Document:

exv10w2

 

Exhibit 10.2

NONSTATUTORY STOCK OPTION

	 	 	 
	Optionee:

	 	«First_Name» «Mid» «Last_Name»
	 

	 	«Position»
	 

	 	Department: «Depart»

     On «Grant_Date» (the “Grant Date”) PetSmart, Inc. (the “Company”), pursuant to its 2006 Equity
Incentive Plan (the “Plan”), granted to you, the Optionee named above, an option to purchase shares
of the common stock of the Company (“Common Stock”). This option is not intended to qualify and
will not be treated as an “incentive stock option” within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”).

     The grant hereunder is in connection with and in furtherance of the Company’s compensatory
benefit plan for participation of the Company’s (and its Affiliates’ as defined in the Plan)
employees (including officers), directors or consultants and is subject to the terms and conditions
of the Plan. In the event that this option is granted to you in connection with the performance of
services as a consultant or director (or you later become a consultant or director), references to
employment, employee and similar terms shall be deemed to include the performance of services as a
consultant or a director, as the case may be, provided, however, that no rights as an employee
shall arise by reason of the use of such terms. Any reference to employment with the Company shall
also refer to employment with an Affiliate, as appropriate.

     The details of your option are as follows:

     1. The total number of shares of Common Stock subject to this option is «Issued». The vesting
commencement date for this option is «Begin_Date». Subject to the limitations contained herein and
as otherwise provided for herein, shares subject to this option shall become exercisable
twenty-five percent (25%) per year for four (4) years commencing one (1) year after the vesting
commencement date and on each anniversary thereafter, unless you cease to be employed by the
Company for any reason prior to any such anniversary date.

     2. (a) The exercise price of this option is $«Price» per share, provided however, that the
exercise price shall not be less than the Fair Market Value (as defined in the Plan) of the Common
Stock on the date of grant of this option.

          (b) Payment of the exercise price per share is due in full upon exercise of all or any part of
each installment, which has accrued to you. The Company may require you, to the extent permitted
by applicable statutes and regulations, to make payment of the exercise price under one of the
following alternatives:

               (i) Payment of the exercise price per share in cash (including check) at the time of exercise;

               (ii) Payment pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board which results in the receipt of cash (or check) by the Company prior to the issuance
of Common Stock;

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               (iii) Provided that at the time of exercise of your option the Common Stock is publicly traded
and quoted regularly in The Wall Street Journal, by delivery of already-owned shares of Common
Stock that have a Fair Market Value (as defined in the Plan) on the date of exercise equal to the
exercise price and that qualify as Permitted Shares. For the purposes of the foregoing, “Permitted
Shares” shall mean shares of Common Stock that are owned free and clear of any liens, claims,
encumbrances or security interests and that either (x) you have held for the period required to
avoid classification of this option as a liability for financial accounting purposes or (y) you did
not acquire, directly or indirectly from the Company. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock; or

               (iv) Payment by a combination of the methods of payment permitted by subparagraph 2(b)(i)
through 2(b)(iii) above.

     3. This option may not be exercised for any number of shares, which would require the issuance
of anything other than whole shares.

     4. Notwithstanding anything to the contrary contained herein, this option may not be exercised
unless the shares issuable upon exercise of this option are then registered under the Securities
Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, the
Company has determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option must also comply with other
applicable laws and regulations governing your option, and you may not exercise your option if the
Company determines that such exercise would not be in material compliance with such laws and
regulations.

     5. The term of this option commences on the Grant Date and, unless sooner terminated as set
forth below or in the Plan, terminates on the date (the “Fixed Termination Date”) which shall be
the earlier of «End_Date» or seven (7) years from the Grant Date. In no event may this option be
exercised on or after the Fixed Termination Date. This option shall terminate prior to the Fixed
Termination Date on the date that is three (3) months after the termination of your employment with
the Company for any reason or for no reason unless:

          (a) such termination of employment is due to Disability, in which event the option shall
terminate on the earlier of the Fixed Termination Date or twelve (12) months following such
termination of employment; or

          (b) such termination of employment is due to your death, in which event the option shall
terminate on the earlier of the Fixed Termination Date or eighteen (18) months after your death; or

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          (c) during any part of such three (3) month period the option is not exercisable solely
because of the condition set forth in paragraph 4 above, the option shall terminate when the
expiration of the period that commences on the termination of the Optionee’s Continuous Status as
an Employee, Director or Consultant and ends when there have been at least ninety-one (91) days,
whether or not such days are consecutive, on which the exercise of the Options would not be in
violation of such registration requirements.

