Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of January 31, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (a) is recorded, processed, summarized and reported within the time periods specified by Securities and Exchange Commission (“SEC”) rules and forms and (b) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding any required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. Our management’s evaluation of internal control over financial reporting excluded the internal control activities of Seal Software Group Limited (acquired in May 2020) and Liveoak Technologies, Inc. (acquired in July 2020), discussed in Note 5 to the Consolidated Financial Statements. The financial results of these acquisitions are included from the date of each acquisition in the January 31, 2021 consolidated financial statements and are collectively approximately 1.5% of total assets as of January 31, 2021 and approximately 1.5% of total revenues for the year ended January 31, 2021.
Management has concluded that its internal control over financial reporting was effective as of January 31, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. The effectiveness of our internal control over financial reporting as of January 31, 2021, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears in Part II, Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the fourth quarter of fiscal 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon
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certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
We maintain a Code of Business Conduct and Ethics applicable to all of our employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, which is a “Code of Ethics for Senior Financial Officers” as defined by applicable rules of the SEC. This code is publicly available on our investor relations website at investor.docusign.com. If we make any amendments to this code other than technical, administrative or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of this code we will disclose the nature of the amendment or waiver, its effective date and to whom it applies on our investor relations website or in a Current Report on Form 8-K filed with the SEC.
The remaining information required by this item, including information about our Directors, Executive Officers and Audit Committee, is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2021.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2021.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2021.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2021.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2021.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as a part of this Annual Report on Form 10-K:
1. Financial Statements
The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Loss
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
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2. Financial Statement Schedules
All other schedules have been omitted because they are not required, not applicable, or the required information is otherwise included.
3. Exhibits
See the Exhibit Index immediately following "Item 16. Form 10-K Summary."
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ITEM 16. FORM 10-K SUMMARY
None.
EXHIBIT INDEX
Exhibit Number Description Form File No. Incorporated by Reference Exhibit Filing Date
2.1 Share Purchase Agreement dated as of February 26, 2020 by and among the Registrant , DocuSign International, Inc., Seal Software Group Limited and Fortis Advisors LLC as the Shareholders’ Representative .
8-K 001-38465 2.1 February 28, 2020
3.1 Amended and Restated Certificate of Incorporation .
8-K 001-38465 3.1 May 1, 2018
3.2 Amended and Restated Bylaws .
8-K 001-38465 3.1 May 29, 2020
4.1 Form of Common Stock Certificate .
S-1/A 333-223990 4.1 April 17, 2018
4.2 Amended and Restated Investors' Rights Agreement dated April 30, 2015 by and among the Registrant and its stockholders .
S-1 333-223990 10.1 March 28, 2018
4.3 Indenture, dated September 18, 2018, between the Registrant and U.S. Bank National Association, as Trustee.
8-K 001-38465 4.1 September 18, 2018
4.4 Form of Global Note representing the Registrant ’ s 0.50% Convertible Senior Notes due 2023 (included as Exhibit A to the Indenture filed as Exhibit 4.1).
8-K 001-38465 4.2 September 18, 2018
4.5 Credit Agreement, dated as of January 11, 2021, by a nd among the Registrant , Bank of America, N.A., BofA Securities, Inc. and Silicon Valley Bank, and the lenders thereunder.
8-K 001-38465 99.1 January 11, 2021
4.6 Indenture, dated January 15, 2021, b y and among the Registrant and U.S. National Bank Association, as Trustee.
8-K 001-38465 4.1 January 15, 2021
4.7 Form of Global Note representing the Registrant ’s 0% Convertible Senior Notes due 2024 (included as Exhibit A to the Indenture filed as Exhibit 4.1) .
8-K 001-38465 4.1 January 15, 2021
4.8 Description of the Registrant's Securities.
10-K 001-38465 Filed herewith March 27, 2020
10.1 Form of Confirmation for Capped Call Transactions .
8-K 001-38465 10.1 September 18, 2018
10.2 Form of Indemnity Agreement between the Registrant and each of its directors and executive officers .
8-K 001-38465 10.1 December 3, 2020
10.3# Amended and Restated 2011 Equity Incentive Plan, as amended.
S-1 333-223990 10.2 March 28, 2018
10.4# Form of Option Agreement and Exercise Notice under Amended and Restated 2011 Equity Incentive Plan .
S-1 333-223990 10.3 March 28, 2018
10.5# Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under Amended and Restated 2011 Equity Incentive Plan .
S-1 333-223990 10.4 March 28, 2018
10.6# 2018 Equity Incentive Plan .
S-1 333-223990 10.5 March 28, 2018
10.7# Form of Option Agreement and Exercise Notice under 2018 Equity Incentive Plan .
S-1 333-223990 10.6 March 28, 2018
10.8# Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under 2018 Equity Incentive Plan .
S-1 333-223990 10.7 March 28, 2018
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10.9# 2018 Employee Stock Purchase Plan .
S-1 333-223990 10.8 March 28, 2018
10.10# Form of Performance Stock Unit Grant Notice under 2018 Equity Incentive Plan.
10-Q 001-38465 10.1 September 6, 2019
10.11 Office Lease 221 Main Street and related amendments .
S-1 333-223990 10.12 March 28, 2018
10.12# Amended and Restated Non-Employee Director Compensation Policy .
