Document:

exv10w15

 

EXHIBIT 10.15

Personal and Confidential

January 17, 2007

Dwayne Black

531 Hahn Drive

Shakopee, MN 55379

RE: Offer of Employment

Dear Dwayne:

Shutterfly, Inc. (the “Company” or “Shutterfly”) is pleased to offer you the opportunity to join
Shutterfly. You are being offered a position as SVP of Manufacturing reporting to me. If you
decide to join us, your annual base pay will be $220,000 less applicable taxes and withholdings.
You will be paid semimonthly in accordance with the Company’s normal payroll procedure.
Additionally, you will be eligible to participate in the Executive Bonus Plan as approved by the
Compensation Committee in 2007. It is anticipated that your position will be eligible for a bonus
up to 25% of your base pay based upon you and the Company reaching certain goals. Your regular
location will be determined no later than January 31, 2007. You will be required to travel to
Hayward, CA and Charlotte, NC for the first 6 months. Shutterfly may change your position,
compensation, duties and work location from time to time, as it deems appropriate.

Subject to the approval of the Company’s Board of Directors, you will be granted an option to
purchase 135,000 shares of the Company’s Common Stock, at an exercise price equal to the fair
market value of the Common Stock on the date the Board grants your stock option or on your first
date of employment with the Company, whichever is later. Your option will be subject to all of the
terms, conditions and restrictions of the Company’s 2006 Stock Plan (the “Plan”) and the execution
of a stock option agreement pursuant to such Plan.

Relocation

Shutterfly will provide reimbursement for actual relocation expenses, not to exceed $50,000. Such
relocation expenses may include the following: the cost of packing and unpacking, moving and
insuring household goods and personal effects of your household goods in MN to your new location
and 2 housing hunting trips for you and your spouse and transportation costs for you and your
family for the move. Some of these reimbursed relocation expenses may be considered income and

 

 

therefore taxable under federal and/or state laws. You are encouraged to seek advice from a
personal tax advisor to determine the impact of relocation income and new location taxes. If you
voluntarily terminate your employment in the first year of employment you will be responsible for
reimbursing the Company a prorated portion of the relocation expenses.

Temporary Housing Allowance

You will be reimbursed up to $4,000 per month for temporary housing in North Carolina for your
first six (6) months of employment or until you move into a new residence whichever is earlier. In
order to be reimbursed for these costs, you must submit expenses no later than 30 days after the
expense. Due to the individual nature of this benefit, the housing allowance may be considered
income and taxable under federal and/or state laws. You are encouraged to seek advice from a
personal tax advisor to determine the impact of relocation income and new location taxes.

Benefits

As an employee, you will also be eligible to receive certain employee benefits including medical
and dental coverage. The medical, dental and vision coverage begin on your date of hire as an
employee. Additionally, you are eligible to participate in the Fidelity 401k plan. The Company
reserves the right to revise or discontinue any or all of its benefit plans, at any time, in the
Company’s sole discretion. Enclosed is some information on the Company benefit plans.

Holidays

Shutterfly will observe twelve paid holidays in 2007. The holiday schedule may change at
management’s discretion.

Change in Control Benefits

If the Company is subject to a Corporate Transaction (as defined in the Plan) whereas within the
first six (6) months following such transaction (1) you will no longer be SVP of Manufacturing, or
(2) your role is materially diminished, then you shall be eligible to receive the following
enhanced severance benefits (“Change of Control Benefits”): (i) severance payments equal to six
(6) months of your then-applicable base salary, payable in accordance with the Company’s standard
payroll procedures; and (ii) the unvested portion of any outstanding options held by you on the
date of such Corporate Transaction shall vest for an additional one year period, and shall remain
exercisable for the periods specified in the relevant option agreements. Your eligibility for the
foregoing Change of Control Benefits is conditioned on you having first signed a release of claims
in a form provided by the Company and returning all Company property. If the Company is subject to
a Corporate Transaction Change and you continue to report to the President, the severance and
accelerated vesting will not be offered.

Paid Time Off

In order to allow you flexibility with your free time, the Company has a paid time off policy. You
begin to accrue paid time off on your date of hire. You will accrue fifteen (15) days of paid time
off per year for your first three (3) years of employment, subject to the paid time off policy.

