Form 4: Kodiak AI CPO's Equity Conversion Post-Merger

Kodiak AI's Chief People Officer, Zsuzsanna Major, reported the conversion of her Legacy Kodiak equity awards into Kodiak AI stock options and restricted stock units following the recent business combination.

Summary

• Zsuzsanna Major, Chief People Officer of Kodiak AI, Inc. (KDK), reported changes in her beneficial ownership of company securities.
• The transactions, dated September 24, 2025, are a result of the Business Combination Agreement dated April 14, 2025.
• Under the agreement, Legacy Kodiak merged into Kodiak AI, Inc. (formerly Ares Acquisition Corporation II), with Legacy Kodiak becoming a wholly-owned subsidiary.
• Legacy Kodiak common stock options and restricted stock units (RSUs) held by Ms. Major were exchanged for comparable Kodiak AI, Inc. options and RSUs, with adjusted exercise prices and share numbers based on a Common Stock Exchange Ratio.
• Ms. Major acquired a total of 2,294,801 stock options with exercise prices ranging from $0.3472 to $6.8388.
• She also acquired a total of 2,294,801 Restricted Stock Units (RSUs), which represent a contingent right to receive one share of Common Stock each.
• Vesting for the stock options and RSUs includes both service-based conditions (continuing as a service provider) and, for RSUs, performance-based conditions.
• Performance-based RSU vesting requires Kodiak AI's Common Stock to achieve price per share thresholds of $18.00, $23.00, and $28.00 for 20 trading days out of 30 consecutive trading days, prior to September 24, 2029, or a change of control.

Sentiment

Score: 7

Explanation: The filing details the conversion of executive equity awards following a business combination, which is a positive for executive retention and incentive alignment. The performance-based vesting for RSUs tied to significant stock price appreciation thresholds ($18, $23, $28) suggests management's confidence in future growth and aligns executive interests with shareholder value creation.

Positives

• The conversion of equity awards ensures continuity of incentives for a key executive (Chief People Officer) following the business combination, promoting retention.
• Performance-based vesting conditions for Restricted Stock Units (RSUs) align management's financial incentives directly with shareholder value creation, requiring significant stock price appreciation to vest.
• The substantial equity holdings (over 4.5 million shares in options and RSUs combined) for the Chief People Officer indicate strong alignment with the company's long-term performance.

Risks

• The vesting of a significant portion of the stock options and Restricted Stock Units is contingent on the Reporting Person continuing as a service provider, posing a retention risk if she were to depart.
• Performance-based RSU vesting is subject to market risk, as it depends on Kodiak AI's Common Stock achieving specific price thresholds ($18.00, $23.00, $28.00) by September 24, 2029, or a change of control.

Future Outlook

The performance-based vesting conditions for the Restricted Stock Units, requiring the company's stock to reach $18.00, $23.00, and $28.00 by September 24, 2029, implicitly signal management's forward-looking expectations and confidence in significant future stock price appreciation.

Industry Context

This filing represents a standard post-merger administrative action, where equity awards of executives from an acquired entity are converted into awards of the acquiring company. This practice is common in business combinations to ensure continuity of incentives and retention of key personnel, aligning their interests with the newly combined entity's performance.

Comparison to Industry Standards

• The combination of stock options and Restricted Stock Units (RSUs) for executive compensation is a widely adopted industry standard, offering both upside potential and retention incentives.
• The inclusion of performance-based vesting conditions tied to specific stock price thresholds ($18.00, $23.00, $28.00) is a common mechanism, particularly in high-growth or post-SPAC companies, to align executive compensation with shareholder value creation and market performance.
• Service-based vesting schedules extending over several years are typical for executive retention, ensuring long-term commitment from key personnel.

Related Party Transactions

• The transactions detailed are a direct consequence of the Business Combination Agreement dated April 14, 2025, involving Kodiak AI, Inc., AAC II Merger Sub, Inc., and Kodiak Robotics, Inc. ('Legacy Kodiak').

Stakeholder Impact

• Shareholders: The conversion and vesting structure of executive equity awards aim to align the Chief People Officer's interests with shareholder value creation, particularly through performance-based RSU vesting tied to stock price appreciation.
• Employees: The continued incentivization of a key executive like the Chief People Officer can contribute to stable leadership and a consistent corporate culture post-merger.

Next Steps

• The Reporting Person must continue as a service provider to satisfy the service-based vesting conditions for both stock options and Restricted Stock Units.
• Kodiak AI's stock price performance will be monitored to determine if the performance-based vesting thresholds for the Restricted Stock Units are met by September 24, 2029, or upon a change of control.

Key Dates

Recommendation

This Form 4 is a disclosure of an executive's equity award conversion following a business combination, not a report on financial performance or a new investment decision. While it indicates continued executive alignment and retention, it does not provide new fundamental information that would significantly alter the investment thesis for a strong buy or sell recommendation. It's an administrative filing reflecting a standard post-merger process.

Keywords

Kodiak AI, KDK, Form 4, Insider Ownership, Stock Options, Restricted Stock Units, Equity Compensation, Business Combination, Merger, Chief People Officer, Zsuzsanna Major