Washington, D.C. 20549
You are cordially invited to attend the
2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Skillz Inc. (the “Company” or “Skillz”)
to be held through a virtual web conference at www.virtualshareholdermeeting.com/SKLZ2021 on May 26, 2021, at 9:00 a.m. Pacific
Time. You will be able to attend the Annual Meeting online, vote your shares electronically, and submit questions during the meeting by logging in to the website listed above using the 16-digit control number included, which can be
found in your Notice of
Internet Availability of Proxy Materials, on your proxy card, or on any additional voting instructions accompanying these proxy
materials. We recommend that you log in a few minutes before the meeting to ensure you are admitted when the meeting starts.
We have included with this letter a proxy
statement that provides you with detailed information about the Annual Meeting. We encourage you to read the entire proxy statement
carefully. You may also obtain more information about Skillz from documents we have filed with the Securities and Exchange Commission
(the “SEC”).
We are delivering our proxy statement and
annual report pursuant to the SEC rules that allow companies to furnish proxy materials to their stockholders over the Internet.
We believe that this delivery method expedites stockholders’ receipt of proxy materials and lowers the cost and environmental
impact of our Annual Meeting. On or about April 14, 2021, we will mail
to our stockholders a notice containing instructions on how to access our proxy materials. In addition, the notice includes instructions
on how you can receive a paper copy of our proxy materials.
You are being asked at the Annual
Meeting to elect directors named in this proxy statement and to ratify the retention of Ernst & Young LLP as our
independent registered public accounting firm.
This proxy statement is dated April 14, 2021 and is first being made available to stockholders on April 14, 2021.
P.O. Box 445
San Francisco, California 94104
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Board has adopted a written related party
transaction approval policy pursuant to which the Audit Committee will review and approve or take such other action as it may deem
appropriate with respect to the following transactions:
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a transaction in which we are a participant and which involves an amount exceeding $120,000 and in which any of our directors, officers or 5% stockholders, or any other “related person” as defined in Item 404 of SEC Regulation S-K (“Item 404”), has or will have a direct or indirect material interest; and
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any other transaction that meets the related party disclosure requirements of the SEC as set forth in Item 404.
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This policy also provides that the following
transactions are deemed pre-approved:
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decisions on compensation of our directors or executive officers, if required to be disclosed in the Company’s proxy statement;
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certain ordinary course transactions where a related person has a limited interest;
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transactions where a related person’s interest or benefit arises solely from such person’s ownership of our securities and holders of such securities receive the same benefit on a pro rata basis; and
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transactions where the rates or charges involved in the transactions are determined by competitive bids.
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Skillz
Historical Old Skillz redeemable convertible
preferred stock, convertible preferred stock, common stock, and per share amounts in this section were not retroactively adjusted
to reflect the effect of the Business Combination.
Series E Financing
From April 15, 2020 through September 15,
2020, Old Skillz issued and sold an aggregate of 2,382,660 shares of its Series E Preferred Stock at a purchase price of $32.208
per share for aggregate consideration of approximately $76.7 million.
The participants in this convertible preferred
stock financing included certain holders of more than 5% of Old Skillz’s capital stock and certain directors or their respective
affiliates. The following table sets forth the aggregate number of shares of Series E Preferred Stock issued to these related parties
in this convertible preferred stock financing:
Stockholder
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Shares of
Series E
Preferred
Stock
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Total
Purchase
Price
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Andrew Paradise
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6,497
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$
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209,255.38
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Bonderman Family Limited Partnership
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62,097
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$
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2,000,020.18
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Accomplice Skillz 2020 Investors, LLC
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93,145
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$
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3,000,014.16
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Liberty Global Ventures Group Ltd.
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119,295
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$
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3,842,253.36
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Telstra Ventures Fund II, L.P.
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130,137
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$
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4,191,452.50
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WestCap Skillz 2020, LLC
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1,295,958
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$
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41,740,215.26
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Other Agreements and Promissory Notes
On April 29, 2019, Old Skillz entered into
an Option Agreement with Andrew Paradise, Skillz’s Chief Executive Officer, pursuant to which Old Skillz granted Mr. Paradise
options to purchase 12,007,118 shares of its Class A common stock. On April 30, 2019, Mr. Paradise exercised his option to purchase
12,007,118 shares of Class A common stock. In connection with this exercise, Mr. Paradise issued Old Skillz a Promissory Note,
dated April 30, 2019, in the principal amount of $3,842,277.76.
On April 15, 2020, Old Skillz entered into
an Option Agreement with Mr. Paradise, pursuant to which Old Skillz granted Mr. Paradise an option to purchase 13,279,768 shares
of its Class A common stock. On May 14, 2020, Old Skillz entered into an Option Exercise Agreement with Mr. Paradise, pursuant
to which Mr. Paradise exercised his option to purchase 13,279,768 shares of Class A common stock. In connection with this exercise,
Mr. Paradise issued Old Skillz a Promissory Note dated May 14, 2020, in the principal amount of $11,420,600.48.
On April 15, 2020, Old Skillz entered Option
Agreements with Casey Chafkin, Skillz’s Chief Revenue Officer, pursuant to which Old Skillz granted Mr. Chafkin an option
to purchase shares of 3,719,774 Class B common stock of Old Skillz. On May 14, 2020, Old Skillz entered into Option Exercise Agreements
with Mr. Chafkin, pursuant to which he exercised his option to purchase 3,719,774 shares of Class B common stock under and pursuant
to Old Skillz’s 2017 Equity Incentive Plan. In connection with this exercise, Mr. Chafkin issued Old Skillz a Promissory
Note, dated May 14, 2020, in the principal amount of $3,199,005.64.
In connection with the closing of the Business
Combination, Old Skillz entered into note cancellation agreements (the “Note Cancellation Agreements”) with each of
Mr. Paradise and Mr. Chafkin. Pursuant to the Note Cancellation Agreements, each of the promissory notes issued by Mr. Paradise
and Mr. Chafkin to Old Skillz were repaid and satisfied in full through the surrender of shares of capital stock of Old Skillz.
In connection with the closing
of the Business Combination, certain FEAC stockholders and certain Old Skillz stockholders entered into an investors’ rights
agreement (the “Investor Rights Agreement”) pursuant to which we are required to register for resale securities held
by the stockholders party thereto. We have no obligation to facilitate more than one demand, made by Eagle Equity, or its affiliates,
that we register such stockholders’ securities. In addition, the holders have certain “piggyback” registration
rights with respect to registrations initiated by us. We will bear the expenses incurred in connection with the filing of any registration
statements pursuant to the Investors’ Rights Agreement. The Investors’ Rights Agreement also restricts the ability
of each stockholder who is a party thereto to transfer its shares of New Skillz common stock for a period of two years following
the closing of the Business Combination, subject to certain permitted transfers. In general, 1,500,000 shares of New Skillz common
stock held by each stockholder who is a party to the Investors’ Rights Agreement and its affiliates will be released from
the transfer restrictions each quarter beginning on the date that is six months following the closing of the Business Combination.
FEAC
On January 15,
2020, Eagle Equity purchased an aggregate of 11,500,000 of FEAC’s founder shares in exchange for a capital contribution to
FEAC of $25,000, or approximately $0.002 per share. On February 10, 2020, FEAC conducted a 1:1.25 stock split of its founder shares,
such that Eagle Equity directly continued to own all 14,375,000 outstanding founder shares. On March 2, 2020, 20,000 founder
shares were transferred to each of Scott M. Delman and Joshua A. Kazam, FEAC’s director nominees,
resulting in Eagle Equity holding 14,335,000 founder shares. On March 6, 2020, FEAC conducted a 1:1.2 stock split of its
founder shares, resulting in Eagle Equity holding an aggregate of 17,210,000 founder shares and there being an aggregate of 17,250,000
founder shares outstanding. In connection with the Business Combination, Eagle Equity agreed to forfeit 899,797 founder shares.
Simultaneously with the closing of FEAC’s
initial public offering, Eagle Equity purchased an aggregate of 10,033,333 private placement warrants at $1.50 per private placement
warrant ($15,050,000 in the aggregate). Each private placement warrant was exercisable to purchase one share of Class A common
stock at an exercise price of $11.50 per share. The proceeds from the private placement warrants were added to the proceeds from
the FEAC initial public offering held in the trust account. In connection with the Business Combination, Eagle Equity agreed to
forfeit 5,016,666 private placement warrants.
RATIFICATION
OF RETENTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(PROPOSAL NO. 2)
Our Audit Committee has retained EY as our
independent registered public accounting firm for the year ending December 31, 2021. A proposal will be presented at the Annual
Meeting to ratify this retention. Ratification of the retention of our independent registered public accounting firm requires the
affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote.
If the stockholders fail to ratify such selection, another independent registered public accounting firm will be considered by
our Audit Committee, but the Audit Committee may nonetheless choose to engage EY. Even if the retention of EY is ratified, the
Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year
if it determines that such a change would be in the best interests of the Company and its stockholders. We have been advised that
a representative of EY will be present at the Annual Meeting and will be available to respond to appropriate questions and, if
such person chooses to do so, make a statement.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
“FOR” RATIFICATION OF THE RETENTION OF EY AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021.
QUESTIONS
AND ANSWERS ABOUT THE
ANNUAL MEETING
Why did you send me this
proxy statement?
We sent you
this proxy statement because the Board is soliciting your proxy to vote at the Annual Meeting to be held on May 26, 2021, at 9:00
a.m. Pacific Time and at any postponements or adjournments of the Annual Meeting. This proxy statement summarizes information
that is intended to assist you in making an informed vote on the proposals described in this proxy statement.
Who can vote at the Annual
Meeting?
