Amendment to Offer Letter
Exhibit
10.20
This
Amendment to Offer Letter (this “Amendment”) is entered into as of
December 23, 2008, by and between Shutterfly, Inc. (the “Company”) and
Xxxxxx Xxxxx (“you”) (collectively, the “parties”). This Amendment
modifies certain provisions of your offer letter from the Company dated January
17, 2007 (the “Offer Letter”).
1. Severance. The parties agree
that the following provisions shall replace and supersede any provisions of the
Offer Letter related to severance benefits:
Severance
If your
employment is terminated by the Company without Cause (as defined below), other
than within twelve (12) months following a Corporate Transaction (as defined in
the Plan):
(1) a
severance payment in the amount equal to six (6) months of your final base pay
rate, and less applicable withholding taxes and regular deductions, payable in a
lump sum (“Severance”);
(2) the
post-termination exercise period for your Company stock options will be extended
from three (3) months to twelve (12) months following your termination date;
and
(3) if
you are covered under the Company’s group health plan as of the termination date
and timely elect to continue your group coverage under COBRA, the Company will
reimburse you upon submission of written proof of premium payment for up to six
(6) months of the applicable COBRA premiums as COBRA is provided in accordance
with the terms of the applicable plans and the law, beginning on the first of
the month following the Company’s receipt of your COBRA election notice and
ending on the earlier of (i) the date you become covered under another group or
individual health plan, or (ii) the last day of the six-month period described
above. You will be solely responsible for making your premium payments
pursuant to COBRA in order to maintain such coverage, and the Company shall not
be responsible for making any direct payments to any health care or insurance
provider on your behalf
Your
receipt of the foregoing severance benefits is conditioned on you having first
executed, and not revoked, a general release of claims in favor of the Company
(in a form prescribed by the Company) and the return of all Company
property. The Severance will be paid in the form of a lump sum, in
accordance with the Company’s standard payroll procedures, commencing within
sixty (60) days following your “separation from service,” as defined under
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
(subject to a six-month delay if you are a “specified employee” as defined under
the Treasury Regulations under Section 409A of the Code and such delay is
required to avoid the penalty taxes that otherwise may be imposed by Section
409A of the Code). The parties intend that the foregoing Severance be
provided in a manner consistent with Section 1.409A-1(b)(9) of the Treasury
regulations such that the Severance will be exempt from Code Section 409A, and
the Offer Letter (as amended) and shall be administered and operated in
conformity with this intention.
“Cause”
means your (i) gross negligence or willful misconduct in the performance of your
duties after a notice is delivered to you that specifically identifies the
manner in which the Company believes you have engaged in gross negligence or
willful misconduct and you have been provided with thirty (30) days to cure any
alleged gross negligence or willful misconduct in the performance of your
duties; (ii) commission of any act of fraud or material dishonesty with respect
to the Company; (iii) conviction of, or plea of guilty or “no contest” to, a
felony or a crime of moral turpitude or dishonesty; (iv) material breach of any
proprietary information and inventions agreement with the Company, including the
Employee Invention Assignment and Confidentiality Agreement, or any other
unauthorized use or disclosure of the Company’s confidential information or
trade secrets; or (v) repeated failure to perform the duties reasonably assigned
to you after your receipt of written notification of such failure and a
reasonable opportunity to cure such failure, which shall not be less than thirty
(30) days following such notice.
2. Change
in Control Benefits. The parties agree
that the following provisions shall replace and supersede any provisions of the
Offer Letter related to benefits available in the event of a Corporate
Transaction or other change in ownership or control of the Company:
Change
in Control Benefits
In the
event of your Termination (as defined below), within twelve (12) months
following a Corporate Transaction (as defined in the Plan), you will receive (A)
items (1) and (2) of the Severance (on the terms and conditions provided above)
and (B) if the Company’s equity awards are assumed in the Corporate Transaction,
accelerated vesting of the number of your then-unvested Company stock option
shares and restricted stock units that would have vested during the twelve (12)
months following the date of such termination (collectively, the “Change in
Control Benefits”). The Change in Control Benefits would be provided
in lieu of any other severance-related benefits for which you may be
eligible. Your receipt of the Change in Control Benefits is
conditioned on you having first executed, and not revoked, a general release of
claims in favor of the Company (in a form prescribed by the Company) and the
return of all Company property.
“Termination”
means (a) a termination of your employment by the Company or its successor
without Cause or (b) your resignation within three (3) months following an event
constituting Good Reason, provided that you have given written notice to the
Company of such event within forty-five (45) days of its occurrence and the
Company has failed to cure such event within thirty (30) days following receipt
of such notice. For purposes of this paragraph, “Good Reason” means
(i) a material reduction or change in your duties and responsibilities as in
effect immediately prior to the Corporate Transaction; (ii) the relocation of
the Company’s corporate office at which you work by more than fifty (50) miles
from its location immediately prior to such Corporate Transaction, which
materially increases your commuting distance or (iii) a material reduction in
your annual compensation, including base salary and bonus.
3. Miscellaneous. This
Amendment, together with the Offer Letter (as amended) and other agreements
referenced therein, contain the entire agreement between you and the Company
concerning your employment with the Company, and supersede any previous
agreements or understandings, whether written or oral. The parties
acknowledge and agree that this Amendment does not affect the at-will nature of
your employment relationship with the Company. This Amendment may be
amended solely in a written document executed on behalf of both
parties.
IN
WITNESS WHEREOF, the parties hereby execute this Amendment to Offer Letter as of
the date first above written.
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SHUTTERFLY,
INC.
By: /s/ Xxxx
Xxxxxxxxxx
Xxxx Xxxxxxxxxx
President &
CEO
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By: /s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx
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