Shutterfly 2014 Annual Report Download - page 106

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As of December 31, 2014, the Company is subject to taxation in the United States and Israel. The
Company is subject to examination for tax years including and after 2010 for federal income taxes. Certain
tax years outside the normal statute of limitation remain open to audit by tax authorities due to tax
attributes generated in those early years which have been carried forward and may be audited in
subsequent years when utilized.
The Company is currently under audit by the Internal Revenue Service (IRS) for the tax year ended
December 31, 2010. The Company is not aware of any proposed adjustments and it believes that the final
outcome of these examinations or agreements will not have a material effect on its results of operations as
of December 31, 2014.
Note 10 — Employee Benefit Plan
In 2000, the Company established a 401(k) plan under the provisions of which eligible employees may
contribute an amount up to 50% of their compensation on a pre-tax basis, subject to IRS limitations. The
Company matches employees’ contributions at the discretion of the Board.
In 2014 and 2013, there were no discretionary contributions.
Note 11 — Share Repurchase Program
On October 24, 2012, the Company’s Board of Directors conditionally authorized and the Audit
Committee subsequently approved a share repurchase program for up to $60.0 million of the Company’s
common stock. On February 6, 2014, the Company’s Board of Directors approved an increase to the
program, authorizing the Company to repurchase up to $100.0 million of the Company’s common stock in
addition to any amounts repurchased as of that date. The share repurchase program is subject to prevailing
market conditions and other considerations; does not require the Company to repurchase any dollar
amount or number of shares; and may be suspended or discontinued at any time. The share repurchase
authorizations permit the Company to effect repurchases for cash from time to time through open market,
privately negotiated or other transactions, including pursuant to trading plans established in accordance
with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, or by a combination of
such methods. As of December 31, 2014, the remaining authorized amount for stock repurchases under the
share repurchase program was $11.2 million.
In 2014, the Company repurchased 1,961,085 shares of its outstanding common stock at an average of
$45.29 per share pursuant to the share repurchase program.
In 2013, the Company repurchased 70,313 shares of its outstanding common stock at an average of
$31.87 per share pursuant to the share repurchase program.
In the second quarter of 2013, the Company repurchased 631,180 shares from purchasers of its 0.25%
senior convertible notes in privately negotiated transactions of outside the share repurchase program using
$30.0 million of the net proceeds of its issuance of the notes.
All repurchased shares of common stock have been retired.
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