Petco Health + Wellness Company, Inc. Announces Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)

Rhea-AI Summary

Petco Health and Wellness Company, Inc. (Nasdaq: WOOF) has announced the granting of inducement equity awards to its newly-hired Chief Executive Officer, Joel D. Anderson, on July 29, 2024. The awards, approved by independent board members, include:

• 1,492,538 restricted stock units
• 1,492,538 target performance stock units
• Non-qualified stock options to purchase 1,366,121 shares at $5.00
• Non-qualified stock options to purchase 1,381,216 shares at $7.50

The restricted stock units and options will vest over three years, while the performance stock units are tied to Petco's adjusted EBITDA performance from February 2, 2025, to January 29, 2028. These awards were granted outside Petco's 2021 Equity Incentive Plan but follow similar terms and conditions.

Positive

• Appointment of a new CEO, Joel D. Anderson, potentially bringing fresh leadership and strategy
• Significant equity incentives aligned with company performance, potentially motivating the new CEO to drive growth

Negative

• Potential dilution of existing shareholders due to the issuance of new equity awards
• Large equity compensation package may impact the company's expenses and financial statements

News Market Reaction – WOOF

+5.49%

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+5.49% News Effect

On the day this news was published, WOOF gained 5.49%, reflecting a notable positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

SAN DIEGO, July 30, 2024 /PRNewswire/ -- Petco Health and Wellness Company, Inc. (Nasdaq: WOOF) today announced that it has granted inducement equity awards on July 29, 2024 to its newly-hired Chief Executive Officer, Joel D. Anderson, as a material inducement to the employment of Mr. Anderson.

The inducement awards consist of (i) 1,492,538 restricted stock units, (ii) 1,492,538 target performance stock units, (iii) non-qualified stock options to purchase 1,366,121 shares of Petco's Class A common stock with an exercise price of $5.00, and (iv) non-qualified stock options to purchase 1,381,216 shares of Petco's Class A common stock with an exercise price of $7.50. The restricted stock units and stock options will vest as to 34% on the first anniversary of July 29, 2024 (the "Transition Date") and 16.5% at the end of each six-month period thereafter through the third anniversary of the Transition Date, and the performance stock units will vest based on Petco's adjusted EBITDA performance over a three-year performance period beginning on February 2, 2025 and ending January 29, 2028. All of the stock options have a maximum term of 10 years. The inducement awards were granted as a material inducement to Mr. Anderson's employment and were approved by the independent members of the Petco Board of Directors, in accordance with Nasdaq Listing Rule 5635(c)(4). The awards were granted outside of the Petco Health and Wellness Company, Inc. 2021 Equity Incentive Plan, but are generally subject to the same terms and conditions that apply to awards granted under such plan.

About Petco, The Health + Wellness Co.

Founded in 1965, Petco is a category-defining health and wellness company focused on improving the lives of pets, pet parents and our own Petco partners. We've consistently set new standards in pet care while delivering comprehensive pet wellness products, services and solutions, and creating communities that deepen the pet-pet parent bond. We operate more than 1,500 pet care centers across the U.S., Mexico and Puerto Rico, which offer merchandise, companion animals, grooming, training and a growing network of on-site veterinary hospitals and mobile veterinary clinics. Our complete pet health and wellness ecosystem is accessible through our pet care centers and digitally at petco.com and on the Petco app. In tandem with Petco Love, an independent nonprofit organization, we work with and support thousands of local animal welfare groups across the country and, through in-store adoption events, we've helped find homes for nearly 7 million animals. 

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SOURCE Petco - Investor Relations

FAQ

What inducement equity awards did Petco (WOOF) grant to its new CEO on July 29, 2024?

Petco granted its new CEO, Joel D. Anderson, 1,492,538 restricted stock units, 1,492,538 target performance stock units, and non-qualified stock options to purchase 2,747,337 shares at $5.00 and $7.50 exercise prices.

How will the restricted stock units and stock options vest for Petco's (WOOF) new CEO?

The restricted stock units and stock options will vest 34% on the first anniversary of July 29, 2024, and 16.5% every six months thereafter until the third anniversary.

What is the performance period for the performance stock units granted to Petco's (WOOF) new CEO?

The performance stock units will vest based on Petco's adjusted EBITDA performance over a three-year period from February 2, 2025, to January 29, 2028.

Were Petco's (WOOF) inducement awards granted under the company's 2021 Equity Incentive Plan?

No, the inducement awards were granted outside of Petco's 2021 Equity Incentive Plan, but are subject to similar terms and conditions.