☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check all boxes that apply): | ||||||
☒ | | | No fee required. | |||
☐ | | | Fee paid previously with preliminary materials. | |||
☐ | | | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
WHAT: | | | 2024 Annual Meeting of Stockholders of Chewy, Inc. (the “Annual Meeting”). | |||
WHEN: | | | Thursday, July 11, 2024, at 10:00 a.m., Eastern Time. | |||
WHERE: | | | Our Annual Meeting will be held virtually, conducted via live audio webcast, a format designed to increase stockholder access, reduce the environmental impact of a physical meeting, and save Chewy and our stockholders time and money. This meeting format also provides stockholders the opportunity to hear all portions of the official Annual Meeting, submit written questions during the Annual Meeting, and vote online during the open poll section of the Annual Meeting. You are invited to attend the live webcast of our meeting, vote your shares, and submit questions at https://www.virtualshareholdermeeting.com/CHWY2024. To join the meeting, you will need the 16-digit control number that is printed on your Notice of Internet Availability of Proxy Materials (the “Notice”). When accessing our Annual Meeting, please allow ample time for online check-in, which will begin at 9:45 a.m., Eastern Time, on Thursday, July 11, 2024. If a bank, brokerage firm, or other nominee holds your shares, you should contact that organization for additional information. | |||
WHY: | | | We are holding the Annual Meeting for the following purposes, as more fully described in our proxy statement: | |||
| | 1. | | | to elect to our Board of Directors four director nominees for three-year terms (Proposal No. 1); | |
| | 2. | | | to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 2, 2025 (Proposal No. 2); | |
| | 3. | | | to approve, on a non-binding, advisory basis, the compensation of our named executive officers (Proposal No. 3); | |
| | 4. | | | to approve the Chewy, Inc. 2024 Omnibus Incentive Plan, including an increase in the number of shares reserved for issuance by 80,000,000 shares (Proposal No. 4); | |
| | 5. | | | to approve an amendment to the Certificate of Incorporation to provide for the exculpation of certain officers as permitted by recent amendments to Delaware law (Proposal No. 5); and | |
| | 6. | | | to transact such other business as may properly be presented at the Annual Meeting or any adjournments or postponements thereof. | |
RECORD DATE: | | | Stockholders of record as of the close of business on May 13, 2024 (the “Record Date”) are entitled to the Notice and to vote at the Annual Meeting or at any adjournment or postponement that takes place. | |||
PROXY VOTING: | | | On or about May 24, 2024, we will mail to stockholders of record as of the Record Date (other than those who previously requested electronic or paper delivery on an ongoing basis) a Notice with instructions for accessing our proxy materials and voting instructions over the Internet, by telephone, or by mail. We expect that our proxy statement and other proxy materials will be available to stockholders on this same date. | |||
| | Your vote is very important. Whether or not you plan to attend our Annual Meeting, we encourage you to read our proxy materials and submit your proxy or voting instructions as soon as possible. |
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Da-Wai Hu | | | |
General Counsel & Secretary | | |
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1. | Why am I receiving these materials? |
2. | How do I attend and participate in the Annual Meeting? |
3. | Who may vote at the Annual Meeting? |
4. | How can I access the proxy materials over the Internet? |
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5. | How can I request a paper or email copy of the proxy materials? |
• | By Internet: www.proxyvote.com |
• | By telephone: 1-800-579-1639 |
• | By email: sendmaterial@proxyvote.com (follow instructions on the Notice) |
6. | What matters are being voted on at the Annual Meeting? |
• | Proposal 1: To elect to the Company’s Board of Directors four director nominees for three-year terms; |
• | Proposal 2: To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2025; |
• | Proposal 3: To approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers; |
• | Proposal 4: To approve the Chewy, Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”), including an increase in the number of shares reserved for issuance by 80,000,000 shares; and |
• | Proposal 5: To approve an amendment to the Certificate of Incorporation to provide for the exculpation of certain officers as permitted by recent amendments to Delaware law. |
7. | How does our Board recommend that stockholders vote on the proposals? |
• | “FOR” the election of all of the Board’s director nominees for three-year terms, as described in Proposal 1; |
• | “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2025, as described in Proposal 2; |
• | “FOR” approval, on a non-binding, advisory basis, of the compensation of the Company’s named executive officers, as described in Proposal 3; |
• | “FOR” approval of the 2024 Plan, including an increase in the number of shares reserved for issuance by 80,000,000 shares, as described in Proposal 4; and |
• | “FOR” approval of the amendment to the Certificate of Incorporation to provide for the exculpation of certain officers as permitted by recent amendments to Delaware law, as described in Proposal 5. |
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8. | What vote is required to approve each of the proposals? |
9. | As a controlled company, how does the voting power of our principal stockholders affect approval of the proposals being voted on at the Annual Meeting? |
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10. | How do I vote? |
11. | What is the difference between a “stockholder of record” and a “beneficial owner”? |
• | Stockholder of record: If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, LLC, you are considered, with respect to those shares, the stockholder of record and the Notice was sent to you directly. As the stockholder of record, you have the right to grant your proxy directly to Chewy or to vote during the Annual Meeting. |
• | Beneficial owner: If your shares are held by your bank, brokerage firm, or other nominee, you are considered the beneficial owner of shares held in street name, and the Notice was forwarded to you by that organization. As the beneficial owner, you have the right to direct your bank, brokerage firm, or other nominee regarding how to vote your shares. Since a beneficial owner is not the stockholder of record, you may not vote your shares at the Annual Meeting unless you obtain a legal proxy from your bank, brokerage firm, or other nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting. |
12. | How do I vote my shares during the Annual Meeting? |
13. | How do I vote my shares without attending the Annual Meeting? |
• | Vote by Internet by going to www.proxyvote.com at any time until 11:59 p.m., Eastern Time, on July 10, 2024. Please have your Notice or proxy card in hand when you access the website and then follow the instructions. |
• | Vote by telephone at 1-800-690-6903 at any time until 11:59 p.m., Eastern Time, on July 10, 2024. Please have your Notice or proxy card in hand when you call and then follow the instructions. |
• | Vote by mail if you requested and received a proxy card. Please mark, sign, and date your proxy card and return it in the postage-paid envelope we provided with it or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Proxy cards returned by mail must be received no later than the close of business on July 10, 2024. |
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14. | What is the effect of giving a proxy? |
15. | If I fail to provide specific voting instructions on my proxy, how will my shares be voted? |
• | If you are a stockholder of record, your shares will be voted in accordance with the recommendations of our Board described in Question 7. |
• | If you are a beneficial owner and you do not provide instructions to your bank, brokerage firm, or other nominee holding your shares, the organization that holds such shares on your behalf will be entitled to vote those shares on matters that are “routine” in nature. Proposal 2 (ratification of independent registered public accounting firm) is the only proposal to be acted on at the Annual Meeting that would be considered “routine.” A bank, brokerage firm, or other nominee is not entitled to vote shares it holds for a beneficial owner on any proposals that are “non-routine” and the absence of a vote on those matters will be considered “broker non-votes.” Proposal 1 (election of directors), Proposal 3 (advisory vote on named executive officer compensation), Proposal 4 (approval of the 2024 Plan), and Proposal 5 (amendment to the Certificate of Incorporation to provide for the exculpation of certain officers as permitted by recent amendments to Delaware law) are each considered “non-routine” and may not be voted on at the Annual Meeting by a bank, brokerage firm, or other nominee that holds your shares in the absence of your instructions. |
16. | May I revoke my proxy or voting instructions before my shares are voted at the Annual Meeting? |
• | Stockholders of record: If you are a stockholder of record, you may revoke a proxy by: |
○ | completing and returning a later-dated proxy card; |
○ | completing and delivering a new proxy by Internet or telephone; |
○ | delivering a signed revocation letter to our General Counsel & Secretary at our principal executive office, bearing a date later than the proxy and stating the proxy is revoked; or |
○ | voting your shares online at the Annual Meeting. |
• | Beneficial owners: If you are a beneficial owner of shares held in street name, you must follow the instructions for changing or revoking your proxy provided by your broker, bank, or other nominee. |
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17. | Are a certain number of shares required to be present at the Annual Meeting? |
18. | Why did some people receive a Notice instead of a full set of printed proxy materials? |
19. | What does it mean if I receive more than one Notice? |
20. | I share an address with another stockholder. What do I do if we received only one paper copy of the proxy materials and want additional copies or we received multiple copies and want only one? |
21. | Who bears the cost of this proxy solicitation? |
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22. | Who will count the votes? |
23. | Where can I find the voting results of the Annual Meeting? |
24. | When are stockholder proposals for inclusion in our proxy materials for the 2025 annual meeting of stockholders due? |
25. | When are other proposals and director nominations for the 2025 Annual Meeting due? |
26. | What is the address of Chewy’s principal executive office? |
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Director Name | | | Public Company | | | Public Company |
Fahim Ahmed | | | Appgate, Inc. | | | |
Martin H. Nesbitt | | | American Airlines, Inc.(1)(4) | | | CenterPoint Energy, Inc. |
Lisa Sibenac | | | Appgate, Inc. | | | |
Sumit Singh | | | Booking Holdings, Inc.(2) | | | |
James A. Star | | | Equity Commonwealth(2)(3) | | | |
Raymond Svider | | | Altice USA, Inc.(1)(2) | | | GFL Environmental Inc. |
(1) | Audit Committee Member |
(2) | Compensation Committee Member |
(3) | Nominating and Corporate Governance Committee Member |
(4) | Corporate Governance & Public Responsibility Committee Member |
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Gender / Ethnic Diverse Directors | | | Age Mix |
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Name | | | Age | | | Class | | | Director Since | | | Current Term Expires | | | Position | | | Committee Membership | ||||||
| AC | | | CC | | | NCGC | |||||||||||||||||
Marco Castelli(1) | | | 42 | | | I | | | 2022 | | | 2026 | | | Director | | | | | | | |||
James Nelson(2) | | | 74 | | | I | | | 2021 | | | 2026 | | | Director | | | ☆ | | | | | ||
Martin H. Nesbitt(3) | | | 61 | | | I | | | 2020 | | | 2026 | | | Director | | | | | | | |||
Raymond Svider(4) | | | 61 | | | I | | | 2019 | | | 2026 | | | Chairperson | | | | | ☆ | | | ☆ | |
Fahim Ahmed(5) | | | 45 | | | II | | | 2019 | | | 2024 | | | Director | | | | | ✓ | | | ✓ | |
Michael Chang(6) | | | 47 | | | II | | | 2019 | | | 2024 | | | Director | | | | | | | ✓ | ||
Kristine Dickson(7) | | | 46 | | | II | | | 2021 | | | 2024 | | | Director | | | ✓ | | | | | ||
James A. Star(8) | | | 63 | | | II | | | 2019 | | | 2024 | | | Director | | | ✓ | | | | | ||
Mathieu Bigand(9) | | | 33 | | | III | | | 2022 | | | 2025 | | | Director | | | | | | | |||
David Leland(10) | | | 49 | | | III | | | 2019 | | | 2025 | | | Director | | | | | | | |||
Lisa Sibenac(11) | | | 43 | | | III | | | 2019 | | | 2025 | | | Director | | | | | | | |||
Sumit Singh(12) | | | 44 | | | III | | | 2019 | | | 2025 | | | Director and CEO | | | | | | | |||
Number of fiscal year 2023 meetings | | | | | | | | | | | | | 4 | | | 4 | | | 2 |
AC: Audit Committee | ☆ Committee Chairperson |
CC: Compensation Committee | ✓ Committee Member |
(1) | Elected to our Board effective May 23, 2022. |
(2) | Elected to our Board effective July 19, 2021, and appointed as Chairperson of our Audit Committee effective September 8, 2021. |
(3) | Elected to our Board effective September 21, 2020. |
(4) | Elected as Chairperson of our Board effective April 29, 2019, and appointed as Chairperson of both our Compensation and Nominating and Corporate Governance Committees effective June 13, 2019. |
(5) | Elected to our Board effective April 29, 2019, and appointed as member of both our Compensation and Nominating and Corporate Governance Committees effective June 13, 2019. |
(6) | Elected to our Board effective April 29, 2019, and appointed as member of our Nominating and Corporate Governance Committee effective June 13, 2019. |
(7) | Elected to our Board and as a member of our Audit Committee effective July 14, 2021. |
(8) | Elected to our Board effective June 13, 2019, and appointed as a member of our Audit Committee effective May 29, 2020. |
(9) | Elected to our Board effective September 14, 2022. |
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(10) | Elected to our Board effective September 10, 2019. |
(11) | Elected to our Board effective April 29, 2019. |
(12) | Elected to our Board effective April 29, 2019. |
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(i) | managing the appointment, retention, compensation, oversight, and termination of our independent registered public accounting firm; |
(ii) | overseeing the pre-approval process governing audit and permitted non-audit and tax services provided by our independent registered public accounting firm; |
(iii) | reviewing and approving the function and scope of our internal audit department, including its purpose, authority, organization, responsibilities, budget, staffing, audit plans, and performance; |
(iv) | assisting the Board with overseeing external financial reporting, including periodic reports, earnings releases, and earnings guidance; |
(v) | overseeing the adequacy and effectiveness of our internal controls over financial reporting and disclosure controls and procedures; |
