ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 20, 2022, Cardlytics, Inc. (the "Company") issued a press release, which
included an update to its billings, revenue and adjusted contribution guidance
for the quarter ended June 30, 2022. The Company's press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Item 2.02 and Exhibit 99.1 attached hereto
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 of 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, regardless of any general incorporation language in such filing.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
Resignation of Lynne M. Laube as Chief Executive Officer
On July 15, 2022, Lynne M. Laube notified the Company of her intent to resign as
the Company's Chief Executive Officer, effective as of September 1, 2022 (the
"Transition Date"), and that Ms. Laube would remain employed in an advisory
capacity to support a transition of responsibilities through May 31, 2024. Ms.
Laube concurrently notified the Company that she does not intend to stand for
reelection at the Company's 2023 annual meeting of stockholders (the "2023
Annual Meeting"). Ms. Laube's separation 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 July 18, 2022, the Company and Ms.
Laube entered into a Transition Agreement (the "Laube Transition Agreement")
that replaces the existing separation agreement with Ms. Laube. The Laube
Transition Agreement provides that on the Transition Date, Ms. Laube will remain
an employee of the Company and begin serving as an advisor to the Chief
Executive Officer until May 31, 2023 (the "First Advisory Period"). After Ms.
Laube's service as advisor to the Chief Executive Officer, she will continue to
serve as an employee of the Company and general advisor for one year, ending May
31, 2024, consistent with her prior separation agreement (the "Second Advisory
Period," and together with the First Advisory Period, the "Advisory Period").
During the Advisory Period, Ms. Laube will be paid 90% of her salary, with the
remaining 10% of her salary retained by the Company and paid at the end of the
Advisory Period. Additionally, Ms. Laube will be eligible for a prorated portion
(based on her time served as Chief Executive Officer) of her third quarter 2022
bonus and annual 2022 bonus, if bonuses for such periods are paid based on
Company performance. The Laube Transition Agreement contains a release and
certain restrictive covenants that are binding upon Ms. Laube.
The foregoing description of the Laube Transition Agreement is not complete and
is qualified in its entirety by reference to the Laube Transition Agreement,
which will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ending September 30, 2022.
Appointment of Karim Temsamani as Chief Executive Officer
On July 18, 2022, the Board of Directors of the Company (the "Board") approved
the appointment of Karim Temsamani as the Company's Chief Executive Officer and
principal executive officer, effective September 1, 2022 (the "Hire Date"). In
connection with Mr. Temsamani's appointment, on July 18, 2022, the Company and
Mr. Temsamani entered into an Offer Letter, a Severance Agreement (the
"Temsamani Severance Agreement") and an Employment Covenants Agreement, each
effective as of the Hire Date. Pursuant to the Offer Letter, Mr. Temsamani will
have a starting annual salary of $500,000 and will be granted restricted stock
units for a number of shares equal to $20.0 million divided by the
30-trailing-trading-day average stock price ending on the trading day prior to
the Hire Date (the "RSU Award"). 25% of the RSU Award shall vest on the first
anniversary of the Hire Date, and the remaining 75% of the RSU Award shall vest
quarterly over the following three (3) years, subject to continuous service with
the Company as of each respective vesting date. In addition to the RSU Award,
Mr. Temsamani will receive a signing bonus of $250,000 and will be eligible to
participate in the Cardlytics Bonus Plan at an annual target of 75% of his base
salary.
The Temsamani Severance Agreement entitles Mr. Temsamani to twelve (12) months
of base salary, the prorated portion of his quarterly bonus for the then-current
quarter if paid to other executives, the pro-rated portion of his annual bonus
if paid to other executives, and continued medical benefits for twelve (12)
months, if the Company terminates Mr. Temsamani Without Cause or Mr. Temsamani
resigns for Good Reason, as those terms are defined in the Temsamani Severance
Agreement. Further, if Mr. Temsamani is terminated by the Company Without Cause
or Mr. Temsamani resigns for Good Reason within three (3) months before a Change
in Control (as defined in the Company's 2018 Equity Inducement Plan) or within
one year following a Change in Control, then 100% of his unvested shares shall
immediately accelerate and become vested and exercisable. In the event Mr.
Temsamani is terminated by the Company Without Cause or Mr. Temsamani resigns
for Good Reason (as such terms are defined in the Temsamani Severance Agreement)
prior to the one-year anniversary of the Start Date, then 25% of the RSU Award
shall accelerate and fully vest on the date of termination. Acceleration of the
RSU Award shall be subject to delivery to the Company of an executed and
effective release of all claims in favor of the Company.
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If at any time prior to the Hire Date the Company (a) terminates the Offer
Letter other than due to Cause (as defined in the Temsamani Severance
Agreement), or (b) consummates a Change in Control (as defined in the Inducement
Plan), then the Company will make Mr. Temsamani a contractor for the purpose of
granting him restricted stock units with a value of $5,000,000 (the "Termination
RSUs"). The Termination RSUs will be fully vested upon grant. To determine the
number of Termination RSUs, the Company will use $5,000,000 divided by a
30-trailing-trading-day average stock price ending on the trading day prior to
the date that either the Offer Letter is terminated or the Change in Control, as
applicable. Issuance of the Termination RSUs shall be subject to delivery to the
Company of an executed and effective release of all claims in favor of the
Company.
