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Table of Contents
SHUTTERFLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts) — (Continued)
The total intrinsic value of options exercised during the twelve months ended December 31, 2006, 2005, and 2004 was $531, $3,274, and
$4,259, respectively. Net cash proceeds from the exercise of stock options were $83 for the twelve months ended December 31, 2006.
The following table summarizes information about stock options outstanding, vested and exercisable at December 31, 2006:
Early Exercise of Employee Options
Stock options granted under the Company’s stock option plans provide employee option holders the right to elect to exercise unvested
options in exchange for restricted common stock. Unvested shares, which amounted to 31, 138, and 698 at December 31, 2006, 2005, and
2004, respectively, were subject to a repurchase right held by the Company at the original issuance price in the event the optionees’
employment is terminated either voluntarily or involuntarily. For exercises of employee options, this right lapses 25% on the first anniversary
of the vesting start date and in 36 equal monthly amounts thereafter. These repurchase terms are considered to be a forfeiture provision and do
not result in variable accounting. In accordance with EITF No. 00-23, Issues Related to the Accounting for Stock Compensation under APB
No. 25,
the shares purchased by the employees pursuant to the early exercise of stock options are not deemed to be outstanding until those
shares vest. In addition, cash received from employees for exercise of unvested options is treated as a refundable deposit shown as a liability in
the Company’s financial statements. As of December 31, 2006, 2005, and 2004, cash received for early exercise of options of $9, $38, and
67
Weighted
Weighted
Options
Average
Average
Granted
Fair Value
Exercise Price
Options with exercise price less than reassessed market price on the grant date
255
$
4.43
$
10.00
Options with exercise price equal to reassessed market price on the grant date
2,014
$
5.06
$
11.25
Total
2,269
$
4.99
$
11.11
Options Vested and
Options Outstanding
Exercisable
Weighted Avg.
Shares Underlying
Remaining
Outstanding Options
Contractual
Weighted Avg.
As of
Weighted Avg.
Range of Exercise Prices
as of 12/31/06
Term (Years)
Ex Price
12/31/06
Ex Price
$ 0.10
-
$ 0.50
747
6.3
$
0.35
551
$
0.37
$ 3.50
-
$ 3.50
14
3.3
$
3.50
14
$
3.50
$ 5.50
-
$ 5.50
1,622
8.1
$
5.50
739
$
5.50
$ 6.00
-
$ 6.56
412
8.6
$
6.10
145
$
6.09
$10.00
-
$10.00
269
9.0
$
10.00
21
$
10.00
$10.39
-
$
10.39
1,482
9.4
$
10.39
11
$
10.39
$12.00
-
$
12.00
97
9.5
$
12.00
—
—
$14.20
-
$
14.20
282
9.7
$
14.20
4
$
14.20
$14.62
-
$
14.62
18
9.9
$
14.62
—
—
$14.91
-
$
14.91
91
10.0
$
14.91
—
—
$ 0.10
-
$
14.91
5,034
8.5
$
7.28
1,485
$
3.75