Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(b)
On December 3, 2019, Stephane Kasriel notified Upwork Inc. (the "Company") of
his decision to resign from his position as the Company's President and Chief
Executive Officer. The resignation will be effective on December 31, 2019 (the
"Resignation Date"). Mr. Kasriel intends to continue to serve as a member of the
Company's Board of Directors (the "Board") until his current term expires at the
Company's 2020 annual meeting of stockholders. Mr. Kasriel's decision to resign
as the Company's President and Chief Executive Officer and not to stand for
re-election to the Board is based on personal reasons and was not due to any
disagreement with the Company on any matter relating to its operations, policies
or practices.
On December 8, 2019, the Company and Mr. Kasriel entered into an agreement (the
"Kasriel Transition Agreement") setting forth the terms of Mr. Kasriel's
separation and transition from the Company. Pursuant to the Kasriel Transition
Agreement, subject to a release of claims by Mr. Kasriel, Mr. Kasriel will be
entitled to certain payments and benefits after the Resignation Date, including
(i) any amounts that Mr. Kasriel has earned under the Company's 2019 performance
bonus plan and (ii) reimbursement for any insurance premium payments paid by
Mr. Kasriel to continue to receive coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, through no later than
December 31, 2020.
The Kasriel Transition Agreement also provides that Mr. Kasriel will become a
special advisor to the Board through April 30, 2021 pursuant to an advisory
services agreement (the "Kasriel Advisory Agreement"). Pursuant to the Kasriel
Advisory Agreement, while he is providing advisory services, (i) the Company
will pay Mr. Kasriel a fee of $40,000 per calendar month, beginning January 1,
2020 and ending December 31, 2020, and (ii) Mr. Kasriel's outstanding stock
options will continue to vest. The exercise period for certain of Mr. Kasriel's
outstanding stock options will be extended to the later of December 31, 2020 or
three months following such date as he ceases to provide services to the
Company. In addition, (i) if the Company terminates Mr. Kasriel's advisory
services (other than for cause (as defined in the Kasriel Transition Agreement))
prior to December 31, 2020, the Company will pay any unpaid portion of the
advisor fee in a lump sum for the remaining months of 2020, or (ii) if there is
a change in control (as defined in the Kasriel Transition Agreement) prior to
April 30, 2021, all of Mr. Kasriel's then-unvested and outstanding stock options
will accelerate and vest in full, in each case, subject to Mr. Kasriel executing
a second release of claims.
The foregoing descriptions of the Kasriel Transition Agreement and the Kasriel
Advisory Agreement are qualified in their entirety by reference to the full text
of the Kasriel Transition Agreement and the Kasriel Advisory Agreement, which
will be filed as exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ending December 31, 2019.
(c) (d)
On December 6, 2019, the Board appointed Hayden Brown, age 38, the Company's
current Chief Marketing and Product Officer, to become the Company's President
and Chief Executive Officer ("CEO") effective January 1, 2020. In addition, the
Board appointed Ms. Brown to the Board effective December 6, 2019. Ms. Brown
will serve as a Class III director whose term will expire at the Company's 2021
annual meeting of stockholders and until Ms. Brown's successor shall have been
duly elected and qualified, or until Ms. Brown's earlier death, resignation,
disqualification or removal.
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Ms. Brown has served as the Company's Chief Marketing and Product Officer since
April 2019. Ms. Brown previously served as the Company's Senior Vice President,
Product and Design from January 2016 to April 2019, as its Vice President, Head
of Product, from January 2015 to January 2016, and as its Vice President and
Senior Director Marketplace, since March 2014. Prior to that, Ms. Brown served
in numerous product leadership roles, starting when she joined the Company's
predecessor oDesk as a Director of Marketplace in December 2011. Prior to
joining oDesk, Ms. Brown was Vice President of Corporate Development at
LivePerson, Inc., an online messaging, marketing, and analytics company, from
September 2010 to November 2011. Ms. Brown also worked for Microsoft
Corporation, a technology company, as Director of Corporate Strategy and M&A
from January 2010 to September 2010 and as Senior Strategy Manager from June
2007 to January 2010. Ms. Brown began her career as a Business Analyst at
McKinsey & Company, a business management consulting firm, in their New York
office. Ms. Brown holds an A.B. in Politics from Princeton University.
