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Shannon and Gibbs met each other while waiting for a train at the station in Stillwater in June 1976.
Gibbs then made his rules, rules that he is known to share with his team in NCIS. She and her daughter Kelly Gibbs were killed in a car crash when NIS Agent Kurt Mitchell was shot and killed. Gibbs tracked down the murderer Pedro Hernandez and killed him with the skills learned as a sniper while in the Marines.
In addition to Jethro, Shannon was also avenged by her mother, Joann when she killed a man associated with the Reynosa cartel, the drug cartel of which Pedro Hernandez had been a high-ranking member.
At some point, Shannon gave Jethro an engraved flask which later stopped a bullet (presumably saving his life). For a time he kept the flask in his basement workshop; but sometime between Enigma (episode) and Under Covers (episode), he moved it to his desk at work.
In Life Before His Eyes (episode), alternate outcomes were revealed regarding Shannon and Kelly Gibbs: Specifically, their survival and/or Gibbs failing to avenge them.
In the former, while Kelly Gibbs was working on her project, she and Kelly discovered Marines arriving at their doorstep (implying that Gibbs had fallen in battle during his tour in Iraq). In the latter, Gibbs became a drunken recluse.
In Hereafter (episode), Gibbs reveals to a grieving Leon Vance that during one of his deployments, Shannon had increased his life insurance policy. This was a worse-case scenario for her and Kelly should Gibbs die overseas. This provided comfort to Vance who had discovered that his recently-deceased wife had taken the same measures, leading Vance to question whether she was planning on leaving him.