(vi) | reviewing risks (including cybersecurity, data privacy, business continuity, and other operational risks), and the policies, guidelines, and processes used by management to assess, manage, monitor, and control such risks; |
(vii) | monitoring legal and regulatory compliance, including compliance with our Code of Conduct and Ethics; |
(viii) | reviewing and approving related party transactions in accordance with our related party transactions policy; |
(ix) | overseeing procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and |
(x) | reviewing our policies and processes for tax planning and compliance. |
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(i) | reviewing and approving corporate goals and objectives applicable to our Chief Executive Officer and other executive officers, evaluating performance in light of such objectives, and approving compensation; |
(ii) | reviewing director compensation and benefits for service on our Board, and making recommendations for modification; |
(iii) | reviewing and approving incentive compensation and equity-based plans, and overseeing the administration of those plans on behalf of executive officers; and |
(iv) | monitoring the effectiveness of non-equity-based benefit plan offerings, and approving any material new employee benefit plan or change to an existing plan that creates a material financial commitment for our Company. |
(i) | determining the qualifications, qualities, skills, and other expertise necessary to serve on our Board; |
(ii) | identifying and evaluating candidates, and making recommendations to our Board for director nominees; |
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(iii) | assessing the size, structure, and composition of our Board and committees, and making recommendations to our Board regarding the appointment of directors to serve as members of each committee and committee chairperson annually; |
(iv) | overseeing periodic evaluations of our Board’s performance, including Board committees; |
(v) | reviewing, assessing the adequacy of, and proposing changes to our Board regarding our certificate of incorporation, Bylaws, Code of Conduct and Ethics, Corporate Governance Guidelines, and other corporate governance policies; |
(vi) | monitoring corporate governance trends and developments, and recommending changes to our Board; and |
(vii) | developing a Chief Executive Officer succession plan and evaluating potential Chief Executive Officer candidates. |
(i) | the independence, judgment, strength of character, reputation in the business community, ethics, and integrity of the individual; |
(ii) | the business and other relevant experience, skill, and knowledge the individual may have that will enable them to provide effective oversight of our business; |
(iii) | the fit of the individual’s skill set and personality with those of the other directors so as to build a Board that works together effectively and constructively; and |
(iv) | the individual’s ability to devote sufficient time to carry out their responsibilities as a director. |
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• | $250,000 for service as a Board member payable 25% in cash and 75% in time-based restricted stock units (“Director RSUs”); |
• | $20,000 for service as a committee chairperson, payable in cash; and |
• | $10,000 for service as a committee member, payable in cash. |
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1)(2) | | | Total ($) |
Kristine Dickson(3) | | | 122,500 | | | 184,952 | | | 307,452 |
James Nelson(4) | | | 292,500 | | | 184,952 | | | 477,452 |
Martin H. Nesbitt(5) | | | 112,500 | | | 184,952 | | | 297,452 |
James A. Star(6) | | | 72,500 | | | 184,952 | | | 257,452 |
(1) | The amounts reflected in this column represent the grant date fair value of the awards made in Fiscal Year 2023, as computed in accordance with Topic 718, Compensation—Stock Compensation, of the Accounting Standards Codification of the Financial Accounting Standards Board (“ASC 718”). For a discussion of the assumptions used in the calculation of the grant date fair value, refer to Part II, Item 8 “Financial Statements and Supplementary Data–Note 11 – Share-Based Compensation” of our Annual Report on Form 10-K for Fiscal Year 2023. |
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(2) | Amounts shown do not reflect compensation actually received by the director, and there can be no assurance that these amounts will ever be realized by the director. Each independent director received a grant of Director RSUs in an amount equal to 75% of their annual retainer divided by the 20-day average closing price of the Company’s Class A common stock for the 20 trading days immediately preceding the grant date, rounded to the nearest whole share. |
(3) | Ms. Dickson was granted 4,880 Director RSUs in Fiscal Year 2023, settlement of which will be deferred until the first to occur of (i) her termination of service, (ii) her death or disability, or (iii) a Change in Control, as defined in our 2022 Omnibus Incentive Plan (the “2022 Plan”). The Director RSUs vest on the date of the Annual Meeting, subject to her continued service with the Company. Ms. Dickson received a cash fee of $50,000 for her service on a special committee. |
(4) | Mr. Nelson was granted 4,880 Director RSUs in Fiscal Year 2023. The Director RSUs vest on the date of the Annual Meeting, subject to his continued service with the Company. Mr. Nelson received a cash fee of $200,000 for his service on a special committee. |
(5) | Mr. Nesbitt was granted 4,880 Director RSUs in Fiscal Year 2023. The Director RSUs vest on the date of the Annual Meeting, subject to his continued service with the Company. Mr. Nesbitt received a cash fee of $50,000 for his service on a special committee. |
(6) | Mr. Star was granted 4,880 Director RSUs in Fiscal Year 2023. The Director RSUs vest on the date of the Annual Meeting, subject to his continued service with the Company. |
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(i) | whether the transaction was undertaken in the ordinary course of our business; |
(ii) | whether the transaction was initiated by us or the related party; |
(iii) | the availability of other sources of comparable products or services; |
(iv) | whether the transaction is proposed to be, or was, entered on terms no less favorable to us than terms that could have been reached with an unrelated third party; |
(v) | the purpose of, and the potential benefits of, the transaction; |
(vi) | the approximate dollar value of the amount involved in the transaction, particularly as it relates to the related party; |
(vii) | the related party’s interest in the transaction; and |
(viii) | any other information regarding the transaction or the related party that would be material to investors in light of the circumstances of the particular transaction. |
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• | On October 30, 2023 (the “Closing Date”), Chewy entered into certain transactions (the “Transactions”) with affiliates of BC Partners pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). The Transactions resulted in, among other things, such affiliates restructuring their ownership interests in Chewy and Chewy Pharmacy KY, LLC (“Chewy KY”) becoming an indirect wholly-owned subsidiary of Chewy. On the Closing Date, affiliates of BC Partners transferred $1,937,093,765 to Chewy to be used to fund: (i) tax obligations of its affiliates that were inherited by Chewy as a result of the Transactions and (ii) expenses incurred by Chewy in connection with the Transactions. |
• | In connection with our IPO, Chewy entered into a master transaction agreement (the “MTA”) with PetSmart. The MTA was amended in February 2021 in connection with PetSmart’s distribution of all of its Chewy stock to reflect our previous contractual relationship with PetSmart. The MTA governed the provision of certain administrative and support services provided by PetSmart to Chewy and fees payable by Chewy to PetSmart for guaranteeing certain of Chewy’s lease related obligations. From the beginning of Fiscal Year 2023 through the Closing Date no payments were made or received related to the MTA. The MTA was terminated on the Closing Date in connection with the Transactions. |
• | Certain of our pharmacy operations are conducted through Chewy KY, which was a wholly-owned subsidiary of PetSmart prior to the Closing Date. Prior to the Closing Date, we entered into a services agreement with Chewy KY that provided for the payment of a management fee to us for providing services to Chewy KY. Pursuant to the terms of this agreement, Chewy received $3,772,389 from Chewy KY from the beginning of Fiscal Year 2023 through the Closing Date. Chewy KY became an indirect wholly-owned subsidiary of Chewy on the Closing Date in connection with the Transactions. |
• | In connection with our IPO, we entered into a tax matters agreement (the “TMA”) with PetSmart and Argos Intermediate Holdco I Inc. that governed the parties’ respective rights, responsibilities, and obligations regarding tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and other matters regarding taxes. From the beginning of Fiscal Year 2023 through the Closing Date, we paid PetSmart $10,278,837 pursuant to the TMA. The TMA was terminated on the Closing Date in connection with the Transactions. |
• | From time to time, we provide services related to veterinary software to PetSmart Veterinary Services, LLC (“PVS”), a PetSmart subsidiary. From the beginning of Fiscal Year 2023 through the Record Date, we received approximately $100,000 from PVS. |
• | From time to time, we purchase compliance-related and educational training materials and services from Navex, a portfolio company of BC Partners. From the beginning of Fiscal Year 2023 through the Record Date, we paid Navex $141,674. |
• | From time to time, we purchase security solutions and other services from GardaWorld, a portfolio company of BC Partners. From the beginning of Fiscal Year 2023 through the Record Date, we paid GardaWorld $4,753,081. |
• | From time to time, we purchase cybersecurity solutions and other services from Appgate, a portfolio company of BC Partners. From the beginning of Fiscal Year 2023 through the Record Date, we paid Appgate $623,625. |
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• | Amended and Restated Investor Rights Agreement, dated October 30, 2023, by and among Chewy and certain holders identified therein; and |
• | Stockholders Agreement, dated as of April 17, 2019, by and among Chewy and the other parties named therein. |
(1) | For a description of our STI program refer to Annual Short-Term Incentive under the heading Elements of NEO Compensation below. The STI program payment for Fiscal Year 2023 was determined and paid in fiscal year ending February 2, 2025 (“Fiscal Year 2024”). |
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FOR ✔ | | | OUR BOARD, UPON RECOMMENDATION OF OUR NOMINATING AND CORPORATE GOVERNANCE COMMITTEE, RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES NAMED ABOVE. |
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| | Voting Shares Beneficially Owned | | | % Total Voting Power(1) | ||||||||||
| | Class A Common Stock | | | Class B Common Stock | | |||||||||
Name of Beneficial Owner | | | Shares | | | % | | | Shares | | | % | | ||
Named Executive Officers | | | | | | | | | | | |||||
Sumit Singh(2) | | | 1,517,374 | | | 1.1 | | | — | | | — | | | * |
Mario Marte | | | 203,023 | | | * | | | — | | | — | | | * |
Stacy Bowman(3) | | | 243,769 | | | * | | | — | | | — | | | * |
Satish Mehta(4) | | | 569,594 | | | * | | | — | | | — | | | * |
Susan Helfrick | | | 55,759 | | | * | | | — | | | — | | | * |
Current Directors | | | | | | | | | | | |||||
Raymond Svider(5) | | | 60,000 | | | * | | | — | | | — | | | * |
Fahim Ahmed(6) | | | 10,000 | | | * | | | — | | | — | | | * |
Mathieu Bigand | | | 0 | | | — | | | — | | | — | | | — |
Marco Castelli | | | 0 | | | — | | | — | | | — | | | — |
Michael Chang(7) | | | 10,000 | | | * | | | — | | | — | | | * |
Kristine Dickson(8) | | | 11,649 | | | * | | | — | | | — | | | * |
David Leland | | | 0 | | | — | | | — | | | — | | | — |
James Nelson(9) | | | 11,632 | | | * | | | — | | | — | | | * |
Martin H. Nesbitt(10) | | | 13,466 | | | * | | | — | | | — | | | * |
Lisa Sibenac(11) | | | 1,000 | | | * | | | — | | | — | | | * |
James A. Star(12) | | | 150,193 | | | * | | | — | | | — | | | * |
Current directors and executive officers as a group(13) | | | 2,857,459 | | | 2.1 | | | — | | | — | | | * |
More Than 5% Security Holders | | | | | | | | | | | |||||
BC Partners Holdings Limited/Argos Holdings GP LLC(14) | | | 0 | | | — | | | 298,863,356 | | | 100.0 | | | 95.6 |
Baillie Gifford & Co(15) | | | 18,482,764 | | | 13.5 | | | — | | | — | | | * |
The Vanguard Group(16) | | | 9,604,698 | | | 7.0 | | | — | | | — | | | * |
* | Represents less than one percent (1%). |
(1) | Percentage total voting power represents voting power with respect to all shares of our Class A common stock and Class B common stock, voting together as a single class. Each holder of Class B common stock is entitled to ten (10) votes per share of Class B common stock, and each holder of Class A common stock is entitled to one (1) vote per share of Class A common |
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(2) | Consists of (i) 1,379,100 shares of Class A common stock held by Mr. Singh and (ii) 138,274 shares of Class A common stock held by Mr. Singh’s spouse. This does not include (i) 664,652 shares of Class A common stock issuable to Mr. Singh upon the vesting of RSUs, which are not expected to vest within 60 days of May 13, 2024, (ii) 1,579,016 shares of Class A common stock (which represents the maximum number of shares that may be issued upon the vesting of PRSUs if maximum performance goals are achieved) issuable to Mr. Singh upon the vesting of PRSUs, which are not expected to vest within 60 days of May 13, 2024, (iii) 143,301 shares of Class A common stock issuable to Mr. Singh’s spouse upon the vesting of RSUs, which are not expected to vest within 60 days of May 13, 2024, or (iv) 103,442 shares of Class A common stock (which represents the maximum number of shares that may be issued upon the vesting of PRSUs if maximum performance goals are achieved) issuable to Mr. Singh’s spouse upon the vesting of PRSUs, which are not expected to vest within 60 days of May 13, 2024. |
(3) | Consists of 243,769 shares of Class A common stock held by Ms. Bowman. This does not include (i) 38,085 shares of Class A common stock issuable to Ms. Bowman upon the vesting of RSUs, which are not expected to vest within 60 days of May 13, 2024, or (ii) 23,178 shares of Class A common stock (which represents the maximum number of shares that may be issued upon the vesting of PRSUs if maximum performance goals are achieved) issuable to Ms. Bowman upon the vesting of PRSUs, which are not expected to vest within 60 days of May 13, 2024. |
(4) | Consists of (i) 569,594 shares of Class A common stock held by Mr. Mehta. This does not include (i) 299,048 shares of Class A common stock issuable to Mr. Mehta upon the vesting of RSUs, which are not expected to vest within 60 days of May 13, 2024, or (ii) 318,709 shares of Class A common stock (which represents the maximum number of shares that may be issued upon the vesting of PRSUs if maximum performance goals are achieved) issuable to Mr. Mehta upon the vesting of PRSUs, which are not expected to vest within 60 days of May 13, 2024. |
