Employee Stock Purchase Plan

Transcription

1 Employee Stock Purchase Plan E N R O L L M E N T G U I D E FOR THE OFFERING PERIOD August 1, 2014 THROUGH January 31, 2015 Your enrollment must be complete by July 21, 2014 ENROLL ONLINE AT

2 July 1, 2014 Dear PetSmart Associate, If you re looking to buy PetSmart stock, the Employee Stock Purchase Plan is a great way for you to do it at a 5 percent discount and without a stockbroker. The next enrollment period is July 7 21, You can enroll online at It s an easy way for you to get started in the plan or increase your contributions if you re already participating. What do you need to do? If you re already participating and don t want to change your contributions, you don t need to do anything. If you re already participating and you d like to increase your contributions, you can do that online at The ticker symbol is PETM. If you were eligible previously but didn t enroll and would like to now, you can do that online at If you just became eligible and want to enroll, these are your enrollment materials. Be sure to review them carefully before enrolling. You can enroll online at A copy of the Prospectus and Plan Document is available at benefits.petsmart.com. If you would like a paper copy mailed to you, please call the Benefits Team at If you have any questions, please log onto benefits.petsmart.com or call HR Shared Services at or us at benefits@ssg.petsmart.com. Sincerely, The Benefits Team ENROLLMENT GUIDE 1

3 Table of Contents Introduction...3 Enrollment Instructions...3 Nuts & Bolts of the Employee Stock Purchase Plan...3 Overview...4 Definitions...4 How the Offering Works...4 How to Enroll...6 How to Change Your Contributions...9 How to Stop Your Contributions or Withdraw Conclusion When Stock is Purchased for You...12 Confirmation of Purchase Form...13 IRS Form Employee Stock Purchase Plan Disposition...15 U.S. Statement of Taxable Income...16 Taxable Income Canada/Puerto Rico...17 Important Contacts ENROLLMENT GUIDE

4 Employee Stock Purchase Plan Enrollment Guide The Employee Stock Purchase Plan provides a way for eligible part-time and full-time associates to own a financial stake in our company. This benefit lets you buy shares of PetSmart stock at a 5 percent discount through convenient payroll deductions. Your decision to enroll should be made after reviewing the Prospectus and Plan Document available at benefits.petsmart.com. Introduction This booklet in conjunction with the Plan Document (Prospectus) provides information you need to decide whether you want to buy PetSmart Common Stock through the 2012 PetSmart, Inc. Employee Stock Purchase Plan. The Plan Document (Prospectus) should be reviewed and is available at benefits.petsmart.com and This booklet will: Give you an overview of the Employee Stock Purchase Plan Explain some of the terms Answer many of the basic questions about how the program works and how you can enroll Enrollment Instructions 1. Read this booklet and the Prospectus in their entirety. 2. Enroll online at Nuts and Bolts of the Employee Stock Purchase Plan 1. Figure out how much you want to contribute to the plan (1 15 percent of your gross pay, only whole percentages like 2 or 7 percent, not 3.5 percent). 2. You contribute through payroll deductions, and your contributions accumulate in an account for six months until the Purchase Date of January 31, 2015 for this Offering Period. 3. Paycheck deductions start August 1, 2014 for hourly associates and August 8, 2014 for salaried associates, and are listed under deductions and labeled stock. 4. All the money you accumulate during the Purchase Period (the six-month period beginning on August 1, 2014, and ending on the Purchase Date) is used to buy as many whole shares of the stock as possible. 5. For this Purchase Period (August 1, 2014 January 31, 2015), your purchase price is 95 percent of the Fair Market Value (a 5 percent discount) of PetSmart Common Stock. The Fair Market Value is defined as the closing price of our Stock on the Purchase Date (January 31, 2015). 6. Because you can t buy a fraction of a share, any remaining money after the purchase is put back into your account and applied on the next Purchase Date. 7. Once you hold shares in your account, you ll get the normal voting and other rights of a PetSmart shareholder (such as dividends), and you ll receive all shareholder reports and information. 8. You ll get your own E*TRADE account at no cost to you when you make your first purchase (E*TRADE charges a fee for selling). Contact E*TRADE at or stockplans. 9. To sell stock, use your E*TRADE account. You are required to report any sale to PetSmart. See page 12, steps 3 and 4 for more information. Questions? Contact the Benefits Team at or them at benefits@ssg.petsmart.com. ENROLLMENT GUIDE 3

