Document:

Exhibit 10.6

 

USANA HEALTH SCIENCES, INC.

2006 EQUITY INCENTIVE AWARD PLAN

 

DEFERRED STOCK UNIT AGREEMENT 

FOR INDEPENDENT DIRECTORS

 

Recipient Name:          

Grant Date:

Number of DSUs:

 

1.                                       Award. USANA Health Sciences, Inc. (the “Company”)
has awarded you the number of Deferred Stock Units (“DSUs”) indicated
above, subject to the terms and conditions set forth in the Company’s 2006
Equity Incentive Award Plan (the “Plan”) and this Award Agreement.

 

2.                                       Vesting. The DSUs shall become vested in four equal quarterly
installments of twenty five percent (25%) of the DSUs, so as to be 100% vested
and exercisable on the first anniversary of the Grant Date, subject to your
continued service as an Independent Director of the Company on each vesting
date. If your service as an Independent Director of the Company terminates, the
shares of Common Stock of the Company
(the “Stock”) represented by the DSUs will be issued only as
described in paragraph 3 below.

 

3.                                       Deferral Account; Termination;
Receipt of Shares. On each vesting date hereunder, the applicable amount of DSUs shall be
credited to a bookkeeping account in your name on the books and records of the
Company (the “Deferral Account”). As soon as practicable following your
termination of service as an Independent Director for any reason other than for
Cause (as defined below), the Company will issue to you, or in the event of
your death to your estate, shares of Stock represented by all vested DSUs. If
you cease to be an Independent Director for any reason, all then unvested DSUs awarded hereunder
shall immediately terminate without notice to you and shall be forfeited. If you are removed as an Independent
Director prior to expiration of your term for Cause, all outstanding DSUs
awarded hereunder which are not vested immediately prior to removal, and all
outstanding DSUs awarded hereunder which are vested immediately prior to
removal, shall terminate as of the date of removal for Cause and Stock may not
be issued in respect of such DSUs. For purposes of this Award Agreement, “Cause”
shall mean (i) any act of personal dishonesty in connection with your
responsibilities to the Company and intended to result in substantial personal
enrichment to you, (ii) your conviction of a felony or (iii) your willful act
which constitutes gross misconduct and which is injurious to the Company.

 

4.                                       Tax Withholding. The Company will withhold from the number of
shares of Stock otherwise issuable hereunder a number of shares necessary to
satisfy the minimum statutorily required tax withholding obligations. Such shares
will be valued at their Fair Market Value when the taxable event occurs.

 

5.                                       Transferability. The DSUs may not be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way, except by will or
by the laws of descent and distribution. The DSUs shall not be subject to
execution, attachment or similar process. Any

 

 

attempted
assignment, transfer, pledge, hypothecation or other disposition of the DSUs contrary
to the provisions hereof, and the levy of any execution, attachment or similar
process upon the DSUs, shall be null and void and without effect.

 

6.                                       Other Restrictions. The issuance of shares of Stock hereunder is
subject to compliance by the Company and you with all applicable legal
requirements applicable thereto, including tax withholding obligations, and
with all applicable regulations of any stock exchange on which the Stock may be
listed at the time of issuance. The Company may delay the issuance of shares of
Stock hereunder to ensure at the time of issuance there is a registration
statement for the shares in effect under the Securities Act of 1933.

 

7.                                       No Employment or
Continued Service. Neither the award to you
of the DSUs nor the delivery to you of this Award Agreement or any other
document relating to the DSUs will confer on you the right to employment with
the Company or to continued service as an Independent Director.

 

8.                                       No Shareholder Rights. Neither the award to you of the DSUs nor
the delivery to you of this Award Agreement or any other document relating to
the DSUs will entitle you to any rights of a shareholder of the Company with
respect to the shares of Stock subject to this Award Agreement prior to the
receipt of shares of Stock in accordance with this Award Agreement.

 

9.                                       No Fractional Shares. The DSUs granted hereunder shall be issued
only in whole shares of Stock, and no fractional share of Stock shall be
issued.

 

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, your rights with respect to
the DSUs awarded hereunder shall be governed by the Committee, as provided in
the Plan.

 

11.                                 Additional
Provisions.

 

a.                                       This Award Agreement is subject to the
provisions of the Plan. A copy of the Plan is available upon request. Capitalized
terms not defined in this Award Agreement are used as defined in the Plan. If
the Plan and this Award Agreement are inconsistent, the provisions of the Plan
will govern.

