8-K
PETMED EXPRESS INC (PETS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 14, 2022
| PetMed Express, Inc.<br> (Exact name of registrant as specified in its charter) | ||
|---|---|---|
| Florida | 000-28827 | 65-0680967 |
| --- | --- | --- |
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (I.R.S. Employer<br> Identification No.) |
| 420 South Congress Avenue Delray Beach, FL 33445 | ||
| --- | ||
| (Address of principal executive offices) (Zip Code) | ||
| (561) 526-4444 | ||
| --- | ||
| (Registrant’s telephone number, including area code) | ||
| Not Applicable | ||
| --- | ||
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $.001 per share | PETS | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
1
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Officer
On July 14, 2022, the Board of Directors of PetMed Express, Inc. (“Company”) appointed Christine Chambers to serve as the Company’s Chief Financial Officer to assume the duties of principal financial officer and principal accounting officer effective August 3, 2022 (“Effective Date”).
Ms. Chambers, age 45, served as Senior Vice President, Chief Financial Officer and Treasurer of RealNetworks, Inc. (NASDAQ: RNWK) from March 2021 to July 2022. Prior to that, Ms. Chambers served as Vice President, Finance for Rosetta Stone Inc., from June 2018 to March 2021. Rosetta Stone was previously a publicly held company (NYSE: RST) until taken private in October 2020. From May 2016 to June 2018, Ms. Chambers served as RealNetworks’ Vice President, Finance. Previously, she served as an independent finance consultant, beginning 2015, and as Deputy Director Budget and Planning at the Bill & Melinda Gates Foundation, from 2013 to 2015. From 2005 to 2013, Ms. Chambers held several positions within the finance department of RealNetworks. Ms. Chambers holds a bachelor’s degree in finance from Loughborough University in the UK and an MBA from the University of Washington. Ms. Chambers is an Associate member of the Chartered Global Management Accountants (CGMA).
Christine Chambers Offer Letter
On July 14, 2022, the Company entered into an offer letter (“Offer Letter”) with Ms. Chambers to set forth the terms and conditions of Ms. Chambers’ employment as Chief Financial Officer of the Company. Ms. Chambers will receive an annual base salary of $375,000, she will be entitled to participate in the Company’s current employee benefit plans and programs, including medical, dental, vision, 401(k), and she will be eligible to receive annual equity awards under the Company’s equity incentive plans as in effect from time to time. Ms. Chambers will receive an initial equity award under the Company’s 2016 Employee Equity Compensation Restricted Stock Plan (“2016 Plan”) in respect of fiscal year 2023, consisting of (i) an award of 13,000 restricted shares, and (ii) 3,000 performance restricted shares, which performance restricted shares will be based on the attainment of performance criteria equally weighted between adjusted EBITDA and revenue. The shares for each grant will be released from restriction equally over a three (3) year period on the anniversary of the grant date, subject to the attainment of performance criteria in the case of the performance restricted shares. In the event of a Change of Control (as defined in 2016 Plan), the restrictions on the restricted stock shall terminate and lapse upon the following conditions: within twelve (12) months following the Change of Control if Ms. Chambers employment with the Company is terminated by (i) the Company, or the Company’s successor, without ”Cause” (as defined in the Offer Letter) or (ii) by Ms. Chambers for “Good Reason” (as defined in the Offer Letter). Ms. Chambers will also receive a one-time sign-on bonus in the amount of $50,000, subject to pro-rata repayment if Ms. Chambers terminates employment with the Company within the first twelve months of employment. Ms. Chambers will be entitled to severance benefits in the event the Company terminates her employment other than for Cause (as defined in the Offer Letter), consisting of (i) twelve months of severance pay at her base salary at the time of termination, paid bi-weekly in accordance with the Company’s payroll practice for employees, and (ii) payment of the employer portion of COBRA premiums (or cash in lieu of) until the earliest of (i) the last day of the period ending on the date that is twelve (12) months following such termination of employment, or (ii) the date when Ms. Chambers becomes eligible for substantially equivalent health insurance coverage in connection with new employment.
The Company and Ms. Chambers intend to enter into an employment agreement for Ms. Chambers’ service as Chief Financial Officer effective on the Effective Date which will provide substantially the same terms as described in, and supersede, the Offer Letter.
There are no family relationships between Ms. Chambers and any other director or executive officer of the Company. There are no understandings or arrangements between Ms. Chambers and any other person pursuant to which Ms. Chambers was appointed as an executive officer of the Company. Ms. Chambers has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Act of 1933, as amended (“Securities Act”).
