Shutterfly 2015 Annual Report Download - page 101

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2015 Equity Incentive Plan
In December 2015 the Company’s stockholders approved, the 2015 Plan, and all shares of common stock
available for grant under the 2006 Plan transferred to the 2015 Plan. The types of awards under the 2015 Plan
include restricted stock awards, stock bonus awards, restricted stock units, and performance shares. The 2015
Plan provides for 1,400,000 shares of the Company’s common stock available for issuance in addition to the
shares available under the 2006 plan.
Stock Option Activity
A summary of the Company’s stock option activity at December 31, 2015 and changes during the period are
presented in the table below (share numbers and aggregate intrinsic values in thousands):
Number of
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Term
(Years)
Aggregate
Intrinsic
Value
Balances, December 31, 2014 ................... 402 $ 25.42
Granted ................................... — —
Exercised ................................. (163) 19.81
Forfeited, canceled or expired ................. (33) 42.81
Balances, December 31, 2015 ................... 206 $ 27.08 3.8 $ 3,902
Options vested and expected to vest at December 31,
2015 ..................................... 206 $ 27.07 3.8 $ 3,898
Options vested at December 31, 2015 ............. 198 $ 26.98 3.7 $ 3,776
As of December 31, 2014 and 2013, there were 356,000 and 462,000 options vested, respectively.
During the years ended December 31, 2015 and 2014, the Company did not grant any stock options. In the
fiscal year ended December 31, 2013, the Company granted stock options to purchase an aggregate of 2,000
shares of common stock, with a weighted average grant-date fair value of $12.55 per share.
The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was
$4.1 million, $6.1 million, and $41.5 million, respectively. Net cash proceeds from the exercise of stock options
were $3.2 million for the year ended December 31, 2015.
Valuation of Stock Options
The Company estimated the fair value of each option award on the date of grant using the Black-Scholes
option-pricing model and the assumptions noted in the following table. The Company calculated volatility using
an average of its historical and implied volatilities as it had sufficient public trading history to cover the entire
expected term. The expected term of options gave consideration to historical exercises, post vest cancellations
and the options contractual term. The risk-free rate for the expected term of the option is based on the U.S.
Treasury Constant Maturity at the time of grant. The assumptions used to value options granted during
December 31, 2013 were as follows:
Year Ended
December 31, 2013
Dividend yield ................................................................ —
Annual risk free rate of return .................................................... 0.8%
Expected volatility ............................................................. 47.0%
Expected term (years) .......................................................... 4.2
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