Sec Form 4 Filing - POPE MICHAEL W @ SHUTTERFLY INC - 2019-09-25

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person POPE MICHAEL W 2. Issuer Name and Ticker or Trading Symbol SHUTTERFLY INC [ SFLY] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) SVP & Chief Financial Officer (Last) (First) (Middle) C/O SHUTTERFLY, INC., 2800 BRIDGE PARKWAY 3. Date of Earliest Transaction (MM/DD/YY) 09/25/2019 (Street) REDWOOD CITY, CA94065 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 09/25/2019 D 24,802 D 0 D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Restricted Stock Units ( 2 ) 09/25/2019 D 94,610 ( 4 )( 5 ) ( 3 ) Common Stock 94,610 $ 0 0 D Employee Stock Option (right to buy) $ 44.75 09/25/2019 D 50,873 ( 6 )( 7 ) 02/13/2024 Common Stock 50,873 $ 0 0 D Employee Stock Option (right to buy) $ 76.73 09/25/2019 D 57,276 ( 8 ) 02/27/2025 Common Stock 57,276 $ 0 0 D Restricted Stock Units ( 2 ) 09/25/2019 A 13,143 ( 9 ) ( 3 ) Common Stock 13,143 $ 0 13,143 D Restricted Stock Units ( 2 ) 09/25/2019 D 13,143 ( 9 ) ( 3 ) Common Stock 13,143 $ 0 0 D Restricted Stock Units ( 2 ) 09/25/2019 A 28,586 ( 10 ) ( 3 ) Common Stock 28,586 $ 0 28,586 D Restricted Stock Units ( 2 ) 09/25/2019 D 28,586 ( 10 ) ( 3 ) Common Stock 28,586 $ 0 0 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other POPE MICHAEL W C/O SHUTTERFLY, INC. 2800 BRIDGE PARKWAY REDWOOD CITY, CA94065 SVP & Chief Financial Officer Signatures /s/ Jason Sebring, Attorney-in-Fact 09/26/2019 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Pursuant to the Agreement and Plan of Merger among the Issuer, Photo Holdings, LLC and Photo Holdings Merger Sub, Inc. dated as of June 10, 2019 (the "Merger Agreement"), the shares of common stock were cancelled and converted into the right to receive $51.00 in cash per share. ( 2 )Each restricted stock unit ("RSU") represents a contingent right to receive one share of common stock of the Issuer upon vesting. ( 3 )Pursuant to the Merger Agreement, each unexpired, unsettled and outstanding RSU was cancelled at the effective time of the merger and automatically converted into the right to receive $51.00 in cash per outstanding RSU, payable in accordance with and subject to the terms of the Merger Agreement. ( 4 )Of these RSUs, (a) 35,000 were originally scheduled to vest on October 27, 2019, (b) 5,875 were originally scheduled to vest on each of February 14, 2020 and February 14, 2021, (c) 16,168 were originally scheduled to vest in three substantially equal installments on each of February 15, 2020, February 15, 2021 and February 15, 2022, (d) 11,977 were originally scheduled to vest on February 15, 2020, and (e) 19,715 were originally scheduled to vest in four equal annual installments, with the first installment scheduled to vest on February 15, 2020, in each case subject to the Reporting Person's continuous service to the Issuer through such vesting date. (continued to 5) ( 5 )(Beginning from 4) Upon the closing of the merger, the RSUs were cancelled and converted into the right to receive $51.00 in cash per RSU, payable in accordance with and subject to the terms of the Merger Agreement, with the cash consideration to vest as follows: on the original vesting date for cash consideration payable in respect of RSUs that would have vested during 2019; on January 1, 2020 for cash consideration payable in respect of RSUs that would have vested during 2020; on January 1, 2021 for cash consideration payable in respect of RSUs that would have vested during 2021; and on July 1, 2021 for cash consideration payable in respect of RSUs that would have vested after December 31, 2021, subject, in each case, to acceleration upon an earlier qualifying termination of employment. ( 6 )The stock option vested and became exercisable as to 1/4th of the shares subject to the option on February 14, 2018, and thereafter vests as to 1/48th of the shares in equal monthly installments, until such time as the option is 100% vested, subject to the continuing employment of the Reporting Person on each vesting date. Pursuant to the Merger Agreement, the option was cancelled and converted into the right to receive a cash payment equal to the difference between $51.00 and the per share exercise price of the option, multiplied by the number of shares subject to the option, payable in accordance with and subject to the terms of the Merger Agreement, with the cash consideration to vest as follows: (continued to 7) ( 7 )(Beginning from 6) on the original vesting date for cash consideration payable in respect of options that would have vested during 2019; on January 1, 2020 for cash consideration payable in respect of options that would have vested during 2020; and on January 1, 2021 for cash consideration payable in respect of options that would have vested during 2021, subject, in each case, to acceleration upon an earlier qualifying termination of employment. ( 8 )The stock option vested and became exercisable as to 1/4th of the shares subject to the option on February 15, 2019, and thereafter vests as to 1/48th of the shares in equal monthly installments, until such time as the option is 100% vested, subject to the continuing employment of the Reporting Person on each vesting date. Pursuant to the Merger Agreement, the option was cancelled without payment of any consideration because the exercise price was greater than $51.00. ( 9 )The RSUs are scheduled to vest in three substantially equal installments on each of September 25, 2019, January 1, 2021 and July 1, 2021, subject to the Reporting Person's continuous service to the Issuer through each such vesting date and subject to acceleration upon an earlier qualifying termination of employment. Upon the closing of the merger, the RSUs were cancelled and converted into the right to receive $51.00 in cash per RSU, payable in accordance with and subject to the terms of the Merger Agreement and subject to the same vesting schedule as applied to the RSUs. ( 10 )The RSUs are scheduled to vest on July 1, 2021, subject to the reporting Person's continuous service to the Issuer through such vesting date and subject to acceleration upon an earlier qualifying termination of employment. Upon the closing of the merger, the RSUs were cancelled and converted into the right to receive $51.00 in cash per RSU, payable in accordance with and subject to the terms of the Merger Agreement and subject to the same vesting schedule as applied to the RSUs.

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