Arnold Scott Form 4 SHUTTERFLY / SCOTT ARNOLD ownership change

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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X

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

ARNOLD SCOTT

(Last) (First) (Middle)

C/O SHUTTERFLY, INC.

2800 BRIDGE PARKWAY

(Street)

REDWOOD CITY CA 94065

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
SHUTTERFLY INC [ SFLY ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
President, Shutterfly Ent.

3. Date of Earliest Transaction (Month/Day/Year)
09/25/2019

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Restricted Stock Units	(1)	09/25/2019		D			39,834	(3)(4)	(2)	Common Stock	39,384	$0	0	D
Employee Stock Option (right to buy)	$47.5	09/25/2019		D			108,552	(5)(6)	06/30/2024	Common Stock	108,552	$0	0	D
Employee Stock Option (right to buy)	$76.73	09/25/2019		D			21,213	(7)	02/27/2025	Common Stock	21,213	$0	0	D
Restricted Stock Units	(1)	09/25/2019		A		5,841		(8)	(2)	Common Stock	5,841	$0	5,841	D
Restricted Stock Units	(1)	09/25/2019		D			5,841	(8)	(2)	Common Stock	5,841	$0	0	D
Restricted Stock Units	(1)	09/25/2019		A		12,704		(9)	(2)	Common Stock	12,704	$0	12,704	D
Restricted Stock Units	(1)	09/25/2019		D			12,704	(9)	(2)	Common Stock	12,704	$0	0	D

Explanation of Responses:

1. Each restricted stock unit ("RSU") represents a contingent right to receive one share of the Issuer's common stock upon vesting.

2. Pursuant to the Agreement and Plan of Merger among the Issuer, Photo Holdings, LLC and Photo Holdings Merger Sub, Inc. dated as of June 10, 2019 (the "Merger Agreement"), each unexpired, unsettled and outstanding RSU was cancelled at the effective time of the merger and automatically converted into the right to receive $51.00 in cash per outstanding RSU, payable in accordance with and subject to the terms of the Merger Agreement.

3. Of these RSUs, (a) 12,542 were originally scheduled to vest on each of June 30, 2020 and June 30, 2021, (b) 1,966 were originally scheduled to vest on each of February 15, 2020, February 15, 2021 and February 15, 2022, and (c) 8,762 were originally scheduled to vest in four substantially equal annual installments, with the first installment scheduled to vest on February 15, 2020, in each case subject to the Reporting Person's continuous service to the Issuer through each such vesting date. (continued to 4)

4. (Beginning from 3) Upon the closing of the Merger, the RSUs were cancelled and converted into the right to receive $51.00 in cash per RSU, payable in accordance with and subject to the terms of the Merger Agreement, with the cash consideration to vest as follows: on the original vesting date for cash consideration payable in respect of RSUs that would have vested during 2019; on January 1, 2020 for cash consideration payable in respect of RSUs that would have vested during 2020; on January 1, 2021 for cash consideration payable in respect of RSUs that would have vested during 2021; and on July 1, 2021 for cash consideration payable in respect of RSUs that would have vested after December 31, 2021, subject, in each case, to acceleration upon an earlier qualifying termination of employment.

5. The stock option vested and became exercisable as to 1/4th of the shares subject to the option on June 30, 2018, and thereafter vests as to 1/48th of the shares in equal monthly installments, until such time as the option is 100% vested, subject to the continuing employment of the Reporting Person on each vesting date. (continued to 6)

6. (Beginning from 5) Pursuant to the Merger Agreement, the option was cancelled and converted into the right to receive a cash payment equal to the difference between $51.00 and the per share exercise price of the option, multiplied by the number of shares subject to the option, payable in accordance with and subject to the terms of the Merger Agreement, with the cash consideration to vest as follows: on the original vesting date for cash consideration payable in respect of options that would have vested during 2019; on January 1, 2020 for cash consideration payable in respect of options that would have vested during 2020; and on January 1, 2021 for cash consideration payable in respect of options that would have vested during 2021, subject, in each case, to acceleration upon an earlier qualifying termination of employment.

7. The stock option vests and becomes exercisable as to 1/4th of the shares subject to the option on February 15, 2019, and thereafter vests as to 1/48th of the shares in equal monthly installments, until such time as the option is 100% vested, subject to the continuing employment of the Reporting Person on each vesting date. Pursuant to the Merger Agreement, the option was cancelled without payment of any consideration because the exercise price was greater than $51.00.

8. The RSUs are scheduled to vest in three substantially equal installments on each of September 25, 2019, January 1, 2021 and July 1, 2021, subject to the Reporting Person's continuous service to the Issuer through each such vesting date and subject to acceleration upon an earlier qualifying termination of employment. Upon the closing of the Merger, the RSUs were cancelled and converted into the right to receive $51.00 in cash per RSU, payable in accordance with and subject to the terms of the Merger Agreement and subject to the same vesting schedule as applied to the RSUs.

9. The RSUs are scheduled to vest on July 1, 2021, subject to the reporting Person's continuous service to the Issuer through such vesting date and subject to acceleration upon an earlier qualifying termination of employment. Upon the closing of the Merger, the RSUs were cancelled and converted into the right to receive $51.00 in cash per RSU, payable in accordance with and subject to the terms of the Merger Agreement and subject to the same vesting schedule as applied to the RSUs.

	/s/ Jason Sebring, Attorney-in-Fact	09/26/2019
	** Signature of Reporting Person	Date
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