Shutterfly 2008 Annual Report Download - page 79

Exhibit 10.20
Personal and Confidential
November 27, 2007
Mark J. Rubash
3392 Monte Sereno Terrace
Fremont, CA 94539
RE: Offer of Employment
Dear Mark:
Shutterfly, Inc. (the “Company” or “Shutterfly”) is pleased to offer you the opportunity to join Shutterfly. You are being offered a position as Senior Vice President, Chief Financial
Officer reporting to me. If you decide to join us, then your anticipated start date will be November 29, 2007.
Compensation
Your annual base pay will be $280,000, less applicable taxes and withholdings. You will be paid semimonthly in accordance with the Company’s normal payroll procedure.
Additionally, you will be eligible to participate in the Executive Bonus Plan to be approved by the Compensation Committee for 2008. Under the Executive Bonus Plan, it is anticipated
that you will be eligible for a bonus of up to 30% of your base pay based upon you and the Company reaching certain performance goals.
Hire in Bonus
Shutterfly will provide you with a hire in bonus of $37,500, repayable on a pro-rata basis if you voluntarily terminate your employment with the Company within twelve (12) months
from your actual employment start date.
Stock Option
Subject to the approval of the Company’s Board of Directors, you will be granted a stock option (the “Option”) to purchase 270,000 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 Option in accordance with the Board’s stock option grant procedures. Since you
will be an executive officer, our procedure provides for stock option grants only four times a year (on February 29, May 31, August 31 and November 30). Therefore, based on your
anticipated start date above, the grant of your Option is anticipated to occur on November 30, 3007, and this is also anticipated to be your vesting start date. Your Option will be
subject to terms, conditions and restrictions similar to those contained in the Company’s 2006 Equity Incentive Plan (the “Plan”) and the execution of a stock option agreement adopted
pursuant to such Plan.
Severance
After expiration of the Introductory Period (defined below), if your employment is involuntarily terminated without Cause (as defined below), then you will receive an amount (the
“Severance”) equal to six (6) months salary (determined using the monthly rate in effect on the date of termination of your employment) which will be paid over the following six (6)
months (subject to a six-month delay if such delay is required to avoid the penalty taxes that may otherwise be imposed by Section 409A of the Internal Revenue Code of 1986, as
amended), provided you have executed, and not revoked, a general release of claims in favor of the Company (in a form prescribed by the Company) and returned all Company
property.
“Cause” shall mean your (i) 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 attached to this letter as Exhibit A , 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 receiving written notification of such
failure and a reasonable opportunity to cure such failure which shall not be less than 30 days following such notice.
Change in Control Benefits
If the Company is subject to a Corporate Transaction (as defined in the Plan) and within the first six (6) months following such Corporate Transaction (1) you resign because either you
are no longer the Chief Financial Officer of the Company or your role is materially diminished from your role immediately prior to such Corporate Transaction, (2) you resign because
the Company’s corporate office at which you work is moved at least 50 miles from its location immediately prior to such Corporate Transaction or (3) your employment is terminated
by the Company, or a successor corporation, other than for Cause (as defined above), then (A) you will receive the Severance (on the terms and conditions provided above) and (B) if
the Option is assumed in the Corporate Transaction, on the date of such termination you shall vest in an additional number of shares as would have vested in the twelve (12) months
following the date of such termination, and the Option shall remain exercisable for the applicable period specified in the stock option agreement (the Option’s vesting acceleration and
the Severance are collectively referred to as the “Change in Control Benefits”). Your receipt of the Change of 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.
Benefits
As an employee, you will also be eligible to receive certain employee benefits including medical and dental coverage. The medical, dental and vision coverage begin on your date of
hire as an employee. Additionally, you are eligible to participate in the Company’
s 401(k) plan. The Company reserves the right to revise or discontinue any or all of its benefit plans, at
any time, in the Company’s sole discretion. Enclosed is some information on the Company benefit plans.
Holidays
Shutterfly generally observes twelve (12) paid holidays each calendar year. The holiday schedule may change at management’s discretion.
Paid Time Off
In order to allow you flexibility with your free time, the Company has a paid time off policy. You begin to accrue paid time off on your date of hire. You will accrue fifteen (15) days of
paid time off per year for your first three (3) years of employment, subject to the paid time off policy.
Introductory Period
Your first ninety (90) days of work is known as an “Introductory Period”. This “getting acquainted” period gives the Company the opportunity to determine your ability to perform
your job. It also provides you with the opportunity to determine if you are satisfied with the job and the Company. Either you or the Company can terminate the employment
relationship at any time during or after the Introductory Period, with or without Cause or advance notice.
Employment Eligibility Verification