 

b.                                      The Plan and this Award Agreement represent
the entire agreement of you and the Company with respect to the DSUs granted
pursuant to this Award Agreement and supersedes in their entirety all prior
undertakings and agreements of the Company and you with respect to the subject
of this Award Agreement and may not be modified except by means of a written
agreement between the Company and you.

 

c.                                       Interpretations of the Plan and this Award
Agreement by the Committee are binding on you and the Company.

 

d.                                      Neither the Plan nor this Award Agreement
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Company and

 

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any
other person. To the extent that any person acquires a right to receive
payments form the Company pursuant to an Award Agreement, such right shall be
no greater than the right of any unsecured creditor of the Company.

 

e.                                       Any notice hereunder by you to the Company
shall be given in writing and such notice shall be deemed duly given only upon
receipt thereof by the Secretary of the Company. Any notice hereunder by the
Company to you shall be given in writing and such notice shall be deemed duly
given only upon receipt thereof at such address as is reflected on the
then-current records of the Company.

 

f.                                         This Award Agreement shall be construed and
enforced in accordance with the laws of the State of Utah, without giving
effect to the choice of law principles thereof.

 

IN
WITNESS WHEREOF, the Company and the recipient of the DSUs hereunder have
executed this Award Agreement effective as of the date first above written.

 

USANA HEALTH SCIENCES, INC.

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  RECIPIENT

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Signature of Participant

  
	
   

  
	
   

  	
   

  
	
  Print Name

  
	
   

  
	
   

  	
   

  
	
  Social Security Number

  
				

 

3Exhibit 10.1

 

EXECUTIVE EMPLOYMENT, NON-COMPETE

AND CONFIDENTIALITY AGREEMENT

 

THIS
EXECUTIVE EMPLOYMENT, NON-COMPETE AND CONFIDENTIALITY AGREEMENT (“Agreement”),
is entered into as of the date set forth on the signature page by and
between Richard A. Montoni (the “Executive”) and MAXIMUS, Inc., a Virginia
corporation with its principal place of business in Reston, Virginia (the “Corporation”)
with reference to the following:

 

WHEREAS,
the parties believe the Executive possesses the experience and capabilities to
provide valuable service on behalf of the Corporation; and

 

WHEREAS,
the Corporation desires to employ the Executive as its Chief Executive Officer;
and

 

WHEREAS,
the Executive desires to be employed by the Corporation at the salary, benefits
and other terms and conditions specified herein.

 

NOW,
THEREFORE, in consideration of these premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:

 

1.                                       Employment.

 

1.1                                 Duties.
The Corporation hereby employs the Executive, and the Executive hereby accepts
such employment, to serve as the Chief Executive Officer. The Executive hereby
represents and warrants that he is in good health and capable of performing the
services required hereunder. The Executive shall perform such services and
duties as are appropriate to such office or delegated to the Executive by the Corporation’s
Board of Directors (“Board”). During the term of this Agreement, the Executive
shall be a full-time employee of the Corporation and shall devote such time and
attention to the discharge of his duties as may be necessary and
appropriate to accomplish and complete such duties.

 

The Executive shall be nominated by the Board for
election as a director and shall serve, without additional compensation, as a
member of the Board, subject to his being so elected by the Corporation’s
stockholders. The Executive agrees to obtain the consent of the Board, which
consent may be withheld in the Board’s sole discretion, before serving on
the board of any other entity or organization.

 

1.2                                 Compensation.

 

(a)                                  Base
Salary. As compensation for performance of his obligations hereunder, the
Corporation shall pay the Executive an annual salary of $600,000 (“Base Salary”),
such Base Salary to be reviewed annually beginning on or about October 1,
2006.

 

(b)                                 Year-End
Bonus. The Executive will participate in the Corporation’s annual bonus
program, with any awards dependent on the performance of the Executive and the
Corporation. The target cash bonus for the Executive will be seventy percent

 

 

(70%) of annual Base Salary for accomplishing his
annual goals; except the Corporation shall pay the Executive a bonus for fiscal
year 2006 equal to $600,000. Commencing on the first day of employment, the
Executive shall be permitted to draw against his 2006 bonus in the amount of
$25,000 per month; provided, however, that the Executive shall repay the
Corporation any and all such amounts should the Executive terminate his
employment with the Corporation before the earliest of (i) September 30,
2006, (ii) a “Change in Control” (as defined in the Income Continuity
Plan), or (iii) his death or disability.

