Exhibit 10.17


EMPLOYMENT AGREEMENT


 


BY AND BETWEEN


 


FAVRILLE, INC.


 


AND


 


DAVID GUY


 


 


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  PAGE

  
	
  1.

  	
  EMPLOYMENT

  	
  1

  
	
  2.

  	
  LOYAL AND CONSCIENTIOUS PERFORMANCE; EXCLUSIVE
  PROPERTY

  	
  2

  
	
  3.

  	
  COMPENSATION OF EXECUTIVE

  	
  2

  
	
  4.

  	
  TERMINATION

  	
  3

  
	
  5.

  	
  CONFIDENTIAL AND PROPRIETARY INFORMATION

  	
  6

  
	
  6.

  	
  ASSIGNMENT AND BINDING EFFECT

  	
  6

  
	
  7.

  	
  SURVIVAL

  	
  6

  
	
  8.

  	
  NOTICES

  	
  7

  
	
  9.

  	
  CHOICE OF LAW

  	
  7

  
	
  10.

  	
  INTEGRATION

  	
  7

  
	
  11.

  	
  AMENDMENT

  	
  7

  
	
  12.

  	
  WAIVER

  	
  7

  
	
  13.

  	
  SEVERABILITY

  	
  8

  
	
  14.

  	
  INTERPRETATION; CONSTRUCTION

  	
  8

  
	
  15.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  8

  
	
  16.

  	
  COUNTERPARTS

  	
  8

  
	
  17.

  	
  REFERENCES

  	
  8

  
	
  18.

  	
  ARBITRATION

  	
  8

  
	
  19.

  	
  TRADE SECRETS OF OTHERS

  	
  9

  
	
  20.

  	
  ADVERTISING; WAIVER

  	
  9

  



 


i

















 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT
AGREEMENT (the “Agreement”) is
made and entered into effective as of December 1, 2005 (the “Effective Date”)
by and between FAVRILLE,
INC., a Delaware corporation (the “Company”), and DAVID GUY (“Executive”).  The Company and Executive are collectively
referred to herein as the “Parties,” and each is individually referred to herein as a “Party.”


 


Recitals


 


A.            The Company
desires assurance of the association and services of Executive in order to
retain Executive’s experience, skills, abilities, background and knowledge, and
is willing to engage Executive’s services on the terms and conditions set forth
in this Agreement.


 


B.            Executive
desires to be in the employ of the Company and is willing to accept such
employment on the terms and conditions set forth in this Agreement.


 


Agreement


 


In consideration of the foregoing recitals
and the mutual promises and covenants herein contained, and for other good and
valuable consideration, the Parties, intending to be legally bound, agree as
follows:


 


1.     Employment.


 


1.1          Term.  The Company hereby employs Executive, and
Executive hereby accepts employment by the Company, upon the terms and
conditions set forth in this Agreement. 
The term of this Agreement shall begin on the Effective Date and shall
continue until it is terminated pursuant to Section 4 (the “Term”).  On the last day of the Term, Executive shall
immediately resign from all positions with the Company.  Notwithstanding anything herein to the
contrary, either Party may terminate Executive’s employment under this
Agreement at any time, with or without Cause (as defined in Subsection 4.6(b)),
subject to the terms and conditions of Sections 4 and 5.


 


1.2          Title.  Executive shall have the title of Chief
Commercial Officer of the Company and shall serve in such other capacity or
capacities as the Board of Directors of the Company (the “Board”) may
prescribe from time to time.  Executive
shall report to the Chief Executive Officer of the Company (the “CEO”) and the Board.


 


1.3          Duties.  Executive shall do
and perform all services, acts or things necessary or advisable to manage and
conduct the business of the Company and that are normally associated with the
position of Chief Commercial Officer, consistent with the bylaws of the Company
and as required by the CEO and the Board.


 


1

















 


1.4          Policies
and Practices.  The
employment relationship between the Parties shall be governed by the policies
and practices established by the Company and the Board.  Executive hereby acknowledges that Executive
has read the Company’s Employee Handbook, which, along with this Agreement,
shall govern the terms and conditions of Executive’s employment with the
Company.  In the event that the terms of
this Agreement differ from or are in conflict with the Company’s policies or
practices or the Company’s Employee Handbook, the terms of this Agreement shall
control. Normal working hours are from 8:00 a.m. to 5:00 p.m., Monday
through Friday. As an exempt salaried employee, you will be expected to work
additional hours as required by the nature of your work assignments.


 


1.5          Location.  Unless the Parties otherwise agree in
writing, during the Term, Executive shall perform the services Executive is
required to perform pursuant to this Agreement at the Company’s offices located
in San Diego, California, or at any other place the Company maintains a
principal office; provided, however,
that the Company may from time to time require Executive to travel temporarily
to other locations in connection with the Company’s business.


