Exhibit 10.2

 

USANA HEALTH SCIENCES, INC.

 

INDEPENDENT DIRECTOR STOCK OPTION AGREEMENT

 

Optionee:

Grant Date:

Number of Covered Shares:

Exercise Price Per Share:

Expiration Date:  Fifth Anniversary of the Grant Date

 

This Stock Option Agreement (“Agreement”) is entered into as of the     day of
                    , between USANA HEALTH SCIENCES, INC., a Utah corporation
(the “Company”), and                      (“Optionee”).

 

WHEREAS, the Company has adopted the 2006 USANA Equity Incentive Award Plan (the
“Plan”) and has approved the granting to certain directors who are not employees
of the Company (“Independent Director,” as defined in the Plan) of stock options
to purchase common stock of the Company, par value $.001 per share (“Common
Stock”); and

 

WHEREAS, Optionee is engaged by the Company as a director who is not an employee
of the Company and the Company desires to secure or increase Optionee’s stock
ownership of the Company in order to increase Optionee’s incentive and personal
interest in the welfare of the Company.

 

NOW, THEREFORE, in consideration of the premises, covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto have agreed
and do hereby agree as follows:

 

1.             Grant of Options.  On the terms and conditions set forth in this
Agreement, the Company hereby grants to Optionee nonqualified stock options (the
“Options”) to purchase all or any part of an aggregate amount of
                    (          ) shares of the Common Stock of the Company at a
purchase price of $          per share.

 

2.             Term of Options; Vesting.  Except as otherwise provided in
Sections 4 and 10 below, the term of the Options commences on the Grant Date and
ends on the Expiration Date, provided that Optionee remains an Independent
Director of the Company.  In no event may the Options be exercised later than
the Expiration Date.  The Options shall become vested and exercisable in four
equal quarterly installments of twenty five percent (25%) of the Options, so as
to be 100% vested and exercisable on the first anniversary of the Grant Date,
subject to Optionee’s continued service as an Independent Director of the
Company on each vesting date.  If Optionee’s service as an Independent Director
of the Company terminates, the Options may be exercised only as described in
paragraph 4 below.

 

3.             Exercise of Options.  The Options or any portion thereof may be
exercised by Optionee paying the purchase price of any shares with respect to
which the Options are being exercised by cash, certified check or cashier’s
check (but no personal checks unless otherwise approved by the Committee). 
Except as otherwise provided by the Committee before the Option is exercised,
(i) all or a portion of the Exercise Price may be paid by Optionee by delivery
of shares of Common Stock already owned by Optionee for at least six (6) months
and acceptable to the Committee having an aggregate Fair Market Value (as of the
date of exercise) that is equal to the amount of cash that would otherwise be

 

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required; (ii) Optionee may pay the Exercise Price by authorizing a third party
to sell shares of Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding resulting from
such exercise; or (iii) Optionee may pay the Exercise Price by a reduction in
the amount of any Company liability to the Optionee.  In each case Optionee’s
payment shall be delivered with a written notice of exercise which shall:

 

a.             State the number of shares being exercised, the name, address and
social security number of each person for whom the stock certificate or
certificates for such shares of the Common Stock are to be registered;

 

b.             Contain any representations and agreements as to Optionee’s
investment intent with respect to the shares exercised as may be satisfactory to
the Company’s counsel; and

 

c.             Be signed by the person or persons entitled to exercise the
Options and, if the Options are being exercised by any person or persons other
than Optionee, be accompanied by proof satisfactory to counsel for the Company
of the right of such person or persons to exercise the Options.

 

In addition, unless the shares to be acquired by Optionee have been registered
under the Securities Act of 1933, as amended, upon and effective as of the date
of exercise of the Option under this Agreement, Optionee agrees, represents and
warrants that Optionee (i) is acquiring the shares of Common Stock for
investment with no present intention of distributing or selling such shares or
any interest therein except as permitted under this Agreement; (ii) is a
director of the Company experienced in making risky investments and has the
capacity to protect his interests in connection with making his decision to
exercise the Option; (iii) is well-informed or capable of asking questions of
the Company’s officials to make himself well-informed concerning the nature of
his investment decision to exercise the Option and of the true financial status
of the Company; and (iv) has obtained, analyzed and retained (or elected not to
retain) copies of the Company’s current financial statements.  Further, as a
condition to the exercise of the Options, the Company may require the person
exercising the Options to make any representation and warranty to the Company
that may be required by any applicable law or regulation.

