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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): September 27, 2022
PayPal Holdings, Inc.
(Exact name of registrant as specified in its charter)
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| 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:
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| 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 September 27, 2022, the Compensation Committee of the Board of Directors of PayPal Holdings, Inc. (the “Company”) approved the terms of a letter agreement dated September 27, 2022 between the Company and Gabrielle Rabinovitch (the “Letter Agreement”) in connection with Ms. Rabinovitch’s previously announced appointment as the Company’s acting Chief Financial Officer (“acting CFO”) effective September 14, 2022, including the following:
•An annual base salary of $750,000 for the duration of Ms. Rabinovitch serving as acting CFO.
•A target bonus opportunity of 125% of her annual base salary, payable in accordance with the terms and conditions of the PayPal Annual Incentive Plan.
•An equity grant with a grant date value of $2,500,000 under the Company’s Amended and Restated 2015 Equity Incentive Award Plan.
◦RSU Grant: One-half of the equity grant will be a service-based restricted stock unit award (“RSU Grant”), with a grant date of October 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: One-half of the equity grant will include a performance-based restricted stock unit award (“PBRSU Grant”), with a grant date in the first quarter of fiscal year 2023. The PBRSU Grant will vest in March 2026, 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 2023-2025 performance period, subject to Ms. Rabinovitch’s continued employment with the Company on the vesting date.
•Ms. Rabinovitch is 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 for the duration of her serving as acting CFO, and six months thereafter, 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 continued reasonable best efforts to support the Company’s Chief Financial Officer in his transition to his Chief Financial Officer role during the six months following the end of Ms. Rabinovitch’s services as acting CFO, unless otherwise determined by the Company in its sole discretion. If Ms. Rabinovitch remains employed with the Company after the six-month period following the end of her services as acting CFO, Ms. Rabinovitch’s 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 September 14, 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
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| Exhibit Number | Exhibit Title or Description |
| Letter agreement by and between PayPal Holdings, Inc. and Gabrielle Rabinovitch, dated September 27, 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.
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| | PayPal Holdings, Inc. |
| | (Registrant) |
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Date: | October 3, 2022 | /s/ Brian Y. Yamasaki |
| | Name: Brian Y. Yamasaki |
| | Title: Vice President, Corporate Legal and Secretary |
September 27, 2022
Gabrielle Rabinovitch
Dear Gabrielle,
In recognition of your appointment to acting Chief Financial Officer (“CFO”), effective as of September 14, 2022, I am thrilled to inform you that for the duration of your service as acting CFO (such duration, the “Active CFO Period”), your base salary will be based on an annual base salary of $750,000, less applicable deductions and tax withholdings. In addition, with respect to the Active CFO Period, your eligibility for a bonus under any PayPal Annual Incentive Plan will be based on a target incentive opportunity of 125% of annual base salary, payable in accordance with the terms and conditions of the PayPal Annual Incentive Plan(s) documents. For the avoidance of doubt, in no event will you be eligible for duplicative compensation under any PayPal Annual Incentive Plan with respect to the same period of time.
About Your Stock Grant
You are also being awarded a special equity award of $2,500,000.
•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 is on or around October 15, 2022 and the anticipated grant date for such PBRSUs is March 1, 2023.
•The chart below details the vesting schedule for these grants.
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| Grant | Value | Vesting Schedule |
| Restricted Stock Units (“RSUs”) | USD $1,250,000 | 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 $1,250,000 | 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, Inc.’s performance over the 2023-2025 performance period will be vested and settled in March of 2026, 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. |
About Your Participation in the Severance Plan
In addition, during the Active CFO Period, and for six months thereafter (altogether, the “Severance Protection 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.
Notwithstanding anything in this letter agreement to the contrary:
•Your eligibility to participate in the Severance Plan at the Executive Vice President level is contingent on your continuous reasonable best efforts to support PayPal’s Chief Financial Officer in his transition to his Chief Financial Officer role during the six months following the end of the Active CFO Period, unless otherwise determined by PayPal in its sole discretion.
•If the Severance Protection 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):
oA return to a role or title similar to or the same as the Senior Vice President, Investor Relations and Treasurer role and title that you held prior to the Effective Date; and/or
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2211 North First Street San Jose, CA 95131 paypal.com
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oA 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.
Nothing in this Agreement is intended to alter the at-will nature of the employment relationship between you and PayPal. This Agreement is the entire agreement between you and PayPal regarding the matters addressed herein and supersedes and replaces any prior agreements regarding such matters, 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.
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| /s/ Gabrielle Rabinovitch | | 9/30/2022 |
| Gabrielle Rabinovitch | | Date |
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2211 North First Street San Jose, CA 95131 paypal.com
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