Only stockholders as of the record date are entitled to vote at the Annual Meeting. The record date to determine stockholders entitled
to notice of and to vote at the Annual Meeting is the close of business on April 1, 2021. On the record date, there were 326,316,202 shares
of Class A common stock and 69,587,138 shares of Class
B common stock outstanding. Our Class A common stock and Class B common stock will vote as a single class on all matters described
in this proxy statement for which your vote is being solicited. Each share of Class A common stock is entitled to one vote on
each proposal and each share of Class B Common Stock is entitled to 20 votes on each proposal. Our Class A common stock and Class
B common stock are collectively referred to in this proxy statement as our “common stock.” We do not have cumulative
voting rights for the election of directors.
How many shares must be present
to conduct the Annual Meeting?
We must have
a quorum present in person or by proxy to conduct the Annual Meeting. A quorum is established when the holders of a majority in
voting power of shares of common stock of the Company issued and outstanding and entitled to vote at the meeting is present in
person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes (as described below) are counted for purposes
of determining whether a quorum is present.
What matters are to be voted
on at the Annual Meeting?
The agenda
for the Annual Meeting is to:
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1.
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elect
seven director nominees;
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2.
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ratify
the retention of EY as our independent registered public accounting firm for 2021; and
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3.
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conduct
any other business properly brought before the Annual Meeting or any adjournments or
postponements thereof.
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As of the
date of this proxy statement, we do not know of any other matters to be presented at the Annual Meeting. If any other matters
properly come before the Annual Meeting, however, the persons named as proxies will be authorized to vote or otherwise act in
accordance with their judgment.
How does the Board recommend
that I vote?
The Board
recommends that you vote:
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1.
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FOR
the election of each of our director nominees named in this proxy statement; and
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2.
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FOR
the ratification of the retention of EY as our independent registered public accounting
firm for 2021.
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How do I vote at the Annual
Meeting?
Stockholders
of record, who hold shares registered in their names, can vote by:
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Internet
www.proxyvote.com
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Calling
1-800-690-6903
Toll-free
from the U.S. or Canada
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Mail
Return
the signed proxy card
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Telephone
and internet voting facilities for stockholders of record will be available 24 hours a day. You may vote over the telephone or
via the Internet until 11:59 p.m. on May 25, 2021.
Stockholders
of record and beneficial stockholders may vote online during the Annual Meeting. You may cast your vote electronically during
the Annual Meeting using the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, on your
proxy card, or on any additional voting instructions accompanying these proxy materials. If you do not have a control number,
please contact your broker, bank, or other nominee as soon as possible so that you can be provided with a control number.
Beneficial
owners, who own shares through a bank, brokerage firm, or other nominee, can vote by returning the voting instruction form, or
by following the instructions for voting via telephone or the internet, as provided by the bank, broker, or other nominee. If
you own shares in different accounts or in more than one name, you may receive different voting instructions for each type of
ownership. Please vote all of your shares.
Even if you
plan to participate in our Annual Meeting via virtual web conference, please cast your vote as soon as possible.
Your proxy
will be voted in accordance with your instructions, so long as, in the case of a proxy card returned by mail, such card has been
signed and dated. If you vote your shares via the Internet, by telephone or by executing and returning a proxy card by mail but
you do not provide specific instructions with respect to the proposals, your shares will be voted FOR the director nominees named
in this proxy statement and FOR the ratification of the retention of our independent registered public accounting firm.
As of the
date of this proxy statement, we do not know of any matters to be presented at the Annual Meeting except those described in this
proxy statement. If any other matters properly come before the Annual Meeting, however, the persons named as proxies will be authorized
to vote or otherwise act in accordance with their judgment.
During the
Annual Meeting, a list of stockholders entitled to vote will be available for examination at www.virtualshareholdermeeting.com/SKLZ2021.
The list will also be available for 10 days prior to the Annual Meeting at our principal executive office at the address listed
above.
What does it mean if I receive
more than one Notice?
You may receive
more than one Notice, more than one e-mail or multiple proxy cards or voting instruction cards. For example, if you hold your
shares in more than one brokerage account, you may receive a separate Notice, a separate e-mail or a separate voting instruction
card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in
more than one name, you may receive more than one Notice, more than one e-mail or more than one proxy card. To vote all of your
shares by proxy, you must complete, sign, date and return each proxy card and voting instruction card that you receive and vote
over the Internet the shares represented by each Notice that you receive (unless you have requested and received a proxy card
or voting instruction card for the shares represented by one or more of those Notices).
May I change my vote?
Yes. You may
revoke your proxy at any time before it is voted at the Annual Meeting. To change your vote, if you are a stockholder of record,
you may submit another later dated proxy by telephone, Internet or mail or by voting your shares electronically on the virtual
meeting platform at the Annual Meeting (your attendance at the Annual Meeting will not, by itself, revoke your proxy; you must
vote in person at the Annual Meeting to revoke your proxy). If you are a beneficial owner and your shares are held in street name,
you may change your vote by submitting new voting instructions to your bank, broker, trustee or nominee, or if you have obtained
a legal proxy from such entity giving you the right to vote your shares, you may change your vote by attending the Annual Meeting
and voting electronically on the virtual meeting platform.
What vote is required to
elect directors and approve the other matters described in this proxy statement?
Because this
is an uncontested election, the director nominees must receive the affirmative vote of a majority of the votes cast to be elected
(i.e., the number of shares voted “for” a director nominee must exceed the number of votes cast “against”
that nominee) (Proposal No. 1). Abstentions and broker non-votes will have no effect on the outcome of the election of directors.
In an uncontested election, our Bylaws provide that any incumbent director that fails to receive a majority of votes cast shall
immediately tender his or her resignation. Our Board, in a process managed by the Nominating Committee and following a recommendation
by that committee, must decide whether or not to accept the tendered resignation.
For the ratification
of the retention of EY as our independent registered public accounting firm (Proposal No. 2), the affirmative
vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote on the proposal will be
required for approval. Abstentions will not be voted but will be counted for purposes of determining whether there is a quorum.
Accordingly, abstentions will have the effect of a negative vote on Proposal No. 2. Absent specific instructions on Proposal
No. 2, brokers are permitted to exercise voting discretion with respect to such proposal. For additional information about
broker non-votes see “How do I vote if my bank or broker holds my shares in ‘street name’?”
What is the difference between
holding shares as a stockholder of record and as a beneficial owner?
If your shares
are registered in your name on the Company’s books and records or with our transfer agent, you are the “stockholder
of record” of those shares, and this proxy statement and accompanying materials have been provided directly to you by the
Company. On the other hand, if you purchased your shares through a brokerage or other financial intermediary, the brokerage or
other financial intermediary will automatically put your shares into “street name” which means that the brokerage
or other financial intermediary will hold your shares in its name or another nominee’s name and not in your name, but will
keep records showing you as the “beneficial owner.” If you hold shares beneficially in street name, this proxy statement
and accompanying materials have been forwarded to you by your broker, bank or other holder of record.
How do I vote if my bank
or broker holds my shares in “street name”?
If you hold
your shares in “street name” through a bank, broker or other nominee, such bank, broker or nominee will vote those
shares in accordance with your instructions. To so instruct your bank, broker or nominee, you should refer to the information
provided to you by such entity. Without instructions from you, a bank, broker or nominee will be permitted to exercise its own
voting discretion with respect to so-called routine matters (Proposal No. 2 (ratification of auditors)), but will not be
permitted to exercise voting discretion with respect to non-routine matters (Proposal No. 1 (director elections)). Thus, if you do not give your bank,
broker or nominee specific instructions with respect to Proposal No. 2, your shares will be voted in such entity’s
discretion. If you do not give your bank, broker or nominee specific instructions with respect to Proposal No. 1,
your shares will not be voted on such proposal. This is called a “broker non-vote.” Shares represented by such broker
non-votes will be counted in determining whether there is a quorum and will have no effect on the non-routine proposal. We urge
you to promptly provide your bank, broker or nominee with appropriate voting instructions so that all your shares may be voted
at the Annual Meeting.
How will the votes be counted
at the Annual Meeting?
The votes
will be counted by the inspector of election appointed for the Annual Meeting.
How will the Company announce
the voting results?
The Company
will report the final results of the voting at the Annual Meeting in a filing with the SEC on a Current Report on Form 8-K.
Who pays for the Company’s
solicitation of proxies?
The Board
is soliciting your proxy to vote your shares of common stock at our Annual Meeting. We will bear the cost of soliciting proxies
on behalf of the Company, including preparing, printing and mailing this proxy statement. Proxies may be solicited personally,
by mail, email or by telephone by certain of our directors, officers, employees or representatives. Our directors and employees
will not be paid any additional compensation for soliciting proxies. We will reimburse brokerage houses, banks, custodians and
other nominees and fiduciaries for out-of-pocket expenses incurred in forwarding our proxy solicitation materials.
What is “householding”
and how does it work?
Under the
rules adopted by the SEC, we may deliver a single set of proxy materials to one address shared by two or more of our stockholders.
This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage
of this opportunity, we have delivered only one set of proxy materials to multiple stockholders who share an address, unless we
received contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written
or oral request, a separate copy of the proxy materials, as requested, to any stockholder at the shared address to which a single
copy of these documents was delivered. If you prefer to receive separate copies of the Notice, proxy statement or annual report,
contact Broadridge Financial Solutions, Inc. by calling 1-800-542-1061 or in writing at Broadridge, Householding Department, 51
Mercedes Way, Edgewood, New York 11717.
In addition,
if you currently are a stockholder who shares an address with another stockholder and would like to receive only one copy of future
notices and proxy materials for your household, you may notify your broker if your shares are held in a brokerage account or you
may notify us if you hold registered shares. Registered stockholders may notify us by contacting Broadridge Financial Solutions,
Inc. at the above telephone number or address or sending a written request to Skillz Inc., P.O. Box 445, San Francisco, California
94104, Attention: Investor Relations.
How do I participate in
the Annual Meeting?
