UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
June 11, 2015
Twitter, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36164 | 20-8913779 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
1355 Market Street, Suite 900
San Francisco, California 94103
(Address of principal executive offices, including zip code)
(415) 222-9670
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On June 11, 2015, Twitter, Inc. (“Twitter”) announced that Richard Costolo has decided to step down as Chief Executive Officer of Twitter, effective July 1, 2015. Twitter’s Board of Directors has named Jack Dorsey, Co-Founder and Chairman of the Board, to serve as Interim Chief Executive Officer while the Board conducts a search for Twitter’s next CEO. Mr. Costolo will continue to serve on Twitter’s Board of Directors, and Mr. Dorsey will continue to serve as CEO of Square, Inc., the payments and financial services company he co-founded in 2009.
Mr. Dorsey, 38, is one of Twitter’s co-founders and has served as the Chairman of Twitter’s Board of Directors since October 2008 and as a member of the Board of Directors since May 2007. Mr. Dorsey served as Twitter’s President and Chief Executive Officer from May 2007 to October 2008. Since February 2009, Mr. Dorsey has served as Co-Founder and Chief Executive Officer of Square, Inc. Mr. Dorsey currently serves on the boards of directors of The Walt Disney Company and Square, Inc.
There are no arrangements or understandings between Mr. Dorsey and any other persons pursuant to which he was selected as Interim Chief Executive Officer. There are also no family relationships between Mr. Dorsey and any director or executive officer of Twitter and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Twitter entered into an offer letter with Mr. Dorsey on June 11, 2015, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference. Mr. Dorsey has agreed to forego all forms of direct compensation until the Compensation Committee of Twitter’s Board of Directors agrees upon a compensation package for him at the same time that it conducts its annual assessment and setting of executive compensation later in the year.
In connection with his change in roles, Mr. Costolo entered into a letter agreement (“Letter Agreement”) with Twitter agreeing to cancel all of his remaining unvested equity after July 1, 2015. After such date, Mr. Costolo will be entitled to the compensation set forth in Twitter’s Outside Director Compensation Policy, a copy of which has been filed as Exhibit 10.23 to Twitter’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2014. The foregoing description of the Letter Agreement is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference.
| Item 7.01. | Regulation FD Disclosure. |
On June 11, 2015, Twitter issued a press release announcing the CEO transition and reaffirming Twitter’s outlook for the second quarter of 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
The information furnished on this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
|
Exhibit
|
Description |
|
| 10.1 | Offer Letter between Twitter and Jack Dorsey, dated as of June 11, 2015. | |
| 10.2 | Letter Agreement between Twitter and Richard Costolo, dated as of June 11, 2015. | |
| 99.1 | Press release issued by Twitter, Inc., dated June 11, 2015. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TWITTER, INC. | ||
| By: |
/s/ Vijaya Gadde |
|
|
Vijaya Gadde General Counsel & Secretary |
||
Date: June 11, 2015
EXHIBIT INDEX
|
Exhibit
|
Description |
|
| 10.1 | Offer Letter between Twitter and Jack Dorsey, dated as of June 11, 2015. | |
| 10.2 | Letter Agreement between Twitter and Richard Costolo, dated as of June 11, 2015. | |
| 99.1 | Press release issued by Twitter, Inc., dated June 11, 2015. | |
Exhibit 10.1
11 June 2015
Dear Jack,
Twitter, Inc., a Delaware corporation (the “Company”), is pleased to offer you employment on the following terms:
| 1. | Position. Your title will be Interim Chief Executive Officer and you will report at the start of your employment to the Company’s Board of Directors. |
| 2. | Start Date. Your employment will commence on 01 July 2015. You will be providing services from the Company’s San Francisco, CA location. |
| 3. | Compensation . At your request, you have agreed to forego any compensation for your role as Interim Chief Executive Officer until the Compensation Committee agree upon a compensation package for you at the same time that it conducts its annual assessment and setting of executive compensation later in the year. Until a compensation package is finalized, you will be entitled to no cash or equity compensation for your services as Interim Chief Executive Officer. |
| 4. | Employee Benefits. As a regular employee of the Company, you will be eligible to participate in Company-sponsored benefits in accordance with the terms of the applicable benefit plans. |
| 5. | Employee Invention Assignment and Confidentiality Agreement. You will be required, as a condition of your employment with the Company, to sign an Employee Invention Assignment and Confidentiality Agreement (“Confidentiality Agreement”). |
| 6. | Employment Relationship. Employment with the Company is for no specific period of time. Your employment with the Company will be “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause. This is the full and complete agreement between you and the Company regarding the duration of the employment relationship. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures may change from time to time, the “at will” nature of your employment, the Confidentiality Agreement and the Dispute Resolution Policy may only be changed through an express written agreement signed by you and the Company’s General Counsel. |
