**Exhibit 10.2**

**FAVRILLE, INC.2005 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLANSTOCK OPTION AGREEMENT(NONSTATUTORY STOCK OPTION)**

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Pursuant to your Stock Option Grant Notice (***“Grant Notice”***) andthis Stock Option Agreement, Favrille, Inc. (the ***“Company”***) has granted you an optionunder its 2005 Non-Employee Directors’ Stock Option Plan (the ***“Plan”***) to purchasethe number of shares of the Company’s Common Stock indicated in your GrantNotice at the exercise price indicated in your Grant Notice.  Defined terms not explicitly defined in thisStock Option Agreement but defined in the Plan shall have the same definitionsas in the Plan.

 

The details of your option are as follows:

 

**1.             VESTING**.  Subject to the limitations contained herein,your option will vest as provided in your Grant Notice, provided that vestingwill cease upon the termination of your Continuous Service.  In addition, notwithstanding any other provisions of the Plan tothe contrary, in the event of a Change in Control (as such term is definedbelow), then the vesting and exercisability of fifty percent (50%) of the thenunvested shares of Common Stock subject to your option (and last scheduled tovest thereunder) shall be accelerated in full (and any reacquisition orrepurchase rights held by the Company with respect to the shares of CommonStock subject to such acceleration shall lapse in full, as appropriate) therebyshortening the remaining vesting period by one half.  Any unvested shares of Common Stock subjectto your option after such acceleration shall continue to vest at the same rate(and in the same amounts) as prior to such acceleration.  For example, assume at the time immediatelyprior to a Change in Control (i) the number of unvested shares of Common Stocksubject to your option is thirty-six (36) shares and (ii) such shares arevesting monthly such that one (1) share is vesting each month.  In such event, following both a Change inControl and the related 50% acceleration described herein, the remainingunvested shares of Common Stock subject to your option (i.e., eighteen) shallcontinue to vest at the same rate (and in the same amounts) as prior to suchacceleration (i.e., one share per month) over the remaining vesting periodthereby shortening the vesting period provided in this example by eighteenmonths).  In addition, notwithstandingany other provisions of the Plan to the contrary, in the event of a Change inControl (as such term is defined below) and if, within the period beginning asof the effective date of such Change in Control and ending twenty-four (24)months after the effective date of such Change in Control your ContinuousService terminates due to an involuntary termination thereof by the Company(not including death or Disability) without Cause, then the vesting and exercisabilityof the shares subject to your option that remain unvested as of the date ofsuch termination of your Continuous Service shall be accelerated in full (andany reacquisition or repurchase rights held by the Company with respect toCommon Stock acquired pursuant to the early exercise of your option shalllapse, as appropriate).

 

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                “Cause” means theoccurrence of any of the following:  (i)your conviction of any felony or any crime involving fraud or dishonesty whichhas a material adverse effect on the Company and/or its Affiliates; (ii) yourparticipation (whether by affirmative act or omission) in a fraud, act ofdishonesty or other act of misconduct against the Company and/or itsAffiliates; (iii) conduct by you which, based upon a good faith and reasonablefactual investigation by the Board, demonstrates your gross unfitness to serve;(iv) your violation of any fiduciary duty or duty of loyalty owed to theCompany and/or its Affiliates; (v) your breach of any material term of anymaterial contract between you and the Company and/or its Affiliates which has amaterial adverse effect on the Company and/or its Affiliates; (vi) yourrepeated violation of any material Company policy which has a material adverseeffect on the Company and/or its Affiliates; and (vii) your violation of stateor federal law in connection with the performance of your job which has amaterial adverse effect on the Company and/or its Affiliates.  Notwithstanding the foregoing, your death orDisability shall not constitute Cause as set forth herein.  The determination that a termination is forCause shall be by the Board in its sole and exclusive judgment and discretion.

