Shutterfly 2011 Annual Report Download - page 86

16. CERTIFICATES
. All certificates for Shares or other securities delivered under this Plan will be subject to such stock
transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable
federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.
17. ESCROW; PLEDGE OF SHARES . To enforce any restrictions on a Participant’
s Shares, the Committee may require the
Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee,
appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to pledge
and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of the Participant’
s obligation to the
Company under the promissory note; provided , however
, that the Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company will have full recourse against the Participant under the promissory note
notwithstanding any pledge of the Participant’
s Shares or other collateral. In connection with any pledge of the Shares, the Participant will be
required to execute and deliver a written pledge agreement in such form as the Committee will from time to time approve. The Shares purchased
with the promissory note may be released from the pledge on a pro rata basis as the promissory note is paid.
18. EXCHANGE AND BUYOUT OF AWARDS
. Except in connection with a (i) Corporate Transaction or a (ii) stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or other similar change in the capital
structure of the Company, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or SARs or
cancel outstanding Options or SARs in exchange for cash or other Awards (including Options or SARs) with an exercise price that is less than
the exercise price of the original Option or SAR without prior shareholder approval.
19. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
. An Award will not be effective unless such
Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on
the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company will
be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of
any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do
so.
20. NO OBLIGATION TO EMPLOY
. Nothing in this Plan or any Award granted under this Plan will confer or be deemed
to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or
Subsidiary of the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant’
s
employment or other relationship at any time, with or without cause.
21. CORPORATE TRANSACTIONS .
21.1 Assumption or Replacement of Awards by Successor
. In the event of a Corporate Transaction any or all
outstanding Awards may be assumed or replaced by the successor corporation, which assumption or replacement shall be binding on all
Participants. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the existing provisions of the Awards). The successor corporation may
also issue, in place of outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such successor or acquiring corporation (if any) refuses to assume,
convert, replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, then notwithstanding any other provision in this
Plan to the contrary, such Awards will expire on such transaction at such time and on such conditions as the Board will determine.