John B. Replogle - 27 Oct 2022 Form 4 Insider Report for Grove Collaborative Holdings, Inc. (GROV)

Footnote F1

On September 26, 2022, the Issuer made an offer (the "Tender Offer") to exchange certain eligible options for new restricted stock units ("RSUs"), each one of which represents the right to receive one share of the Issuer's Class A Common Stock, pursuant to a tender offer statement on Schedule TO filed with the Securities and Exchange Commission on September 26, 2022, and subject to approval by the Issuer's board of directors (the "Board"). The Tender Offer closed on October 21, 2022, and the Board approved the exchange of options for RSUs (the "Exchange") on October 27, 2022.

Footnote F2

The Reporting Person elected to exchange this option and, in accordance with the terms of the Tender Offer and based on its exercise price of $7.43, received 1 RSU per each 1.95 options in the Exchange.

Footnote F3

This option was scheduled to vest 30% on November 9, 2022, and then 7.5% for each subsequent quarter of continuous service for the following year and then 5% for each subsequent quarter of continuous service for the following two years.

Footnote F4

Each RSU represents a contingent right to receive one share of Class A Common Stock.

Footnote F5

In accordance with the terms of the Tender Offer, because the exchanged option was entirely unvested as of October 21, 2022, these new RSUs will vest in equal installments on each February 15, May 15, August 15 and November 15 until becoming fully vested on November 15, 2025 (the calendar quarter in which the option that was exchanged would have fully vested), subject to the Reporting Person's continued service with the Issuer through each applicable vesting date. The RSUs have no expiration date.

Footnote F6

These RSUs vest 30% on November 15, 2022, and then 7.5% for each subsequent quarter of continuous service for the following year and then 5% for each subsequent quarter of continuous service for the following two years. The RSUs have no expiration date.

Footnote F7

Upon tender of each exchanged option in the Exchange, in accordance with the terms of the Tender Offer, the Reporting Person forfeited 35,084 Earnout Shares (defined herein) that were granted in connection with each exchanged option. An "Earnout Share" is a share of the Issuer's Class B Common Stock that was issued together with the option upon the closing of the Business Combination (as defined in footnote 9 below) in exchange for options to purchase shares of common stock of Grove Collaborative Inc., and that were scheduled to vest upon the achievement of certain Milestones (as defined in footnote 10 below) prior to the tenth anniversary of the closing of the Business Combination. Such forfeiture is exempt from Sections 16(a) and 16(b) pursuant to Rules 16a-4(d) and 16b-6(d), respectively, under the Securities Exchange Act of 1934, but is being reported herein for transparency and completeness.

Footnote F8

Class B Common Stock is convertible into Class A Common Stock on a one-for-one basis at any time, and will be automatically converted into an equal number of Class A Common Stock upon any transfer.

Footnote F9

The "Business Combination" was the merger contemplated by the Agreement and Plan of Merger, dated December 7, 2021, as amended and restated on March 31, 2022 (the "Merger Agreement"), by and among Virgin Group Acquisition Corp. II ("VGAC II"), two wholly owned direct subsidiaries of VGAC II, and Grove Collaborative, Inc., which closed on June 16, 2022.

Footnote F10

The "Milestones" are defined in the Merger Agreement as follows: (i) 50% of the Earnout Shares automatically vest if the daily volume weighted average price ("VWAP") of the shares of Class A Common Stock is greater than or equal to $12.50 per share for any 20 trading days within any 30-trading-day period; and (ii) 50% of the Earnout Shares automatically vest if the daily VWAP of the shares of Class A Common Stock is greater than or equal to $15.00 per share for any 20 trading days within any 30-trading-day period, each subject to certain change-of-control provisions. In addition, any Earnout Shares issued in exchange for Grove RSUs or options are subject to the same vesting terms as the underlying RSUs and options and, if the underlying RSU or option is forfeited, the corresponding Earnout Shares will also be forfeited and distributed to the other holder of Grove securities as if immediately prior to the closing of the Business Combination on a pro rata basis.

Footnote F11

This amount consists entirely of 58,267 Earnout Shares, which are subject to the Milestones described in footnote 10 above.

Footnote F12

This amount consists entirely of 25 Earnout Shares, which are subject to the Milestones described in footnote 10 above.

Footnote F13

These securities are directly held by Replogle Family LLC, for which the Reporting Person serves as manager.

Footnote F14

This amount reflects an additional 2,939 Earnout Shares that the Reporting Person received in connection with the redistribution of forfeited Earnout Shares, pursuant to the terms of the Merger Agreement, to other holders of Earnout Shares on a pro rata basis based upon the allocation of Earnout Shares as of the closing of the Business Combination. Such pro rata redistribution of Earnout Shares is exempt from Section 16 pursuant to Rule 16a-9 under the Securities Exchange Act of 1934.

Footnote F15

This amount reflects an additional 1 Earnout Share that Replogle Family LLC received in connection with the redistribution of forfeited Earnout Shares, pursuant to the terms of the Merger Agreement, to other holders of Earnout Shares on a pro rata basis based upon the allocation of Earnout Shares as of the closing of the Business Combination. Such pro rata redistribution of Earnout Shares is exempt from Section 16 pursuant to Rule 16a-9 under the Securities Exchange Act of 1934.