Amended and Restated 1997 Stock Option Plan



 EXHIBIT 10.4 
  
 AMENDMENT TO 
  
 THE MANNATECH, INCORPORATED 
  
 1997 STOCK OPTION PLAN 
  
 Effective as of August 7, 2003 
  
 The undersigned, constituting all members of the Board of Directors (“Board”) of Mannatech, Incorporated, a Texas corporation (the
“Company”), hereby approve, adopt, and consent to the adoption of the following resolutions by unanimous written consent without a meeting pursuant to the provisions of Article 9.10(B) of the Texas Business Corporation Act:

  
 WHEREAS, the Company maintains a plan
known as the Mannatech, Incorporated 1997 Stock Option Plan (the “Plan”), which, by its terms, is subject to amendment by action of the Board; 
  

WHEREAS, the Board has determined that it is in the best interests of the Company and the Plan participants to amend the Plan;

  
 NOW, THEREFORE, BE IT HEREBY:

  
 RESOLVED, that Section 4(a) of the
Plan shall be amended to include the insertion of the following sentence: 
  
 “The Committee, as administrator of the Plan, shall have the authority to administer and interpret the option agreement.” 
  
 RESOLVED FURTHER, that the provision of Section 4(a) of the Plan beginning “The Committee shall,
in addition to its other authority and subject to the provisions of the Plan, determine ...” shall be amended to include the insertion of the following clause: 
  
 “whether a bona fide leave of absence shall be deemed to continue, to the extent that applicable law does not require
that it be deemed to continue;” 
  
 RESOLVED FURTHER, that Section 5(b) of the Plan shall be amended to read in its entirety as follows: 
  
 “(b) An option may be exercised in whole or in part prior to its expiration at the time or times specified in the vesting schedule contained in the
stock option agreement. An option shall be deemed to be exercised, in whole or in part, when written notice of such exercise has been given to the Chief Financial Officer of the Company prior to its expiration, in accordance with the terms of the
option, by the person entitled to exercise the option, and full payment (including any applicable tax withholding amounts) for the Shares with respect to which the 
  

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 option is exercised has been received by the Company. Each option shall terminate and is not exercisable
after 5:00 p.m. on the day immediately preceding the ten (10) year anniversary of the date of its grant, except if terminated earlier as provided in the stock option agreement.” 
  
 RESOLVED FURTHER, that a new Section 5(e) shall be incorporated into the Plan as follows: 

 
 “(e) The term of each option shall be ten (10) years from the date
of the grant thereof or such shorter term as may be provided in the option agreement. However, in the case of an option granted to an optionee who, at the time the option is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any parent or subsidiary, the term of the option shall be five (5) years from the date of the grant thereof or such shorter time as may be provided in the option agreement. Further, the per share
exercise price on an option granted to an optionee who, at the time the option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any parent or subsidiary shall be no less
than 110% of the fair market value per share on the date of the grant.” 
  
 RESOLVED FURTHER, that a new Section 5(f) shall be incorporated into the Plan as follows: 
  
 “(f) In the event of any recapitalization, merger, consolidation, transfer of assets, reorganization, conversion or what the Committee deems in its
sole discretion to be a similar transaction or circumstance, where the Company is not the surviving entity, if this option is cancelled without substitution of a successor option or payment of alternative consideration that the Committee determines
in good faith to be equitable under the circumstances, optionee shall have the right, exercisable during the later of the ten-day period ending on the fifth day prior to such transaction or ten days after the Committee provides notice of
cancellation, to exercise this option in whole or in part without regard to any installment exercise provisions in the option agreement.” 
  
 RESOLVED FURTHER, that a new Section 5(g) shall be incorporated into the Plan as follows: 
  
 “(g) Service shall be deemed to continue while Employee is on a bona
fide leave of absence, to the extent required by applicable law. To the extent applicable law does not require such a leave to be deemed to continue while on a bona fide leave of absence, such bona fide leave of absence shall be deemed to continue
if, and only if, expressly provided in writing by the Committee or a duly authorized officer of the Company, parent or subsidiary for whom Employee provides services.” 
  

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 Outstanding options that are not exercisable at the time of termination of service for
any reason shall expire at the close of business on the date of such termination.” 
  
