Shutterfly 2011 Annual Report Download - page 87

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21.2 Assumption of Awards by the Company
. The Company, from time to time, also may substitute or assume
outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either; (a)
granting an Award under this Plan in substitution of such other company’
s award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other
company had applied the rules of this Plan to such grant. In the event the Company assumes an award granted by another company, the terms
and conditions of such award will remain unchanged ( except
that the exercise price and the number and nature of Shares issuable upon exercise
of any such award will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects to grant a new Award
rather than assuming an award, such new Award may be granted with a similarly adjusted Exercise Price.
21.3 Outside Directors’ Awards
. Notwithstanding any provision to the contrary, in the event of a Corporate
Transaction, the vesting of all Awards granted to Outside Directors pursuant to Section 6 of this Plan will accelerate and such Awards will
become exercisable in full prior to the consummation of such event at such times and on such conditions as the Committee determines.
22. ADOPTION AND SHAREHOLDER APPROVAL . This Plan shall be submitted for the approval of the Company’
s
shareholders, consistent with applicable laws, within twelve (12) months before or after the date this Plan is adopted by the Board.
23. TERM OF PLAN/GOVERNING LAW
. Unless earlier terminated as provided herein, this Plan will become effective on
the Effective Date and will terminate ten (10) years from the date this Plan is adopted by the Board. This Plan and all agreements thereunder
shall be governed by and construed in accordance with the laws of the State of California.
24. AMENDMENT OR TERMINATION OF PLAN
. The Board may at any time terminate or amend this Plan in any
respect, including, without limitation, amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan;
provided , however
, that the Board will not, without the approval of the shareholders of the Company, amend this Plan in any manner that
requires such shareholder approval; provided further , that a Participant’
s Award shall be governed by the version of this Plan then in effect at
the time such Award was granted.
25. NONEXCLUSIVITY OF THE PLAN
. Neither the adoption of this Plan by the Board, the submission of this Plan to the
shareholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board
to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock awards and
bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
26. INSIDER TRADING POLICY
. Each Participant who receives an Award shall comply with any policy adopted by the
Company from time to time covering transactions in the Company’s securities by employees, officers and/or directors of the Company.
27. DEFINITIONS . As used in this Plan, the following terms will have the following meanings:
“ Award ”
means any award under the Plan, including any Option, Restricted Stock, Stock Bonus, Stock Appreciation Right, Restricted
Stock Unit or award of Performance Shares.
“ Award Agreement ”
means, with respect to each Award, the signed written agreement between the Company and the Participant
setting forth the terms and conditions of the Award.
“ Board ” means the Board of Directors of the Company.
“ Cause ”
means (a) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) a breach of fiduciary duty to the Company
or a Parent or Subsidiary of the Company, or (c) a failure to materially perform the customary duties of employee’s employment.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Committee ”
means the Compensation Committee of the Board or those persons to whom administration of the Plan, or part of the
Plan, has been delegated as permitted by law.