 

                For purposes of this Section 1 only,Change in Control means: (i) a sale of all or substantially all of the assetsof the Company; (ii) a merger or consolidation in which the Company is not thesurviving entity and in which the holders of the Company’s outstanding votingstock immediately prior to such transaction own, immediately after suchtransaction, securities representing less than fifty percent (50%) of thevoting power of the entity surviving such transaction or the surviving entity’sparent; (iii) a reverse merger in which the Company is the surviving entity butthe shares of Common Stock outstanding immediately preceding the merger areconverted by virtue of the merger into other property, whether in the form ofsecurities of the surviving entity’s parent, cash or otherwise, and in whichthe holders of the Company’s outstanding voting stock immediately prior to suchtransaction own, immediately after such transaction, securities representingless than fifty percent (50%) of the voting power of the Company or the Company’sparent entity immediately after such transaction; or (iv) an acquisition by anyperson, entity or group within the meaning of Section 13(d) or 14(d) of theExchange Act, or any comparable successor provisions (excluding any employeebenefit plan, or related trust, sponsored or maintained by the Company orsubsidiary of the Company or other entity controlled by the Company) of thebeneficial ownership (within the meaning of Rule 13d-3 promulgated under theExchange Act, or comparable successor rule) of securities of the Companyrepresenting at least fifty percent (50%) of the combined voting power entitledto vote in the election of Directors; provided, however, that nothing in thisSection 1 shall apply to a sale of assets, merger or other transaction effectedexclusively for the purpose of changing the domicile of the Company.

 

**2.             NUMBEROF SHARES AND EXERCISE PRICE**.  The number of shares of Common Stock subjectto your option and your exercise price per share referenced in your GrantNotice may be adjusted from time to time for Capitalization Adjustments, asprovided in the Plan.

 

**3.             METHODOF PAYMENT**.  Payment of theexercise price is due in full upon exercise of all or any part of youroption.  You may elect to make payment ofthe exercise price in cash or by check or in any other manner ***permitted by your Grant Notice***,which may include one or more of the following:

 

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**(a)          **In the Company’s sole discretionat the time your option is exercised and provided that at the time of exercisethe Common Stock is publicly traded and quoted regularly in *The Wall Street Journal*, pursuant to a program developedunder Regulation T as promulgated by the Federal Reserve Board that, prior tothe issuance of Common Stock, results in either the receipt of cash (or check)by the Company or the receipt of irrevocable instructions to pay the aggregateexercise price to the Company from the sales proceeds.

 

**(b)          **Provided that at the time ofexercise the Common Stock is publicly traded and quoted regularly in *The Wall Street Journal*, by delivery of already-owned sharesof Common Stock either that you have held for the period required to avoid acharge to the Company’s reported earnings (generally six months) or that youdid not acquire, directly or indirectly from the Company, that are owned freeand clear of any liens, claims, encumbrances or security interests, and thatare valued at Fair Market Value on the date of exercise.  “Delivery” for these purposes, in the solediscretion of the Company at the time you exercise your option, shall includedelivery to the Company of your attestation of ownership of such shares ofCommon Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option bytender to the Company of Common Stock to the extent such tender would violatethe provisions of any law, regulation or agreement restricting the redemptionof the Company’s stock.

 

**(c)          **Provided that at the time ofexercise the Company has adopted FAS 123, as revised, by a “net exercise”arrangement pursuant to which the Company will reduce the number of shares ofCommon Stock issued upon exercise of your option by the largest whole number ofshares with a Fair Market Value that does not exceed the aggregate exerciseprice; provided, however, the Company shall accept a cash or other payment fromyou to the extent of any remaining balance of the aggregate exercise price notsatisfied by such holding back of whole shares; provided, however, shares ofCommon Stock will no longer be outstanding under your option and will not beexercisable thereafter to the extent that (1) shares are used to pay theexercise price pursuant to the “net exercise,” (2) shares are deliveredto you as a result of such exercise, and (3) shares are withheld to satisfy taxwithholding obligations.

