1stdibs.Com (DIBS) 8-KCost Associated with Exit or Disposal Activities

On June 28, 2023, 1stdibs.com, Inc. (the “Company”) announced a workforce reduction designed to reduce operating costs and realign investment priorities. This reduction is expected to represent approximately 20% of the Company’s current global workforce.

As a result of the reduction, the Company estimates that it will incur approximately $1.9 million - $2.2 million in non-recurring restructuring charges, consisting primarily of employee severance and benefits costs. The Company expects that substantially all of the restructuring charges will be incurred in the second quarter of 2023.

Potential position eliminations in each country are subject to local law and consultation requirements. The charges that the Company expects to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above.

On June 28, 2023, to facilitate his transition, the Company entered into an advisory agreement with Mr. Paul pursuant to which he will advise the Company on various matters until December 31, 2023 (unless terminated earlier by the Company at any time, with or without cause). All of Mr. Paul’s previously issued equity incentive awards will continue to vest during the term of the advisory agreement. Further, in consideration of such services, the Company and Mr. Paul agreed that, in the event that his service is terminated by the Company without Cause, as defined in the Severance Plan, during the term of the advisory agreement, all of Mr. Paul’s previously issued equity incentive awards that are unvested as of the effective date of such termination that would have vested on or prior to December 31, 2023 had Mr. Paul remained in service on the applicable vesting dates will immediately vest upon the effective date of such termination and the remaining unvested equity awards will be subject to the treatment described below. Additionally, in consideration of Mr. Paul’s advisory services, the Company and Mr. Paul agreed that, in the event that a Change in Control, as defined in the Severance Plan, is consummated on or prior to December 31, 2023 and Mr. Paul is providing services to the Company on such date or his service has been terminated by the Company without Cause prior to the date on which the Change in Control is consummated, Mr. Paul will be entitled to receive the “change in control benefits” set forth in Section 4(c) of the Severance Plan as if his employment was terminated within 12 months after a Change in Control (the “Change in Control Benefits”) subject to, and in accordance with, the terms and conditions of the Severance Plan; provided, however, that (a) any payments and/or benefits payable or to be provided to Mr. Paul under Section 4(c) of the Severance Plan will be offset by any payments and/or benefits previously paid or provided to him under Section 4(a) of the Severance Plan such that there will be no duplication of payments or benefits; (b) to give effect to the foregoing, if Mr. Paul’s service is terminated for any reason other than for Cause on or prior to December 31, 2023, the remaining unvested equity awards shall remain outstanding (but unvested) until the earliest to occur of (i) the original expiration date of the equity award, (ii) December 31, 2023 and (iii) the date on which the Change in Control is consummated and (c) if the Company subsequently determines that it had grounds to terminate Mr. Paul’s employment for Cause (as defined in the Severance Plan) had it known of all of the relevant facts as of the date of his termination of employment, Mr. Paul will not be eligible to receive the Change in Control Benefits.