 

 

Introductory Period

Your first 90 days of work is known as an “Introductory Period”. This “getting acquainted” period
gives your manager the opportunity to determine your ability to perform your job. It also provides
you with the opportunity to determine if you are satisfied with the job and the Company. Shutterfly
reserves the right to extend or cut short the duration of the Introductory Period when it
determines appropriate to do so. However, either you or the company can terminate the employment
relationship at any time during or after the Introductory Period, with or without cause or advance
notice.

Employment Eligibility Verification

For purposes of federal immigration law, you will be required to provide to Shutterfly documentary
evidence of your identity and eligibility for employment in the United States. Such documentation
must be provided to us within three (3) business days of your first date of hire with Shutterfly,
or our employment relationship with you may be terminated.

Employment at Will

If you choose to accept this offer, your employment with Shutterfly will be voluntarily entered
into and will be for no specified period. As a result, you will be free to resign at any time, for
any reason, as you deem appropriate. Shutterfly will have a similar right and may conclude its
employment relationship with you at any time, with or without cause or advance notice.

Acceptance of Offer

To indicate your acceptance of this the terms of the offer, please sign and date in the space
provided below and return it to Shutterfly, 2800 Bridge Parkway, Redwood City, CA 94065 attention
Human Resources or via Fax to (650) 610 – 5280 no later than January 24, 2007 after which it will
expire. A duplicate original is enclosed for your records. In addition to this letter, your offer
of employment is conditioned upon your: (1) completion and signing of the Shutterfly employment
application; (2) successful completion of a background and reference check and (3) your signing of
the Shutterfly Employee Invention Assignment and Confidentiality (and any other similar agreements
relating to proprietary rights between you and the Company).

In the event of any dispute or claim relating to or arising out of your employment relationship
with the Company, this agreement, or the termination of your employment with the Company for any
reason (including, but not limited to, any claims of breach of contract, wrongful termination or
age, sex, race, national origin, disability or other discrimination or harassment), all such
disputes shall be fully, finally and exclusively resolved by binding arbitration conducted by JAMS
under JAMS Employment Arbitration Rules and Procedures then in effect, which are available online
at JAMS’ website at www.jamsadr.org You and the Company hereby waive your respective rights to
have any such disputes or claims tried before a judge or jury.

 

 

This letter agreement, the Shutterfly Employee Invention Assignment and Confidentiality Agreement,
and stock option agreement constitute the entire agreement between you and the Company regarding
the terms and conditions of your employment with Shutterfly and supersedes any prior
representations or agreements, whether written or oral. This letter, along with any agreements
herein, may not be modified or amended except by a written agreement signed by the Chief Executive
Officer of the Company. If we do not hear from you by January 22, 2007 we will assume you have
decided not to join Shutterfly.

We look forward to your positive response and welcoming you to the Shutterfly team.

Sincerely,

/s/ Jeff Housenbold
Jeff Housenbold

CEO & President

Enclosures

Acceptance

I agree to and accept employment with Shutterfly on the terms and conditions set forth in this
agreement. I understand and agree that my employment with the Company is at-will.

	 	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Dwayne Black	 	 	 	Date:	 	1/25/07
	 

	 	 
	 	 	 	 	 	 
	 

	 	Dwayne Black	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Start Date:

	 	2/12/07

	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

 

 

EMPLOYEE INVENTION ASSIGNMENT AND

CONFIDENTIALITY AGREEMENT

In consideration of, and as a condition of my employment with Shutterfly, Inc., a Delaware
corporation (the “Company”), I hereby represent to, and agree with the Company as follows:

• Purpose of Agreement. I understand that the Company is engaged in a continuous
program of research, development, production and marketing in connection with its business and that
it is critical for the Company to preserve and protect its “Proprietary Information” (as defined in
Section 7 below), its rights in “Inventions” (as defined in Section 2 below) and in all related
intellectual property rights. Accordingly, I am entering into this Employee Invention Assignment
and Confidentiality Agreement (this “Agreement”) as a condition of my employment with the Company,
whether or not I am expected to create inventions of value for the Company.

• Disclosure of Inventions. I will promptly disclose in confidence to the Company all
inventions, improvements, designs, original works of authorship, formulas, processes, compositions
of matter, computer software programs, databases, mask works and trade secrets that I make or
conceive or first reduce to practice or create, either alone or jointly with others, during the
period of my employment, whether or not in the course of my employment, and whether or not
patentable, copyrightable or protectable as trade secrets (the “Inventions”).

