Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
"Agreement"), dated as of January 27, 2009 (the "Effective Date"),
is entered into among Favrille, Inc., a Delaware corporation
("Parent"), MyMedicalRecords, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent (the "Company") and Robert H.
Lorsch (the "Executive").
WITNESSETH:
WHEREAS, Executive has been
employed by Company pursuant to the Employment Agreement between
the Company and the Executive dated as of July 1, 2006 (the
"Original Agreement");
WHEREAS, the Company desires to
continue to employ the Executive so that it will have the continued
benefit of his ability, experience and services, and Parent desires
to employ the Executive as its President and Chief Executive
Officer;
WHEREAS, the Executive is willing
to enter into this Agreement to that end, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby covenant and agree as follows:
- Employment
Each of
Parent and the Company hereby agrees to employ the Executive, and
the Executive hereby agrees to be in the employ of Parent and the
Company, on and subject to the terms and conditions of this
Agreement.
- Term
The
period of this Agreement (the "Agreement Term") shall commence on
the Effective Date and shall expire on December 31, 2011 (the
"Initial Term") unless extended or otherwise terminated pursuant to
this Agreement (the "Employment Period"). The Agreement Term shall
be extended automatically for successive additional one-year
periods at the expiration of the then-current term unless written
notice of non-extension is provided by Executive to the Company and
Parent, or by Parent and the Company to the Executive after
appropriate Board resolution, in either case at least 60 days prior
to the expiration of the Initial Term or such extended term, as the
case may be.
- Position,
Authority and Responsibilities
-
- The Executive
shall serve as, and with the title, office and authority of, the
President and Chief Executive Officer of Parent and the Company. In
this capacity, the Executive shall report directly and only to the
Board of Directors of Parent and the Company (the "Board"). The
Executive shall also hold such other ancillary titles and offices
with Parent or the Company or their respective affiliates as may be
reasonably requested by the Board.
- Subject to the
authority of the Board, the Executive shall have the full authority
of the President and Chief Executive Officer of each of Parent and
the Company for the supervision and control over the management of
the day-to-day business and affairs of Parent and the Company, and
he shall have such duties and responsibilities to Parent and the
Company as are commensurate with such authority. Subject to the
authority of the Board, all operational priorities shall be set,
and projects assigned, by the Executive or with his prior
approval.
-
-
The Executive agrees to devote a reasonable portion of his business
time, efforts and skills to the performance of his duties and
responsibilities under this Agreement.
- Compensation and Benefits
In
consideration of the services rendered by the Executive during the
Employment Period, the Company shall pay or provide (and Parent
shall cause the Company to pay or provide) the Executive the
compensation and benefits set forth below.
-
- Salary . The Company shall pay the Executive a base
salary during the Employment Period (the "Base Salary") at the rate
of $15,000 per month payable on the normal payroll dates for the
Company. The Base Salary shall be subject to an increase as
determined by the Board of Directors of Parent from time to time in
its sole discretion.
- Annual
Bonus . Each year during
the Employment Period, the Executive shall earn an annual bonus
(the "Annual Bonus") as determined by the Board of Directors of
Parent in its sole discretion.
- Stock
Options. Each year during
the Employment Period, the Executive shall be entitled to a grant
or grants of stock options (the "Option Grants") as determined by
the Board of Directors of Parent in its sole
discretion.
- Employee
Benefits . The Executive
shall be entitled to reimbursement for expenditures for life
insurance on the Executive in the face amount of $3,000,000 (or
such higher amount as may be agreed to by the Board of Directors of
Parent), provided that Executive shall assign not less than 50% of
the face amount of any proceeds of such insurance to the Company.
The Executive shall also be entitled to: (i) four weeks' vacation
for each 12-month period during the Employment Period; (ii) an
automobile allowance of $3,000 per month; (iii) reimbursement for
up to $3,000,000 of coverage under the existing policy (249736) and
other insurance (which may include D&O coverage or excess
coverage) in amounts consistent with past practice, and any policy
issued upon renewal or replacement thereof; and (iv) such other
benefits and perquisites that are generally made available to
senior executives of Parent or the Company from time to
time.
