Shutterfly 2011 Annual Report Download - page 80

5. OPTIONS
. The Committee may grant Options to eligible persons and will determine whether such Options will be
Incentive Stock Options within the meaning of the Code (“ ISOs ”) or Nonqualified Stock Options (“ NQSOs ”),
the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the
Option, subject to the following:
5.1 Form of Option Grant
. Each Option granted under this Plan will be evidenced by an Option Agreement which will
expressly identify the Option as an ISO or an NQSO (“ Stock Option Agreement ”),
and will be in such form and contain such provisions (which
need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the
terms and conditions of this Plan.
5.2 Date of Grant
. The date of grant of an Option will be the date on which the Committee makes the determination to
grant such Option, or a specified future date. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a
reasonable time after the granting of the Option.
5.3 Exercise Period
. Options may be exercisable within the times or upon the conditions (including confirmation by
the Committee of the attainment during a Performance Period of performance goals based on Performance Factors) as set forth in the Stock
Option Agreement governing such Option; provided , however
, that no Option will be exercisable after the expiration of ten (10) years from the
date the Option is granted; and provided further
that no ISO granted to a person who directly or by attribution owns more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the Company (“
Ten Percent
Shareholder
”)
will be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee also may provide for
Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as
the Committee determines.
5.4 Exercise Price
. The Exercise Price of an Option will be determined by the Committee when the Option is granted;
provided that: (i) the Exercise Price of an ISO will be not less than 100% of the Fair Market Value of the Shares on the date of grant; (ii) the
Exercise Price of any ISO granted to a Ten Percent Shareholder will not be less than 110% of the Fair Market Value of the Shares on the date of
grant; and (iii) the Exercise Price of an NQSO will not be less than 100% of the Fair Market Value of the Shares on the date of grant. Payment
for the Shares purchased may be made in accordance with Section 12.
5.5 Method of Exercise
. Options may be exercised only by delivery to the Company of a written stock option exercise
agreement (the “ Exercise Agreement ”)
in a form approved by the Committee (which need not be the same for each Participant), stating the
number of Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant’
s investment intent and access to information and other matters, if any, as may be
required by or desirable to the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the
number of Shares being purchased.
5.6 Termination
. Notwithstanding the exercise periods set forth in the Stock Option Agreement, the exercise of an
Option will always be subject to the following:
(a) If the Participant is Terminated for any reason except the Participant’
s death or Disability, then the
Participant may exercise such Participant’
s Options only to the extent that such Options would have been exercisable by the Participant on the
Termination Date no later than three (3) months after the Termination Date (or such shorter time period not less than thirty (30) days or longer
time period not exceeding five (5) years as may be determined by the Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO), but in any event no later than the expiration date of the Options.
(b) If the Participant is Terminated because of Participant’
s death (or the Participant dies within three (3)
months after a Termination other than for Cause or because of the Participant’s Disability), then the Participant’
s Options may be exercised only
to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised by the
Participant’
s legal representative, or authorized assignee, no later than twelve (12) months after the Termination Date (or such shorter time
period not less than six (6) months or longer time period not exceeding five (5) years as may be determined by the Committee, with any exercise
beyond (a) three (3) months after the Termination Date when the Termination is for any reason other than the Participant’
s death, or (b) twelve
(12) months after the Termination Date when the Termination is for the Participant’
s death, deemed to be an NQSO), but in any event no later
than the expiration date of the Options.