**Exhibit 10.3**

 

FAVRILLE, INC.

 

SALARY DEFERRAL PAYMENT AGREEMENT

 

WHEREAS, at the May 28, 2008 meeting of the Special StrategicMeeting of the Board of Directors of Favrille, Inc. (the “***Company***”), due to the Company’s dire financial condition and in considerationof his continued employment and other benefits provided by the Company, John P. Longenecker, the Company’s Presidentand Chief Executive Officer, agreed to immediately and indefinitely forgoreceiving any future salary payments until such time as the Company may resumemaking such salary payments to him without jeopardizing the Company’s abilityto continue as a going concern.

 

WHEREAS, the Company and Dr. Longenecker desire to formallydocument their agreement with respect to the terms of deferral of payment of Dr. Longenecker’ssalary compensation.

 

NOW, THEREFORE, Dr. Longenecker and the Company hereby agrees asfollows:

 

1.              In consideration of Dr. Longenecker’scontinued employment and other benefits provided by the Company, on an ongoing basis from and after June 7,2008, the Company will defermaking payment of Dr. Longenecker’s otherwise payable salary compensation.

 

2.             Any salary paymentsdeferred pursuant to Paragraph 1 of this Agreement will be paid to Dr. Longeneckeras soon as practicable after suchpayments may be made without jeopardizing the Company’s ability to continue asa going concern.

 

3.             The Company will resume paying Dr. Longenecker’ssalary compensation on an ongoing basis as soon as practicable after suchsalary payments may resume without jeopardizing the Company’s ability tocontinue as a going concern, subject to Dr. Longenecker’s continuedservice with the Company.

 

4.              The Company’sobligations under this Agreement are unfunded and unsecured, and Dr. Longeneckerwill have no rights to the deferred salary amounts other than those of theCompany’s general creditors.

 

5.              It is intended thatany deferred salary payments will qualify for the exception from application ofSection 409A of the Internal Revenue Code that is available under Treas.Reg. §1.409A-1(b)(4)(ii).

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement asof the date(s) set forth below.

 
| /s/ John P. Longenecker                     |                  | Date:  |  June 27, 2008 |
|---------------------------------------------|-----------------------|--------|--------------------------|
| JOHN P. LONGENECKER                         |                  |   |                     |
|                                        |                  |   |                     |
|                                        |                  |   |                     |
| FAVRILLE, INC.                              |                  |   |                     |
|                                        |                  |   |                     |
| By:                                         | /s/ Tamara A. Seymour |   | Date:                    |  June 27, 2008 |
| Tamara A. Seymour, Chief  Financial Officer |                  |   |                     |
|                                             |                       |        |                          |  |

 

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