Shutterfly 2011 Annual Report Download - page 65

2006 Equity Incentive Plan
In June 2006, the Board adopted, and in September 2006 the Company’s stockholders approved, the 2006 Equity Incentive Plan (the “
2006
Plan”),
and all shares of common stock available for grant under the 1999 Plan transferred to the 2006 Plan. The 2006 Plan provides for the grant
of ISOs to employees (including officers and directors who are also employees) of the Company or of a parent or subsidiary of the Company,
and for the grant of all other types of awards to employees, officers, directors, consultants, independent contractors and advisors of the Company
or any parent or subsidiary of the Company, provided such consultants, independent contractors and advisors render bona-
fide services not in
connection with the offer and sale of securities in a capital-
raising transaction. Other types of awards under the 2006 Plan include NSOs,
restricted stock awards, stock bonus awards, restricted stock units, and performance shares.
Options issued under the 2006 Plan are generally for periods not to exceed 10 years and are issued at the fair value of the shares of common
stock on the date of grant as determined by the Board. The fair value of the Company’
s common stock is determined by the last sale price of
such stock on the Nasdaq Global Market. Options issued under the 2006 Plan typically vest with respect to 25% of the shares one year after the
options’ vesting commencement date, and the remainder ratably on a monthly basis over the following three years.
The 2006 Plan provides for automatic replenishments on January 1 of 2011, 2012, and 2013 of 3.5%, 3.3%, and 3.1%, respectively of the
number of shares of the Company’s common stock issued and outstanding on the December 31 immediately prior to the date of increase.
Stock Option Activity
A summary of the status of the Company’
s stock option plan at December 31, 2010 and changes during the period are presented in the table
below (share numbers and aggregate intrinsic value in thousands):
As of December 31, 2009 and 2008, there were 3,572,000 and 3,237,000 options vested, respectively.
During the year ended December 31, 2010, the Company granted stock options to purchase an aggregate of 257,000 shares of common stock
with a weighted average grant-
date fair value of $10.62 per share. In fiscal years ended December 2009 and 2008, the Company granted stock
options to purchase an aggregate of 159,000 and 642,000 shares of common stock, respectively, with a weighted average grant-
date value of
$6.61 and $5.99 per share, respectively.
The total intrinsic value of options exercised during the twelve months ended December 31, 2010, 2009 and 2008 was $19,721,000,
$3,963,000 and $3,662,000, respectively. Net cash proceeds from the exercise of stock options were $14,703,000 for the twelve months ended
December 31, 2010.
Table of Contents
Number of
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Term (Years)
Aggregate
Intrinsic
Value
Balances, December 31, 2009
4,689
$
13.88
Granted
257
24.29
Exercised
(1,320
)
11.14
Forfeited, cancelled or expired
(269
)
19.49
Balances, December 31, 2010
3,357
$
15.33
6.1
$
65,669
Options vested and expected to vest at December 31, 2010
3,196
$
15.05
6.0
$
63,400
Options vested at December 31, 2010
2,716
$
13.98
5.6
$
56,807
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