 


2.     Loyal and
Conscientious Performance; Exclusive Property.


 


2.1          Loyalty.  During Executive’s employment by the Company,
Executive shall devote Executive’s full business energies, interest, abilities
and productive time to the proper and efficient performance of Executive’s
duties under this Agreement.


 


2.2          Exclusive Property.  Executive agrees that all business procured by
Executive on behalf of the Company, and all Company-related business
opportunities and plans made known to Executive, while employed by the Company
are and shall remain the exclusive property of the Company.


 


3.     Compensation
of Executive.


 


3.1          Base
Salary.  The
Company shall pay Executive a base salary of $250,000 per year, less payroll
deductions and all required withholdings payable in regular periodic payments in
accordance with Company policy.  Such
base salary shall be subject to annual review and prorated for any partial year
of employment on the basis of a 365-day fiscal year.


 


3.2          Stock
Options.  Upon
the commencement of Executive’s employment with the Company and
subject to approval of the Board or the Compensation Committee and the terms of
the Company’s Amended and Restated 2001 Equity
Incentive Plan, as may be amended from time to time (the “Plan”), Executive will be granted a stock
option (the “Option”)
under the Plan to purchase shares of the Company’s common stock (the “Common Stock”).  To the maximum extent possible, the Option
shall be an Incentive Stock Option as such term is defined in Section 422 (“Section 422”) of the
Internal Revenue Code of 1986, as amended. 
The Option will be governed by and granted pursuant to the Plan and a
separate Grant Notice and Stock Option Agreement, in substantially the form
attached hereto as EXHIBIT A,
as may be amended from time to time upon the approval of the Board or the
Compensation Committee.  The exercise
price per share of the Option will be equal to the fair market value of the
Common Stock established on the date of grant subject to any limitations under
Section 422 and approval by the


 


2

















 


Board or the Compensation
Committee.  The Option will be subject to
vesting over four years so long as Executive provides Continuous Service (as
defined in the Plan) to the Company or an Affiliate in accordance with the
Plan, according to the following schedule: 25% of the shares subject to the
Option will vest on the first anniversary of the date of grant and 1/48th
of the shares subject to the Option will vest monthly thereafter over the next
three years.


 


3.3          Employment
Taxes.  All of
Executive’s compensation shall be subject to customary withholding taxes and
any other employment taxes as are commonly required to be collected or withheld
by the Company.


 


3.4          Benefits.  Executive
shall, in accordance with Company policy and the terms of the applicable plan
documents, be eligible for the following standard Company benefits: medical,
dental and vision insurance, as well as participation in the Company’s
Section 125 flexible spending plan and participation in the Company’s
401(k) plan, subject to the terms of those plans. Executive also shall, in
accordance with Company policy and the terms of the applicable plan documents,
be eligible to participate in benefits under any executive benefit plan or
arrangement which may be in effect from time to time and made available to the
Company’s executive or key management employees. The Company reserves the right
to modify benefits from time to time as it deems necessary in its sole
discretion. Executive will also be eligible for paid time off in accordance
with the Company’s flexible “time-off” plan. Executive will accrue flexible “time-off”
at a rate of 25 days per year and will be entitled to 12 holidays per year. The
Company reserves the right to modify its policies from time to time as it deems
necessary in its sole discretion.


 


4.     Termination.


 


4.1          Termination
for Complete Disability.  Executive’s employment with the Company shall
terminate effective upon the date of Executive’s Complete Disability (as defined in Subsection 4.6(a)).


 


4.2          Termination
by the Company. 
Executive’s employment with the Company may be terminated by the Company
as follows:


 


(a)           For
Cause.  The
Company may terminate Executive’s employment under this Agreement at any time
for “Cause” (as
defined in Subsection 4.6(b)) by
delivery of written notice to Executive specifying the Cause or Causes relied
upon for such termination.  Any notice of
termination given pursuant to this Subsection 4.2(a) shall effect termination
as of the date specified in such notice or, in the event no such date is
specified, two business days after written notice is given to Executive.


 


(b)           Without
Cause.  The
Company may terminate Executive’s employment under this Agreement at any time
and for any reason by delivery of written notice of such termination to
Executive.  Any notice of termination
given pursuant to this Subsection 4.2(b) shall
effect termination as of the date specified in such notice or, in the event no
such date is specified, two weeks after written notice is given to Executive.


 


3

















 


4.3          Termination
by Executive. 
Executive may terminate Executive’s employment with the Company at any
time.


 


4.4          Compensation
upon Termination.


 


(a)           Death
or Complete Disability.  If Executive’s employment by the Company is
terminated by Executive’s death or Complete Disability, the Company shall pay
to Executive’s heirs or Executive, as applicable, Executive’s base salary and
accrued and unused vacation benefits earned through the date of termination at the
rate in effect at the time of such termination, less standard deductions and
withholdings, and the Company shall thereafter have no further obligations to
Executive and/or Executive’s heirs under this Agreement.


