Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(d)
On February 2, 2022, the Board of Directors (the "Board") of Coinbase Global,
Inc. (the "Company"), following a recommendation from the Nominating and
Corporate Governance Committee of the Board, appointed Tobi Lütke to serve as a
director of the Company, effective immediately. Mr. Lütke will serve until the
earliest to occur of the Company's 2022 annual meeting of stockholders (the
"Annual Meeting") and until his successor is duly elected and qualified, or
until his death, resignation, disqualification or removal.
Mr. Lütke's compensation will be as provided under the Company's non-employee
director compensation program (the "Non-Employee Director Compensation
Program"). In connection with his election as a non-employee director of the
Board and consistent with the Non-Employee Director Compensation Program, the
Board granted to Mr. Lütke, effective February 2, 2022, an initial award of
1,867 restricted stock units ("RSUs"), which will vest annually over three
years, subject to Mr. Lütke's continued service as a director on the Board (the
"Initial Award"), and a pro-rated annual award of 522 RSUs, which will vest on
the date of the Annual Meeting, subject to Mr. Lütke's continued service as a
director on the Board (the "Annual Award"). The Initial Award and the Annual
Award will accelerate in full upon the consummation of a Corporate Transaction
(as defined in the Company's 2021 Equity Incentive Plan).
The Company has entered into its standard form of indemnification agreement with
Mr. Lütke. The form of the indemnification agreement was previously filed by the
Company as Exhibit 10.1 to the Company's Registration Statement on Form S-1
filed with the Securities and Exchange Commission on February 25, 2021 (File No.
333-253482) and is incorporated by reference herein.
Similar to certain of our executive officers, directors, and holders of more
than 5% of our capital stock, Mr. Lütke and other entities affiliated with Mr.
Lütke have accounts on our platform and use our products and services in the
ordinary course. Similar to our other customers, these individuals and entities
pay us transaction and other fees related to such uses. There are no
arrangements or understandings between Mr. Lütke and any other persons pursuant
to which Mr. Lütke was selected as a member of the Board. There are also no
family relationships between Mr. Lütke and any director or executive officer of
the Company. Except as disclosed herein, Mr. Lütke does not have any other
direct or indirect material interest in any transaction required to be disclosed
pursuant to Item 404(a) of Regulation S-K promulgated under the Securities
Exchange Act of 1934, as amended.
(e)
On January 31, 2022, the Compensation Committee (the "Compensation Committee")
of the Board approved the payment or reimbursement by the Company to Brian
Armstrong, the Company's Chief Executive Officer, of up to $4.0 million annually
in expenses related to personal security services and information technology
support (the "CEO Security and IT Expenses") together with any associated tax
gross-up payments. Additionally, for 2022, the Compensation Committee approved
the one-time payment or reimbursement by the Company to Mr. Armstrong of up to
$1.1 million for expenses related to personal security services and information
technology support improvements (the "Additional Expenses") together with any
associated tax gross-up payments. The Compensation Committee believes that the
CEO Security and IT Expenses and Additional Expenses are appropriate and
necessary due to the importance of Mr. Armstrong to the Company and because of
his unique position with the Company, the high visibility of the Company and Mr.
Armstrong, and, as a result of the Company's business, the size of its user
base, and the Company and Mr. Armstrong's continued exposure to global media and
regulatory attention.
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