We are hosting
the Annual Meeting through a virtual web conference. You will not be able to attend the meeting in person. You will be able to
attend the virtual annual meeting, vote your shares electronically, and submit your questions during the live webcast of the meeting
by visiting www.virtualshareholdermeeting.com/SKLZ2021 and entering your 16-digit control number included in your Notice of Internet
Availability of Proxy Materials, on your proxy card, or on any additional voting instructions accompanying these proxy materials.
The Annual Meeting will begin promptly at 9:00 a.m. Pacific Time. Online check-in will be available beginning at 8:30 a.m. Pacific
Time. Please allow ample time for the online check-in process. Please be assured that you will be afforded the same rights and
opportunities to participate in the virtual meeting as you would at an in-person meeting.
As part of
the Annual Meeting, we will hold a question and answer session, during which we intend to answer questions submitted during the
meeting in accordance with the Annual Meeting procedures which are pertinent to the Company and the meeting matters, as time permits.
Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/SKLZ2021. Questions and answers
will be grouped by topic and substantially similar questions will be grouped and answered once.
There will
be technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you
encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical
support number that will be posted on the Annual Meeting login page.
Are there rules of conduct for the Annual Meeting?
Yes, the rules of conduct for the Annual Meeting will be available by visiting www.virtualshareholdermeeting.com/SKLZ2021. The rules
of conduct will provide information regarding the rules and procedures for participating in the Annual Meeting.
STOCKHOLDER PROPOSALS FOR 2022
ANNUAL MEETING OF STOCKHOLDERS
Stockholders
who intend to present proposals at the Company’s annual meeting of stockholders in 2022 pursuant to Rule 14a-8 under the
Exchange Act must send notice of their proposal to us so that we receive it no later than December 15, 2021. Stockholders who intend
to present proposals at the annual meeting of stockholders in 2022 other than pursuant to Rule 14a-8 must comply with the notice
provisions in our Bylaws. Under these requirements, the deadline for proposals brought under our Bylaws is February 25, 2022.
Stockholder proposals should be addressed to Skillz Inc., P.O. Box 445, San Francisco, California 94104, Attention: Charlotte
Edelman, VP of Legal and Secretary.
OTHER
MATTERS
We know of
no other matters to be submitted to the stockholders at the Annual Meeting. If any other matters properly come before the Annual
Meeting, persons named in the proxy intend to vote the shares they represent in accordance with their own judgments.
Upon written
request by any stockholder entitled to vote at the Annual Meeting, we will promptly furnish, without charge, a copy of the Annual
Report on Form 10-K for the fiscal year ended December 31, 2020, which we filed with the SEC, including Skillz’ consolidated financial statements. If the person requesting the report was not a stockholder of record on April 1, 2021, the request must contain a
good faith representation that he or she was a beneficial owner of our common stock at the close of business on that date. Requests
should be addressed to Skillz Inc., P.O. Box 445, San Francisco, California 94104, Attention: Charlotte Edelman, VP of Legal and
Secretary.
YOUR
VOTE IS IMPORTANT. WE URGE YOU TO VOTE TODAY BY TELEPHONE, VIA THE INTERNET OR BY MAIL.
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By Order of the Board of Directors,
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Charlotte Edelman
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VP of Legal and Secretary
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APPENDIX A
SKILLZ INC. 2020 OMNIBUS INCENTIVE PLAN
Section
1. General.
The
purposes of the Skillz Inc. 2020 Omnibus Incentive Plan (the “Plan”) are to: (a) encourage the profitability
and growth of the Company through short-term and long-term incentives that are consistent with the Company’s objectives;
(b) give Participants an incentive for excellence in individual performance; (c) promote teamwork among Participants; and (d)
give the Company a significant advantage in attracting and retaining key Employees, Directors and Consultants. To accomplish such
purposes, the Plan provides that the Company may grant (i) Options, (ii) Stock Appreciation Rights, (iii) Restricted Shares, (iv)
Restricted Stock Units, (v) Performance-Based Awards (including performance-based Restricted Shares and Restricted Stock Units),
(vi) Other Share-Based Awards, (vii) Other Cash-Based Awards or (viii) any combination of the foregoing.
Section
2. Definitions.
For
purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Administrator”
means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 3 of
the Plan.
(b) “Affiliate”
means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified. An entity shall be deemed an Affiliate of the Company for purposes of this definition only
for such periods as the requisite ownership or control relationship is maintained. For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling,” “controlled by,” or “under common
control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by
contract or otherwise.
(c) “Articles
of Incorporation” means the articles of incorporation of the Company, as amended and/or restated and in effect from
time to time.
(d) “Automatic
Exercise Date” means, with respect to an Option or a Stock Appreciation Right, the last business day of the applicable
term of the Option pursuant to Section 7(k) or the Stock Appreciation Right pursuant to Section 8(h).
(e) “Award”
means any Option, Stock Appreciation Right, Restricted Share, Restricted Stock Unit, Performance-Based Award, Other Share-Based
Award or Other Cash-Based Award granted under the Plan.
(f) “Award
Agreement” means a written agreement, contract or other instrument or document evidencing the terms and conditions of
an individual Award granted under the Plan. Evidence of an Award may be in written or electronic form, may be limited to notation
on the books and records of the Company and, with the approval of the Administrator, need not be signed by a representative of
the Company or a Participant. Any Shares that become deliverable to the Participant pursuant to the Plan may be issued in certificate
form in the name of the Participant or in book-entry form in the name of the Participant. Each Award Agreement shall be subject
to the terms and conditions of the Plan.
(g) “Beneficial
Owner” (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.
(h) “Board”
means the Board of Directors of the Company.
(i) “Bylaws”
means the bylaws of the Company, as may be amended and/or restated from time to time.
(j) “Cause”
shall have the meaning assigned to such term in any Company, Subsidiary or Affiliate unexpired employment, severance, or
similar agreement or Award Agreement with a Participant, or if no such agreement exists or if such agreement does not define
“Cause” (or a word of like import), Cause means (i) the Participant’s breach of fiduciary duty or duty of
loyalty to the Company, (ii) the Participant’s conviction of or plea of nolo contendere to a felony or a crime
involving moral turpitude, (iii) the Participant’s failure, refusal or neglect to perform and discharge his or her
duties and responsibilities on behalf of the Company or a Subsidiary of the Company (other than by reason of Disability) or
to comply with any lawful directive of the Board or its designee, (iv) the Participant’s breach of any written policy
of the Company or a Subsidiary or Affiliate thereof (including, without limitation, those relating to sexual harassment or
the disclosure or misuse of confidential information), (v) the Participant’s breach of any agreement with the Company
or a Subsidiary or Affiliate thereof (including, without limitation, any confidentiality, non-competition, non-solicitation
or assignment of inventions agreement), (vi) the Participant’s commission of fraud, dishonesty, theft, embezzlement,
self-dealing, misappropriation or other malfeasance against
the
business of the Company or a Subsidiary or Affiliate thereof, or (vii) the Participant’s commission of acts or omissions
constituting gross negligence or gross misconduct in the performance of any aspect of his or her lawful duties or responsibilities,
which have or may be expected to have an adverse effect on the Company, its Subsidiaries or Affiliates. A Participant’s
employment shall be deemed to have terminated for “Cause” if, on the date his or her employment terminates, facts
and circumstances exist that would have justified a termination for Cause, to the extent that such facts and circumstances are
discovered within three (3) months following such termination. The Administrator, in its absolute discretion, shall determine
the effect of all matters and questions relating to whether a Participant has been discharged for Cause.
(k) “Change
in Capitalization” means any (i) merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase
or other reorganization or corporate transaction or event, (ii) extraordinary dividend (whether in the form of cash, Shares or
other property), stock split or reverse stock split, (iii) combination or exchange of shares, (iv) other change in corporate structure
or (v) payment of any other distribution, which, in any such case, the Administrator determines, in its sole discretion, affects
the Class A Common Stock (or, with respect to Awards denominated in shares of Class B Common Stock, the Class B Common Stock)
such that an adjustment pursuant to Section 5 of the Plan is appropriate.
(l) “Change
in Control” means the occurrence of any of the following:
(i) any
Person, other than the Company or a Subsidiary thereof, becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding voting
securities (the “Outstanding Company Voting Securities”), excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in clause (A) of paragraph (iii) below or any acquisition directly from the Company;
or
(ii) the
following individuals cease for any reason to constitute a majority of the number of Directors then serving on the Board: individuals
who, during any period of two (2) consecutive years, constitute the Board and any new Director (other than a Director whose initial
assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent
solicitation, relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for
election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3)
of the Directors then still in office who either were Directors at the beginning of the two (2) year period or whose appointment,
election or nomination for election was previously so approved or recommended; or
(iii) the
consummation of a merger or consolidation of the Company or any Subsidiary thereof with any other corporation, other than a merger
or consolidation (A) that results in the Outstanding Company Voting Securities immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent
(50%) of the combined voting power of the Outstanding Company Voting Securities (or such surviving entity or, if the Company or
the entity surviving such merger is then a subsidiary, the ultimate parent thereof) outstanding immediately after such merger
or consolidation, and (B) immediately following which the individuals who comprise the Board immediately prior thereto constitute
at least a majority of the Board of the entity surviving such merger or consolidation or, if the Company or the entity surviving
such merger is then a subsidiary, the ultimate parent thereof; or
(iv) the
consummation of a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the
sale or disposition by the Company of all or substantially all of the Company’s assets, other than (A) a sale or disposition
by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined
voting power of the voting securities of which are owned directly or indirectly by stockholders of the Company following the completion
of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or
(B) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals
who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which
such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.
For
each Award that constitutes deferred compensation under Code Section 409A, a Change in Control (where applicable) shall be
deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the
Company or a change in ownership of a substantial portion of the assets of the Company also constitutes a “change in control
event” under Code Section 409A.
Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction
or series of integrated transactions immediately following which the holders of Class A Common Stock immediately prior to such
transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns
all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
(m) “Change
in Control Price” shall have the meaning set forth in Section 12 of the Plan.
