PayPal Holdings, Inc. (Form: 8-K, Received: 06/28/2017 16:58:05)

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 27, 2017

PayPal Holdings, Inc.

(Exact name of registrant as specified in its charter)



Delaware	001-36859	47-2989869
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		Identification No.)

2211 North First Street

San Jose, CA 95131

(Address of principal executive offices)

(408) 967-1000

(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))

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.

Appointment of New Director

On June 28, 2017, PayPal Holdings, Inc. (the “Company”) announced that Ann M. Sarnoff had been appointed as a new member of the Company’s Board of Directors (the “Board”) and a member of the Audit, Risk and Compliance Committee of the Board, effective June 27, 2017. Ms. Sarnoff fills a vacancy created by an increase in the size of the Company’s Board from nine to ten, and her term of office will expire at the Company’s 2018 annual meeting of stockholders or until her successor has been elected and qualified.

As a non-employee director, Ms. Sarnoff will be entitled to receive compensation in accordance with the Company’s Independent Director Compensation Policy, which is attached as Exhibit 10.1 to this Current Report on Form 8-K.

There is no arrangement or understanding between Ms. Sarnoff and any other persons pursuant to which Ms. Sarnoff was appointed as a director. Furthermore, there are no transactions between Ms. Sarnoff and the Company that would be required to be reported under Item 404(a) of Regulation S-K.

A copy of the Company’s press release announcing Ms. Sarnoff’s appointment is attached as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.



Exhibit No.	Description
10.1+	Independent Director Compensation Policy
99.1	Press Release dated June 28, 2017

+ Indicates a management contract or compensatory plan or arrangement.

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.



	PayPal Holdings, Inc.
	(Registrant)
Date: June 28, 2017	/s/ Brian Y. Yamasaki
	Name: Brian Y. Yamasaki Title: Vice President, Corporate Legal and Secretary

EXHIBIT INDEX



Exhibit No.	Description
10.1+	Independent Director Compensation Policy
99.1	Press Release dated June 28, 2017

+ Indicates a management contract or compensatory plan or arrangement.

EXHIBIT 10.1

PayPal Holdings, Inc.

INDEPENDENT DIRECTOR COMPENSATION POLICY

(Effective as of June 27, 2017)

Independent Directors (as defined in the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as it may be amended and restated from time to time (the “Plan”)) of PayPal Holdings, Inc. (“PayPal”) shall be eligible to receive cash and/or equity compensation as set forth in this Independent Director Compensation Policy (this “Policy”). The cash compensation and equity grants described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board of Directors of PayPal (the “Board”) or the Compensation Committee of the Board, to each Independent Director who may be eligible to receive such cash compensation or equity grants. This Policy shall remain in effect until it is revised or rescinded by further action of the Board or the Compensation Committee of the Board.

Equity Awards:



All Independent Directors	$250,000 in PayPal common stock
Board Chair	$100,000 in PayPal common stock

For purposes of clarity, the Board Chair receives $100,000 in PayPal common stock, in addition to the $250,000 in PayPal common stock he receives as an Independent Director.

Annual Retainers:



All Independent Directors	$80,000/year
Board Chair	$100,000/year
Lead Independent Director	$75,000/year
Audit Committee Chair	$25,000/year
Compensation Committee Chair and Corporate Governance & Nominating Committee Chair	$20,000/year
Audit Committee Member	$20,000/year
Compensation Committee Member	$18,000/year
Corporate Governance & Nominating Committee Member	$10,000/year

For purposes of clarity, (i) an Independent Director who serves as the chair of a committee will be entitled to the committee chair annual retainer for that specific committee in addition to the Independent Director annual retainer but will not be entitled to the committee annual retainer for serving as a member of that specific committee and (ii) an Independent Director who serves as Board Chair will be entitled to the Board Chair annual retainer in addition to the Independent Director annual retainer.

Annual retainers shall be payable on the first trading day after January 1 of each year in which the Independent Director serves as an Independent Director of the Board of PayPal (“the Annual Retainer Payment Date”) and shall be paid as soon as administratively practicable following the Annual Retainer Payment Date. If an Independent Director is elected or appointed to serve as a member of the Board, or appointed to serve as a member of a committee or as a chair of a committee in which such director is not a member prior to such appointment, during a calendar year but following the Annual Retainer Payment Date for such calendar year, his or her annual retainer(s) (or additional retainer if the Independent Director is serving in a different capacity) will be prorated, by multiplying such annual retainer(s) by a fraction, the numerator of which is the number of days from the appointment or election

date to December 31 of such calendar year, and the denominator of which is 365 (the “prorated annual retainer”). The prorated annual retainer shall be paid to the Independent Director as soon as administratively practicable following such appointment or election. An Independent Director that changes roles during a calendar year but following the Annual Retainer Payment Date for such calendar year will be entitled to a proration of the incremental increase, if any, between his or her annual retainer amount received for such calendar year and the increased retainer amount. For the avoidance of doubt, the Independent Director is not required to repay his or her annual retainer(s) or any portion thereof in the event that such Independent Director’s role is changed or service is terminated during the calendar year. In lieu of receiving an annual retainer in cash, an Independent Director may elect to receive a fully vested Stock Payment award of PayPal common stock having a Fair Market Value equal to the forgone retainer.

