Employment offer letter between Etsy, Inc. and Michael Fisher, dated July 27, 2017

July 27, 2017

Michael Fisher

[Delivered electronically]

Dear Mike,

Congratulations! We are thrilled to offer you a full-time position at Etsy (technically, at Etsy, Inc.). This letter details the terms of the offer. Please read it carefully and, if you accept, sign and date this letter and the attached Confidentiality and Prior Inventions Agreement (which we refer to in this offer letter as the CPIA). This offer is contingent on successful completion of a background check and formal approval of Etsy’s Compensation Committee.

Your employment will begin on a date mutually agreed upon between you and Etsy (“Start Date”). Your title will be Chief Technology Officer. You will report to Josh Silverman, working from our Brooklyn office. If you ever wish to change your work location, you will need prior written approval from Etsy. Your salary will be $325,000 per year and you will also be eligible for the great benefits that Etsy provides to regular, full-time employees. To the extent the terms of this offer letter conflict with any of the company’s standardized plans referenced herein, the terms of this offer letter control.

 

You will receive a signing bonus of $200,000 on the first administratively feasible payroll after your Start Date. You agree that if you resign your position with Etsy for any reason before you have worked for Etsy for two full years, you will repay a prorated portion of the bonus to Etsy (for example, you will repay 50% of your signing bonus if you resign after one year). This signing bonus is intended to help offset travel expenses between Brooklyn and Ohio, which will not otherwise be eligible for reimbursement under Etsy’s Travel & Entertainment Policy.

You will be eligible to participate in the Management Cash Incentive Plan, with an annual target of 50% of your base salary earned during the performance period, which currently follows a calendar year (Jan 1 to Dec 31) cycle. Your bonus award will be determined based upon company financial performance and your individual performance. Your participation is subject to the terms and conditions of the Management Cash Incentive Plan and the applicable participation notice. Generally, awards (if any) are paid within two and a half months after the end of a calendar year. For the 2017 performance period, you will receive not less than 100% of your prorated target.

 

You will participate in the Etsy, Inc. Change in Control Severance Plan, which provides, subject to the terms and conditions of the plan document, twelve (12) months of severance in a single lump sum payment within 30 days of the date of termination, any unpaid annual bonus for the fiscal year in which the termination occurs, up to twelve (12) months of company-paid COBRA coverage, and a 100% acceleration factor for all outstanding equity awards issued to you. You will also participate in the Etsy, Inc. Severance Plan, which provides, subject to the terms and conditions of the plan document, six (6) months of severance any unpaid annual bonus for the fiscal year in which the termination occurs and up to twelve (12) months of company-paid COBRA coverage.

Etsy will propose that you receive an equity award in the form of Stock Options (an option to purchase shares of the Etsy’s common stock) for 250,000 shares with an exercise price per share equal to the fair market value of Etsy’s common stock on the grant date. 25% of your Stock Options will vest (or become exercisable) if you remain continuously employed at Etsy for 12 months after the grant date. The balance of your Stock Options will vest in equal monthly installments over the next three years of continuous employment with Etsy.

Etsy will also propose that you receive an equity award in the form of 112,500 Restricted Stock Units (“RSUs”). The RSUs will “vest” (or convert into shares of Etsy’s common stock) over the course of your employment with Etsy. 25% of your RSUs will vest if you remain continuously employed at Etsy for 12 months after the first RSU vesting date following your Start Date. The balance of your RSUs will vest in equal quarterly installments over the next three years of continuous employment with Etsy.

Your equity awards will be subject to the terms and conditions of Etsy’s 2015 Equity Incentive Plan and your award agreements, which will also specify your vesting dates. You will not be eligible for the grant of future awards for the next four (4) years. After four years, any future equity awards will be made at the discretion of Etsy’s Board of Directors and/or its Compensation Committee,

To accept our offer, you will also need to sign the attached CPIA. It contains important information about your employment with Etsy, so please read it carefully. Here are a few highlights:

You acknowledge that during your employment with Etsy you will not have any operating or other active role at AKF Consulting dba AKF Partners and that your sole interest or involvement shall be a passive one-third ownership interest.

Before starting work, you will be required to provide proof of your identity and your legal authorization to work in the United States.

This letter (including the attached CPIA) is the entire agreement between you and Etsy. Any discussions you may have had previously with Etsy are superseded by the terms of this letter and the CPIA. The terms of this offer may only be changed by a written agreement signed by you and a duly authorized Etsy officer.

Although we are hiring you for the position listed above, your job duties, title, compensation, and benefits may change in the future. You understand that you will be an at-will employee of Etsy with the right to terminate your employment at any time and for any reason, and that Etsy will have a similar right. You also agree to comply with Etsy’s workplace policies, which will be made available to you and may change from time to time.

