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Zynga (ZNGA) Adds Venture Capital Veteran, Early Backer as Board Member

April 5, 2013 8:13 AM EDT
Zynga (Nasdaq: ZNGA) is adding a big name in the venture capital world to its Board of Directors.

According to reports out Friday, Kleiner Perkins Caufield & Byers partner John Doerr will join Zynga's slate of directors. Kleiner Perkins was one of Zynga's bigger backers before the social gaming company went public in 2011.

Doerr also sits on the Board at Google (Nasdaq: GOOG), Flipboard, and Coursera, TechCrunch noted today.

Zynga CEO Mark Pincus commented in a statement today: "John has been a supporter of Zynga since our early days, and truly understands our core values and mission...John has worked with some of the most well-known companies in the world at every stage imaginable and his experience helping teams innovate at scale will be a tremendous asset for our leadership team. I’m personally looking forward to working closer with John, a true pioneer in the consumer internet space, and welcoming him to the board as a trusted advisor through this pivotal, transition year. John inspired us all to pursue creating internet treasures. He is a true missionary and will deepen and strengthen our DNA."

UPDATE - Some of the details of Doerr's agreement are below:

On April 4, 2013, the Board of Directors (the “Board”) of Zynga Inc. (the “Company”) elected, upon the recommendation of the Nominating and Corporate Governance Committee of the Board, L. John Doerr to serve as a member of the Board until his successor is duly elected and qualified, or until his earlier death, resignation or removal.

As a non-employee director, Mr. Doerr will be entitled to receive compensation in the form of an annual grant of restricted stock units (“ZSUs”) with an aggregate fair market value of $250,000 as an annual retainer for his service as a director (the “Annual Equity Grant”) under our Non-Employee Director Compensation Policy. These awards are automatically granted on the date of the Company’s annual meeting of stockholders and will vest on the 15th day of the month of the one year anniversary of the annual meeting, provided that the recipient is a director on such date. In connection with his appointment and pursuant to the terms of our Non-Employee Director Compensation Policy, Mr. Doerr received on the date of his appointment an automatic grant award of ZSUs with an aggregate value of approximately $41,667, which is the pro-rated Annual Equity Grant, reflecting a reduction for each month prior to the date of grant that has elapsed since the 2012 Annual Meeting.

Mr. Doerr will also receive reimbursement for reasonable out-of-pocket expenses incurred in attending meetings of the Board. The Company does not currently provide any cash compensation to our non-employee directors.

The Company also entered into a standard form of indemnification agreement with Mr. Doerr (the “Indemnification Agreement”). The Indemnification Agreement provides, among other things, that the Company will indemnify Mr. Doerr, under the circumstances and to the extent provided for therein, for certain expenses which he may be required to pay in connection with certain claims to which he may be made a party by reason of his position as a director of the Company, and otherwise to the fullest extent permitted under Delaware law and the Company’s Bylaws.

The Company’s standard form of indemnification agreement was previously filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-1/A (No. 333-175298), as filed on November 17, 2011, and is incorporated herein by reference.

The Company’s Non-Employee Director Compensation Policy was previously filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (No. 001-35375), as filed on May 8, 2012, and is incorporated herein by reference.

In October 2010, we made a capital subscription in the amount of $500,000 to KPCB sFund, LLC, a Delaware limited liability company, whose focus is on venture-backed investments in social networking companies. From January 1, 2011 through April 4, 2013, we have contributed an aggregate of approximately $400,000 of our commitment to the fund. Certain of our executive officers also made capital subscriptions to KPCB funds, including funds holding our shares of common stock. The managing member of KPCB sFund, LLC is KPCB sFund Associates, LLC, an affiliate of Kleiner Perkins Caufield & Byers of which Mr. Doerr is a General Partner. Each of these transactions was reviewed and approved by our Board or an appropriate committee thereof.


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