All capitalized terms used but not defined herein (or in Exhibit A) shall have the meaning ascribed to them in the Plan. See Exhibit A for additional information regarding Independent Director equity compensation.

EXHIBIT A

PayPal Holdings, Inc.

INDEPENDENT DIRECTOR EQUITY COMPENSATION POLICY

(Effective as of June 27, 2017)

Independent Directors of the Board of Directors (the “Board”) of PayPal Holdings, Inc. (“PayPal”) are entitled to receive equity awards as part of the compensation for their service to the Board. The Compensation Committee of the Board (the “Committee”) is responsible for reviewing and approving the equity compensation arrangements for Independent Directors. Currently, the Committee has approved an arrangement whereby Independent Directors receive awards of PayPal common stock under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as it may be amended and restated from time to time (the “Plan”) according to a set, non-discretionary formula. This memorandum shall serve as written documentation of the non-discretionary formula established by the Committee pursuant to Section 11.1 of the Plan and shall supersede any prior policy or description of the formula. All awards are subject to the terms and conditions of the Plan and an award agreement in the form approved by the Committee to evidence such type of grant pursuant to this policy (the “award agreement”).


(1)	Annual Award of Common Stock

Each Independent Director shall be granted a fully vested Stock Payment award of PayPal common stock under the Plan, promptly following the annual meeting of stockholders of PayPal (“Annual Meeting”). The number of shares of PayPal common stock subject to the award will be determined by dividing the amount of the annual equity award (i.e., $250,000 and, with respect to the additional equity award to the Board Chair, $100,000) by the per share Fair Market Value of PayPal common stock on the date of the Annual Meeting, rounded up to the nearest whole share (the “Annual Stock Award”).

If an Independent Director is appointed or elected at any time other than an Annual Meeting, the Independent Director shall be eligible to receive a prorated Annual Stock Award, as of the date of his or her appointment or election, for the period prior to the first Annual Meeting following his or her appointment or election, determined by (i) multiplying the amount of the annual equity award (i.e., $250,000 and, with respect to the additional equity award to the Board Chair, $100,000) by a fraction, the numerator of which is the number of days from the date of appointment or election to the first anniversary of the most recent Annual Meeting, and the denominator of which is 365, and (ii) dividing such amount by the per share Fair Market Value of PayPal common stock on the date of appointment or election, rounded up to the nearest whole share.


(2)	Annual Retainer Elections

An Independent Director may elect to have all of his or her annual retainer (“Annual Retainer”) for services to the Board (and, to the extent applicable, on any committees thereof) in a particular taxable year delivered in the form of a fully vested Stock Payment award for PayPal common stock under the Plan rather than in the form of an annual cash payment (the “Elective Stock Award”). Such an election may only be made with respect to 100% of the Annual Retainer(s) for the calendar year and may not be made for a portion of any Annual Retainer. In the event an Independent Director receives a prorated Annual Retainer due to his or her appointment or election during a calendar year but following the Annual Retainer Payment Date (as defined in the Policy) for such calendar year, such Independent Director may elect to receive 100% of his or her prorated Annual Retainer for the calendar year as an Elective Stock Award. An Independent Director who elects to receive an Elective Stock Award is referred to as an “Electing Director.”

The number of shares of PayPal common stock subject to each Elective Stock Award will be determined by dividing the amount of the cash payment in lieu of which such Elective Stock Award is being made by the per share Fair Market Value of PayPal common stock on the date that the cash payment would otherwise be payable, rounded up to the nearest whole share. For example, if an Electing Director were entitled to an Annual Retainer payment of $100,000 on January 3 and the per share Fair Market Value of PayPal common stock was $40 on such date, the Electing Director would be entitled to receive a fully vested Stock Payment award for 2,500 shares of PayPal common stock

in lieu of the $100,000 cash payment. The Elective Stock Award will be granted as of the date the cash payment would otherwise have been payable to the Independent Director.

Each Electing Director’s election must be in a form approved by the Committee and must be delivered to the Committee (or a person designated by the Committee to receive such election) as specified by the Committee or as otherwise prescribed by law.

(3) Treatment of DSUs Previously Granted to Independent Directors

Any elections made by Independent Directors, under the terms and conditions of the eBay Inc. Independent Director Compensation policy or the PayPal Holdings, Inc. Independent Director Compensation policy at the time of election, to have their annual retainers in respect of service to the Board prior to January 1, 2016 delivered in the form of DSUs (rather than in cash) will continue to apply to such annual retainers and shall be administered under such policies.

All applicable terms of the Plan and the applicable award agreement shall continue to apply to all DSUs. With respect to DSUs granted prior to August 1, 2013 under the eBay Inc. Independent Director Compensation policy and assumed by PayPal, PayPal has the discretion to deliver shares of PayPal common stock subject to the vested DSU award or a lump sum payment in cash equal to the aggregate Fair Market Value of such shares on the date of distribution. DSUs granted on or after August 1, 2013 may only be settled in shares of PayPal common stock.

