exhibit10-03.htm


    Exhibit
10.03





      Amendment
Number 2 to Employment Agreement

       

       

      This
Amendment (the “Amendment”)
to the Letter Agreement dated January 5, 2005 (the “Agreement”)
by and between you, Jeffrey T. Housenbold, and Shutterfly, Inc. (the “Company”),
as amended effective December 8, 2008, is effective as of March 12, 2009 (the
“Effective
Date”).

       

      Recitals

       

      Whereas,
you and the Company have previously entered into an Agreement dated as of
January 5, 2005, whereby the Company confirmed your employment upon certain
terms and conditions;

       

      Whereas,
you and the Company have also previously entered into an amendment to the
Agreement effective as of December 8, 2008 (“Amendment
Number 1”); and

       

      Whereas,
you and the Company agree it is advisable to amend the Agreement further in
order to align the length of time during which your options may be exercised
after your disability or death;

       

      Now,
Therefore, for good and valuable consideration, the receipt, sufficiency
and adequacy of which is hereby acknowledged, you and the Company hereby agree
to the following changes to the Agreement as follows:

       

      Any
capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Agreement.

       

      (1)           The
last paragraph of Section 3 of the Agreement, as it has been deleted and
replaced by paragraph (1) of Amendment Number 1, is hereby deleted and replaced
with the following:

       

      In the
event you terminate employment with the Company as a result of Involuntary
Termination or Termination without Cause, each as defined below, you may
exercise the outstanding, vested portion of any of your options for Company
common stock during the twenty-four (24) month period commencing on the date of
your termination of employment, provided, however, that in no event may any
option be exercised after its expiration date.  In the event you
terminate employment with the Company as the result of Termination for
Disability, as defined below, or your death, the outstanding, vested portion of
any of such options may be exercised during the twenty-four (24) month period
commencing on the date of your Termination for Disability or your death,
provided, however, that in no event may any option be exercised after its
expiration date. In the event you terminate employment with the Company as a
result of Voluntary Termination or Termination for Cause, you may exercise the
outstanding, vested portion of any of such options during the period allowed
under the 1999 Stock Plan or the Company’s 2006 Equity Incentive Plan, as
applicable.

       

      Except as
specifically set forth above, all terms and conditions of the Agreement, as
amended by Amendment Number 1 shall remain in full force and
effect.  This Amendment shall be deemed to form an integral part of
the Agreement, as amended by Amendment Number 1.  In the event of any
inconsistency or conflict between the provisions of the Agreement, as amended by
Amendment Number 1 and this Amendment, the provisions of this Amendment will
prevail and govern.

       

      This
Amendment may be executed in counterparts and, upon delivery of counterparts
which together show the execution by both parties hereto, shall constitute one
agreement which shall inure to the benefit of and be binding upon the parties
hereto.

       

       

      In
Witness Whereof, the parties hereto have caused this Amendment to be
entered into as of the Effective Date.

       

       

       

      
        	 Shutterfly,
      Inc.	 Jeffrey
      T. Housenbold
	 	 
	By:/s/Mark
      J. Rubash   	By: /s/Jeffrey
      T. Housenbold
	
                Name:
      Mark J. Rubash

              	 
	
                Title:
      Senior Vice President, Chief Financial Officer

              	
                Date:
      March 12, 2009