Exhibit 10.4


 


USANA HEALTH SCIENCES, INC.


 


EMPLOYEE STOCK OPTION AGREEMENT


 


Optionee:


Date of Grant:


Number of Covered Shares:


Exercise Price Per Share:


Expiration 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 2002
USANA Health Sciences, Inc. Stock Option Plan (the “Plan”) and has approved the
granting to certain employees of the Company of stock options to purchase
common stock of the Company, par value $.001 per share (“Common Stock”); and


 


WHEREAS, Optionee is employed by the Company
in a key executive capacity, or is engaged by the Company as an officer and/or
employee, and the Company desires that Optionee remain in such employ and
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, including but not limited to the substitution provisions of Section
27 below, 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 5
and 11 below, the Options shall be fully vested on the Date of Grant and shall
remain exercisable until                 
(          ) years after the Date
of Grant (the “effective term”), at which time the Options shall terminate and
not be exercisable thereafter.


 


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 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 not only an employee but also a
director or executive officer 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.             Stock
Settlement Feature.  Notwithstanding
anything contained herein to the contrary, the Committee in its sole discretion
may, at any time prior to an exercise of the Options and with written notice to
the Optionee, elect to settle an exercise of the Options by the Optionee in
whole or in part through the stock settlement feature described in this
Section.  To the extent that the
Committee elects the stock settlement feature:


 


a.             The
provisions of Section 3 relating to the payment of the purchase price shall not
be applicable; and


 


b.             In
lieu of delivering the shares of Common Stock for which the Options are being
exercised, the Company shall deliver the number of shares of Common Stock to
the Optionee, subject to the provisions of Section 10 hereof, equal to the
result of dividing the Cash Amount (as defined below) by the Fair Market Value
of one share of Common Stock on the date of exercise of the Options.  The “Cash Amount” is equal to the result of
multiplying (A) the number of shares of Common Stock for which the Options are
being exercised that are settled by the stock settlement feature by (B) the
difference between (x) the Fair Market Value of one share of Common Stock on
the date of exercise of the Options and (y) the Exercise Price.  Any shares of Common Stock delivered above
shall be subject to the restrictions of Section 9 hereof.  Notwithstanding the foregoing, this Section
shall not be effective until the date that Financial Standards Board Statement
No. 123 (revised 2004) is applicable to the financial statements of the
Company.


 


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5.             Termination
of Employment or Death.


 


a.             In
the event Optionee’s employment shall be involuntarily terminated by the
Company without cause, the Optionee may exercise the Options, provided such
exercise occurs both within the remaining effective term of the Options and
ninety (90) days after the date of termination by the Company.


 


b.             In
the event Optionee dies while employed by the Company or dies within ninety
(90) days after termination of employment with the Company (whether such
termination preceding death was by reason of Retirement or Disability,
involuntary termination without cause, or voluntary termination (but not
termination For Cause)), the Options granted hereunder to Optionee shall be
exercisable within three (3) years after the date of Optionee’s death.  The legal representative, if any, of Optionee’s
estate, or otherwise the appropriate legatees or distributees of Optionee’s
estate, may exercise the Option on behalf of Optionee.


 


c.             In
the event Optionee’s employment shall terminate on account of Retirement or
Disability, the Options held by Optionee may be exercised by Optionee, provided
such exercise occurs within the remaining effective term of the Options.


 


d.             In
the event Optionee shall have an Involuntary Termination of Employment “For
Cause” (as defined in Section 12(d)(ii) of the Plan), no exercise period shall
exist and Optionee shall forfeit the Options as of the date of termination.


 


e.             For
purposes of this Agreement, termination of employment shall be considered to
occur when an employee is no longer an employee of the Company or any
Subsidiary. Whether an authorized leave of absence or absence on military or
government service shall constitute termination of employment for purposes of
this Agreement shall be determined by the Committee.  Retirement shall be considered to mean
retirement as defined in the Plan.


 


6.             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.


 


7.             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.


 


8.             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


 


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informational purposes only and is not to be
construed as increasing, limiting or describing the rights and obligations of
the parties hereunder.


 


9.             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 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.


 


10.           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.


 


11.           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.


 


12.           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


 


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resulting from a recapitalization,
reorganization, merger, consolidation or similar transaction as provided in the
Plan.


 


13.           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.


 


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


 


15.           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.


 


16.           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 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.


 


17.           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.


 


18.           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.


 


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


 


20.           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.


 


21.           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.


 


22.           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


 


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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.


 


23.           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.


 


24.           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.


 


25.           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.


 


26.           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. 


 


27.           Company
Right to Substitute Award. Notwithstanding anything to the contrary herein,
the Company, in its sole discretion, shall have the right to cancel in whole or
in part the Options granted to Optionee hereunder, provided that the Company
shall substitute therefore and grant to Optionee, alternative options, or other
equity or cash compensation or award, as may be permitted under the Company’s
then current omnibus equity incentive compensation plan, as may be
substantially equal in value to the Options (or cancelled portion thereof)
originally granted to Optionee hereunder.


 


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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