 


(b)           With
Cause.  If
Executive’s employment is terminated by the Company for Cause, the Company
shall pay Executive’s base salary and accrued and unused vacation benefits
earned through the date of termination at the rate in effect at the time of
such termination, less standard deductions and withholdings, and the Company
shall thereafter have no further obligations to Executive under this Agreement.


 


(c)           Without
Cause. If the Company terminates Executive’s
employment without Cause, the Company shall pay Executive’s base salary and
accrued and unused vacation earned through the date of termination at the rate
in effect at the time of such termination, less standard deductions and
withholdings.  In addition, subject to
the limitations set forth in Subsection 4.5(d) and upon Executive’s furnishing
to the Company an effective release and waiver of claims, in substantially the
form attached hereto as EXHIBIT B (the “Release and Waiver”), Executive also shall
be entitled to:


 


i.              The
equivalent of Executive’s annual base salary in effect at the time of termination
for a period of 9 months (the “Severance
Period”), in each case, less standard deductions and
withholdings, to be paid over a period of 9 months after the date of
termination pursuant to the Company’s standard payroll practices;


 


ii.            In
the event Executive elects continued coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall reimburse
Executive for the same portion of Executive’s COBRA health insurance premium
that it paid during Executive’s employment up until the earlier of either
(i) the last day of the Severance Period or (ii) the date on which
Executive begins full-time employment with another company, organization or
business entity; and


 


iii.           The
accelerated vesting of the portion of any outstanding option to purchase Common
Stock held by Executive on the date of termination that would have otherwise
vested during the Severance Period, so that each such portion is vested and
exercisable as of the date of termination to the extent such portion would
otherwise become vested and exercisable as of the end of the Severance Period.


 


(d)           Termination
of Obligations. 
Notwithstanding any provisions in this Agreement to the contrary,
including any provisions contained in this Subsection 4.5,
the


 


4

















 


Company’s obligations, and Executive’s rights, pursuant to Subsection 4.5(c) shall cease and be rendered a nullity immediately
should Executive violate any provision of Section 2 and Section 5, or should
Executive violate the terms and conditions of either Executive’s Proprietary
Information and Inventions Agreement or Nondisclosure Agreement with the
Company (discussed in Subsection 5.1).


 


4.5          Definitions.  For purposes of this Agreement, the following
terms shall have the following meanings:


 


(a)           Complete
Disability.  “Complete Disability”
shall mean the inability of Executive to perform Executive’s duties under
this Agreement because Executive has become permanently disabled within the
meaning of any policy of disability income insurance covering employees of the
Company then in force.  In the event the
Company has no policy of disability income insurance covering employees of the
Company in force when Executive becomes disabled, the term “Complete Disability”  shall mean the
inability of Executive to perform Executive’s duties under this Agreement by
reason of any incapacity, physical or mental, that the Board, based upon
medical advice or an opinion provided by a licensed physician acceptable to the
Board, determines to have incapacitated Executive from satisfactorily
performing all of Executive’s usual services for the Company for a period of at
least 120 days during any 12-month period (whether or not consecutive).  Based upon such medical advice or opinion,
the determination of the Board shall be final and binding and the date such
determination is made shall be the date of such Complete Disability for
purposes of this Agreement.


 


(b)           For
Cause.  “Cause”  for the
Company to terminate Executive’s employment hereunder shall mean the occurrence
of any of the following events:


 


(i)            Executive’s conviction of any felony or any crime
involving fraud or dishonesty;


 


(ii)           Executive’s participation (whether by affirmative
act or omission) in a fraud, act of dishonesty or other act of misconduct
against the Company and/or an Affiliate;


 


(iii)         Conduct by Executive which, based upon a good
faith and reasonable factual investigation by the Board, demonstrates Executive’s
gross unfitness to serve;


 


(iv)          Executive’s violation of any fiduciary duty or
duty of loyalty owed to the Company and/or an Affiliate;


 


(v)            Executive’s breach of any material term of any
material contract between Executive and the Company and/or an Affiliate;


 


(vi)          Executive’s violation of any material Company
policy; and


 


(vii)         Executive’s violation of state or federal law in
connection with the performance of Executive’s job.


 


5

















 


The determination that a termination is for
Cause shall be made by the Board in its sole and exclusive judgment and
discretion.


 


5.     Confidential
and Proprietary Information.


 


5.1          As
a condition of employment, Executive agrees to execute and abide by the terms
of Proprietary Information and Inventions Agreement, in substantially the form
attached hereto as EXHIBIT
C, and a Nondisclosure Agreement, in substantially the form attached hereto
as EXHIBIT D.