• Work for Hire; Assignment of Inventions. I acknowledge and agree that any
copyrightable works prepared by me within the scope of my employment are “works for hire” under the
Copyright Act and that the Company will be considered the author and owner of such copyrightable
works. I agree that all Inventions that (i) are developed using equipment, supplies, facilities or
trade secrets of the Company, (ii) result from work performed by me for the Company, or (iii)
relate to the Company’s business or current or anticipated research and development (the “Assigned
Inventions”), will be the sole and exclusive property of the Company and are hereby irrevocably
assigned by me to the Company. Attached hereto as Exhibit A is a list describing all
inventions, original works of authorship, developments and trade secrets which were made by me
prior to the date of this Agreement, which belong to me and which are not assigned to the Company
(“Prior Inventions”). I acknowledge and agree that if I use any of my Prior Inventions in the
scope of my employment, or include them in any product or service of the Company, I hereby grant to
the Company a perpetual, irrevocable, nonexclusive, world-wide, royalty-free license to use,
disclose, make, sell, copy, distribute, modify and create works based on, perform or display such
Prior Inventions and to sublicense third parties with the same rights.

 

 

• Labor Code Section 2870 Notice. I have been notified and understand that the
provisions of Sections 3 and 5 of this Agreement do not apply to any Assigned Invention that
qualifies fully under the provisions of Section 2870 of the California Labor Code, which states as
follows:

ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN

EMPLOYEE SHALL ASSIGN, OR OFFER TO ASSIGN, ANY OF HIS OR HER

RIGHTS IN AN INVENTION TO HIS OR HER EMPLOYER SHALL NOT APPLY TO

AN INVENTION THAT THE EMPLOYEE DEVELOPED ENTIRELY ON HIS OR HER

OWN TIME WITHOUT USING THE EMPLOYER’S EQUIPMENT, SUPPLIES,

FACILITIES, OR TRADE SECRET INFORMATION EXCEPT FOR THOSE

INVENTIONS THAT EITHER: (1) RELATE AT THE TIME OF CONCEPTION OR

REDUCTION TO PRACTICE OF THE INVENTION TO THE EMPLOYER’S

BUSINESS, OR ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR

DEVELOPMENT OF THE EMPLOYER; OR (2) RESULT FROM ANY WORK

PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. TO THE EXTENT A

PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE AN

EMPLOYEE TO ASSIGN AN INVENTION OTHERWISE EXCLUDED FROM BEING

REQUIRED TO BE ASSIGNED UNDER CALIFORNIA LABOR CODE SECTION

2870(a), THE PROVISION IS AGAINST THE PUBLIC POLICY OF THIS

STATE AND IS UNENFORCEABLE.

• Assignment of Other Rights. In addition to the foregoing assignment of Assigned
Inventions to the Company, I hereby irrevocably transfer and assign to the Company: (i) all
worldwide patents, patent applications, copyrights, mask works, trade secrets and other
intellectual property rights, including but not limited to rights in databases, in any Assigned
Inventions, along with any registrations of or applications to register such rights; and (ii) any
and all “Moral Rights” (as defined below) that I may have in or with respect to any Assigned
Inventions. I also hereby forever waive and agree never to assert any and all Moral Rights I may
have in or with respect to any Assigned Inventions, even after termination of my work on behalf of
the Company. “Moral Rights” mean any rights to claim authorship of or credit on an Assigned
Inventions, to object to or prevent the modification or destruction of any Assigned Inventions or
Prior Inventions licensed to Company under Section 3, or to withdraw from circulation or control
the publication or distribution of any Assigned Inventions or Prior Inventions licensed to Company

 

 

under Section 3, and any similar right, existing under judicial or statutory law of any country or
subdivision thereof in the world, or under any treaty, regardless of whether or not such right is
denominated or generally referred to as a “moral right.”