 

(c)                                  Signing
Bonus. The Corporation shall pay the Executive a lump sum cash bonus of
$300,000 upon his execution of this Agreement; provided that, the Executive
shall repay this bonus amount in full if he terminates employment with the
Corporation before the earliest of (i) the one-year anniversary of the
Effective Date, (ii) a “Change in Control” (as defined in the Income
Continuity Plan), or (iii) his death or disability.

 

(d)                                 Equity
Awards. On the Effective Date, the Corporation shall award the Executive 112,500
Restricted Stock Units, under and subject to the terms of the MAXIMUS, Inc.
1997 Equity Incentive Plan (the “Equity Plan”), vesting at one-third on March 31,
2007, March 31, 2008 and March 31, 2009. Such award shall (i) provide
for accelerated vesting in the event of a Change in Control and (ii) have
such other terms and conditions as are included in the standard MAXIMUS
Restricted Stock Unit Agreement that will be subsequently executed by the
parties. In addition, the Executive shall be entitled to future awards under
the Equity Plan in the discretion of the Corporation’s Board of Directors, and
shall also be entitled to participate in stock option and similar plans as
currently exist or may be established by the Corporation from time to time.
The Corporation agrees to proportionately adjust the Executive’s vested and
unvested equity awards in the event the Corporation declares an extraordinary
dividend during the term hereof. For these purposes, an “extraordinary dividend”
would be any distribution per share having a value in excess of ten percent
(10%) of the average trading price of the Corporation’s common stock during the
three-month period preceding such distribution.

 

(e)                                  Income
Continuity Program. On the Effective Date, the Executive shall become a
Participant in the MAXIMUS, Inc. Income Continuity Program (the “Income
Continuity Plan”).

 

(f)                                    Vacation,
Insurance, Expenses, Etc. The Executive shall be entitled to 20 days
accrual paid vacation per year, and such benefits, health, disability and life
insurance and other benefits and expense reimbursements in a manner consistent
with the Corporation’s past practices and as are provided to executives at a
similar level.

 

(g)                                 Insurance.
The Corporation shall maintain the Executive as an insured party on all
directors’ and officers’ insurance maintained by the Corporation for the
benefit of its directors and officers on at least the same basis as all other
covered individuals and provide the Executive with at least the same corporate
indemnification as its officers.

 

(h)                                 Indemnification.
The Corporation shall reimburse the Executive for reasonable attorneys’ fees
incurred in connection with the review and negotiation of this

 

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Agreement as well as the termination of his employment
with his immediate predecessor employer. The Corporation shall indemnify the Executive
for any losses or costs (including reasonable attorneys’ fees) arising from a
claim by his immediate predecessor employer that the Executive breached his
employment agreement with them or otherwise wrongfully terminated his employment
with them. The amount of such indemnification shall not exceed $500,000. This
provision shall survive the termination of Executive’s employment, except in
the case of a Termination for Cause (as defined in the Income Continuity Plan).

 

1.3                                 Term;
Termination. The term of the employment agreement set forth in this Section 1
shall be for a period commencing at the Effective Date and continuing for four (4) years
thereafter (the “Scheduled Term”) provided that this Agreement shall terminate:

 

(a)                                  by
mutual written consent of the parties;

 

(b)                                 upon
Executive’s death or inability, by reason of physical or mental impairment, to
perform substantially all of Executive’s duties as contemplated herein for
a continuous period of 120 days or more; or

 

(c)                                  by
the Corporation for Cause (as defined in the Income Continuity Plan).

 

Upon
any termination of employment under this Section 1.3, neither party shall
have any obligation to the other pursuant to this Section 1, but such
termination shall have no effect on the obligations of the parties under other
provisions of this Agreement.

 

“Effective
Date” shall mean the date Executive commences work for the Corporation, which
shall not be later than May 1, 2006.

 

1.4                                 Severance.
The parties agree that in the event the Corporation terminates the Executive’s
employment without Cause or the Executive terminates the employment for “Good
Reason” (as defined in the Income Continuity Plan) prior to the expiration of
the Scheduled Term, the Executive shall be entitled to receive the greater of (i) Base
Salary and benefits (including the benefits specified in Section 1.2 above
and the vesting of stock options and Restricted Stock Units) for the remainder
of the Scheduled Term or (ii) the severance benefits specified in the
severance guidelines adopted by the Compensation Committee of the Corporation’s
Board of Directors on March 21, 2006. If the Executive’s employment
termination occurs in connection with a Change in Control, the Executive shall
be entitled to receive such payments and benefits as provided under the Income
Continuity Plan, and this Section 1.4 shall not apply.