 


5.2          Executive
recognizes that Executive’s employment with the Company will involve contact
with information of substantial value to the Company that is not generally
known in the trade and that gives the Company an advantage over its competitors
who do not know or use it, including but not limited to, techniques, designs,
drawings, processes, inventions know how, strategies, marketing, and/or
advertising plans or arrangements, developments, equipment, prototypes, sales,
supplier, service provider, vendor, distributor and customer information, and
business and financial information relating to the business, products,
services, practices and techniques of the Company (hereinafter referred to as “Confidential and Proprietary
Information”).  Executive
will at all times regard and preserve as confidential such Confidential and
Proprietary Information obtained by Executive from whatever source and will
not, either during Executive’s employment with the Company or thereafter,
publish or disclose any part of such Confidential and Proprietary Information
in any manner at any time, or use the same except on behalf of the Company,
without the prior written consent of the Company.


 


6.     Assignment and Binding
Effect.  Neither this
Agreement nor any rights or obligations hereunder shall be assignable by
Executive.  This Agreement shall be
binding upon and inure to the benefit of the Company and its successors,
assigns and legal representatives.


 


7.     SURVIVAL.  Subsections 4.4(c) and
4.4(d) and Sections 5, 6, 7, 8, 9, 18 and 19 shall survive the termination of
this Agreement.


 


6

















 


8.     NOTICES.  All notices or demands of
any kind required or permitted to be given by the Company or Executive under
this Agreement shall be given in writing and shall be personally delivered (and
receipted for) or faxed during normal business hours or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:


 


If to the
Company:


 


Favrille, Inc.


10421 Pacific Center Court


San Diego, CA 
92121


Phone: (858) 526-8000


Fax: (858) 597-7040


Attn:  Chief Financial Officer


 


	
  If to
  Executive:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


Any such written notice shall be deemed given
on the earlier of the date on which such notice is personally delivered or
three days after its deposit in the United States mail as specified above.  Either Party may change its address for
notices by giving notice to the other Party in the manner specified in this
Section 8.


 


9.     CHOICE
OF LAW.  This Agreement
is made in San Diego, California.  This
Agreement shall be construed and interpreted in accordance with the internal
laws of the State of California, excluding its conflicts of laws principles.


 


10.  INTEGRATION.  Except as provided in
Executive’s Proprietary Information and Inventions Agreement and Nondisclosure
Agreement with the Company, the Plan and the related Plan documents, this
Agreement, including EXHIBIT
B hereto, contains the complete, final and exclusive agreement of
the Parties relating to the terms and conditions of Executive’s employment with
the Company and the termination of Executive’s employment, and supersedes all
prior and contemporaneous oral and written employment agreements or
arrangements between the Parties. To the extent this Agreement conflicts with
the Proprietary Information and Inventions Agreement or the Nondisclosure
Agreement, the terms of such Proprietary Information and Inventions Agreement
or Nondisclosure Agreement, respectively, shall control.


 


11.  AMENDMENT.
 This Agreement
cannot be amended or modified except by a written agreement signed by Executive
and the Company.


 


12.  WAIVER.  No term, covenant or condition of this
Agreement or any breach thereof shall be deemed waived, except with the written
consent of the Party against whom the wavier is claimed, and any waiver or any
such term, covenant, condition or breach shall not be deemed to be a waiver of
any preceding or succeeding breach of the same or any other term, covenant,
condition or breach.


 


7

















 


13.  SEVERABILITY.  The finding by a court of competent
jurisdiction of the unenforceability, invalidity or illegality of any provision
of this Agreement shall not render any other provision of this Agreement
unenforceable, invalid or illegal.  Such
court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
that most accurately represents the Parties’ intention with respect to the invalid or unenforceable term or
provision.


 


14.  INTERPRETATION;
CONSTRUCTION. 
The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement.  This Agreement has been drafted by legal
counsel representing the Company, but Executive has been encouraged to consult
with, and has had the opportunity to consult with, Executive’s own independent
counsel and tax advisors with respect to the terms of this Agreement.  The Parties acknowledge that each Party and
its counsel have reviewed and revised, or had an opportunity to review and
revise, this Agreement, and the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.


 


15.  REPRESENTATIONS
AND WARRANTIES. 
Executive represents and warrants that Executive is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that Executive’s
execution and performance of this Agreement will not violate or breach any
other agreements between Executive and any other person or entity.


 


16.  COUNTERPARTS.  This Agreement may be executed in two
counterparts, each of which shall be deemed an original, both of which together
shall constitute one and the same instrument.


 


17.  REFERENCES.  References herein to a “Section” or a “Subsection” shall be
to a Section or a Subsection, respectively, of this Agreement.


