Shutterfly 2011 Annual Report Download - page 81

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(c) If the Participant is Terminated because of 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 (or the Participant’
s legal representative or authorized assignee) no later than six (6) months after the Termination Date, with any
exercise beyond (a) three (3) months after the Termination Date when the Termination is for any reason other than the Participant’
s Disability, or
(b) twelve (12) months after the Termination Date when the Termination is for the Participant’
s Disability, deemed to be an NQSO), but in any
event no later than the expiration date of the Options.
(d) If the Participant is terminated for Cause, then Participant’s Options shall expire on such Participant’
s
Termination Date, or at such later time and on such conditions as are determined by the Committee.
5.7 Limitations on Exercise
. The Committee may specify a reasonable minimum number of Shares that may be
purchased on any exercise of an Option, provided that such minimum number will not prevent any Participant from exercising the Option for the
full number of Shares for which it is then exercisable.
5.8 Limitations on ISOs
. The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect
to which ISOs are exercisable for the first time by a Participant during any calendar year (under this Plan or under any other incentive stock
option plan of the Company or any Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds $100,000, then the
Options for the first $100,000 worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the amount in
excess of $100,000 that become exercisable in such calendar year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date to provide for a different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such
amendment.
5.9 Modification, Extension or Renewal
. The Committee may modify, extend or renew outstanding Options and, with
prior shareholder approval, authorize the grant of new Options in substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant’
s rights under any Option previously granted. Any outstanding ISO that is
modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code. Subject to Section 18 of this
Plan, with prior shareholder approval and by written notice to affected Participants the Committee may reduce the Exercise Price of outstanding
Options without the consent of such Participants; provided , however
, that the Exercise Price may not be reduced below the Fair Market Value
on the date the action is taken to reduce the Exercise Price.
5.10 No Disqualification
. Notwithstanding any other provision in this Plan, no term of this Plan relating to ISOs will
be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under
Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code.
6. GRANTS TO OUTSIDE DIRECTORS .
6.1 Types of Awards
. Outside Directors are eligible to receive any type of Award offered under this Plan, except
ISOs. Awards pursuant to this Section 6 may be automatically made pursuant to policy adopted by the Board, or made from time to time as
determined in the discretion of the Board.
6.2 Eligibility
. Awards subject to this Section 6 shall be granted only to Outside Directors. An Outside Director who is
elected or re-elected as a member of the Board will be eligible to receive an Award under this Section 6.
6.3 Vesting and Exercisability
. Except as set forth in Section 21.3, Awards shall vest and be exercisable as determined
by the Board.
6.4 Exercise Price
. The exercise price of an Option or a SAR granted to an Outside Director shall be not less than the
Fair Market Value of the Shares at the time that such Option or SAR is granted.