNAME >
< LASTNAME > hereby assigns and transfers unto PETsMART, Inc., a Delaware
corporation (the "Corporation"), ________ shares of the Common Stock of the
Corporation, standing in the undersigned's name on the books of said
Corporation, and does hereby irrevocably constitute and appoint the Stock
Plan Administration Manager of the Corporation as attorney-in-fact to
transfer the said stock on the books of the Corporation with full power of
substitution in the premises. This Assignment may be used only in accordance
with and subject to the terms and conditions of the Agreement, in connection
with the reacquisition of shares of Common Stock of the Corporation issued to
the undersigned pursuant to the Agreement, and only to the extent that such
shares remain subject to the Corporation's reacquisition right under the
Agreement.
Dated:______________
Signature:_____________________________________
< FIRSTNAME > < LASTNAME >
1.
EXHIBIT B
JOINT ESCROW INSTRUCTIONS
Stock Plan Administration Manager
PETsMART, Inc.
00000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Dear Sir/Madam:
As Escrow Agent for both PETsMART, Inc., a Delaware corporation (the
"Corporation"), and the undersigned (the "Award Recipient"), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Restricted Stock Bonus Agreement ( the "Agreement"), dated
[_____________], 1998, to which a copy of these Joint Escrow Instructions is
attached as Exhibit B, in accordance with the following instructions:
1. In the event that the Award Recipient's service with the Corporation
terminates before April 3, 2003, the Corporation shall automatically reacquire
all Unvested Shares (as defined in the Agreement) as of the date of such
termination (the "Reacquisition Right"), unless the Corporation elects to waive
such right as to some or all of the Unvested Shares. If the Corporation (or its
assignee) elects to waive the Reacquisition Right, the Corporation or its
assignee will give to Award Recipient and you a written notice specifying the
number of shares of stock not to be reacquired. The Award Recipient and the
Corporation hereby irrevocably authorize and direct you to close the transaction
contemplated by the Agreement as soon as administratively reasonable following
the date of such termination of service in accordance with the terms of the
Agreement and the notice of waiver, if any.
2. In the event of (i) a sale of all or substantially all of the assets
of the Corporation, (ii) a merger or consolidation in which the Corporation is
not the surviving corporation, (iii) a reverse merger in which the Corporation
is the surviving corporation but the shares of the common stock of the
Corporation (the "Common Stock") outstanding immediately preceding the merger
are converted by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, (iv) an acquisition by any person, entity or
group within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Corporation or an affiliate of the Corporation) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Corporation
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors, or (v) the individuals who are members of
the Board of Directors of the Corporation (the "Incumbent Board") as of April 3,
1998 ceasing for any reason to constitute at least fifty percent (50%) of the
Board of Directors of the Corporation, provided that if the election, or
nomination for election, by the Corporation's stockholders of any new director
was approved by a vote of at least fifty percent (50%) of the Incumbent Board,
such new director shall be considered as a member of the Incumbent Board, then
to the extent that the shares of Common Stock are exchanged, converted, or
otherwise transferred into other property, such other property will continue to
be held in accordance with the terms of these Joint Escrow Instructions and the
terms of the Agreement.
1.
The Award Recipient and the Corporation hereby irrevocably authorize and
direct you to close the transaction in accordance with the terms of the
Agreement and the terms of these Joint Escrow Instructions.
3. Vested Shares (as defined in the Agreement) shall be delivered to the
Award Recipient upon the request of the Award Recipient given in the manner
provided in Section 17 of these Joint Escrow Instructions for giving notices.
4. At any closing involving the transfer or delivery of some or all of
the property subject to this Agreement, you are directed (a) to date any stock
assignments necessary for the transfer in question, (b) to fill in the number of
shares being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Award Recipient and/or
the Corporation, as applicable.
5. The Award Recipient irrevocably authorizes the Corporation to deposit
with you any certificates evidencing shares of stock and any additions and
substitutions to said shares as specified in the Agreement. The Award Recipient
does hereby irrevocably constitute and appoint you as his attorney-in-fact and
agent for the term of this escrow to execute with respect to such securities and
other property all documents of assignment and/or transfer and all stock
certificates necessary or appropriate to make all securities negotiable and
complete any transaction herein contemplated.
6. This escrow shall terminate upon expiration or application in full of
the Reacquisition Right, whichever occurs first, and the completion of the tasks
contemplated by these Joint Escrow Instructions.
7. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to the Award
Recipient, you shall deliver all of same to the Award Recipient and shall be
discharged of all further obligations hereunder.
8. Except as otherwise provided in these Joint Escrow Instructions, your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.
9. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties or
their assignees. You shall not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for the Award
Recipient while acting in good faith and any act done or omitted by you pursuant
to the advice of your own attorneys shall be conclusive evidence of such good
faith.
10. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In case you obey or comply with any such order, judgment or decree of any court,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree
2.
being subsequently reversed, modified, annulled, set aside, vacated or found
to have been entered without jurisdiction.
11. You shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
12. You shall not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
13. You shall be entitled to employ such legal counsel (including without
limitation the firm of Xxxxxx Godward LLP) and other experts as you may deem
necessary to advise you in connection with your obligations hereunder, may rely
upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor.
14. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall resign by written notice to each party or if your service to the
Corporation as Stock Plan Administration Manager should terminate for any
reason. In the event of any such termination, the Corporation may appoint any
person who in the future assumes the position of Stock Plan Administration
Manager for the Corporation or any officer or assistant officer of the
Corporation as successor Escrow Agent and the Award Recipient hereby confirms
the appointment of such successor or successors as his attorney-in-fact and
agent to the full extent of your appointment.
15. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
16. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities, you
may (but are not obligated to) retain in your possession without liability to
anyone all or any part of said securities until such dispute shall have been
settled either by mutual written agreement of the parties concerned or by a
final order, decree or judgment of a court of competent jurisdiction after the
time for appeal has expired and no appeal has been perfected, but you shall be
under no duty whatsoever to institute or defend any such proceedings.
17. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery, upon transmission
via facsimile, upon transmission via electronic mail (with acknowledgment
requested) or upon deposit in any United States Post Box, by registered or
certified mail with postage and fees prepaid, addressed to each of the other
parties hereunto entitled at the following addresses, or at such other addresses
as a party may designate by ten (10) days' written notice to each of the other
parties hereto:
CORPORATION: PETsMART, Inc.
00000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
AWARD RECIPIENT: < FIRST NAME > < LAST NAME >
< ADDRESS 1 >
3.
< CITY >, < STATE > < POSTALCODE >
ESCROW AGENT: Stock Plan Administration Manager,
PETsMART, Inc.
00000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
18. By signing these Joint Escrow Instructions you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
19. This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Corporation may at any time or from time to time
assign its rights under the Agreement and these Joint Escrow Instructions in
whole or in part.
Very truly yours,
PETSMART, INC.
By:_______________________________
AWARD RECIPIENT:
__________________________________
< FIRSTNAME > < LASTNAME >
ESCROW AGENT:
__________________________________
4.