          However, this option may be exercised following such termination of employment only as to that
number of shares as to which it was exercisable on the date of such termination of employment under
the provisions of paragraph 1 of this option.

     6. (a) This option may be exercised, to the extent specified above, by delivering a notice of
exercise (in a form designated by the Company) together with the exercise price to the Secretary of
the Company, or to such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require pursuant to Section 12 of
the Plan.

          (b) By exercising this option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of: (1) the exercise of
this option; (2) the lapse of any substantial risk of forfeiture to which the shares are subject at
the time of exercise; or (3) the disposition of shares acquired upon such exercise. You may not
exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are
satisfied. Accordingly, you may not be able to exercise your option when desired even though your
option is vested, and the Company shall have no obligation to issue a certificate for such shares
of Common Stock. In the Company’s sole discretion, subject only to compliance with any applicable
conditions or restrictions of law, the Company may require you to satisfy your obligations as set
forth in this subparagraph 6(b) by one or more of the following:

               (i) Payment by you to the Company of cash.

               (ii) Withholding from payroll or any other amounts payable to you.

               (iii) Pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board often referred to as a “cashless exercise program” or a “same day sale program.”

               (iv) Withholding from fully vested shares of Common Stock otherwise issuable to you upon the
exercise of your option a number of whole shares of Common Stock having a Fair Market Value, as
determined by the Company, that is not in excess of the minimum amount of tax required to be
withheld by law. If the date of determination of any tax withholding obligation is deferred to a
date later than the date of exercise of your option, you agree to review with your own tax advisors
the federal, state, local and foreign tax consequences of the exercise. You will rely solely on
your own advisors and not on any statements or representations of the Company or any of its agents
for advice regarding, without limitation, whether and when to exercise your option and whether to
make a proper and timely election

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under Section 83(b) of the
Code to accelerate the determination of such tax withholding obligation to the date of exercise of
your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld
solely from fully vested shares of Common Stock determined as of the date of exercise of your
option that are otherwise issuable to you upon such exercise. Any adverse consequences to you
arising in connection with such share withholding procedure shall be your sole responsibility.

     7. This option is not transferable, except by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act (a “QDRO”), and is exercisable during your life only by you
or a transferee pursuant to a QDRO. By delivering written notice to the Company, in a form
satisfactory to the Company, you may designate a third party who, in the event of your death, shall
thereafter be entitled to exercise this option.

     8. This option is not an employment or other service contract and nothing in this option shall
be deemed to create in any way whatsoever any obligation on your part to continue in the employ or
other service of the Company, or of the Company to continue your employment or other service with
the Company.

     9. Any notices provided for in your option or the Plan shall be given in writing and shall be
deemed effectively given upon receipt or, in the case of notices delivered by the Company to you,
five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate by written notice to
the Company.

     10. Your option is subject to all the provisions of the Plan, a copy of which is attached
hereto, and its provisions are hereby made a part of your option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions. Your option is further subject
to all interpretations, amendments, rules and regulations, which may from time to time be
promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions
of your option and those of the Plan, the provisions of the Plan shall control.

     11. This Agreement, the Plan, any written agreements with the Company and any other equity
compensation plan adopted or approved by the Board of Directors or the Compensation Committee of
the Company shall constitute the complete and exclusive agreement between the parties regarding the
subject matter hereof. No modification or amendment of this Agreement or waiver of any rights
hereunder shall be valid unless in writing and duly signed by a party authorized by each party
hereto.

     Dated effective as of the Grant Date.

Very truly yours,

PetSmart, Inc.

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	 	By:
	 	
	 	 
	 

	 	 	 	Duly authorized on behalf	 	 
	 

	 	 	 	of the Board of Directors	 	 

Attachments:

PetSmart, Inc. 2006 Equity Incentive Plan

PetSmart, Inc. 2006 Equity Incentive Plan Prospectus

5exv10w3

 

EXHIBIT 10.3

PETsMART, Inc.

Restricted Stock Grant Notice

PetSmart, Inc. (the “Company”), pursuant to its 2006 Equity Incentive Plan as defined below
(the “Plan”) hereby grants to Participant the right to acquire the number of shares of the
Company’s Common Stock set forth below (“Award”). This Award is subject to all of the terms and
conditions as set forth herein and in the Restricted Stock Agreement and the Plan, both of which
are attached hereto and incorporated herein in their entirety.

