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 and our Chief 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 Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K.
112
Table of Contents
Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S generally accepted accounting principles.
Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer and oversight of the board of directors, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included in Part II, Item 8, “Financial Statements and Supplementary Data,” 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 in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect 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, within the organization have been detected. The design of any system of controls also is based in part upon 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 the 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.
Item 9B. Other Information
Securities Trading Plans of Directors and Executive Officers
During the three months ended December 31, 2023, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408 of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
113
Table of Contents
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to our Proxy Statement relating to our 2024 Annual Meeting of Stockholders (the “Proxy Statement”). The Proxy Statement will be filed with the SEC within 120 days of the year ended December 31, 2023.
Our board of directors has adopted a code of conduct that applies to all officers, directors and employees, which is available on our website at (investors.twilio.com) under “Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waiver from, a provision of our code of conduct by posting such information on the website address and location specified above.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days of the year ended December 31, 2023.
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 Proxy Statement to be filed with the SEC within 120 days of the year ended December 31, 2023.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days of the year ended December 31, 2023.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days of the year ended December 31, 2023.
PART IV
Item 15. Exhibit and Financial Statement Schedules
(a) The following documents are filed as part of this report:
1. Financial Statements
See Index to Financial Statements at Item 8 herein.
2. Financial Statement Schedules
Schedules not listed above have been omitted because they are not required, not applicable, or the required information is otherwise included.
3. Exhibits
The exhibits listed below are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference, in each case as indicated below.
114
Table of Contents
EXHIBIT INDEX
Exhibit
Number Incorporated by Reference
Description Form File No. Exhibit Filing Date
2.1 Agreement and Plan of Merger and Reorganization, dated as of May 16, 2021, by and among Twilio Inc., Zeus Merger Sub I, Inc., Zeus Merger Sub II, LLC, Zipwhip, Inc. and Fortis Advisors LLC
10-Q 001-37806
2.1 July 30, 2021
2.2 Agreement and Plan of Reorganization, dated as of October 12, 2020, by and among Twilio Inc., Scorpio Merger Sub, Inc., Segment,io, Inc., and Shareholder Representative Services LLC
S-3
333-249889
2.1 November 5, 2020
3.1 Amended and Restated Certificate of Incorporation of Twilio Inc.
S-1/A
333-211634 3.1 June 13, 2016
3.2 Third Amended and Restated Bylaws of Twilio Inc.
8-K
001-37806 3.1 February 9, 2024
3.3 Certificate of Retirement of Class B Common Stock of Twilio Inc, dated as of June 28, 2023
8-K
001-37806
3.1 June 29, 2023
4.1 Form of Class A Common Stock Certificate of Twilio Inc.
S-1 333-211634 4.1 May 26, 2016
4.2 Indenture, dated as of March 9, 2021 by and between Twilio Inc. and U.S. Bank National Association, as Trustee
8-K 001-37806 4.1 March 9, 2021
4.3 First Supplemental Indenture, dated as of March 9, 2021, between Twilio Inc. and U.S. Bank National Association, as Trustee
8-K 001-37806 4.2 March 9, 2021
4.4 Form of 3.625% Senior Notes due 2029
8-K 001-37806 4.3 March 9, 2021
4.5 Form of 3.875% Senior Notes due 2031
8-K 001-37806 4.4 March 9, 2021
4.6 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
Filed herewith
10.1* Form of Indemnification Agreement
10-K 001-37806 10.1 February 26, 2021
10.2*
Twilio Inc. Amended and Restated 2008 Stock Option Plan and forms of Stock Option Agreement and form of Stock Option Grant Notice
10-K 001-37806 10.2 February 26, 2021
10.3*
Twilio Inc. Amended and Restated 2016 Stock Option and Incentive Plan, and forms of a greements thereunder
10-K 001-37806 10.3 February 26, 2021
10.4* Twilio Inc. 2019 France Sub-Plan to the 2016 Stock Option and Incentive Plan
10-Q 001-37806 10.2 October 31, 2019
10.5*
Cash-Based Award Agreement for Company Employees under the Twilio Inc. 2016 Stock Option and Incentive Plan
8-K
001-37806
10.1 February 22, 2023
10.6*
Twilio Inc. Amended and Restated Non-Employee Director Compensation Policy
10-Q 001-37806 10.1 November 4, 2022
10.7*
Twilio Inc. Amended and Restated 2016 Employee Stock Purchase Plan
10-Q 001-37806 10.1 October 31, 2019
10.8 Twilio Inc. Amended Chief Executive Officer Severance Plan
8-K
001-37806 10.2 February 22, 2023
10.9* Twilio Inc. Senior Executive Severance Plan
8-K
001-37806 10.3 February 22, 2023
10.10* Twilio Inc. Non-Employee Directors’ Deferred Compensation Program and forms thereunder
