Rapid7 Reports Inducement Grants under Nasdaq Listing Rule 5635(c)(4)

Rhea-AI Summary

Rapid7 (NASDAQ: RPD) granted inducement equity awards tied to its March 26, 2026 acquisition of Kenzo Security. Rapid7 issued 467,945 RSUs to Kenzo employees and contractors and granted founders Harish Singh and Partha Naidu 525,769 PSUs each (assuming maximum performance).

RSUs vest one-third annually over three years; PSUs depend on Year-over-Year Managed MDR & SIEM ARR goals over two annual performance periods beginning January 1, 2027. Awards were approved by the independent Compensation Committee under Nasdaq Listing Rule 5635(c)(4).

Positive

• 467,945 RSUs granted to Kenzo employees and contractors
• 525,769 PSUs granted to each Kenzo founder (maximum performance)
• Awards approved under Nasdaq Rule 5635(c)(4) by independent committee

Negative

• Total granted units equal 1,519,483 RSUs/PSUs, posing potential dilution
• PSU payouts depend on ARR goals, creating performance execution risk

Key Figures

Kenzo RSU inducement: 467,945 RSUs Founder PSU inducement: 525,769 PSUs each RSU vesting schedule: 1/3 annually over 3 years +5 more

8 metrics

Kenzo RSU inducement 467,945 RSUs Inducement awards to Kenzo employees and contractors

Founder PSU inducement 525,769 PSUs each Inducement awards to founders Harish Singh and Partha Naidu

RSU vesting schedule 1/3 annually over 3 years From vesting commencement date, subject to continued employment

PSU performance periods 2 annual periods beginning Jan 1, 2027 Based on YoY Managed MDR & SIEM ARR goals

Current share price $5.6 Pre-news trading level for RPD

52-week range $5.47–$29.92 RPD 52-week low and high before this news

Price vs 52-week high -81.28% Distance from 52-week high prior to the announcement

Market capitalization $376,249,670 Equity value before inducement grant news

Market Reality Check

Price: $5.27 Vol: Volume 1622295 is below t...

low vol

$5.27 Last Close

Volume Volume 1622295 is below the 20-day average of 2458102 (relative volume 0.66x), suggesting a relatively muted pre-news session. low

Technical Shares at 5.6 trade well below the 16.48 200-day MA and are 81.28% under the 52-week high of 29.92, hovering just 2.38% above the 52-week low of 5.47.

Peers on Argus

RPD was down 1.93% while key peers like RDWR were positive (e.g., 5.27%), and ot...

RPD was down 1.93% while key peers like RDWR were positive (e.g., 5.27%), and others such as ATEN and VRNT also showed gains. With no peers in the momentum scanner and no same-day peer headlines, the move appeared more company-specific than sector-driven.

Historical Context

5 past events · Latest: 2026-03-19 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
2026-03-19	Product enhancement launch	Positive	+1.9%	New Exposure Command cloud security features for runtime validation and DSPM.
2026-03-18	Threat report release	Neutral	+0.2%	Global Threat Landscape Report detailing surge in exploited vulnerabilities.
2026-03-17	Partner program update	Positive	-1.9%	2026 PACT Partner Program changes to strengthen partner-led MDR growth.
2026-03-03	Conference attendance	Neutral	+1.5%	Participation in Stifel 2026 NYC Technology One-on-One Conference.
2026-02-24	Conference presentation	Neutral	+2.5%	Presentation at Raymond James 47th Annual Institutional Investors Conference.

Pattern Detected

Recent product, report, and conference news typically saw modestly positive reactions, with one divergence on partner-program updates.

Recent Company History

Over recent months, Rapid7 has issued several product and go-to-market updates, including new Exposure Command cloud security capabilities on Mar 19, 2026 and enhancements to its 2026 PACT Partner Program on Mar 17, 2026. Industry thought-leadership pieces like the 2026 Global Threat Landscape Report and conference participation have generally elicited mild positive stock reactions, except for a negative response to the partner-program news.