We hope and expect that working at Etsy will be beneficial and rewarding for both you and us, but we do have to let you know that this letter and the resolution of any disputes relating to this letter or your employment with Etsy will be governed by the laws of New York State (excluding laws relating to conflicts or choice of law). Also, because Etsy is based in Brooklyn, you and Etsy agree to submit to the personal jurisdiction of a state court located in Kings County, New York or the United States District Court for the Eastern District of New York located in Brooklyn to resolve any dispute or claim between you and Etsy or any of its directors, officers, managers, or employees.

We can’t wait for you to join our team!

Very truly yours,

/s/ Carrissa Menendez

Carrissa Menendez

Vice President, People and Workplace

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Name:        Michael Fisher /NHName1/

Signature:     /s/ Michael Fisher /

Date:         7/28/2017    /NHDate1/

Email:         XXXXXXXXX    /NHEmail1/

Exhibit A

    

You will not use any property or confidential information of a current or former employer without their permission (i.e., AKF Consulting dba AKF Partners or any of their clients). We want to respect the rights of your current and former employers, and quite frankly, we don’t want them claiming any rights to the work you do here at Etsy. By signing this Agreement, you agree that you will not bring to Etsy, and will not use or disclose at Etsy, the confidential information of any current or former employer or any other party, unless you have their written permission to do so (and our Legal team would like to see that written permission, thank you). You also agree that you will not use at Etsy any documents or other property (including documents or property that you created yourself) from your current or former employer without the employer’s written permission.

Etsy will own anything you create while working for Etsy that relates to the work you do for Etsy. While working for Etsy, you will hopefully develop or contribute to one or more products, services, or programs. In this Agreement, we refer to all ideas, products, services, processes, and designs you develop or contribute to while working for Etsy and that relate to Etsy’s business as “Covered Inventions.” In addition to your salary and benefits, Etsy will also provide you with the resources, materials, and support you need to do your job, including the development of Covered Inventions. In return, you agree that Etsy will own all rights in all Covered Inventions (including all patents, copyrights and other intellectual property rights), whether or not the work is performed in Etsy’s offices, uses Etsy resources, or takes place during business hours.

By signing this Agreement, you are assigning to Etsy all of your rights in the U.S. and internationally in all Covered Inventions and all intellectual property rights related to those Covered Inventions. Any copyrights in the Covered Inventions, including in any computer programs, programming documentation, and other works of authorship, are “works made for hire” for purposes of Etsy’s rights under copyright laws. By signing this Agreement, you are also assigning to Etsy any rights you currently have or may acquire at any time in the future in any Covered Inventions. Lastly, you agree to disclose all Covered Inventions to Etsy and to waive any claims you have or may have in the future for infringement of any Covered Inventions.

Etsy has no interest in owning things you created or developed in the past, but Etsy needs a license from you if you incorporate that prior work into the work you do at Etsy. If you previously created something that relates to Etsy’s business, and you do not want that creation to be considered a Covered Invention for purposes of this Agreement, please list it in Appendix A. We refer to any items listed in Appendix A as “Prior Inventions.” We will follow an internal review process to be sure that we understand and agree about what you are claiming as a Prior Invention. While Etsy does not claim to own your Prior Inventions, you agree that if you incorporate Prior Inventions into the work you do for Etsy, Etsy will have the right to use those Prior Inventions to operate its business. Here is the legalese version of the previous sentence: If any of the work you do for Etsy incorporates or uses a Prior Invention, you give Etsy a perpetual, irrevocable, worldwide, royalty-free, non-exclusive, sublicensable right and license to incorporate or use such Prior Invention and any related intellectual property rights.

Etsy permits its employees to perform outside work and to take on side projects if certain conditions are met. We recognize that you may want to take on some outside work or side projects while working for Etsy. We have an approval process for activities like those; you will receive more information about the process after your start date. Etsy will not have or claim rights in anything you develop or create through an authorized side project as long as (a) the work is done entirely on your own time and will not interfere with your ability to perform the work you do for Etsy, (b) you did not incorporate any Etsy materials or resources, and (c) the development or creation does not relate to an Etsy product or service or Etsy intellectual property.

    

 

You will keep confidential any Confidential Information you receive or learn about while working for Etsy. In order to perform your job at Etsy, you may create or be given access to Confidential Information about Etsy, or about its employees, contractors, customers, suppliers, and other parties. When we refer to “Confidential Information” in this Agreement, we mean information and physical materials not generally known or available outside of Etsy. Confidential Information could be technical data, product ideas, product roadmaps, business deals that we haven’t announced to the public, software code and designs, personal information about other Etsy employees, or lists of suppliers. Confidential Information includes both information and materials that belong or relate to Etsy, as well as information and materials that a third party has disclosed to Etsy on a confidential basis.