(5) | Consists of 60,000 shares of Class A common stock held by Mr. Svider. |
(6) | Consists of 10,000 shares of Class A common stock held by Mr. Ahmed. |
(7) | Consists of 10,000 shares of Class A common stock held by Mr. Chang. |
(8) | Consists of (i) 4,880 shares of Class A common stock issuable upon the vesting of RSUs, which will vest on the date of the Annual Meeting, subject to Ms. Dickson’s continued service as a director on the Board through the vesting date, and (ii) 1,624 and 5,145 shares of Class A common stock underlying RSUs that vested on July 14, 2022 and July 14, 2023, respectively and will be settled upon the earlier of (x) the date of Ms. Dickson leaving the Board or (y) a change in control of the Company. |
(9) | Consists of (i) 6,752 shares of Class A common stock held by Mr. Nelson, and (ii) 4,880 shares of Class A common stock held by Mr. Nelson, which will vest on the date of the Annual Meeting, subject to Mr. Nelson’s continued service as a director on the Board through the vesting date. |
(10) | Consists of (i) 1,543 shares of Class A common stock held by Mr. Nesbitt, (ii) 4,880 shares of Class A common stock issuable upon the vesting of RSUs, which will vest on the date of the Annual Meeting, subject to Mr. Nesbitt’s continued service as a director on the Board through the vesting date, and (iii) 1,817, 1,624, and 3,602 shares of Class A common stock underlying RSUs that vested on July 14, 2021, July 14, 2022, and July 14, 2023, respectively, and will be settled upon the earlier of (x) the date of Mr. Nesbitt leaving the Board or (y) a change in control of the Company. |
(11) | Consists of 1,000 shares of Class A common stock held by Ms. Sibenac. |
(12) | Consists of (i) 141,790 shares of Class A common stock held by Mr. Star, (ii) 4,880 shares of Class A common stock issuable upon the vesting of RSUs, which will vest on the date of the Annual Meeting, subject to Mr. Star’s continued service as a director on the Board through the vesting date, and (iii) 804 and 2,719 shares of Class A common stock underlying RSUs that vested on July 14, 2020 and July 14, 2021, respectively, and will be settled upon the earlier of (x) the date of Mr. Star leaving the Board or (y) a change in control of the Company. |
(13) | Consists of (i) 820,604 shares of Class A common stock held by our executive officers (i.e., Messrs. Singh, Reeder, and Mehta) and directors, (ii) 19,520 shares of Class A common stock issuable upon the vesting of RSUs within 60 days of May 13, 2024, and (iii) 17,335 shares of Class A common stock underlying RSUs that have vested for which settlement has been deferred. |
(14) | Based solely on a Schedule 13G/A filed on February 12, 2024, Argos Holdings GP LLC (“GP LLC”) is the general partner of Argos Holdings L.P. (“Argos”). Argos is the sole common equity holder of Citrus Intermediate Holdings L.P. (“Citrus”), which indirectly is the sole equity holder of Citrus Intermediate Topco LLC and Buddy Chester Sub LLC, the direct holders of the reported shares of Class B common stock. GP LLC is the general partner of Citrus. CIE Management IX Limited controls a majority of the equity interests of GP LLC and has the power to appoint members to the board of directors of GP LLC who may exercise majority voting power at meetings of the board of directors of GP LLC. BC Partners Holdings Limited is the controlling shareholder of CIE Management IX Limited. The business address of each of these entities is 650 Madison Avenue, New York, NY 10022. |
(15) | Based solely on a Schedule 13G/A filed on January 30, 2024. Baillie Gifford & Co. exercises sole voting power with respect to 15,723,741 shares of Class A Common Stock and sole dispositive power with respect to 18,482,764 shares of Class A Common stock. The business address of Baillie Gifford & Co. is Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, Scotland, United Kingdom. |
(16) | Based solely on a Schedule 13G/A filed on February 13, 2024. The Vanguard Group exercises shared voting power with respect to 43,176 shares of Class A Common Stock, sole dispositive power with respect to 9,455,981 shares of Class A Common Stock and shared dispositive power with respect to 148,717 shares of Class A common stock. The business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
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| | January 28, 2024 | | | January 29, 2023 | |
Audit Fees(1) | | | $2,466,000 | | | $2,289,000 |
Audit-Related Fees(2) | | | 300,000 | | | 15,000 |
Tax Fees | | | — | | | — |
All Other Fees | | | — | | | — |
Total Fees | | | $2,766,000 | | | $2,304,000 |
(1) | Audit fees consist of fees for services rendered and expenses billed in connection with the annual audit of our consolidated financial statements, the review of our quarterly condensed consolidated financial statements, and consultations on accounting matters directly related to the audit. |
(2) | Audit-related fees include fees for assurance and related services that are traditionally performed by the independent registered accounting firm. In Fiscal Year 2023, this includes services rendered in connection with the submission of a Registration Statement on Form S-3, transactions with affiliates of BC Partners pursuant to the Merger Agreement and filing an amended Form 10-K for Fiscal Year 2022. In Fiscal Year 2022, this includes services rendered in connection with the submission of a Registration Statement on Form S-8. |
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• | reviewed and discussed the audited financial statements with management and Deloitte & Touche LLP; |
• | discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements issued by the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC; and |
• | received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with Deloitte & Touche LLP its independence. |
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FOR ✔ | | | OUR BOARD, UPON RECOMMENDATION OF OUR AUDIT COMMITTEE, RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 2, 2025. |
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Name | | | Age | | | Title |
Sumit Singh | | | 44 | | | Chief Executive Officer |
Mario Marte(1) | | | 48 | | | Former Chief Financial Officer |
Stacy Bowman(2) | | | 45 | | | Former Chief Financial Officer and Current Chief Accounting Officer |
Satish Mehta | | | 59 | | | Chief Technology Officer |
Susan Helfrick(3) | | | 57 | | | Former General Counsel & Secretary |
Michael Morant(4) | | | 48 | | | Former General Counsel & Secretary |
(1) | Mr. Marte voluntarily resigned as the Chief Financial Officer effective July 28, 2023. |
(2) | Ms. Bowman was appointed as the Chief Financial Officer effective July 29, 2023 and resigned as the Chief Financial Officer effective February 14, 2024 following the appointment of David Reeder as the Chief Financial Officer. |
(3) | Ms. Helfrick voluntarily resigned as the General Counsel & Secretary effective June 20, 2023. |
(4) | Mr. Morant was appointed as the General Counsel & Secretary effective June 21, 2023 and passed away on August 25, 2023. |
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Airbnb, Inc. | | | Expedia Group, Inc. |
Bath & Body Works, Inc. | | | Netflix, Inc. |
Best Buy Co., Inc. | | | Spotify Technology S.A. |
Booking Holdings, Inc. | | | Tractor Supply Company |
Carvana Co. | | | ULTA Beauty, Inc. |
DICK’s Sporting Goods, Inc. | | | Wayfair Inc. |
DoorDash, Inc. | | | Zoom Video Communications, Inc. |
eBay Inc. | | |
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Element | | | Objective | | | Key Features |
Base Salary | | | Recognizes market factors and individual experience, performance, and level of responsibility. | | | Fixed compensation designed to attract and retain talent. |
Annual Short-Term Incentive | | | Motivates and establishes a strong link between pay and performance. | | | Variable at-risk compensation directly tied to the achievement of financial and strategic annual goals. STI thresholds, targets, and maximums are set as a percentage of base salary. |
Long-Term Equity Incentives | | | Aligns compensation with creating long-term stockholder value and retains talent through multiyear vesting. | | | Variable at-risk compensation in the form of RSUs that vest upon satisfaction of Service Conditions and Performance RSUs that vest upon satisfaction of Service Conditions and Performance Conditions. |
• | Net sales of $11.1 billion improved 10.2 percent year over year |
• | Gross margin of 28.4 percent expanded 40 basis points year over year |
• | Net income of $39.6 million, including share-based compensation expense and related taxes of $248.5 million |
• | Net margin of 0.4 percent contracted 10 basis points year over year |
• | Basic earnings per share of $0.09, a decrease of $0.03 year over year |
• | Diluted earnings per share of $0.09, a decrease of $0.03 year over year |
• | Adjusted EBITDA(1) of $368.1 million, an increase of $61.3 million year over year |
• | Adjusted EBITDA margin(1) of 3.3 percent expanded 30 basis points year over year |
• | Adjusted net income(1) of $296.2 million, an increase of $69.8 million year over year |
• | Adjusted basic earnings per share(1) of $0.69, an increase of $0.15 year over year |
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• | Adjusted diluted earnings per share(1) of $0.69, an increase of $0.16 year over year |
• | Net cash provided by operating activities of $486.2 million, an increase of $136.4 million year over year |
• | Free cash flow(1) of $342.9 million, an increase of $223.5 million year over year |
(1) | Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP financial measures. For a reconciliation of non-GAAP to GAAP financial measures refer to Reconciliation of Non-GAAP Financial Measures in Appendix A. |
Named Executive Officer | | | FY 2023 Base Salary | | | FY 2022 Base Salary |
Sumit Singh | | | $1,200,000 | | | $1,200,000 |
Mario Marte | | | $595,000 | | | $595,000 |
Stacy Bowman | | | $400,000 | | | $400,000 |
Satish Mehta | | | $475,000 | | | $475,000 |
Susan Helfrick | | | $450,000 | | | $450,000 |
Michael Morant | | | $450,000 | | | $379,400 |
Metric | | | Weighting | | | Achievement (% of Target) | | | Weighted Achievement |
Net Sales Growth | | | 50% | | | 62% | | | 31% |
Adjusted EBITDA Margin | | | 50% | | | 200% | | | 100% |
Total | | | 100% | | | | | 131% |
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NEO | | | Eligible Earnings(1) | | | Target % of Eligible Earnings | | | Award at Target | | | Achievement | | | Payout |
Sumit Singh | | | $1,200,000 | | | 150% | | | $1,800,000 | | | 131% | | | $2,358,000 |
Mario Marte | | | $595,000 | | | 100% | | | $595,000 | | | —% | | | $0 |
Stacy Bowman | | | $400,000 | | | 75% | | | $300,000 | | | 131% | | | $393,000 |
Satish Mehta | | | $475,000 | | | 100% | | | $475,000 | | | 131% | | | $622,250 |
Susan Helfrick | | | $450,000 | | | 100% | | | $450,000 | | | —% | | | $0 |
Michael Morant | | | $450,000 | | | 100% | | | $450,000 | | | —% | | | $0 |
(1) | Eligible Earnings means the portion of the NEO’s base salary earned while in a STI eligible position and excludes any one-off bonus or other types of compensation. For Fiscal Year 2023, Eligible Earnings for our NEOs equaled their respective base salary. NEOs that departed the Company during Fiscal Year 2023 did not receive a STI payment. |
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• | CEO - six (6) times annual base salary |
• | CFO - three (3) times annual base salary |
• | Other officers for purposes of Section 16 of the Exchange Act - three (3) times annual base salary |
• | Independent Director - five (5) times annual equity retainer |
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Name and Principal Position | | | Year | | | Salary ($)(1) | | | Stock Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) |
Sumit Singh Chief Executive Officer | | | FY23 | | | 1,200,000 | | | 31,048,358 | | | 2,358,000 | | | 579,837 | | | 35,186,195 |
| FY22 | | | 1,200,000 | | | — | | | 900,000 | | | 381,735 | | | 2,481,735 | ||
| FY21 | | | 1,200,000 | | | 10,106,250 | | | 900,000 | | | 244,088 | | | 12,450,338 | ||
Mario Marte Former Chief Financial Officer | | | FY23 | | | 320,385 | | | — | | | — | | | 5,498 | | | 325,883 |
| FY22 | | | 595,000 | | | — | | | 446,250 | | | 11,850 | | | 1,053,100 | ||
| FY21 | | | 595,000 | | | 2,425,500 | | | 446,250 | | | 7,461 | | | 3,474,211 | ||
Stacy Bowman Former Chief Financial Officer and Current Chief Accounting Officer | | | FY23 | | | 400,000 | | | 1,753,183 | | | 393,000 | | | 9,248 | | | 2,555,431 |
Satish Mehta Chief Technology Officer | | | FY23 | | | 475,000 | | | 10,556,862 | | | 622,250 | | | 8,532 | | | 11,662,644 |
| FY22 | | | 475,000 | | | — | | | 356,250 | | | 9,150 | | | 840,400 | ||
| FY21 | | | 475,000 | | | 1,617,000 | | | 356,250 | | | 8,700 | | | 2,456,950 | ||
Susan Helfrick Former General Counsel & Secretary | | | FY23 | | | 193,846 | | | — | | | — | | | 3,825 | | | 197,671 |
| FY22 | | | 450,000 | | | — | | | 337,500 | | | 9,150 | | | 796,650 | ||
| FY21 | | | 450,000 | | | — | | | 337,500 | | | 8,585 | | | 796,085 | ||
Michael Morant Former General Counsel & Secretary | | | FY23 | | | 247,054 | | | 4,114,800 | | | — | | | 4,486 | | | 4,366,340 |
(1) | These amounts reflect the actual salary earned by each NEO during fiscal years 2021, 2022, and 2023. |
(2) | These amounts reflect the aggregate grant date fair value of the RSUs, as computed in accordance with ASC 718. For a discussion of the assumptions used in the calculation of the grant date fair value, refer to Part II, Item 8 “Financial Statements and Supplementary Data–Note 11 – Share-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended January 28, 2024. |
(3) | For Fiscal Year 2023, these amounts reflect payouts for performance under our 2023 STI program. For additional information regarding these amounts refer to Annual Short-Term Incentive in the Elements of NEO Compensation section above. |
(4) | The amounts disclosed for Fiscal Year 2023 reflect the following for each NEO: For Mr. Singh, $4,089 of Company matching contributions made to his account under the 401(k) Plan and $545,344 for the value of certain personal security-related services, which included home security, security employees (including meals and incidentals for the security employees), and certain other security-related services (such as threat and risk monitoring), and $30,404 for two automobiles. For Mr. Marte, $5,498 of Company matching contributions made to his account under the 401(k) Plan. For Ms. Bowman, $9,248 of Company matching contributions made to her account under the 401(k) Plan. For Mr. Mehta, $8,532 of Company matching contributions made to his account under the 401(k) Plan. For Ms. Helfrick, $3,825 of Company matching contributions made to her account under the 401(k) Plan. For Mr. Morant, $4,486 of Company matching contributions made to his account under the 401(k) Plan. A portion of the Company 401(k) match made to each of the NEOs during Fiscal Year 2023 was refunded in March 2024 due to the 401(k) Plan failing nondiscrimination testing, resulting in the Company matching contributions previously described. |
