Shutterfly 2011 Annual Report Download - page 117

SHUTTERFLY, INC.
AWARD AGREEMENT (RESTRICTED STOCK UNITS) TO THE
SHUTTERFLY, INC. 2006 EQUITY INCENTIVE PLAN
(U.S. FORM)
Unless otherwise defined herein, the terms defined in Shutterfly, Inc.’s 2006 Equity Incentive Plan (the “Plan”)
shall have the same defined
meanings in this Award Agreement (Restricted Stock Units) (the “Agreement”).
You have been granted Restricted Stock Units (“RSUs”)
subject to the terms, restrictions and conditions of the Plan, the Notice of Restricted
Stock Unit Grant (“Notice of Grant”) and this Agreement.
1. Settlement .
Settlement of RSUs shall be made within 30 days following the applicable date of vesting under the vesting schedule set
forth in the Notice of Grant. Settlement of RSUs shall be in Shares.
2. No Stockholder Rights .
Unless and until such time as Shares are issued in settlement of vested RSUs, Participant shall have no
ownership of the Shares allocated to the RSUs and shall have no right dividends or to vote such Shares.
3. Dividend Equivalents . Dividends, if any (whether in cash or Shares), shall not be credited to Participant.
4. No Transfer .
The RSUs and any interest therein shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise
disposed of.
5. Termination . If Participant’
s service Terminates for any reason, all unvested RSUs shall be forfeited to the Company forthwith, and
all rights of Participant to such RSUs shall immediately terminate. In case of any dispute as to whether Termination has occurred, the
Committee shall have sole discretion to determine whether such Termination has occurred and the effective date of such Termination.
6. Acknowledgement .
The Company and Participant agree that the RSUs are granted under and governed by this Agreement and by
the provisions of the Plan (incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan and the Plan prospectus,
(ii) represents that Participant has carefully read and is familiar with their provisions, and (iii) hereby accepts the RSUs subject to all of the terms
and conditions set forth herein and those set forth in the Plan and the Notice of Grant.
7. U.S. Tax Consequences .
Participant acknowledges that there will be tax consequences upon settlement of the RSUs or disposition
of the Shares, if any, received in connection therewith, and Participant should consult a tax adviser regarding Participant’
s tax obligations prior
to such settlement or disposition. Upon vesting of the RSU, Participant will include in income the fair market value of the Shares subject to the
RSU. The included amount will be treated as ordinary income by Participant and will be subject to withholding by the Company when required
by applicable law (the “Tax Withholding Obligation”).
Upon vesting of the Shares in accordance with Vesting Schedule set forth in the Notice,
such vested Shares, minus the number of Shares sold to offset the Tax Withholding Obligation (as defined herein) described in Section 4 of this
Agreement, will be deposited directly into the Grantee’
s account with the brokerage firm so designated by the Company for this purpose
(hereinafter, the “Designated Brokerage Firm”). Participant’s acceptance of this Award constitutes Participant’
s authorization to the Company to
sell on Participant’
s behalf a whole number of Shares from those Shares issuable to Participant as the Company determines to be appropriate to
generate cash proceeds sufficient to satisfy the minimum applicable Tax Withholding Obligation. Participant has entered into or will enter into
an instruction under Rule 10b5-1 to authorize the sale described in this Section 4. Participant shall also complete any one-
time sale authorization
form required by the Designated Brokerage Firm. Such Shares shall be sold on the first trading day immediately following the day on which
such Tax Withholding Obligation arises (e.g., a vesting date) with a market order at the opening of such trading day by the Designated
Brokerage Firm. The Participant shall be responsible for all broker’
s fees and other costs of sale, and the Participant agrees to indemnify and
hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale. To the extent the proceeds of such sale
exceed Participant’s minimum Tax Withholding Obligation, the excess will be placed in the Participant’
s account with the Designated Brokerage
Firm. Participant acknowledges that the Company or the Designated Brokerage Firm is under no obligation to arrange for such sale at any
particular price, and that the proceeds of any such sale may not be sufficient to satisfy the Participant’
s minimum Tax Withholding
Obligation. Participant is responsible for payment of any additional amounts to satisfy Participant’
s minimum Tax Withholding Obligation. In
such event, the Company shall contact Participant regarding the manner in which such additional amount will be remitted to the
Company. Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as short-term or long-
term capital gain or
loss, depending on whether the Shares are held for more than one year from the date of settlement. Further, a RSU may be considered a deferral
of compensation that is subject to Section 409A of the Code. Section 409A of the Code imposes special rules to the timing of making and
effecting certain amendments of this RSU with respect to distribution of any deferred compensation. You should consult your personal tax
advisor for more information on the actual and potential tax consequences of this RSU.