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): May 7, 2018 (May 4, 2018)

 

 

SNAP INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   001-38017   45-5452795

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

63 Market Street

Venice, California

    90291
(Address of Principal Executive Offices)     (Zip Code)

(310) 399-3339

(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 Instructions 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

 

 

 

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

On May 4, 2018, we and Andrew Vollero, our Chief Financial Officer, agreed that he will depart Snap. On May 7, 2018, we entered into a transition agreement with Mr. Vollero. Mr. Vollero will continue to serve as our Chief Financial Officer until May 15, 2018, and will transition to a non-employee advisor through August 15, 2018 to ensure an effective transition of his duties and responsibilities. Under the transition agreement, Mr. Vollero will receive one year of his current base salary and one year of COBRA premiums together in one lump sum, and we will accelerate vesting of all unvested restricted stock units held by him. While he serves as our advisor, Mr. Vollero will be paid the same base rate that he received as Chief Financial Officer at the time of his departure.

Mr. Vollero has confirmed that this transition is not related to any disagreement with us on any matter relating to our accounting, strategy, management, operations, policies, or practices (financial or otherwise). The foregoing description of Mr. Vollero’s transition agreement is qualified in its entirety by reference to the full text of the agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated by reference.

“I am deeply grateful for Drew and his many contributions to the growth of Snap” said Evan Spiegel, Chief Executive Officer. “He has done an amazing job as Snap’s first CFO, building a strong team and helping to guide us through our transition to becoming a public company. The discipline that he has brought to our business will serve us well into the future. We wish Drew continued success and all the best.”

The compensation committee of the board of directors appointed Tim Stone as Chief Financial Officer with an expected start date of May 16, 2018. Mr. Stone will have an annual salary of $500,000. In addition, Mr. Stone will be awarded restricted stock units with a value of $20,000,000 and 500,000 options to purchase shares of our Class A common stock, all of which are subject to time-based vesting. The foregoing description of Mr. Stone’s offer letter is qualified in its entirety by reference to the full text of the agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.2 and incorporated by reference.

Tim Stone, age 51, has been employed at Amazon.com Inc. since March 1998. Mr. Stone currently serves as Vice President of Finance and served as Vice President of Physical Stores from August 2017 until February 2018. Prior to that, Mr. Stone served as Vice President of Finance from May 2010 until August 2017 in different roles overseeing financial planning and analysis, investor relations, and various businesses, including Amazon Web Services & Digital Content and Amazon Devices and eBooks. Mr. Stone holds a B.S. in Accounting from the University of Southern California.

Mr. Stone does not have any family relationship with any of our board of directors or any executive officer. There are no relationships or related transactions between Mr. Stone and us that would be required to be reported.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

  

Description

10.1    Transition Agreement, by and between Snap Inc. and Andrew Vollero, dated May 7, 2018.
10.2    Offer Letter, by and between Snap Inc. and Tim Stone, dated May 4, 2018.

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 thereunto duly authorized.

 

    SNAP INC.
Date: May 7, 2018     By:  

/s/ Michael O’Sullivan

      Michael O’Sullivan
      General Counsel

Exhibit 10.1

 

LOGO

May 7, 2018

Andrew Vollero

Via Email

 

  Re: Transition Agreement

Drew,

This letter outlines the terms of your departure from Snap Inc. (“ Snap ”). Snap appreciates how you built our finance department from the ground up, prepared us for our IPO last year, and helped us build a cost structure that will enable us to scale our business into the future.

 

  1. Your last day as Snap’s Chief Financial Officer will be May 15, 2018.

 

  2. Following your execution of our standard separation agreement, including a release, and expiration of any required rescission period, Snap will pay you an amount equal to one year of your base salary and an amount equal to one year of COBRA premiums in one lump sum, and will accelerate the vesting of your remaining unvested restricted stock units, in each case subject to applicable payroll deduction and withholdings.

 

  3. From May 16, 2018 to August 15, 2018, you will serve as a non-employee advisor to Snap to assist with transition matters. While providing these transition services, you will be paid the same rate as your base salary rate that you received as Chief Financial Officer at the time of your departure. You will not be a Snap employee during this transition period, and will therefore not be eligible for any employee benefits, nor will Snap make deductions from any amounts payable to you for taxes; any taxes shall be solely your responsibility.

 

  4. You confirm that this transition is not related to any disagreement with Snap on any matter relating to Snap’s accounting, strategy, management, operations, policies, or practices (financial or otherwise).

To qualify for the payments, benefits, and RSU accelerations listed in this letter, you must (a) sign and not subsequently revoke Snap’s standard separation agreement, including a full release of claims, and (b) perform your duties in good faith and in compliance with Snap policy until your last day of employment.

If this Agreement is acceptable to you, please sign below and return the original to Snap.

Sincerely,

 

  /s/ Mike O’Sullivan
  Mike O’Sullivan, General Counsel

Accepted and agreed:

 

  /s/ Andrew Vollero
  Andrew Vollero

 

  May 7, 2018
  Date

Exhibit 10.2

 

LOGO

May 4, 2018

Tim Stone, via personal email

Dear Tim,

Congratulations! Snap Inc. (the “ Company ”) is pleased to offer you a regular, full-time, exempt position as follows:

Offer Summary :

Offer Expiration Date: May 4, 2018

Initial Title : Chief Financial Officer

Start Date : May 16, 2018

Work Location and Office Address : Santa Monica and Venice, California

Compensation : annual salary of $500,000

RSUs : Subject to the terms below, the Company will grant you an award of restricted stock units (“RSUs”) with an aggregate value of $20,000,000.00, consisting of $19,000,000.00 as a new hire grant and $1,000,000.00 as a special sign-on equity grant.

