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 our Chief Financial Officer (our Principal Financial Officer), 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, as amended, which we refer to as the Exchange Act, as of December 31, 2023.
Our Chief Executive Officer and 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 the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.
Management’s Report on Internal Control Over Financial Reporting
Our management, including our Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management conducted an assessment 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 (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2023. This report appears on page 60 .
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Internal Controls
An effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error or overriding of controls, and therefore can provide only reasonable assurance with respect to reliable financial reporting. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect all misstatements, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
Item 9B. Other Information.
On December 6, 2023 , Hayden Brown , our Chief Executive Officer , adopted a 10b5-1 sales plan, which we refer to as the Brown 10b5-1 Sales Plan, intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Brown 10b5-1 Sales Plan provides for the potential sale of up to 390,000 shares of our common stock. The Brown 10b5-1 Sales Plan will be in effect until the earlier of (i) December 31, 2024 and (ii) the date on which the maximum number of shares of our common stock subject to the Brown 10b5-1 Sales Plan have been sold thereunder.
The Brown 10b5-1 Sales Plan included a representation from the officer to the broker administering the plan that the officer was not in possession of any material nonpublic information regarding Upwork or the securities subject to the plan. A similar representation was made to us in connection with the adoption of the plan under our Insider Trading Policy. Those representations were made as of the date of adoption of the Brown 10b5-1 Sales Plan and speak only as of that date. In making those representations, there is no assurance with respect to any material nonpublic information of which the officer was unaware, or with respect to any material nonpublic information acquired by the officer or Upwork after the date of the representation.
97
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item will be included in our Proxy Statement for the 2024 Annual Meeting of Stockholders, which we refer to as the Proxy Statement, to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023, and is incorporated herein by reference.
Item 11. Executive Compensation.
The information required by this item will be included in our Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2023, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be included in our Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2023, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be included in our Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2023, and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
The information required by this item will be included in our Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2023, and is incorporated herein by reference.
98
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this report:
(1) Financial Statements.
Our consolidated financial statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.
(2) Financial Statement Schedules.
All schedules are omitted because they are not applicable or because the required information is shown in the consolidated financial statements and notes.
(3) Exhibits.
Exhibit Index
Exhibit
Number
Incorporated by Reference Filed Herewith
Exhibit Title Form File No. Exhibit Filing Date
3.1 Restated Certificate of Incorporation
8-K
001-38678 3.1 June 12, 2023
3.2 Amended and Restated Bylaws.
8-K 001-38678 3.1 October 24, 2022
4.1 Form of Common Stock Certificate.
S-1 333-227207 4.1 September 6, 2018
4.2
Warrant, dated May 1, 2018, by and between Upwork and Tides Foundation.
S-1 333-227207 4.4 September 6, 2018
4.3
Description of Securities Registered Under Section 12 of the Exchange Act.
X
4.4
Indenture, dated as of August 10, 2021, between Upwork Inc. and Wells Fargo Bank, National Association, as trustee.
8-K 001-38678 4.1 August 10, 2021
4.5
Form of 0.25% Convertible Senior Notes due 2026 (included in Exhibit 4.4).
8-K 001-38678 4.2 August 10, 2021
10.1* Form of Indemnification Agreement by and between Upwork and each of its directors and executive officers.
S-1 333-227207 10.1 September 6, 2018
10.2*
2014 Equity Incentive Plan, as amended, and forms of equity agreements thereunder.
S-1 333-227207 10.3 September 6, 2018
10.3*
2018 Equity Incentive Plan and forms of award agreements thereunder.
S-1 333-227207 10.4 September 6, 2018
10.4*
2018 Employee Stock Purchase Plan and enrollment forms thereunder.
S-1 333-227207 10.5 September 6, 2018
10.5*
Offer Letter, dated February 25, 2015, by and between Upwork and Elizabeth Nelson.
S-1 333-227207 10.13 September 6, 2018
10.6*
Offer Letter, dated August 3, 2018, by and between Upwork and Gary Steele.
