Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 26, 2023, the Company determined that the employment of Ross Paul, the Company’s Chief Technology Officer and a named executive officer, would be terminated as part of the above-referenced workforce reduction, with such termination effective June 30, 2023. In connection with his termination of employment, Mr. Paul is eligible to receive the severance payments and benefits under Section 4(a) of the Company’s Executive Severance Plan (the “Severance Plan”) in accordance with the terms and conditions of the Severance Plan, including that Mr. Paul execute and not revoke a release of claims in favor of the Company which Mr. Paul executed on June 28, 2023.
On June 28, 2023, to facilitate his transition, the Company entered into an advisory agreement with Mr. Paul pursuant to which he will advise the Company on various matters until December 31, 2023 (unless terminated earlier by the Company at any time, with or without cause). All of Mr. Paul’s previously issued equity incentive awards will continue to vest during the term of the advisory agreement. Further, in consideration of such services, the Company and Mr. Paul agreed that, in the event that his service is terminated by the Company without Cause, as defined in the Severance Plan, during the term of the advisory agreement, all of Mr. Paul’s previously issued equity incentive awards that are unvested as of the effective date of such termination that would have vested on or prior to December 31, 2023 had Mr. Paul remained in service on the applicable vesting dates will immediately vest upon the effective date of such termination and the remaining unvested equity awards will be subject to the treatment described below. Additionally, in consideration of Mr. Paul’s advisory services, the Company and Mr. Paul agreed that, in the event that a Change in Control, as defined in the Severance Plan, is consummated on or prior to December 31, 2023 and Mr. Paul is providing services to the Company on such date or his service has been terminated by the Company without Cause prior to the date on which the Change in Control is consummated, Mr. Paul will be entitled to receive the “change in control benefits” set forth in Section 4(c) of the Severance Plan as if his employment was terminated within 12 months after a Change in Control (the “Change in Control Benefits”) subject to, and in accordance with, the terms and conditions of the Severance Plan; provided, however, that (a) any payments and/or benefits payable or to be provided to Mr. Paul under Section 4(c) of the Severance Plan will be offset by any payments and/or benefits previously paid or provided to him under Section 4(a) of the Severance Plan such that there will be no duplication of payments or benefits; (b) to give effect to the foregoing, if Mr. Paul’s service is terminated for any reason other than for Cause on or prior to December 31, 2023, the remaining unvested equity awards shall remain outstanding (but unvested) until the earliest to occur of (i) the original expiration date of the equity award, (ii) December 31, 2023 and (iii) the date on which the Change in Control is consummated and (c) if the Company subsequently determines that it had grounds to terminate Mr. Paul’s employment for Cause (as defined in the Severance Plan) had it known of all of the relevant facts as of the date of his termination of employment, Mr. Paul will not be eligible to receive the Change in Control Benefits.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included or incorporated by reference in this Current Report on Form 8-K are forward-looking statements. These forward-looking statements may be identified by terms such as “continue,” “could,” “designed to,” “estimates,” “expects,” “intends,” “may,” “potential,” “will,” and “would,” or the negative of such terms or other variations or comparable terminology, although not all forward-looking statements may contain such terms. These forward-looking statements include, without limitation, statements regarding the estimated size, parameters, timing, implementation, and impact of the workforce reduction plan, and the estimated charges and expenses expected to be recognized and incurred in connection therewith and the timing thereof. These forward-looking statements are based on the Company’s current expectations and projections about future events and various assumptions, and are not a guarantee that the Company will actually achieve the results, objectives, intentions, or expectations disclosed in the forward-looking statements. These forward-looking statements involve a number of risks and uncertainties or other assumptions, many of which are beyond the Company’s control, that may cause actual results to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are also subject generally to other risks and uncertainties that are described from time to time in the Company’s filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, and as revised and updated by the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Accordingly, you should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date of this Current Report on Form 8-K and, except as may be required by law, the Company undertakes no obligation to update them, whether as a result of new information, developments, or otherwise.