 

1.5                                 Continuation
of Employment and Benefits. The Corporation shall treat the Executive as
remaining in employment with the Corporation continuously during the period beginning
March 18, 2002 through the Effective Date, to the maximum extent permitted
by law and the terms of the applicable plan documents. If any law or the terms
of any plan document (or related agreement) prevents the Corporation from
treating the Executive as remaining in employment with the Corporation
continuously during this period, the Corporation shall pay or provide to the
Executive an amount equal to the difference between (a) and (b), where (a) and
(b) are determined as follows:

 

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(a)                                  The
payments or benefits the Executive would have received or been entitled to if
the Executive had remained in employment with the Corporation continuously
during the period beginning March 18, 2002 through the Effective Date; and

 

(b)                                 The
payments or benefits the Executive actually received or is entitled to under
applicable law and the terms of the applicable plan documents;

 

2.                                       Non-Competition.

 

2.1                                 Prohibited
Activities.

 

(a)                                  The
Executive agrees that, during his employment with the Corporation and for a
period of one (1) year after the termination of such employment, the
Executive will not engage in any Unethical Behavior which may adversely
affect the Corporation. For the purpose of this Section 2.1, “Unethical Behavior”
is defined as:

 

(i)                                     any
attempt, successful or unsuccessful, by the Executive to divert any existing or
pending contracts or subcontracts from the Corporation to any other firm,
whether or not affiliated with the Executive;

 

(ii)                                  any
attempt, successful or unsuccessful, by the Executive, to influence clients of
the Corporation or organizations with which the Corporation has an existing or
pending contract or proposal to refrain from doing business with the
Corporation or to terminate existing business with the Corporation;

 

(iii)                               any
attempt, successful or unsuccessful, by the Executive to offer his services, or
to influence any other employee of the Corporation to offer their services, to
any firm to compete against the Corporation; or

 

(iv)                              any
attempt, successful or unsuccessful, by the Executive to employ or offer
employment to, or cause any other person to employ or offer employment to any individual
who was an employee of the Corporation at any time during the Executive’s last
six months of employment with the Corporation.

 

(b)                                 The
Executive shall notify any new employer, partner, association or any other firm
or corporation in competition with the Corporation with whom the Executive
shall become associated in any capacity whatsoever of the provisions of this Section 2
and the Executive agrees that the Corporation may give such notice to such
firm, corporation or other person.

 

2.2                                 Business
Opportunities; Conflicts of Interest; Other Employment and Activities of the
Executive.

 

(a)                                  The
Executive agrees promptly to advise the Corporation of, and provide the
Corporation with an opportunity to pursue, all business opportunities that
reasonably relate to the present business conducted by the Corporation.

 

(b)                                 The
Executive, in his capacity as an employee of the Corporation, shall not engage
in any business with any member of the Executive’s immediate family or with

 

4

 

any person or business entity in which the Executive
or any member of the Executive’s immediate family has any ownership interest or
financial interest, unless and until the Executive has first fully disclosed
such interest to and received written consent from the Board of Directors. As
used herein, the term “immediate family” means the Executive’s spouse, natural
or adopted children, parents or siblings and the term “financial interest”
means any relationship with such person or business entity that may monetarily
benefit the Executive or member of the Executive’s immediate family, including
any lending relationship or the guarantying of any obligations of such person
or business entity by the Executive or member of his immediate family.

 

(c)                                  The
parties hereto agree that the Executive may, consistent with this Section 2.2,
receive and retain speaking fees, referral fees from business opportunities not
accepted by the Corporation, and fees from outside business activities and
opportunities of the Executive consented to by the Board of Directors.

 

3.                                       Confidentiality.
The Executive agrees that the Corporation’s books, records, files and all other
non-public information relating to the Corporation, its business, clients and
employees are proprietary in nature and contain trade secrets and shall be held
in strict confidence by the Executive, and shall not, either during the term of
this Agreement or after the termination hereof, be used by Executive or
disclosed, directly or indirectly, to any third party, except to the extent
such use or disclosure is in furtherance of the Corporation’s business or
required by any law, rule, regulation or other legal process. The trade secrets
or other proprietary or confidential information referred to in the prior
sentence includes, without limitation, all proposals to clients or potential
clients, contracts, client or potential client lists, fee policies, financial
information, administration or marketing practices or procedures and all other
information regarding the business of the Corporation and its clients not
generally known to the public.