(n) “Class
A Common Stock” means the Class A common stock, $0.0001 par value per share, of the Company (and any stock or other
securities into which such shares of Class A common stock may be converted or into which they may be exchanged).
(o) “Class
B Common Stock” means the Class B common stock, $0.0001 par value per share, of the Company (and any stock or other
securities into which such shares of Class B common stock may be converted or into which they may be exchanged).
(p) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto. Any reference to a section of
the Code shall be deemed to include a reference to any regulations promulgated thereunder.
(q) “Committee”
means any committee or subcommittee the Board may appoint to administer the Plan. Subject to the discretion of the Board, the
Committee shall be composed entirely of individuals who meet the qualifications of a “non-employee director” within
the meaning of Rule 16b-3 under the Exchange Act and any other qualifications required by the applicable stock exchange on
which the Shares are traded. If at any time or to any extent the Board shall not administer the Plan, then the functions of the
Administrator specified in the Plan shall be exercised by the Committee. Except as otherwise provided in the Company’s Articles
of Incorporation or Bylaws, any action of the Committee with respect to the administration of the Plan shall be taken by a majority
vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members.
(r) “Common
Stock” means, individually or collectively (as the context requires), the Class A Common Stock and the Class B Common
Stock. The Award Agreement with respect to an Award shall designate whether such Award relates to the Class A Common Stock or
the Class B Common Stock.
(s) “Company”
means Skillz Inc., a Delaware corporation (or any successor corporation, except as the term “Company” is used in the
definition of “Change in Control” above).
(t) “Consultant”
means any current or prospective consultant or independent contractor of the Company or an Affiliate thereof, in each case, who
is not an Employee, Executive Officer or Non-Employee Director.
(u) “Director”
means any individual who is a member of the Board on or after the Effective Date.
(v) “Disability”
means, with respect to any Participant who is an Employee, a permanent and total disability as defined in Code Section 22(e)(3).
(w) “Effective
Date” shall have the meaning set forth in Section 22 of the Plan.
(x) “Eligible
Recipient” means, with respect to an Award denominated in Class A Common Stock issued under the Plan: (i) an Employee;
(ii) a Non-Employee Director; or (iii) a Consultant, in each case, who has been selected as an eligible recipient under the Plan
by the Administrator; provided, that any Awards granted prior to the date an Eligible Recipient first performs services for the
Company or an Affiliate thereof will not become vested or exercisable, and no Shares shall be issued or other payment made to
such Eligible Recipient with respect to such Awards, prior to the date on which such Eligible Recipient first performs services
for the Company or an Affiliate thereof. Notwithstanding the foregoing, to the extent required to avoid the imposition of additional
taxes under Code Section 409A, “Eligible Recipient” means: an (1) Employee; (2) a Non-Employee Director; or (3) a
Consultant, in each case, of the Company or a Subsidiary thereof, who has been selected as an eligible recipient under the Plan
by the Administrator. With respect to an Award denominated in Class B Common Stock issued under the Plan, “Eligible Recipient”
means any Employee, Non-Employee Director or Consultant who is a Qualified Stockholder, as defined in and determined under the
Company’s Articles of Incorporation, and who has been selected as an eligible recipient under the Plan by the Administrator.
(y) “Employee”
shall mean any current or prospective employee of the Company or an Affiliate thereof, as described in Treasury Regulation Section
1.421-1(h), including an Executive Officer or Director who is also treated as an employee.
(z) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time.
(aa) “Executive
Officer” means each Participant who is an executive officer (within the meaning of Rule 3b-7 under the Exchange Act)
of the Company.
(bb) “Exercise
Price” means, with respect to any Award under which the holder may purchase Shares, the price per share at which a holder
of such Award granted hereunder may purchase Shares issuable upon exercise of such Award, as determined by the Administrator in
accordance with Code Section 409A, as applicable.
(cc) “Fair
Market Value” as of a particular date shall mean: (i) if the Shares are listed on any established stock exchange
or a national market system, including, without limitation, the New York Stock Exchange or the Nasdaq Stock Market, the Fair Market
Value shall be the closing price of a Share (or if no sales were reported, the closing price on the date immediately preceding
such date) as quoted on such exchange or system on the day of determination; (ii) if the Shares are not then listed on a national
securities exchange, the average of the highest reported bid and lowest reported asked prices for a Share as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System for the last preceding date on which there was a sale
of such stock in such market; or (iii) whether or not the Shares are then listed on a national securities exchange or traded
in an over-the-counter market or the value of such Shares is not otherwise determinable, such value as determined by the Administrator
in good faith and in a manner not inconsistent with the regulations under Code Section 409A.
(dd) “Free
Standing Rights” shall have the meaning set forth in Section 8(a) of the Plan.
(ee) “Incentive
Stock Option” means an Option that is designated by the Committee as an incentive stock option within the meaning of
Section 422 of the Code and that meets the requirements set out in the Plan.
(ff) “Non-Employee
Director” means a Director who is not an Employee.
(gg) “Nonqualified
Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock
Option.
(hh) “Outstanding
Class A Shares” means the then-outstanding shares of Class A Common Stock of the Company, taking into account as outstanding
for this purpose such Common Stock issuable upon the exercise of Options or warrants, the conversion of convertible stock or debt,
and the exercise of any similar right to acquire such Common Stock.
(ii) “Outstanding
Class B Shares” means the then-outstanding shares of Class B Common Stock of the Company, taking into account as outstanding
for this purpose such Common Stock issuable upon the exercise of Options or warrants, the conversion of convertible stock or debt,
and the exercise of any similar right to acquire such Common Stock.
(jj) “Option”
means an option to purchase Shares granted pursuant to Section 7 of the Plan.
(kk) “Other
Cash-Based Award” means a cash Award granted to a Participant under Section 11 of the Plan, including cash awarded as
a bonus or upon the attainment of Performance Goals or otherwise as permitted under the Plan.
(ll) “Other
Share-Based Award” means a right or other interest granted to a Participant under the Plan that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, including, but not limited
to, unrestricted Shares or dividend equivalents, each of which may be subject to the attainment of Performance Goals or a period
of continued employment or other terms or conditions as permitted under the Plan.
(mm) “Participant”
means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority provided for in Section
3 of the Plan, to receive an Award under the Plan, and, upon his or her death, his or her successors, heirs, executors and administrators,
as the case may be, solely with respect to any Awards outstanding at the date of the Eligible Recipient’s death.
(nn) “Performance-Based
Award” means any Award granted under the Plan that is subject to one or more Performance Goals. Any dividends or dividend
equivalents payable or credited to a Participant with respect to any unvested Performance-Based Award shall be subject to the
same Performance Goals as the Shares or units underlying the Performance-Based Award.
(oo) “Performance
Goals” means performance goals based on performance criteria selected by the Administrator, which may include, but are
not limited to, any of the following: (i) earnings before interest and taxes; (ii) earnings before interest, taxes, depreciation
and amortization; (iii) net operating profit after tax; (iv) cash flow; (v) revenue; (vi) net revenues; (vii) sales; (viii) days
sales outstanding; (ix) income; (x) net income; (xi) operating income; (xii) net operating income; (xiii) operating margin; (xiv)
earnings; (xv) earnings per share; (xvi) return on equity; (xvii) return on investment; (xviii) return on capital; (xix) return
on assets; (xx) return on net assets; (xxi) total shareholder return; (xxii) economic profit; (xxiii) market share; (xxiv) appreciation
in the fair market value, book value or other measure of value of the Shares; (xxv) expense or cost control; (xxvi) working capital;
(xxvii) customer satisfaction; (xxviii) employee retention or employee turnover; (xxix) employee satisfaction or engagement;
(xxx) environmental, health or other safety goals; (xxxi) individual performance; (xxxii) strategic objective milestones;
(xxxiii) any other criteria specified by the Administrator in its sole discretion; and (xxxiv) any combination of, or a specified
increase or decrease in, as applicable, any of the foregoing. Where applicable, the Performance Goals may be expressed in terms
of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular
criteria, and may be applied to one or more of the Company or an Affiliate thereof, or a division or strategic business unit of
the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination
thereof, all as determined by the Administrator. The Performance Goals may include a threshold level of performance below which
no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified
vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full
vesting shall occur). At the time such an Award is granted, the Administrator may specify any reasonable definition of the Performance
Goals it uses. Such definitions may provide for equitable adjustments to the Performance Goals in recognition of unusual or non-recurring
events affecting the Company or an Affiliate thereof or the financial statements of the Company or an Affiliate thereof, in response
to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be unusual in nature,
infrequent in occurrence or unusual in nature and infrequent in occurrence or related to the disposal of a segment of a business
or related to a change in accounting principles. If the Administrator determines that a change in the business, operations, corporate
structure or capital structure of the Company or the manner in which the Company or an Affiliate conducts its business, or other
events or circumstances render performance goals to be unsuitable, the Administrator may modify such Performance Goals in whole
or in part, as the Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different business unit
or function during a performance period, the Administrator may determine that the Performance Goals or performance period are
no longer appropriate and may (x) adjust, change or eliminate the Performance Goals or the applicable performance period as it
deems appropriate to make such goals and period comparable to the initial goals and period, or (y) make a cash payment to the
Participant in an amount determined by the Administrator.
(pp) “Person”
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
however, a Person shall not include (i) the Company or any of its Subsidiaries; (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Subsidiaries; (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportion as their ownership of stock of the Company.
(qq) “Plan”
means this Skillz Inc. 2020 Omnibus Incentive Plan, as amended and/or amended and restated from time to time.
(rr) “Related
Rights” shall have the meaning set forth in Section 8(a) of the Plan.
(ss) “Restricted
Shares” means an Award of Shares granted pursuant to Section 9 of the Plan subject to certain restrictions that lapse
at the end of a specified period or periods.