 


18.  ARBITRATION.  To ensure the rapid and
economical resolution of disputes that may arise in connection with Executive’s
employment with the Company, the Parties agree that any and all disputes,
claims, or causes of action, in law or equity, arising from or relating to
Executive’s employment, or the termination of that employment, will be
resolved, to the fullest extent permitted by law, by final, binding and
confidential arbitration in San Diego, California conducted by the Judicial
Arbitration and Mediation Services/Endispute, Inc. (“JAMS”), or its successors, under the then
current rules of JAMS for employment disputes; provided
that the arbitrator shall: 
(a) have the authority to compel adequate discovery for the resolution
of the dispute and to award such relief as would otherwise be permitted by law;
and (b) issue a written arbitration decision including the arbitrator’s
essential findings and conclusions and a statement of the award.  Each Party shall be entitled to all rights
and remedies that such Party would be entitled to pursue in a court of
law.  The Company shall pay all
arbitration fees.  Nothing in this
Agreement is intended to prevent either Party from obtaining injunctive relief
in court to prevent irreparable harm pending the conclusion of any such
arbitration.


 


8

















 


19.  TRADE
SECRETS OF OTHERS.  It is the understanding of the Parties that
Executive shall not divulge to the Company and/or an Affiliate any confidential
information or trade secrets belonging to others, including Executive’s former
employers, nor shall the Company and/or an Affiliate seek to elicit from
Executive any such information. 
Consistent with the foregoing, Executive shall not provide to the
Company and/or an Affiliate, and the Company and/or an Affiliate shall not
request, any documents or copies of documents containing such information.


 


20.  ADVERTISING;
WAIVER.  Executive agrees to permit the Company
and/or an Affiliate, and persons or other organizations authorized by the
Company and/or an Affiliate, to use, publish and distribute advertising or
sales promotional literature concerning the products and/or services of the
Company and/or an Affiliate, or the machinery and equipment used in the
provision thereof, in which Executive’s name and/or pictures of Executive taken
in the course of Executive’s provision of services to the Company and/or an
Affiliate, appear.  Executive hereby
waives and releases any claim or right Executive may otherwise have arising out
of such use, publication or distribution.


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]


 


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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above
written.


 


	
  FAVRILLE,
  INC. 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John P. Longenecker, PhD.

  	
   

  	
   

  
	
  Name:

  	
  John P. Longenecker, Ph.D.

  	
   

  	
   

  
	
  Its:

  	
  President and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated: 

  	
  December 1, 2005

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David L. Guy

  	
   

  	
   

  
	
  [EXECUTIVE]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
  December 5, 2005

  	
   

  	
   

  
	
   

  	
   

  
											



 


[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]


 


10

















 


 


EXHIBIT A


 


FORM OF STOCK OPTION AGREEMENT


 

















 


EXHIBIT B


 


RELEASE AND WAIVER OF CLAIMS


 


In
consideration of the payments and other benefits set forth in Section 4 of the
Employment Agreement dated                ,
to which this form is attached, I, DAVID
GUY, hereby furnish FAVRILLE, INC., a Delaware corporation (the “Company”), with
the following release and waiver (“Release
and Waiver”).


 


In exchange
for the consideration provided to me by the Employment Agreement that I am not
otherwise entitled to receive, I hereby generally and completely release the
Company and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
Affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Release and
Waiver.  This general release includes,
but is not limited to: (1) all claims arising out of or in any way related to
my employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including, but
not limited to, salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing; (4) all tort claims, including, but not limited
to, claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (5) all federal, state, and local statutory
claims, including, but not limited to, claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the
California Fair Employment and Housing Act (as amended).


 


I also acknowledge
that I have read and understand Section 1542 of the California Civil Code which
reads as follows:  “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all rights and
benefits under that section and any law of any jurisdiction of similar effect
with respect to any claims I may have against the Company.


 


I acknowledge
that, among other rights, I am waiving and releasing any rights I may have
under ADEA, that this Release and Waiver is knowing and voluntary, and that the
consideration given for this Release and Waiver is in addition to anything of
value to which I was already entitled as an executive of the Company.  If I am 40 years of age or older upon
execution of this Release and Waiver, I further acknowledge that I have been
advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein
does not relate to claims under the ADEA which may arise after this Release and
Waiver is executed; (b) I have the right to consult with an attorney prior to executing
this Release and Waiver (although I may choose voluntarily not to do so); and
(c) I have twenty-one (21) days from the date of termination of my employment
with the Company in which to consider this Release and Waiver (although I may
choose voluntarily to execute this Release and Waiver earlier); (d) I have
seven (7) days following the execution of this Release and Waiver to revoke my
consent to this Release and


 


2

















 


Waiver; and (e) this Release
and Waiver shall not be effective until the seven (7) day revocation period has
expired.


 


If I am less
than 40 years of age upon execution of this Release and Waiver, I acknowledge
that I have the right to consult with an attorney prior to executing this
Release and Waiver (although I may choose voluntarily not to do so); and (c) I
have five (5) days from the date of termination of my employment with the
Company in which to consider this Release and Waiver (although I may choose
voluntarily to execute this Release and Waiver earlier).


