Item
5.02.
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Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain
Officers.
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On April 15, 2016, the Board of
Directors (the Board) of Yelp Inc. (the Company) appointed Charles Lanny
Baker as the Companys Chief Financial Officer, effective as of May 9, 2016. Mr.
Bakers employment with the Company commenced on April 18, 2016 and he will
serve as an advisor to the Company until his effective start date as Chief
Financial Officer. Rob Krolik will continue as the Companys Chief Financial
Officer through May 8, 2016, after which date he will remain employed by the
Company in an advisory capacity, as previously disclosed, through the earlier of
(a) the date he begins providing similar executive management services to
another company or (b) December 15, 2016.
Mr. Baker, 49, previously served as
chief executive officer and president of ZipRealty, Inc., an online real estate
brokerage and technology company, from September 2010 through March 2016. He
also served as executive vice president and chief financial officer of ZipRealty
from December 2008 to September 2010. ZipRealty was acquired by Realogy
Holdings, Inc. in August 2014. From June 2007 to December 2008, Mr. Baker was an
independent investor. From March 2005 to June 2007, he served as senior vice
president and chief financial officer of Monster Worldwide, Inc., which operates
the employment website monster.com. From 1993 to 2005, Mr. Baker held various
positions at Salomon Brothers (subsequently Salomon Smith Barney, then
Citigroup), including managing director in the Equity Research Department. Mr.
Baker currently serves on the board of XO Group, Inc., a life stage consumer
Internet and media company, where he chairs the Audit and Nominating and
Corporate Governance Committees. He also served as a director and chairman of
the Audit Committee of HomeAway, Inc., an online vacation rental company, from
2011 to December 2015, when it was acquired by Expedia, Inc. Mr. Baker holds a
B.A. from Yale College and holds the designation of Chartered Financial Analyst.
There are no arrangements or
understandings between Mr. Baker and any other persons pursuant to which he was
selected as Chief Financial Officer. There are no family relationships between
Mr. Baker and any director or executive officer of the Company and he has no
direct or indirect material interest in any transaction required to be disclosed
pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Act
of 1933, as amended.
On April 15, 2016, the Company entered
into an employment offer letter (the Offer Letter) with Mr. Baker establishing
his compensation, as follows:
Base
Salary.
Mr. Bakers annual base salary will
be $325,000.
Equity Compensation.
The Board granted Mr. Baker a restricted
stock unit award covering 129,038 shares of the Companys Class A common stock
(the RSUs), which vest over four years, with 25% of the RSUs vesting on May
20, 2017 and the remainder vesting ratably on a quarterly basis over the
following three years. The Board also granted Mr. Baker an option to purchase
281,150 shares of the Companys Class A common stock (the Option, and together
with the RSUs, the Equity Awards), which vests over four years, with 25%
of the shares subject to the Option vesting after his first year of employment,
and the remainder vesting ratably on a monthly basis over the following three
years.
The Board granted the Equity Awards
pursuant to, and in accordance with the terms and conditions of, the Companys
2012 Equity Incentive Plan, as amended (the Plan), the forms of RSU Agreement
and Grant Notice (together, the RSU Agreement) and the forms of Option
Agreement and Grant Notice (together, the Option Agreement) previously filed
with the U.S. Securities and Exchange Commission (the SEC). The grant date of
the Equity Awards will be May 1, 2016, and the exercise price of the Option will
be the closing price of the Companys Class A common stock as reported on the
New York Stock Exchange on that date, representing the fair market value of the
Companys Class A common stock on the date of grant as determined under the
terms of the Plan.
Severance
Arrangements.
Mr. Baker will be eligible to
participate in the Companys Executive Severance Benefits Plan, established
effective January 6, 2012 (the Severance Plan), previously filed with the SEC.
Under the Severance Plan, if Mr. Baker suffers an involuntary termination
without cause or a constructive termination (each as defined in the Severance
Plan), and provided that he signs a release of claims and complies with
continuing obligations of confidentiality, he will be eligible to receive (i) a
lump sum cash payment equal to one year of his then-current base salary, (ii) a
lump sum bonus payment equal to the actual cash bonus amount he would have
earned for the year in which the termination occurred, if any, based on the
Companys actual performance and (iii) six months of Company-paid health
insurance coverage. In the event he suffers an involuntary termination without
cause or a constructive termination in the same year as a change in control, the
lump sum bonus payment will be equal to the cash bonus amount he would have
earned if the Company had achieved all of the goals under the bonus plan in the
year in which the termination occurred. In addition, if he experiences an
involuntary termination without cause or constructive termination on or within
12 months following a change in control, he will receive accelerated vesting of
50% of the number of unvested shares subject to his then-outstanding equity
awards.
The foregoing is only a
brief description of the Offer Letter, Equity Awards and Severance Plan, does
not purport to be complete and is qualified in its entirety by reference to the
Offer Letter, Plan, RSU Agreement, Option Agreement and Severance
Plan.