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): January 16, 2019

YELP INC.
(Exact name of registrant as specified in its charter)

 
 
 
 
 
Delaware
 
001-35444
 
20-1854266
(State of incorporation)
 
(Commission File No.)
 
(IRS Employer Identification No.)

140 New Montgomery Street, 9 th Floor
San Francisco, CA 94105
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (415) 908-3801

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 o

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. o
 
 






Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 16, 2019, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Yelp Inc. (the “Company”), pursuant to the authority delegated to it by the Board, approved compensation arrangements for the Company’s named executive officers (as defined in Item 402(a)(3) of Regulation S-K promulgated by the Securities and Exchange Commission (collectively, the “Executive Officers”)).
Base Salaries
The Compensation Committee approved annual base salaries for each of the Executive Officers as set forth in the table below, to be effective from January 1, 2019. The Compensation Committee determined not to make a change at this time to the annual base salary of Jeremy Stoppelman, the Company’s Chief Executive Officer.
Executive Officer
 
Title
2019 Annual Base Salary
Jeremy Stoppelman
 
Chief Executive Officer
$
1.00

Joseph R. (“Jed”) Nachman
 
Chief Operating Officer
$
350,000.00

Charles (“Lanny”) Baker
 
Chief Financial Officer
$
350,000.00

Laurence Wilson
 
Chief Administrative Officer & General Counsel
$
350,000.00

Alan Ramsay
 
Chief Accounting Officer
$
330,000.00

Performance-Based Awards
The Compensation Committee approved the grant of performance-based restricted stock units covering shares of the Company’s common stock (“Performance Awards”) to the Executive Officers. The grant date of the Performance Awards will be February 7, 2019 and the number of shares of the Company’s common stock subject to the Performance Awards will be determined as follows: (a) the dollar value of each Performance Award as set forth in the table below, divided by (b) the closing price of the Company’s common stock as quoted on the New York Stock Exchange on the grant date (the “Grant Date Closing Price”), (c) rounded up to the nearest whole share. The Performance Awards will be granted pursuant to, and in accordance with, the terms and conditions of the Company’s 2012 Equity Incentive Plan, as amended (the “Plan”), as well as a Performance Award Agreement and Grant Notice, the forms of which will be approved at a later date.
The Performance Awards are subject to both a performance goal and a time-based vesting schedule. The shares underlying each Performance Award will be eligible to vest only if the average closing price of the Company’s common stock equals or exceeds 125% of the Grant Date Closing Price over any 60-trading day period during the four years following the Grant Date (the “Performance Goal”). If the Performance Goal is met, the shares underlying each Performance Award will vest quarterly over four years from the grant date, subject to the applicable Executive Officer’s continued services as of each such vesting date (the “Time-Based Vesting Schedule”).
Any shares subject to the Performance Awards that have met the Time-Based Vesting Schedule at the time the Performance Goal is achieved will fully vest as of such date, provided that the applicable Executive Officer is providing services to the Company at such time. Thereafter, any remaining unvested shares subject to the Performance Awards will continue vesting solely according to the Time-Based Vesting Schedule, subject to the continuous service requirement.
Executive Officer
 
Performance Awards
Mr. Stoppelman
 
$
1,625,000.00

Mr. Nachman
 
$
750,000.00

Mr. Baker
 
$
750,000.00

Mr. Wilson
 
$
500,000.00

Mr. Ramsay
 
$
237,500.00





Equity Awards
The Compensation Committee also approved the grant of (a) options to purchase shares of the Company’s common stock (the “Options”) and (b) restricted stock units covering shares of the Company’s common stock (the “RSUs,” and together with the Options, the “Equity Awards”) to the Executive Officers. The grant date of the Equity Awards will be February 7, 2019.
The number of shares of the Company’s common stock subject to each Option will be determined as follows: (a) the dollar value of each Option as set forth in the table below, divided by (b) the fair value of an option on the grant date using the Black-Scholes-Merton option valuation model, (c) rounded up to the nearest multiple of 50. The number of shares of the Company’s common stock subject to each RSU will be determined by dividing the dollar value of each RSU as set forth in the table below by the Grant Date Closing Price, rounded up to the nearest whole share.
The Equity Awards will be granted pursuant to, and in accordance with, the terms and conditions of the Plan, the forms of Option Agreement and Grant Notice (together, the “Option Agreements”) and forms of RSU Agreement and Grant Notice (together, the “RSU Agreements”) previously filed with the Securities and Exchange Commission. Each option will have an exercise price equal to the Grant Date Closing Price, which represents the fair market value of the Company’s common stock on the grant date as determined under the terms of the Plan. Each Option will have a term of 10 years from the date of grant.
Executive Officer
 
