**Exhibit 10.5****AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT**     This Amendment No. 1 (this “Amendment”) dated as of November 18, 2002 to that certain Stock OptionAgreement (the “Stock Option Agreement”), dated as of October 14, 2002, by and between NaturalHealth Trends Corp., a Florida corporation the (“Company”), and the LaCore & Woodburn Partnership(the “Optionee”).**W I T N E S S E T H:**     **WHEREAS,**the Company and Optionee are parties to the Stock Option Agreement, a copy of whichis attached hereto as Exhibit A; and     **WHEREAS,**the parties to the Stock Option Agreement desire to amend the Stock Option Agreement toamend the cashless exercise provision contained therein.     **NOW, THEREFORE,**in consideration of the premises and mutual covenants contained herein, the receiptand sufficiency of which is hereby acknowledged, the parties hereto agree as follows:     1. Effective as of the date hereof, the Stock Option Agreement is hereby amended bydeleting the following phrase contained in the first sentence of Section 4:“the Optionee may, at its election”and in lieu thereof the following phrase shall be inserted:“the Company may, at its election, permit the Optionee to”.     2. This amendment shall be governed by and construed in accordance with the Laws of the State ofTexas, without regard to principles of conflicts of law.     3. Except as otherwise specifically set forth herein, all of the terms and provisions ofthe Stock Option Agreement shall remain in full force and effect.     **IN WITNESS WHEREOF,**the undersigned have executed this Amendment as of the day first above written.       **NATURAL HEALTH TRENDS CORP.**       By: /s/ Mark D. Woodburn         Name: MARK D. WOODBURN    Title: President       **LACORE & WOODBURN PARTNERSHIP**       By: /s/ Terry L. LaCore         Name: Terry L. LaCore    Title: Partner
 

 
**STOCK OPTION AGREEMENT**     This Agreement, dated as of October 14, 2002 by and between Natural Health Trends Corp.*,*aFlorida corporation (the “Company”), and LaCore &Woodburn Partnership (the “Optionee”).**WI T N E S S E T H:**     **WHEREAS,**the Company considers it to be in its best interests and in the best interests of itsstockholders that the Optionee be given the opportunity to acquire a proprietary interest in theCompany by possessing an option to purchase certain shares of common stock, par value $.001 pershare (the “Common Stock”), of the Company in accordance with the provisions set forth below;     **NOW, THEREFORE,**in consideration of the premises and mutual promises contained herein, it is agreedby and between the parties as follows:     **1. ****Grantof Option**. The Company hereby grants to Optionee the right, privilege andoption (the “Option”) to purchase all or any part of 57,000,000 shares of Common Stock (the “OptionShares”) at a purchase price of $.01 per share in the manner and subject to the conditions providedherein.     **2. ****Timeof Exercise of Option**. The Option is exercisable in full commencing! onthe date hereof through October 14, 2012 subject to the terms ofthis Agreement.     **3. ****Methodof Exercise**. The Option shall be exercised by written notice directed tothe Company at the Company’s principal place of business, accompanied by a check in payment of theoption price for the number of Option Shares specified and paid for in full. The Company shallmake prompt delivery of such Option Shares once payment clears, provided that if any law orregulation requires the Company to take any action with respect to the Option Shares specified insuch notice before the issuance thereof, then the date of delivery of such Option Shares shall beextended for the period necessary to take such action. If the Optionee fails to pay for any of theOption Shares specified in such notice or fails to accept delivery thereof, the Optionee’s right topurchase such Option Shares may be terminated by the Company. The date specified in the Optionee’snotice as the date of exercises shall be deemed the date of exercise of the Option, provided thatpayment in full for the Option Shares to be purchased upon such exercise shall have been receivedby such date. No fractional shares may be purchased hereunder.     **4. ****CashlessExercise**. At any time during the term, the Optionee may, at itselection, exchange these options, in whole or in part (an “Option Exchange”), into the number ofshares determined in accordance with this paragraph 4 by surrendering these
 