S-1 333-227207 10.16 September 6, 2018
10.7*
Upwork Performance Bonus Plan.
10-Q 001-38678 10.2 May 8, 2019
10.8*
Offer Letter, dated June 17, 2019 by and between Upwork and Leela Srinivasan.
10-Q 001-38678 10.2 August 7, 2019
10.9*
Change in Control and Severance Agreement, dated December 8, 2019, by and between Upwork and Hayden Brown.
10-K 001-38678 10.8 March 2, 2020
10.10*
Amended and Restated Offer Letter, dated December 8, 2019, by and between Upwork and Hayden Brown.
10-K 001-38678 10.11 March 2, 2020
10.11*
Change in Control and Severance Agreement, dated May 29, 2018, by and between Upwork and Randoll Eric Gilpin.
10-Q 001-38678 10.1 August 4, 2020
10.12*
Amended and Restated Offer Letter, dated May 29, 2018, by and between Upwork and Randoll Eric Gilpin.
10-Q 001-38678 10.2 August 4, 2020
10.13*
Offer Letter, dated October 13, 2020, by and between Upwork Inc. and Anilu Vazquez-Ubarri.
10-K 001-38678 10.21 February 24, 2021
10.14*
Stock Option Agreement, dated January 18, 2021, by and between Upwork Inc. and Hayden Brown.
10-Q 001-38678 10.1 May 4, 2021
10.15
Form of Capped Call Transaction Confirmation.
8-K 001-38678 10.1 August 10, 2021
10.16
Lease Agreement, dated May 14, 2014, by and between Upwork and CLPF, as amended.
10-K 001-38678 10.19 February 15, 2022
10.17*
Offer Letter, dated March 22, 2023, by and between Upwork Inc. and Erica Gessert.
10-Q
001-38678 10.1
May 3, 2023
99
10.18*
Change in Control and Severance Agreement, dated April 25, 2023, by and between Upwork Inc. and Erica Gessert.
10-Q
001-38678 10.2
May 3, 2023
10.19*
Transition and Separation Agreement, dated May 2, 2023, by and between Upwork Inc. and Eric Gilpin
10-Q
001-38678
10.1
August 2, 2023
21.1 List of Subsidiaries.
X
23.1 Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
X
24.1 Power of Attorney (included on signature page to Annual Report).
X
31.1 Certification of Principal Executive Officer and Interim Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1# Certification of Principal Executive Officer and Interim Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2# Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
97.1*
U pwork Inc. Incentive Compensation Re covery Policy
X
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. X
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104 Cover Page Interactive Data File - the cover page from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2022 is formatted in Inline XBRL. X
* Indicates a management contract or compensatory plan.
# This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
100
Item 16. Form 10-K Summary.
None.
101
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 Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized .
Upwork Inc.
Date: February 15, 2024
By: /s/ Hayden Brown
Hayden Brown
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Hayden Brown and Erica Gessert, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him or her 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, proxies, and agents 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 for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
102
Signature Title Date
/s/ Hayden Brown President, Chief Executive Officer, and Director February 15, 2024
Hayden Brown (Principal Executive Officer)
/s/ Erica Gessert
Chief Financial Officer
February 15, 2024
Erica Gessert
(Principal Financial Officer)
/s/ Olivier Marie Chief Accounting Officer and Treasurer February 15, 2024
Olivier Marie (Principal Accounting Officer)
/s/ Gregory C. Gretsch Director February 15, 2024
Gregory C. Gretsch
/s/ Kevin Harvey Director February 15, 2024
Kevin Harvey
/s/ Thomas Layton Director February 15, 2024
Thomas Layton
/s/ Elizabeth Nelson Director February 15, 2024
Elizabeth Nelson
/s/ Leela Srinivasan Director February 15, 2024
Leela Srinivasan
/s/ Gary Steele Director February 15, 2024
Gary Steele
/s/ Anilu Vazquez-Ubarri Director February 15, 2024
Anilu Vazquez-Ubarri
103