• Assistance. I agree to assist the Company in every proper way to obtain for the
Company and enforce patents, copyrights, mask work rights, trade secret rights and other legal
protections for the Company’s Assigned Inventions in any and all countries. I will execute any
documents that the Company may reasonably request for use in obtaining or enforcing such patents,
copyrights, mask work rights, trade secrets and other legal protections. My obligations under this
paragraph will continue beyond the termination of my employment with the Company, provided that the
Company will compensate me at a reasonable rate after such termination for time or expenses
actually spent by me at the Company’s request on such assistance. I appoint the Secretary of the
Company as my attorney-in-fact to execute documents on my behalf for this purpose.

• Proprietary Information. I understand that my employment by the Company creates a
relationship of confidence and trust with respect to any information of a confidential or secret
nature that may be disclosed to me by the Company or a third party that relates to the business of
the Company or to the business of any parent, subsidiary, affiliate, customer or supplier of the
Company or any other party with whom the Company agrees to hold information of such party in
confidence (the “Proprietary Information”). Such Proprietary Information includes, but is not
limited to, Assigned Inventions, marketing plans, product plans, business strategies, financial
information, forecasts, personnel information, customer lists and data, and domain names.

• Confidentiality. At all times, both during my employment and after its termination, I
will keep and hold all such Proprietary Information in strict confidence and trust. I will not use
or disclose any Proprietary Information without the prior written consent of the Company, except as
may be necessary to perform my duties as an employee of the Company for the benefit of the Company.
Upon termination of my employment with the Company, I will promptly deliver to the Company all
documents and materials of any nature pertaining to my work with the Company and, upon Company
request, will execute a document confirming my agreement to honor my responsibilities contained in
this Agreement. I will not take with me or retain any documents or materials or copies thereof
containing any Proprietary Information.

• No Breach of Prior Agreement. I represent that my performance of all the terms of
this Agreement and my duties as an employee of the Company will not breach any invention
assignment, proprietary information, confidentiality or similar agreement with any former employer
or other party. I represent that I will not bring with me to the Company or use in the performance
of my duties for the Company any documents or materials or intangibles of a former employer or
third party that are not generally available to the public or have not been legally transferred to
the Company.

 

 

• Efforts; Duty Not to Compete. I understand that my employment with the Company
requires my undivided attention and effort during normal business hours. While I am employed by
the Company, I will not, without the Company’s express prior written consent, provide services to,
or assist in any manner, any business or third party if such services or assistance would be in
direct conflict with the Company’s business interests.

• Notification. I hereby authorize the Company to notify third parties, including,
without limitation, customers and actual or potential employers, of the terms of this Agreement and
my responsibilities hereunder.

• Non-Solicitation of Employees/Consultants. During my employment with the Company and
for a period of one (1) year thereafter, I will not directly or indirectly solicit away employees
or consultants of the Company for my own benefit or for the benefit of any other person or entity.

• Non-Solicitation of Suppliers/Customers. During my employment with the Company and
after termination of my employment, I will not directly or indirectly solicit or take away
suppliers or customers of the Company if the identity of the supplier or customer or information
about the supplier or customer relationship is a trade secret or is otherwise deemed confidential
information within the meaning of California law.

• Name & Likeness Rights. I hereby authorize the Company to use, reuse, and to grant
others the right to use and reuse, my name, photograph, likeness (including caricature), voice, and
biographical information, and any reproduction or simulation thereof, in any form of media or
technology now known or hereafter developed (including, but not limited to, film, video and digital
or other electronic media), both during and after my employment, for whatever purposes the Company
deems necessary.

• Injunctive Relief. I understand that in the event of a breach or threatened breach of
this Agreement by me the Company may suffer irreparable harm and will therefore be entitled to
injunctive relief to enforce this Agreement.

• Governing Law; Severability. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without giving effect to its laws pertaining
to conflict of laws. If any provision of this Agreement is determined by any court or arbitrator
of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision
will be enforced to the maximum extent possible given the intent of the parties hereto. If such
clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and
the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable
clause or provision had (to the extent not enforceable) never been contained in this Agreement.

 

 

• Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered will be deemed an original, and all of which together shall
constitute one and the same agreement.

• Entire Agreement. This Agreement and the documents referred to herein constitute the
entire agreement and understanding of the parties with respect to the subject matter of this
Agreement, and supersede all prior understandings and agreements, whether oral or written, between
or among the parties hereto with respect to the specific subject matter hereof.