	 	 	 
	Plan:

	 	2006 Equity Incentive Plan (the “Plan”)
	Participant:

	 	«First_Name» «Mid» «Last_Name»
	 

	 	 
	Date of Grant:

	 	                    , 200_
	Number of Shares Subject to Award:

	 	«RSh»
	Closing Date:
	 	 
	 

	 	 
	Email Address:
	 	 
	 

	 	 
	 
	 	 

Vesting Schedule:      The shares subject to this Award will vest in accordance with the following schedule:

	 	 	 	 	 	 	 
	 

	 	 	 	Percentage of Shares Vesting	 	 
	 

	 	Vesting Date:
	 	on the Vesting Date:	 	 
	 

	 	 

	 	 

	 	 
	 

	 	______, 20___
	 	100 %	 	 

Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Restricted Stock Agreement and the Plan.
Participant also acknowledges receipt of the PetSmart, Inc. 2006 Equity Incentive Plan Prospectus.
Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Restricted
Stock Agreement and the Plan set forth the entire understanding between Participant and the Company
regarding the acquisition of stock in the Company pursuant to the Award and supersede all prior
oral and written agreements on that subject with the exception of (i) Awards previously granted and
delivered to Participant under the Plan, and (ii) the following agreements only:

	 	 	 	 	 
	 

	Other Agreements:
	 	 [Executive Change in Control and Severance Benefit Plan]
	 
	 	 	 	 
	 	 	 	 	 

	 	 	 
	PETsMART, Inc.

	 	Participant:

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	Signature
	 	Signature
	 
	 	 	 	 
	Title:

	 	 	 	Date:
	 

	 	 	 	 

	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

Attachments:      Restricted Stock Agreement and the Plan

 

 

Attachment I

PETsMART, Inc.

Restricted Stock Agreement

     PetSmart, Inc. (the “Company”) wishes to issue to the Participant (“you”) named in the
attached Restricted Stock Grant Notice (“Grant Notice”), and you wish to acquire, shares of the
Company’s common stock (the “Common Stock”) from the Company, as set forth in your Grant Notice
pursuant to the provisions of the Company’s Equity Incentive Plan (the “Plan”) as set forth in the
Grant Notice. A copy of the Plan is attached to the Grant Notice as Attachment II.

     Therefore, pursuant to the terms of the Grant Notice and this Restricted Stock Agreement (the
“Agreement”) (collectively, the “Award”), the Company grants you the right to purchase the number
of shares of Common Stock indicated in the Grant Notice. Defined terms not explicitly defined in
this Agreement but defined in the Plan shall have the same definitions as in the Plan.

     The details of your Award are as follows:

     1. Agreement to Purchase. By signing the Grant Notice, you hereby agree to purchase
from the Company, and the Company hereby agrees to sell to you, the aggregate number of shares of
Common Stock specified in your Grant Notice for the consideration set forth in Section 3 and
subject to all of the terms and conditions of the Award and the Plan. You may not purchase less
than the aggregate number of shares specified in the Grant Notice.

     2. Closing. The purchase and sale of the shares shall be consummated as follows:

            (a) You will purchase the shares by delivering your Grant Notice, executed by you in the
manner required by the Company, to the Stock Plan Administration Manager of the Company, or to such
other person as the Company may designate, during regular business hours, on the Closing Date
specified in the Grant Notice (or at such other time and place as you and the Company may mutually
agree upon in writing) along with any consideration, other than your past or future services, to be
delivered by you on the Closing Date pursuant to Section 3 and such additional documents as the
Company may then require.

            (b) The Company will direct the transfer agent for the Company to deliver to the Escrow Agent
pursuant to the terms of Section 9, below, the certificate or certificates evidencing the shares of
Common Stock being purchased by you. You acknowledge and agree that any such shares may be held in
book entry form directly registered with the transfer agent or in such other form as the Company
may determine.

     3. Payment. Unless otherwise specified in your Grant Notice, the purchase price for
the Common Stock to be delivered by you on the Closing Date shall be deemed paid, in whole or in
part, in consideration of past and future services in the amounts and to the extent required by
law.