             Options (1)
                                 RSUs (2)
Mr. Stoppelman
 
$
4,875,000.00

—

Mr. Nachman
 
$
1,500,000.00

$
750,000.00

Mr. Baker
 
$
1,500,000.00

$
750,000.00

Mr. Wilson
 
$
1,000,000.00

$
500,000.00

Mr. Ramsay
 
$
475,000.00

$
237,500.00


(1)
The shares underlying this Option will vest in equal monthly installments over four years from the grant date, provided that such Executive Officer is providing services to the Company at the time of each such vesting.
(2)
The shares subject to this RSU will vest in equal quarterly installments over four years from the grant date, provided that such Executive Officer is providing services to the Company at the time of each such vesting.
Clawback Policy
On January 18, 2019, following the recommendation of the Compensation Committee, the Board adopted a Policy for Recoupment of Incentive Compensation (the “Clawback Policy”), a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K. The Clawback Policy requires the Company to seek to recover certain incentive compensation from a current or former officer of the Company who is (or was at the relevant time) subject to Section 16 of the Securities Exchange Act of 1934, as amended (an “Affected Officer”), if: (a) the Company is required to prepare an accounting restatement for any fiscal period commencing after the adoption of the Clawback Policy due to material non-compliance with any financial reporting requirement and (b) it is determined that fraud, gross negligence or intentional misconduct by such Affected Officer contributed to the non-compliance underlying the restatement.
Compensation is subject to recoupment under the Clawback Policy if it was granted, earned or vested based, in whole or part, on the attainment of a financial reporting measure and was received by the Affected Officer during the three fiscal years preceding the date on which the Company is required to prepare the accounting restatement, as follows:
•
with respect to cash bonuses, the Company may seek to recoup up to the full amount of the difference between the compensation received by the Affected Officer and the amount the Affected Officer would have received based on the Company’s restated results;
•
with respect to equity incentive awards, the Company may seek to recoup up to the full amount of any such award that was determined based on the financial statements that were subsequently restated; and
•
if, after the release of earnings for any period with respect to which financial statements were subsequently restated and prior to the announcement of such restatement, an Affected Officer sells shares acquired pursuant to an option or other award granted after the adoption of the Clawback Policy, the Company may seek to recoup the difference between (x) the actual aggregate proceeds from the sale and (y) the aggregate proceeds the Affected Officer would have received if the sale had been at a price




per share reflecting the restated results, as determined in the discretion of the Board (provided that the aggregate sale proceeds determined by the Board may not be less than the aggregate exercise price paid for the shares).
When the SEC adopts final clawback policy rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company will review and may revise the Clawback Policy to the extent required to comply with such rules.
The foregoing is only a brief description of the material terms of the Performance Awards, Options, RSUs and Clawback Policy, does not purport to be complete and is qualified in its entirety by reference to the Plan, Option Agreements, RSU Agreements and Clawback Policy. In addition, the Company expects to file the form of Performance Award Agreement and Grant Notice with its Quarterly Report on Form 10-Q for the quarter ending March 31, 2019.
Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits.
  





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.

Date: January 23, 2019
YELP INC.
 
