Etsy, Inc. (NASDAQ:ETSY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

ME Staff 8-k
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Etsy, Inc. (NASDAQ:ETSY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.

Appointment of New President and Chief Executive Officer
On April 30, 2017, the board of directors (the Board) of Etsy, Inc.
(Etsy) appointed Josh Silverman, a director on the Board since
November 2016, as Etsys President and Chief Executive Officer,
effective May 3, 2017.
From January 2017 until recently, Mr. Silverman, 48, served as
Senior Operating Advisor at Hellman Friedman, a private equity
investment firm. In 2016, Mr. Silverman served as Executive in
Residence at Greylock Partners, a venture capital firm. Prior to
that, Mr. Silverman served as President of Consumer Products and
Services at American Express from June 2011 to December 2015.
Before joining American Express, he was the CEO of Skype from
February 2008 to September 2010. Mr. Silverman served as CEO of
Shopping.com, an eBay company, from July 2006 to February 2008 and,
prior to that, in various executive roles at eBay. Mr. Silverman
was also co-founder and CEO of Evite, Inc. He currently serves on
the board of directors of Shake Shack.
In connection with Mr. Silvermans appointment, Etsy and Mr.
Silverman entered into an offer letter on May 2, 2017 (the
Silverman Offer Letter), which provides for the following
compensation and benefits:
(i)
an annual base salary of $375,000;
(ii)
eligibility to participate in Etsys management cash incentive
plan with a target bonus of 50% of base salary;
(iii)
an award under Etsys 2015 Equity Incentive Plan (the 2015
Plan) of 250,000 restricted stock units (RSUs) granted on May
4, 2017, which will fully vest on the earlier of: (1) May 3,
2018; or (2) a Change in Control (as defined in the Etsy,
Inc. Change in Control Severance Plan (the CIC Severance
Plan)); in each case subject to continued employment;
(iv)
a grant under the Plan of options (Stock Options) to purchase
3,869,969 shares of Etsy common stock on the date of grant
(May 4, 2017) at a price per share of $10.62, which will
vest: (1) 25% on the first anniversary of the date of grant,
with the remaining 75% of the grant to vest in equal monthly
installments over the following 36 months or (2) 25% upon a
Change in Control (as defined in the CIC Severance Plan); in
each case subject to continued employment;
(v)
eligibility to participate in the CIC Severance Plan, which,
subject to the terms and conditions therein, provides for 18
months of severance pay, up to 18 months of COBRA coverage,
and 50% acceleration of all outstanding equity awards;
(vi)
eligibility to participate in the Etsy, Inc. Severance Plan
(the Etsy Severance Plan) which, subject to the terms and
conditions therein, provides for 12 months of severance pay
and up to 12 months of COBRA coverage;
(vii)
Mr. Silverman will not be eligible for grants of future
equity awards for the next four years. In addition, in
connection with his transition from an independent director
to an employee director, Mr. Silverman has forfeited his
unvested non-employee director equity awards;
(viii)
for purposes of>Mr. Silvermans participation in the CIC
Severance Plan and the Etsy Severance Plan:
the definition of Cause is amended, such that, in the case of
clauses (b),(c) and (f) thereof, Etsy has agreed to give
notice of the circumstances constituting Cause, and Mr.
Silverman shall have the opportunity to cure such
circumstances (if curable) within ten (10) business days
following his receipt of such notice; and
the hiring of an Executive Chairman would be a material
breach of a material agreement between Mr. Silverman and Etsy
to clause (d) of the definition of Qualifying Termination;
(ix)
outside the context of a change in control:
If Mr. Silvermans employment is terminated in a Qualifying
Termination (as defined in the Etsy Severance Plan, as
modified by the Silverman Offer Letter), 25% of his Stock
Options will immediately vest; and
If Mr. Silvermans employment is terminated other than for
Cause (as defined in the Etsy Severance Plan, as modified by
the Silverman Offer Letter), Mr. Silvermans vested Stock
Options will remain exercisable until the earlier of: (x) six
months after his last day of employment; or (y) ten years
after such Stock Options were granted; and
(x)
Etsy will reimburse Mr. Silverman for up to $10,000 in legal
fees incurred by Mr. Silverman in connection with the
employment offer.
This description of the Silverman Offer Letter is qualified in its
entirety by reference to the full text of the Silverman Offer
Letter, which will be filed as an exhibit to Etsys next quarterly
report on Form 10-Q.
Departure of President and Chief Executive Officer
Mr. Silverman succeeds Chad Dickerson, who resigned from his
positions as President, Chief Executive Officer and Chair,
effective May 3, 2017. Mr. Dickerson will serve in an advisory role
through May 31, 2017 (the Dickerson Departure Date).
On May 2, 2017, Mr. Dickerson and Etsy entered into a letter
agreement (the Dickerson Letter Agreement) governing the terms of
his departure. The Dickerson Letter Agreement provides for the
following compensation and benefits:
(i)
continuation of Mr. Dickersons current base salary of
$375,000 for 12 months after the Dickerson Departure Date;
(ii)
a one-time lump sum payment of $156,250;
(iii)
reimbursement of the COBRA premiums for up to 12 months after
the Dickerson Departure Date;
(iv)
full acceleration on the Dickerson Departure Date of the
vesting of the stock options previously awarded to Mr.
Dickerson on January 30, 2015 and March 1, 2016;
(v)
acceleration on the Dickerson Departure Date of the vesting
of 50% of the RSUs awarded to Mr. Dickerson on March 15,
2017;
(vi)
an extension of the period for Mr. Dickerson to exercise his