 

                                4.             Termination of Directorship or
Death. In the event Optionee ceases to be an Independent Director for any
reason, all then unvested Options awarded hereunder shall immediately terminate
without notice to Optionee and shall be forfeited.  Vested Options will be
exercisable according to the following provisions:

 

a.             If Optionee ceases to be an Independent Director for any reason
other than retirement or Disability (which are governed by paragraph b. below),
removal for Cause (which is governed by paragraph c. below) or death (which is
governed by paragraph d. below), all Options awarded hereunder that are vested
at such time shall be exercisable at any time prior to the Expiration Date.

b.             If Optionee ceases to be an Independent Director on account of
his retirement or Disability, all Options awarded hereunder that are vested at
such time shall be exercisable at any time prior to the Expiration Date.

 

c.             If Optionee is removed as an Independent Director prior to
expiration of his term for Cause (as defined below), all outstanding Options
awarded hereunder which are not exercisable immediately prior to removal, and
all outstanding Options awarded hereunder which are exercisable immediately
prior to removal, shall terminate as of the date of removal for Cause and may
not be exercised.  For purposes of this Award Agreement, “Cause” shall mean (i)
any act of personal dishonesty in connection with Optionee’s responsibilities to
the Company and intended to result in

 

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substantial personal enrichment to Optionee, (ii) Optionee’s conviction of a
felony or (iii) Optionee’s willful act which constitutes gross misconduct and
which is injurious to the Company.

 

d.             If Optionee’s service as an Independent Director of the Company
terminates by reason of Optionee’s death, or if Optionee dies within the ninety
day period after the date Optionee ceases to be an Independent Director of the
Company for any reason other than Cause, any of Optionee’s vested Options
hereunder may be exercised by Optionee’s estate, personal representative or
beneficiary who has acquired the Options by will or by the laws of descent and
distribution, at any time prior to the Expiration Date.

 

                                5.             Transfer of Options.  Unless the
Company, upon advice of its securities counsel, directs otherwise, the Options
may not be assigned or transferred in any manner except upon the death of
Optionee by will or by the laws of descent and distribution.  During the
lifetime of Optionee, the Options shall be exercisable only by Optionee.

 

                                6.             Reservation of Shares.  The
Company, during the term hereof, will at all times reserve and keep available,
and will seek or obtain from any regulatory body having jurisdiction any
requisite authority in order to issue and sell such number of shares of its
Common Stock as shall be sufficient to satisfy the requirements hereof.  The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any shares of stock hereunder shall relieve the Company of
any liability in respect of the nonissuance or sale of such stock as to which
such requisite authority shall not have been obtained.

 

                                7.             Application of Section 16(b). 
The parties acknowledge that, if the Company has a class of securities required
to be registered pursuant to the Securities Exchange Act of 1934 (the “Exchange
Act”), and if Optionee is an officer, director or ten percent (10%) shareholder
of the Company, the grant to Optionee of Options hereunder, or the Optionee’s
sale of shares underlying the Options, may, unless the Plan is qualified under
Rule 16b-3 of the SEC, subject Optionee to liability under the insider trading
prohibitions of Section 16(b) of the Exchange Act, if Optionee purchases or
sells Common Stock of the Company within six months before or after the grant of
the Options, or within six months before or after the sale of the shares
underlying the Options.  This acknowledgment is for informational purposes only
and is not to be construed as increasing, limiting or describing the rights and
obligations of the parties hereunder.

 

                                8.             Restriction on Option Exercise. 
Notwithstanding any contrary provision hereof, the Options may not be exercised
by Optionee unless the shares to be acquired by Optionee have been registered
under the Securities Act of 1933 (the “Act”), and any other applicable
securities laws of any other state, or the Company receives an opinion of
counsel (which may be counsel for the Company) reasonably acceptable to the
Company stating that the exercise of the Options and the issuance of shares
pursuant to the exercise is registered or exempt from such registration
requirements.  Optionee shall represent that unless and until the shares have
been registered under the Act and applicable state securities laws: 
(1) Optionee is acquiring the shares for investment purposes only and without
the intent of making any sale or disposition thereof; (2) Optionee has been
advised and understands that the shares have not been registered for sale
pursuant to federal and state securities laws and are “restricted securities”
under such laws; and (3) Optionee acknowledges that the shares will be subject
to stop transfer instructions and bear the following legend:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER STATE SECURITIES LAWS AND
MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE

 

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ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH
REGISTRATION.  NO OFFER, SALE OR TRANSFER MAY TAKE PLACE WITHOUT PRIOR WRITTEN
APPROVAL OF THE COMPANY BEING AFFIXED HERETO.  IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT, SUCH APPROVAL SHALL BE GRANTED ONLY IF THE COMPANY HAS
RECEIVED AN OPINION OF SHAREHOLDER’S COUNSEL AT SHAREHOLDER’S EXPENSE
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THIS CERTIFICATE MAY BE LAWFULLY
TRANSFERRED PURSUANT TO AN EXEMPTION FROM REGISTRATION.

