ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
On November 8, 2022, Cardlytics, Inc. (the "Company") committed to and
effectuated a plan of termination of 51 employees. This decision was based on
cost-reduction initiatives intended to reduce operating expenses and allow the
Company to focus on key growth priorities.
The Company currently estimates that it will incur charges of approximately $1.1
million in connection with the reduction in force, primarily consisting of
severance payments, employee benefits and related costs. The Company expects
that substantially all of these charges will be incurred in the fourth quarter
of 2022, and that the reduction in force will be substantially complete by the
first quarter of 2023, subject to local law and consultation requirements, which
may extend the process beyond the first quarter of 2023 in certain countries.
The charges the Company expects to incur are subject to assumptions, including
local law requirements, and actual expenses may differ materially from the
estimates disclosed above.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENT OF CERTAIN OFFICERS.
Resignation of Scott D. Grimes
On November 11, 2022, Scott D. Grimes resigned from all positions with the
Company, including but not limited to that of the Executive Chairman of the
Board of Directors (the "Board") of the Company. Mr. Grimes' resignation was not
the result of any disagreement with the Company on any matter relating to the
Company's operations, policies or practices. In connection with Mr. Grimes'
departure, on November 11, 2022, the Company and Mr. Grimes entered into a
Resignation and Release Agreement (the "Grimes Resignation and Release
Agreement"), which replaces the existing Amended and Restated Separation Pay
Agreement between Mr. Grimes and the Company. The Grimes Resignation and Release
Agreement provides that 51,117 unvested restricted stock units held by Mr.
Grimes shall be accelerated and vest by November 18, 2022. All other restricted
stock units and all performance stock units held by Mr. Grimes were forfeited
for no consideration. Mr. Grimes is also entitled to reimbursement on a monthly
basis for the COBRA premiums actually paid by Mr. Grimes to continue Mr. Grimes'
and his covered dependents' health insurance coverage in effect on the date of
separation for up to eighteen months following the date of separation, subject
to certain criteria. The Grimes Resignation and Release Agreement contains a
release and certain restrictive covenants that are binding upon Mr. Grimes.
Resignation of Lynne Laube
On November 11, 2022, Lynne Laube resigned from all positions with the Company,
including but not limited to that of Advisor to the Chief Executive Officer and
Director of the Board of the Company. Ms. Laube's resignation was not the result
of any disagreement with the Company on any matter relating to the Company's
operations, policies or practices. In connection with Ms. Laube's departure, on
November 11, 2022, the Company and Ms. Laube entered into a Resignation and
Release Agreement (the "Laube Resignation and Release Agreement"), which
replaced the existing Transition Agreement and Amended and Restated Separation
Pay Agreement between Ms. Laube and the Company. The Laube Resignation and
Release Agreement provides that 65,372 unvested restricted stock units held by
Ms. Laube shall be accelerated and vest by November 18, 2022. All other
restricted stock units and all performance stock units held by Ms. Laube were
forfeited for no consideration. Ms. Laube is also entitled to reimbursement on a
monthly basis for the COBRA premiums actually paid by Ms. Laube to continue Ms.
Laube's and her covered dependents' health insurance coverage in effect on the
date of separation for up to eighteen months following the date of separation,
subject to certain criteria. The Laube Resignation and Release Agreement
contains a release and certain restrictive covenants that are binding upon Ms.
Laube.
The foregoing descriptions of the Grimes Resignation and Release Agreement and
the Laube Resignation and Release Agreement are not complete and are qualified
in their entirety by reference to the Laube Resignation and Release Agreement
and the Grimes Resignation and Release Agreement, which are filed as Exhibits
10.1 and 10.2, respectively, to the Current Report on Form 8-K and are
incorporated herein by reference.
Board of Director Changes
In connection with the resignation of Mr. Grimes as Executive Chairman, on
November 12, 2022, the Board also approved the appointment of Board member John
V. Balen as Board Chairman, effective immediately, in addition to his ongoing
service on the Board's Compensation Committee and Nominating and Corporate
Governance Committee. Prior to this appointment, Mr. Balen served as the Lead
Independent Director of the Board.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit Exhibit Description
10.1 The Laube Resignation and Release Agreement
10.2 The Grimes Resignation and Release Agreement
Forward Looking Statements
This report includes information that constitutes "forward-looking statements"
made pursuant to the safe harbor provision of the Private Securities Litigation
Reform Act of 1995 that involve risk and uncertainties. These statements include
the estimate of charges to be incurred in connection with the reduction in
force, the timing of the charges and the Company's ability to reduce operating
expenses. Management cautions the reader that these forward-looking statements
are only predictions and are subject to a number of both known and unknown risks
and uncertainties, and actual results, performance, and/or achievements may
differ materially from the future results, performance and/or achievements
expressed or implied by these forward-looking statements as a result of a number
of factors. A description of the risks and uncertainties that may arise are set
forth in the Company's Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission on November 1, 2022 and the Company's other periodic
reports that it files with the Securities and Exchange Commission from time to
time. The statements made in this report are based on information available to
the Company as of the date of this report and the Company undertakes no
obligation to update any of the forward-looking statements after the date of
this report.
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