 


I acknowledge my continuing obligations under
my Proprietary Information and Inventions Agreement, a copy of which is
attached hereto (the “Proprietary
Agreement”).  Pursuant to
the Proprietary Information and Inventions Agreement I understand that among
other things, I must not use or disclose any confidential or proprietary
information of the Company and I must immediately return all Company property
and documents (including all embodiments of proprietary information) and all
copies thereof in my possession or control. 
I understand and agree that my right to the severance pay I am receiving
in exchange for my agreement to the terms of this Release and Waiver is
contingent upon my continued compliance with my Proprietary Information &
Inventions Agreement.


 


This Release and Waiver and the Proprietary
Agreement constitute the complete, final and exclusive embodiment of the entire
agreement between the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified
by a writing signed by both me and a duly authorized officer of the Company.


 


 


	
  Date: 

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  DAVID GUY

  



 


3

















 


EXHIBIT C


 


FAVRILLE, INC.


 


PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT


 


In consideration of my employment or
continued employment by FAVRILLE, INC., a Delaware corporation the “Company”),
and the compensation now and hereafter paid to me, I, DAVID GUY], hereby agree as follows:


 


1.             NONDISCLOSURE


 


1.1          Recognition
of Company’s Rights; Nondisclosure.  At all times during my employment and
thereafter, I will hold in strictest confidence and will not disclose, use,
lecture upon or publish any of the Company’s and/or its Affiliates’ Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing.  I will obtain Company’s written approval
before publishing or submitting for publication any material (written, verbal,
or otherwise) that relates to my work at Company and/or incorporates any
Proprietary Information.  I hereby assign
to the Company any rights I may have or acquire in such Proprietary Information
and recognize that all Proprietary Information shall be the sole property of
the Company and its assigns.  For
purposes of this Agreement,  “Affiliate” means, with
respect to any specific entity, any other entity that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with such specified entity.


 


1.2          Proprietary
Information. The term “Proprietary
Information” shall mean any and all confidential and/or proprietary
knowledge, data or information of the Company and/or its Affiliates.  By way of illustration but not limitation, “Proprietary Information” includes (a) trade secrets,
inventions, mask works, ideas, processes, formulas, source and object codes,
data, programs, other works of authorship, know-how, improvements, discoveries,
developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for
research, development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers; and (c) information regarding the skills and
compensation of other employees of the Company and/or its Affiliates.  Notwithstanding the foregoing, it is
understood that, at all such times, I am free to use information which is
generally known in the trade or industry, which is not gained as result of a
breach of this Agreement, and my own, skill, knowledge, know-how and experience
to whatever extent and in whichever way I wish.


 


1.3          Third
Party Information. 
I understand, in addition, that the Company has received and in the
future will receive from third parties confidential or proprietary information
(“Third Party Information”) subject to a duty on the Company’s
part to maintain the confidentiality of such information and to use it only for
certain limited purposes.  During the
term of my employment and thereafter, I will hold Third Party Information in
the strictest confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with my work for the Company, Third
Party Information unless expressly authorized by an officer of the Company in
writing.


 


1.4          No
Improper Use of Information of Prior Employers and Others.  During my employment by the Company I will
not improperly use or disclose any confidential information or trade secrets,
if any, of any former employer or any other person to whom I have an obligation
of confidentiality, and I will not bring onto the premises of the Company any
unpublished documents or any property belonging to any former employer or any
other person to whom I have an obligation of confidentiality unless consented
to in writing by that former employer or person.  I will use in the performance of my duties
only information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.


 


 


2.             ASSIGNMENT OF
INVENTIONS.


 


2.1          Proprietary
Rights.  The
term “Proprietary Rights” shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.


 


2.2          Prior
Inventions. 
Inventions, if any, patented or unpatented, which I made prior to the
commencement of my employment with the Company are excluded from the scope of
this Agreement.  To preclude any possible
uncertainty, I have set forth on Exhibit C-2 (Previous Inventions)
attached hereto a


 


1

















 


complete list of all Inventions that I have,
alone or jointly with others, conceived, developed or reduced to practice or
caused to be conceived, developed or reduced to practice prior to the
commencement of my employment with the Company, that I consider to be my
property or the property of third parties and that I wish to have excluded from
the scope of this Agreement (collectively referred to as “Prior
Inventions”).  If disclosure
of any such Prior Invention would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Prior Inventions in
Exhibit C-2 but am only to disclose a cursory name for each such
invention, a listing of the party(ies) to whom it belongs and the fact that
full disclosure as to such inventions has not been made for that reason.  A space is provided on Exhibit C-2 for
such purpose.  If no such disclosure is
attached, I represent that there are no Prior Inventions.  If, in the course of my employment with the
Company, I incorporate a Prior Invention into a Company product, process or
machine, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license (with rights to
sublicense through multiple tiers of sublicensees) to make, have made, modify,
use and sell such Prior Invention. 
Notwithstanding the foregoing, I agree that I will not incorporate, or
permit to be incorporated, Prior Inventions in any Company Inventions without
the Company’s prior written consent.