 

                                9.             Withholding of Taxes.  The
Options may not be exercised unless Optionee has paid or has made provision
satisfactory to the Company for payment of, federal, state and local income
taxes, or any other taxes (other than stock transfer taxes) which the Company
may be obligated to collect as a result of the issue or transfer of Common Stock
upon such exercise of the Options.  In its sole discretion, and at the request
of Optionee, the Company may permit Optionee (other than an Optionee who would
be subject to Section 16(b) of the Exchange Act) to satisfy the obligation
imposed by this Section, in whole or in part, by instructing the Company to
withhold up to that number of shares otherwise issuable to Optionee with a fair
market value equal to the amount of tax to be withheld.

 

                                10.           Mergers, Reorganizations, and
Certain Other Changes.  In the event of the Company’s liquidation,
reorganization, separation, merger or consolidation into, or acquisition of
property or stock by another corporation, or sale of substantially all assets to
another corporation, the rights of Optionee with respect to the Options granted
hereunder shall be governed by the Committee, as provided in the Plan.

 

                                11.           Antidilution.  The aggregate
number of shares of Common Stock available for issuance under the Options, and
the price per share, shall all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock subsequent to the date
of this Agreement resulting from a recapitalization, reorganization, merger,
consolidation or similar transaction as provided in the Plan.

 

                                12.           No Rights as a Stockholder. 
Optionee or a permitted transferee of the Options shall have no rights as a
stockholder with respect to any shares covered by the Options until the date as
of which stock is issued following exercise of such Options.  Except as provided
in this Agreement, no adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or any other
distributions for which the record date is prior to the date as of which such
stock is issued.

 

                                13.           No Employment Rights.  This
Agreement is not an employment agreement or contract and does not grant any
employment rights to Optionee.

 

                                14.           Other Provisions.  The Company
may, as a condition precedent to the exercise of the Options, require Optionee
(including, in the event of Optionee’s death, his legal representatives,
legatees or distributees) to enter into such agreements or to make such
representations as may be required to make lawful the exercise of the Options
and the ultimate disposition of the shares acquired by such exercise.

 

                                15.           Notices.  Any notice which either
of the parties hereto is required or permitted to give to the other must be in
writing and may be given by personal delivery, electronic or facsimile

 

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transmission,  or by mailing the same by registered or certified mail, return
receipt requested, to the party to which or to whom the notice is directed, at
the address each party designates in writing.  Any notice mailed to such address
shall be effective when deposited in the mail, duly addressed and postage
prepaid, notwithstanding failure by the addressee thereof to receive the mailed
notice.

 

                                16.           Governing Law.  All transactions
contemplated hereunder and all rights of the parties hereto shall be governed as
to validity, construction, enforcement and in all other respects by the laws and
decisions of the State of Utah.

 

                                17.           Titles.  The titles of the
sections of this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit or describe the scope of this Agreement
or the intent of any provisions hereof.

 

                                18.           Amendment.  This Agreement shall
not be modified or amended except by written agreement signed by all of the
parties hereto.

 

                                19.           Attorney’s Fees and Costs of
Enforcement.  If any party to this Agreement shall incur any costs resulting
from enforcement of this Agreement, the defaulting party shall be liable to the
prevailing party for such costs.  Costs, as used herein, shall include costs of
enforcement, interpretation, or collection, including without limitation,
reasonable attorney’s fees, court costs, collection charges, travel and other
related or similar expenses.

 

                                20.           Severability of Provisions.  Any
provision of this Agreement that is invalid, prohibited, or unenforceable in any
jurisdiction, shall not invalidate the remainder of the provision or the
remaining provisions of the Agreement.

 

                                21.           Entire Agreement.  Subject to the
Plan, a copy of which in its present form is available from the Secretary of the
Company, this Agreement contains all of the representations, declarations and
statements from either party to the other and expresses the entire understanding
between the parties with respect to the transactions provided for herein. All
prior memoranda, letters, statements and agreements concerning this subject
matter, if any, are merged in and replaced by this Agreement.

 

                                22.           Pronouns, Number and Gender. 
Wherever necessary to implement the intent of the parties hereto, references
herein to the singular shall be interpreted as the plural, and vice versa, and
the feminine, masculine or neuter gender shall be treated as one of the other
genders.

 

                                23.           Binding Effect.  This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, successors and assigns.

 

                                24.           Defined Terms.  The capitalized
terms contained in this Agreement but not otherwise defined herein shall have
the same meanings given to them in the Plan.

 

                                25.           Counterparts.  This Agreement may
be executed in one or more counterparts, each of which may be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the day and year first above written.

 

 

COMPANY:

USANA HEALTH SCIENCES, INC.,

 

 

a Utah corporation

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

OPTIONEE:

 

 

 

(Signature)

 

 

 

 

 

 

 

 

 

(Printed Name)

 

 

 

 

 

 

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