Stock Options : Subject to the terms below, the Company will grant you an award of 500,000 stock options.

You may be eligible to receive an annual discretionary bonus; please note that whether or not you receive a discretionary bonus, as well as the amount, will be determined by the Company in its sole discretion.

You will be paid biweekly, subject to applicable payroll deductions and withholdings.

In addition, employees qualify for a range of benefits. Check out the enclosed benefits documents for more details, or contact Recruiting for the current suite of benefits available to you. The Company may change compensation and benefits at its discretion.

Under the Snap Inc. 2017 Equity Incentive Plan or any successor equity plan (the “ Plan ”), and subject to approval by the Company’s Board of Directors (the “Board”), the Company will grant you an award of restricted stock units (“ RSUs ”) with an aggregate value of $20,000,000.00, consisting of $19,000,000.00 as a new hire grant (“ New Hire RSUs ”) and $1,000,000.00 as a special sign-on equity grant (“ Sign-On RSUs ”). If approved, the number of RSUs granted will be determined by using the fair market value of the Company’s Common Stock, based on the methodology adopted by the Board as of your employment start date. The vesting date of your RSUs and grant price will be set by the Board after your start date and you will be notified of the same. So long as you remain an employee, (a) the New Hire RSUs will vest equally over forty-eight months in monthly installments from your vest start date, and (b) the Sign-On RSUs will vest after six months from your vest start date. For all RSUs, the Company may, in its sole discretion, elect to holdback that number of vested shares required to cover the taxes, withholdings, and other similar obligations due upon the issuance of the vested RSU shares to you. In all cases, all RSUs will be subject to the terms and conditions of the Plan and the applicable grant agreement.

In the event your employment terminates within the first 6 months of your start date, you will receive a prorated amount of the $1,000,000.00 special sign-on equity grant.

Under the Plan, and subject to approval by the Board, the Company will also grant you an award of 500,000 stock options to purchase shares of the Company’s Class A common stock (“ Stock Options ”). If approved, the exercise price of your Stock Options will be equal to the fair market value of the Company’s Class A common stock, which is the average of the high and low trading price of the Company’s Common Stock on the last trading day of the

month in which such approval occurs. The vesting start date and the exercise price of your Stock Options will be set by the Board after your start date and you will be notified of the same. So long as you remain an employee, the Stock Option will vest equally over forty-eight months in monthly installments from your vesting start date. The Stock Options will be subject to the terms and conditions of the Plan and the applicable option agreement.

You are being offered employment at the Company because of the personal skills and experience you have, not because of any confidential, proprietary, or trade-secret information of a former or current employer you may have. In your work for the Company, we do not want you to use or disclose any such confidential, proprietary, or trade-secret information. Likewise, as an employee of the Company, you may learn about confidential, proprietary, or trade-secret information related to the Company and its clients. To protect the interests of both the Company and its clients, all employees are required to read and sign the enclosed Confidential Information and Inventions Assignment Agreement as a condition of employment at the Company. Also enclosed for you to review and then sign as a condition of employment are the Confidential Information and Inventions Assignment Agreement, the Conflict of Interest Agreement, the Acknowledgement of At-Will Employment, and our Arbitration Agreement, which provides that all disputes arising out of your employment must be resolved through binding arbitration. We encourage you to read all these documents carefully, and to seek independent legal counsel if you have any questions about the meaning or scope of these documents.

The Company may change your position, duties, and work location from time to time at its discretion. As a Snap Inc. employee, you will be expected to follow Company policies and acknowledge in writing that you have read our Employee Handbook. With the exception of the “employment at-will” policy discussed below, the Company may modify or eliminate its policies at its discretion.

Your employment with the Company is at-will. This means you may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying us. Likewise, the Company may terminate your employment at any time or change the terms and conditions of your employment, with or without cause or notice. By signing below, you agree to the at-will nature of your employment and acknowledge that this paragraph describing the at-will nature of your employment supersedes any other agreements or promises made to you by anyone, whether written or oral. Your employment at-will status can be modified only in a written agreement signed by an officer of Snap Inc.

If you accept our offer, we would like you to start on the start date stated in the offer summary above. This offer is contingent upon a background-check clearance, reference check, and satisfactory proof of your right to work in the United States. You agree to assist as needed and to complete any documentation at the Company’s request to meet these conditions. This offer letter supersedes any other agreements or promises made to you by anyone, whether oral or written.

 

2

If you wish to accept employment at Snap Inc. under the terms described above, please sign and date this offer letter, the enclosed Confidential Information and Inventions Assignment Agreement, Conflict of Interest Agreement, Acknowledgement of At-Will Employment, Export Control Laws Compliance Screening Form, and Arbitration Agreement, and return them all to me by the expiration date stated in the offer summary above.

We’re excited to have you join the team.

 

Sincerely,

/s/ Mike O’Sullivan

Mike O’Sullivan, General Counsel

Accepted and agreed:

 

/s/ Tim Stone

Tim Stone

 

Date May 4, 2018                                    

 

Attachment:    Confidential Information and Inventions Assignment Agreement
   Conflict of Interest Agreement
   Acknowledgement of At-Will Employment
   Arbitration Agreement
   Export Control Laws Compliance Screening Form
   Relocation Assistance Repayment Agreement

 

3