Shutterfly 2007 Annual Report Download - page 71

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Table of Contents
SHUTTERFLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts) — (Continued)
Board and Company’s management at the time of the grant. Following the IPO, the fair value of the Company’s common stock is determined
by the last sale price of such stock on the Nasdaq Global Market. Options issued under the 2006 Plan typically vest with respect to 25% of the
shares one year after the options’ vesting commencement date, and the remainder ratably on a monthly basis over the following three years.
Option holders under the 2006 Plan are allowed to exercise options prior to vesting.
At the time of adoption of the 2006 Plan, there were 1,358 shares of common stock authorized for issuance under the 2006 Plan, plus
93 shares of common stock from the 1999 Plan that were unissued. The 2006 Plan provides for automatic replenishments on January 1 of 2008,
2009, and 2010, of the lesser of a) 4.62% of stock options issued and outstanding on the December 31 immediately prior to the date of increase
or b) a lesser number as determined by the Board.
Stock Option Activity
A summary of the status of the Company’
s stock option plans at December 31, 2006 and changes during the period then ended is presented
in the table below (share numbers and aggregate intrinsic value in thousands):
As of December 31, 2005 and 2004, there were 489 and 645 shares exercisable, respectively.
Options granted in 2006 are grouped as follows:
66
Shares
Weighted
Weighted
Available
Number of
Average
Average
Aggregate
for
Options
Exercise
Contractual
Intrinsic
Grant
Outstanding
Price
Term (Years)
Value
Balances, December 31, 2003
155
2,137
$
0.31
Additional authorized
1,000
—
—
Granted
(687
)
687
0.30
Exercised
—
(
1,448
)
0.22
Forfeited, cancelled or expired
42
(40
)
0.50
Balances, December 31, 2004
510
1,336
0.40
Additional authorized
2,720
—
—
Granted
(2,372
)
2,372
5.12
Exercised
—
(
315
)
0.35
Forfeited, cancelled or expired
501
(375
)
2.89
Balances, December 31, 2005
1,359
3,018
3.91
Additional authorized
2,055
—
—
Granted
(2,269
)
2,269
11.11
Exercised
—
(
52
)
1.61
Forfeited, cancelled or expired
233
(201
)
6.10
Balances, December 31, 2006
1,378
5,034
$
7.28
8.5
$
35,914
Options vested and expected to vest at December 31, 2006
4,788
$
7.17
8.4
$
34,666
Options vested at December 31, 2006
1,485
$
3.75
7.3
$
15,808