• Amendment and Waivers. This Agreement may be amended only by a written agreement
executed by each of the parties hereto. No amendment of or waiver of, or modification of any
obligation under this Agreement will be enforceable unless set forth in a writing signed by the
party against which enforcement is sought. Any amendment effected in accordance with this section
will be binding upon all parties hereto and each of their respective successors and assigns. No
delay or failure to require performance of any provision of this Agreement shall constitute a
waiver of that provision as to that or any other instance. No waiver granted under this Agreement
as to any one provision herein shall constitute a subsequent waiver of such provision or of any
other provision herein, nor shall it constitute the waiver of any performance other than the actual
performance specifically waived.

• Successors and Assigns; Assignment. Except as otherwise provided in this Agreement,
this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and
inure to the benefit of their respective successors, assigns, heirs, executors, administrators and
legal representatives. The Company may assign any of its rights and obligations under this
Agreement. No other party to this Agreement may assign, whether voluntarily or by operation of
law, any of its rights and obligations under this Agreement, except with the prior written consent
of the Company.

• Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Agreement.

• “At Will” Employment. I understand that this Agreement does not constitute a contract
of employment or obligate the Company to employ me for any stated period of time. I understand
that I am an “at will” employee of the Company and that my employment can be terminated at any
time, with or without notice and with or without cause, for any reason or for no reason, by either
the Company or myself. I acknowledge that any statements or representations to the contrary are
ineffective, unless put into a writing signed by the Company. I further acknowledge that my
participation in any stock option or benefit program is not to be construed as any assurance of
continuing employment for any particular period of time. This Agreement shall be effective as of
the first day of my employment by the Company, which is 2/12/07.

 

 

	 	 	 	 	 
	SHUTTERFLY, INC.:	 	Employee:
	 
	 	 	 	 
	By:
	 	/s/ Jeff Housenbold	 	/s/ Dwayne Black
	 

	 	 
	 	 
	 

	 	 	 	Signature
	 
	 	 	 
	Name:

	 	Jeff Housenbold	 	 
	 

	 	 
	 	 
	 

	 	 	 	Dwayne Black
	 
	 	 	 	 
	Title:

	 	CEO & President	 	 
	 

	 	 	 	 

Signature Page to Employee Invention Assignment and Confidentiality Agreement

 

 

APPENDIX A

     California Labor Code Section 2870. Application of provision providing that employee shall
assign or offer to assign rights in invention to employer.

     1. Any provision in an employment agreement which provides that an employee shall assign, or
offer to assign, any of his or her rights in an invention to his or her employer shall not apply to
an invention that the employee developed entirely on his or her own time without using the
employer’s equipment, supplies, facilities, or trade secret information except for those inventions
that either:

     (a) Relate at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or development of the
employer; or

     (b) Result from any work performed by the employee for his employer.

     2. To the extent a provision in an employment agreement purports to require an employee to
assign an invention otherwise excluded from being required to be assigned under paragraph 1, the
provision is against the public policy of this state is unenforceable.

 

 

APPENDIX B

PRIOR MATTER

None.exv10w16

 

EXHIBIT 10.16

CONFIDENTIAL SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

     THIS CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (“Agreement”) is entered
into by and between Jeannine Smith (“Employee”) and Shutterfly, Inc. (the “Company”). This
Agreement will become effective on the eighth day after it is signed by Employee (the “Effective
Date”), provided that Employee has not revoked this Agreement (by written notice to Patricia
Schoof, Vice President, Human Resources at the Company) prior to that date.

RECITALS

     A. Employee is employed by the Company as its Senior Vice President, Operations. The Company
and Employee have agreed to terminate the employment relationship.

     B. It is the Company’s desire to provide Employee with certain benefits that she would not
otherwise be entitled to receive upon her termination of employment and to resolve any claims that
she has or may have against the Company.

     Accordingly, in consideration of the terms, conditions and covenants contained herein, the
parties agree as follows:

1. Termination of Employment; Transition Period. Company hereby terminates Employee’s employment
relationship with the Company effective as of the earlier of (a) June 8, 2007, or (b) the date she
is employed by another employer or is engaged to provide consulting services (the “Termination
Date”) subject to the provisions of this paragraph. During the period following the date of this
Agreement and up to the Termination Date (the “Transition Period”), Employee will provide
transition services to the Company as requested by the Company. Such services will generally be
provided on-site at the Company and on a regular, full-time basis pursuant to a transition plan
established by the Company. However, Employee may provide such services from home with the prior
approval of the Company. In the event Employee becomes employed (in any capacity and on any basis)
during the Transition Period, she must notify the Company and the Termination Date will be as of
the date of such notice.