There is no arrangement or understanding between Ms. Brown and any other persons
pursuant to which Ms. Brown was selected as a director. Ms. Brown is not a party
to any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
In connection with her appointment as CEO, Ms. Brown and the Company entered
into an Amended and Restated Offer Letter dated December 8, 2019 (the "Offer
Letter"). Pursuant to the Offer Letter, Ms. Brown will receive an initial annual
base salary of $480,000. In addition, Ms. Brown will be eligible to participate
in the Company's bonus plan and will have a target annual bonus of 60% of her
base salary. Ms. Brown will also be granted a restricted stock unit award under
the Company's 2018 Equity Incentive Plan to acquire such number of shares of the
Company's common stock equal to $10,000,000 divided by the average daily closing
price of the Company's common stock for the 30-day period ending on the trading
day immediately prior to the date of grant (the "RSU Grant"). The RSU Grant will
vest at a rate of 6.25% quarterly over the next sixteen quarters for so long as
Ms. Brown remains employed as CEO of the Company.
Ms. Brown also entered into a new change in control and severance agreement (the
"Change in Control and Severance Agreement") with the Company with the same
terms and conditions as Mr. Kasriel's change in control and severance agreement.
The Change in Control and Severance Agreement provides for the following
benefits if Ms. Brown is terminated by the Company without cause or by Ms. Brown
for good reason (as such terms are defined in the Change in Control and
Severance Agreement) outside of a change in control (as such term is defined in
the Change in Control and Severance Agreement) in exchange for a customary
release of claims: (i) a lump sum severance payment equal to twelve months of
salary, (ii) payment of premiums for continued medical benefits for up to twelve
months and (iii) 50% acceleration of any then-unvested equity awards (excluding
equity awards that vest, in whole or in part, upon satisfaction of performance
criteria).
If Ms. Brown's employment is terminated by the Company without cause or by her
for good reason within the three months preceding a change in control (but after
a legally binding and definitive agreement for a potential change of control has
been executed) or within the twelve months following a change in control, the
Change in Control and Severance Agreement provides the following benefits in
exchange for a customary release of claims: (i) a lump sum severance payment
equal to eighteen months of salary, (ii) a lump sum payment equal to Ms. Brown's
then-current target bonus opportunity on a prorated basis, (iii) 100%
acceleration of any then-unvested equity awards (excluding equity awards that
vest, in whole or in part, upon satisfaction of performance criteria) and
(iv) payment of premiums for continued medical benefits for up to eighteen
months. The Change in Control and Severance Agreement will be in effect for
three years, with automatic renewals for new three-year periods unless notice is
given by the Company to Ms. Brown at least three months prior to expiration.
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The foregoing descriptions of the Offer Letter and Change in Control and
Severance Agreement are qualified in their entirety by reference to the full
text of the Offer Letter and the Change in Control and Severance Agreement,
which will be filed as exhibits to the Company's Annual Report on Form 10-K for
the fiscal year ending December 31, 2019.
(e)
The information set forth above under 5.02(b), (c) and (d) is hereby
incorporated by reference into this Item 5.02(e).
Item 7.01 Regulation FD Disclosure
On December 9, 2019, the Company issued a press release (the "Press Release")
that, among other disclosures, described the executive transitions discussed
above and reaffirmed the Company's earnings guidance for the fourth quarter and
full year ending December 31, 2019 that was previously provided by the Company
on November 6, 2019. A copy of the press release is attached hereto as Exhibit
99.1.
The information disclosed in this Item 7.01, including Exhibit 99.1, is being
furnished and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities under that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act except as expressly set forth by specific reference
in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated December 9, 2019.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
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