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Name | | | | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) | | | Grant Date Fair Value of Stock Awards(4) | |||||||||||||
| Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | (#) | | | ($) | ||
Sumit Singh | | | — | | | $450,000 | | | $1,800,000 | | | $3,600,000 | | | — | | | — | | | — | | | — | | | — |
| 1/18/2024 | | | — | | | — | | | — | | | — | | | — | | | — | | | 268,078 | | | $5,168,544 | ||
| 1/18/2024 | | | — | | | — | | | — | | | 26,808 | | | 268,078 | | | 536,156 | | | — | | | $5,168,544 | ||
| 1/18/2024 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,074,236 | | | $20,711,270 | ||
Mario Marte | | | — | | | $148,750 | | | $595,000 | | | $1,190,000 | | | — | | | — | | | — | | | — | | | — |
Stacy Bowman | | | — | | | $75,000 | | | $300,000 | | | $600,000 | | | — | | | — | | | — | | | — | | | — |
| 4/6/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 10,453 | | | $397,528 | ||
| 4/6/2023 | | | — | | | — | | | — | | | 348 | | | 3,484 | | | 6,968 | | | — | | | $132,497 | ||
| 4/6/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 32,163 | | | $1,223,158 | ||
Satish Mehta | | | — | | | $118,750 | | | $475,000 | | | $950,000 | | | — | | | — | | | — | | | — | | | — |
| 4/6/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 54,109 | | | $1,905,178 | ||
| 4/6/2023 | | | — | | | — | | | — | | | 5,411 | | | 54,109 | | | 108,218 | | | — | | | $1,905,178 | ||
| 4/6/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 169,097 | | | $5,953,905 | ||
| 1/18/2024 | | | — | | | — | | | — | | | — | | | — | | | — | | | 41,110 | | | $792,601 | ||
Susan Helfrick | | | — | | | $112,500 | | | $450,000 | | | $900,000 | | | — | | | — | | | — | | | — | | | — |
Michael Morant | | | — | | | $105,033 | | | $420,131 | | | $840,262 | | | — | | | — | | | — | | | — | | | — |
| 4/6/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,020 | | | $152,881 | ||
| 4/6/2023 | | | — | | | — | | | — | | | 229 | | | 2,288 | | | 4,576 | | | — | | | $87,013 | ||
| 4/6/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,865 | | | $261,076 | ||
| 7/5/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 95,604 | | | $3,613,830 |
(1) | These amounts reflect the threshold, target, and maximum payouts under our 2023 STI program. For amounts actually earned by each NEO pursuant to our STI program for Fiscal Year 2023, refer to the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table above. The amounts are based on a percentage of expected eligible earnings at the beginning of Fiscal Year 2023 or, in the case of Ms. Bowman and Mr. Morant, when the individual became a NEO. Mr. Marte, Ms. Helfrick, and Mr. Morant did not receive a STI payment in Fiscal Year 2023 because of their departures during Fiscal Year 2023. For additional information regarding these amounts, refer to Annual Short-Term Incentive in the Elements of NEO Compensation section above. |
(2) | These amounts reflect the threshold, target, and maximum payouts of Performance RSUs under our LTI plan, depending on whether specific performance goals are achieved. Earned awards can range from 0% to 200% of the target grant. For additional information regarding these amounts, refer to Long Term Equity Incentives in the Elements of NEO Compensation section above. |
(3) | These amounts reflect the Service RSUs granted in Fiscal Year 2023. |
(4) | These amounts reflect the aggregate grant date fair value of the RSUs and the PRSUs, as computed in accordance with ASC 718. For Ms. Bowman and for those awards for Mr. Morant granted on April 6, 2023, these amounts are computed using the fair value as of June 26, 2023 as the ASC 718 conditions were satisfied on that date. For a discussion of the assumptions used in the calculation of the grant date fair value, refer to Part II, Item 8 “Financial Statements and Supplementary Data–Note 11 – Share-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended January 28, 2024. |
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Name | | | Stock Awards | |||||||||
| Number of Shares or Units of Stock That Have Not Vested (#)(1) | | | Market Value of Shares of Units of Stock That Have Not Vested ($)(2) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | ||
Sumit Singh | | | 1,342,314(4) | | | $36,205,348 | | | 268,078(5) | | | $12,183,450 |
Mario Marte | | | 0 | | | $— | | | 0 | | | $— |
Stacy Bowman | | | 54,236(6) | | | $870,491 | | | 3,484(7) | | | $158,393 |
Satish Mehta | | | 264,316(8) | | | $7,053,913 | | | 54,109(9) | | | $2,459,109 |
Susan Helfrick | | | 0 | | | $— | | | 0 | | | $— |
Michael Morant | | | 0 | | | $— | | | 0 | | | $— |
(1) | These amounts reflect (i) Performance RSUs that have met the Performance Condition and are subject to the Service Condition, and (ii) Service RSUs, each as described in the Long-Term Equity Incentives in the Elements of NEO Compensation section above. |
(2) | These amounts reflect the closing price of our Class A common stock on the NYSE on January 26, 2024 (the last trading day of Fiscal Year 2023), which was $19.38. |
(3) | These amounts reflect Performance RSUs as described in the Long-Term Equity Incentives in the Elements of NEO Compensation section above. |
(4) | Consists of (i) 1,074,236 Service RSUs that vest 41% on February 1, 2024, 11% on May 1, 2024, 11% on December 1, 2024, 34% on February 1, 2025, and 3% on February 1, 2026, (ii) 268,078 Service RSUs that vest 25% on February 1, 2024, and 12.5% on each six-month anniversary thereafter, each subject to Mr. Singh’s continued employment through the applicable vesting date. |
(5) | Consists of 268,078 Performance RSUs that vest on February 1, 2026 contingent on the achievement of the Performance Condition and Mr. Singh’s continued employment through the vesting date. |
(6) | Consists of (i) 778 Performance RSUs that vest on March 1, 2024, (ii) 2,267 Performance RSUs that vest on February 1, 2025, (iii) 32,163 Service RSUs that vest on April 1, 2024, (iv) 524 Service RSUs that vest on March 1, 2024, (v) 2,383 Service RSUs that vest 50% on March 1, 2024, 25% on September 1, 2024, and 25% on March 1, 2025, (vi) 5,668 Service RSUs that vest 20% on February 1, 2024 and on each six-month anniversary thereafter, (vii) 10,453 Service RSUs that vest 25% on February 1, 2024 and 12.5% on each six-month anniversary thereafter, each subject to Ms. Bowman’s continued employment through the applicable vesting date. |
(7) | Consists of 3,484 Performance RSUs that vest on February 1, 2026 contingent on the achievement of the Performance Condition and Ms. Bowman’s continued employment through the vesting date. |
(8) | Consists of (i) 41,110 Service RSUs that vest 50% on May 1, 2024 and 50% on December 1, 2024, (ii) 54,109 Service RSUs that vest 25% on February 1, 2024 and 12.5% on each six-month anniversary thereafter, and (iii) 169,097 Service RSUs that vest 52% on February 1, 2024, 44% on February 1, 2025 , and 4% on February 1, 2026, each subject to Mr. Mehta’s continued employment through the applicable vesting date. |
(9) | Consists of 54,109 Performance RSUs that vest on February 1, 2026 contingent on the achievement of the Performance Condition and Mr. Mehta’s continued employment through the vesting date. |
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| | Stock Awards | ||||
Name | | | Number of Shares Acquired on Vesting (#)(1) | | | Value Realized on Vesting ($)(2) |
Sumit Singh | | | 435,917 | | | 17,266,032 |
Mario Marte | | | 194,240 | | | 7,694,589 |
Stacy Bowman | | | 77,477 | | | 3,043,930 |
Satish Mehta | | | 144,430 | | | 5,721,517 |
Susan Helfrick | | | 89,620 | | | 3,550,744 |
Michael Morant | | | 70,077 | | | 2,061,237 |
(1) | These amounts reflect Performance RSUs and Service RSUs as described in the Long-Term Equity Incentives in the Elements of NEO Compensation section above. |
(2) | The value realized upon vesting has been calculated by multiplying the gross number of shares acquired on vesting by the closing price of our Class A common stock on the NYSE on the vesting date. Therefore, the amounts shown in this column do not represent the actual amounts paid to or realized by the NEO during Fiscal Year 2023. |
Name | | | Executive Contributions in Last FY ($)(1) | | | Aggregate Earnings in Last FY ($)(2) | | | Aggregate Balance at Last FYE ($) |
Sumit Singh | | | 0 | | | 0 | | | 0 |
Mario Marte | | | 0 | | | 0 | | | 0 |
Stacy Bowman | | | 0 | | | 0 | | | 0 |
Satish Mehta | | | 228,366 | | | 18,582 | | | 256,152 |
Susan Helfrick | | | 0 | | | 0 | | | 0 |
Michael Morant | | | 0 | | | 0 | | | 0 |
(1) | These amounts are included in the Fiscal Year 2023 compensation in the “Salary” column of the Summary Compensation Table. |
(2) | None of these amounts are included in the Summary Compensation Table because earnings were not above-market or preferential, as credited earnings on NQDCP contributions are tied to changes in the value of publicly traded investment funds. |
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| | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | | | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | |
Plan Category | | | (a) | | | (b) | | | (c) |
Equity Compensation Plans Approved by Security Holders(1) | | | 14,961,377(2) | | | N/A(3) | | | 26,033,407 |
Equity Compensation Plans Not Approved by Security Holders | | | N/A | | | N/A | | | N/A |
Total | | | 14,961,377 | | | N/A | | | 26,033,407 |
(1) | Includes issuances under the 2022 Plan. |
(2) | This amount reflects Performance RSUs (at max) and Service RSUs issued under the 2022 Plan. |
(3) | As of fiscal year ended January 28, 2024, no options or other exercisable awards were outstanding under the 2022 Plan. |
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• | all accrued but unpaid base salary through the date of termination, including any unpaid or unreimbursed expenses, accrued vacation that the executive has not taken, and any benefits provided under the Company’s employee benefit plans upon a termination of employment; |
• | Twelve (12) months of base salary payable in equal monthly installments over the twelve (12) month period following termination; |
• | an annual bonus earned for any fiscal year completed prior to the date of termination that remains unpaid as of the date of termination, payable at the same time annual bonuses are paid to executives generally for the relevant year; |
• | a pro-rated annual bonus for the year of termination based on actual performance, payable at the same time annual bonuses are paid to executives generally for the relevant year; |
• | an amount equal to eighteen (18) months of premiums for continuation coverage under our group health plans payable in a lump sum payment within thirty (30) days of termination; |
• | 100% of the Target Bonus (as defined in Mr. Singh’s employment agreement), payable in equal monthly installments over the twelve (12) month period following termination; and |
• | nine (9) months of service credit with respect to any time- or service-based equity incentive awards (or if greater, service credit for 40% of the awards). |
• | all accrued but unpaid base salary through the date of termination, including any unpaid or unreimbursed expenses, accrued vacation that the executive has not taken, and any benefits provided under the Company’s employee benefit plans upon a termination of employment; |
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• | twenty-four (24) months of base salary and 200% of the Target Bonus (as defined in Mr. Singh’s employment agreement), both generally payable in a lump sum within thirty (30) days following termination; |
• | an annual bonus earned for any fiscal year completed prior to the date of termination that remains unpaid as of the date of termination, payable at the same time annual bonuses are paid to executives generally for the relevant year; |
• | a pro-rated annual bonus for the year of termination based on actual performance, payable at the same time annual bonuses are paid to executives generally for the relevant year; |
• | an amount equal to twenty-four (24) months of premiums for continuation coverage under our group health plans payable in a lump sum within thirty (30) days of termination; and |
• | nine (9) months of service credit with respect to any time- or service-based equity incentive awards (or if greater, service credit for 40% of the awards). |
• | all accrued but unpaid base salary through the date of termination, including any unpaid or unreimbursed expenses, accrued vacation that the executive has not taken, and any benefits provided under the Company’s employee benefit plans upon a termination of employment; |
• | eighteen (18) months of base salary and 100% of the Target Bonus (as defined in their respective employment agreements), both generally payable in a lump sum within thirty (30) days following termination; |
• | an amount equal to eighteen (18) months of premiums for continuation coverage under our group health plans payable in a lump sum payment within thirty (30) days of termination; and |
• | any earned, but unpaid, annual bonus for the year preceding termination. |
46 | | | ![]() | | |
Name | | | Involuntary Termination (not for Cause; Good Reason w/ no Change in Control ($)(1) | | | Change in Control no Termination ($)(2) | | | Involuntary Termination (not for Cause) in Connection with a Change in Control ($)(3) | | | Death or Disability ($)(4) |
Sumit Singh | | | | | | | | | ||||
Cash Payments | | | 2,411,853 | | | 0 | | | 4,815,804 | | | 0 |
Accelerated Equity Vesting | | | 12,773,920 | | | 31,209,397 | | | 31,209,397 | | | 15,063,977 |
Total | | | 15,185,773 | | | 31,209,397 | | | 36,025,201 | | | 15,063,977 |
Stacy Bowman | | | | | | | | | ||||
Cash Payments | | | 0 | | | 0 | | | 0 | | | 0 |
Accelerated Equity Vesting | | | 0 | | | 1,118,614 | | | 1,118,614 | | | 0 |
Total | | | 0 | | | 1,118,614 | | | 1,118,614 | | | 0 |
Satish Mehta | | | | | | | | | ||||
Cash Payments | | | 0 | | | 0 | | | 0 | | | 0 |
Accelerated Equity Vesting | | | 0 | | | 6,171,077 | | | 6,171,077 | | | 0 |
Total | | | 0 | | | 6,171,077 | | | 6,171,077 | | | 0 |
(1) | For Mr. Singh, this amount includes (i) cash payments and (ii) partial accelerated vesting of the Service Condition for Performance RSUs, both as outlined in Involuntary Termination of Employment Not Involving a Change in Control in the Employment Agreements and Potential Payments Upon Termination or Change in Control section above. |
(2) | These amounts reflect accelerated vesting of the Service Condition upon a Change in Control for each NEO’s respective Performance RSUs as described in Long-Term Equity Incentives in the Elements of NEO Compensation section above. These amounts are single-trigger. |
(3) | For Mr. Singh, this amount includes (i) double-trigger cash payments for termination of employment without cause or for good reason within three (3) months before or twelve (12) months following a “Change in Control,” as described in Involuntary Termination of Employment Not Involving a Change in Control in the Employment Agreements and Potential Payments Upon Termination or Change in Control section above, and (ii) single-trigger accelerated vesting of the Service Condition upon a Change in Control for Performance RSUs as described in Long-Term Equity Incentives in the Elements of NEO Compensation section above. For Ms. Bowman and Mr. Mehta, this amount includes single-trigger accelerated vesting of the Service Condition upon a Change in Control for Performance RSUs as described in Long-Term Equity Incentives in the Elements of NEO Compensation section above. |