(tt) “Restricted
Stock Unit” means a notional account established pursuant to an Award granted to a Participant, as described in Section
10 of the Plan, that is (i) valued solely by reference to Shares, (ii) subject to restrictions specified in the Award Agreement,
and (iii) payable in cash or in Shares (as specified in the Award Agreement). The Restricted Stock Units awarded to the Participant
will vest according to the time-based criteria or Performance Goals, and vested Restricted Stock Units will be settled at the
time(s), specified in the Award Agreement.
(uu) “Restricted
Period” means the period of time determined by the Administrator during which an Award or a portion thereof is subject
to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether
an Award has been earned.
(vv) “Rule
16b-3” shall have the meaning set forth in Section 3(a) of the Plan.
(ww) “Securities
Act” means the Securities Act of 1933, as amended from time to time.
(xx) “Share”
means a share of Common Stock.
(yy) “Stock
Appreciation Right” means the right pursuant to an Award granted under Section 8 of the Plan to receive an amount equal
to the excess, if any, of (i) the aggregate Fair Market Value, as of the date such Award or portion thereof is surrendered, of
the Shares covered by such Award or such portion thereof, over (ii) the aggregate Exercise Price of such Award or such portion
thereof.
(zz) “Subsidiary”
means, with respect to any Person, as of any date of determination, any other Person as to which such first Person owns or otherwise
controls, directly or indirectly, more than fifty percent (50%) of the voting shares or other similar interests or a sole general
partner interest or managing member or similar interest of such other Person. An entity shall be deemed a Subsidiary of the Company
for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained. Notwithstanding
the foregoing, in the case of an Incentive Stock Option or any determination relating to an Incentive Stock Option, “Subsidiary”
means a corporation that is a subsidiary of the Company within the meaning of Code Section 424(f).
(aaa) “Substitute
Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity
awards granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation,
or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award”
be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.
Section
3. Administration.
(a) The
Plan shall be administered by the Administrator in accordance with the requirements of Rule 16b-3 under the Exchange Act
(“Rule 16b-3”), to the extent applicable.
(b) Pursuant
to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated
to it by the Board, shall have the power and authority, without limitation:
(i) to
select those Eligible Recipients who shall be Participants;
(ii) to
determine whether and to what extent Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Other Share-Based
Awards, Other Cash-Based Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;
(iii) to
determine the number of Shares to be made subject to each Award (and whether such Award will be denominated in shares of Class
A Common Stock or Class B Common Stock);
(iv) to
determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder, including,
but not limited to, (A) the restrictions applicable to Awards and the conditions under which restrictions
applicable to such
Awards shall lapse, (B) the Performance Goals and performance periods applicable to Awards, if any, (C) the Exercise
Price of each Award, (D) the vesting schedule applicable to each Award, (E) any confidentiality or restrictive covenant
provisions applicable to the Award, and (F) subject to the requirements of Code Section 409A (to the extent applicable),
any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise
period of such Awards and accelerating the vesting schedule of such Awards;
(v) to
determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all Award Agreements evidencing
Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units or Other Share-Based Awards, Other Cash-Based Awards
or any combination of the foregoing granted hereunder;
(vi) to
determine Fair Market Value;
(vii) to
determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination
of the Participant’s employment for purposes of Awards granted under the Plan;
(viii) to
adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem
advisable;
(ix) to
reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan, any Award Agreement or other instrument
or agreement relating to the Plan or an Award granted under the Plan; and
(x) to
construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating
thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and authorities either specifically
granted under the Plan or necessary and advisable in the administration of the Plan.
(c) All
decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons,
including the Company and the Participants. No member of the Board or the Committee, or any officer or employee of the Company
or any Subsidiary thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission,
determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee
and each and any officer or employee of the Company and of any Subsidiary thereof acting on their behalf shall, to the maximum
extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, omission, determination
or interpretation.
Section
4. Shares Reserved for Issuance Under the Plan and Limitations on Awards.
(a) Subject
to adjustment in accordance with Section 5 of the Plan, the Administrator is authorized to deliver with respect to Awards granted
under the Plan an aggregate of 39,669,278 shares of Class A Common Stock; provided, that the total number of shares of Class A
Common Stock that will be reserved, and that may be issued, under the Plan will automatically increase on the first trading day
of each calendar year, beginning with calendar year 2021, by a number of Class A Common Shares equal to five percent (5%) of the
total number of Outstanding Class A Shares on the last day of the prior calendar year. Notwithstanding the foregoing, the Administrator
may act prior to January 1 of a given year to provide that there will be no such increase in the share reserve for that year or
that the increase in the share reserve for such year will be a lesser number of Class A Common Shares than provided herein.
(b) In
addition, subject to adjustment in accordance with Section 5 of the Plan, the Administrator is authorized to deliver with respect
to Awards granted under the Plan an aggregate of 8,172,581 shares of Class B Common Stock; provided, that the total number of
shares of Class B Common Stock that will be reserved, and that may be issued, under the Plan will automatically increase on the
first trading day of each calendar year, beginning with calendar year 2021, by a number of Class B Common Shares equal to five
percent (5%) of the total number of Outstanding Class B Shares on the last day of the prior calendar year. Notwithstanding the
foregoing, the Administrator may act prior to January 1 of a given year to provide that there will be no such increase in the
share reserve for that year or that the increase in the share reserve for such year will be a lesser number of Class B Common
Shares than provided herein.
(c) Notwithstanding
anything herein to the contrary, the maximum number of Shares subject to Awards granted during any fiscal year to any Non-Employee
Director, taken together with any cash fees paid to such Non-Employee Director during the fiscal year with respect to such Director’s
service as a Non-Employee Director, shall not exceed $750,000 (calculating the value of any such Awards based on the grant date
Fair Market Value of such Awards for financial reporting purposes).
(d) Shares
issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or otherwise. Any shares of Class A Common Stock
subject to an Award under the Plan that, after the Effective Date, are forfeited, canceled, settled or otherwise terminated
without a distribution of Shares to a Participant will thereafter be deemed to be available for Awards, and any shares of
Class B Common Stock subject to an Award under the Plan that, after the Effective Date, are forfeited, canceled, settled or
otherwise terminated without a
distribution of Shares to a Participant will thereafter be deemed to be available for Awards with respect to shares of Class A
Common Stock. In applying the immediately preceding sentence, if (i) Shares otherwise issuable or issued in respect of, or as
part of, any Award are withheld to cover taxes or any applicable Exercise Price, such Shares shall be treated as having been issued
under the Plan and shall not be available for issuance under the Plan, and (ii) any Share-settled Stock Appreciation Rights or
Options are exercised, the aggregate number of Shares subject to such Stock Appreciation Rights or Options shall be deemed issued
under the Plan and shall not be available for issuance under the Plan. In addition, Shares (x) tendered to exercise outstanding
Options or other Awards, (y) withheld to cover applicable taxes on any Awards or (z) repurchased on the open market using Exercise
Price proceeds shall not be available for issuance under the Plan. For the avoidance of doubt, (A) Shares underlying Awards that
are subject to the achievement of performance goals shall be counted against the Share reserve based on the target value of such
Awards unless and until such time as such Awards become vested and settled in Shares, and (B) Awards that, pursuant to their terms,
may be settled only in cash shall not count against the Share reserve set forth in Section 4(a).
(e) Substitute
Awards shall not reduce the Shares authorized for grant under the Plan. In the event that a company acquired by the Company or
any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders
and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities
party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for
grant under the Plan; provided, that Awards using such available Shares shall not be made after the date awards or grants
could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to
individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition
or combination.
(f) In
the event that the Company or an Affiliate thereof consummates a transaction described in Code Section 424(a) (e.g., the acquisition
of property or stock from an unrelated corporation), persons who become Employees or Directors in account of such transaction
may be granted Substitute Awards in substitution for awards granted by their former employer, and any such substitute Options
or Stock Appreciation Rights may be granted with an Exercise Price less than the Fair Market Value of a Share on the grant date
thereof; provided, however, the grant of such substitute Option or Stock Appreciation Right shall not constitute a “modification”
as defined in Code Section 424(h)(3) and the applicable Treasury regulations.
Section
5. Equitable Adjustments.
In
the event of any Change in Capitalization, including, without limitation, a Change in Control, an equitable substitution or proportionate
adjustment shall be made, in each case, as may be determined by the Administrator, in its sole discretion, in (a) the aggregate
number of Shares reserved for issuance under the Plan, (b) the kind, number and Exercise Price subject to outstanding Options
and Stock Appreciation Rights granted under the Plan; provided, however, that any such substitution or adjustment
with respect to Options and Stock Appreciation Rights shall occur in accordance with the requirements of Code Section 409A, and
(c) the kind, number and purchase price of Shares subject to outstanding Restricted Shares or Other Share-Based Awards granted
under the Plan, in each case as may be determined by the Administrator, in its sole discretion; provided, however,
that any fractional Shares resulting from the adjustment shall be eliminated. Such other equitable substitutions or adjustments
shall be made as may be determined by the Administrator, in its sole discretion. Without limiting the generality of the foregoing,
in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of
any outstanding Award granted hereunder (i) in exchange for payment in cash or other property having an aggregate Fair Market
Value of the Shares covered by such Award, reduced by the aggregate Exercise Price or purchase price thereof, if any, and (ii)
with respect to any Awards for which the Exercise Price or purchase price per share of Common Stock is greater than or equal to
the then current Fair Market Value per share of Common Stock, for no consideration. Notwithstanding anything contained in the
Plan to the contrary, any adjustment with respect to an Incentive Stock Option due to an adjustment or substitution described
in this Section 5 shall comply with the rules of Code Section 424(a), and in no event shall any adjustment be made which would
render any Incentive Stock Option granted hereunder to be disqualified as an incentive stock option for purposes of Code Section
422. The Administrator’s determinations pursuant to this Section 5 shall be final, binding and conclusive.
Section
6. Eligibility.
The
Participants under the Plan shall be selected from time to time by the Administrator, in its sole discretion, from among Eligible
Recipients.