5 Overview Public Company PetSmart is a public company, which means that stock in the Company is bought and sold on the open market. Purpose of the Plan The Employee Stock Purchase Plan gives you the opportunity to buy PetSmart Common Stock at a discount from what you would generally have to pay on the open market for a purchase occurring at the same time. The Company is currently authorized to sell up to approximately 2,426,000 shares of the Company s common stock through the Plan. You should never look at purchasing stock as a substitute for retirement programs such as the 401(k) program. Stock prices can rise and fall for a number of reasons, and some of these reasons are beyond PetSmart s control. Definitions PetSmart Common Stock (or the Stock) PetSmart Common Stock just means that the stock is the same as the stock sold on the open market. When you buy stock through the Plan, your shares will be deposited into an account with E*TRADE. If you decide to sell your stock, it can be done through E*TRADE either online or via the telephone. Board of Directors (or the Board) The Board of Directors is composed of well qualified men and women who are independent of the operations of PetSmart, and one or more of PetSmart s top executives. They have been elected by the stockholders of PetSmart or appointed by the Board to oversee management and assure the long-term interests of the shareholders are being served. Employee Stock Purchase Plan (or the Plan) The Plan is the legal document adopted by the Board and approved by our stockholders to define the terms and general rules about how PetSmart Common Stock will be offered to associates. You should read the Plan completely before you make any decisions about participating. Offering The grant of rights from time to time to purchase PetSmart Common Stock made during an Offering Period. Offering Period/Purchase Period This Offering begins on August 1, 2014 and will end on January 31, 2015, and consists of one six-month Purchase Period. The Offering Period runs concurrently with the Purchase Period, which is the period during which you can accumulate payroll deductions in order to purchase PetSmart Common Stock. Purchase Date The date on which your accumulated payroll deductions will be used to buy your PetSmart Common Stock under the Plan. Stock will be purchased on the last day of the Purchase Period. How the Offering Works Eligibility To be eligible to participate in the Plan during an Offering, you must have been employed for at least six calendar months as of the Entry Date. In addition, you must customarily have worked 20 or more hours a week at least five months per calendar year. Entry Dates There are certain dates that you can actually begin participating in the Plan, as shown here (sometimes also called an Offering Date). Entry Dates: Feb 1 & Aug 1 If you don t enroll by the deadline before an Entry Date, you will have to wait until the next Entry Date to participate in the Plan. How Much You Can Contribute You can contribute any whole percentage of your gross pay between 1 percent and 15 percent. Gross pay means the total compensation paid to you, including salary, deferred wages, overtime pay, commissions, bonuses 4 ENROLLMENT GUIDE

6 and other pay you receive up to a max of $25,000. See Section 2(i) of the Plan Document for the full definition. This money is deposited into PetSmart s general fund until the Purchase Date. You will not receive interest on the money withheld. Purchase Date For this Offering, your money will be used to buy stock on the Purchase Date shown here. Purchase Date: January 31 The money you have accumulated during the Purchase Period will be used to buy as many whole shares of stock as possible (not to exceed the limits set forth in Section 9 of the Plan Document) based on the discounted stock price at the time of the purchase. Because you can t buy part of a share, any money left over after the purchase will be put back into the account to be applied toward the next Purchase Date. Example Situation: You were eligible for the offering with an Entry Date of August 1. You chose to participate and you accumulated $1,000 during the Purchase Period from August 1 to January 31. When the stock is purchased January 31, the Fair Market Value of the stock is $55. The purchase price is 95 percent of $55. $ Purchase Date January 31, price $55.00 x 95% Your cost per share $52.25 $1,000/52.25 = 19 shares, with $7.25 left over, which will remain in your account for use on the next Purchase Date. This is just an example. The price of stock used in this example is hypothetical. Discount Price The price you pay is 95 percent of the Fair Market Value on the Purchase Date. The Fair Market Value is the closing price of the stock on the NASDAQ Stock Market exchange. ENROLLMENT GUIDE 5

