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 ”).

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)