Petsmart 2000 Annual Report Download - page 59

the Company believes that the allegations which have been made are without merit. Nevertheless, there can be
no assurance that these former affiliates will not initiate litigation seeking monetary damages or an equitable
remedy. A mediation has been scheduled to occur on May 3, 2000.
NOTE 13 — STOCK INCENTIVE PLANS
Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan under which essentially all employees with six or more
months of service can purchase common stock on semi-annual offering dates at 85% of the fair market value on
the offering date or, if lower, at 85% of the fair market value of the shares on the exercise date. A maximum of
3,000,000 shares are authorized for purchase until the plan termination date of December 31, 2002. A total of
346,000, 182,000, and 411,000 shares were purchased in fiscal 1999, 1998, and 1997, respectively, for
aggregate proceeds of $2,366,000, $1,246,000, and $3,073,000, respectively. Only one semi-annual offering
was made during fiscal 1998 as the second offering date occurred after January 31, 1999.
Restricted Stock Bonus
In April 1998, the Company adopted a Restricted Stock Bonus Plan. Under the terms of this plan,
employees of the Company may be awarded shares of common stock of the Company as approved by the
Board of Directors. The employee is not required to make any cash payment as a condition of receiving the
award. The shares of common stock awarded under this plan are subject to a reacquisition right held by the
Company. In the event that the award recipient’ s employment by or service to the Company is terminated for
any reason, the Company shall simultaneously with such termination automatically reacquire for no consideration
all of the unvested shares of restricted common stock previously awarded to the recipient. The shares of
restricted common stock awarded under this plan vest and are released from the Company’ s reacquisition right
under an accelerated schedule if the Company’ s common stock price reaches certain specified targets. If the
specified stock price targets are not reached, the shares nevertheless become 100% vested on April 3, 2003,
provided that the award recipient has been in continuous service with the Company from the award date through
April 3, 2003. Approximately 286,000 shares were awarded under this plan on April 3, 1998. As of
January 30, 2000, no shares were vested. Approximately $3,003,000 was recorded in fiscal 1998 as deferred
compensation (a deduction from stockholder’ s equity) with an offsetting credit to additional paid-in capital. Such
deferred compensation is being amortized ratably by a charge to income over the five-
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PETSMART, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
year term of the restricted stock awards. The attainment of the performance goals could accelerate the future
recognition of compensation expense as the restrictions on the shares of common stock lapse.
Stock Options
The Company may grant under a stock option plan (“the Plan”) either incentive stock options or
supplemental stock options to purchase up to 29,701,849 shares of common stock to key employees (including
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