vested options until May 31, 2018;
(vii)
subject to the acceleration described above, any options and
RSUs that are unvested as of the Dickerson Departure Date
will be forfeited in accordance with the 2015 Plan (or
predecessor equity plan) and the applicable award agreements;
(viii)
a mutual release and waiver of claims between Etsy and Mr.
Dickerson; and
(ix)
Etsy will reimburse Mr. Dickerson for up to $15,000 in legal
fees incurred by Mr. Dickerson in connection with the
Dickerson Letter Agreement.
This description of the Dickerson Letter Agreement is qualified in
its entirety by reference to the full text of the Dickerson Letter
Agreement, which will be filed as an exhibit to Etsys next
quarterly report on Form 10-Q.
Departure of Chief Technology Officer
In addition, on May 2, 2017, Etsy also announced that John Allspaw,
Chief Technology Officer, will be departing from Etsy. Mr. Allspaw
will serve in an advisory role through May 30, 2017 (the Allspaw
Departure Date).
On May 3, 2017, Mr. Allspaw and Etsy entered into a letter
agreement (the Allspaw Letter Agreement) governing the terms of his
departure. The Allspaw Letter Agreement provides for the following
compensation and benefits:
(i)
continuation of Mr. Allspaws current base salary of $325,000
for 12 months after the Allspaw Departure Date;
(ii)
reimbursement of the COBRA premiums for up to 12 months after
the Allspaw Departure Date;
(iii)
full acceleration on the Allspaw Departure Date of the
vesting of the stock options previously awarded to Mr.
Allspaw in October 2013 and November 2015;
(iv)
acceleration on the Allspaw Departure Date of the vesting of
50% of the RSUs awarded to Mr. Allspaw in November 2015 and
50% of the RSUs awarded to Mr. Allspaw in March 2017;
(v)
an extension of the period for Mr. Allspaw to exercise his
vested options until May 30, 2018;
(vi)
subject to the acceleration described above, any options and
RSUs that are unvested as of the Allspaw Departure Date will
be forfeited in accordance with the 2015 Plan (or predecessor
equity plan) and the applicable award agreements;
(vii)
a release and waiver of claims against Etsy by Mr. Allspaw;
and
(viii)
Etsy will reimburse Mr. Allspaw for up to $10,000 in legal
fees incurred by Mr. Allspaw in connection with the Allspaw
Letter Agreement.
This description of the Allspaw Letter Agreement is qualified in
its entirety by reference to the full text of the Allspaw Letter
Agreement, which will be filed as an exhibit to Etsys next
quarterly report on Form 10-Q.
Amendment to Letter Agreement for Incoming Chief Financial Officer
On May 4, 2017, the letter agreement between Rachel Glaser and Etsy
dated April 2, 2017 (the Glaser Offer Letter) regarding her
employment as Etsy’s incoming Chief Financial Officer, was amended
to provide for the following updated terms:
(i)
a start date of May 16, 2017;
(ii)
an increase in base salary from $350,000 to $375,000;
(iii)
an increase in signing bonus from $100,000 to $250,000;
(iv)
an increase in the grant date fair value of Ms. Glasers
equity award from $1.6 million to $2.1 million; and
(v)
an amended definition of Good Reason for resignation
purposes, such that this term shall mean the occurrence of
any one or more of the following events without Ms. Glasers
prior written consent, unless Etsy fully corrects the
circumstances constituting Good Reason (provided such
circumstances are capable of correction):
a material reduction by Etsy of Ms. Glasers duties,
responsibilities, authority, or reporting relationship, such
that she no longer serves in a substantive, senior executive
role for Etsy comparable in stature to Ms. Glasers
then-current role, or she no longer reports to the Chief
Executive Officer of Etsy or the Board (in the circumstance
where Etsy does not have a Chief Executive Officer or acting
Chief Executive Officer);
a requirement that she reports to work at a Company location
that is more than twenty (20) miles greater than the distance
between the principal residence she establishes following Ms.
Glasers relocation to New York City and Etsys current office
location in Brooklyn, NY (provided that such change in
distance is not the result of a change in Ms. Glasers
principal residence);
a material reduction in Ms. Glasers base salary; or
a material breach by Etsy of its obligations under the Glaser
Offer Letter.
This description of the amendment to the Glaser Offer Letter is
qualified in its entirety by reference to the full text of the
Glaser Offer Letter, as amended. The amendment to the Glaser Offer
Letter will be filed as an exhibit to Etsys next quarterly report
on Form 10-Q.


About Etsy, Inc. (NASDAQ:ETSY)

Etsy, Inc. (Etsy) operates a marketplace to connect people around the both online and offline for making, selling and buying goods. The Company’s geographical segments include United States and International. The Company’s community includes Etsy sellers, Etsy buyers, wholesale partners, manufacturers and Etsy employees. The Company’s platform includes marketplace, Seller Services, technology and community, both online and offline. The Company offers a range of services to help Etsy sellers build their personal brands, engage customers and complete transactions. The Company has over three seller services: Promoted Listings, Direct Checkout and Shipping Labels. Its Promoted Listings offering enables an Etsy seller to pay a cost-per-click-based fee to feature and promote her goods in search results generated by Etsy buyers on its platform. Its Direct Checkout offering allows Etsy sellers to accept various forms of payment, such as credit cards, debit cards, PayPal and Etsy gift cards.

Etsy, Inc. (NASDAQ:ETSY) Recent Trading Information

Etsy, Inc. (NASDAQ:ETSY) closed its last trading session up +0.11 at 10.62 with 7,222,072 shares trading hands.