7 How to Enroll You must enroll online at Your enrollment must be completed on or before the deadline. If your enrollment is completed after the enrollment deadline, you will have to wait until the next Entry Date to begin contributing to the Plan. Once you are enrolled, you remain in the Plan until you decide to withdraw, you become ineligible, or the Offering Period ends. Ticker Symbol is PETM If you have trouble navigating the website, please contact E*TRADE at ENROLLMENT GUIDE

8 Your Stock Purchase Plan Specify Plan Elections i You have not yet enrolled. Simply complete the information below to begin participating in your stock purchase plan. Current status & enrollment options available (e.g., changes allowed) Your Enrollment Information A MESSAGE FROM YOUR EMPLOYER Welcome to the PetSmart online enrollment system for the Employee Stock Purchase Plan (ESPP). This benefit gives you an opportunity to buy PetSmart stock at a discount. Use this site to enroll in the Employee Stock Purchase Plan. You can contribute from 1 to 15 percent of your gross pay. The enrollment period is July Once enrollment is complete, you can use this site to change your contributions, stop them or withdraw from the plan. The Enrollment Guide, Plan Prospectus and Plan Document are available on this web site. Custom message from PetSmart for all associates to see If you have any questions, please contact the Benefits Team at benefits@ssg.petsmart.com or Set percentage contributions to: address: Verify address: (required only if changing) Enter your percentage Enter your address Your Plan Information Your Offering Period is from 8/1/14 to 1/31/15. Your Purchase Date is 1/31/15. Your Plan Documents (you'll need Adobe Acrobat Reader to view documents) Enrollment Guide Prospectus Plan Summary Contribution info. and relevant dates (e.g., purchase, offering) See customized plan documents here Your Brokerage Account Information Select your broker: Your Electronic Signature To certify that you have read and understood the terms and conditions of your employer's stock purchase plan, enter "I agree" in the box below. Then click Enroll. Associate confirms selections by electronically "signing" enrollment ENROLLMENT GUIDE 7

9 Your Stock Purchase Plan Confirm Your Elections A summary of your plan is listed below. You may want to print this page for your records. Your Enrollment Information Edit A MESSAGE FROM YOUR EMPLOYER Welcome to the PetSmart online enrollment system for the Employee Stock Purchase Plan (ESPP). This benefit gives you an opportunity to buy PetSmart stock at a discount. Use this site to enroll in the Employee Stock Purchase Plan. You can contribute from 1 to 15 percent of your gross pay. The enrollment period is July Once enrollment is complete, you can use this site to change your contributions, stop them or withdraw from the plan. The Enrollment Guide, Prospectus, and Plan Document are available on this web site. If you have any questions, please contact the Benefits Team at benefits@ssg.petsmart.com or Your contribution is: 15% Your contribution to date is: $1, You enrolled on 1/2/07 Your last change was today, 7/7/14. On that day you increased your contribution. Your Plan Information Your Offering Period is from 8/1/14 to 1/31/15. Your Purchase Date is 1/31/15. Your Plan Documents (you'll need Adobe Acrobat Reader to view documents) Enrollment Guide Prospectus Plan Summary Your Brokerage Account Information Your broker is: E*TRADE Securities Your account number is: Associate confirms preferences and can view summary at any time. Edit You must open these documents to proceed. Edit You will be sent a confirmation . If you do not receive it within 24 hours, your enrollment is not complete. Please call the Benefits Team at for help completing the process. 8 ENROLLMENT GUIDE

