Item 1.02. Termination of a Material Definitive Agreement.
On February 3, 2020, in connection with entering into the Marcelo Letter
Agreement (as described in Item 5.02 below), the Transition Agreement, effective
as of August 6, 2019, by and between Care.com, Inc. (the "Company") and Sheila
Lirio Marcelo, the Company's President and Chief Executive Officer (the
"Transition Agreement"), was terminated. A summary of the material terms of the
Transition Agreement is disclosed in the Company's current report on Form 8-K
filed on August 6, 2019, which summary is qualified in its entirety by reference
to the full text of the Transition Agreement filed as Exhibits 10.1 thereto.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Directors; Compensatory Arrangements of Certain
Officers
Marcelo Letter Agreement
On February 3, 2020, the Company, Ms. Marcelo, and IAC/InterActiveCorp ("IAC")
entered into a letter agreement (the "Marcelo Letter Agreement") whereby, among
other things, Ms. Marcelo, the Company and IAC acknowledged and agreed that (i)
the Transition Agreement was terminated and of no continuing force or effect as
of February 3, 2020 and that Ms. Marcelo will have no rights under the
Transition Agreement; (ii) Ms. Marcelo's resignation as President and Chief
Executive Officer of the Company and termination of employment with the Company
will be effective as of the closing of the transactions contemplated by that
certain Agreement and Plan of Merger entered into by the Company, IAC and Buzz
Merger Sub Inc. ("Merger Sub"), pursuant to which IAC has made a tender offer
for all of the outstanding shares of the Company's common stock and Series A
Convertible Preferred Stock ( the "Tender Offer") immediately after which, upon
satisfaction of certain conditions of the Tender Offer, Merger Sub will merge
with and into the Company, with the Company surviving as a wholly-owned
subsidiary of IAC (the "Merger"); (iii) Ms. Marcelo's resignation and
termination will constitute a qualifying termination under Ms. Marcelo's
executive severance agreement with the Company, dated July 19, 2017 (the
"Marcelo Severance Agreement"), and, subject to Ms. Marcelo's execution and
non-revocation of a release of claims in favor of the Company and its
affiliates, Ms. Marcelo will be entitled to receive the severance payments and
benefits set forth in the Marcelo Severance Agreement (assuming a base salary of
$485,000 and a target annual bonus of $485,000 for purposes of calculating such
severance payments and benefits), payable in accordance with the schedule that
was provided under the Transition Agreement prior to its termination; and (iv)
the Company will pay the reasonable legal fees (not to exceed $25,000) of Ms.
Marcelo's counsel with respect to their help in preparing the Marcelo Letter
Agreement. The Marcelo Letter Agreement will be null and void if the closing of
the Merger does not occur.
The foregoing description of the Marcelo Letter Agreement does not purport to be
complete and is qualified in its entirety by reference to such agreement, which
is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Executive Severance Agreement with Michael Goss
On February 7, 2020, the Company entered into an executive severance agreement
with Michael Goss, the Company's acting Chief Financial Officer (the "Severance
Agreement"). Under the terms of the Severance Agreement, upon a qualifying
termination, Mr. Goss will be eligible to receive (a) continued payment of his
then-current base salary for a period of six months following the qualifying
termination, payable in accordance with the Company's ordinary payroll practices
and (b) payment of continued healthcare insurance premiums for a period of up to
six months. In addition, Mr. Goss will be entitled to receive accrued and
earned, but unpaid, remuneration due to him through the date of his qualifying
termination, including, without limitation, earned but unpaid salary, accrued
but unpaid time off, other amounts or benefits under the Company's employee
benefit plans, programs or arrangements and earned but unpaid annual bonus for
the year immediately prior to the qualifying termination (provided that, Mr.
Goss will not receive any cash bonus amount in respect of the 2019 performance
year).
The foregoing severance payments and benefits are subject to Mr. Goss's
continued compliance with restrictive covenants and his execution and
non-revocation of a general release of claims in favor of the Company and its
affiliates. Mr. Goss is subject to confidentiality, non-compete and non-solicit
covenants pursuant to which he has agreed to refrain from disclosing the
Company's proprietary information in perpetuity and from competing with the
Company or soliciting the Company's clients, customers or employees for a period
of 12 months following termination of his employment. The severance payments and
benefits for Mr. Goss are also subject to reduction to the extent necessary to
avoid application of Section 280G of the Internal Revenue Code if the reduction
results in his retaining a greater amount of benefits on an after-tax basis.
The foregoing description of the Severance Agreement does not purport to be
complete and is qualified in its entirety by reference to such agreement, which
is filed herewith as Exhibit 10.2 and incorporated herein by reference.
Retention Bonus Agreements with Certain Officers
On February 7, 2020, the Company entered into retention bonus agreements with
each of Mr. Goss and David Krupinski, the Company's Chief Technology, Safety and
Cybersecurity Officer. The retention bonus agreements provide for cash retention
bonus awards that vest and become payable 50% upon the closing of the Merger and
50% on the date that is six months following the closing of the Merger, in each
case, subject to Mr. Goss's or Mr. Krupinski's continued service with the
Company or one of its subsidiaries through the applicable vesting date;
provided, however, that such cash retention award will become fully vested and
payable upon the involuntary termination of Mr. Goss's or Mr. Krupinski's
employment, respectively, subject to his execution and non-revocation of a
release of claims in favor of the Company and its affiliates. The retention
bonus award amount for Mr. Goss is $114,000, and the retention bonus award
amount for Mr. Krupinski is $145,000.
The foregoing description of the retention bonus agreements does not purport to
be complete and is qualified in its entirety by reference to such agreements,
which are filed herewith as Exhibit 10.3 and Exhibit 10.4 and incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits
(d)
Exhibit Number Exhibit Title or Description
10.1 Letter Agreement, dated February 3, 2020, by and among the
Company, IAC/InterActiveCorp and Sheila Lirio Marcelo
(incorporated by reference to Exhibit (e)(13) to the Schedule
14D-9/A filed by the Company on February 3, 2020)
Executive Severance Agreement, dated as of February 7, 2020,
10.2 between the Company and Michael Goss
Retention Bonus Agreement, dated as of February 7, 2020,
10.3 between the Company and Michael Goss
Retention Bonus Agreement, dated as of February 7, 2020,
10.4 between the Company and David Krupinski
Forward-Looking Statements
This current report on Form 8-K contains forward-looking statements regarding
future events, including statements regarding the terms of the Marcelo Letter
Agreement, the Severance Agreement, and Mr. Goss's and Mr. Krupinski's retention
bonus agreements. These statements are only predictions and reflect the
Company's current beliefs and expectations. Actual events or results may differ
materially from those contained in the forward-looking statements. It is routine
for internal projections and expectations to change as the quarter and year
progress, and therefore it should be clearly understood that the internal
projections and beliefs upon which the Company bases its expectations may
change. Although these expectations may change, the Company will not necessarily
inform you if they do nor will the Company necessarily update the information
contained in this current report on Form 8-K. Readers are urged to read the
reports and documents filed from time to time by the Company with the Securities
and Exchange Commission for a discussion of important risk factors that could
cause actual results to differ materially from those discussed in the
forward-looking statements. Forward-looking statements in this report are made
pursuant to the safe harbor provisions contained in the Private Securities
Litigation Reform Act of 1995.
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