Exhibit 10.2

 

Execution Copy

 

VOTING AGREEMENT

 

THIS VOTING AGREEMENT (this “Agreement”) is made and executed as of the 22nd day
of May, 2009 (the “Effective Date”), by, between and among Nature’s Sunshine
Products, Inc., a Utah corporation organized under the Utah Revised Business
Corporation Act (“URBCA”) (the “Company”); Red Mountain Capital Partners II,
L.P., a Delaware limited partnership (the “Shareholder”); Kristine F. Hughes,
Pauline Hughes Francis and Eugene L. Hughes (collectively, the “Hughes
Parties”).

 

RECITALS

 

A.                                   As of the date of this Agreement, the
Shareholder Beneficially Owns 755,050 shares of common stock of the Company,
representing approximately 4.9% of the issued and outstanding common stock of
the Company.

 

B.                                     The Company and the Shareholder have
agreed that, among other things, if the Company’s Board of Directors (the
“Board”) is reconstituted as set forth herein, the Shareholder will vote its
shares for the election of the members of the reconstituted Board in the next
annual meeting of the Company’s shareholders.  The parties desire to memorialize
their arrangement in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:

 

1.                                       CERTAIN DEFINITIONS. FOR PURPOSES OF
THIS AGREEMENT:

 

1.1                                 “AFFILIATE” HAS THE MEANING SET FORTH IN
RULE 12B-2 PROMULGATED BY THE SEC UNDER THE EXCHANGE ACT.

 

1.2                                 “BENEFICIAL OWNER,” “BENEFICIAL OWNERSHIP”
AND “BENEFICIALLY OWN” HAVE THE SAME MEANING AS SET FORTH IN RULE 13D-3
PROMULGATED BY THE SEC UNDER THE EXCHANGE ACT.

 

1.3                                 “SEC” MEANS THE SECURITIES AND EXCHANGE
COMMISSION.

 

1.4                                 “VOTING SHARES” MEANS (I) ALL EQUITY
SECURITIES OF THE COMPANY BENEFICIALLY OWNED BY THE SHAREHOLDER OR THE HUGHES
PARTIES, RESPECTIVELY, AS OF THE DATE OF THIS AGREEMENT LESS ANY SUCH SHARES
DISPOSED OF BY THE SHAREHOLDER OR THE HUGHES PARTIES, RESPECTIVELY, AFTER THE
EFFECTIVE DATE IN COMPLIANCE WITH SECTION 6.9 AND (II) ALL ADDITIONAL EQUITY
SECURITIES OF THE COMPANY OF WHICH THE SHAREHOLDER OR THE HUGHES PARTIES MAY
ACQUIRE BENEFICIAL OWNERSHIP DURING THE PERIOD FROM THE DATE OF THIS AGREEMENT
THROUGH THE VOTING AGREEMENT TERMINATION DATE.

 

--------------------------------------------------------------------------------

 

2.                                       DISTRIBUTION OF
SECTION 14(F) STATEMENT. WITHIN THREE (3) BUSINESS DAYS FOLLOWING THE EXECUTION
OF THIS AGREEMENT, THE COMPANY WILL DISTRIBUTE TO ITS SHAREHOLDERS THE
INFORMATION STATEMENT (THE “SECTION 14(F) STATEMENT”) REQUIRED BY
SECTION 14(F) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE
ACT”) AND RULE 14F-1 PROMULGATED PURSUANT THERETO.

 

3.                                       BOARD CHANGES.  THE FOLLOWING ACTIONS
SHALL BE EFFECTIVE IMMEDIATELY FOLLOWING THE TENTH (10TH) DAY AFTER THE COMPANY
DISTRIBUTES TO ITS SHAREHOLDERS THE SECTION 14(F) STATEMENT:

 

3.1                                 THE NUMBER OF DIRECTORS CONSTITUTING THE
BOARD SHALL BE INCREASED TO EIGHT (8) IN ACCORDANCE WITH SECTION 3.2 OF THE
BYLAWS OF THE COMPANY AND ONE OF THE NEWLY CREATED VACANCIES SHALL BE ASSIGNED
TO CLASS II AND THE OTHER NEWLY CREATED VACANCY SHALL BE ASSIGNED TO CLASS III
IN ACCORDANCE WITH ARTICLE IX OF THE COMPANY’S RESTATED ARTICLES OF
INCORPORATION.