Market Pulse Summary

This announcement detailed equity inducement grants tied to Rapid7’s acquisition of Kenzo, including...

Analysis

This announcement detailed equity inducement grants tied to Rapid7’s acquisition of Kenzo, including 467,945 RSUs and 525,769 PSUs for each founder, vesting over multi-year periods and linked to Managed MDR & SIEM ARR goals from 2027. It came while RPD traded near its 52-week low and well below its 200-day MA. Investors may watch future ARR performance and integration progress alongside this new equity overhang.

Key Terms

restricted stock units, performance-based restricted stock units, Nasdaq Listing Rule 5635(c)(4), Nasdaq Listing Rule 5605(a)(2), +2 more

6 terms

restricted stock units financial

"Rapid7 granted inducement awards comprised of 467,945 restricted stock units"

Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.

performance-based restricted stock units financial

"received an inducement award comprised of 525,769 performance-based restricted stock units"

Performance-based restricted stock units are a type of employee equity award that converts into company shares only if predefined financial or operational targets are met over a set period. Think of it like a bonus check that becomes stock only when specific goals are hit; it ties pay to results, aligning managers’ incentives with shareholders. Investors care because these awards affect future share count, executive incentives, and signal how management’s success will be measured and rewarded.

Nasdaq Listing Rule 5635(c)(4) regulatory

"in accordance with Nasdaq Listing Rule 5635(c)(4) as a material inducement"

NASDAQ Listing Rule 5635(c)(4) is a rule that requires a company to get approval from its shareholders before selling a large amount of its shares, usually over 20%. This helps protect investors by making sure the company doesn't flood the market with new shares without their say, which could lower the stock's value.

Nasdaq Listing Rule 5605(a)(2) regulatory

"independent within the meaning of Nasdaq Listing Rule 5605(a)(2)"

Nasdaq Listing Rule 5605(a)(2) sets the criteria Nasdaq uses to decide whether a company’s board members are independent, listing examples of relationships or ties that would disqualify a director from being considered independent. Investors care because a board with genuinely independent directors acts like an impartial referee overseeing management decisions, reducing conflicts of interest and improving the chance that shareholder interests are protected and corporate decisions are scrutinized effectively.

Annualized Recurring Revenue financial

"based on Rapid7’s attainment of Year over Year Managed MDR & SIEM Annualized Recurring Revenue goals"

Annualized recurring revenue is the predictable income a business expects to earn over a year from ongoing customer subscriptions or contracts. It’s similar to estimating how much money you would make in a year if your current monthly income stayed the same. Investors use this figure to assess the stability and growth potential of a company's revenue stream.

Equity Incentive Plan financial

"granted under Rapid7’s 2015 Equity Incentive Plan, as amended (the “Equity Plan”)"

An equity incentive plan is a program that gives employees, executives or directors the right to receive company stock or options to buy stock as part of their pay. Think of it as offering slices of future company profit to motivate people to boost long‑term performance; for investors it matters because it can align employee goals with shareholder value but also increases the number of shares outstanding, which can dilute existing ownership.

AI-generated analysis. Not financial advice.

BOSTON, March 26, 2026 (GLOBE NEWSWIRE) -- Rapid7, Inc. (NASDAQ: RPD), a global leader in AI-powered managed cybersecurity operations, announced that the company granted inducement awards, effective as of March 26, 2026, to employees and contractors of Kenzo Security, Inc. (“Kenzo”) in connection with Rapid7’s acquisition of Kenzo on March 26, 2026, as a material inducement for the Kenzo employees and contractors to commence employment with Rapid7 and its subsidiaries following Rapid7’s acquisition of Kenzo.

Rapid7 granted inducement awards comprised of 467,945 restricted stock units (“RSUs”) in respect of Rapid7’s common stock, in the aggregate, to Kenzo employees and contractors. In addition to RSUs, each of Harish Singh and Partha Naidu, Kenzo’s founders, received an inducement award comprised of 525,769 performance-based restricted stock units (“PSUs”) in respect of Rapid7’s common stock (assuming maximum performance is achieved).