 


2.3          Assignment
of Inventions. 
Subject to Sections 2.4 and 2.6, I
hereby assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and
to any and all Inventions (and all Proprietary Rights with respect thereto)
whether or not patentable or registrable under copyright or similar statutes,
made or conceived or reduced to practice or learned by me, either alone or
jointly with others, during the period of my employment with the Company.  Inventions assigned to the Company, or to a
third party as directed by the Company pursuant to this Section 2, are hereinafter referred to as “Company Inventions”.


 


2.4          Nonassignable
Inventions. 
This Agreement does not apply to an Invention which qualifies fully as a
nonassignable Invention under Section 2870 of
the California Labor Code (hereinafter “Section 2870”). 
I have reviewed the notification on Exhibit C-1 (Limited Exclusion
Notification) and agree that my signature acknowledges receipt of the
notification.


 


2.5          Obligation
to Keep Company Informed.  During the period of my employment and for
six (6) months after termination of my employment with the Company, I will
promptly disclose to the Company fully and in writing all Inventions authored,
conceived or reduced to practice by me, either alone or jointly with
others.  In addition, I will promptly
disclose to the Company all patent applications filed by me or on my behalf
within a year after termination of employment. 
At the time of each such disclosure, I will advise the Company in
writing of any Inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing
all evidence necessary to substantiate that belief.  The Company will keep in confidence and will
not use for any purpose or disclose to third parties without my consent any
confidential information disclosed in writing to the Company pursuant to this
Agreement relating to Inventions that qualify fully for protection under the
provisions of Section 2870.  I will
preserve the confidentiality of any Invention that does not fully qualify for
protection under Section 2870.


 


2.6          Government
or Third Party. 
I also agree to assign all my right, title and interest in and to any
particular Company Invention to a third party, including without limitation the
United States, as directed by the Company.


 


2.7          Works
for Hire.  I
acknowledge that all original works of authorship which are made by me (solely
or jointly with others) within the scope of my employment and which are
protectable by copyright are “works made for hire”,
pursuant to United States Copyright Act (17 U.S.C., Section 101).


 


2.8          Enforcement
of Proprietary Rights. 
I will assist the Company in every proper way to obtain, and from time
to time enforce, United States and foreign Proprietary Rights relating to
Company Inventions in any and all countries. 
To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment
thereof.  In addition, I will execute,
verify and deliver assignments of such Proprietary Rights to the Company or its
designee.  My obligation to assist the
Company with respect to Proprietary Rights relating to such Company Inventions
in any and all countries shall continue beyond the termination of my
employment, but the Company shall compensate me at a reasonable rate after my
termination for the time actually spent by me at the Company’s request on such
assistance.


 


2

















 


In the event the Company is unable for any
reason, after reasonable effort, to secure my signature on any document needed
in connection with the actions specified in the preceding paragraph, I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney in fact, which appointment is coupled with
an interest, to act for and in my behalf to execute, verify and file any such
documents and to do all other lawfully permitted acts to further the purposes
of the preceding paragraph with the same legal force and effect as if executed
by me.  I hereby waive and quitclaim to
the Company any and all claims, of any nature whatsoever, which I now or may
hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.


 


3.             RECORDS.  I agree to keep and maintain adequate and
current records (in the form of notes, sketches, drawings and in any other form
that may be required by the Company) of all Proprietary Information developed
by me and all Inventions made by me during the period of my employment at the
Company, which records shall be available to and remain the sole property of
the Company at all times.


 


4.             ADDITIONAL ACTIVITIES.  I agree that during the period of my
employment by the Company I will not, without the Company’s express written
consent, engage in any employment or business activity which is competitive
with, or would otherwise conflict with, my employment by the Company.  I agree further that for the period of my
employment by the Company and for one (l) year after the date of termination of
my employment by the Company I will not induce any employee of the Company to
leave the employ of the Company.


 


5.             NO CONFLICTING OBLIGATION.  I represent that my performance of all the
terms of this Agreement and as an executive of the Company does not and will
not breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company.  I have not entered into, and I agree I will
not enter into, any agreement either written or oral in conflict herewith.


 


6.             RETURN OF COMPANY DOCUMENTS.  When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company
Inventions, Third Party Information or Proprietary Information of the
Company.  I further agree that any
property situated on the Company’s premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice.  Prior to leaving, I will cooperate with the
Company in completing and signing the Company’s termination statement.


 


7.             LEGAL AND EQUITABLE REMEDIES.  Because my services are personal and unique
and because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or
other equitable relief, without bond and without prejudice to any other rights
and remedies that the Company may have for a breach of this Agreement.