10-Q 001-37806 10.6 May 10, 2023
10.11* Twilio Inc. Executive Incentive Compensation Plan
8-K
001-37806 10.1 December 1, 2023
10.12* Offer Letter with Dana Wagner , dated as of October 7, 2021
10-K 001-37806 10.17 February 22, 2022
10.13* Offer Letter with Elena Donio, dated as of April 28, 2022
10-Q 001-37806 10.1 August 5, 2022
10.14* Offer Letter with Aidan Viggiano, dated February 10, 2023
10-K 001-37806 10.14 February 27, 2023
10.15*
Separation Agreement and Release with Jeff Lawson, dated as of January 7, 2024
8-K
001-37806 10.2 January 8, 2024
10.16* Offer Letter with Khozema Shipchandler, dated as of January 7, 2024
8-K
001-37806 10.1 January 8, 2024
10.17 Sublease, dated as of August 30, 2018, by and between Salesforce.com, Inc. and Twilio Inc.
10-Q 001-37806 10.1 November 8, 2018
10.18 Consent to Sublease Agreement, dated as of September 25, 2018, by and among Hudson Rincon Center, LLC, Salesforce.com Inc. and Twilio Inc.
10-Q 001-37806 10.2 November 8, 2018
10.19†
Framework Agreement, dated as of February 26, 2021, by and among Twilio Inc., Carlyle Partners V Holdings, L.P. and Syniverse Corporation
10-Q 001-37806 10.1 May 6, 2021
10.20 Framework Agreement Letter Agreement, dated as of August 16, 2021, by and among Twilio Inc., Carlyle Partners V Holdings, L.P. and Syniverse Corporation
8-K 001-37806 2.1 August 17, 2021
10.21 Second Framework Agreement Letter Agreement, dated as of May 13, 2022, by and among Twilio Inc., Carlyle Partners V Holdings, L.P. and Syniverse Corporation
8-K 001-37806 2.1 May 16, 2022
21.1 List of Subsidiaries of Twilio Inc.
Filed herewith
23.1 Consent of KPMG, LLP, Independent Registered Public Accounting Firm
Filed herewith
24.1 Power of Attorney (included in signature page hereto) Filed herewith
115
Table of Contents
Exhibit
Number Incorporated by Reference
Description Form File No. Exhibit Filing Date
31.1 Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), 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 Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.1** Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished herewith
97.1 Twilio Inc. Compensation Recovery Policy
Filed herewith
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document Filed herewith
101.SCH Inline XBRL Taxonomy Extension Schema Document. Filed herewith
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith
101.LAB XBRL Taxonomy Extension Label Linkbase Document. Filed herewith
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith
104 Cover Page with Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
__________________________________________
† Certain portions of this exhibit have been omitted because they are not material, and they are the type of information that the registrant treats as private or confidential.
* Indicates a management contract or compensatory plan or arrangement.
** 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, except to the extent that the registrant specifically incorporates it by reference.
Item 16. Form 10-K Summary
None.
116
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TWILIO INC.
By: /s/ KHOZEMA Z. SHIPCHANDLER
Khozema Z. Shipchandler
Chief Executive Officer
117
Table of Contents
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Khozema Z. Shipchandler, Aidan Viggiano and Dana R. Wagner, and each of them, as his or her true and lawful attorney-in-fact and agent, 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 or her substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
February 27, 2024 /s/ KHOZEMA Z. SHIPCHANDLER
Khozema Z. Shipchandler
Director and Chief Executive Officer (Principal Executive Officer)
February 27, 2024 /s/ AIDAN VIGGIANO
Aidan Viggiano
Chief Financial Officer (Principal Accounting and Financial Officer)
February 27, 2024 /s/ CHARLIE BELL
Charlie Bell
Director
February 27, 2024 /s/ BYRON B. DEETER
Byron B. Deeter
Director
February 27, 2024 /s/ DONNA L. DUBINSKY
Donna L. Dubinsky
Director
February 27, 2024 /s/ JEFF EPSTEIN
Jeff Epstein
Director
February 27, 2024 /s/ JEFFREY R. IMMELT
Jeffrey R. Immelt
Director
February 27, 2024 /s/ DEVAL L. PATRICK
Deval L. Patrick
Director
February 27, 2024 /s/ ERIKA ROTTENBERG
Erika Rottenberg
Director
February 27, 2024 /s/ MIYUKI SUZUKI
Miyuki Suzuki
Director
118