10-Q 001-38465 10.1 December 4, 2020
10.13# Amended and Restated Offer Letter, dated as of March 27, 2018, by and between the Registrant and Daniel D. Springer.
S-1 333-223990 10.10 March 28, 2018
10.14# Amendment to Offer Letter, dated as of March 1 0 , 2020, by and between the Registrant and Daniel D. Springer .
8-K 001-38465 99.2 March 12, 2020
10.15# Offer Letter, dated as of June 6, 2019, by and between t he Registrant and Loren Alhadeff.
10-K 001-38465 10.15 March 27, 2020
10.16# Offer Letter, dated as of March 31, 2017, by and between the Registrant and Scott V. Olrich.
S-1/A 333-223990 10.10.2 April 3, 2018
10.17# Offer Letter, dated as of May 10, 2019, by and between t he Registrant and Tram Phi.
10-K 001-38465 10.17 March 27, 2020
10.18# Amended and Restated Offer Letter, dated as of April 11, 2018, by and between the Registrant and Michael J. Sheridan.
S-1/A 333-223990 10.10.4 April 3, 2018
10.19# Offer Letter, dated as of October 5, 2017, by and between the Registrant and Kirsten O. Wolberg.
S-1/A 333-223990 10.10.5 April 3, 2018
10.20# Amended and Restated Retention Agreement, dated as of March 27, 2018, by and between the Registrant and Scott V. Olrich.
S-1 333-223990 10.19 March 28, 2018
10.21# Amended and Restated Retention Agreement, dated as of March 27, 2018, by and between the Registrant and Kirsten O. Wolberg.
S-1 333-223990 10.20 March 28, 2018
10.22# Offer Letter, dated as of August 28, 2020, by and between the Registrant and Cynthia Gaylor .
10-Q 001-38465 10.2 December 4, 2020
10.23 Form of Capped Call Transaction Confirmation entered into January 2021 .
8-K 001-38465 99.1 January 15, 2021
10.24 Form of Ex c h ange Agreement.
8-K 001-38465 99.2 January 15, 2021
10.25# Amended and Restated Executive Severance and Change in Control Agreement , dated as of March 31, 2021, by and between the Company and Loren Alhadeff .
Filed herewith
10.26# Executive Severance and Change in Control Agreement, dated as of March 11, 2021, by and between the Company and Joan Burke .
8-K 001-38465 99.3 March 11, 2021
10.27# Executive Severance and Change in Control Agreement , da ted as of March 12, 2021, by and between the Company and Tom Casey.
Filed herewith
10.28# Amended and Restated Executive Severance and Change in Control Agreement, dated as of March 31, 2021, by and between the Company and Cynthia Gaylor.
Filed herewith
10.29# Executive Severance and Change in Control Agreement, dated as of March 12, 2021, by and between the Company and Scott Olrich.
Filed herewith
10.30# Amended and Restated Executive Severance and Change in Control Agreement, dated as of March 11, 2021, by and between the Company and Trâm Phi .
8-K 001-38465 99.7 March 11, 2021
10.31# Executive Severance and Change in Control Agreement, dated as of March 11, 2021, by and between the Company and Dan Springer.
Filed herewith
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10.32# Amended and Restated Executive Severance and Change in Control Agreement, dated as of March 13, 2021, by and between the Company and Lambert Walsh.
Filed herewith
21.1 Subsidiaries of the Registrant.
Filed herewith
23.1 Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
Filed herewith
24.1 Power of Attorney (reference is made to the signature page hereto). Filed herewith
31.1 Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith
31.2 Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith
32.1* Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith
101.INS XBRL Instance Document. Filed herewith
101.SCH XBRL Taxonomy Extension Schema Document. Filed herewith
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith
101.DEF XBRL Taxonomy Definition Linkbase Document. Filed herewith
101.LAB XBRL Taxonomy Extension Labels Linkbase Document. Filed herewith
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith
104 Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) Filed herewith
* The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
# Indicates management contract or compensatory plan, contract or agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: March 31, 2021
DOCUSIGN, INC.
By: /s/ Daniel D. Springer
Daniel D. Springer
Chief Executive Officer
(Principal Executive Officer)
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Daniel D. Springer and Cynthia Gaylor, and each of them, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.
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Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/ Daniel D. Springer Chief Executive Officer and Director March 26, 2021
Daniel D. Springer ( Principal Executive Officer )
/s/ Cynthia Gaylor Chief Financial Officer March 26, 2021
Cynthia Gaylor ( Principal Financial Officer and Principal Accounting Officer )
/s/ Mary Agnes Wilderotter Chair, Director March 26, 2021
Mary Agnes Wilderotter
/s/ James Beer Director March 26, 2021
James Beer
/s/ Teresa Briggs Director March 26, 2021
Teresa Briggs
/s/ Cain A. Hayes Director March 26, 2021
Cain A. Hayes
/s/ Blake J. Irving Director March 26, 2021
Blake J. Irving
/s/ Enrique T. Salem Director March 26, 2021
Enrique T. Salem
/s/ Peter Solvik Director March 26, 2021
Peter Solvik
/s/ Inhi Cho Suh Director March 26, 2021
Inhi Cho Suh
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