 

**4.             WHOLESHARES**.  You mayexercise your option only for whole shares of Common Stock.

 

**5.             SECURITIESLAW COMPLIANCE**. Notwithstanding anything to the contrary contained herein, you may notexercise your option unless the shares of Common Stock issuable upon suchexercise are then registered under the Securities Act or, if such shares ofCommon Stock are not then so registered, the Company has determined that suchexercise and issuance would be exempt from the registration requirements of theSecurities Act.  The exercise of youroption must also comply with other applicable laws and regulations governingyour option, and you may not exercise your option if the Company determinesthat such exercise would not be in material compliance with such laws andregulations.

 

**6.             TERM**.  You may not exercise your option before thecommencement of its term or after its term expires.  The term of your option commences on the Dateof Grant and expires upon the earliest of the following:

 

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**(a)          **three (3) months after thetermination of your Continuous Service for any reason other than yourDisability or death, provided that if during any part of such three- (3-) monthperiod your option is not exercisable solely because of the condition set forthin the preceding paragraph relating to “Securities Law Compliance,” your optionshall not expire until the earlier of the Expiration Date or until it shallhave been exercisable for an aggregate period of three (3) months after thetermination of your Continuous Service;

 

**(b)          **twelve (12) months after thetermination of your Continuous Service due to your Disability;

 

**(c)          **eighteen (18) months after yourdeath if you die either during your Continuous Service or within three (3)months after your Continuous Service terminates;

 

**(d)          **the Expiration Date indicated inyour Grant Notice; or

 

**(e)          **the day before the tenth (10th)anniversary of the Date of Grant.

 

**7.             EXERCISE.**

 

**(a)          **You may exercise the vestedportion of your option (and the unvested portion of your option if your GrantNotice so permits) during its term by delivering a Notice of Exercise (in a formdesignated by the Company) together with the exercise price to the Secretary ofthe Company, or to such other person as the Company may designate, duringregular business hours, together with such additional documents as the Companymay then require.

 

**(b)          **By exercising your option youagree that, as a condition to any exercise of your option, the Company mayrequire you to enter into an arrangement providing for the payment by you tothe Company of any tax withholding obligation of the Company arising by reasonof (1) the exercise of your option, (2) the lapse of any substantial risk offorfeiture to which the shares of Common Stock are subject at the time ofexercise, or (3) the disposition of shares of Common Stock acquired upon suchexercise.

 

**8.             TRANSFERABILITY**.  Your option is not transferable, except (i) by will orby the laws of descent and distribution, (ii) with the prior written approvalof the Company, by instrument to an inter vivos or testamentary trust, in aform accepted by the Company, in which the option is to be passed tobeneficiaries upon the death of the trustor (settlor) and (iii) with the priorwritten approval of the Company, by gift, in a form accepted by the Company, toa permitted transferee under Rule 701 of the Securities Act.

 

**9.             OPTIONNOT A SERVICE CONTRACT**.  Your option is not an employment or servicecontract, and nothing in your option shall be deemed to create in any waywhatsoever any obligation on your part to continue in the employ of the Companyor an Affiliate, or of the Company or an Affiliate to continue youremployment.  In addition, nothing in youroption shall obligate the Company or an Affiliate, their respectiveshareholders, Boards of Directors, Officers or Employees to continue anyrelationship that you might have as a Director or Consultant for the Company oran Affiliate.

 

**10.          WITHHOLDINGOBLIGATIONS.**

 

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**(a)          **At the time you exercise youroption, in whole or in part, or at any time thereafter as requested by theCompany, you hereby authorize withholding from payroll and any other amountspayable to you, and otherwise agree to make adequate provision as directed bythe Company (including by means of a “cashless exercise” pursuant to a programdeveloped under Regulation T as promulgated by the Federal Reserve Board to theextent directed by the Company), for any sums required to satisfy the federal,state, local and foreign tax withholding obligations of the Company or anAffiliate, if any, which arise in connection with your option.