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| 7. | Outside Activities and Conflicts of Interest. While you render services to the Company, you will not engage in any other employment, consulting, or other business activity that would create a conflict of interest with the Company, which includes engaging in any work that is competitive in nature. To that end, prior to your start date on July 1, 2015, we will develop and agree on a Conflict of Interest Policy as it pertains to your work with Square, Inc. |
| 8. | Verification of Employability. This offer is contingent upon your providing legal proof of your identity and authorization to work in the United States within three (3) days of the commencement of your employment. |
| 9. | Taxes. All forms of compensation that are subject to income or payroll taxes will be reduced to reflect applicable income tax withholding and payroll taxes. Any form of compensation that is subject to income or payroll taxes and that is not paid in cash will result in a reduction in cash compensation to reflect applicable income tax withholding and payroll taxes. |
| 10. | Dispute Resolution. We sincerely hope that no dispute will arise between us. If a dispute should arise, it can be resolved through the Company’s Dispute Resolution Policy. A copy of the Dispute Resolution Policy is enclosed with this letter. |
| 11. | Entire Agreement . This letter agreement supersedes and replaces any prior agreements, representations or understandings, whether written, oral or implied, between you and the Company. |
By signing this letter agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company.
Very truly yours,
Twitter, Inc.
/s/ Brian Schipper
Brian Schipper, Vice President, Human Resources
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I have read, understood and accept all the provisions of this offer of employment:
|
/s/ Jack Dorsey |
||
| Jack Dorsey | ||
|
June 11, 2015 |
||
| Date | ||
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Exhibit 10.2
June 11, 2015
Dick Costolo
c/o Twitter, Inc.
1355 Market Street, Suite 900
San Francisco, California 94103
| Re: | Terms of Transition |
Dear Dick:
As we have discussed, this letter is the agreement (“Agreement”) between you and Twitter, Inc. (the “Company”) concerning the terms of your transition out of the role of the Company’s Chief Executive Officer.
1. Transition Date . Your final date of employment with the Company will be July 1, 2015 (the “Employment End Date”). Following the Employment End Date, you will cease to be the Company’s Chief Executive Officer. You will continue to be a member of the Company’s Board of Directors until the earlier of your resignation or when your term expires and you are not re-nominated to the board.
2. Subsidiary and Affiliate Positions . In addition, your signature below signifies your resignation as an officer and director on all boards of directors of subsidiaries and affiliates that you hold as a result of your service as Chief Executive Officer; provided, for the avoidance of doubt, you will continue as a director on the Company’s Board of Directors. Such resignation will be effective as of July 1, 2015 or such later date as is necessary to ensure appropriate transition to a replacement. You agree that you will take any actions necessary to ensure an orderly transition of such positions.
3. Payment of Salary and Employee Benefits . You will continue to be paid your salary and participate in the Company’s employee benefit plans (including the accrual of vacation) through the Employment End Date.
4. Equity Awards . In consideration of your continued service as Chief Executive Officer through the Employment End Date, you will continue to vest in all Company equity awards held by you and outstanding as of the date hereof through and including the Employment End Date. Following the Employment End Date, all Company equity awards that remain unvested as of that date shall cease to vest and will be cancelled and unvested shares forfeited. The terms and conditions of your vested Company equity awards as of that date and the governing plan(s) shall remain in effect as set out in those documents.
5. Effective Date : Once you sign this Agreement, it will immediately be effective as to all terms contained herein.
6. Governing Law : This Agreement shall be governed by and construed in accordance with the laws of the State of California.
If you agree to abide by all of the terms of this Agreement, please sign below, initial the first page, and return it to the Company.
| Sincerely, | ||
| Twitter, Inc. | ||
| By: |
/s/ Vijaya Gadde |
|
| Vijaya Gadde | ||
| General Counsel, on behalf of the Board of Directors | ||
I HAVE READ, UNDERSTOOD, AND HEREBY AGREE TO ALL THE PROVISIONS OF THIS AGREEMENT:
|
/s/ Dick Costolo |
Date: |
June 11, 2015 |
||||
| Dick Costolo |
Exhibit 99.1
Twitter Initiates CEO Transition
Dick Costolo to Step Down as CEO on July 1 and Continue on Board of Directors
Co-Founder and Chairman Jack Dorsey to Become Interim CEO While Board Conducts Search
Company Reaffirms Second Quarter 2015 Outlook
SAN FRANCISCO, Calif. – June 11, 2015 – Twitter, Inc. (NYSE: TWTR) today announced that Dick Costolo has decided to step down as Chief Executive Officer of Twitter, effective July 1, 2015. Twitter’s Board of Directors has named Jack Dorsey, Co-Founder and Chairman of the Board, to serve as Interim CEO while the Board conducts a search for Twitter’s next CEO. Costolo will continue to serve on Twitter’s Board of Directors, and Dorsey will continue to serve as CEO of Square, Inc., the payments and financial services company he co-founded in 2009.
