Duluth Trading Outlines Inducement Grant Agreement with New CEO

Duluth Holdings, Inc. (dba, Duluth Trading Company) made an inducement grant to Stephanie Pugliese concerning her employment as the company’s new president and CEO, effective May 5, 2025, aligned with the previously disclosed material terms.

The company granted a total of 1,759,532 shares of Class B common stock to the new chief executive pursuant to the terms of the Inducement Stock Award Agreement and the Inducement Restricted Stock Award Agreement, entered between the company and Pugliese on May 5, 2025, each as a material inducement to her hiring.

Pursuant to the Inducement Stock Award Agreement, the company granted 586,511 shares to Pugliese on May 5, 2025. If Pugliese terminates her employment without good reason or the company terminates Pugliese for cause before May 5, 2026, she must reimburse the company for a pro rata portion of the 586,511 shares granted to her under such agreement.

In connection with the 1,173,021 shares of restricted stock granted to Pugliese pursuant to the Inducement Restricted Stock Award Agreement, (i) 33 percent of such shares will vest on May 5, 2026, (ii) 33 percent of such shares will vest on May 5, 2027, and (iii) the remaining 34 percent of the shares will vest May 5, 2028.

If Pugliese’s employment with the company is terminated (i) due to her death, (ii) due to her disability, (iii) without cause, or (iv) by Pugliese for good reason, then all unvested stock will vest immediately. If her employment with the company is terminated for any other reason, all unvested stock will be forfeited and revert to the company.

The stock awards were granted outside the terms of the company’s 2024 Equity Incentive Plan and approved by the company’s Board of Directors, Compensation Committee and the Subcommittee of the Compensation Committee of the Board of Directors, consisting of the independent directors of the Compensation Committee, in reliance on the employment inducement exemption under NASDAQ Listing Rule 5635(c)(4), which requires public announcement of inducement awards.

Image courtesy Duluth Holdings Inc.