The description in this report of Ms. Chambers’ Offer Letter does not purport to be complete, and is qualified in its entirety by reference to the full text of the Offer Letter attached hereto as Exhibit 10.1, which is incorporated by reference herein.
2
Departure of Officer
The current Chief Financial Officer of the Company, Bruce Rosenbloom, will continue as the Company’s Chief Financial Officer until the Effective Date. The Company has presented a proposal to Mr. Rosenbloom regarding the continuation of his employment with the Company for services following the Effective Date until December 31, 2022. The Company and Mr. Rosenbloom are in the process of finalizing a transition and separation agreement with the Company.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|
The following exhibits are provided as part of this report:
| Exhibit No. | Description |
|---|---|
| 10.1 | Offer Letter by and between PetMed Express, Inc. and Christine Chambers |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section21E of the Exchange Act. From time to time, the Company may also provide oral or written forward-looking statements in other materials the Company releases to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Statements that refer to future events or circumstances are forward-looking statements, and include, but are not limited to, the Company’s expectations regarding the appointment of Ms. Chambers as Chief Financial Officer and the transition of Mr. Rosenbloom. In addition, statements that the Company makes in this Current Report on Form 8-K that are not statements of historical fact may also be forward-looking statements. Words such as “expects,” “intends,” “goals,” “plans,” “believes,” “continues,” “may,” “should,” “anticipate,” “seek,” “estimate,” “outlook,” “future benefits,” “potential,” "estimates," "anticipates," and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those indicated (both favorably and unfavorably). These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions. For further information on other risk factors, please refer to the “Risk Factors” contained in the Company’s Form 10-K, under Part I, Item 1A, for the year ended March 31, 2022 filed with the Securities and Exchange Commission. Caution should be taken not to place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date when made and the Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 14, 2022
| PETMED EXPRESS, INC. | |
|---|---|
| By: | /s/ Mathew N. Hulett |
| Name: | Mathew N. Hulett |
| Title: | Chief Executive Officer and President |
4
ex_395374.htm
Exhibit 10.1
DELIVERED ELECTRONICALLY ****
Christine Chambers
[address]
[telephone number]
[email address]
RE: Offer of Employment
Dear Ms. Chambers:
We appreciate your interest in PetMed Express, Inc. (the “Company”). On behalf of the Company, I am pleased to present you with this offer of employment. We are offering you the full-time position of Chief Financial Officer, reporting to Mathew Hulett, CEO and President. This offer is contingent upon successful completion of both the background check and pre-employment drug screening. This offer of employment will expire in five (5) business days.
We anticipate that your start date will be on or about 03-AUG-2022.
Also, as we discussed, your compensation is described on the attached exhibit, entitled “Compensation Structure.”
As an employee at the Company, you are also entitled to participate in the Company’s employee benefit plans or programs (if any) to the extent you are eligible to participate under the specific plan’s provisions. Such plans and programs currently include, but are not limited to, the following:
| Medical Insurance | Company Sponsored 401(k) |
|---|---|
| Dental Insurance | Voluntary Life Insurance |
| Vision Insurance | Voluntary Spouse & Dependent Insurance |
| Voluntary Short-Term Disability | Flexible Spending Accounts – Medical & Dependent |
| Voluntary Long-Term Disability | PetMeds Employee Discount |
You will become eligible for benefit coverages on the first day of employment. These benefits are governed by the rules of each policy. Employees are eligible to participate in the 401(k) program after ninety (90) days of employment. The Company policies and benefit plans, which may be modified at the Company’s discretion in the future, describe what contributions, if any, are made to the plans on the employee’s behalf.
In addition to the foregoing benefits, you are eligible for three (3) weeks of vacation annually, accrued on a bi-weekly basis, as well as three (3) days of Personal Time Off.
The terms of your employment will be governed by the policies and procedures outlined in the Company’s Employee Handbook. While we have outlined the general benefits and terms of the employment relationship in this letter, this letter is not a contract of employment for any specified period of time and should not be construed as such. A formal Employment Agreement will follow this Offer of Employment.
Exhibit 10.1 Page 1 of 4
By signing this offer of employment letter, you confirm that (i) you are not bound by any covenant, contract, agreement or other legal obligations that would prohibit or restrict you in any manner from performing your duties for the Company, and you are not aware of any presently existing fact, circumstance or event which would prohibit or restrict you from providing to the Company the services contemplated by this letter of agreement, and (ii) you will not disclose to or use on behalf of the Company any proprietary information of a third party without that party’s written consent.