Notwithstanding anything to the contrary, for any Independent Director who ceases to be a Board member, any unvested DSUs granted prior to the effective date of such resignation or termination shall automatically vest in full.

In addition, any unvested DSU awards previously granted to an Independent Director will automatically vest in full and become distributable immediately prior to a Change in Control (as defined under the Plan), subject to Section 409A of the Code.

(4) DSUs Held by Former Directors of eBay Inc.

In connection with the distribution of shares of PayPal common stock to the stockholders of eBay Inc., DSUs previously granted to members of the eBay Inc. Board of Directors (the “eBay Board”) were adjusted in the manner set forth in the Employee Matters Agreement by and between PayPal and eBay Inc., dated July 17, 2015, and PayPal assumed and shall deliver or pay the portion of such DSUs relating to PayPal common stock to such members upon their separation from service with the Board or, if such member continues to serve as a member of the eBay Board after such distribution, upon their separation from service with the eBay Board.

EXHIBIT 99.1

June 28, 2017

PayPal Appoints Ann M. Sarnoff to its Board of Directors

SAN JOSE, Calif. -- (BUSINESS WIRE) -- PayPal Holdings, Inc. (NASDAQ: PYPL) today announced it has appointed Ann M. Sarnoff to its Board of Directors. A seasoned media executive with a proven track record of creating innovative partnerships and joint ventures across the media industry, Ms. Sarnoff will serve on PayPal's Audit, Risk and Compliance Committee. Her appointment was effective June 27, 2017.

Ms. Sarnoff is President, BBC Worldwide - Americas, the main commercial arm and wholly-owned subsidiary of the public service broadcaster British Broadcasting Corporation (BBC), which operates in the Americas. In her role, Ms. Sarnoff drives growth and profit across the company’s business divisions, and oversees the amplification of BBC Worldwide’s global brands Planet Earth II, Doctor Who , Top Gear, Dancing with the Stars and BBC Earth. She was promoted to President from Chief Operating Officer in 2015. Prior to joining BBC Worldwide, she was President of Dow Jones Ventures and Senior Vice President of Strategy. She has also held roles as the Chief Operating Officer for the Women’s National Basketball Association (WNBA) and spent ten years at Viacom as Nickelodeon’s Executive Vice President for Consumer Products and Business Development, and Chief Operating Officer for VH1 and CMT. While at Viacom she helped launch new cable channels and built Nickelodeon consumer products into a multi-billion dollar business at retail.

"I join PayPal’s directors and the entire PayPal team in welcoming Ann to our Board," said Dan Schulman, president and chief executive officer of PayPal. “Ann’s experience and impressive track record of forging partnerships and joint ventures to drive profitability and growth, and building consumer-driven businesses, aligns well with our strategy. We are successfully forging alliances across our ecosystem to give our customers more choice in where and how they can pay with PayPal.”

“I am delighted and honored to serve on the Board of PayPal, especially during this transformative period for the payments and financial services industries,” said Ann M. Sarnoff. “I look forward to working with the Board and PayPal leadership to contribute to the company’s business and partnership strategy, and focus on consumer insights and engagement to support PayPal’s vision to democratize financial services for consumers and drive the global transition from cash to digital payments.”

Ms. Sarnoff holds a BS from Georgetown University’s McDonough School of Business and an MBA from Harvard Business School. For the past six years, she has been named one of the Most Powerful Women in Cable by CableFAX Magazine and was recently honored with the “Women of Achievement Award” by The Women’s Project Theater. She sits on the boards of HSNi and Georgetown University, and chairs the board of BritBox, the recently launched subscription video-on-demand service in the U.S. - a joint venture between BBC Worldwide and ITV, the UK’s biggest commercial broadcaster.

The appointment of Ms. Sarnoff will increase PayPal's Board of Directors to 10 members.

About PayPal

Fueled by a fundamental belief that having access to financial services creates opportunity, PayPal (Nasdaq: PYPL) is committed to democratizing financial services and empowering people and businesses to join and thrive in the global economy. Our open digital payments platform gives PayPal's 203 million active account holders the confidence to connect and transact in new and powerful ways, whether they are online, on a mobile device, in an app, or in person. Through a combination of technological innovation and strategic partnerships, PayPal creates better ways to manage and move money, and offers choice and flexibility when sending payments, paying or getting paid. Available in more than 200 markets around the world, the PayPal platform, including Braintree, Venmo and Xoom, enables consumers and merchants to receive money in more than 100 currencies, withdraw funds in 56 currencies and hold balances in their PayPal accounts in 25 currencies. For more information on PayPal, visit https://www.paypal.com/about . For PayPal financial information, visit https://investor.paypal-corp.com .

PayPal Investor Relations Contact:

Gabrielle Rabinovitch

Vice President, Investor Relations

grabinovitch@paypal.com

PayPal Media Relations Contact:

Amanda Miller, 408-219-0563

Director, Corporate Communications

amanmiller@paypal.com

Source: PayPal Holdings, Inc.

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