By:
/s/ Laurence Wilson
 
 
Laurence Wilson
 
 
Chief Administrative Officer & General Counsel
 




YELP INC.
POLICY FOR RECOUPMENT OF INCENTIVE COMPENSATION
(Adopted January 18, 2019)
1.      INTRODUCTION
The Board of Directors (the “ Board ”) of Yelp Inc. (the “ Company ”) has determined that it is in the best interests of the Company to adopt a policy (the “ Policy ”) providing for the Company’s recoupment of certain Incentive Compensation (as defined below) paid to Affected Officers (as defined below) of the Company under certain circumstances. The Board may delegate determinations to be made under the Policy to the Compensation Committee of the Board (the “ Compensation Committee ”), and the Board and the Compensation Committee are collectively referred to in this Policy as the “ Board .”
This Policy shall be administered by the Board and, except as specifically provided herein, the Board shall have full and final authority to make any and all determinations required under this Policy. Any determination by the Board with respect to this Policy shall be final, conclusive and binding on all interested parties. The Board may amend or terminate this Policy at any time.
This Policy will be revised upon the adoption of federal regulations implementing the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
2.      EFFECTIVE DATE
This Policy shall apply to all Incentive Compensation paid or awarded on or after the date of adoption of this Policy, as and to the extent permitted by applicable law.
3.     DEFINITIONS
For purposes of this Policy, the following terms shall have the meanings set forth below:
“ Affected Officer ” shall mean a current or former executive officer of the Company who was at the relevant time designated by the Board as an officer for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.
“ Incentive Compensation ” shall mean any compensation that is granted, earned or vested based in whole or in part on the attainment of a financial reporting measure.
“ Misconduct ” shall mean a knowing violation of Securities and Exchange Commission rules and regulations or Company policy or the willful commission of an act of fraud, dishonesty, gross recklessness or gross negligence in the performance of a person’s duties, as determined as a result of the final disposition of any related action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative.
4 .      RECOUPMENT
If (a) the Company is required to prepare an accounting restatement for any fiscal quarter or year commencing after the adoption of this Policy due to the material noncompliance of the Company with any financial reporting requirement, and (b) it is determined that Misconduct contributed to the noncompliance

 
 
 
 
 


that resulted in the obligation to restate the Company’s financial statements, the Company shall seek to recover and claw back from any Affected Officer whose Misconduct contributed to the noncompliance which resulted in the obligation to restate the Company’s financial statements, the Incentive Compensation listed in A, B and C below to the extent received by the Affected Officer during the three fiscal years preceding the date on which the Company was required to prepare an accounting restatement:
A.
With respect to any Incentive Compensation that is bonus compensation, up to the full amount of the difference between any such bonus compensation received by the Affected Officer that was calculated based on the financial statements that were subsequently restated and the lower bonus compensation to which the Affected Officer would have been entitled had the financial statements been properly reported;
B.
With respect to any Incentive Compensation that constitutes an equity incentive award, up to the full amount of any such award received by the Affected Officer that was determined based on the financial statements that were subsequently restated;
C.
If, after the release of earnings for any period with respect to which financial statements were subsequently restated and prior to the announcement of such restatement, the Affected Officer sold any shares of Company common stock acquired pursuant to an option or other award granted after the adoption of this policy under the Company’s equity incentive plans, the excess of (i) the actual aggregate sales proceeds from the Affected Officer’s sale of those shares, over (ii) the aggregate sales proceeds the Affected Officer would have received from the sale of those shares at a price per share determined appropriate by the Board in its discretion to reflect what the Company’s common stock price would have been if the restatement had occurred prior to such sales; provided, however, that the aggregate sales proceeds determined by the Board under this clause (ii) with respect to shares acquired upon exercise of an option shall not be less than the aggregate exercise price paid for those shares.
For purposes of clarity, in no event shall the Company be required to award any Affected Officers an additional payment or other compensation if the restated or accurate financial results would have resulted in the grant, payment or vesting of Incentive Compensation that is greater than the Incentive Compensation actually received by the Affected Officer.
5.      SOURCES OF RECOUPMENT
To the extent permitted by applicable law, the Board, in its discretion, may seek recoupment from the Affected Officer(s) from any of the following sources: prior Incentive Compensation payments; future payments of Incentive Compensation; cancellation of outstanding Incentive Compensation; and direct repayment. To the extent permitted by applicable law, the Company may offset such amount against any compensation or other amounts owed by the Company to the Affected Officer.
If an amount repaid to the Company under this Policy will not be fully deductible by the Affected Officer, the Board may, in its discretion, reduce the amount to be repaid by the amount determined by the Board to reasonably take into account the adverse tax consequences of such repayment to the Affected Officer.
6.      SEVERABILITY
If any provision of this Policy or the application of any such provision to any Affected Officer shall be adjudicated to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or

2
 
 
 


unenforceability shall not affect any other provisions of this Policy, and the invalid, illegal or unenforceable provisions shall be deemed amended to the minimum extent necessary to render any such provision or application enforceable.
7.      NO IMPAIRMENT OF OTHER REMEDIES
This Policy does not preclude the Company from taking any other action to enforce an Affected Officer’s obligations to the Company, including termination of employment, institution of civil proceedings, or reporting of the Misconduct to appropriate government authorities. This Policy is in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to the Company’s Chief Executive Officer and Chief Financial Officer.


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