You will maintain the privacy of Etsy members and employees. As part of your work for Etsy, you may have access to private information about Etsy members and employees. Both groups place a high value on their privacy and it is critical that you treat private member and employee information with the highest degree of care. By signing this Agreement, you agree that you will only access and use Etsy member and employee information when it is necessary to do your job. You also agree that you will not share Etsy member and employee personal information outside of Etsy, or even with other Etsy employees, without proper authorization and even then only when required as part of your job. If you are ever in doubt about whether member or employee information may be shared within or outside of Etsy, you should ask the Etsy Legal team.

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You will not compete against Etsy while you are employed by Etsy. It probably goes without saying, but Etsy is hiring you to help build its business and not to compete with it. Competition could take several different forms, including starting or working for a Competing Business, doing consulting work for another company that conflicts with your work for Etsy, or diverting business opportunities from Etsy. By signing this Agreement, you agree that while working for Etsy you will not start, invest in, or do work for a Competing Business, or divert business opportunities with vendors, suppliers, or other business partners that otherwise might have been available to Etsy.

You will not compete against Etsy for a short period after your employment with Etsy ends. While working for Etsy you may be given access to plans, processes, contacts, customers, or other information that could put Etsy at an unfair competitive disadvantage if they were shared with or used for the benefit of a Competing Business. To protect Etsy’s legitimate interests, we require that you agree to certain limits on actions that would be competitive with Etsy for a short period after your employment with Etsy ends. By signing this Agreement, you agree that for six months after your employment with Etsy ends for any reason, you will not, without Etsy’s written permission, start, invest in, or do work for a Competing Business in a capacity that is similar in form or function to that which you performed in the last year of your employment with Etsy, and that you will not divert business opportunities that otherwise might have been available to Etsy.

You will not poach or solicit Etsy employees, members, or business partners while you are employed by Etsy or for a short period of time after your employment with Etsy ends. In addition to working for a Competing Business or diverting business opportunities from Etsy, you could also unfairly compete against Etsy by poaching or soliciting Etsy employees, members, vendors, suppliers, or other business partners. By signing this Agreement, you agree that both during your employment with Etsy and for one year after your employment with Etsy ends for any reason, you will not directly or indirectly cause anyone to leave their position with Etsy, or solicit any Etsy members, vendors, suppliers, or other business partners with whom you worked or acquired Confidential Information from in the last two years of your employment with Etsy.

You will be an at-will employee of Etsy. You will be an at-will employee of Etsy, which means that you are free to resign at any time and that Etsy may terminate your employment at any time and for any or no reason. By signing this Agreement, you acknowledge that you will be an at-will employee of Etsy and that you are not entering into an employment contract with Etsy for a set period of time.

Nothing in this Agreement prohibits you from reporting violations of the law or Etsy’s policies, and no retaliatory action will be taken against you for doing so. Nothing in this Agreement, including the section on Confidential Information, prohibits you from reporting possible violations of the law. This includes making reports to a governmental agency, such as the Department of Justice or the Securities and Exchange Commission. Similarly, nothing in this Agreement prohibits you from reporting possible violations of the law or Etsy’s Code of Conduct or other policies to your manager, Etsy’s General Counsel, or Etsy’s SVP of Human Resources, or through Etsy’s

whistleblower hotline. You do not need authorization from Etsy to report violations of the law or Etsy’s policies and you do not have to notify Etsy that you have done so. Etsy takes its non-retaliatory culture very seriously and will not allow anyone to take adverse action, threaten, intimidate, or retaliate against you if you report a violation or a suspected violation in good faith, or cooperate with an investigation.

You may have additional rights not described in this Agreement. You may have additional rights that are not described in this Agreement. If you have any questions about your rights under this Agreement or otherwise, you should speak with a lawyer before signing this Agreement.

What you and Etsy must do to waive rights created by this Agreement. For you or Etsy to waive a right granted by this Agreement, you and an authorized representative of Etsy must explicitly agree to waive that right in writing. If either you or Etsy do not enforce a right granted by this Agreement for some period of time, that right will not be considered to have been waived. Similarly, if you or Etsy exercise one right granted by this Agreement, that will not be considered a waiver of any other right you or Etsy may have under this Agreement.

Etsy may assign this Agreement to certain third parties. Etsy may assign this Agreement to an affiliate, or to a third party in the case of a merger or acquisition. In the case of a merger or acquisition, as an at-will employee, you would still be free to resign at any time.

Etsy will be entitled to an injunction if you violate or threaten to violate this Agreement. Etsy could suffer serious harm if you violate this Agreement. By signing this Agreement, you agree that Etsy will be entitled to an injunction (and will not be required to post a bond) to protect itself if you breach or threaten to breach this Agreement. Note that a court has the discretion to strike or modify any part of this Agreement that it determines is too broad or unenforceable under the specific circumstances related to your departure.

Section 1 of this Agreement will remain in effect after you stop working for Etsy. Whether you resign from Etsy or Etsy terminates your employment, the obligations you agreed to in Section 1 of this Agreement, including those concerning Confidential Information, ownership of your work, and non-competition, will remain in effect indefinitely.