Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 22, 2022, DocuSign, Inc. (the “Company”) announced that Allan
Thygesen would be joining the Company as its President and Chief Executive
Officer, effective as of Mr. Thygesen’s start date, expected to be no later than
October 10, 2022 (the “CEO Start Date”).
Mr. Thygesen served as President, Americas & Global Partners at Google Inc. (a subsidiary of Alphabet Inc.) from June 2021 to September 2022, as President, Americas from February 2017 to May 2021, as President, Google Marketing Solutions from September 2014 to February 2017, and as Vice President, Global SMB Sales and Operations from September 2011 to September 2014. Before joining Google, Mr. Thygesen consulted to Google and other companies in 2010 and until September 2011 and previously co-founded an early stage venture firm and was a managing director and partner in the U.S. venture and growth funds of The Carlyle Group, where he led investments in startups in sectors including e-commerce, enterprise software, mobile advertising and imaging. Earlier, Mr. Thygesen served as an executive in several public and private companies, including Wink Communications, Inc., an interactive television technology company, which he helped take public in 1999. He also served as a lecturer at the Stanford Graduate School of Business from 2014 to 2021. Mr. Thygesen has served on the board of directors of RingCentral, Inc. (NYSE: RNG) since October 2015 and has served on the boards of directors of various private companies. Mr. Thygesen holds an M.Sc. in Economics from the University of Copenhagen and an MBA from Stanford University. There are no arrangements or understandings between Mr. Thygesen and any other persons, pursuant to which he was appointed as President and Chief Executive Officer, no family relationships among any of the Company's directors or executive officers and Mr. Thygesen, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Offer Letter with Mr. Thygesen
On September 13, 2022, the Company and Mr. Thygesen entered into an offer letter containing the principal terms and conditions of his employment as the Company's President and Chief Executive Officer (the "CEO Offer Letter"). Pursuant to the terms of the CEO Offer Letter, Mr. Thygesen will also join the Board of Directors of the Company, which is expected to occur on or before the CEO Start Date. The CEO Offer Letter provides for, among other things: (i) an initial annual base salary of $1,000,000; (ii) eligibility for an annual target cash bonus up to 100% of the amount of his then-current base salary, 60% of which, on a prorated basis, Mr. Thygesen will be eligible to receive with respect to the remainder of the Company's current fiscal year; and (iii) certain equity awards as described below. Sign-On RSU Award. Mr. Thygesen is eligible to receive an award of restricted stock units with a target value of $20,000,000, subject to his continuous service with the Company on the one-year anniversary of the CEO Start Date (the "Sign-On RSU Award"). FY23 RSU Award. Mr. Thygesen is also eligible to receive an award of restricted stock units with a target value of $10,000,000, vesting over four years, subject to Mr. Thygesen's continuous service through each such vesting date (the "FY23 RSU Award"). TSR PSU Award. Mr. Thygesen is also eligible to receive an award of performance-based restricted stock units (the "TSR PSU Award") with a target value of $10,000,000, subject to the achievement of certain performance metrics (the "Target TSR PSUs"). Mr. Thygesen is eligible to earn up to 200% of the Target TSR PSUs upon "maximum" level achievement of the applicable performance metrics. The TSR PSU Award is subject to both (i) the achievement of performance goals related to the Company's relative "total shareholder return" as measured against the Nasdaq Composite Index over a three-year performance period, determined at the end of one-year, two-year and three-year performance periods with performance capped at 1/3rd of the Target TSR PSUs for the first and second performance periods and (ii) Mr. Thygesen's continuous service as the Company's Chief Executive Officer, or as the Company's Executive Chairman under certain circumstances (as applicable, the "CEO Service") through the end of the applicable performance period. Generally, if Mr. Thygesen's CEO Service terminates for any reason prior to the end of a performance period, the remaining unvested TSR PSUs will be forfeited. However, in the event Mr. Thygesen's CEO Service is terminated by the Company without "Cause" or by Mr. Thygesen for "Good Reason" (as each such term is defined in the CEO Offer Letter), he shall vest in a pro rata portion of the TSR PSUs that would have vested upon actual performance with respect to the in-progress performance period at the time of such termination, subject to Mr. Thygesen's delivery to the Company of a release of claims in favor of the Company. -------------------------------------------------------------------------------- In the event of a change in control of the Company, the performance period will end prior to the change in control; achievement with respect to the Company's relative total shareholder return will be measured using the price per