Shutterfly 2008 Annual Report Download - page 85

Exhibit 10.21
SEPARATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS
THIS SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (“Agreement”)
is entered into by and between Stephen E. Recht, his heirs, successors,
assigns, agents or representatives of any kind (collectively, “Employee”)
and Shutterfly, Inc., its officers, directors, stockholders, investors, assigns, attorneys, agents, independent
contractors, employees, predecessors, successors, affiliates or other representatives of any kind (collectively, the “Company”).
This Agreement will become effective on the eighth day
after it is signed by Employee (the “Effective Date”),
provided that Employee has not revoked this Agreement (by written notice to Doug Appleton, Vice President, Legal at the
Company) prior to that date in accordance with the revocation terms contained herein.
RECITALS
A. Employee is employed by the Company as its Chief Financial Officer pursuant to the terms of an offer letter dated June 23, 2004 (the “Offer Letter”).
B. Employee’s employment relationship with the Company shall be terminated without cause.
C. In accordance with the Offer Letter, Employee is entitled to certain severance benefits in exchange for signing this Agreement. In addition, Employee shall be provided
with additional severance benefits not set forth in the Offer Letter.
Accordingly, in consideration of the terms, conditions and covenants contained herein, the parties agree as follows:
1. Termination of Employment; Transition Period . Employee’s employment relationship with the Company shall be terminated as of the earlier of (a) February 9,
2008, or (b) the date he enters into a working relationship as an employee, independent contractor, consultant, or other type of worker in exchange for compensation of any kind (the
“Termination Date”), subject to the following provisions:
(a) Through the Termination Date, Employee will provide continued employment services to the Company to transition his work to the new Chief Financial
Officer for the Company, as requested by the Company (the “Transition Period”).
(b) In the event Employee enters into a working relationship as an employee, independent contractor, consultant, or other type of worker in exchange for
compensation of any kind during the Transition Period, he must notify the Company and the Termination Date will be as of the date of such notice.
2. Severance Benefits. As of the Termination Date, Employee will be paid all final wages and accrued, unused paid time off that Employee earned during his
employment with the Company through the Termination Date in accordance with applicable law.
In addition to these mandatory payments and benefits, upon the Termination Date (provided the Employee has not terminated this Agreement prior to February 9,
2008 and Employee is not in breach of this Agreement), Employee shall receive the following severance benefits:
(a) Severance payment. A severance payment in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00), which is equal to twelve (12) months’ pay
at Employee’s final base pay rate, and less applicable withholding taxes and regular deductions, payable in a lump sum within three (3) days following the Termination Date, but no
earlier than eight (8) days following Employee’s execution of this Agreement, provided that Employee has not revoked this Agreement.
(b) Accelerated Stock Vesting. Employee shall vest in such additional number of shares as would have vested in the twelve (12) months following the
Termination Date.
(c) Bonus . In the event that the Company pays bonuses to the senior executive officers of the Company , and provided that Employee is providing satisfactory
performance in accordance with this Agreement, Employee shall receive his year-end bonus payment pro-rata with the other senior executive officers, payable in a lump sum no later
than three (3) days following the Termination Date, but no earlier than eight (8) days following Employee’s execution of this Agreement, provided that Employee has not revoked this
Agreement.
(d) COBRA premiums. If Employee is covered under the Company’s group health plan as of the Termination Date and he timely elects to continue his group
coverage pursuant to federal/state law (COBRA), the Company will reimburse Employee upon submission of written proof of premium payment for 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 Company’s receipt of
Employee’s COBRA election notice until the earlier of (i) the date Employee becomes covered under another group or individual health plan, or (ii) the last day of the six-
month period
described herein. Employee shall at all times be responsible for making his 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 behalf of Employee.
Employee further understands that the severance benefits set forth in Sections 2(a)-(d) above shall be provided contingent upon Employee’
s execution of and compliance with
the terms of this Agreement. Employee understands and acknowledges that he shall not be entitled to any payments or benefits from the Company other than those expressly set forth
in this Section 2, and that he would not be entitled to the payment and benefits set forth in Sections 2(a)-(d) above in the absence of signing this Agreement
3. General Release .
In consideration of the severance compensation and benefits to be paid to Employee pursuant to Section 2(a)-(
d) above, Employee and his heirs, successors, assigns, agents or
representatives of any kind fully release the Company, its officers, directors, stockholders, investors, assigns, attorneys, agents, independent contractors, employees, predecessors,
successors, affiliates or other representatives of any kind (the “Released Parties”)
of and from any and all claims, liabilities, obligations, demands, actions and causes of action, whether
now known or unknown, that Employee now has, or at any other time had, or shall or may have against those Released Parties based upon or arising out of any matter, cause, fact,
thing, act or omission whatsoever occurring or existing at any time up to and including the Effective Date of this Agreement.
This release includes specifically but not exclusively and without limiting the generality of the foregoing, any claims of breach of contract, wrongful termination, retaliation,
fraud, defamation, infliction of emotional distress or discrimination based upon national origin, race, age, sex, sexual orientation, disability or other personal characteristic protected by
state and federal law or any other form of discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, as amended, the Older
Workers Benefit Protection Act, the Americans with Disabilities Act, the Fair Employment and Housing Act, the California Labor Code or any other applicable state or federal
law. However, this Release is not intended to bar any claims that, by statute, may not be waived, such as claims for workers’
compensation benefits, unemployment insurance benefits,
and any challenges to the validity of Employee’s release of claims under the Age Discrimination in Employment Act of 1967, as amended, as set forth in this Agreement.
Employee acknowledges that he has read section 1542 of the Civil Code of the State of California, which states in full:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
Notwithstanding Section 1542, Employee agrees that this Agreement shall act as a release of all past and future claims that may arise from or related to his employment or termination
from employment with the Company, whether such claims are currently known or unknown, foreseen or unforeseen, contingent or absolute. Employee intentionally and specifically
waives any rights he may have under the provisions of Section 1542, as well as under any other statutes or common law principles of similar effect, and assumes full responsibility for
any injuries, damages, losses or liabilities that he may hereafter incur with respect to such claims.