2. Vacation. As of the Termination Date, Employee will be paid all wages and accrued, unused paid
time off that Employee earned during her employment with the Company through the Termination Date.
Employee shall provide necessary PTO forms for any planned vacation during the Transition Period.

3. Release.

     In consideration of remaining an employee of the Company during the Transition Period,
Employee and her successors and assigns fully release the Company and its related entities, past
and present affiliates, stockholders, investors, directors, officers, employees, agents, attorneys,
insurers, legal successors and assigns (the “Released Parties”) of and from any and all claims,

1

 

liabilities, obligations, demands, actions and causes of action, whether now known or unknown,
that Employee now has, or at any other time had, or shall or may have against those Released
Parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever
occurring or existing at any time up to and including the Termination Date.

     This release includes specifically but not exclusively and without limiting the generality of
the foregoing, any claims of breach of contract, wrongful termination, retaliation, fraud,
defamation, infliction of emotional distress or national origin, race, age, sex, sexual
orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964,
the Age Discrimination In Employment Act of 1967, as amended, the Older Workers Benefit Protection
Act, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other
applicable law. However, this Release is not intended to bar any claims that, by statute, may not
be waived, such as claims for workers’ compensation benefits, unemployment insurance benefits, and
any challenges to the validity of Employee’s release of claims under the Age Discrimination in
Employment Act of 1967, as amended, as set forth in this Agreement.

     Employee acknowledges that she has read section 1542 of the Civil Code of the State of
California, which states in full:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW

OR SUSPECT TO EXIST IN her FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH

IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED her SETTLEMENT WITH THE

DEBTOR.

Notwithstanding Section 1542, Employee agrees that this Agreement shall act as a release of all
past and future claims that may arise from or related to her employment or termination from
employment with the Company, whether such claims are currently known or unknown, foreseen or
unforeseen, contingent or absolute. Employee intentionally and specifically waives any rights she
may have under the provisions of Section 1542, as well as under any other statutes or common law
principles of similar effect, and assumes full responsibility for any injuries, damages, losses or
liabilities that she may hereafter incur with respect to such claims.

     As additional consideration for the compensation and benefits described in this Agreement,
Employee agrees that she will affirm and extend this Release of Claims for the Transition Period by
re-signing this Agreement in the space at the end of the Agreement on or shortly before the
Termination Date.

4. No Assignment or Transfer. Employee represents and warrants that there has been no assignment
or other transfer of any interest in any claim that she may have against the Company and agrees to
indemnify and hold the Company harmless from any liabilities, claims, demands, damages, costs,
expenses and attorneys’ fees incurred by the Company as a result of any assertion of assignment or
transfer.

5. Review / Rescind Period.

     (a) This Agreement shall not become effective or enforceable until the eighth day after
Employee signs this Agreement. In other words, Employee may revoke Employee’s

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acceptance of this Agreement within seven (7) days after the date Employee signs it.
Employee’s revocation must be in writing and received by Patricia School, Vice President, Human
Resources at the Company by 5:00 p.m. Pacific Time on the seventh day in order to be effective. If
Employee does not revoke acceptance within the seven (7) day period, Employee’s acceptance of this
Agreement shall become binding and enforceable on the Effective Date.

     (b) Employee acknowledges and agrees that (i) Employee has read and understands the terms of
this Agreement; (ii) Employee has been advised in writing to consult with an attorney before
executing this Agreement; (iii) that Employee has obtained and considered such legal counsel as
Employee deems necessary; (iv) that Employee has been given up to twenty-one (21) days to consider
whether or not to enter into this Agreement (although Employee may elect not to use the full 21-day
period at Employee’s option); and (v) that by signing this Agreement, Employee acknowledges that
Employee does so freely, knowingly, and voluntarily.

6. Confidentiality.

     (a) Employee acknowledges and agrees that she shall continue to be bound by and comply with
the terms of any proprietary rights, assignment of inventions and/or confidentiality agreements
between the Company and Employee. On or before the Termination Date, Employee will return to the
Company, in good working condition, all Company property and equipment that is in Employee’s
possession or control, including, but not limited to, any files, records, computers, computer
equipment, cell phones, credit cards, keys, programs, manuals, business plans, financial records,
and all documents (and any copies thereof) that Employee prepared or received in the course of her
employment with the Company.

