PayPal Holdings, Inc. (Form: 8-K, Received: 06/17/2022 16:40:28)

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 15, 2022

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))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	PYPL	NASDAQ Global Select Market

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 June 15, 2022, the Compensation Committee of the Board of Directors of PayPal Holdings, Inc. (the “Company”) approved the terms of a letter agreement dated June 15, 2022 between the Company and Gabrielle Rabinovitch (the “Letter Agreement”) in connection with Ms. Rabinovitch’s previously announced appointment as the Company’s interim Chief Financial Officer, including the following:

•RSU Grant: Ms. Rabinovitch was granted a service-based restricted stock unit award with a grant date value of $1.5 million (the “RSU Grant”) under the Company’s Amended and Restated 2015 Equity Incentive Award Plan (the “Plan”), effective as of June 15, 2022 (the “Grant Date”). The RSU Grant will vest over three years from the Grant Date: one-third of such grant will vest on the first anniversary of the Grant Date and the remainder will vest in eight equal quarterly installments thereafter, subject to Ms. Rabinovitch’s continued employment with the Company on each applicable vesting date.

•PBRSU Grant: Ms. Rabinovitch was granted a performance-based restricted stock unit award with a target grant date value of $1.5 million (the “PBRSU Grant”) under the Plan, effective as of the Grant Date. The PBRSU Grant will vest on March 1, 2025, with the number of shares issuable in respect of such award to be determined in accordance with the achievement of Company performance conditions set forth in the underlying award agreement, based on the same performance metrics that apply generally to Company executives for the 2022-2024 performance period, subject to Ms. Rabinovitch’s continued employment with the Company on the vesting date.

•Bonus: Ms. Rabinovitch was awarded a cash retention bonus (the “Bonus”) with an aggregate value of $1,000,000, with half of such amount to be paid shortly following the date of the Letter Agreement and the remainder to be paid shortly following the earlier of (i) the second month anniversary of the start date of the Company’s permanent or successor Chief Financial Officer and (ii) March 1, 2023, subject, in each case, to Ms. Rabinovitch’s continued employment with the Company on the applicable payment date.

•Severance Protection: During the period commencing on May 23, 2022 and ending on the sixth month anniversary of the start date of the Company's permanent or successor Chief Financial Officer (such period, the “Transition Period”), Ms. Rabinovitch will be eligible to participate in the PayPal Holdings, Inc. Executive Change in Control and Severance Plan (as it may be amended and restated from time to time, the “Severance Plan”) at the Executive Vice President level, subject to the terms and conditions of the Severance Plan and as set forth in the Letter Agreement. Such eligibility is contingent on Ms. Rabinovitch’s continuous reasonable best efforts to support the permanent or successor Chief Financial Officer in their transition until the sixth month anniversary of their start date, unless otherwise determined by the Company in its sole discretion. If the Transition Period expires while Ms. Rabinovitch remains employed with the Company, her eligibility to receive severance from the Company in the future (if any) will return to the Senior Vice President level, unless otherwise determined by the Company in its sole discretion. Additionally, the following occurrences will not constitute “Good Reason” with respect to Ms. Rabinovitch under the Severance Plan: (i) a return to a role or title similar to or the same as the role and title that Ms. Rabinovitch held prior to May 23, 2022; and/or (ii) a change in Ms. Rabinovitch’s reporting relationship such that she no longer reports to the Company's Chief Executive Officer and/or such that she is required to report to the Company's Chief Financial Officer.

The foregoing description of the Letter Agreement is qualified in its entirety by reference to the text of the Letter Agreement, which is filed as Exhibit 10.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits


Exhibit Number			Exhibit Title or Description
10.1			Letter agreement by and between PayPal Holdings, Inc. and Gabrielle Rabinovitch, dated June 15, 2022
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

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 17, 2022	/s/ Brian Y. Yamasaki
		Name: Brian Y. Yamasaki
		Title: Vice President, Corporate Legal and Secretary

June 15, 2022

Gabrielle Rabinovitch

Dear Gabrielle,

PayPal is transforming the digital economy and the work we are doing together has never been more important. Our products and services are needed more than ever, and our journey continues to fulfill our mission of democratizing financial services and improving the financial health of individuals, families, businesses, and communities throughout the world. Your contributions play a critical role in driving PayPal’s continued growth and success. I look forward to continuing our work together and supporting your ongoing career growth at PayPal as we seize the endless opportunities ahead.

In recognition of your appointment to interim Chief Financial Officer effective May 23, 2022 upon John Rainey’s departure (the “Effective Date”), I am thrilled to inform you that you are being awarded a special equity award of $3,000,000 and a cash bonus award of $1,000,000, subject to the approval of the Compensation Committee of the Board of Directors of PayPal Holdings, Inc. (the “Compensation Committee”). In addition, during the Transition Period (as defined below), you will be eligible to participate in the PayPal Holdings, Inc. Executive Change in Control and Severance Plan (as it may be amended and restated from time to time, the “Severance Plan”) at the Executive Vice President level, subject to the terms and conditions of this letter agreement.