 

**(b)          **The Company may, in its solediscretion, and in compliance with any applicable conditions or restrictions oflaw, withhold from fully vested shares of Common Stock otherwise issuable toyou upon the exercise of your option a number of whole shares of Common Stockhaving a Fair Market Value, determined by the Company as of the date ofexercise, not in excess of the minimum amount of tax required to be withheld bylaw.  Any adverse consequences to youarising in connection with such share withholding procedure shall be your soleresponsibility.

 

**(c)          **You may not exercise your option unless the taxwithholding obligations of the Company and/or any Affiliate are satisfied.  Accordingly, you may not be able to exerciseyour option when desired even though your option is vested, and the Companyshall have no obligation to issue a certificate for such shares of Common Stockor release such shares of Common Stock from any escrow provided for herein.

 

**(d)          **If any payment or benefit you would receive pursuant to a Change inControl (as defined in Section 1 of this Agreement or in the Plan) from theCompany or otherwise (“Payment”) would (i) constitute a “parachute payment”within the meaning of Section 280G of the Code, and (ii) but for this sentence,be subject to the excise tax imposed by Section 4999 of the Code (the “ExciseTax”), then such Payment shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) thelargest portion of the Payment that would result in no portion of the Paymentbeing subject to the Excise Tax or (y) the largest portion, up to and includingthe total, of the Payment, whichever amount, after taking into account allapplicable federal, state and local employment taxes, income taxes, and theExcise Tax (all computed at the highest applicable marginal rate), results inyour receipt, on an after-tax basis, of the greater amount of the Paymentnotwithstanding that all or some portion of the Payment may be subject to theExcise Tax. If a reduction in payments or benefits constituting “parachutepayments” is necessary so that the Payment equals the Reduced Amount, reductionshall occur in the following order unless you elect in writing a differentorder (*provided, however,* that such electionshall be subject to Company approval if made on or after the effective date ofthe event that triggers the Payment): reduction of cash payments; cancellationof accelerated vesting of Stock Awards; reduction of employee benefits.  In the event that acceleration of vesting ofStock Award compensation is to be reduced, such acceleration of vesting shallbe cancelled in the reverse order of the date of grant of your Stock Awards(i.e., earliest granted Stock Award cancelled last) unless you elect in writinga different order for cancellation.

 

                The accountingfirm engaged by the Company for general audit purposes as of the day prior tothe effective date of the Change in Control shall perform the foregoingcalculations.  If the accounting firm soengaged by the Company is serving as accountant or auditor for the individual,entity or group effecting the Change in Control, the Company shall appoint a 

 

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nationally recognized accounting firm to make the determinationsrequired hereunder.  The Company shallbear all expenses with respect to the determinations by such accounting firmrequired to be made hereunder.

 

The accounting firm engaged to make the determinations hereunder shallprovide its calculations, together with detailed supporting documentation, toyou and the Company within fifteen (15) calendar days after the date on whichyour right to a Payment is triggered (if requested at that time by you or theCompany) or such other time as requested by you or the Company.  If the accounting firm determines that noExcise Tax is payable with respect to a Payment, either before or after theapplication of the Reduced Amount, it shall furnish you and the Company with anopinion reasonably acceptable to you that no Excise Tax will be imposed withrespect to such Payment.  Any good faithdeterminations of the accounting firm made hereunder shall be final, bindingand conclusive upon you and the Company.

 

**11.          NOTICES**.  Any notices provided for in your option orthe Plan shall be given in writing and shall be deemed effectively given uponreceipt or, in the case of notices delivered by mail by the Company to you,five (5) days after deposit in the United States mail, postage prepaid,addressed to you at the last address you provided to the Company.

 

**12.          GOVERNINGPLAN DOCUMENT**.  Your option issubject to all the provisions of the Plan, the provisions of which are herebymade a part of your option, and is further subject to all interpretations,amendments, rules and regulations which may from time to time be promulgatedand adopted pursuant to the Plan.  In theevent of any conflict between the provisions of your option and those of thePlan, the provisions of the Plan shall control, except as expressly providedherein.

 

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