Threshold

Base salary of $700,000, effective December 1, 2014

Cash bonus target of 100% of base salary, earned quarterly in accordance with the 2015 Quarterly Bonus Plan (CEO & eStaff); maximum bonus is 200% of target

162,000 Time-vested Restricted Stock Units (RSU) with a target grant value of $6,805,620

Value of shares determined by multiplying the share count by the closing price on the date of grant – November 20, 2014

Vesting will occur over 4 years, 25% each on the 1^st, 2^nd, 3^rd and 4^th anniversary of the grant date

198,000 Performance-based Restricted Stock Units (PBRSU) with a target grant value of $8,654,580, modified for absolute company performance by Trigger and Funding Goals, and relative company performance in a Relative Shareholder Return Modifier Goal, as follows:

Trigger Goal: EBITDA one year target for 2015, must be achieved at the “target” level set for this plan of $182M in 2015; achievement below target results in no earned PBRSU

Funding Goal: Revenue 1 year goal in 2015 will earn PBRSU as follows:

Achievement between Threshold and Target, or Target and Maximum will be interpolated on a straight-line basis

Relative Shareholder Return Modifier Goal: Comparison SFLY 2-year cumulative share value growth compared to Russell 2000 Index (RUT) share value growth over the same period*, will modify the PBRSU Funding as follows:

Minimum: If SFLY is 25 percentage points or lower than RUT = 75% of Funded Goal result

Target: If SFLY is Equal to RUT = 100% of Funded Goal result

Maximum: If SFLY is 25 percentage points or higher than RUT = 125% of Funded Goal result

Achievement between Minimum and Target, or Target and Maximum will be interpolated on a straight-line basis; every whole percentage point of SFLY 2-year cumulative share value growth that is above or below the RUT Index, will add or subtract, respectively, 1% from the 100% of Funded Goal result

Example:    SFLY 2 year cumulative share value growth = 30%

Vesting of earned PBRSU under the funding goal will occur over 3 years; one third on the 1^st anniversary of the grant based on achievement of performance goals, and one third on both the 2^nd and 3^rd anniversaries of the grant assuming continued service until that date.

Vesting of earned PBRSUs under the RUT modifier will occur over 3 years, with two thirds on the 2^nd anniversary of the grant based on achievement of market goals; and the remaining one third on the 3^rd anniversary of the grant assuming continued service until that date.

In order to ensure sufficient pool shares in the 2006 Equity Incentive Plan to accommodate the full range of PBRSU shares earned under this plan, the PBRSU grant will be made at the Maximum grant date face value shown in the Plan Summary above, with achievement of the PBRSU goals determining the portion of the grant that vests

PBRSU Calculation to determine number of shares to vest:

Target Shares x Trigger Goal Result x Funding Goal Result x Modifier Goal Result

Example assuming Trigger achieved (100%), Funding @ 150%, Modifier @ 110%:

198,000 x 100% Trigger x 150% Funding x 110% Modifier = 326,700 to vest

The RSU and PBRSU grants will be governed by Shutterfly’s 2006 Equity Incentive Plan.