Shutterfly 2011 Annual Report Download - page 114

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SHUTTERFLY, INC.
STOCK APPRECIATION RIGHT AWARD AGREEMENT TO THE
SHUTTERFLY, INC. 2006 EQUITY INCENTIVE PLAN
Unless otherwise defined herein, the terms defined in the Company’s 2006 Equity Incentive Plan (the “Plan”)
shall have the same defined
meanings in this Stock Appreciation Right Award Agreement (the “Agreement”).
You have been granted Stock Appreciation Rights (“SARs”)
subject to the terms and conditions of the Plan, the Notice of Stock Appreciation
Rights Award (“Notice of Grant”) and this Agreement.
1. Settlement .
Settlement of SARs shall be made within 30 days following the applicable date of vesting under the vesting schedule set
forth in the Notice of Grant. Settlement of SARs shall be in Shares, except no fractional shares will be issued in settlement of SARs. Any
amounts attributable to a fractional share will be settled in cash.
2. No Stockholder Rights .
Unless and until such time as Shares are issued in settlement of SARs, Participant shall have no ownership
of the Shares allocated to the SARs and shall have no right to vote such Shares, subject to the terms, conditions and restrictions described in the
Plan and herein.
3. Dividend Equivalents . Dividends, if any (whether in cash or Shares), shall not be credited to Participant.
4. No Transfer .
The SARs and any interest therein shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise
disposed of.
5. Termination . If Participant’
s continuous employment with the Company or any of its subsidiaries shall terminate for any reason, all
unvested SARs shall be forfeited to the Company forthwith, and all rights of Participant to such SARs shall immediately terminate. In case of
any dispute as to whether Termination has occurred, the Committee shall have sole discretion to determine whether such Termination has
occurred and the effective date of such Termination.
6. Acknowledgement .
The Company and Participant agree that the SARs are granted under and governed by this Agreement and by
the provisions of the Plan (incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan and the Plan prospectus,
(ii) represents that Participant has carefully read and is familiar with their provisions, and (iii) hereby accepts the SARs subject to all of the terms
and conditions set forth herein and those set forth in the Plan and the Notice of Grant.
7. Tax Consequences . Participant acknowledges that there will be tax consequences
upon settlement of the SARs or disposition of the
Shares, if any, received in connection therewith, and Participant should consult a tax adviser prior to such settlement or disposition. Applicable
withholding taxes shall be satisfied by the Company by withholding the applicable number of Shares otherwise deliverable upon settlement of
the SAR in accordance with rules and procedures established by the Committee. There is no tax event upon granting of an SAR. Upon
settlement of the SAR, Participant will include in income the fair market value of the Shares subject to the Shares payable in accordance with
settlement of the SAR. The included amount will be treated as ordinary income by Participant and will be subject to withholding by the
Company. Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as short-term or long-
term capital gain or
loss, depending on whether the Shares are held greater than one year from the date of settlement.
8. Compliance with Laws and Regulations .
The issuance of Shares will be subject to and conditioned upon compliance by the
Company and Participant with all applicable state and federal laws and regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Company’s Common Stock may be listed or quoted at the time of such issuance or transfer.
9. Successors and Assigns . The Company may assign any of its rights under this Agreement.
This Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will
be binding upon Participant and Participant’s heirs, executors, administrators, legal representatives, successors and assigns.