Equity Awards
In fiscal 2025, the Compensation Committee granted a combination of restricted stock awards and PSUs to executive officers for equity compensation, as described below.
Restricted Stock
Generally, restricted stock vests, and the restrictions on transfer lapse, in accordance with a schedule determined by the Compensation Committee. The Compensation Committee has the authority to accelerate the time at which restrictions lapse, and/or remove restrictions, on previously granted restricted stock.
Annual Equity Grants. On February 11, 2025, the Compensation Committee granted Mr. Lahanas an award of 14,868 shares of restricted Class A common stock with a fair value of $500,011, vesting over a three-year period, with 50% of the shares vesting on each of February 11, 2027 and 2028, subject to continued service on each vesting date. Each of Messrs. Smith, Hanson, and Walker received a grant of 3,717 restricted shares with a fair value of $125,003 vesting over a three-year period, with 50% of the shares vesting on each of February 11, 2027 and 2028, subject to continued service on each vesting date. Mr. Brown received a grant of 13,381 restricted shares with a fair value of $450,003 vesting over a five-year period, with one-third of the shares vesting on each of February 11, 2028, 2029 and 2030, subject to continued service on each vesting date.
Special Equity Grants. On February 11, 2025, the Compensation Committee also granted Mr. Hanson a special retention grant of 35,682 restricted shares vesting over a five-year period, with 25% of the shares vesting on each of February 11, 2027, 2028, 2029, and 2030, subject to continued service on each vesting date. Additionally, for his expected assistance to Mr. Lahanas as the Company’s new Chief Executive Officer, Mr. Brown also received a special grant of 22,302 restricted shares vesting over a four-year period, with 25% of the shares vesting at the end of years two and three, and 50% of the shares vesting at the end of year four, subject to continued service on each vesting date.
In February 2025, the executive officers were granted PSUs with respect to the target number of shares of the Company’s Class A Common Stock based on their award target divided by the stock price on the grant date. The actual number of PSUs earned may vary from the target number and will be determined at the end of the four-year performance period based on performance against the applicable performance goals (including pre-defined adjustments thereto) and targets over such performance period. Ultimately, the total number of shares awarded to the executive is based on company performance over the performance period, and may range from 65% to 225% of target, including the impact of any increase or decrease by up to 25 percentage points based on a relative total shareholder return (TSR) modifier. The relative TSR modifier for the PSU awards is based on the following peer group, which includes lawn and garden and pet supplies companies and other consumer products companies: Scotts Miracle-Gro Co., Spectrum Brands Holdings Inc., J.M. Smucker Co., Church & Dwight Co., Helen of Troy Ltd., Newell Brands Inc., The Clorox Company, Edgewell Personal Care Co., and Energizer Holdings Inc.
The actual number of PSUs earned will be determined using the following formula based on fiscal 2028 results:
Target Number of FY25 PSUs x (Primary Measures Multiplier +/- TSR Modifier) =
total shares of Company Class A Common Stock earned under the FY25 PSUs
The Primary Measures Multiplier shall be based on two performance goals, weighted as follows: (i) 70% based on Organic EBIT CAGR and (ii) 30% based on Organic Net Sales CAGR. In February 2025, the Compensation Committee granted 14,868 PSUs to Mr. Lahanas, and 3,717 PSUs to each of Messrs. Smith, Hanson and Walker. The actual number of shares to be earned under the PSU awards to the named executive officers shall be determined by the Compensation Committee based on the extent to which performance goals have been achieved over the four-year performance period. To the extent earned, the PSUs will vest at the end of the four-year performance period, subject to the executive being continuously employed by the Company or by one of its affiliates from the grant date through the last day of the performance period.
Stock Ownership Requirements and Claw Back Policy
As Chief Executive Officer, Mr. Lahanas agreed to own capital stock of the Company with a value of not less than four times his annual salary throughout the term of his employment with the Company. The following shares are considered owned: shares owned outright; shares held in a 401(k) plan; shares beneficially owned (e.g., in a family trust); unvested restricted stock held subject only to vesting; deferred shares; and 20% of the exercisable “in-the-money” value of stock options. Mr. Lahanas is not required to purchase additional stock to achieve this holding requirement but is required to hold 50% of the net after-tax shares received from the vesting of equity awards and the exercise of stock options until the minimum stock ownership is attained. The Company does not have stock ownership requirements that apply to its other executive officers, except for Mr. Brown who is subject to the director stock ownership requirements.
Effective October 2, 2023, the Compensation Committee adopted a Compensation Recovery Policy (the “Clawback Policy”) intended to comply with Section 10D-1 of the Exchange Act and the related Nasdaq listing standards. Under the Policy, in the event of a restatement of the Company’s financial
