Shutterfly 2011 Annual Report Download - page 98

4. COMPLIANCE WITH SECURITIES LAWS .
Purchaser understands and acknowledges that the exercise of any rights to
purchase any Shares is expressly conditioned upon compliance with the Securities Act and all applicable state securities laws. Purchaser agrees
to cooperate with the Company to ensure compliance with such laws.
5. RESTRICTED SECURITIES .
5.1 No Transfer Unless Registered or Exempt .
Purchaser understands that Purchaser may not transfer any Shares
except when such Shares are registered under the Securities Act or qualified under applicable state securities laws or unless, in the opinion of
counsel to the Company, exemptions from such registration and qualification requirements are available. Purchaser understands that only the
Company may file a registration statement with the SEC and that the Company is under no obligation to do so with respect to the Shares, and
may withdraw any such registration statement at any time after filing. Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all or any of the Shares in the amounts or at the times proposed by
Purchaser.
5.2 SEC Rule 144 . If Purchaser is an “affiliate”
for purposes of Rule 144 promulgated under the Securities Act, then
in addition, Purchaser has been advised that Rule 144 requires that the Shares be held for a minimum of one (1) year, and in certain cases two (2)
years, after they have been purchased
and paid for
(within the meaning of Rule 144). Purchaser understands that Rule 144 may indefinitely
restrict transfer of the Shares so long as Purchaser remains an "affiliate" of the Company or if "current public information" about the Company
(as defined in Rule 144) is not publicly available.
6. RIGHTS AS A STOCKHOLDER .
Subject to the terms and conditions of this Exercise Agreement, Purchaser will have
all of the rights of a stockholder of the Company with respect to the Shares from and after the date that Shares are issued to Purchaser until such
time as Purchaser disposes of the Shares.
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS .
7.1 Legends .
Purchaser understands and agrees that the Company will place any legends that may be required by
state or U.S. Federal securities laws, the Company's Certificate of Incorporation or Bylaws, any other agreement between Purchaser and the
Company or, subject to the assent of the Company, any agreement between Purchaser and any third party.
7.2 Stop-Transfer Instructions .
Purchaser agrees that, to ensure compliance with any restrictions imposed by this
Exercise Agreement, the Company may issue appropriate "stop-
transfer" instructions to its transfer agent, if any, and if the Company transfers its
own securities, it may make appropriate notations to the same effect in its own records.
7.3 Refusal to Transfer .
The Company will not be required (i) to transfer on its books any Shares that have been
sold or otherwise transferred in violation of any of the provisions of this Exercise Agreement or (ii) to treat as owner of such Shares, or to accord
the right to vote or pay dividends to any purchaser or other transferee to whom such Shares have been so transferred.
8. TAX CONSEQUENCES .
PURCHASER UNDERSTANDS AND REPRESENTS: (i) THAT PURCHASER HAS
REVIEWED THE PROSPECTUS PREPARED FOR THE PLAN AND CONSULTED PURCHASER’
S PERSONAL TAX ADVISER IN
CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE
COMPANY FOR ANY TAX ADVICE. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE THE PLAN WAS ADOPTED
BY THE BOARD OF SOME OF THE U.S. FEDERAL TAX CONSEQUENCES OF EXERCISE OF THE OPTION AND DISPOSITION OF
THE SHARES. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. PURCHASER SHOULD CONSULT THE PROSPECTUS AND PURCHASER’
S PERSONAL TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.