 
Options at the principal office of the Company, accompanied by a notice stating theOptionee’s intent to effect such exchange, the number of shares to be exchanged and the date onwhich the Optionee requests that such Option Exchange occur (the “Notice of Exchange”). The OptionExchange shall take place on the date specified in the Notice of Exchange or, if later, the datethe Notice of Exchange is received by the Company (the “Exchange Date”). Certificates for theshares issuable upon such Option Exchange and, if applicable, a new Option of like tenor evidencingthe balance of the shares remaining subject to this Option, shall be issued as of the Exchange Dateand delivered to the Optionee within seven (7) business days following the Exchange Date. Inconnection with any Option Exchange, the Option shall represent the right to subscribe for andacquire the number of shares (rounded to the next highest integer) equal to (i) the number ofshares specified by the Optionee in its Notice of Exchange (the “Total Number”) less (ii) thenumber of shares equal to the quotient obtained by dividing (A) the product of the Total Number andthe then existing exercise price by (B) the current market value of a share of the Company’s commonstock.     **5. ****Terminationof Option****.** The Option and all rights granted by this Agreement, tothe extent such rights have not been exercised, will terminate and become null and void ten yearsfrom the date hereof or upon ninety (90) days after the termination of the Optionee,     **6. ****Adjustmentsin Event of Change in Common Stock****.** In the event of any change in theCommon Stock by reason of any stock dividend, recapitalization, reorganization, merger,consolidation, split-up, combination or exchange of shares, or of any similar change affecting theCommon Stock, the number and kind of Option Shares subject to Option hereunder and the purchaseprice per Option Share thereof shall be appropriately adjusted consistent with such change in suchmanner as the Committee may reasonably deem equitable.     **7. ****PiggybackRegistration Rights****.** Simultaneous herewith, the Company shall grantto the Optionee Piggyback Registration Rights, as set forth in Exhibit “A” annexed hereto.     **8. ****RightsPrior to Exercise of Option****.** The Optionee shall have no rights as astockholder of the Company with respect to the Option Shares until full payment of the option priceand delivery of such Option Shares as herein provided. Nothing contained herein or in the Planshall be construed as creating or evidence of any agreement on the part of the Company to continueto employ or retain the Optionee in any capacity.     **9. ****InvestmentRepresentation****.** The Optionee, as a condition to the Optionee’sexercise of this Option, shall represent to the Company that the shares of Common Stock that theOptionee acquires hereunder are being acquired by the Optionee for investment and not with a viewto distribution or resale thereof, unless counsel for the Company is then of the opinion that sucha representation is not required under the Securities Act of 1933, as amended, or any otherapplicable law, regulation or rule of any
 

 
governmental agency, except that this representation shall not apply to any transaction byOptionee pursuant to a registration statement under the SecuritiesAct.     **10. ****Waiver;Entire Agreement****.** No waiver of any breach or condition of this Agreement shallbe deemed to be a waiver of any other or subsequent breach or condition, whether of like ordifferent nature. This Agreement constitutes the entire agreement between the parties with respectto the subject matter hereof.     **12. ****Governing Law****.** The validity, construction, interpretation and effect of this Agreementshall exclusively be governed by and determined in accordance with the internal 1aws of the State ofTexas, which is the sole jurisdiction in which any issues relating to this Agreement may belitigated.     **12. ****Binding Effect****.** This Agreement shall inure to the benefit of and be binding upon theparties hereto and their respective heirs, executors, administrators, successors and assigns.     **IN WITNESS WHEREOF,**the parties hereto have caused this Agreement to be executed on the date andyear first above written.                **NATURAL HEALTH TRENDS CORP.           By: /s/ Mark D. Woodburn           Name: MARK D. WOODBURN    Title:  President           **THE OPTIONEE**      /s/ Terry L. LaCore         LaCore & Woodburn Partnership  
 

 
**EXHIBIT A**     The Investor shall have piggy-back registration rights with respect to the Investor Shares thenheld by the Investor (collectively, the “Remaining Investor Shares”), subject to the conditions setforth below. If, at any time the Company participates (whether voluntarily or by reason of anobligation to a third party) in the registration of any shares of the Company’s stock (other than aregistration on Form S-4 or Form S-8), the Company shall give written notice thereof to theInvestor and the Investor shall have the right, exercisable within ten (10) business days afterreceipt of such notice, to demand inclusion of all or a portion of the Investor’s RemainingInvestor Shares in such registration statement. If the Investor exercises such election, theRemaining Investor Shares so designated shall be included in the registration statement at no costor expense to the Investor (other than any costs or commissions which would be borne by theInvestor under the terms of the Registration Rights Agreement). If, in connection with anyunderwritten offering for the account of the Company the managing underwriter or underwritersthereof (collectively, the “Underwriter”) shall impose a limitation on the number of shares ofCommon Stock which may be included in the registration statement because, in the Underwriter’sjudgement, such limitation is necessary to effect an orderly public distribution of securitiescovered thereby, then the Company shall be obligated to include in such registration only suchlimited portion of the Registrable Securities for which such Investor has requested inclusionhereunder as the Underwriter shall permit. Any exclusion of Registrable Securities shall be madepro rata among the Investors seeking to include Registrable Securities, in proportion to the numberof Registrable Securities sought to be included by such Investors; provided, however, that theCompany shall not exclude any Registrable Securities unless the Company has first excluded alloutstanding securities the Investors of which are not entitled by right to inclusion of securitiesin such registration statement; and provided further, however, that, after giving effect to theimmediately preceding proviso, any exclusion of Registrable Securities shall be made pro rata withInvestors of other securities having the right to include such securities in such registrationstatement. The Investor’s rights under this Section shall expireat such time as the Investor cansell all of the Remaining Investor Shares under Rule 144 (k) without volume or other restrictionsor limit.
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