 


8.             NOTICES.  Any notices required or permitted hereunder
shall be given to the appropriate party at the address specified below or at
such other address as the Party shall specify in writing.  Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.


 


9.             NOTIFICATION OF NEW EMPLOYER.  In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.


 


10.          GENERAL PROVISIONS.


 


10.1        Governing
Law; Consent to Personal Jurisdiction.  This Agreement will be governed by and
construed according to the laws of the State of California, as such laws are
applied to agreements entered into and to be performed entirely within
California between California residents. 
I hereby expressly consent to the personal jurisdiction of the state and
federal courts located in San Diego County, California for any lawsuit filed
there against me by Company arising from or related to this Agreement.


 


10.2        Severability.  In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. 
If moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent


 


3

















 


compatible with the applicable law as it
shall then appear.


 


10.3        Successors
and Assigns. 
This Agreement will be binding upon my heirs, executors, administrators
and other legal representatives and will be for the benefit of the Company, its
successors, and its assigns.


 


10.4        Survival.  The provisions of this Agreement shall
survive the termination of my employment and the assignment of this Agreement
by the Company to any successor in interest or other assignee.


 


10.5        Employment.  I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s right to terminate my employment
at any time, with or without Cause.


 


10.6        Waiver.  No waiver by the Company of any breach of
this Agreement shall be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under
this Agreement shall be construed as a waiver of any other right.  The Company shall not be required to give
notice to enforce strict adherence to all terms of this Agreement.


 


10.7        Entire
Agreement.  The
obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such
period.  This Agreement is the final,
complete and exclusive agreement of the Parties with respect to the subject
matter hereof and supersedes and merges all prior discussions between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the Party to be charged.  Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement.


 


This Agreement shall be effective as of the
first day of my employment with the Company, namely:                           ,
2004.


 


I HAVE READ THIS AGREEMENT
CAREFULLY AND UNDERSTAND ITS TERMS.  I
HAVE COMPLETELY FILLED OUT EXHIBIT C-1 TO THIS AGREEMENT.


 


	
  Dated: 

  	
       12/5/05

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Signature)

  	
   

  
	
   

  	
   

  
	
  /s/ David Guy

  	
   

  
	
  David Guy

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  FAVRILLE, INC.

  	
   

  
	
   

  	
   

  
	
  10421 Pacific Center Court

  	
   

  
	
  San Diego, CA 92121

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
						



 


4

















 


EXHIBIT C-1


 


LIMITED
EXCLUSION NOTIFICATION


 


THIS IS TO NOTIFY EXECUTIVE in
accordance with Section 2872 of the California Labor Code that the foregoing
Agreement between Executive and the Company does not require Executive to
assign or offer to assign to the Company any invention that Executive developed
entirely on your own time without using the Company’s equipment, supplies,
facilities or trade secret information except for those inventions that either:


 


1.                                       Relate at the
time of conception or reduction to practice of the invention to the Company’s
business, or actual or demonstrably anticipated research or development of the
Company;


 


2.                                       Result from any
work performed by Executive for the Company.


 


To the extent a provision in the foregoing
Agreement purports to require Executive to assign an invention otherwise
excluded from the preceding paragraph, the provision is against the public
policy of this state and is unenforceable.


 


This limited exclusion does not apply to any
patent or invention covered by a contract between the Company and the United
States or any of its agencies requiring full title to such patent or invention
to be in the United States.


 


I ACKNOWLEDGE RECEIPT of
a copy of this notification.


 


	
   

  	
     /s/ David L. Guy

  
	
   

  	
  [EXECUTIVE]

  
	
   

  	
   

  
	
   

  	
  Date:

  	
       12/5/05

  
	
   

  	
   

  
	
  WITNESSED BY:

  	
   

  
	
   

  	
   

  
	
  Sheila Rodgers

  	
   

  	
   

  
	
  (PRINTED NAME OF REPRESENTATIVE)

  	
   

  	
   

  



 

















 


EXHIBIT C-2


 


TO:                             FAVRILLE,
INC.


 


FROM:            [EXECUTIVE]


 


DATE:                                         ,
2004


 


SUBJECT:      Previous
Inventions


 


1.             Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by FAVRILLE, INC. (the “Company”)
that have been made or conceived or first reduced to practice by me alone or
jointly with others prior to my engagement by the Company:


 


o            No inventions or improvements.


 


o            See below:


 


 


 


o            Additional sheets attached.


 


2.             Due to a prior
confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):


 


	
   

  	
   

  	
  Invention or Improvement

  	
   

  	
  Party(ies)

  	
   

  	
  Relationship

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


o            Additional sheets attached.


 

















 


EXHIBIT D


 


FAVRILLE, INC.


 


NONDISCLOSURE
AGREEMENT