The RSUs vest 1/3 on each of the first three anniversaries of the vesting commencement date, subject to continued employment through the applicable vesting date. The PSUs will generally be earned over two annual performance periods beginning January 1, 2027, based on Rapid7’s attainment of Year over Year Managed MDR & SIEM Annualized Recurring Revenue goals. Earned PSUs for performance period 1 will vest 50% at the end of performance period 1 and 50% at the end of performance period 2, subject to the recipient’s continued employment through the payment date. All earned PSUs for performance period 2 will vest at the end of performance period 2, subject to the recipient’s continued employment through the payment date.

The RSUs and PSUs were granted under Rapid7’s 2015 Equity Incentive Plan, as amended (the “Equity Plan”) pursuant to the Equity Plan’s inducement award share pool. The RSUs and PSUs were unanimously approved by Rapid7’s Compensation Committee, which is independent within the meaning of Nasdaq Listing Rule 5605(a)(2), in accordance with Nasdaq Listing Rule 5635(c)(4) as a material inducement for the Kenzo employees and contractors to commence employment with Rapid7 following Rapid7’s acquisition of Kenzo.

About Rapid7

Rapid7, Inc. (NASDAQ: RPD) is a global leader in AI-powered managed cybersecurity operations, trusted to advance organizations’ cyber resilience. Open and extensible, the Rapid7 Command Platform integrates security data, enriching it with AI, threat intelligence, and 25 years of expertise and innovation to reduce risk and disrupt attackers. As a recognized leader in preemptive managed detection and response (MDR), Rapid7 unifies exposure and detection to transform the cybersecurity operations of more than 11,500 customers worldwide. For more information, visit our website, check out our blog, or follow us on LinkedIn or X.

Rapid7 Media Relations
Alice Randall
Director, Global Communications
press@rapid7.com
(857) 216-7804

Rapid7 Investor Contact
Matt Wells
Vice President, Investor Relations
investors@rapid7.com
(617) 865-4277

FAQ

What equity inducement did Rapid7 (RPD) grant in the Kenzo acquisition on March 26, 2026?

Rapid7 granted 467,945 RSUs to Kenzo employees and contractors and 525,769 PSUs to each Kenzo founder at maximum performance. According to the company, these awards are inducements for employees to join Rapid7 after the March 26, 2026 closing.

How do the Kenzo RSUs granted by Rapid7 (RPD) vest and when do they start vesting?

The RSUs vest one-third on each of the first three anniversaries of the vesting commencement date, subject to continued employment. According to the company, vesting requires employment through each applicable vesting date.

What performance targets determine the founders' PSUs in the Rapid7 (RPD) Kenzo deal?

PSUs are earned over two annual performance periods beginning January 1, 2027, tied to Year-over-Year Managed MDR & SIEM Annualized Recurring Revenue goals. According to the company, earned PSUs vest based on meeting those ARR targets and continued employment.

Will the Kenzo inducement awards for Rapid7 (RPD) dilute existing shareholders?

The awards total 1,519,483 RSUs/PSUs granted in aggregate, which could dilute shareholders depending on shares outstanding and vesting. According to the company, grants were issued under the Equity Plan inducement share pool and subject to vesting and performance.

Under what authority did Rapid7 (RPD) approve inducement grants for Kenzo employees on March 26, 2026?

The Compensation Committee unanimously approved the inducement awards under Rapid7's 2015 Equity Incentive Plan and Nasdaq Listing Rule 5635(c)(4). According to the company, the committee is independent under Nasdaq Listing Rule 5605(a)(2).

When do PSUs awarded to Kenzo founders under Rapid7 (RPD) vest if performance is met?

Earned PSUs for performance period 1 vest 50% at period end 1 and 50% at period end 2; all earned PSUs for period 2 vest at period end 2. According to the company, vesting also requires continued employment through each payment date.