10 How to Change Your Contributions after the enrollment period You can decrease the percentage of your deduction to any percentage (other than zero) on the Entry Date and also only once during any 6-month Purchase Period. To reduce your deduction percentage, log onto Your withholding rate will be changed within a reasonable period of time after receipt of the change. Employee Stock Purchase Plan View Your ESPP Summary A summary of your ESPP information, including your contributions and plan documents, is listed below. You may want to print this page for your records. Your Enrollment Information Edit A MESSAGE FROM YOUR EMPLOYER Welcome to the PetSmart online enrollment system for the Employee Stock Purchase Plan (ESPP). This benefit gives you an opportunity to buy PetSmart stock at a discount. Use this site to enroll in the Employee Stock Purchase Plan. You can contribute from 1 to 15 percent of your gross pay. The enrollment period is July Once enrollment is complete, you can use this site to change your contributions, stop them or withdraw from the plan. The Enrollment Guide, Plan Prospectus and Plan Document are available on this web site. If you have any questions, please contact the Benefits Team at benefits@ssg.petsmart.com or Your contribution is: 8% You can make any number of contribution changes during open enrollment. You can increase your contribution 0 time(s), and decrease 1 time(s) during the purchase period. You have increased 0 times, and decreased 0 times. Your address is test@etrade.com Your Plan Information Your Offering Period is from 8/1/14 to 1/31/15. Your Purchase Date is 1/31/15. Your Plan Documents (you'll need Adobe Acrobat Reader to view documents) 2012 EMPLOYEE STOCK PURCHASE PLAN, as amended Enrollment Guide Prospectus Plan Summary Edit Click Edit to make your change To change your percentage, stop or withdraw from the plan ENROLLMENT GUIDE 9

11 Employee Stock Purchase Plan Set 1 of 3: Edit Your Plan Elections i If you'd like to make a change in your stock purchase plan information, you can do that below. Be sure to click Continue to confirm your changes. Your Enrollment Information A MESSAGE FROM YOUR EMPLOYER Welcome to the PetSmart online enrollment system for the Employee Stock Purchase Plan (ESPP). This benefit gives you an opportunity to buy PetSmart stock at a discount. Use this site to enroll in the Employee Stock Purchase Plan. You can contribute from 1 to 15 percent of your gross pay. The enrollment period is July Once enrollment is complete, you can use this site to change your contributions, stop them or withdraw from the plan. The Enrollment Guide, Prospectus, and Plan Document are available on this web site. If you have any questions, please contact the Benefits Team at benefits@ssg.petsmart.com or Set contribution percentage to: Suspend contributions Withdraw from plan % (Between 1% and 15%) Choose, change percentage, suspend, stop or withdraw Your enrollment is effective on 8/1/2014 You can make any number of contribution changes during open enrollment. You can increase your contributions 0 time(s), and decrease 1 time(s) during the Purchase Period. You have increased 0 times, and decreased 0 times. Enter your address: Confirm your address: (required only if changing) Your Plan Information Your Offering Period is from 8/1/14 to 1/31/15. Your Purchase Date is 1/31/15. Your Plan Documents (you'll need Adobe Acrobat Reader to view documents) 2012 EMPLOYEE STOCK PURCHASE PLAN, as amended 10 ENROLLMENT GUIDE

12 How to Stop your contributions or withdraw Conclusion You can stop, or suspend your deductions (i.e., reduce your payroll deduction percentage to zero) at any time. To stop your deductions, log onto If you suspend your deductions, you are still in the Plan. Any money already deducted will be used to buy stock on the next Purchase Date. You can withdraw from the Plan completely at anytime (except during the open enrollment months of January and July). This is not the same thing as stopping your deductions. When you withdraw, all of the money you have accumulated will be refunded to you and no stock will be bought for you on the next Purchase Date. Once you withdraw, you cannot participate in the Plan during the current Offering Period. You can enroll in the Plan for the next Offering, provided you have met the eligibility requirements. Before you make a decision about enrolling in the Plan, please read through all of the documents that have been provided to you including the Prospectus and PetSmart s Annual Report or Form 10-K. Taxes Tax laws are very complicated. Some of the basic information about the tax laws are explained for U.S., Canadian and Puerto Rican associates for this Plan, in the Prospectus in this booklet. We strongly recommend that you get in touch with a tax advisor for specific information about how the tax laws apply to you. Other Rules and Restrictions There are also other rules and restrictions contained in the Prospectus that haven t been covered here. You are responsible for reading the Prospectus before you buy or sell PetSmart Common Stock. A copy of the Prospectus is available online at benefits.petsmart.com or one can be mailed to you by calling Since PetSmart is a public company, laws governing insider trading (which are explained in the Prospectus) will apply to you. Special Note: Withdrawals from the Plan during enrollment months, January and July, will be delayed and will take effect the beginning of the next month. ENROLLMENT GUIDE 11