share paid in such change in control; and any achievement between two performance targets will be interpolated. Following such change in control, if the TSR PSU Award is assumed by the acquiror, the resulting PSUs will vest in equal installments on the last day of the remaining open performance periods, subject to Mr. Thygesen's service through such dates; provided, however, in the event his service following the change in control is terminated without "Cause" or by Mr. Thygesen for "Good Reason", the PSUs will vest on Mr. Thygesen's termination date, subject to Mr. Thygesen's delivery to the Company of a release of claims in favor of the Company. SVC PSU Award. In addition to the foregoing grants, Mr. Thygesen is eligible to receive an award of performance-based restricted stock units subject to certain stock price targets (the "Shareholder Value Creation (SVC) PSU Award"). The SVC PSU Award is divided into six tranches (each, a "Tranche") that each require achievement of a stock price target (each, a "Stock Price Target") as set forth in the Stock Price Target Table below. Each of Tranches 1 through 5 represent the right to acquire the number of shares of our common stock equal to approximately (x) $7,700,000 divided by (y) the average daily closing price of the Company's common stock on the Nasdaq Global Select Market for the thirty (30) trading days ending on the fifteenth (15th) trading day following the first public announcement by the Company of Mr. Thygesen's appointment as CEO (the "30-Day Average") multiplied by a Monte Carlo factor, with such resulting shares vesting if the applicable Stock Price Targets are achieved within five years of the CEO Start Date (the "5-Year Performance Period"). Tranche 6 represents the right to acquire the number of shares of our common stock equal to (x) $11,500,000 divided by (y) the 30-Day Average multiplied by a Monte Carlo factor, with such resulting shares vesting if the applicable Stock Price Target is achieved within seven years of the CEO Start Date (the "7-Year Performance Period"). Tranche No. Tranche Value Share
Price Target as % increase from
30-Day Average 1 $7,700,000 25% 2 $7,700,000 80% 3 $7,700,000 120% 4 $7,700,000 233% 5 $7,700,000 317% 6 $11,500,000 483% A Stock Price Target will be achieved if the average daily closing price of the Company's common stock on the Nasdaq Global Select Market for ninety (90) calendar days equals or exceeds the applicable Stock Price Target during the applicable performance period. For each achieved Tranche, 50% of the achieved PSUs will vest upon the later of its achievement and the one-year anniversary of the grant date (the "One-Year Anniversary"), and the remaining 50% will vest on the two-year anniversary of its achievement, subject to Mr. Thygesen's continuous CEO Service through such dates. Generally, if Mr. Thygesen's CEO Service terminates for any reason, any unachieved PSUs and any achieved PSUs that have not yet time-vested will be forfeited upon such termination. However, in the event Mr. Thygesen's CEO Service is terminated by the Company without "Cause" or he resigns for "Good Reason" (each as defined in the CEO Offer Letter) any achieved PSUs that have not yet time-vested shall vest, subject to Mr. Thygesen's delivery to the Company of a release of claims in favor of the Company. In addition, in the event Mr. Thygesen's CEO Service terminates due to a termination by the Company without "Cause", his resignation for "Good Reason" or as a result of his death or terminal condition, in each case after the One-Year Anniversary, Mr. Thygesen will be entitled to vest in 50% of any Tranches that are achieved during the six months following such termination. . . .
Item 7.01. Regulation FD Disclosure
A press release dated September 22, 2022 announcing the Company's new President and CEO is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. The information in Item 7.01 of this current report, including Exhibit 99.1 attached hereto, is furnished and shall not be treated as filed for purposes of the Securities Exchange Act of 1934.
Safe Harbor Statement
Information provided in this Current Report on Form 8-K may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Company's plans, objectives and expectations for compensation matters related to its Mr. Thygesen's service as the Company's President and Chief Executive Officer and Mr. Thygesen's start date as the Company's Chief Executive Officer and President. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Risk Factors" as described in the Company's Annual Report for the year ended January 31, 2022 on Form 10-K filed with the Commission on March 25, 2022, the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 2022 filed with the Commission on September 8, 2022, and other reports on file with the Commission.
These forward-looking statements are made only as of the date hereof, and the
Company undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: Exhibit No. Description Offer Letter dated September 13, 2022 by and between Allan Thygesen and 10.1 DocuSign, Inc. 99.1 Press Release dated September 22, 2022. 104 Cover Page Interactive Data File (embedded within the
Inline XBRL document)
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