Section
7. Options.
(a) General.
The Administrator may, in its sole discretion, grant Options to Participants. Solely with respect to Participants who are Employees,
the Administrator may grant Incentive Stock Options, Nonqualified Stock Options or a combination of both. With respect to all
other Participants, the Administrator may grant only Nonqualified Stock Options. Each Participant who is granted an Option shall
enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in
its sole discretion, which Award Agreement shall specify whether the Option is an Incentive Stock Option or a Nonqualified Stock
Option and shall set forth, among other things, the Exercise Price of the Option, the term of the Option and
provisions regarding exercisability of the Option granted thereunder. The provisions of each Option need not be the same with
respect to each Participant. More than one Option may be granted to the same Participant and be outstanding concurrently
hereunder. Options granted under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall
contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem
desirable and set forth in the applicable Award Agreement. The prospective recipient of an Option shall not have any rights
with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the
Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of
sixty (60) days (or such other period as the Administrator may specify) after the award date.
(b) Limits
on Incentive Stock Options. If the Administrator grants Incentive Stock Options, then to the extent that the aggregate fair
market value of Shares with respect to which Incentive Stock Options are exercisable for the first time by any individual during
any calendar year (under all plans of the Company) exceeds $100,000, such Options will be treated as Nonqualified Stock Options
to the extent required by Code Section 422. Subject to Section 5, the maximum number of shares that may be issued pursuant to
Options intended to be Incentive Stock Options is 39,669,278 Shares and, for the avoidance of doubt, such share limit shall not
be subject to the annual adjustment provided in Section 4(b).
(c) Exercise
Price. The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion
at the time of grant; provided, however, that (i) in no event shall the Exercise Price of an Option be less than
one hundred percent (100%) of the Fair Market Value of a Share on the date of grant, and (ii) no Incentive Stock Option granted
to a ten percent (10%) stockholder of the Company (within the meaning of Code Section 422(b)(6)) shall have an Exercise Price
per Share less than one-hundred ten percent (110%) of the Fair Market Value of a Share on such date.
(d) Option
Term. The maximum term of each Option shall be fixed by the Administrator, but in no event shall (i) an Option be exercisable
more than ten (10) years after the date such Option is granted, and (ii) an Incentive Stock Option granted to a ten percent
(10%) stockholder of the Company (within the meaning of Code Section 422(b)(6)) be exercisable more than five (5) years after
the date such Option is granted. Each Option’s term is subject to earlier expiration pursuant to the applicable provisions
in the Plan and the Award Agreement. Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the
exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole discretion,
deems appropriate. Notwithstanding any contrary provision in this Plan (including, without limitation, Section 7(h)), if, on the
date an outstanding Option would expire, the exercise of the Option, including by a “net exercise” or “cashless”
exercise, would violate applicable securities laws or any insider trading policy maintained by the Company from time to time,
the expiration date applicable to the Option will be extended, except to the extent such extension would violate Code Section
409A, to a date that is thirty (30) calendar days after the date the exercise of the Option would no longer violate applicable
securities laws or any such insider trading policy.
(e) Exercisability.
Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of pre-established
Performance Goals, as shall be determined by the Administrator in the applicable Award Agreement. The Administrator may also provide
that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions
at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion. Notwithstanding
anything to the contrary contained herein, an Option may not be exercised for a fraction of a share.
(f) Method
of Exercise. Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the
number of Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in
cash or its equivalent, as determined by the Administrator. As determined by the Administrator, in its sole discretion, with respect
to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under
any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise),
(ii) in the form of unrestricted Shares already owned by the Participant which have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the Shares as to which such Option shall be exercised, (iii) any other form of consideration
approved by the Administrator and permitted by applicable law, or (iv) any combination of the foregoing. In determining which
methods a Participant may utilize to pay the Exercise Price, the Administrator may consider such factors as it determines are
appropriate; provided, however, that with respect to Incentive Stock Options, all such discretionary determinations
shall be made by the Administrator at the time of grant and specified in the Award Agreement.
(g) Rights
as Stockholder. A Participant shall have no rights to dividends or any other rights of a stockholder with respect to the Shares
subject to an Option until the Participant has given written notice of the exercise thereof, has paid in full for such Shares
and has satisfied the requirements of Section 16 of the Plan.
(h) Termination
of Employment or Service. Unless the applicable Award Agreement provides otherwise, in the event that the employment or service
of a Participant with the Company and all Affiliates thereof shall terminate, the following terms and conditions shall apply:
(i) In
the event of the termination of a Participant’s employment or service by the Company without Cause or due to a resignation
by the Participant for any reason, (A) Options granted to such Participant, to the extent that they are exercisable at the time
of such termination, shall remain exercisable until the date that is ninety (90) days after
such
termination (with such period being extended to one (1) year after the date of such termination in the event of the Participant’s
death during such ninety (90) day period), on which date they shall expire, and (B) Options granted to such Participant, to the
extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date
of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.
(ii) In the event of the termination of a Participant’s employment or service as a result of the Participant’s Disability
or death, (A) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall
remain exercisable until the date that is one (1) year after such termination, on which date they shall expire, and (B) Options
granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the
close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration
of its term.
(iii) In
the event of the termination of a Participant’s employment or service for Cause, all outstanding Options granted to such
Participant shall expire at the commencement of business on the date of such termination.
(iv) For
purposes of determining which Options are exercisable upon termination of employment or service for purposes of this Section 7(h),
Options that are not exercisable solely due to a blackout period shall be considered exercisable.
(v) Notwithstanding
anything herein to the contrary, an Incentive Stock Option may not be exercised more than three (3) months following the date
as of which a Participant ceases to be an Employee for any reason other than death or Disability. In the event that an Option
is exercisable following the date that is three (3) months following the date as of which a Participant ceases to be an Employee
for any reason other than death or Disability, such Option shall be deemed to be a Nonqualified Stock Option.
(i) Other
Change in Employment Status. An Option may be affected, both with regard to vesting schedule and termination, by leaves of
absence, changes from full-time to part-time employment, partial disability or other changes in the employment status or service
of a Participant, as evidenced in a Participant’s Award Agreement.
(j) Change
in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Options shall be subject
to Section 12 of the Plan.
(k) Automatic
Exercise. Unless otherwise provided by the Administrator in an Award Agreement or otherwise, or as otherwise directed by the
Participant in writing to the Company, each vested and exercisable Option outstanding on the Automatic Exercise Date with an Exercise
Price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action
by the Participant or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Administrator, payment
of the exercise price of any such Option shall be made pursuant to Section 7(f)(i) or (ii), and the Company or any Affiliate shall
deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 16. Unless
otherwise determined by the Administrator, this Section 7(k) shall not apply to an Option if the Participant’s employment
or service has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Option with an Exercise Price
per Share that is equal to or greater the Fair Market Value per Share on the Automatic Exercise Date shall be exercised pursuant
to this Section 7(k).
Section
8. Stock Appreciation Rights.
(a) General.
Stock Appreciation Rights may be granted either alone (“Free Standing Rights”) or in conjunction with all or
part of any Option granted under the Plan (“Related Rights”). Any Related Right that relates to a Nonqualified
Stock Option may be granted at the same time the Option is granted or at any time thereafter, but before the exercise or expiration
of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock
Option is granted. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of
Stock Appreciation Rights shall be made, the number of Shares to be awarded, the price per Share, and all other conditions of
Stock Appreciation Rights. Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to
the Option to which it relates and any Stock Appreciation Right must be granted with an Exercise Price not less than the Fair
Market Value of a Share on the date of grant. The provisions of Stock Appreciation Rights need not be the same with respect to
each Participant. Stock Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set
forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as
the Administrator shall deem desirable, as set forth in the applicable Award Agreement.
(b) Awards;
Rights as Stockholder. The prospective recipient of a Stock Appreciation Right shall not have any rights with respect to such
Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement,
executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period
as the Administrator may specify) after the award date. Participants who are granted Stock Appreciation Rights shall have no rights
as stockholders of the Company with respect to the grant or exercise of such rights.
(c) Exercisability.
(i) Stock
Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Administrator in the applicable Award Agreement.
(ii) Stock
Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options
to which they relate shall be exercisable in accordance with the provisions of Section 7 above and this Section 8 of the Plan.
(d) Payment
Upon Exercise.
(i) Upon
the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares,
determined using the Fair Market Value, equal in value to the excess of the Fair Market Value as of the date of exercise over
the price per share specified in the Free Standing Right multiplied by the number of Shares in respect of which the Free Standing
Right is being exercised.
(ii) A
Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option. Upon such exercise
and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares, determined using
the Fair Market Value, equal in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price
specified in the related Option multiplied by the number of Shares in respect of which the Related Right is being exercised. Options
which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been
so exercised.
(iii) Notwithstanding
the foregoing, the Administrator may determine to settle the exercise of a Stock Appreciation Right in cash (or in any combination
of Shares and cash).
(e) Termination
of Employment or Service.
(i) Subject
to Section 8(f), in the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant
who has been granted one or more Free Standing Rights, such rights shall be exercisable at such time or times and subject to such
terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.
(ii) Subject
to Section 8(f), in the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant
who has been granted one or more Related Rights, such rights shall be exercisable at such time or times and subject to such terms
and conditions as set forth in the related Options.
(f) Term.
(i) The
term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than
ten (10) years after the date such right is granted.
(ii) The
term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more
than ten (10) years after the date such right is granted.
(g) Change
in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Stock Appreciation
Rights shall be subject to Section 12 of the Plan.
(h) Automatic
Exercise. Unless otherwise provided by the Administrator in an Award Agreement or otherwise, or as otherwise directed by the
Participant in writing to the Company, each vested and exercisable Stock Appreciation Right outstanding on the Automatic Exercise
Date with an Exercise Price per Share that is less than the Fair Market Value per Share as of such date shall automatically and
without further action by the Participant or the Company be exercised on the Automatic Exercise Date. The Company or any Affiliate
shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 16.