The foregoing description of the Offer Letter and the Temsamani Severance
Agreement is not complete and is qualified in its entirety by reference to the
Offer Letter and the Temsamani Severance Agreement, which will be filed as
exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ending
September 30, 2022.
Karim Temsamani, age 49, has served as the Head of Global Partnerships at Stripe
since November 2021. Prior to this role, Mr. Temsamani served as Head of Banking
and Financial Products at Stripe since April 2019. Prior to his time at Stripe,
Mr. Temsamani held numerous positions of increasing responsibility at Google
from 2007 to April 2019, including President of Google's Asia-Pacific division
from December 2012 through April 2019 and VP, Global Head of Mobile from August
2010 through December 2012. Mr. Temsamani holds a bachelor's degree in
International Affairs from European Business School Paris.
Board of Directors Changes
In connection with the appointment of Mr. Temsamani as Chief Executive Officer,
on July 18, 2022, the Board also approved the appointment of Mr. Temsamani to
the Board, effective on the Hire Date and conditioned upon Mr. Temsamani
becoming an employee of the Company. Mr. Temsamani will serve as a Class II
director whose term will expire at the 2023 Annual Meeting. Mr. Temsamani does
not have any family relationships with any of the Company's directors or
executive officers, is not a party to any transactions of the type listed in
Item 404(a) of Regulation S-K, and was not appointed pursuant to any arrangement
or understanding with any other person.
The Board also approved the continuation of Ms. Laube as a Director until the
2023 Annual Meeting.
Stock Grant
On July 18, 2022, the Board approved a grant of restricted stock units for Andy
Christiansen, the Company's Chief Financial Officer, for a number of shares
equal to $700,000 divided by the 30-trailing-trading-day average stock price
ending on the date of the grant (the "CFO Award"). 100% of the CFO Award shall
vest on the first anniversary of the grant date. Additionally, in the event of
Mr. Christiansen is terminated by the Company Without Cause or Mr. Christiansen
resigns for Good Reason (as such terms are defined in his existing severance
agreement) prior to the anniversary of the grant date, the CFO Award shall
accelerate and fully vest on the date of termination.
Adoption of Inducement Plan
On July 18, 2022, the Board adopted the Cardlytics, Inc. Inducement Plan (the
"Inducement Plan"). The Board also adopted a form of stock option grant notice
and agreement and a form of restricted stock unit grant notice and agreement
(the "Award Agreements") for use with the Inducement Plan. A total of 1,500,000
shares of the Company's common stock, par value $0.0001 per share ("Common
Stock"), have been reserved for issuance under the Inducement Plan, subject to
adjustment for stock dividends, stock splits, or other changes in the Company's
Common Stock or capital structure.
The purpose of the Inducement Plan is to secure the services of eligible
employees, to provide incentives for such eligible employees to exert maximum
efforts for the success of the Company, and to provide such eligible employees
an opportunity to benefit from increases in value of the Company's Common Stock
through the granting of certain stock awards. The Inducement Plan was approved
by the Compensation Committee without stockholder approval pursuant to Nasdaq
Stock Market Listing Rule 5635(c)(4), and is to be utilized exclusively for the
grant of stock awards to individuals who were not previously an employee or
non-employee director of the Company (or following a bona fide period of
non-employment with the Company) as an inducement material to such individual's
entry into employment with the Company, within the meaning of Nasdaq Listing
Rule 5635(c)(4).
The Inducement Plan will be administered by the Board and the Company's
Compensation Committee. Stock awards under the Inducement Plan may only be
granted by (i) the Compensation Committee, or (ii) another committee of the
Board composed solely of at least a majority of the members of the Board who
meet the requirements for independence under the Nasdaq Stock Market Listing
Rules ("Independent Directors") (the foregoing subsections (i) and (ii) are
collectively referred to as the "Committee").
The Committee may choose to grant (i) nonstatutory stock options, (ii) stock
appreciation rights, (iii) restricted stock awards, (iv) restricted stock unit
awards, and (v) other stock awards to eligible recipients, with each grant to be
evidenced by an award agreement setting forth the terms and conditions of the
grant as determined by the Committee in accordance with the terms of the
Inducement Plan.
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The foregoing description of the Inducement Plan and Award Agreements is not
complete and is qualified in its entirety by reference to the text of the
Inducement Plan and Award Agreements, which are filed as Exhibits 10.1, 10.2 and
10.3 to this Current Report on Form 8-K, respectively.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit Exhibit Description
10.1 2022 Inducement Plan
10.2 Form of option grant notice and agreement under 2022 Inducement Plan
10.3 Form of restricted stock unit grant notice and agreement under 2022
Inducement Plan
99.1 Press release dated July 20, 2022
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