On behalf of
Shutterfly, Inc. (the “Company”), I am pleased to offer
you the full-time position of Chief Financial Officer reporting to
Dave Bagshaw, CEO. By signing this letter, you confirm to the
Company that you have no contractual commitments or other legal
obligations that would prohibit you from performing your duties for
the Company.
Your base
salary will be $235,000, annually, subject to all applicable
deductions and withholding payable in accordance with the
Company’s standard payroll policies.
Bonus:
You will be eligible to be considered for an incentive bonus with a
total target amount of 25% per quarter. The bonus (if any) will be
awarded based on your achievement of the following criteria
established by the Company’s Chief Executive Officer and
approved by the Company’s Board of Directors; 7.5% of base on
achieving the base plan for revenue, 7.5% of base for achieving
base plan for net income, the plan also awards 5% for achieving the
revenue in the stretch plan and 5% for achieving net income. The
first eligible bonus period will be September 2004. Each
quarterly bonus (if any) will be paid after the Company’s
books for that quarter have been closed and will be earned by you
only if you are employed by the Company at the time of payment. The
determinations of the Company’s Board of Directors with
respect to your bonus will be final and binding.
Start
Date:
Your start date with Shutterfly will be June 25,
2004.
Stock
Options:
You will be granted an option to purchase 230,000 shares of the
Company’s Common Stock, at an exercise price equal to the
fair market value of the Common Stock on the date the Board grants
your stock option or on your first date of employment with the
Company, whichever is later. Your option will be subject to all of
the terms, conditions and restrictions of the Company’s 1999
Stock Plan and the execution of a stock option agreement pursuant
to such plan.
If the Company
is subject to a Change in Control (as defined in the Plan), merger
or acquisition, whereas, you will no longer be CFO of Shutterfly,
Shutterfly will agree to pay you severance pay of 6 months
following the termination of your employment and accelerate your
vesting schedule by 12 months from that date. Your severance pay
will be paid in accordance with the Company’s standard
payroll procedures. However, to receive this severance pay you must
have (a) signed a general release (in a form prescribed by the
Company) and (b) returned all Company property. If the Company
is subject to a Change in Control (as defined in the Plan), merger
or acquisition, whereas, you continue to report to Shutterfly, the
severance and accelerated vesting will not be offered.
Severance:
If the Company terminates your employment for any reason other than
Cause (as defined in the next paragraph), then the Company will pay
you severance pay for a period of 12 months and accelerate
your vesting schedule by 12 months from that date following
the termination of your
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