     (b) Employee agrees that she shall not directly or indirectly disclose any of the terms of
this Agreement to anyone other than her immediate family or counsel, except as such disclosure may
be required for accounting or tax reporting purposes or as otherwise may be required by law.
Employee further agrees that she will not, at any time in the future, make any critical or
disparaging statements about the Company, its products, services or its employees, unless such
statements are made truthfully in response to a subpoena or other legal process. The Company also
agrees that it will not, at any time in the future, make any critical or disparaging statements
about the Employee, unless such statements are made truthfully in response to a subpoena or other
legal process.

7. No Pursuit of or Joinder in Claims. Employee agrees that if she commences, joins in or in any
manner seeks relief through any lawsuit arising out of, based upon, or related to any claim
released hereunder, she shall pay to Company, in addition to any other damages caused to the
Company thereby, all attorneys’ fees incurred by the Company in defending or otherwise responding
to such suit or claim.

8. Nonsolicitation of Employees and Customers. Employee agrees that for a period of one (1) year
following the Termination Date, she will not, either on her own behalf or on behalf of another
person or entity, by using or disclosing the trade secrets or confidential, proprietary, or
business information of Company: (a) directly or indirectly solicit or take away employees,
independent contractors or consultants of Company for the purpose of hiring them; or (b) directly
or indirectly solicit or take away suppliers or customers of Company if the identity of the

3

 

supplier or customer, or information about the supplier or customer relationship, is a trade secret
or is otherwise deemed confidential information within the meaning of applicable law.
Notwithstanding the foregoing, nothing prevents Employee from soliciting business from any supplier
or customer of Company that is unrelated to the business conducted by Company.

9. Attorney’s Fees. In the event of any legal action relating to or arising out of this Agreement,
the prevailing party shall be entitled to recover from the losing party its attorneys’ fees and
costs incurred in that action.

10. No Admission of Liability. Employee and the Company understand and acknowledge that this
Agreement constitutes a compromise and settlement of disputed claims. No action taken by the
parties hereto, or either of them, either previously or in connection with this Agreement, shall be
deemed or construed to be (a) an admission of truth or falsity of any claims heretofore made or (b)
an acknowledgement or admission by either Party of any fault or liability whatsoever to the other
party or to any third party.

11. Consult with Attorney. Each party represents that it has been advised of its right to consult
with an attorney and to seek legal representation of its choosing in the execution of this
Agreement, and has carefully read and understands the scope and effect of the provisions of this
Agreement. Neither party has relied upon any representations or statements made by the other party
hereto which are not specifically set forth in this Agreement.

12. Miscellaneous. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether
written or oral, with the exception of any stock option agreements between the parties and any
agreements described in paragraph 5(a). This Agreement may be modified or amended only with the
written consent of Employee and an authorized officer of the Company, provided, however, that the
Company may amend or modify this Agreement in order to comply with the provisions of Section 409A
of the Internal Revenue Code, to the extent applicable. No oral waiver, amendment or modification
will be effective under any circumstances whatsoever.

EMPLOYEE UNDERSTANDS THAT SHE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND
THAT SHE IS GIVING UP ANY LEGAL CLAIMS SHE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS
AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT SHE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND
VOLUNTARILY IN EXCHANGE FOR THE BENEFITS DESCRIBED HEREIN.

	 	 	 	 	 
	Dated: January 23, 2007
	 	/s/ Jeannine Smith	 	 
	 	 	 
	 	 	Jeannine Smith
	 
	 	 	 	 
	 	 	SHUTTERFLY, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Jeff Housenbold
	 

	 	 	 	 
	Dated: January                     , 2007

	 	 	 	Jeff Housenbold
	 

	 	 	 	President & CEO

4

 

By re-signing this Agreement on or shortly before the Termination Date, Employee hereby extends the
Release of Claims set forth in paragraph 3 above to include any claims arising through and
including the Termination Date.

	 	 	 
	Dated:                                                             , 2007
	 	 
	 

	 	 
	 

	 	Jeannine Smith

5

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