In order to accept this offer of employment letter, you will need to sign and return this letter along with the signed original(s) of the document(s) listed below:
| ■ | Background Screening Authorization Form |
|---|---|
| ■ | Drug Screening Authorization Form |
| --- | --- |
We look forward to building our relationship with you and ask you to confirm your acceptance of this offer by signing below and returning a signed copy to us. Should you have any questions regarding the documents you need to return to accept this offer of employment, please do not hesitate to contact me at your earliest convenience.
Very truly yours,
/s/ Mathew N. Hulett
Mathew N. Hulett
CEO and President
| July 14, 2022 |
|---|
| Date |
I hereby accept the offer of employment stated in this letter.
| /s/ Christine Chambers | July 14, 2022 |
|---|---|
| Christine Chambers | Date |
Exhibit 10.1 Page 2 of 4
Compensation Structure
Base Annual Salary: $375,000 paid bi-weekly in accordance with the Company’s standard payroll practice from time to time for employees, and subject to applicable withholding taxes.
The position is an Exempt position and is not eligible for overtime pay.
Sign-On Bonus: We are pleased to offer you a one-time sign-on bonus in the amount of $50,000. This bonus will be paid in a lump sum on the next regularly scheduled pay date after you start employment. If you terminate employment with PetMeds within the first twelve (12) months of employment, a pro-rated repayment of the signing bonus is required.
Restricted Stock
In accordance with the terms of the PetMed Express, Inc. 2016 Employee Equity Compensation Restricted Stock Plan (“Plan”), and subject to the further terms, conditions and restrictions contained in a separate agreement, titled “Restricted Stock Agreement Pursuant To PetMed Express, Inc. 2016 Restricted Stock Plan,” to be entered into by and between the Company and you on your start date, you will be granted 16,000 restricted shares of the Company’s common stock, of which 3,000 shares are performance stock. The performance criteria is equally weighted between Adjusted EBITA and Revenue. The details will be outlined in a separate agreement. The shares for each grant will vest equally over a three (3) year vesting period on the anniversary of the grant date.
You will be eligible for future annual restricted stock grants which may be comprised of a combination of both restricted stock and restricted performance stock. Restricted performance stock criteria will be determined in a future agreement and will be in accordance with the policy set forth at that time.
In the event of a Change of Control (as defined in Plan), the restrictions on the restricted stock shall terminate and lapse upon the following conditions: within twelve (12) months following the Change of Control your employment with the Company is terminated by (i) the Company, or the Company’s successor, without ”Cause” (as defined below) or (ii) by you for “Good Reason” (as defined below).
“Good Reason” means your voluntary termination, following the expiration of the Company cure period (described below), following the occurrence of one or more of the following, without your consent, that occurs within (A) sixty (60) days prior to the consummation of a Change of Control where such Change of Control was under consideration at the time of your termination date or (B) twelve (12) months after the date upon which such a Change of Control occurs:
(i) a material reduction of your authority, duties or responsibilities, relative to your authority, duties or responsibilities in effect immediately prior to such reduction, or a change in your reporting position such that you no longer report directly to the Chief Executive Officer of the Company; or
(ii) a material reduction by the Company of your annual base salary as in effect on your start date (or, if higher or lower, as in effect immediately prior to the reduction), except to the extent the base salaries of all other senior executives of the Company are similarly reduced totaling no more than 20% in the aggregate.
Exhibit 10.1 Page 3 of 4
You may not terminate the employment relationship for Good Reason in connection with a Change of Control without first providing the Company with written notice within sixty (60) days of the initial existence of the condition that you believe constitutes Good Reason in connection with a Change of Control specifically identifying the acts or omissions constituting the grounds therefor and a reasonable cure period of not less than thirty (30) days following the date of such notice.
Severance
If the Company terminates your employment other than for Cause, you will be entitled to twelve (12) months of severance pay at your base salary at the time of your termination, paid bi-weekly in accordance with the Company’s payroll practice from time to time for employees, and subject to applicable withholding taxes. “Cause” shall mean (a) committing or participating in an act of fraud, neglect, misrepresentation, embezzlement or dishonesty against the Company; (b) committing or participating in any other act or omission wantonly, willfully, recklessly or in a manner which was negligent against the Company; (c) engaging in a criminal enterprise involving moral turpitude; (d) conviction for a felony under the laws of the United States or any state thereof; (e) loss of any state or federal license required for you to perform your material duties or responsibilities for the Company.
As part of the severance package, you will also be entitled to receive Company paid Cobra for the benefits plans that are in effect and are eligible for this program in the event of termination until the earliest of (i) the last day of the period ending on the date that is twelve (12) months following such termination of employment, or (ii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment.
Exhibit 10.1 Page 4 of 4