July 12, 2001 Dear Andrew,


Exhibit 10.11
July 12, 2001
Dear Andrew,
On behalf of Shutterfly, Inc. (the “Company”), I am pleased to offer you the full-time position ofChief Marketing Officer reporting to the Company’s Chief Executive Officer. By signing this letteragreement, you confirm to the Company that you have no contractual commitments or other legalobligations that would prohibit you from performing your duties for the Company.
Base Salary:
The Company will pay you a starting base salary at the monthly rate of $16,666.67, subject to allapplicable deductions and withholdings and payable in accordance with the Company’s standardpayroll policies.
You will be eligible to be considered for an incentive bonus with a target amount of $5,000.00 perquarter. The bonus (if any) will be awarded based on your achievement of criteria established bythe Company’s Chief Executive Officer and approved by the Company’s Board of Directors, includingbut not limited to the Company’s achievement of its financial target objectives. Thus, your totaltarget bonus is a maximum of $20,000.00 per annum. The terms and conditions of your target bonusgoals will be developed within 60 days of your start date. The first eligible bonus period will beSeptember 2001. Each quarterly bonus (if any) will be paid after the Company’s books for thatquarter have been closed and will be earned by you only if you are employed by the Company at thetime of payment. The determinations of the Company’s CEO with respect to your bonus will be finaland binding.
You will be immediately eligible for 4 weeks of vacation.
If the Company terminates your employment for any reason other than Cause (as defined in the nextparagraph), then the Company will pay you severance pay for a period of 6 months following thetermination of your employment. Your monthly severance pay will be paid at the rate of yourmonthly base salary in effect at the time of the termination of your employment and in accordancewith the Company’s standard payroll procedures. However, to receive this severance pay you musthave (a) signed a general release (in a form prescribed by the Company) and (b) returned allCompany property.
For all purposes under this letter agreement, “Cause” means (a) any breach of this letteragreement, the Proprietary information and Inventions Agreement between you and the Company, or anyother written agreement between you and the Company; (b) any failure to comply with the Company’swritten policies or rules, as they may be in effect from time to time during your employment; (c)commission, conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of theUnited States or any State; (d) neglect of duties; or (e) misconduct.



Stock Options:
Subject to the approval of the Company’s Board of Directors, you will be granted an option topurchase 2,000,000 shares of the Company’s Common Stock, at an exercise price per share equal tothe fair market value of the Common Stock per share on the date the Board of Directors grants yourstock option or on your first date of employment with the Company, whichever is later. Your optionwill be subject to all of the terms, conditions and restrictions of the Company’s 1999 Stock Plan(the “Plan”) and the execution of a stock option agreement pursuant to such plan. The option canbe Immediately exercisable, but the purchased shares will be subject to repurchase by the Companyat the exercise price if your service terminates for any reason before you vest in the shares. Youwill vest in 25% of the option shares upon your completion of 12 months of service with theCompany, and you will vest in 1/48 of the option shares upon your completion of each of the next 36months of service, as described in the applicable stock optionagreement.
As a regular, full time employee of Shutterfly, you will be provided with the Company benefitpackage. The Company’s existing plans for group life, health and accident insurance may changefrom time to time.
Shutterfly is excited about having you join our team. We feel we are a great company and takepride in treating our employees with dignity and respect. As you well know, there are numerouslaws that both the employee and employer must understand and accept. The next several paragraphslist the legal requirements associated with becoming a Shutterfly employee.
This offer of employment is contingent upon you completing, signing, and returning to us, thisletter agreement and the Employee Proprietary Information and Inventions Agreement and Shutterfly’sEmployment Application. In addition, by accepting these terms of employment, you represent thatyou have not brought and will not bring with you to the Company, or utilize in the course of youremployment by the Company, any confidential or proprietary information or materials of any prioremployer.
For purposes of federal immigration law (Immigration Reform and Control Act of 1986) you arerequired to provide documentary evidence of your eligibility for employment in the United States.Please bring the appropriate documentation, as listed on the enclosed I-9 Form, with you to NewHire Orientation.
Employment with the Company is for no specific period of time. Your employment with the Companywill be “at will”, meaning that either you or the Company may terminate your employment at any timeand for any reason, with or without Cause. Any contrary representations that may have been made toyou are superseded by this offer. This is the full and complete agreement between you and theCompany on this term. Although your job duties, title, compensation and benefits, as well as theCompany’s personnel policies and procedures, may change from time to time, the “at will” nature ofyour employment may only be changed in an express written agreement signed by you and the ChiefExecutive Officer of the Company.
While you render services to the Company, you agree that you will not engage in any otheremployment, consulting or other business activity without the prior written consent of the Company.While you render services to the Company, you also will not assist any person or



