EXPLANATORY NOTE
This Registration Statement on Form S-8 is filed by PayPal Holdings, Inc. (the Company) in
connection with that certain Agreement and Plan of Merger, dated as of November 20, 2019 (the Merger Agreement), by and among PayPal, Inc. (Parent), Hive Acquisition Corp. (Merger Sub), Honey Science
Corporation (Honey) and Fortis Advisors LLC. Pursuant to the Merger Agreement, on January 3, 2020 (the Effective Time), Merger Sub merged with and into Honey with Honey surviving as a wholly-owned subsidiary of Parent.
Under the Merger Agreement, each in-the-money
unvested option to purchase Honey common stock granted under the Honey Science Corporation 2015 Equity Incentive Plan, as amended on February 17, 2017 and April 16, 2018 (the Plan), held by an individual who continues in
employment with Honey or Honeys subsidiaries following the Effective Time (each, a Continuing Employee) that was outstanding and unexercised immediately prior to the Effective Time was assumed by the Company and converted into an
option to purchase shares of common stock of the Company, on substantially the same terms and conditions (including vesting and exercisability) as the Honey stock option, except (X) the number of shares of Company common stock subject to each
such converted Honey stock option equals (a) the number of shares of Honey common stock subject to each such Honey stock option, multiplied by (b) the conversion ratio (as defined below), rounded down to the nearest whole share of Company
common stock; (Y) the per share exercise price for each such converted Honey stock option equals (i) the per share exercise price of such Honey stock option, divided by (ii) the conversion ratio, rounded up to the nearest whole cent;
and (Z) for certain administrative and other changes required for consistency with the Companys equity compensation plan.
In
addition, under the Merger Agreement, each Honey unvested restricted stock unit granted under the Plan held by a Continuing Employee that was outstanding immediately prior to the Effective Time was assumed by the Company and converted into an
unvested restricted stock unit to acquire common stock of the Company upon settlement, on substantially the same terms and conditions (including vesting and settlement) as the Honey restricted stock unit, except (X) the number of shares of
Company common stock subject to each such converted Honey restricted stock unit equals (a) the number of shares of Honey common stock subject to each such Honey restricted stock unit, multiplied by (b) the conversion ratio, rounded down to
the nearest whole share of Company common stock, and (Y) for certain administrative and other changes required for consistency with the Companys equity compensation plan.
In addition, under the Merger Agreement, each restricted share of Honey common stock granted under the Plan that was outstanding immediately
prior to the Effective Time was assumed by the Company and converted into restricted shares of Company common stock, on the same terms and conditions (including vesting and exercisability) as the Honey restricted shares, except (X) the number
of restricted shares of Company common stock subject to each such award of Honey restricted shares equals (a) the number of shares of Honey common stock subject thereto, multiplied by (b) the conversion ratio, rounded down to the nearest
whole shares of Company common stock, and (Y) for certain administrative and other changes required for consistency with the Companys equity compensation plan.
The conversion ratio is equal to 0.0547, which equals the fraction (rounded to the nearest 1/10,000) obtained by dividing $5.94,
by the volume weighted average price of a share of Company common stock as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the second trading day prior to the Effective Time.
This Registration Statement relates to an aggregate of 1,241,441 shares of Company common stock issuable pursuant to such converted
(a) Honey unvested stock options outstanding as of January 3, 2020 under the Plan, (b) Honey unvested restricted stock units outstanding as of January 3, 2020, and (c) restricted shares of Honey common stock outstanding as
of January 3, 2020 under the Plan. On January 2, 2020, the reported closing sale price for our common stock on the NASDAQ Stock Market was $110.75 per share.