Document:

Exhibit 10.4

 

USANA HEALTH SCIENCES, INC.

2006 EQUITY INCENTIVE AWARD PLAN

 

STOCK-SETTLED STOCK APPRECIATION RIGHT 

AWARD AGREEMENT FOR EMPLOYEES

 

Recipient Name:              

Grant Date:                

Number of SSARs:          

Per Share Grant Price:  $          

Expiration Date:  [63 Months After Grant Date]

 

1.             Award. USANA Health Sciences, Inc. (the “Company”)
has awarded you the number of Stock-Settled Stock Appreciation Rights (“SSARs”)
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.             Term and
Vesting. The term of the SSARs commences on the Grant Date and ends
on the Expiration Date, provided that you remain an employee of the Company. In
no event may the SSARs be exercised later than the Expiration Date. The SSARs
shall become vested and exercisable in five equal annual installments of twenty
percent (20%) of the SSARs on each of the first through fifth anniversary of
the Grant Date, so as to be 100% vested and exercisable on the fifth
anniversary of the Grant Date, subject to your continued employment by the
Company on each vesting date. If your employment by the Company terminates, the
SSARs may be exercised only as described in paragraph 4 below.

 

3.             Exercise of
SSAR.

 

a.             Upon exercise of the SSARs, you shall be entitled to
receive a number of shares of Common Stock of the Company (the “Stock”) for
each share with respect to which the SSARs are exercised equal to the quotient
of (i) the excess of the Fair Market Value of one share of Stock on the
date of exercise over the Per Share Grant Price, divided by (ii) the Fair
Market Value of one share of Stock on the date of exercise.

 

b.             To exercise all or part of the SSARs you must deliver to
the Company a “Notice of Exercise,” in such form as the Company authorizes. You
shall not have any rights as a shareholder of the Company with respect to the
shares of Stock subject to the SSARs until you have exercised the SSARs for
such shares. While you are alive, the SSARs may be exercised only by you or
your legal representative.

 

c.             Upon exercise, the number of shares of Stock issued will
be reduced to satisfy the minimum statutorily required tax withholding
obligations. The remaining shares of Stock will be issued to you or, in case of
your death, your beneficiary designated in accordance with the procedures
specified by the Committee. If at the time of your death, there is not an
effective beneficiary designation on file or you are not survived by your designated
beneficiary, the shares will be issued to the legal representative of your
estate. Upon any exercise of the SSARs, you must furnish to the Company before
the closing of such exercise such other

 

 

documents
or representations as the Company may require to comply with applicable laws
and regulations.

 

4.             Termination. If you cease to
be employed by the Company for any reason, all then unvested SSARs awarded hereunder
shall immediately terminate without notice to you and shall be forfeited. Vested SSARs will be exercisable according
to the following provisions:

 

a.             If you cease to be employed by the
Company for any reason other than retirement or Disability (which are governed
by paragraph b. below), removal for Cause (which is governed by paragraph c.
below) or death (which is governed by paragraph d. below), all SSARs awarded
hereunder that are vested at such time shall be exercisable at any time prior
to the earlier of (i) the Expiration Date of such SSARs or (ii) the date that
is ninety days after the date you cease to be employed by the Company.

 

b.             If you cease to be employed by the
Company on account of your retirement or Disability, all SSARs awarded
hereunder that are vested at such time shall be exercisable at any time prior
to the earlier of (i) the Expiration Date of such SSARs or (ii) the date that
is three years after the date you cease to be employed by the Company.

 

c.             If your employment by the Company
is terminated for Cause (as defined below), all outstanding SSARs awarded
hereunder which are not exercisable immediately prior to removal, and all outstanding
SSARs awarded hereunder which are exercisable immediately prior to removal,
shall terminate as of the date of removal for Cause and may not be exercised. 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, (iii) your willful act which constitutes gross misconduct and
which is injurious to the Company or (iv) continued substantial violation of
your duties to the Company which are demonstrably willful and deliberate on
your part after your receipt of a written demand from the Company for performance
which specifically sets forth the factual basis for the Company’s belief that
you have committed continued substantial violations of your duties.

 

d.             If your employment by the Company terminates by reason of your death, or
if you die within the ninety day period after the date you cease to be employed by the Company for any reason
other than Cause, any of your vested SSARs hereunder may be exercised by your
estate, personal representative or beneficiary who has acquired the SSARs by
will or by the laws of descent and distribution, at any time prior to the earlier of (i) the Expiration Date
of such SSARs or (ii) the date that is three years after the date of
your death.

 

5.             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.

 

6.             Transferability. The SSARs 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. In the event that you become
legally incapacitated, the SSARs shall be exercisable

 

2

 

by
your legal guardian, committee or legal representative. If you die, the SSARs
shall thereafter be exercisable by your beneficiary as designated by you in the
manner prescribed by the Committee or, in the absence of an authorized beneficiary
designation, by the legatee of such SSARs under your will, or by your estate in
accordance with your will or the laws of descent and distribution, in each case
in the same manner and to the same extent that the SSARs were exercisable by
you on the date of your death. The SSARs shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the SSARs contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon the
SSARs, shall be null and void and without effect.

 

7.             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.

 

8.             No Employment
Agreement. Neither
the award to you of the SSARs nor the delivery to you of this Award Agreement
or any other document relating to the SSARs will confer on you the right to
continued employment with the Company or any Subsidiary.