entity in competing with the Company, in preparing to compete with the Company or in hiring anyemployees or consultants of the Company.
All forms of compensation referred to in this letter agreement are subject to reduction to reflectapplicable withholding and payroll taxes and other deductions required by law.
Finally, by accepting this offer, you and the Company agree to waive any rights to a trial before ajudge or jury and agree to arbitrate before a neutral arbitrator any and all claims or disputesarising out of this letter agreement and any and all claims arising from or relating to youremployment with the Company, including (but not limited to) claims against any current or formeremployee, director or agent of the Company, claims of wrongful termination, retaliation,discrimination, harassment, breach of contract, breach of the covenant of good faith and fairdealing, defamation, invasion of privacy, fraud, misrepresentation, constructive discharge orfailure to provide a leave of absence, claims regarding commissions, stock options or bonuses,infliction of emotional distress or unfair business practices.
The arbitrator’s decision must be written and must include the findings of fact and law thatsupport the decision. The arbitrator’s decision will be final and binding on both parties, exceptto the extent applicable law allows for judicial review of arbitration awards. The arbitrator mayaward any remedies that would otherwise be available to the parties if they were to bring thedispute in court. The arbitration will be conducted in accordance with the National Rules for theResolution of Employment Disputes of the American Arbitration Association; provided, however thatthe arbitrator must allow the discovery authorized by the California Arbitration Act or that thearbitrator deems necessary for you and the Company to vindicate your respective claims or defenses.The arbitration will take place in San Mateo County or, at your option, the county in which youprimarily worked with the Company at the time when the arbitrable dispute or claim first arose.
You and the Company will share the costs of arbitration equally, except that the Company will bearthe cost of the arbitrator’s fee and any other type of expense or cost that you would not berequired to bear if you were to bring the dispute or claim in court. Both the Company and you willbe responsible for their own attorneys’ fees, and the arbitrator may not award attorneys’ feesunless a statute or contract at issue specifically authorizes such an award.
This arbitration provision does not apply to the following: (a) workers’ compensation orunemployment insurance claims or (b) claims concerning the validity, infringement or enforceabilityof any trade secret, patent right, copyright or any other trade secret or intellectual propertyheld or sought by either you or the Company (whether or not arising under the Employee ProprietaryInformation and Inventions Agreement between you and the Company).
If you would like to review a copy of the AAA Employment Dispute Resolution rules, please contactConnie Tedrow in the Human Resources Department.
To schedule your New Hire Orientation, please call Connie Tedrow. Failure to attend Orientationmay result in an unnecessary delay of your first paycheck as well as a delay in your employeebenefit coverage.



Andrew, we are pleased to welcome you to Shutterfly. Realizing this is an important decision foryou, we believe this position is an excellent opportunity and we are confident it will provide youwith personal challenge and potential growth opportunities. We believe you will find Shutterfly anexciting and fulfilling place to work. Please signify your acceptance of our offer by signingbelow and returning this letter agreement to Connie Tedrow, no later than July 13, 2001.
Very truly yours,
/s/ Andy Wood
Andy Wood

cc: Human Resources File



I accept Shutterfly’s offer of employment and agree to the terms in this letter agreement and itsattachments. I acknowledge that except for the Employee Proprietary Information and InventionsAgreement attached to the letter agreement, this letter agreement is the entire agreement relatedto my employment with Shutterfly and supersedes all prior or contemporaneous oral or writtencommunication and representations. This letter agreement (offer of employment, attachments andEmployee Proprietary Information and Inventions Agreement) can only be modified in writing, bysigned agreement from the Chief Executive Officer. I accept this offer voluntarily and not inreliance on any promises other than those contained in this letter agreement and its attachments.
/s/ A.F. Young
  /s/ Andrew F Young    
Name, Signature
  Name, Printed    

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