On behalf of
Shutterfly, Inc. (the “Company”), I am pleased to
promote you to the full-time position of Vice President of
Engineering reporting to the Company’s Chief Executive
Officer. By signing this letter agreement, you confirm to the
Company that you have accepted this promotion and it’s
effective date of August 1, 2001.
Base
Salary:
The Company has agreed to increase your base salary to the monthly
rate of $14,099.00, subject to all applicable deductions and
withholdings and payable in accordance with the Company’s
standard payroll policies.
Bonus:
You will be eligible to be considered for an incentive bonus with a
target amount of $5,000.00 per quarter. The bonus (if any) will be
awarded based on your achievement of criteria established by the
Company’s Chief Executive Officer and approved by the
Company’s Board of Directors, including but not limited to
the Company’s achievement of its financial target objectives.
Thus, your total target bonus is a maximum of $20,000.00 per annum.
The terms and conditions of your target bonus goals will be
developed within 60 days of your start date. The first
eligible bonus period will be September 2001. 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 CEO with respect to your
bonus will be final and binding.
Stock
Options:
Subject to the approval of the Company’s Board of Directors,
you will be granted an option to purchase an additional 1,880,000
shares of the Company’s Common Stock, at an exercise price
per share equal to the fair market value of the Common Stock per
share on the date the Board of Directors grants your stock option.
Your option will be subject to all of the terms, conditions and
restrictions of the Company’s 1999 Stock Plan (the
“Plan” and the execution of a stock option agreement
pursuant to such plan. The option can be immediately exercisable,
but the purchased shares will be subject to repurchase by the
Company at the exercise price if your service terminates for any
reason before you vest in the shares. You will vest in 25% of the
option shares upon your completion of 12 months of service
with the Company, and you will vest in 1/48 of the option shares
upon your completion of each of the next 36 months of service,
as described in the applicable stock option agreement
If the Company
is subject to a Change in Control (as defined in the Plan), merger
or acquisition, before your service with the Company terminates and
you are subject to an Involuntary Termination within 12 months
after that Change in Control, merger or acquisition then you will
become fully vested in your option shares. “involuntary
Termination” means either (a) that your service is
terminated by the Company without Cause or (b) that you resign
because the annual rate of your salary was reduced by the Company
without your written consent, because the scope of your job
responsibilities or authority was materially reduced without your
written consent, or
1
because the
Company has determined without your written consent to relocate
your principal place of work by a distance of 35 miles or
more.
Clause:
If within the first 12 months of this agreement, it is agreed
by both yourself and the Chief Executive Officer, that this
promotion is not in the best interest of the Company, the Company
will reinstate you back to the role of Director of
Engineering.
|