     4. Vesting. Subject to the limitations contained herein, the shares you purchase
will vest as follows:

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            (a) The shares will vest as provided in the Vesting Schedule set forth in your Grant Notice,
provided that vesting will cease upon the termination of your Continuous Status as an Employee,
Director, or Consultant. (The vesting pursuant to this Section 4(a) is referred to as “Regular
Vesting.”) Notwithstanding the foregoing provisions of this Section 4(a), in the event that you
are subject to the Company’s policy on Stock Trading by Officers, Directors and Certain Other
Employees and any shares covered by your Award vest on a day (the “Original Vest Date”) that does
not occur during a “window period” applicable to you as determined by the Company in accordance
with such policy, then such shares shall not vest on such Original Vest Date and shall instead vest
on the first to occur of the following: (a) the first day of the next “window period” applicable to
you pursuant to such policy, (b) your termination of employment provided such termination of
employment is after the Original Vest Date and constitutes a Covered Termination as defined in the
Plan, or (c) the day that is sixty (60) days after the Original Vest Date.

            (b) If you are an Eligible Retiree as defined below and you incur a Retirement Termination,
the shares will vest pursuant to the Retirement Vesting Schedule set forth below. (The vesting
pursuant to this Section 4(b) is referred to as “Retirement Vesting.”) A “Retirement Termination”
shall mean a termination of your Continuous Status as an Employee, Director or Consultant either
(i) as a result of your death or Disability or (ii) pursuant to your voluntary termination but only
if (A) such voluntary termination has been designated by the Company, in its sole discretion, as a
retirement and (B) you enter into a noncompetition agreement in a form acceptable to the Company.
Notwithstanding the foregoing, the Company shall not designate a voluntary termination as a
retirement if the Company determines that such termination is detrimental to the Company. Unless
and until there is a Retirement Termination, the vesting percentage for the Retirement Vesting
Schedule shall be zero. If a Retirement Termination occurs, the vesting percentage for the
Retirement Vesting Schedule shall be twenty-five percent (25%) for each completed full year
following the Date of Grant until the date of the Retirement Termination (with any fractional or
partial year eliminated), not to exceed one hundred percent (100%). You will be an “Eligible
Retiree” if, at the time of the termination of your Continuous Status as an Employee, Director or
Consultant, (W) you are an Employee, (X) you are at least fifty-five (55) years of age, (Y) you
have been continuously employed by the Company or an Affiliate during the five (5) year period
ending on the date of your termination and (Z) the sum of your age and the number of years you were
continuously employed by the Company or an Affiliate ending on the date of your termination is at
least sixty-two (62).

            (c) At any point in time, the vesting shall be the greater of the vesting determined under the
Regular Vesting or the vesting determined under the Retirement Vesting. For clarity, at no time
shall the vesting be greater than one hundred percent (100%).

            (d) Shares purchased by you that have vested in accordance with the Vesting Schedule set forth
in the Grant Notice and this Section 4 are “Vested Shares.” Shares purchased by you pursuant to
this Agreement that are not Vested Shares are “Unvested Shares.”

     5. Number of Shares and Cash Purchase Price per Share. The number of shares of
Common Stock subject to your Award and your Cash Purchase Price per Share referenced in your Grant
Notice may be adjusted from time to time for capitalization adjustments as set forth in the Plan.

2.

 

     6. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not purchase any shares of Common Stock under your Award unless the shares of
Common Stock issuable upon such purchase are then registered under the Securities Act or, if such
shares of Common Stock are not then so registered, the Company has determined that such purchase
and issuance would be exempt from the registration requirements of the Securities Act. The
purchase of shares under your Award also must comply with other applicable laws and regulations
governing your Award, and you may not purchase such shares if the Company determines that such
purchase would not be in material compliance with such laws and regulations.

     7. Right of Reacquisition. The Company shall simultaneously with the termination of
your Continuous Status as an Employee, Director, or Consultant automatically reacquire (the
“Reacquisition Right”) for no consideration all of the Unvested Shares, unless the Company agrees
to waive its Reacquisition Right as to some or all of the Unvested Shares. Any such waiver shall
be exercised by the Company by written notice to you or your representative (with a copy to the
Escrow Agent, as defined below) within ninety (90) days after the termination of your Continuous
Status as an Employee, Director, or Consultant, and the Escrow Agent may then release to you the
number of Unvested Shares not being reacquired by the Company. If the Company does not waive its
reacquisition right as to all of the Unvested Shares, then upon such termination of your Continuous
Status as an Employee, Director, or Consultant, the Escrow Agent shall transfer to the Company the
number of Unvested Shares the Company is reacquiring. The Reacquisition Right shall expire when
all of the shares have become Vested Shares in accordance with Section 4.