Unless otherwise determined by the Administrator, this Section 8(h) shall not apply to a Stock Appreciation Right if the Participant’s
employment or service has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Stock Appreciation
Right with an Exercise Price per Share that is equal to or greater the Fair Market Value per Share on the Automatic Exercise Date
shall be exercised pursuant to this Section 8(h).
Section
9. Restricted Shares.
(a) General.
Each Award of Restricted Shares granted under the Plan shall be evidenced by an Award Agreement. Restricted Shares may be issued
either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients
to whom, and the time or times at which, grants of Restricted Shares shall be made; the number of Shares to be
awarded;
the price, if any, to be paid by the Participant for the acquisition of Restricted Shares; the Restricted Period, if any, applicable
to Restricted Shares; the Performance Goals (if any) applicable to Restricted Shares; and all other conditions of the Restricted
Shares. If the restrictions, Performance Goals and/or conditions established by the Administrator are not attained, a Participant
shall forfeit his or her Restricted Shares in accordance with the terms of the grant. The terms and conditions applicable to the
Restricted Shares need not be the same with respect to each Participant.
(b) Awards
and Certificates. The prospective recipient of Restricted Shares shall not have any rights with respect to any such Award,
unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement,
executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period
as the Administrator may specify) after the award date. Except as otherwise provided in herein, (i) each Participant who is granted
an Award of Restricted Shares may, in the Company’s sole discretion, be issued a stock certificate in respect of such Restricted
Shares; and (ii) any such certificate so issued shall be registered in the name of the Participant, and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to any such Award. The Company may require that the stock
certificates, if any, evidencing Restricted Shares granted hereunder be held in the custody of the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any award of Restricted Shares, the Participant shall have delivered a
stock power, endorsed in blank, relating to the Shares covered by such Award. Notwithstanding anything in the Plan to the contrary,
any Restricted Shares (whether before or after any vesting conditions have been satisfied) may, in the Company’s sole discretion,
be issued in uncertificated form pursuant to the customary arrangements for issuing shares in such form.
(c) Restrictions
and Conditions. The Restricted Shares granted pursuant to this Section 9 shall be subject to the following restrictions and
conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or thereafter:
(i) The
Restricted Shares shall be subject to the restrictions on transferability set forth in the Award Agreement and in the Plan.
(ii) The
Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole
discretion, including, but not limited to, the attainment of certain Performance Goals, the Participant’s termination of
employment or service as Non-Employee Director or Consultant of the Company or an Affiliate thereof, or the Participant’s
death or Disability.
(iii) Subject
to this Section 9(c)(ii), the Participant shall generally have the rights of a stockholder of the Company with respect to Restricted
Shares during the Restricted Period. In the Administrator’s discretion and as provided in the applicable Award Agreement,
a Participant may be entitled to dividends or dividend equivalents on an Award of Restricted Shares, which will be payable in
accordance with the terms of such grant as determined by the Administrator in accordance with Section 18 of the Plan. Certificates
for unrestricted Shares may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted
Period has expired without forfeiture in respect of such Restricted Shares, except as the Administrator, in its sole discretion,
shall otherwise determine.
(iv) The
rights of Participants granted Restricted Shares upon termination of employment or service as a Non-Employee Director or Consultant
of the Company or an Affiliate thereof terminates for any reason during the Restricted Period shall be set forth in the Award
Agreement.
(d) Change
in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Restricted Shares shall
be subject to Section 12 of the Plan.
Section
10. Restricted Stock Units.
(a) General.
Restricted Stock Units may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall
determine the Eligible Recipients to whom, and the time or times at which, grants of Restricted Stock Units shall be made; the
number of Restricted Stock Units to be awarded; the Restricted Period, if any, applicable to Restricted Stock Units; the Performance
Goals (if any) applicable to Restricted Stock Units; and all other conditions of the Restricted Stock Units. If the restrictions,
Performance Goals and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her
Restricted Stock Units in accordance with the terms of the grant. The provisions of Restricted Stock Units need not be the same
with respect to each Participant.
(b) Award
Agreement. The prospective recipient of Restricted Stock Units shall not have any rights with respect to any such Award, unless
and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed
and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the
Administrator may specify) after the award date.
(c) Restrictions
and Conditions. The Restricted Stock Units granted pursuant to this Section 10 shall be subject to the following restrictions
and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject
to Code Section 409A, thereafter:
(i) The
Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole
discretion, including, but not limited to, the attainment of certain Performance Goals, the Participant’s termination of
employment or service as a Non-Employee Director or Consultant of the Company or an Affiliate thereof, or the Participant’s
death or Disability.
(ii) Participants
holding Restricted Stock Units shall have no voting rights. A Restricted Stock Unit may, at the Administrator’s discretion,
carry with it a right to dividend equivalents, subject to Section 18 of the Plan. Such right would entitle the holder to be credited
with an amount equal to all cash dividends paid on one Share while the Restricted Stock Unit is outstanding. The Administrator,
in its discretion, may grant dividend equivalents from the date of grant or only after a Restricted Stock Unit is vested.
(iii) The
rights of Participants granted Restricted Stock Units upon termination of employment or service as a Non-Employee Director or
Consultant of the Company or an Affiliate thereof terminates for any reason during the Restricted Period shall be set forth in
the Award Agreement.
(d) Settlement
of Restricted Stock Units. Settlement of vested Restricted Stock Units shall be made to Participants in the form of Shares,
unless the Administrator, in its sole discretion, provides for the payment of the Restricted Stock Units in cash (or partly in
cash and partly in Shares) equal to the value of the Shares that would otherwise be distributed to the Participant.
(e) Change
in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Restricted Stock Units
shall be subject to Section 12 of the Plan.
Section
11. Other Share-Based or Cash-Based Awards.
(a) The
Administrator is authorized to grant Awards to Participants in the form of Other Share-Based Awards or Other Cash-Based Awards,
as deemed by the Administrator to be consistent with the purposes of the Plan and as evidenced by an Award Agreement. The Administrator
shall determine the terms and conditions of such Awards, consistent with the terms of the Plan, at the date of grant or thereafter,
including any Performance Goals and performance periods. Shares or other securities or property delivered pursuant to an Award
in the nature of a purchase right granted under this Section 11 shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, Shares, other Awards, notes or other property, as the Administrator
shall determine, subject to any required corporate action.
(b) The
prospective recipient of an Other Share-Based Award or Other Cash-Based Award shall not have any rights with respect to such Award,
unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement,
executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period
as the Administrator may specify) after the award date.
(c) Notwithstanding
anything herein to the contrary, upon a Change in Control, all outstanding Other Share-Based Awards and Other Cash-Based Awards
shall be subject to Section 12 of the Plan.
Section
12. Change in Control.
The
Administrator may provide in the applicable Award Agreement that an Award will vest on an accelerated basis upon the Participant’s
termination of employment or service in connection with a Change in Control or upon the occurrence of any other event that the
Administrator may set forth in the Award Agreement. If the Company is a party to an agreement that is reasonably likely to result
in a Change in Control, such agreement may provide for: (i) the continuation of any Award by the Company, if the Company is the
surviving corporation; (ii) the assumption of any Award by the surviving corporation or its parent or subsidiary; (iii) the substitution
by the surviving corporation or its parent or subsidiary of equivalent awards for any Award, provided, however, that any
such substitution with respect to Options and Stock Appreciation Rights shall occur in accordance with the requirements of Code
Section 409A; or (iv) settlement of any Award for the Change in Control Price (less, to the extent applicable, the per share exercise
or grant price), or, if the per share exercise or grant price equals or exceeds the Change in Control Price or if the Administrator
determines that Award cannot reasonably become vested pursuant to its terms, such Award shall terminate and be canceled without
consideration. To the extent that Restricted Shares, Restricted Stock Units or other Awards settle in Shares in accordance with
their terms upon a Change in Control, such Shares shall be entitled to receive as a result of the Change in Control transaction
the same consideration as the Shares held by stockholders of the Company as a result of the Change in Control transaction. For
purposes of this Section 12, “Change in Control Price” shall mean (A) the price per Share paid to stockholders
of the Company in the Change in Control transaction, or (B) the Fair Market Value of a Share upon a Change in Control, as determined
by the Administrator. To the extent that the consideration paid in any such Change in Control transaction consists all or in part
of securities or other non-cash consideration, the value of such securities or other non-cash consideration shall be determined
in good faith by the Administrator.
Section
13. Amendment and Termination.
(a) The
Board or the Committee may amend, alter or terminate the Plan, but no amendment, alteration, or termination shall be made that
would adversely alter or impair the rights of a Participant under any Award theretofore granted without such Participant’s
prior written consent.
(b) Notwithstanding
the foregoing, (i) approval of the Company’s stockholders shall be obtained for any amendment that would require such approval
in order to satisfy the requirements of Code Section 422, if applicable, any rules of the stock exchange on which the Shares are
traded or other applicable law, and (ii) without stockholder approval to the extent required by the rules of any applicable national
securities exchange or inter-dealer quotation system on which the Shares are listed or quoted, except as otherwise permitted under
Section 5 of the Plan, (A) no amendment or modification may reduce the Exercise Price of any Option or Stock Appreciation Right,
(B) the Administrator may not cancel any outstanding Option or Stock Appreciation Right and replace it with a new Option or Stock
Appreciation Right, another Award or cash and (C) the Administrator may not take any other action that is considered a “repricing”
for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system.
(c) Subject
to the terms and conditions of the Plan and Code Section 409A, the Administrator may modify, extend or renew outstanding Awards
under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution
of them (to the extent not already exercised).
(d) Notwithstanding
the foregoing, no alteration, modification or termination of an Award will, without the prior written consent of the Participant,
adversely alter or impair any rights or obligations under any Award already granted under the Plan.
