If Mr. O’Hara’s employment with the Company is terminated without Cause or he resigns his employment for Good Reason (as defined in the Offer Letter), not in connection with a Change in Control, then subject to Mr. O’Hara satisfying a release condition, he will be entitled to receive: (i) his accrued compensation, (ii) alump-sum payment equal to 12 months of his then-current base salary, (iii) alump-sum payment equal to 100% of his target bonus (assuming target achievement) for the then-current fiscal year, (iv) alump-sum payment equal to the employer and employee portions of applicable COBRA premiums for 18 months, (v) acceleration of 100% of the then-unvested shares subject to theSign-On RSUs (items (ii)-(v), collectively, the “Severance Benefits”), (vi) acceleration of 50% of the then-unvested shares subject to the Initial RSUs that would have vested had Mr. O’Hara completed an additional 12 months of service following the termination date and (vii) acceleration of 50% of the then-unvested shares subject to earned Initial PSUs (i.e., those for which the performance-based vesting conditions have previously been satisfied and only service-based vesting conditions remain) that would have vested had Mr. O’Hara completed an additional 12 months of service following the termination date. Mr. O’Hara will forfeit any unearned shares subject to the PSUs and MSUs upon termination. Receipt of these severance benefits is conditioned on execution by Mr. O’Hara of a release of claims in favor of the Company.
If Mr. O’Hara’s employment with the Company is terminated without Cause or he resigns his employment for Good Reason within 90 days before or 12 months after a Change in Control, then subject to Mr. O’Hara satisfying a release condition, he will be entitled to receive: (i) his accrued compensation, (ii) the Severance Benefits, (iii) acceleration of 100% of the then-unvested shares subject to the Initial RSUs, (iii) acceleration of 100% of the then-unvested shares subject to earned Initial PSUs, (assuming, if necessary, target achievement for the then-current fiscal year) prorated, if necessary, for the time elapsed in the performance period, and (iv) acceleration of 100% of the then-unvested shares subject to the Initial MSUs earned based on a truncated performance period, if necessary, ending on the date of the Change in Control by reference to the actual TSR as of closing.
If Mr. O’Hara’s employment with the Company is terminated due to Mr. O’Hara’s death or Disability (as defined in the Offer Letter), then subject to Mr. O’Hara (or his personal representative) satisfying a release condition, Mr. O’Hara (or his successor in interest) will be entitled to receive: (i) his accrued compensation,(ii) lump-sum payment equal to his actual annual performance bonus for the bonus period in which the termination occurs, based on actual achievement of Company performance objectives and achievement of any personal performance objectives, if any, at a minimum of 100% for such fiscal year, in each case, prorated for Mr. O’Hara’s period of employment in such bonus period, and (iii) immediate acceleration, effective as of immediately prior to Mr. O’Hara’s death or Disability, as applicable, of 100% of the then-unvestedSign-On RSUs.
There was no arrangement or understanding pursuant to which Mr. O’Hara was selected as an officer of the Company. There are no family relationships between Mr. O’Hara and any director or executive officer of the Company, or any person chosen by the Company to become a director or executive officer. There are no related party transactions of the kind described in Item 404(a) of RegulationS-K in which Mr. O’Hara was a participant.
The foregoing description of the Offer Letter is qualified in its entirety by reference to the full text of the Offer Letter, which is filed as Exhibit 99.1 to this Current Report on Form8-K and is incorporated by reference herein.
(e)
The information set forth above under Item 5.02(c) is hereby incorporated by reference into this Item 5.02(e).
| Item 8.01 | Other Information |
A copy of the press release announcing Mr. O’Hara’s appointment as the Company’s Chief Executive Officer is filed as Exhibit 99.2 to this Current Report on Form 8-K.
Additional Information and Where to Find It
In connection with the proposed acquisition of the Company by affiliates of Apollo Global Management, LLC (“Apollo”), the Company will file relevant materials with the SEC, including a preliminary and definitive proxy statement. Promptly after filing the definitive proxy statement, the Company will mail the definitive proxy statement and a proxy card to the stockholders of the Company. STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Stockholder of the Company will be able to obtain a free copy of these documents, when they become available, at the website maintained by the SEC at www.sec.gov or free of charge at http://ir.shutterfly.com/investor-relations.
Additionally, the Company will file other relevant materials in connection with the proposed acquisition of the Company by affiliates of Apollo pursuant to the terms of the definitive merger agreement. The Company and its directors, executive officers and other members of its management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of the stockholders of the Company in connection with the proposed transaction. Stockholders of the Company may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive officers and directors in the solicitation by reading the Company’s most recent Annual Report on Form 10-K, which was filed with the SEC on March 1, 2019 and the proxy statement for the Company’s 2019 annual meeting of stockholders, which was filed with the SEC on April 8, 2019. These documents are available free of charge at the SEC’s web site at www.sec.gov or by going to the Company’s Investor Relations Website at http://ir.shutterfly.com/investor-relations. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the definitive proxy statement relating to the proposed transaction when it becomes available.
| Item 9.01 | Financial Statements and Exhibits |
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