Shutterfly 2014 Annual Report Download - page 100

respectively, and (ii) the exercise price of an ISO and NSO granted to a 10% stockholder was not less than
110% of the deemed fair value of the shares on the date of grant. The Board determined the period over
which options became exercisable. The term of the options was to be no longer than five years for ISOs for
which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than ten
years for all other options. Options granted under the 1999 Plan generally vested over four years. The
Board of Directors determined that no further grants of awards under the 1999 Plan would be made after
the Company’s IPO.
2006 Equity Incentive Plan
In June 2006, the Board adopted, and in September 2006 the Company’s stockholders approved, the
2006 Equity Incentive Plan (the ‘‘2006 Plan’’), and all shares of common stock available for grant under the
1999 Plan transferred to the 2006 Plan. The 2006 Plan provides for the grant of ISOs to employees
(including officers and directors who are also employees) of the Company or of a parent or subsidiary of
the Company, and for the grant of all other types of awards to employees, officers, directors, consultants,
independent contractors and advisors of the Company or any parent or subsidiary of the Company,
provided such consultants, independent contractors and advisors render bona-fide services not in
connection with the offer and sale of securities in a capital-raising transaction. Other types of awards under
the 2006 Plan include NSOs, restricted stock awards, stock bonus awards, restricted stock units, and
performance shares.
Options issued under the 2006 Plan are generally for periods not to exceed 10 years and are issued at
the fair value of the shares of common stock on the date of grant as determined by the Board. The fair
value of the Company’s common stock is determined by the last sale price of such stock on the NASDAQ
Global Select 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.
The 2006 Plan provides for automatic increases in the maximum number of shares available for
issuance on January 1, 2011, 2012, and 2013 by 3.5%, 3.3%, and 3.1%, respectively, of the number of
shares of the Company’s common stock issued and outstanding on the December 31 immediately prior to
the date of increase and for automatic increases on January 1, 2014 and January 1, 2015 by 1,200,000
shares of the Company’s common stock.
Tiny Prints 2008 Equity Incentive Plan
In April 2011, in connection with the acquisition of Tiny Prints, the Company converted and assumed
the equity awards granted under the Tiny Prints 2008 Equity Incentive Plan (the ‘‘Tiny Prints Plan’’).
Awards granted under the Tiny Prints Plan include ISO, NSO, and restricted share awards, all of which
generally 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. Options under this plan will
expire if not exercised within 10 years from the date of grant, and options and awards will expire if
forfeited due to termination.
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