Section
14. Unfunded Status of Plan.
The
Plan is intended to constitute an “unfunded” plan for incentive compensation. Neither the Company, the Board nor the
Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of
its obligations under the Plan. With respect to any payments not yet made or Shares not yet transferred to a Participant by the
Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general unsecured
creditor of the Company.
Section
15. Deferrals of Payment.
To
the extent permitted by applicable law, the Administrator, in its sole discretion, may determine that the delivery of Shares or
the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award, shall be deferred. The Administrator
may also, in its sole discretion, establish one or more programs under the Plan to permit selected Participants the opportunity
to elect to defer receipt of any such consideration, including any applicable election procedures, the timing of such elections,
the mechanisms for payments of amounts, shares or other consideration so deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the administration of any such deferral program. Deferrals by Participants
(or deferred settlement or payment required by the Administrator) shall be made in accordance with Code Section 409A, if
applicable, and any other applicable law.
Section
16. Withholding Taxes.
Each
Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such
Participant for federal, state and/or local income tax purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any federal, state, or local taxes of any kind, domestic or foreign, required by law or regulation
to be withheld with respect to the Award. The obligations of the Company under the Plan shall be conditional on the making of
such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to such Participant. Whenever cash is to be paid pursuant to an Award granted hereunder,
the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding
tax requirements related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to
require the Participant to remit to the Company in cash an amount sufficient to satisfy any related federal, state and local taxes,
domestic or foreign, to be withheld and applied to the tax obligations. With the approval of the Administrator, a Participant
may satisfy the foregoing requirement by electing to have the Company withhold from delivery of Shares or by delivering already
owned unrestricted Shares, in each case, having a value equal to the amount required to be withheld or other greater amount not
exceeding the maximum statutory rate required to be collected on the transaction under applicable law, as applicable to the Participant,
if such other greater amount would not, as determined by the Administrator, result in adverse financial accounting treatment (including
in connection with the effectiveness of FASB Accounting Standards Update 2016-09). Such Shares shall be valued at their Fair Market
Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash.
Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an Award. The Company
may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding
obligation with respect to any Option or other Award.
Section
17. Certain Forfeitures.
The
Administrator may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an
Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition
to the applicable vesting conditions of an Award. Such events may include, without limitation, breach of any non-competition,
non-solicitation, confidentiality, or other restrictive covenants that are contained in an Award Agreement or that are otherwise
applicable to the Participant, a termination of the Participant’s employment for Cause, or other conduct by the Participant
that is detrimental to the business or reputation of the Company and its Subsidiaries and/or its Affiliates.
Section
18. Dividends; Dividend Equivalents.
Notwithstanding
anything in this Plan to the contrary, to the extent that an Award contains a right to receive dividends or dividend equivalents
while such Award remains unvested, such dividends or dividend equivalents will be accumulated and paid once and to the extent
that the underlying Award vests.
Section
19. Non-United States Employees.
Without
amending the Plan, the Administrator may grant Awards to eligible persons residing in non-United States jurisdictions on such
terms and conditions different from those specified in the Plan, including the terms of any award agreement or plan, adopted by
the Company or any Subsidiary thereof to comply with, or take advantage of favorable tax or other treatment available under, the
laws of any non-United States jurisdiction, as may in the judgment of the Administrator be necessary or desirable to foster and
promote achievement of the purposes of the Plan and, in furtherance of such purposes the Administrator may make such modifications,
amendments, procedures, sub-plans and the like as may be necessary or advisable to comply with provisions of laws in other countries
or jurisdictions in which the Company or its Subsidiaries operates or has employees.
Section
20. Transfer of Awards.
No
purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or
other) or other disposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to
do any of the foregoing (each, a “Transfer”) by any holder thereof in violation of the provisions of the Plan
or an Award Agreement will be valid, except with the prior written consent of the Administrator, which consent may be granted
or withheld in the sole discretion of the Administrator, and other than by will or by the laws of descent and distribution. Any
purported Transfer of an Award or any economic benefit or interest therein in violation of the Plan or an Award Agreement shall
be null and void ab initio, and shall not create any obligation or liability of the Company, and any person purportedly
acquiring any Award or any economic benefit or interest therein transferred in violation of the Plan or an Award Agreement shall
not be entitled to be recognized as a holder of such Shares. Unless otherwise determined by the Administrator in accordance with
the provisions of the immediately preceding sentence, an Option may be exercised, during the lifetime of the Participant, only
by the Participant or, during any period during which the Participant is under a legal disability, by the Participant’s
guardian or legal representative. Under no circumstances will a Participant be permitted to transfer an Option or Stock Appreciation
Right to a third-party financial institution without prior stockholder approval.
Section
21. Continued Employment.
The
adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with the Company
or an Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or an Affiliate thereof
to terminate the employment or service of any of its Eligible Recipients at any time.
Section
22. Effective Date.
The
Plan will be effective as of the date of consummation of the transactions contemplated by that certain agreement and plan of merger,
dated as of September 1, 2020, by and among Flying Eagle Acquisition Corp., a Delaware corporation, FEAC Merger Sub Inc., a Delaware
corporation, Skillz Inc., a Delaware corporation, and Andrew Paradise, solely in his capacity as the stockholder representative,
subject to approval by the Company’s stockholders (the “Effective Date”). The Plan will be unlimited
in duration and, in the event of Plan termination, will remain in effect as long as any Shares awarded under it are outstanding
and not fully vested; provided, however, that no Awards will be made under the Plan on or after the tenth anniversary of
the Effective Date.
Section
23. Code Section 409A.
The
intent of the parties is that payments and benefits under the Plan be either exempt from Code Section 409A or comply with Code
Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted
and be administered consistent with such intent. Any payments described in the Plan that are due within the “short-term
deferral period” as defined in Code Section 409A shall not be treated as deferred compensation unless applicable law
requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required in order to avoid accelerated
taxation and/or tax penalties under Code Section 409A, amounts that would otherwise be payable and benefits that would otherwise
be provided upon a “separation from service” to a Participant who is a “specified employee” shall be paid
on the first business day after the date that is six (6) months
following
the Participant’s separation from service (or upon the Participant’s death, if earlier). In addition, for purposes
of the Plan, each amount to be paid or benefit to be provided to the Participant pursuant to the Plan, which constitute deferred
compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A.
Nothing contained in the Plan or an Award Agreement shall be construed as a guarantee of any particular tax effect with respect
to an Award. The Company does not guarantee that any Awards provided under the Plan will be exempt from or in compliance with
the provisions of Code Section 409A, and in no event will the Company be liable for any or all portion of any taxes, penalties,
interest or other expenses that may be incurred by a Participant on account of any Award being subject to, but not in compliance
with, Code Section 409A.
Section
24. Compliance with Laws.
(a) The
obligation of the Company to settle Awards in Shares or other consideration shall be subject to (i) all applicable laws, rules,
and regulations, (ii) such approvals as may be required by governmental agencies or the applicable national securities exchange
on which the Shares may be admitted, and (iii) policies maintained by the Company from time to time in order to comply with applicable
laws, rules, regulations and corporate governance requirements, including, without limitation, with respect to insider trading
restrictions. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to
offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Shares pursuant to an Award unless such
shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless
the Company has received an opinion of counsel (if the Company has requested such an opinion), satisfactory to the Company, that
such Shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions
of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities
Act any of the Shares to be offered or sold under the Plan. The Administrator shall have the authority to provide that all Shares
or other securities of the Company issued under the Plan shall be subject to such stop transfer orders and other restrictions
as the Committee may deem advisable under the Plan, the applicable Award Agreement, the federal securities laws, or the rules,
regulations and other requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer quotation
system on which the securities of the Company are listed or quoted and any other applicable federal, state, local or non-U.S.
laws, rules, regulations and other requirements, and the Administrator may cause a legend or legends to be put on certificates
representing Shares or other securities of the Company issued under the Plan to make appropriate reference to such restrictions
or may cause such Shares or other securities of the Company issued under the Plan in book-entry form to be held subject to the
Company’s instructions or subject to appropriate stop-transfer orders. Notwithstanding any provision in the Plan to the
contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that
it, in its sole discretion, deems necessary or advisable in order that such Award complies with the legal requirements of any
governmental entity to whose jurisdiction the Award is subject.
(b) The
Administrator may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions
and/or blockage and/or other market considerations would make the Company’s acquisition of Shares from the public markets,
the Company’s issuance of Shares to the Participant, the Participant’s acquisition of Shares from the Company and/or
the Participant’s sale of Shares to the public markets, illegal, impracticable or inadvisable. If the Administrator determines
to cancel all or any portion of an Award in accordance with the foregoing, the Company shall, subject to any limitations or reductions
as may be necessary to comply with Code Section 409A, (i) pay to the Participant an amount equal to the excess of (A) the aggregate
Fair Market Value of the Shares subject to such Award or portion thereof canceled (determined as of the applicable exercise date,
or the date that the Shares would have been vested or issued, as applicable), over (B) the aggregate Exercise Price (in the case
of an Option or Stock Appreciation Right) or any amount payable as a condition of issuance of Shares (in the case of any other
Award), and such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award
or portion thereof, or (ii) in the case of Restricted Shares, Restricted Stock Units or Other Share-Based Awards, provide the
Participant with a cash payment or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable
to such Restricted Shares, Restricted Stock Units or Other Share-Based Awards, or the underlying Shares in respect thereof.
Section
25. Erroneously Awarded Compensation.
The
Plan and all Awards issued hereunder shall be subject to any compensation recovery and/or recoupment policy adopted by the Company
to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or
to comport with good corporate governance practices, as such policies may be amended from time to time.
Section
26. Governing Law.
The
Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles
of conflicts of law of such state.
Section
27. Plan Document Controls.
The
Plan and each Award Agreement together constitute the entire agreement with respect to the subject matter hereof and thereof;
provided, that in the event of any inconsistency between the Plan and such Award Agreement, the terms and conditions of
the Plan shall control.