 RESOLVED FURTHER, that a new Section 5(h) of the Plan shall be incorporated as follows: 
  
 “(h) An option may be exercised, in whole or in part, to the
extent exercisable, by giving written notice prior to its expiration to the Chief Financial Officer of the Company in the form specified by the Committee, accompanied by payment of the option price. In addition to the option price the optionee will
be required to include payment of all federal, state, local or other income excise or employment taxes subject to withholding (if any) by the Company, a parent or subsidiary as a result of the exercise of this option (collectively, the
“Exercise Price”) for the total number of shares specified for purchase. The Exercise Price payment shall be payable in full by cash or check. Alternatively, in the sole discretion of the Committee and upon such terms as the Committee
shall approve, the option may provide that the Exercise Price may be paid by: 
  
 (1) Cashless Exercise. During any period for which the shares are publicly traded (i.e., the shares are listed on any established stock exchange or a national market system, including without limitation the Nasdaq
National Market, or if the shares are quoted on the Nasdaq System (but not on the Nasdaq National Market) or any similar system whereby the stock is regularly quoted by a recognized securities dealer but closing sale prices are not reported), by a
copy of instructions to a broker directing such broker to sell the shares for which this option is exercised, and to remit to the Company the aggregate Exercise Price of such option (“Cashless Exercise”); provided, however, a Cashless
Exercise by a Director or executive officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, a parent or subsidiary in violation of section 402(a) of the Sarbanes-Oxley
Act (codified as Section 13(k) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m(k)) shall be prohibited; 
  
 (2) (unless prohibited by the Committee) certificates representing shares of Common Stock of the Company, which will be valued by the Company at the
closing fair market value price per share of the Company’s Common Stock on the date of exercise of such certificates to the Company, accompanied by an assignment of the stock to the Company, provided that such shares have been held and owned by
the optionee for at least six (6) prior months; or 
  
 (3)
(unless prohibited by the Committee) any combination of cash and Common Stock of the Company valued and subject to the restrictions as provided in clause (2). Any assignment of stock shall be in a form and substance satisfactory to the Secretary of
the Company, including 
  

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 guarantees of signature(s) and payment of all transfer taxes if the Secretary deems such
guarantees necessary or desirable. “ 
  
 RESOLVED FURTHER, that a new Section 5(i) of the Plan shall be incorporated as follows: 
  
 “(i) Under Section 422(d) of the Code, to the extent that the aggregate fair market value of stock with respect to which incentive stock options are
exercisable for the first time by the undersigned during any calendar year (under all incentive stock option plans of the Company, a parent or subsidiaries) exceeds $100,000.00, such options shall be treated as options which are not incentive stock
options, but shall be exercisable by their terms. Where more than one option that has been designated as an incentive stock option, the determination of which options are to be treated as incentive stock options shall be based on the order in which
such options were granted. If the $100,000 annual limitation is first exceeded as the result of the option covered by this agreement, upon each exercise of this option, that fraction of shares of Common Stock covered by such exercise, equal to (i)
the amount by which the grant of this option causes the $100,000 annual limitation to be exceeded, divided by (ii) the aggregate fair market value of this option, determined as provided above, shall be treated as shares acquired upon exercise of
options which are not incentive stock options, and the balance shall be treated as shares acquired upon exercise of an incentive stock option.” 
  
 RESOLVED FURTHER, that a new Section 5(j) of the Plan shall be incorporated as follows: 
  
 “(j) Prior to the time of issuance, the Company shall satisfy its
employment tax and other tax withholding obligations by requiring the optionee to pay the amount of withholding tax, if any, that must be paid under federal, state, and local law due to the exercise of the option, subject to such restrictions or
procedures as the Company deems necessary to satisfy Rule 16b-3 of the Exchange Act. The payment of such withholding tax may be by certified or official bank check or by the delivery of a number of shares of Common Stock that have been held for at
least six months (plus cash if necessary) having a fair market value equal to the Company’s minimum required statutory tax withholding.” 
  
 RESOLVED FURTHER, that a new paragraph shall be added to the end of Section 8(a) of the Plan as follows: 
  
 “An Employee who is employed by an employer that is a
subsidiary of the Company, will be considered to have terminated Employee status in the event that his or her employer ceases to be a subsidiary of the Company.” 
  
 The foregoing amendments shall be effective with respect to options granted after the effective date first specified above.

  
  

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