13 When Stock is Purchased for You Step 1 A Confirmation of Purchase is sent to your home from the PetSmart Stock Plan Administration Team (see sample on page 13). Keep this for your tax records. Step 2 The shares you purchased may be deposited into your E*TRADE account. If you don t already have an E*TRADE account, one will be set up for you. Step 3 If you sell stock acquired through the Employee Stock Purchase Plan using E*TRADE, your sale will be automatically tracked and PetSmart will mail you a Statement of Taxable Income for Stock Purchase in January (see example on page 16). Keep this for your tax records. Note: Tax laws vary in the U.S., Canada and Puerto Rico; examples of all are in this booklet. Step 4 If you transfer stock acquired through the Employee Stock Purchase Plan to a broker other than E*TRADE you will receive a Disposition Survey from the PetSmart Stock Plan Administration Team in November (see example on page 15). You are required to report the number of shares sold, the sales date and the sale price per share on the form. Return the form to the PetSmart Stock Plan Administration Team at SSG. A Statement of Taxable Income for Stock Purchase will be mailed to you in January (see example on page 16). Keep this for your tax records. Step 5 If you sell your stock, your broker will also send you a statement. Keep this for your tax records. 12 ENROLLMENT GUIDE

14 Confirmation of Purchase Form A Confirmation of Purchase is sent to your home from the PetSmart Stock Plan Administration Team after each purchase. Keep all your transaction documents in a safe place. It is your responsibility to keep accurate records of all your transactions. You will be required to report transaction information to the IRS when you complete your annual income tax filings. Understanding your Confirmation of Purchase Form 1 Your address on record 2 Previous purchase carry-forward amount 3 Current six-month contributions 1 4 Current total purchase amount (previous carry-forward plus sixmonth contributions) 5 Number of shares from previous purchase(s) in this offering period 6 Number of shares from current purchase 7 Total number of shares purchased in current offering 8 Fair Market Value (FMV) of stock on your Offering Date 9 Fair Market Value of stock on current Purchase Date 10 Purchase price (FMV on Purchase Date minus 5%) Number of shares to be deposited into your E*TRADE Account Total purchase amount (total contributions X FMV) 13 Current carry-forward amount (to be added to contributions in next sixmonth purchase period) The Offering Date 15 Current Offering Period begin date 16 Current Purchase Date ENROLLMENT GUIDE 13