     8. Certain Corporate Transactions. In the event of a corporate transaction event set
forth in Section 13(b) of the Plan, the Reacquisition Right may be assigned by the Company to the
successor of the Company (or such successor’s parent company), if any, in connection with such
transaction. To the extent the Reacquisition Right remains in effect following such transaction,
it shall apply to the new capital stock or other property received in exchange for the Common Stock
in consummation of the transaction, but only to the extent the Common Stock was at the time covered
by such right.

     9. Escrow of Unvested Common Stock. As security for your faithful performance of the
terms of this Agreement and to insure the availability for delivery of your Common Stock upon
execution of the Reacquisition Right provided in Section 7, above, you agree to the following
“Joint Escrow” and “Joint Escrow Instructions,” and you and the Company hereby authorize and direct
the Corporate Secretary of the Company or the Corporate Secretary’s designee (“Escrow Agent”) to
hold the documents delivered to Escrow Agent pursuant to the terms of this Agreement and of your
Grant Notice, in accordance with the following Joint Escrow Instructions:

            (a) In the event of the termination of your Continuous Status as an Employee, Director, or
Consultant, the Company shall pursuant to the Reacquisition Right in Section 7, above,
automatically reacquire for no consideration all Unvested Shares, within the meaning of Section 4,
above, as of the date of such termination, unless the Company elects to waive such right as to some
or all of the Unvested Shares. If the Company (or its assignee) elects to waive the Reacquisition
Right, the Company or its assignee will give you and Escrow Agent a written

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notice specifying the number of shares of stock not to be reacquired. You and the Company hereby irrevocably authorize
and direct Escrow Agent to close the transaction contemplated by such notice as soon as practicable
following the date of termination of service in accordance with the terms of this Agreement and the
notice of waiver, if any.

     (b) Vested Shares shall be delivered to you upon your request given in the manner provided in
Section 19 for giving notices.

            (c) At any closing involving the transfer or delivery of some or all of the property subject
to the Grant Notice and this Agreement, Escrow Agent is directed (a) to date any stock assignments
necessary for the transfer in question, (b) to fill in the number of shares being transferred, and
(c) to deliver same, together with the certificate, if any, evidencing the shares of Common Stock
to be transferred, to you or the Company, as applicable.

            (d) You irrevocably authorize the Company to deposit with Escrow Agent the certificates, if
any, evidencing shares of Common Stock to be held by Escrow Agent hereunder and any additions and
substitutions to said shares as specified in this Agreement. You do hereby irrevocably constitute
and appoint Escrow Agent as your attorney-in-fact and agent for the term of this escrow to execute
with respect to such securities and other property all documents of assignment and/or transfer and
all stock certificates necessary or appropriate to make all securities negotiable and complete any
transaction herein contemplated.

            (e) This escrow shall terminate upon the expiration or application in full of the
Reacquisition Right, whichever occurs first, and the completion of the tasks contemplated by these
Joint Escrow Instructions.

            (f) If at the time of termination of this escrow Escrow Agent should have in its possession
any documents, securities, or other property belonging to you, Escrow Agent shall deliver all of
same to you and shall be discharged of all further obligations hereunder.

            (g) Except as otherwise provided in these Joint Escrow Instructions, Escrow Agent’s duties
hereunder may be altered, amended, modified, or revoked only by a writing signed by all of the
parties hereto.

            (h) Escrow Agent shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or refraining from
acting on any instrument reasonably believed by Escrow Agent to be genuine and to have been signed
or presented by the proper party or parties or their assignees. Escrow Agent shall not be
personally liable for any act Escrow Agent may do or omit to do hereunder as Escrow Agent or as
attorney-in-fact for you while acting in good faith and any act done or omitted by Escrow Agent
pursuant to the advice of Escrow Agent’s own attorneys shall be conclusive evidence of such good
faith.