(4) | These amounts reflect partial accelerated vesting of the Service Condition for Mr. Singh’s Performance RSUs as described in Death or Disability and Restrictive Covenants in the Employment Agreements and Potential Payments Upon Termination or Change in Control section above. |
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• | As of December 31, 2023, there were 18,283 Chewy employees. |
• | To determine the Median Employee, Chewy used W-2 earnings (base pay, cash bonuses, overtime, etc., as applicable) reflected in payroll records of all employees in the United States for the calendar year ended December 31, 2023, as its measure of compensation. In making this determination, Chewy annualized the base pay or monthly wages and annual bonus amounts paid in respect of calendar year 2023 for those full-time and part-time employees who did not work for the entire calendar year. |
• | The Median Employee’s annual total compensation was calculated based on the rules for determining the annual total compensation of our NEOs, which includes base salary, bonus, non-equity incentive plan compensation, and other elements of pay, such as 401(k) employer match, stock awards, or overtime, as applicable. The pay ratio disclosed is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. |
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FOR ✔ | | | OUR BOARD, UPON RECOMMENDATION OF OUR COMPENSATION COMMITTEE, RECOMMENDS THAT STOCKHOLDERS VOTE “FOR,” ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT. |
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| | | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | ||||||||||
Fiscal Year (a) | | | Summary Compensation Table (“SCT”) Total for Principal Executive Officer (“PEO”) (b)1 | | | Compensation Actually Paid (“CAP”) to PEO (c)2 | | | Average SCT Total for non-PEO NEOs (d)1 | | | Average CAP to non-PEO NEOs (e)2 | | | Total Shareholder Return (“TSR”) (f)3 | | | Peer Group TSR (g)4 | | | Net Income (Loss)7 (in thousands) (h)5 | | | Net Sales7 (in thousands) (i)6 |
2023 | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ |
2022 | | | $ | | | $( | | | $ | | | $( | | | $ | | | $ | | | $ | | | $ |
2021 | | | $ | | | $( | | | $ | | | $( | | | $ | | | $ | | | $( | | | $ |
2020 | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $( | | | $ |
(1) | Included in column (b) are the total compensation amounts reported in the Summary Compensation Table for |
(2) | Included in columns (c) and (e) are CAP and average CAP to the PEO and the non-PEO NEOs, respectively, for each of the fiscal years presented. To calculate CAP and average CAP, amounts in columns (b) and (d) are adjusted in accordance with Item 402(v) of Regulation S-K requirements and are presented in the tables below. These amounts do not reflect the actual amount of compensation earned by or paid to the PEO and our non-PEO NEOs for each of the fiscal years presented. |
PEO SCT to CAP Reconciliation | ||||||||||||
| | Fiscal Year | ||||||||||
| | 2023 | | | 2022 | | | 2021 | | | 2020 | |
SCT Total | | | $ | | | $ | | | $ | | | $ |
Less value of Stock Awards reported in SCT | | | ( | | | | | ( | | | ||
Plus year-end fair value of outstanding and unvested equity awards granted in the year | | | | | | | | | ||||
(Less) plus year over year change in fair value of outstanding and unvested equity awards granted in prior years | | | | | | | ( | | | |||
(Less) plus year over year change in fair value of equity awards granted in prior years that vested in the year | | | ( | | | ( | | | ( | | | |
CAP Total | | | $ | | | $( | | | $( | | | $ |
50 | | | ![]() | | |
Average of Non-PEO NEOs SCT to CAP Reconciliation | ||||||||||||
| | Fiscal Year | ||||||||||
| | 2023 | | | 2022 | | | 2021 | | | 2020 | |
SCT Total | | | $ | | | $ | | | $ | | | $ |
Less value of Stock Awards reported in SCT | | | ( | | | | | ( | | | ||
Plus year-end fair value of outstanding and unvested equity awards granted in the year | | | | | | | | | ||||
(Less) plus year over year change in fair value of outstanding and unvested equity awards granted in prior years | | | ( | | | | | ( | | | ||
(Less) plus year over year change in fair value of equity awards granted in prior years that vested in the year | | | ( | | | ( | | | ( | | | |
Plus fair value as of vesting date of equity awards granted and vested in the year | | | | | | | | | ||||
Less prior year-end fair value for any equity awards forfeited in the year | | | ( | | | | | | | |||
CAP Total | | | $ | | | $( | | | $( | | | $ |
(3) | Based on an initial fixed investment of $100 on January 29, 2021, the last business day of our 2020 fiscal year. |
(4) | Represents the Dow Jones Internet Commerce Index, which we consider to be our peer group under Regulation S-K Item 201(e), as presented in our 2023 Annual Report. Based on an initial fixed investment of $100 on January 29, 2021, the last business day of our 2020 fiscal year. TSR is weighted according to each peer company’s stock market capitalization at the beginning of each period for which a return is indicated. |
(5) | Represents our net income (loss) amounts for each of the years presented as reported in the respective annual report on Form 10-K. |
(6) | We have selected |
(7) | Consistent with the Company’s Annual Report on Form 10-K for Fiscal Year 2023, the Company has updated historical comparative periods to reflect the operations of Chewy Pharmacy KY beginning with the Company’s 2021 Fiscal Year. Any historical comparatives prior to Fiscal Year 2021 are consistent with previously reported financial information. |
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52 | | | ![]() | | |
Most Important Performance Measures |
(1) | Adjusted EBITDA margin and free cash flow are non-GAAP financial measures. For a reconciliation of non-GAAP to GAAP financial measures refer to “Reconciliation of Non-GAAP Financial Measures” in Appendix A. |
54 | | | ![]() | | |
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• | No new Awards will be granted under the 2022 Plan following the Annual Meeting if the 2024 Plan is approved by our stockholders; |
• | No automatic Award grants are promised to any eligible individual; |
• | Certain Shares subject to Awards under the 2024 Plan that are not delivered will again be available for issuance pursuant to new Awards under the 2024 Plan; however, if Shares are withheld to pay the exercise price of an option or base price of a share appreciation right or to satisfy any tax withholding requirement in connection with an option or share appreciation right, both the Shares issued (if any) and the Shares withheld will be deemed delivered; |
• | Awards assumed by a successor in connection with a change in control will not vest solely as a result of the change in control (unless specifically provided otherwise in an Award agreement); |
• | No gross-ups under Section 280G of the Code; |
• | No evergreen for the share reserve; |
• | A ten-year term; |
• | No (i) repricing of any option or share appreciation right, (ii) purchase of underwater options or share appreciation rights from a participant for value in excess of zero, in each case without the approval of the stockholders of Chewy or (iii) granting of any new option, share appreciation right, or other Award in substitution for, or upon the cancellation of, any previously granted option or share appreciation right that has the effect of reducing the exercise price thereof; |
• | Awards are subject to potential recoupment pursuant to any recoupment policy adopted by the Company; |
• | Awards are generally nontransferable; and |
• | Dividends and dividend equivalents are subject to restrictions and risk of forfeiture to the same extent as the Award with respect to which such dividends or dividend equivalents are accrued and will not be paid unless and until such Award has vested. |
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58 | | | ![]() | | |
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FOR ✔ | | | OUR BOARD, UPON RECOMMENDATION OF OUR COMPENSATION COMMITTEE, RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE CHEWY, INC. 2024 OMNIBUS INCENTIVE PLAN. |
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62 | | | ![]() | | |
A. | To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, a director or officer of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty owed to the Company or its stockholders. |
B. | Neither the amendment nor repeal of this Article VII, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation, nor, to the fullest extent permitted by the DGCL, any modification of law shall eliminate, reduce or otherwise adversely affect any right or protection of a current or former director or officer of the Company existing at the time of such amendment, repeal, adoption or modification. |
FOR ✔ | | | OUR BOARD, UPON RECOMMENDATION OF OUR NOMINATING AND CORPORATE GOVERNANCE COMMITTEE, RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE EXCULPATION OF CERTAIN OFFICERS AS PERMITTED BY RECENT AMENDMENTS TO DELAWARE LAW. |
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64 | | | ![]() | | |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and adjusted EBITDA does not reflect capital expenditure requirements for such replacements or for new capital expenditures; |
• | adjusted EBITDA does not reflect share-based compensation and related taxes. Share-based compensation has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy; |
• | adjusted EBITDA does not reflect interest income (expense), net; or changes in, or cash requirements for, our working capital; |
• | adjusted EBITDA does not reflect transaction related costs and other items which are either not representative of our underlying operations or are incremental costs that result from an actual or planned transaction or initiative and include changes in the fair value of equity warrants, severance and exit costs, litigation matters, integration consulting fees, internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and converging IT systems; and |
• | other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure. |
| | ![]() | | | A-1 |
(in thousands, except percentages) | | | Fiscal Year | |||
Reconciliation of Net Income to Adjusted EBITDA | | | 2023 | | | 2022 |
Net income | | | $39,580 | | | $49,899 |
Add (deduct): | | | | | ||
Depreciation and amortization | | | 109,693 | | | 83,440 |
Share-based compensation expense and related taxes | | | 248,543 | | | 163,211 |
Interest (income) expense, net | | | (58,501) | | | (9,290) |
Change in fair value of equity warrants | | | (13,079) | | | 13,340 |
Income tax provision | | | 8,650 | | | 2,646 |
Severance costs | | | 14,348 | | | — |
Exit costs | | | 6,839 | | | — |
Transaction related costs | | | 7,827 | | | 3,953 |
Other | | | 4,168 | | | (460) |
Adjusted EBITDA | | | $368,068 | | | $306,739 |
Net sales | | | $11,147,720 | | | $10,119,000 |
Net margin | | | 0.4% | | | 0.5% |
Adjusted EBITDA margin | | | 3.3% | | | 3.0% |
A-2 | | | ![]() | | |
(in thousands, except per share data) | | | Fiscal Year | |||
Reconciliation of Net Income to Adjusted Net Income | | | 2023 | | | 2022 |
Net income | | | $39,580 | | | $49,899 |
Add (deduct): | | | | | ||
Share-based compensation expense and related taxes | | | 248,543 | | | 163,211 |
Change in fair value of equity warrants | | | (13,079) | | | 13,340 |
Severance costs | | | 14,348 | | | — |
Exit costs | | | 6,839 | | | — |
Adjusted net income | | | $296,231 | | | $226,450 |
Weighted-average common shares used in computing adjusted earnings per share: | | | | | ||
Basic | | | 429,457 | | | 422,331 |
Effect of dilutive share-based awards | | | 2,583 | | | 5,439 |
Diluted | | | 432,040 | | | 427,770 |
Earnings (loss) per share attributable to common Class A and Class B stockholders | | | | | ||
Basic | | | $0.09 | | | $0.12 |
Diluted | | | $0.09 | | | $0.12 |
Adjusted basic | | | $0.69 | | | $0.54 |
Adjusted diluted | | | $0.69 | | | $0.53 |
| | ![]() | | | A-3 |
(in thousands) | | | Fiscal Year | |||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | | | 2023 | | | 2022 |
Net cash provided by operating activities | | | $486,211 | | | $349,777 |
Deduct: | | | | | ||
Capital expenditures | | | (143,282) | | | (230,310) |
Free Cash Flow | | | $342,929 | | | $119,467 |
A-4 | | | ![]() | | |
1. | Purpose of the Plan |
2. | Definitions |
(a) | “Affiliate” means, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified Person. |
(b) | “Award Agreement” means a written or electronic agreement, in a form determined by the Committee from time to time, entered into by each Participant and Chewy, evidencing the grant of an Incentive Award under the Plan. |
(c) | “Beneficial Owner” (including correlative terms) shall have the meaning ascribed to that term in Rule 13d-3 promulgated under the Exchange Act. |
(d) | “Board of Directors” means the Board of Directors of Chewy. |
(e) | “Cash-Based Award” means an Incentive Award granted pursuant to Section 8(b) hereof and payable in cash at such time or times and subject to such terms and conditions as determined by the Committee in its sole discretion. |
(f) | “Cause” means, unless otherwise specified by the Committee in the applicable Award Agreement, with respect to a Participant’s termination of Service, the following: (i) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Incentive Award (or where there is such an agreement but it does not define “cause” (or words of like import)), termination due to a Participant’s dishonesty, fraud, moral turpitude, willful misconduct, refusal to perform the Participant’s duties or responsibilities for any reason other than illness or incapacity, or materially unsatisfactory performance of the Participant’s duties for the Company or an Affiliate, as determined by the Company or the Committee, in each case, in its good-faith discretion; or (ii) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Incentive Award that defines “cause” (or words of like import), “cause” as defined under such agreement. |
| | ![]() | | | B-1 |
(g) | “Change in Control” means, unless otherwise defined in the Award Agreement: |
(i) | any one Person, or more than one Person acting as a group (as defined under Treasury Regulation § 1.409A-3(i)(5)(v)(B)), other than Chewy, any employee benefit plan sponsored by Chewy or BC Partners LLP (“BC Partners”) or any of its Affiliates, becomes the Beneficial Owner of stock of Chewy that, together with stock held by such Person or group, constitutes more than 50 percent of the total Voting Power of the stock of Chewy; |
(ii) | a majority of members of the Board of Directors is comprised of directors whose appointment or election is (A) not endorsed by a majority of the members of the Board of Directors before the date of each appointment or election or (B) approved in connection with any actual or threatened contest for election to positions on the Board of Directors; |
