October 24, 2013

Shutterfly Acquires BorrowLenses

Gives Consumers Access to Premium Photography and Video Equipment Marketplace

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Shutterfly, Inc. (NASDAQ:SFLY), the leading manufacturer and digital retailer of high-quality personalized products and services, announced today that it has acquired BorrowLenses, the premier online marketplace for photographic and video equipment rentals. BorrowLenses's Founders, Max Shevyakov and Mark Gurevich, will join Shutterfly Inc.

"BorrowLenses addresses the growing consumer demand for high-quality products and services that are delivered on demand without high up-front costs," said Jeffrey Housenbold, president and CEO of Shutterfly. "BorrowLenses is a perfect addition to the Shutterfly Inc. family of lifestyle brands, as they are the premium provider in the photo equipment rental category and are passionate about helping their customers capture moments by providing them with best in class photography and video equipment."

"This acquisition gives Shutterfly a presence in the rapidly expanding sharing economy. We now have a greater ability to diversify our revenue streams, reduce fourth quarter seasonality and improve upsell and cross-sell opportunities among our family of brands," added Housenbold.

With operations in San Carlos, CA and Boston, MA, BorrowLenses provides professional and amateur photographers and videographers with a choice of thousands of camera, lens, and equipment options delivered through the mail or local pick up at more than 30 local and independent camera stores in 12 states across the nation.

Inducement Grant Disclosure

In accordance with NASDAQ Listing Rule 5635(c)(4), Shutterfly granted an inducement grant to Max Shevyakov and Mark Gurevich. The inducement grant consists of a restricted stock unit award representing the right for each founder to receive up to 134,698 shares of Shutterfly's common stock for a combined total of 269,396 shares of Shutterfly's common stock. The award will vest over two years, with 50 percent of the underlying shares vesting on each of the first and second anniversaries of the initial October 24, 2013 grant date. The grant is being made as an inducement material to Max Shevyakov's and Mark Gurevich's acceptance of employment with Shutterfly, in accordance with NASDAQ Listing Rule 5635(c)(4). Vesting of the award is subject to Max Shevyakov's and Mark Gurevich's continuous service through each vesting date.

About Shutterfly, Inc.

Shutterfly, Inc. is the leading manufacturer and digital retailer of high-quality personalized products and services offered through a family of lifestyle brands. Founded in 1999, the Shutterfly, Inc. family of brands includes Shutterfly, where your photos come to life in photo books, cards and gifts; Tiny Prints, premium cards and stationery for all life's occasions; Wedding Paper Divas, wedding invitations and stationery for every step of the planning process; Treat, personalized greeting cards that really stand out; MyPublisher, one of the pioneers in the photo book industry and creator of easy-to-use photo book-making software; ThisLife,a private, cloud-based solution that makes it easy for consumers to find, share and enjoy their photos and videos, all in one place; and BorrowLenses, the premier online marketplace for photographic and video equipment rentals. For more information about Shutterfly, Inc. (NASDAQ:SFLY), visit www.shutterflyinc.com.

Shutterfly, Inc.
Investors
Michael Look, 650-610-5910
mlook@shutterfly.com
or
Media
Gretchen Sloan, 650-610-5276
gsloan@shutterfly.com

Source: Shutterfly, Inc.

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