            (i) Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any
of the parties hereto or by any other person or corporation, excepting only orders or process of
courts of law, and is hereby expressly authorized to comply with and obey orders, judgments, or
decrees of any court. In case Escrow Agent obeys or complies with any such order, judgment, or
decree of any court, Escrow Agent shall not be liable to any of the

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parties hereto or to any other person, firm, or corporation by reason of such compliance, notwithstanding any such order,
judgment, or decree being subsequently reversed, modified, annulled, set aside, vacated, or found
to have been entered without jurisdiction.

            (j) Escrow Agent shall not be liable in any respect on account of the identity, authority, or
rights of the parties executing or delivering or purporting to execute or deliver this Agreement or
any documents or papers deposited or called for hereunder.

            (k) Escrow Agent shall not be liable for the outlawing of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents deposited with Escrow
Agent.

            (l) Escrow Agent’s responsibilities as Escrow Agent hereunder shall terminate if Escrow Agent
shall cease to be the Secretary of the Company or if Escrow Agent shall resign by written notice to
each party. In the event of any such termination, the Company may appoint any officer or assistant
officer of the Company or other person who in the future assumes the position of Secretary for the
Company as successor Escrow Agent and you hereby confirm the appointment of such successor or
successors as your attorney-in-fact and agent to the full extent of such successor Escrow Agent’s
appointment.

            (m) If Escrow Agent reasonably requires other or further instruments in connection with these
Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join
in furnishing such instruments.

            (n) It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, Escrow Agent is authorized and directed
to retain in its possession without liability to anyone all or any part of said securities until
such dispute shall have been settled either by mutual written agreement of the parties concerned or
by a final order, decree, or judgment of a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings.

            (o) By signing this Agreement below Escrow Agent becomes a party hereto only for the purpose
of said Joint Escrow Instructions in this Section 9; Escrow Agent does not become a party to any
other rights and obligations of this Agreement apart from those in this Section 9.

            (p) Escrow Agent shall be entitled to employ such legal counsel and other experts as Escrow
Agent may deem necessary properly to advise Escrow Agent in connection with Escrow Agent’s
obligations hereunder. Escrow Agent may rely upon the advice of such counsel, and may pay such
counsel reasonable compensation therefor. The Company shall be responsible for all fees generated
by such legal counsel in connection with Escrow Agent’s obligations hereunder.

            (q) These Joint Escrow Instructions set forth in this Section 9 shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and permitted assigns.
It is understood and agreed that references to “Escrow Agent” or “Escrow Agent’s” herein refer to
the original Escrow Agent and to any and all successor Escrow Agents. It is

5.

 

understood and agreed that the Company may at any time or from time to time assign its rights under the Agreement and
these Joint Escrow Instructions in whole or in part.

     10. Execution of Documents. You hereby acknowledge and agree that the manner
selected by the Company by which you indicate your consent to your Grant Notice is also deemed to
be your execution of your Grant Notice and of this Agreement. You further agree that such manner
of indicating consent may be relied upon as your signature for establishing your execution of any
documents to be executed in the future in connection with your Award.

     11. Irrevocable Power of Attorney.  You constitute and appoint the Company’s
Secretary as attorney-in-fact and agent to transfer said Common Stock on the books of the Company
with full power of substitution in the premises, and to execute with respect to such securities and
other property all documents of assignment and/or transfer and all stock certificates necessary or
appropriate to make all securities negotiable and complete any transaction herein contemplated.
This is a special power of attorney coupled with an interest (specifically, the Company’s
underlying security interest in retaining the shares of Common Stock in the event you do not
perform the associated services for the Company), and is irrevocable and shall survive your death
or legal incapacity. This power of attorney is limited to the matters specified in this Agreement.

     12. Rights as Stockholder. Subject to the provisions of this Agreement, you shall
have the right to exercise all rights and privileges of a stockholder of the Company with respect
to the shares deposited in the Joint Escrow. You shall be deemed to be the holder of the
shares for purposes of receiving any dividends that may be paid with respect to such shares and for
purposes of exercising any voting rights relating to such shares, even if some or all of the shares
are Unvested Shares.

     13. Limitations on Transfer of the Common Stock. In addition to any other limitation
on transfer created by applicable securities laws, you shall not sell, assign, hypothecate, donate,
encumber, or otherwise dispose of any interest in the Common Stock while such shares of Common
Stock are Unvested Shares or continue to be held in the Joint Escrow; provided, however, that an
interest in such shares may be transferred pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act. After any Common
Stock has been released from the Joint Escrow, you shall not sell, assign, hypothecate, donate,
encumber, or otherwise dispose of any interest in the Common Stock except in compliance with the
provisions herein and applicable securities laws.