(iii) | there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Company of all or substantially all of the Company’s assets, other than the sale or other disposition by the Company of all or substantially all of the Company’s assets to a Person, at least 50 percent of the total Voting Power of the outstanding Voting Securities of which are Beneficially Owned by the holders of the Voting Securities of Chewy immediately prior to such sale or other disposition; or |
(iv) | a merger, consolidation, reorganization or similar transaction with or into Chewy or in which securities of Chewy are issued, as a result of which the holders of Voting Securities of Chewy immediately before such event own, directly or indirectly, immediately after such event less than 50% of the combined Voting Power of the outstanding Voting Securities of the surviving company or parent corporation resulting from, or issuing its Voting Securities as part of, such event. |
(h) | “Chewy” means Chewy, Inc., a Delaware corporation. |
(i) | “Code” means the Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder. |
(j) | “Committee” means the Compensation Committee of the Board of Directors or such other committee as the Board of Directors shall appoint from time to time to administer the Plan and to otherwise exercise and perform the authority and functions assigned to the Committee under the terms of the Plan. |
(k) | “Company” means Chewy and all of its Subsidiaries, collectively. |
(l) | “Consultant” means any natural person who is an advisor, contractor or consultant to Chewy or any of its Affiliates. |
(m) | “Director” means any non-employee member of the Board of Directors. |
(n) | “Dividend Equivalent Rights” means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares. |
(o) | “Effective Date” means the date the Plan is approved by the shareholders of the Company. |
B-2 | | | ![]() | | |
(p) | “Employee” means an employee of Chewy or one of its Affiliates or Subsidiaries. |
(q) | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
(r) | “Fair Market Value” means, with respect to a Share, as of the applicable date of determination, any of (i) the closing price as reported on the securities exchange/s on which Shares are then listed or admitted to trading (the “Securities Exchange”) on the trading day immediately prior to the date of grant of an Incentive Award, or (ii) the closing price as reported on the Securities Exchange on the date of grant of an Incentive Award. In the event that the price of a Share shall not be so reported, the Fair Market Value of a Share shall be determined by the Committee in its sole discretion taking into account the requirements of Section 409A of the Code. |
(s) | “Incentive Award” means an Option, Restricted Stock Unit, Other Share-Based Award or Cash-Based Award granted pursuant to the terms of the Plan. |
(t) | “Option” means a stock option to purchase Shares granted to a Participant pursuant to Section 6. |
(u) | “Other Share-Based Award” means an award granted to a Participant pursuant to Section 8. |
(v) | “Participant” means an Eligible Person (as defined in Section 5) to whom one or more Incentive Awards have been granted pursuant to the Plan and have not been fully settled or cancelled and, following the death of any such Eligible Person, such Eligible Person’s successors, heirs, executors and administrators, as the case may be. |
(w) | “Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act, including any “group” within the meaning of Section 13(d)(3) under the Exchange Act. |
(x) | “Plan” means the Chewy, Inc. 2024 Omnibus Incentive Plan, as it may be amended from time to time. |
(y) | “Prior Plan Award” means an award outstanding under the Prior Plan as of the Effective Date. |
(z) | “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Committee to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions. |
(aa) | “Securities Act” means the Securities Act of 1933, as amended. |
(bb) | “Service” means (i) for an Eligible Person who is an Employee, the period during which such Eligible Person is employed by the Company or an Affiliate, (ii) for an Eligible Person who is a Director, the period during which such Eligible Person is a member of the Board of Directors, and (iii) for an Eligible Person who is a Consultant, the period during which such Eligible Person is providing services to the Company. |
(cc) | “Share” means a share of Class A common stock, par value $0.01 per share, of Chewy, or any other security into which the common stock shall be changed pursuant to the adjustment provisions of Section 9 of the Plan. |
(dd) | “Subsidiary” means any “subsidiary” within the meaning of Rule 405 under the Securities Act. |
(ee) | “Substitute Award” means Incentive Awards that result from the assumption of, or are in substitution for, outstanding awards previously granted by a company or other entity acquired, directly or indirectly, by Chewy or one of its Subsidiaries or with which Chewy or one of its Subsidiaries combines. |
(ff) | “Termination Date” means the date an Eligible Person’s Service terminates. |
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(gg) | “Voting Power” means the number of votes available to be cast (determined by reference to the maximum number of votes entitled to be cast by the holders of Voting Securities upon any matter submitted to shareholders where the holders of all Voting Securities vote together as a single class) by the holders of Voting Securities. |
(hh) | “Voting Securities” means any securities or other ownership interests of an entity entitled, or which may be entitled, to vote on the election of directors, or securities or other ownership interests which are convertible into, or exercisable in exchange for, such Voting Securities, whether or not subject to the passage of time or any contingency. |
3. | Shares Subject to the Plan and Limitations on Incentive Awards |
(a) | The maximum number of Shares that may be covered by Incentive Awards granted under the Plan shall not exceed the aggregate total of (i) eighty million (80,000,000) Shares plus (ii) the number of Shares remaining available for new awards under the Prior Plan as of the Effective Date (after counting for outstanding performance-based awards at the maximum payout level), not to exceed three million one hundred thousand (3,100,000) Shares. Out of such aggregate, the maximum number of Shares that may be covered by Options that are designated as “incentive stock options” within the meaning of Section 422 of the Code shall not exceed eighty-three million one hundred thousand (83,100,000) Shares. The maximum number of Shares referred to in the preceding sentences of this Section 3 shall in each case be subject to adjustment as provided in Section 9 and the following provisions of this Section 3. Any Shares granted under any Incentive Awards shall be counted against the Share limit on a one-for-one basis. Shares issued under the Plan may be either: authorized and unissued shares, treasury shares, shares purchased by the Company in the open market, or any combination of the preceding categories as the Company determines in its sole discretion. The sum of the grant date fair value of the Incentive Awards and the amount of any cash-based payments that may be granted to a Participant who is an Eligible Person solely by virtue of Service as a Director during any calendar year may not exceed one million dollars ($1,000,000). |
(b) | For purposes of the preceding paragraph, Shares covered by Incentive Awards shall only be counted as used to the extent they are actually issued and delivered to a Participant (or such Participant’s permitted transferees as described in Section 19 of the Plan) pursuant to the Plan; provided, however, that if Shares are withheld to pay the exercise price of an Option or base price of a share appreciation right or to satisfy any tax withholding requirement in connection with an Option or share appreciation right, both the Shares issued (if any) and the Shares withheld will be deemed delivered for purposes of determining the number of Shares that are available for delivery under the Plan. Any Shares subject to an Incentive Award or a Prior Plan Award that expires or is canceled, forfeited, or terminated without issuance of the full number of Shares to which the Incentive Award or the Prior Plan Award related will again be available for issuance under the Plan. Notwithstanding anything to the contrary contained herein, Shares subject to an Incentive Award under the Plan or a Prior Plan Award shall again be made available for issuance or delivery under the Plan if such Shares are Shares covered by Incentive Awards of Restricted Stock Units or Other Share-Based Awards (other than Options and share appreciation rights) that were withheld by the Company to satisfy any tax withholding obligation. Any Incentive Award settled in cash shall not count as against the share limitation in Section 3(a). Additionally, Shares covered by Incentive Awards granted pursuant to the Plan in connection with the assumption, replacement, conversion or adjustment of outstanding equity-based awards in the context of a corporate acquisition or merger (within the meaning of Section 303A.08 of the New York Stock Exchange (“NYSE”) Listed Company Manual) shall not count as used under the Plan for purposes of this Section 3. |
4. | Administration of the Plan |
(a) | The Plan shall be administered by a Committee of the Board of Directors consisting of two or more Persons, each of whom qualifies as a “non-employee director” (within the meaning of |
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(b) | The Committee shall have full discretionary authority to administer the Plan, including discretionary authority to interpret and construe any and all provisions of the Plan and any Award Agreement thereunder, and to adopt, amend and rescind from time to time such rules and regulations for the administration of the Plan, including rules and regulations related to sub-plans established for the purpose of satisfying applicable foreign laws and/or qualifying for preferred tax treatment under applicable foreign tax laws, as the Committee may deem necessary or appropriate. Decisions of the Committee shall be final, binding and conclusive on all parties. For the avoidance of doubt, the Committee may exercise all discretion granted to it under the Plan in a non-uniform manner among Participants. |
(c) | The Committee may delegate the administration of the Plan to one or more officers or employees of the Company, (each, an “Administrator”) and such Administrator(s) may have the authority to execute and distribute Award Agreements, to maintain records relating to Incentive Awards, to process or oversee the issuance of Shares under Incentive Awards, to interpret and administer the terms of Incentive Awards, and to take such other actions as may be necessary or appropriate for the administration of the Plan and of Incentive Awards under the Plan, provided that in no case shall any such Administrator be authorized (i) to take any action inconsistent with Section 409A of the Code with respect to any Incentive Award subject to such provision or (ii) to take any action inconsistent with applicable law. Any action by any such Administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee and, except as otherwise specifically provided, references in the Plan to the Committee shall include any such Administrator. The Committee and, to the extent it so provides, any subcommittee, shall have sole authority to determine whether to review any actions and/or interpretations of any such Administrator, and if the Committee, or subcommittee, shall decide to conduct such a review, any such actions and/or interpretations of any such Administrator shall be subject to approval, disapproval, or modification by the Committee or subcommittee. |
(d) | On or after the date of grant of an Incentive Award under the Plan, the Committee may (i) accelerate the date on which any such Incentive Award becomes vested, exercisable or transferable, as the case may be, (ii) extend the term of any such Incentive Award, including, without limitation, extending the period following a termination of a Participant’s Service during which any such Incentive Award may remain outstanding, (iii) waive any conditions to the vesting, exercisability or transferability, as the case may be, of any such Incentive Award, (iv) provide for the payment of dividends or Dividend Equivalent Rights with respect to any such Incentive Award, or (v) adopt procedures regarding the exercise of Options or share appreciation rights, including establishing “black out” or other periods during which Options or share appreciation rights may not be exercised; provided, that the Committee shall not have any such authority to the extent that the grant of such authority would cause any tax to become due under Section 409A of the Code. Notwithstanding anything herein to the contrary, Chewy |
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(e) | The Company shall pay any amount payable with respect to an Incentive Award in accordance with the terms of such Incentive Award, provided that the Committee may, in its discretion, defer, or give a Participant the election to defer, the payment of amounts payable with respect to an Incentive Award pursuant to a deferred compensation plan. |
(f) | No member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and Chewy shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company. |
5. | Eligibility |
6. | Options |
(a) | Exercise Price. The exercise price per Share covered by any Option shall be not less than 100% of the Fair Market Value of a Share on the date on which such Option is granted, it being understood that the exercise price of an Option that is a Substitute Award may be less than the Fair Market Value per Share on the date such Substitute Award is assumed, provided that such substitution complies with applicable laws and regulations. |
(b) | Term and Exercise of Options |
(i) | Each Option shall become vested and exercisable on such date or dates, during such period and for such number of Shares as set forth in the Award Agreement; provided that each Option shall be subject to earlier termination, expiration or cancellation as provided in the Plan or the Award Agreement. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of ten years from the date such Option is granted; provided, however that the expiration of the Option may be tolled while the Participant cannot exercise such Option because an exercise would violate an applicable federal, state, local, or foreign law, or would jeopardize the ability of Chewy to continue as a going concern, |
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(ii) | Each Option shall be exercisable in whole or in part. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof. |
(iii) | An Option shall be exercised by such methods and procedures as the Committee determines from time to time, including without limitation through net physical settlement or other method of cashless exercise. |
(c) | Special Rules for Incentive Stock Options |
