• by Mark Walsh  @markfwal, January 25, 2007

Two senior Shutterfly executives are leaving the Internet photo-sharing and services company, according to a securities filing Wednesday. News of the departures comes just two weeks after Netscape co-founder Jim Clark quit Shutterfly's board, complaining of overly restrictive securities regulations.

In the filing, Shutterfly reported that Chief Marketing Officer Andrew F. Young and Jeannine M. Smith, senior vice president, operations, had entered into severance agreements that would end their employment, respectively, on or before May 10 and June 8. Young's agreement calls for him to receive a cash payment equal to six months' salary and payment of six months' COBRA premiums.

Young had served as Shutterfly's CMO since July 2001. Previously, he was vice president of marketing at Vivaldi Networks, a retail-based technology company.

Shutterfly was one of the few Internet media companies to go public last year, with its stock still trading around its $15 offering price. In November, Shutterfly posted a third-quarter loss of $2.7 million, or 70 cents a share--up from $1.3 million, or 38 cents a share, a year ago after paying preferred dividends. Revenue increased 36% from last year to $21.2 million.

Clark resigned from the board on Jan. 8. In a letter to management, he said he was stepping down because the company had grown from a technology developer into a manufacturer, and due to constraints placed on large shareholders by the Sarbanes-Oxley securities law.

A Shutterfly representative did not return calls for comment.