Twitter’s Board has formed a Search Committee to lead the search for a permanent CEO. The Search Committee is chaired by the Board’s Lead Independent Director, Peter Currie, and includes Peter Fenton and Evan Williams. The Committee will retain a leading executive search firm to assist in conducting a global search, which will consider both internal and external candidates for the CEO position.
Costolo said, “I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the Company. We have great leaders who work well together and a clear strategy that informs our objectives and priorities. There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter’s mission in the world as well as a great relationship with Twitter’s leadership team. I am deeply appreciative of the confidence the Board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward.”
Dorsey said, “The future belongs to Twitter thanks in large part to Dick Costolo’s dedication and vision. Dick has put a world-class team in place and created a great foundation from which Twitter can continue to change the world and grow. We have an exciting lineup of products and initiatives coming to market, and I look forward to continuing to execute our strategy while helping facilitate a smooth transition as the Board conducts its search.”
Dorsey continued, “I am grateful for the talented team at Square, which I will continue to lead. We have built a very strong company from top to bottom, and I am as committed as ever to its continued success.”
Currie said, “On behalf of the Board, I want to thank Dick for his years of tireless devotion to building Twitter into the strong and dynamic company it is today, putting us in a superb position for continued growth and innovation for many years to come. We look forward to his continued contributions during the transition period and as an ongoing member of the Board. The Board is fully committed to running a thorough process to identify the right CEO to lead Twitter into its next phase of growth. In the meantime, we are fortunate to have Jack – one of our founders – step back into a management role and help lead Twitter as we continue executing on our strategic priorities.”
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Second Quarter 2015 Outlook
Twitter also today reaffirmed its outlook for the second quarter of 2015. The Company continues to expect revenue to be in the range of $470 million to $485 million and adjusted EBITDA to be in the range of $97 million to $102 million. Stock-based compensation expense is expected to be in the range of $190 million to $200 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.
Webcast and Conference Call Details
Twitter will host a conference call today, Thursday, June 11, 2015 at 2:15 p.m. Pacific Time (5:15 p.m. Eastern Time) to discuss the executive transition. Questions submitted via Twitter, directed to @TwitterIR, using the hashtag #TWTRannouncement will be considered during the Q&A portion of the conference call in addition to questions submitted by conference call participants. A live webcast of the conference call will be accessible from the Investor Relations page of Twitter’s website at investor.twitterinc.com. The live webcast can also be accessed in the United States at 1-855-631-5368 and outside the United States at +1-330-863-3283 with the passcode 65627327. A replay will be archived and accessible at the same website after the conference call. Twitter has used, and intends to continue to use, its Investor Relations website (investor.twitterinc.com), as well as certain Twitter accounts (@dickc, @twitter and @twitterIR), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Twitter, Inc.
Twitter (NYSE: TWTR) is a global platform for public self-expression and conversation in real time. By developing a fundamentally new way for people to create, distribute and discover content, we have democratized content creation and distribution, enabling any voice to echo around the world instantly and unfiltered. The service can be accessed at Twitter.com, via the Twitter mobile application and via text message. Available in more than 35 languages, Twitter has approximately 302 million monthly active users. For more information, visit discover.twitter.com or follow @twitter.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Twitter’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern Twitter’s expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter’s outlook for revenue, adjusted EBITDA and stock based compensation for the second quarter of 2015, as well as statements regarding Twitter’s products, strategy, objectives, priorities, initiatives and future growth. The forward-looking statements are based on Twitter’s current expectations and are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. These risks include the possibility that: Twitter’s user base and engagement do not continue to grow; advertisers reduce or discontinue their spending on Twitter; data partners reduce or discontinue their purchases of data licenses from Twitter; and Twitter experiences expenses that exceed its expectations. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Twitter’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the Securities and Exchange Commission. The forward-looking statements in this press release are based on information available to Twitter as of the date hereof, and Twitter disclaims any obligation to update any forward-looking statements, except as required by law.
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Contacts
Investors:
Krista Bessinger
ir@twitter.com
Press:
George Sard / Paul Kranhold
Sard Verbinnen & Co
(212) 687-8080 / (415) 618-8750
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