(i) | The aggregate Fair Market Value of Shares with respect to which “incentive stock options” (within the meaning of Section 422 of the Code) are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of Chewy or any of its “subsidiaries” (within the meaning of Section 424 of the Code) shall not exceed one hundred thousand dollars ($100,000). Such Fair Market Value shall be determined as of the date on which each such incentive stock option is granted. In the event that the aggregate Fair Market Value of Shares with respect to such incentive stock options exceeds one hundred thousand dollars ($100,000), then incentive stock options granted hereunder to such Participant shall, to the extent and in the order required by regulations promulgated under the Code (or any other authority having the force of regulations), automatically be deemed to be non-qualified stock options, but all other terms and provisions of such incentive stock options shall remain unchanged. In the absence of such regulations (and authority), or in the event such regulations (or authority) require or permit a designation of the Options which shall cease to constitute incentive stock options, incentive stock options granted hereunder shall, to the extent of such excess and in the order in which they were granted, automatically be deemed to be non-qualified stock options, but all other terms and provisions of such incentive stock options shall remain unchanged. |
(ii) | Incentive stock options may only be granted to individuals who are employees of Chewy or any of its “subsidiaries” (within the meaning of Section 424 of the Code). No incentive stock option may be granted to an individual if, at the time of the proposed grant, such individual owns stock possessing more than ten percent of the total combined “voting power” (within the meaning of Section 422 of the Code) of all classes of stock of Chewy or any of its “subsidiaries” (within the meaning of Section 424 of the Code), unless (i) the exercise price of such incentive stock option is at least 110% of the Fair Market Value of a Share at the time such incentive stock option is granted and (ii) such incentive stock option is not exercisable after the expiration of five years from the date such incentive stock option is granted. |
7. | Restricted Stock Units |
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(a) | Settlement. The Committee may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practical after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election, in a manner intended to comply with Section 409A of the Code. |
(b) | Dividend Equivalent Rights. If the Committee so provides, a grant of Restricted Stock Units may provide a Participant with the right to receive Dividend Equivalent Rights. Dividend Equivalent Rights will be credited to an account for the Participant, settled in cash or Shares, and subject to the same restrictions on transferability and forfeitability as the Restricted Stock Units with respect to which the Dividend Equivalent Rights are granted and subject to other terms and conditions as set forth in the Award Agreement. |
8. | Other Share-Based Awards and Cash-Based Awards |
(a) | Other Share-Based Awards. The Committee may from time to time grant equity-based or equity-related Incentive Awards not otherwise described herein in such amounts and on such terms as it shall determine, subject to the terms and conditions set forth in the Plan. Without limiting the generality of the preceding sentence, each such Other Share-Based Award may (i) involve the transfer of actual Shares to Participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of Shares, (ii) be subject to performance-based and/or service-based conditions, (iii) be in the form of share appreciation rights, phantom stock, restricted shares, performance shares, deferred share units or share-denominated performance units (other than Restricted Stock Units), and/or (iv) be designed to comply with applicable laws of jurisdictions other than the United States; provided, that each Other Share-Based Award shall be denominated in, or shall have a value determined by reference to, a number of Shares that is specified at the time of the grant of such Incentive Award. |
(b) | Cash-Based Awards. The Committee may from time to time grant Cash-Based Awards to Eligible Persons in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by applicable law, as it shall determine in its sole discretion. Cash-Based Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such Cash-Based Awards at any time in its sole discretion. The grant of a Cash-Based Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder. |
9. | Adjustment Upon Certain Changes |
(a) | Shares Available for Grants. In the event of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of Shares, spin-off or similar corporate change or extraordinary cash dividend, the maximum aggregate number of Shares with respect to which the Committee may grant Incentive Awards, the number of Shares subject to Incentive Awards, the exercise price of any Option or base price of any share appreciation right and the applicable performance targets or criteria shall be equitably adjusted or substituted by the Committee to prevent enlargement or reduction in rights granted under the Incentive Award. In the event of any change in the number of Shares of Chewy outstanding by reason of any other event or transaction, the Committee shall, to the extent deemed appropriate by the Committee, make such adjustments to the type or number of Shares with respect to which Incentive Awards may be granted and/or to the number of Shares subject to Incentive Awards. |
(b) | Increase or Decrease in Issued Shares Without Consideration. In the event of any increase or decrease in the number of issued Shares resulting from a subdivision or consolidation of Shares |
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(c) | Certain Mergers and Other Transactions. In the event of a dissolution or liquidation of the Company, a sale of all or substantially all of the Company’s assets (on a consolidated basis), or a merger, consolidation or similar transaction involving the Company in which the holders of Shares receive consideration in respect of Shares, including cash, securities and/or other property, other than, or in addition to, shares of the surviving corporation in such transaction, the Committee shall, to the extent deemed appropriate by the Committee, have the power to: |
(i) | cancel, effective immediately prior to the occurrence of such event, each Incentive Award (whether or not then exercisable or vested), and, in full consideration of such cancellation, pay to the Participant to whom such Incentive Award was granted an amount in cash, for each Share subject to such Incentive Award, equal to the value, as determined by the Committee, of such Incentive Award, provided that with respect to any outstanding Option or share appreciation right such value shall be equal to the excess of (A) the value, as determined by the Committee, of the property (including cash) received by the holder of a Share as a result of such event over (B) the exercise price of such Option or base price of such share appreciation right (which, for the avoidance of doubt, may be zero in the case of underwater Options and share appreciation rights); or |
(ii) | provide for the termination of an Incentive Award in (whether or not then exercisable or vested) in exchange for an award with respect to (A) some or all of the cash, securities and/or other property, if any, which a holder of the number of Shares subject to such Incentive Award would have received in such transaction upon the exercise of such Incentive Award or realization of the Participant’s rights as of the date of occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Committee determines in good faith that no amount would have been attained upon the exercise of such Incentive Award or realization of the Participant’s rights, then such Incentive Award may be terminated by the Company without payment) or (B) securities of the acquirer or surviving entity, or any combination of the foregoing and, incident thereto, in any case, make an equitable adjustment as determined by the Committee in the exercise price of the Incentive Award, or the number of securities or amount of property subject to the Incentive Award or provide for a payment (in cash or other property) to the Participant to whom such Incentive Award was granted in partial consideration for the exchange of the Incentive Award. |
(d) | Other Changes. In the event of any change in the capitalization of Chewy or corporate change other than those specifically referred to in Sections 9(a), (b) or (c), the Committee shall, to the extent deemed appropriate by the Committee, make such adjustments in the number and class of Shares subject to Incentive Awards outstanding on the date on which such change occurs and in such other terms of such Incentive Awards as the Committee may consider appropriate. |
(e) | No Other Rights. Except as expressly provided in the Plan or any Award Agreement, no Participant shall have any rights by reason of any subdivision or consolidation of Shares of any class, the payment of any dividends or dividend equivalents, any increase or decrease in the number of Shares of any class or any dissolution, liquidation, merger or consolidation of Chewy or any other corporation. Except as expressly provided in the Plan, no issuance by Chewy of Shares of any class, or securities convertible into Shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares or amount of other property subject to, or the terms related to, any Incentive Award. In taking any of the actions permitted under this Section 9, the Committee will not be required to treat all Incentive Awards similarly in the transaction. |
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(f) | Savings Clause. No provision of this Section 9 shall be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code with regard to Incentive Awards subject to Section 409A of the Code. Furthermore, no provision of this Section 9 shall be given effect to the extent such provision would result in short-swing profits liability under Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the Exchange Act. |
10. | Change in Control; Termination of Service |
(a) | Change in Control |
(i) | Subject to the terms of an Award Agreement, in the event of a Change in Control, (A) Incentive Awards that vest based on time-based criteria will not vest on a Change in Control but will vest if the applicable Participant is terminated without Cause within two years after the consummation of a Change in Control and (B) all performance-based Incentive Awards will convert to time-based Incentive Awards that will be subject to clause (A), with the number of Shares to be determined based on assuming either (1) actual performance to date of a Change in Control (extrapolated as appropriate to the end of the performance period), (2) target performance or (3) the higher of (1) or (2), in the discretion of the Committee. |
(ii) | Notwithstanding the foregoing and subject to the terms of an Award Agreement, in the event of a Change in Control, each outstanding Incentive Award shall be treated as the Committee determines, including, without limitation that (A) Incentive Awards may be continued, assumed, or substantially equivalent Incentive Awards may be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices, (B) Incentive Awards may be terminated in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Incentive Award or realization of the Participant’s rights as of the date of occurrence of the Change in Control (and, for the avoidance of doubt, if as of the date of the occurrence of the Change in Control the Committee determines in good faith that no amount would have been attained upon the exercise of such Incentive Award or realization of the Participant’s rights, then such Incentive Award may be terminated by the Company without payment) or (C) outstanding Incentive Awards will terminate upon or immediately prior to the consummation of such Change in Control (provided that the Committee provides at least twenty days’ notice to the Participants holding such Incentive Awards and each Participant has had the right to exercise such Incentive Awards in full). |
(b) | Termination of Service |
(i) | The Service of a Participant with the Company shall be deemed to have terminated for all purposes of the Plan if such Person is employed by or provides services to a Person that is a Subsidiary of the Company and such Person ceases to be a Subsidiary of the Company, unless the Committee determines otherwise. Without limiting the generality of the foregoing, the Committee shall determine whether an authorized leave of absence shall constitute termination of Service, provided that a Participant who is an employee will not be deemed to cease Service in the case of any leave of absence approved by the Company. Furthermore, no payment shall be made with respect to any Incentive Awards under the Plan that are subject to Section 409A of the Code as a result of any such authorized leave of absence or absence in military or government service unless such authorized leave of absence constitutes a separation from service for purposes of Section 409A of the Code. Notwithstanding the foregoing provisions of this definition, with respect to any Incentive Award that constitutes a “nonqualified deferred compensation” within the meaning of Section 409A of the Code, a Participant shall not be considered to have experienced a “termination of Service” unless the Participant has experienced a “separation from service” within the meaning of Section 409A of the Code. |
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(ii) | The Award Agreement shall specify the consequences with respect to such Incentive Award of the termination of Service of the Participant holding the Incentive Award. |
11. | Rights Under the Plan |
12. | Dividends and Dividend Equivalent Rights |
13. | No Special Service Rights; No Right to Incentive Award |
14. | Securities Matters |
(a) | Chewy shall be under no obligation to effect the registration pursuant to the Securities Act of any Shares to be issued hereunder or to effect similar compliance under any applicable federal, state, local, or foreign laws. Notwithstanding anything herein to the contrary, Chewy shall not be obligated to cause to be issued Shares pursuant to the Plan unless and until Chewy is advised by its counsel that the issuance is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which Shares are traded. The Committee may require, as a condition to the issuance of Shares pursuant to the terms hereof, that the recipient of such Shares make such covenants, agreements and representations, and that any related certificates representing such Shares bear such legends, as the Committee, in its sole discretion, deems necessary or desirable. |
(b) | The exercise or settlement of any Incentive Award (including, without limitation, any Option) granted hereunder shall only be effective unless at such time counsel to Chewy shall have determined that the issuance and delivery of Shares pursuant to such exercise would not be in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which Shares are traded. Chewy may, in its sole discretion, defer the effectiveness of any exercise or settlement of an Incentive Award granted hereunder in order to allow the issuance of Shares pursuant thereto to be made pursuant to registration or an exemption from registration or other methods for compliance available under |