15 IRS Form 3922 Stock Purchase U.S. You will receive this form because you purchased shares of the Company stock through the ESPP. Companies are required to report both to the employee and to the IRS when first transfer of legal title of stock acquired pursuant an ESPP is recorded during the calendar year. CORPORATION'S federal identification number : PetSmart, Inc N 27TH Avenue Phoenix AZ This is important tax information and is being furnished to the Internal Revenue Service. OMB No Form 3922 Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c) No income is recognized when you purchase shares. However, you must recognize the gain or loss when you sell or transfer ownership of the shares. John Doe 123 Main Street Anytown, USA Copy B For Employee (keep for your records) Date option granted (Box 1) Date option exercised (Box 2) Account Number: Fair market value per share on grant date (Box 3) Fair market value per share on exercise date (Box 4) Exercise price paid per share (Box 5) EMPLOYEE S iden cation number : No. of shares Date legal Exercise price per share transferred title determined as if the transferred option was exercised on the date shown in box 1. (Box 6) (Box 7) 08/01/ /31/2012 $43.50 $53.22 $ /31/2012 $41.33 Account Number: /01/ /31/2012 $53.74 $66.11 $ /31/2012 $51.05 (Box 8) Instructions for Employee: You have received this form because (1) your employer (or its transfer agent) has recorded a first transfer of legal title of stock you acquired pursuant to your exercise of an option granted under an employee stock purchase plan and (2) the exercise price was less than 100 percent of the value of the stock on the date shown in box 1 or was not fixed or determinable on that date. No income is recognized when you exercise an option under an employee stock purchase plan. However, you must recognize (report) gain or loss on your tax return for the year in which you sell or otherwise dispose of the stock. Keep this form and use it to figure the gain or loss. For more information, see Pub. 525, Taxable and Nontaxable Income. Account Number. May show an account or other unique number your employer or transfer agent assigned to distinguish your account. Box 2. Shows the date you exercised the option to purchase the stock Box 3. Shows the fair market value (FMV) per share on the date the option to purchase the stock was granted to you. Box 4. Shows the FMV per share on the date you exercised the option to purchase the stock. Box 5. Shows the price paid per share on the date you exercised the option to purchase the stock. Box 6. Shows the number of shares to which legal title was transferred by you. Box 7. Shows the date legal title of the shares was first transferred by you. Box 8. If the exercise price per share was not fixed or determinable on the date entered in box 1, box 8 shows the exercise price 14 ENROLLMENT GUIDE

16 Employee Stock Purchase Plan (ESPP Disposition) It is important that PetSmart track associate sales of Employee Stock Purchase Plan stock for its own tax and financial reporting requirements. For this reason, associates must notify PetSmart of any sales of Employee Stock Purchase Plan purchased stock. By keeping your shares in the account set up for you, any sales will be tracked and your reporting obligation will be fulfilled. However, in the event that your shares are maintained outside of this account, you should notify PetSmart when your shares have been sold by returning a completed Employee Stock Purchase Plan Disposition Survey that will be sent to you on a regular basis. Understanding your Disposition Survey Statement 1 Your address on record Your associate number 3 Your Offering Date 4 Dates shares were purchased 5 Number of shares reported transferred 6 Date shares were reported transferred 7 Fair Market Value on date of purchase 8 Purchase price 9 Current Offering Period begin date Purchase Date 11 Total value of Stock on date of purchase 12 Total purchase price of Stock 13 Potential compensation (value minus purchase price) Call the PetSmart Benefits Team if you have questions about your Employee Stock Purchase Plan at ENROLLMENT GUIDE 15

17 Statement of Taxable Income Stock Purchase U.S. If you sell your stock you must report the sale to PetSmart. A Statement of Taxable Income will be mailed to you by the following January 31. The statement will reflect the disposition of your Stock and the income to be added to your W-2 as Other income. Please see page 11 of the Prospectus and Plan Document booklet for more details on the tax consequences of selling your ESPP shares. Statement of Taxable Income Income Tax Receipt Keep this statement and provide it to your tax advisor for completion of your annual income tax return. 16 ENROLLMENT GUIDE

18 Taxable Income ESPP Purchase Canada/Puerto Rico The purchase of ESPP shares in Canada and Puerto Rico is a taxable event. On the paycheque following the purchase date, taxes will be withheld on the gain (see example below). Understanding your Confirmation of Purchase Form 1 10 shares times $65.41, the Purchase Value per share 2 10 shares times $62.14, the Purchase Price per share 3 Taxable income This statement is in U.S. dollars. Amounts will be converted to Canadian dollars for your payroll cheque. ENROLLMENT GUIDE 17

19 Important Contacts PetSmart Benefits Team Call HR Shared Services for assistance in enrolling in the Plan benefits.petsmart.com PetSmart Stock Administration Team Call if you have questions about the Stock purchased through the Plan or benefits.petsmart.com Employee Stock Purchase Plan (ESPP) Enrollment/Changes/Withdrawals... Account Activation and Stock Trading US/Canada/Puerto Rico North 27th Avenue, Phoenix, Arizona