Shutterfly 2011 Annual Report Download - page 104

3.2 Exercise of Repurchase Right
. Unless the Company provides written notice to Participant within 90 days from the
date of termination of Participant’
s employment or consulting relationship that the Company does not intend to exercise its Repurchase Right
with respect to some or all of the Unvested Shares, the Repurchase Right shall be deemed automatically exercised by the Company as of the 90th
day following such termination, provided that the Company may notify Participant that it is exercising its Repurchase Right as of a date prior to
such 90th day. Unless Participant is otherwise notified by the Company pursuant to the preceding sentence that the Company does not intend to
exercise its Repurchase Right as to some or all of the Unvested Shares, execution of this Agreement by Participant constitutes written notice to
Participant of the Company’
s intention to exercise its Repurchase Right with respect to all Unvested Shares to which such Repurchase Right
applies at the time of Termination of Participant. The Company, at its choice, may satisfy its payment obligation to Participant with respect to
exercise of the Repurchase Right by either (A) delivering a check to Participant in the amount of the purchase price for the Unvested Shares
being repurchased, or (B) in the event Participant is indebted to the Company, canceling an amount of such indebtedness equal to the purchase
price for the Unvested Shares being repurchased, or (C) by a combination of (A) and (B) so that the combined payment and cancellation of
indebtedness equals such purchase price. In the event of any deemed automatic exercise of the Repurchase Right by canceling an amount of
such indebtedness equal to the purchase price for the Unvested Shares being repurchased, such cancellation of indebtedness shall be deemed
automatically to occur as of the 90th day following termination of Participant’
s employment or consulting relationship unless the Company
otherwise satisfies its payment obligations. As a result of any repurchase of Unvested Shares pursuant to the Repurchase Right, the Company
shall become the legal and beneficial owner of the Unvested Shares being repurchased and shall have all rights and interest therein or related
thereto, and the Company shall have the right to transfer to its own name the number of Unvested Shares being repurchased by the Company,
without further action by Participant.
3.3 Acceptance of Restrictions . Acceptance of the Shares shall constitute Participant’
s agreement to such restrictions
and the legending of his or her certificates with respect thereto. Notwithstanding such restrictions, however, so long as Participant is the holder
of the Shares, or any portion thereof, he or she shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights
of a stockholder with respect thereto.
3.4 Non-Transferability of Unvested Shares
. In addition to any other limitation on transfer created by applicable
securities laws or any other agreement between the Company and Participant, Participant may not transfer any Unvested Shares, or any interest
therein, unless consented to in writing by a duly authorized representative of the Company. Any purported transfer is void and of no effect, and
no purported transferee thereof will be recognized as a holder of the Unvested Shares for any purpose whatsoever. Should such a transfer
purport to occur, the Company may refuse to carry out the transfer on its books, set aside the transfer, or exercise any other legal or equitable
remedy. In the event the Company consents to a transfer of Unvested Shares, all transferees of Shares or any interest therein will receive and
hold such Shares or interest subject to the provisions of this Agreement, including, insofar as applicable, the Repurchase Right. In the event of
any purchase by the Company hereunder where the Shares or interest are held by a transferee, the transferee shall be obligated, if requested by
the Company, to transfer the Shares or interest to the Participant for consideration equal to the amount to be paid by the Company hereunder. In
the event the Repurchase Right is deemed exercised by the Company, the Company may deem any transferee to have transferred the Shares or
interest to Participant prior to their purchase by the Company, and payment of the purchase price by the Company to such transferee shall be
deemed to satisfy Participant’s obligation to pay such transferee for such Shares or interest, and also to satisfy the Company’
s obligation to pay
Participant for such Shares or interest.
3.5 Assignment
. The Repurchase Right may be assigned by the Company in whole or in part to any persons or
organization.
4. Restrictive Legends and Stop Transfer Orders .
4.1 Legends
. The certificate or certificates representing the Shares shall bear the following legend (as well as any
legends required by applicable state and federal corporate and securities laws):