     14. Restrictive Legends. The certificates representing the Common Stock shall have
endorsed thereon appropriate legends as determined by the Company.

     15. Non-transferability of the Award. Your Award (except for Vested Shares issued
pursuant thereto) is not transferable except by will or by the laws of descent and distribution and
shall be exercisable during your lifetime only by you. In the event of the termination of your
Continuous Status as an Employee, Director, or Consultant prior to the Closing Date, the Closing
shall not occur.

6.

 

     16. Award not a Service Contract. Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your Award shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.

17. Withholding Obligations.

            (a) At the time your Award is granted, or at any time thereafter as requested by the Company,
you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision in cash for, as determined by the Company, any sums required to
satisfy the federal, state, local and foreign tax withholding obligations of the Company or an
Affiliate, if any, which arise in connection with your Award. In the Company’s sole discretion,
the Company may elect, and you hereby authorize the Company, to withhold Vested Shares in such
amounts as the Company determines are necessary to satisfy your obligation pursuant to the
preceding sentence.

            (b) Unless the tax withholding obligations of the Company or any Affiliate are satisfied, the
Company shall have no obligation to issue a certificate for such shares or release such shares from
any escrow provided for herein.

     18. Tax Consequences. You have reviewed with your own tax advisors the federal,
state, local and foreign tax consequences of this investment and the transactions contemplated by
this Agreement. You are relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. You understand that you (and not the Company)
shall be responsible for your own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement. You understand that Section 83 of the Code taxes
as ordinary income to you the fair market value of the shares of Common Stock as of the date any
restrictions on the shares lapse (that is, as of the date on which part or all of the shares vest).
In this context, “restriction” includes the right of the Company to reacquire the shares pursuant
to its Reacquisition Right. You understand that you may elect to be taxed on the fair market value
of the shares at the time the shares are purchased rather than when and as the Company’s
Reacquisition Right expires by filing an election under Section 83(b) of the Code with the Internal
Revenue Service within thirty (30) days after the date you purchase the shares pursuant to your
Award. YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A
TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THE FILING ON YOUR BEHALF. You further acknowledge that you are aware that should you file an
election under Section 83(b) of the Code and then subsequently forfeit the shares, you will not be
able to report as a loss the value of any shares forfeited and will not get a refund of any of the
tax paid.

     19. Notices. Any notice or request required or permitted hereunder shall be given in
writing to each of the other parties hereto and shall be deemed effectively given on the earlier of
(a) the date of personal delivery, including delivery by express courier, or (b) the date that is
five

7.

 

days after deposit in the United States Post Office (whether or not actually received by the
addressee), by registered or certified mail with postage and fees prepaid, addressed at the
following addresses, or at such other address(es) as a party may designate by ten days’ advance
written notice to each of the other parties hereto:

	 	 	 
	Company:

	 	PetSmart Inc.
	 

	 	19601 North 27th Avenue
	 

	 	Phoenix, AZ 85027
	 

	 	Attn: General Counsel
	 
	 	 
	You:

	 	Your address as on file with the Company’s
	 

	 	People Department at the time notice is given
	 
	 	 
	Escrow Agent:

	 	Corporate Secretary
	 

	 	PetSmart, Inc.
	 

	 	19601 North 27th Avenue
	 

	 	Phoenix, AZ 85027

     20. Miscellaneous.

            (a) The rights and obligations of the Company under your Award shall be transferable to any
one or more persons or entities, and all covenants and agreements hereunder shall inure to the
benefit of, and be enforceable by, the Company’s successors and assigns. Your rights and
obligations under your Award may only be assigned with the prior written consent of the Company.

            (b) You agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or intent of your
Award.

            (c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an
opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully
understand all provisions of your Award.

     21. Governing Plan Document. Your Award is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your Award, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award
and those of the Plan, the provisions of the Plan shall control.

* * * * *

     This Restricted Stock Agreement shall be deemed to be signed by the Company and the
Participant upon the signing by the Participant of the Restricted Stock Grant Notice to which it is
attached.

8.

 

     The Escrow Agent hereby acknowledges and accepts its rights and responsibilities pursuant to
Section 9, above.

	 	 	 
	 	 	 
	Escrow Agent
	 	 

9.

 

Attachment II

The Plan

10.

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