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EX-10.1 - EX-10.1 - PETSMART INC | p18756exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 22, 2011
PetSmart, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware | 0-21888 | 94-3024325 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
19601 North 27th Avenue, Phoenix, Arizona 85027
(Address of Principal Executive Offices) (Zip Code)
(623) 580-6100
(Registrants telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b)
Lawrence A. Del Santo, who has served as a member of the PetSmart Board of Directors since
1998, has informed the Company that he has decided to retire from the Board in order to devote more
time to other professional and personal commitments. Mr. Del Santo will not stand for re-election
at the 2011 Annual Meeting of Stockholders; therefore, his retirement will be effective on that
date.
(e)
Cash Bonuses for Fiscal Year Ending January 29, 2012
On March 22, 2011, the Compensation Committee of the Board of Directors, or the Committee,
selected the following business criteria pursuant to PetSmarts Executive Short-Term Incentive
Plan, or the ESTIP, for determining the amount of the cash bonuses that may be awarded to our
executive officers for our fiscal year ending January 29, 2012:
| Growth in earnings before taxes as calculated from PetSmarts audited financial statements; and | ||
| Increase in comparable store sales as calculated from PetSmarts audited financial statements. (1) |
(1) | Defined as sales in stores open at least one year as measured by comparing fiscal year 2011 to fiscal year 2010. |
The Compensation Committee also approved the following target bonuses, multipliers and
business criteria weightings.
Executive | Other | |||||||||||||||||||
Chairman(2) | President/CEO | CFO | EVP | SVP | ||||||||||||||||
Bonus |
||||||||||||||||||||
Target bonus as a percent of salary |
100/75 | % | 100 | % | 75 | % | 85 | % | 50 | % | ||||||||||
Multiplier due to achievement
against target criteria |
up to 3 times | up to 3 times | up to 3 times | up to 3 times | up to 3 times | |||||||||||||||
Criteria |
||||||||||||||||||||
Earnings before taxes |
75 | % | 75 | % | 75 | % | 75 | % | 75 | % | ||||||||||
Comparable store sales |
25 | % | 25 | % | 25 | % | 25 | % | 25 | % |
PetSmart must achieve a minimum level of earnings before taxes before any payment can be made under
any of the business criteria.
(2) | The target bonus will be 100% of base salary for the first half of fiscal 2011, and 50% of base salary for the second half. |
2011 Performance Share Unit Program
On March 22, 2011, the Committee also approved the performance criteria for grants of
performance share units under our Performance Share Unit Program, or the Program. Grants under
the Program will be made from our 2006 Equity Incentive Plan. The Committee established the Program
to provide greater linkage of pay and performance, help focus key employees on achieving a key
performance goal, and provide significant award upside for achieving outstanding performance, while
maintaining a level of total direct compensation competitiveness for participants. All members of
our senior management team and other key members of management will participate in the Program. The
Committee approved the grant of performance share units in a number equal to a specified dollar
value divided the closing price of our common stock as reported on the NASDAQ Global Select Market
on March 22, 2011.
For fiscal year 2011, the actual number of performance share units awarded to each participant
will be set at a minimum threshold of 50% of his or her target number of performance share units,
regardless of performance results. The performance criteria require that we achieve a minimum
earnings before taxes threshold before participants may be awarded more than 50% of the target
number of performance share units. If the initial performance threshold is not achieved, 50% of
the target number of performance
share units will be awarded, and participants will forfeit the remainder of the target award.
If the initial performance threshold is met, the Program then provides, using the performance
criteria, for the calculation of additional performance share units to be awarded, depending on the
level of actual achievement. If we achieve the minimum and maximum level of earnings before taxes
performance, each participant will earn between 50% to 150% of his or her target number of
performance share units, with linear interpolation for achievement falling between the threshold
and target, and target and maximum performance levels, respectively, rounded up to the next whole
number of performance share units. For example, if performance results are halfway between the
threshold and target performance levels, 75% of the target number of performance share units will
be awarded. Similarly, if performance results are halfway between the target and maximum
performance levels, each participant will receive 125% of the target number of the performance
share units. If we achieve above the maximum performance level earnings before taxes, each
participant will earn 150% of his or her target number of performance share units.
Performance share units will be awarded (if at all) upon certification by the Committee of
actual performance achievement following our 2011 fiscal year-end, subject to specified change of
control exceptions that will accelerate the award of the performance share units. Thereafter, any
awarded performance units are subject to time-based vesting and will cliff vest on the third
anniversary of the grant date (currently expected to be March 22, 2014), contingent upon the
participants continued service to PetSmart. The awarded performance share units may also earlier
vest upon the participants death, disability or termination of employment due to retirement or
upon specified change of control transactions. The shares of common stock will be issued to the
participant once the performance share units vest.
The minimum, target and maximum awards for the performance share units granted to our
principal executive officer, principal financial officer and other named executive officers, as set
forth in our proxy statement for our fiscal year 2010, expressed in dollars as of the grant date,
are as follows:
Minimum | Target | Maximum | ||||||||||||
Officer | Title | Award ($ value) | Award ($ value) | Award ($ value) | ||||||||||
Philip L. Francis |
Executive Chairman | $ | 525,000 | $ | 1,050,000 | $ | 1,575,000 | |||||||
Robert F. Moran |
President and Chief Executive Officer | $ | 525,000 | $ | 1,050,000 | $ | 1,575,000 | |||||||
Lawrence P. Molloy |
Senior Vice President, Chief Financial Officer | $ | 177,084 | $ | 354,167 | $ | 531,251 | |||||||
Joseph D. OLeary |
Executive Vice President, Merchandising, | |||||||||||||
Marketing and Supply Chain | $ | 197,917 | $ | 395,833 | $ | 593,750 | ||||||||
David K. Lenhardt |
Executive Vice President, Store Operations, | |||||||||||||
Human Resources and Information Systems | $ | 208,334 | $ | 416,667 | $ | 625,001 |
A participant may earn less than his or her target award, but in no event may a participant
earn an award in excess of his or her maximum award.
The description of the Program contained herein is a summary of the material terms of the
Program, does not purport to be complete, and is qualified in its entirety by reference to (i) the
2006 Equity Incentive Plan, which is filed as Exhibit 10.21 to PetSmarts Annual Report on Form
10-K for the fiscal year ended January 28, 2007 (File No. 0-21888), filed with the Securities and
Exchange Commission on March 28, 2007, (ii) the Form of Award Grant Notice and Performance Share
Award Agreement filed as Exhibit 10.1 to PetSmarts Form 8-K filed with the Securities and Exchange
Commission on February 19, 2009 (File No. 0-21888)(the
8-K), and (iii) the 2011 Performance Share
Unit Program filed as Exhibit 10.1 hereto, each of which is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PetSmart, Inc. |
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By: | /S/ J. Dale Brunk | |||
Dated: March 25, 2011 | J. Dale Brunk | |||
Vice President, Deputy General Counsel, and Assistant Secretary | ||||