 

4.                                       Miscellaneous.

 

4.1                                 Notices.
All notices, requests, demands or other communications provided for in this
Agreement shall be in writing and shall be delivered by hand, sent prepaid by
overnight delivery service or sent by the United States mail, certified,
postage prepaid, return receipt request, to the following:

 

If to
the Corporation:

 

MAXIMUS, Inc.

11419
Sunset Hills Road

Reston, Virginia 20190

Attention: 
General Counsel

 

5

 

If to
the Executive:

 

Richard
A. Montoni

9317
Morison Lane

Great
Falls, Virginia 22066

 

Any notice, request,
demand or other communication delivered or sent in the foregoing manner shall
be deemed given or made (as the case may be) upon the earliest of (i) the
date it is actually received, (ii) the business-day after the day on which
it is delivered by hand, (iii) the business day after the day on which it
is properly delivered to Federal Express (or a comparable overnight delivery
service), or (iv) the third business day after the date on which it is
deposited in the United States mail. Either party may change its address
by notifying the other party of the new address in any manner permitted by this
paragraph.

 

4.2                                 Remedies. The parties agree and acknowledge
that any violation by the Executive of the terms hereof may result in
irreparable injury and damage to the Corporation or its clients, which may not
adequately be compensable in monetary damages, that the Corporation will have
no adequate remedy at law therefor, and that the Corporation may obtain
such preliminary, temporary or permanent mandatory or restraining injunctions,
orders or decrees as may be necessary to protect it against, or on account
of, any breach of the provisions contained in this Agreement.

 

4.3                                 No
Obligation of Continued Employment. The Executive understands that this
Agreement does not create an obligation on the part of the Corporation to
continue the Executive’s employment with the Corporation after the expiration
or termination of this Agreement.

 

4.4                                 Benefit;
Assignment. This Agreement shall bind and inure to the benefit of the
parties and their respective personal representatives, heirs, successors and
assigns, provided this Agreement may not be assigned by either party
without the consent of the other, except that the Corporation may assign
this Agreement in connection with the merger, consolidation or sale of all or
substantially all of its business or assets.

 

4.5                                 Entire
Agreement. This Agreement supersedes all prior agreements, written or oral,
with respect to the subject matter of this Agreement.

 

4.6                                 Severability. In the event that any one or
more of the provisions contained herein shall be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, and
all other provisions shall remain in full force and effect. If any of the
provisions of this Agreement is held to be excessively broad, it shall be
reformed and construed by limiting and reducing it so as to be enforceable to
the maximum extent permitted by law.

 

4.7                                 Waivers. No delay or omission by the
Corporation in exercising any right under this Agreement will operate as a
waiver of that or any other right. A waiver or consent given by the Corporation
on any occasion is effective only in that instance and will not be construed as
a bar to or waiver of any right on any other occasion.

 

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4.8                                 Captions. The captions of the various sections
and paragraphs of this Agreement have been inserted only for the purpose of
convenience; such captions are not a part of this Agreement and shall not
be deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.

 

4.9                                 Governing
Law and Jurisdiction. This Agreement shall in all events and for all
purposes be governed by, and construed in accordance with, the laws of the
Commonwealth of Virginia. Any action or proceeding against the parties relating
in any way to this Agreement must be brought and enforced in the courts of
Fairfax County, Virginia or the Northern District of Virginia, and the parties
irrevocably submit to the jurisdiction of such courts in respect of any such
action or proceeding.

 

4.10                           Amendments. No changes to this Agreement shall
be binding unless in writing and signed by both the parties.

 

4.11                           Counterparts. This Agreement may be
executed in several counterparts, each of which shall be deemed an original,
and all such counterparts shall constitute one instrument.

 

THE EXECUTIVE HAS READ ALL OF THE PROVISIONS OF
THIS AGREEMENT AND THE EXECUTIVE UNDERSTANDS, AND AGREES TO, EACH OF SUCH
PROVISIONS. THE EXECUTIVE UNDERSTANDS THAT THIS AGREEMENT MAY AFFECT THE
EXECUTIVE’S RIGHT TO ACCEPT EMPLOYMENT WITH OTHER COMPANIES SUBSEQUENT TO THE
EXECUTIVE’S EMPLOYMENT WITH THE CORPORATION.

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement effective as of
the date first above written.

 

	
  EXECUTIVE

  	
   

  	
   

  	
  MAXIMUS, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Richard A.
  Montoni

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
								

 

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