 

9.             No Shareholder Rights. Neither the award to you
of the SSARs nor the delivery to you of this Award Agreement or any other
document relating to the SSARs 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 exercise of the SSARs and the receipt of shares of Stock
in accordance with this Award Agreement.

 

10.           No Fractional Shares. The SSARs granted hereunder
may be exercised only with respect to whole shares of Stock, and no fractional
share of Stock shall be issued.

 

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

 

12.           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 SSARs 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.

 

3

 

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 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 SSARs 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

  	
   

  	
   

  
						

 

4Exhibit 10.5

 

USANA HEALTH SCIENCES, INC.

2006 EQUITY INCENTIVE AWARD PLAN

 

STOCK-SETTLED STOCK APPRECIATION RIGHT AWARD

AGREEMENT FOR INDEPENDENT DIRECTORS

 

Recipient Name:         

Grant Date:       

Number of SSARs:        

Per Share Grant
Price:  $          

 

Expiration Date:  Fifth Anniversary of the Grant Date

 

1.                                       Award. USANA Health Sciences, Inc. (the “Company”)
has awarded you the number of Stock-Settled Stock Appreciation Rights (“SSARs”)
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.                                       Term and Vesting. The term of the SSARs commences on the Grant
Date and ends on the Expiration Date, provided that you remain an Independent
Director of the Company. In no event may the SSARs be exercised later than
the Expiration Date. The SSARs shall become vested and exercisable in four
equal quarterly installments of twenty five percent (25%) of the SSARs, 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 SSARs may be exercised only as described in paragraph 4 below.

 

3.                                       Exercise of SSAR.

 

a.                                       Upon exercise of the SSARs, you shall be
entitled to receive a number of shares of Common Stock of the Company (the “Stock”)
for each share with respect to which the SSARs are exercised equal to the
quotient of (i) the excess of the Fair Market Value of one share of Stock
on the date of exercise over the Per Share Grant Price, divided by (ii) the
Fair Market Value of one share of Stock on the date of exercise.

 

b.                                      To exercise all or part of the SSARs you
must deliver to the Company a “Notice of Exercise,” in such form as the
Company authorizes. You shall not have any rights as a shareholder of the
Company with respect to the shares of Stock subject to the SSARs until you have
exercised the SSARs for such shares. While you are alive, the SSARs may be
exercised only by you or your legal representative.

 

c.                                       Upon exercise, the number of shares of Stock
issued will be reduced to satisfy the minimum statutorily required tax
withholding obligations. The remaining shares of Stock will be issued to you
or, in case of your death, your beneficiary designated in accordance with the
procedures specified by the Committee. If at the time of your death, there is
not an effective beneficiary designation on file or you are not survived by your
designated beneficiary, the shares will be issued to the legal representative
of your estate. Upon any exercise of the SSARs, you must furnish to the Company
before the closing of such exercise such other

 

 

documents
or representations as the Company may require to comply with applicable
laws and regulations.

 

4.                                       Termination. If you cease to
be an Independent Director for any reason, all then unvested SSARs awarded hereunder shall immediately terminate
without notice to you and shall be forfeited. Vested SSARs will be exercisable according to the following provisions:

 

a.                                       If you cease to be
an Independent Director for any reason other than retirement or Disability
(which are governed by paragraph b. below), removal for Cause (which is
governed by paragraph c. below) or death (which is governed by paragraph d.
below), all SSARs awarded hereunder that are vested at such time shall be
exercisable at any time prior to the Expiration Date.

 

b.                                      If you cease to be
an Independent Director on account of your retirement or Disability, all SSARs
awarded hereunder that are vested at such time shall be exercisable at any time
prior to the Expiration Date.

 

c.                                       If you are removed
as an Independent Director prior to expiration of your term for Cause (as
defined below), all outstanding SSARs awarded hereunder which are not
exercisable immediately prior to removal, and all outstanding SSARs awarded
hereunder which are exercisable immediately prior to removal, shall terminate
as of the date of removal for Cause and may not be exercised. 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.

 

d.                                      If your service as an Independent Director of
the Company terminates by reason of your death, or if you die within the ninety
day period after the date you cease to be an Independent Director of the Company
for any reason other than Cause, any of your vested SSARs hereunder may be
exercised by your estate, personal representative or beneficiary who has
acquired the SSARs by will or by the laws of descent and distribution, at any
time prior to the Expiration Date.

 

5.                                       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.

 

6.                                       Transferability. The SSARs 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. In the event that you become
legally incapacitated, the SSARs shall be exercisable by your legal guardian,
committee or legal representative. If you die, the SSARs shall thereafter be
exercisable by your beneficiary as designated by you in the manner prescribed
by the Committee or, in the absence of an authorized beneficiary designation,
by the legatee of such SSARs under your will, or by your estate in accordance
with your will or the laws of descent and distribution, in each case in the
same manner and to the same extent that the SSARs were exercisable by you on
the date of your death. The SSARs shall not be subject to execution,

 

2

 

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

 

7.                                       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.

 

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

 

9.                                       No Shareholder Rights. Neither the award to you of the SSARs nor
the delivery to you of this Award Agreement or any other document relating to
the SSARs 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
exercise of the SSARs and the receipt of shares of Stock in accordance with
this Award Agreement.

 

10.                                 No Fractional Shares. The SSARs granted hereunder may be
exercised only with respect to whole shares of Stock, and no fractional share
of Stock shall be issued.

 

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

 

12.                                 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 SSARs 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.

 

3

 

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 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 SSARs 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

  	
   

  	
   

  
						

 

4

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