Nothing in this letter agreement is intended to alter the at-will nature of the employment relationship between you and PayPal.

About Your Equity Awards

•This equity award will be granted* in restricted stock units (RSUs) and performance-based restricted stock units (PBRSUs), supporting our pay-for-performance philosophy.

•The anticipated grant date for such RSUs and PBRSUs is on or around June 15, 2022.*

•The chart below details the vesting schedule for these grants.


Grant	Value	Vesting Schedule
Restricted Stock Units (“RSUs”)	USD $1,500,000	The value of the RSUs will be converted into the number of shares to be granted, as determined based on PayPal policies on the date of grant. One-third (1/3) of the shares subject to the RSUs will vest on the first anniversary of the grant date, with one-twelfth (1/12) of the shares subject to the RSUs vesting on each quarterly vest date thereafter, in each case conditioned upon your continued employment with a PayPal company. The RSUs are subject to applicable taxes and withholdings and are governed by the applicable award agreement and any other related plans and agreements.
Performance-based Restricted Stock Units (“PBRSUs”)	Target value of USD $1,500,000	The target value of the PBRSUs will be converted into the number of target shares to be granted, as determined based on PayPal policies. Any PBRSUs earned based on PayPal Holdings’ performance over the 2022-2024 performance period will be vested and settled in March of 2025, conditioned upon your continued employment with a PayPal company. The PBRSUs are subject to applicable taxes and withholdings and are governed by the applicable award agreement and any other related plans and agreements.

*Grant awards are subject to approval by the Compensation Committee.

About Your Cash Bonus

•The cash bonus award will be paid in two installments:

•$500,000 will be payable within the first two pay periods from the date of this letter; and

•the remaining $500,000 will be payable within two pay periods following the earlier of: (i) the second month anniversary of the start date of the permanent or successor Chief Financial Officer and (ii) March 1, 2023.

•Each payment is subject to applicable taxes and withholdings and is governed by the terms and conditions of this letter agreement.

•Your active employment, as a full-time employee of PayPal in good standing as of the respective payment date, is required to receive the portion of the cash bonus payable on such date.

•If your employment with PayPal ceases for reasons of resignation or Cause (as defined in the Severance Plan, provided that the name “Gabrielle Rabinovitch” will be deemed to replace the defined term “Eligible Participant”), or notice is given for reasons of Cause or resignation, in each case before the applicable payment date, the then-unpaid portion of the cash bonus will not be earned and no pro-rata payment of the then-unpaid portion of the cash bonus will be paid.

About Your Participation in the Severance Plan

•During the Transition Period, you will be eligible to participate in the Severance Plan at the Executive Vice President level, subject to the terms and conditions of the Severance Plan and as set forth herein.

•“Transition Period” shall mean the period commencing on the Effective Date and ending on the sixth month anniversary of the start date of the permanent or successor PayPal Chief Financial Officer.

•Notwithstanding anything in this letter agreement to the contrary:


2211 North First Street San Jose, CA 95131 paypal.com

◦Your eligibility to participate in the Severance Plan at the Executive Vice President level is contingent on your continuous reasonable best efforts to support the permanent or successor Chief Financial Officer in their transition to their Chief Financial Officer role until the sixth month anniversary of the start date of the permanent or successor PayPal Chief Financial Officer, unless otherwise determined by PayPal in its sole discretion.

◦If the Transition Period expires while you remain employed with PayPal, your eligibility to receive severance from PayPal in the future (if any) shall return to the Senior Vice President level, unless otherwise determined by PayPal in its sole discretion.

◦Notwithstanding anything in the Severance Plan to the contrary, the following occurrences will not constitute Good Reason under the Severance Plan with respect to you (and, for the avoidance of doubt, they will not be considered a “material reduction in the Eligible Participant’s authorities, duties or responsibilities” under the Severance Plan):

▪A return to a role or title similar to or the same as the Senior Vice President, Corporate Finance and Investor Relations role and title that you held prior to the Effective Date; and/or

▪A change in your reporting relationship such that you no longer report to PayPal’s Chief Executive Officer and/or such that you are required to report to the Chief Financial Officer.

This letter agreement is the entire agreement between you and PayPal regarding any special equity award or cash bonus and supersedes and replaces any prior agreements regarding any retention bonus, whether verbal or written.

PayPal has tremendous opportunities ahead and your continued contributions are key to helping us live our values and deliver for our customers. Thank you again for all you do on behalf of PayPal, and congratulations on this well-deserved recognition.

Sincerely,

/s/ Dan Schulman

Dan Schulman

President and CEO

I agree to the terms and conditions set forth in this letter agreement.



/s/ Gabrielle Rabinovitch						6/16/2022
Gabrielle Rabinovitch						Date


2211 North First Street San Jose, CA 95131 paypal.com