- Indemnification . The Executive shall be provided with any
indemnification rights and indemnification insurance coverage on
the same basis as are provided to other senior executives of Parent
or the Company.
- Reimbursement of Expenses
. The Company shall reimburse all
reasonable business expenses and disbursements incurred by the
Executive in the performance of his duties under this Agreement in
accordance with the Company's normal practices and procedures upon
accounting thereafter.
- Termination
of Employment
The
Employment Period shall be terminated upon the happening of any of
the following events, subject to the provisions of this Agreement
applicable to termination of employment under certain
circumstances.
-
- Termination
without Cause . Parent or
the Company may terminate the Executive's employment hereunder for
any reason by giving the Executive 30 days' advance written notice
of such termination.
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-
-
Termination for Cause .
Parent or the Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Executive
shall be considered to be terminated for "Cause" upon (i) willful
breach of the material terms of this Agreement, (ii) demonstrated
fraud in connection with performance of his duties hereunder as
determined by a court of competent jurisdiction; or (iii) the final
conviction for, or plea of nolo contendere to, a
charge of commission of a felony. However, in no event shall the
Executive's employment be considered to have been terminated for
"Cause", unless the Executive receives a copy of a resolution, duly
adopted at a meeting of the Board, identifying in reasonable detail
the acts or omissions constituting "Cause", and such acts or
omissions are not cured (to the extent susceptible to cure) by the
Executive within 30 days of the receipt of notice of termination
and a copy of such resolution.
- Resignation
without Good Reason . The
Executive may voluntarily terminate his employment hereunder for
any reason that does not constitute Good Reason (as set forth
below) by giving Parent or the Company 30 days' advance written
notice of such termination.
- Resignation
for Good Reason . The
Executive may voluntarily terminate his employment hereunder for
Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:
-
- the assignment
to the Executive of any duties materially and adversely
inconsistent with the Executive's position and authority as
contemplated by Section 3 hereof;
- any change or
diminution of Executive's authority or reporting relationship or
bypassing of the normal chain of command, including any conduct by
persons associated with the Company which are intended to, or have
the effect of, materially interfering with, or limiting, the
ability of the Executive to carry out his responsibilities,
excluding for these purposes isolated and insubstantial actions not
taken in bad faith and which are remedied by Parent or the Company
promptly after receipt of notice thereof given by the
Executive;
- any
requirement that the Executive report to any person or entity other
than as contemplated in Section 3(a) hereof;
- any material
failure by Parent or the Company to comply with the compensation
and benefits provisions of Section 4 hereof;
- the offices of
Parent or the Company shall be moved to a location that is more
than 50 miles away from the current offices of Parent and the
Company;
- a Change in
Control shall have occurred; or
- any material
breach of this Agreement by the Company.
In no
event shall the Executive be considered to have terminated his
employment for "Good Reason" unless and until (i) Parent or the
Company receives written notice from the Executive identifying in
reasonable detail the acts or omissions constituting such "Good
Reason" and the provision of this Agreement relied upon by the
Executive for such termination, and (ii) such acts or omissions are
not cured by Parent or the Company within 30 days of the Company's
receipt of such notice. As used in this section (d), "Change in
Control" means the occurrence of any one or
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more of
the following: (A) any person (which may be individual, a
corporation, a limited liability company, an association, a
partnership, an estate, a trust or any other entity or
organization) becomes the owner of 50% or more of the voting power
of Parent's capital stock; or (B) individuals who, as of the
Effective Date, constitute the Board of Directors of Parent (the
"Continuing Directors") cease for any reason to constitute at least
a majority of such Board; provided , however , that
any individual becoming a director after the Effective Date
w