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15. | Withholding Taxes |
(a) | Cash Remittance. Whenever withholding tax obligations are incurred in connection with any Incentive Award, Chewy shall have the right to require the Participant to remit to Chewy in cash an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, attributable to such event. In addition, upon the exercise or settlement of any Incentive Award in cash, or the making of any other payment with respect to any Incentive Award (other than in Shares), Chewy shall have the right to withhold from any payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise, settlement or payment. |
(b) | Share Remittance. At the election of the Participant, subject to the approval of the Committee, whenever withholding tax obligations are incurred in connection with any Incentive Award, the Participant may tender to Chewy a number of Shares that have been owned by the Participant (or such other period as the Committee may determine) having a Fair Market Value at the tender date determined by the Committee to be sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such event. Such election shall satisfy the Participant’s obligations under Section 15(a) hereof, if any. |
(c) | Share Withholding. At the election of the Participant, subject to the approval of the Committee, whenever withholding tax obligations are incurred in connection with any Incentive Award, Chewy shall withhold a number of such shares having a Fair Market Value determined by the Committee to be sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such event. Such election shall satisfy the Participant’s obligations under Section 15(a) hereof, if any. |
16. | Amendment or Termination of the Plan |
17. | Recoupment |
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18. | No Obligation to Exercise |
19. | Transfers |
20. | Expenses and Receipts |
21. | Relationship to Other Benefits |
22. | Governing Law |
23. | Severability |
24. | Effective Date and Term of Plan |
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A. | Notwithstanding anything contained in this Amended and Restated Certificate of Incorporation to the contrary, after the date on which the outstanding shares of Class B Common Stock represent less than 50% of the combined voting power of Class A Common Stock and Class B Common Stock, the following provisions in this Amended and Restated Certificate of Incorporation may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least 75% in voting power of all the then-outstanding shares Class A Common Stock and Class B Common Stock entitled to vote thereon, voting together as a single class: Article V, Article VI, Article VII, Article VIII, Article IX and Article X. For the purposes of this Amended and Restated Certificate of Incorporation, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (except, for the avoidance of doubt, holders of Class B Common Stock will not be deemed to be beneficial owners of Class A Common Stock). |
B. | The Board is expressly authorized to make, repeal, alter, amend and rescind, in whole or in part, the amended and restated bylaws of the Company (as in effect from time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Amended and Restated Certificate of Incorporation. Notwithstanding anything to the contrary contained in this Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote of the stockholders, after the date on which the outstanding shares of Class B Common Stock represent less than 50% of the combined voting power of Class A Common Stock and Class B Common Stock, in addition to any vote of the holders of any class or series of capital stock of the Company required herein (including any certificate of designation relating to any series of Preferred Stock), the Bylaws or applicable law, the affirmative |
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A. | Except as otherwise provided in this Amended and Restated Certificate of Incorporation or the DGCL, the business and affairs of the Company shall be managed by or under the direction of the Board. Except as otherwise provided for or fixed pursuant to the provisions of Article IV hereof (including any certificate of designation with respect to any series of Preferred Stock) and this Article VI relating to the rights of the holders of any series of Preferred Stock to elect additional directors, the total number of directors shall be determined from time to time by resolution adopted by the Board or the stockholders of the Company. The directors (other than those directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such series, as the case may be) shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of such directors. Class I directors shall initially serve for a term expiring at the first annual meeting of stockholders following the date the Common Stock is first publicly traded (the “IPO Date”), Class II directors shall initially serve for a term expiring at the second annual meeting of stockholders following the IPO Date and Class III directors shall initially serve for a term expiring at the third annual meeting of stockholders following the IPO Date. At each succeeding annual meeting, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third succeeding annual meeting of stockholders. If the number of such directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any such additional director of any class elected to fill a newly created directorship resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decrease in the number of directors remove or shorten the term of any incumbent director. Any such director shall hold office until the annual meeting at which his or her term expires and until his or her successor shall be elected and qualified, or his or her death, resignation, retirement, disqualification or removal from office. The Board is authorized to assign members of the Board to their respective class. |
B. | Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding, any newly-created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled by a majority of the directors then in office, even if less than a quorum, by a sole remaining director or by the stockholders; provided, however, that after the date on which the outstanding shares of Class B Common Stock represent less than 50% of the combined voting power of Class A Common Stock and Class B Common Stock, any newly-created directorship on the Board that results from an increase in the number of directors and any vacancy occurring on the Board shall be filled only by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director (and not by the stockholders). Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal. |
C. | Any or all of the directors (other than the directors elected by the holders of any series of Preferred Stock of the Company, voting separately as a series or together with one or more other such series, as the case may be) may be removed at any time either with or without cause by the affirmative vote of a majority in voting power of all outstanding shares of Common Stock entitled to vote thereon, voting as a single class; provided, however, that after the date on which the outstanding shares of Class B Common Stock represent less than 50% of the combined voting power of Class A Common |
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D. | Elections of directors need not be by written ballot unless the Bylaws shall so provide. |
E. | During any period when the holders of any series of Preferred Stock, voting separately as a series or together with one or more series, have the right to elect additional directors, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Company shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his or her earlier death, resignation, retirement, disqualification or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total authorized number of directors of the Company shall be reduced accordingly. |
A. | To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, a director or officer of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty owed to the Company or its stockholders. |
B. | Neither the amendment nor repeal of this Article VII, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation, nor, to the fullest extent permitted by the DGCL, any modification of law shall eliminate, reduce or otherwise adversely affect any right or protection of a current or former director or officer of the Company existing at the time of such amendment, repeal, adoption or modification. |
A. | For as long as the outstanding shares of Class B Common Stock represent 50% or more of the combined voting power of Class A Common Stock and Class B Common Stock, any action required or permitted to be taken at any annual or special meeting of stockholders of the Company may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Company by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Company having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to the Company’s registered office shall be made by hand, overnight courier or by certified or registered mail, return receipt requested. Once no shares of Class B Common Stock remain outstanding, any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders; provided, however, |
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B. | Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Company for any purpose or purposes may only be called in the manner provided in the Bylaws. |
C. | An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date, and at such time as shall be fixed in the manner provided in the Bylaws. |
A. | In recognition and anticipation that (i) certain directors, principals, members, officers, associated funds, employees and/or other representatives of one or more of the Sponsors and their respective Affiliates (as defined below) may serve as directors, officers or agents of the Company, (ii) one or more of the Sponsors and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company, directly or indirectly, may engage, and (iii) members of the Board who are not employees of the Company (“Non-Employee Directors”) and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company, directly or indirectly, may engage, the provisions of this Article IX are set forth to regulate and define the conduct of certain affairs of the Company with respect to certain classes or categories of business opportunities as they may involve any of the Sponsors, the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Company and its directors, officers and stockholders in connection therewith. |
B. | None of (i) the Sponsors or any of their respective Affiliates or (ii) any Non-Employee Director (including any Non-Employee Director who serves as an officer of the Company in both his or her director and officer capacities) or his or her Affiliates (the Persons (as defined below) identified in (i) and (ii) above being referred to, collectively, as “Identified Persons” and, individually, as an “Identified Person”) shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (1) engaging in the same or similar business activities or lines of business in which the Company or any of its Affiliates now engages or proposes to engage or (2) otherwise competing with the Company or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities. To the fullest extent permitted by law, the Company hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Company or any of its Affiliates, except as provided in Section D of this Article IX. Subject to Section D of this Article IX, in the event that any Identified Person acquires knowledge of a potential transaction or other matter or business opportunity which may be a corporate opportunity for itself, herself or himself and the Company or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no fiduciary duty or other duty (contractual or otherwise) to communicate, present or offer such transaction or other business opportunity to the Company or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty or other duty (contractual or otherwise) as a stockholder, director or officer of the Company solely by reason of the |
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C. | The Company and its Affiliates do not have any rights in and to the business ventures of any Identified Person, or the income or profits derived therefrom, and the Company agrees that each of the Identified Persons may do business with any potential or actual customer or supplier of the Company or may employ or otherwise engage any officer or employee of the Company. |
D. | The Company does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any Non-Employee Director who serves as an officer of the Company) if such opportunity is expressly offered to such person in writing solely in his or her capacity as a director or officer of the Company, and the provisions of Section B of this Article IX shall not apply to any such corporate opportunity. |
E. | In addition to and notwithstanding the foregoing provisions of this Article IX, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Company if it is a business opportunity that (i) the Company is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Company’s business or is of no practical advantage to the Company or (iii) is one in which the Company has no interest or reasonable expectancy. |
F. | For purposes of this Article IX, (i) “Affiliate” shall mean (a) in respect of any Sponsor, any Person that, directly or indirectly, is controlled by such Sponsor, controls such Sponsor or is under common control with such Sponsor and shall include any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Company and any entity that is controlled by the Company), (b) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Company and any entity that is controlled by the Company) and (c) in respect of the Company, any Person that, directly or indirectly, is controlled by the Company; and (ii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity. |
G. | To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article IX. Neither the alteration, amendment, addition to or repeal of this Article IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article IX, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. |
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A. | The Company hereby expressly elects not to be governed by Section 203 of the DGCL. |
A. | If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Company to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Company to the fullest extent permitted by law. |
B. | Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee or stockholder of the Company to the Company or the Company’s stockholders, creditors or other constituents, (iii) any action asserting a claim against the Company or any director or officer of the Company arising pursuant to any provision of the DGCL or this Amended and Restated Certificate of Incorporation or the Bylaws (as either may be amended and/or restated from time to time) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware. |
C. | Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. |
D. | To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to the provisions of Section B and Section C of Article XI. |
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