 

3.2                                 THE RESIGNATIONS OF ROBERT K. BOWEN,
LARRY K. DEPPE, PAULINE HUGHES FRANCIS, AND EUGENE L. HUGHES AS MEMBERS OF THE
BOARD ATTACHED AS EXHIBITS A-1 THOUGH A-4 AND PREVIOUSLY TENDERED TO THE COMPANY
SHALL BECOME EFFECTIVE IN ACCORDANCE WITH THEIR TERMS LEAVING KRISTINE F. HUGHES
AS THE SOLE REMAINING INCUMBENT DIRECTOR ASSIGNED TO CLASS III AND CREATING FOUR
VACANCIES ON THE BOARD IN ADDITION TO THE FIFTH VACANCY PREVIOUSLY CREATED BY
FRANZ CRISTIANI’S PRIOR RESIGNATION AS A DIRECTOR EFFECTIVE MARCH 1, 2007 AND
THE SIXTH AND SEVENTH VACANCIES CREATED BY THE INCREASE IN THE SIZE OF THE BOARD
OF DIRECTORS AS DESCRIBED IN SECTION 3.1.

 

3.3                                 EACH OF THE SEVEN PERSONS IDENTIFIED ON
EXHIBIT B AS AN “APPOINTEE” (COLLECTIVELY, THE “APPOINTEES”) SHALL BE APPOINTED,
PURSUANT TO SECTION 3.10 OF THE BYLAWS OF THE COMPANY AND
SECTION 16-10A-810(1)(C) OF THE URBCA, TO FILL THE SEVEN VACANCIES ON THE BOARD
AND SERVE AS DIRECTORS UNTIL THE NEXT SHAREHOLDERS’ MEETING AT WHICH DIRECTORS
ARE ELECTED AND UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE DULY ELECTED AND
QUALIFIED, UNLESS THEY RESIGN, ARE REMOVED OR ARE OTHERWISE DISQUALIFIED FROM
SERVING AS A DIRECTOR OF THE COMPANY, AND EACH SUCH APPOINTEE SHALL SERVE IN THE
CLASS SET FORTH NEXT TO HIS OR HER NAME ON EXHIBIT B.

 

4.                                       ANNUAL MEETINGS OF THE SHAREHOLDERS. 
THE COMPANY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO HOLD AN ANNUAL MEETING
OF THE SHAREHOLDERS NO LATER THAN DECEMBER 31, 2009 UNLESS OTHERWISE AGREED BY
THE THEN SERVING BOARD OF DIRECTORS (THE “NEXT ANNUAL MEETING”).

 

5.                                       VOTING AGREEMENT.

 

5.1                                 THE SHAREHOLDER AND THE HUGHES PARTIES AGREE
THAT FROM THE DATE OF THIS AGREEMENT AND UNTIL IMMEDIATELY FOLLOWING THE NEXT
ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF OR DECEMBER 31, 2009,
WHICHEVER IS EARLIER (THE “VOTING AGREEMENT TERMINATION DATE”), AT THE NEXT
ANNUAL MEETING OR ANY OTHER MEETING OF SHAREHOLDERS OF THE COMPANY OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF, AND ON EVERY ACTION OR APPROVAL BY WRITTEN
CONSENT OF THE SHAREHOLDERS OF THE COMPANY, IF ANY, THE SHAREHOLDER AND THE
HUGHES PARTIES WILL TAKE SUCH ACTIONS AS ARE NECESSARY TO EFFECT THE INTENT OF
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO THE FOLLOWING:

 

5.1.1                        VOTE ALL OF THE VOTING SHARES IN FAVOR OF THE
DIRECTOR NOMINEES RECOMMENDED TO THE SHAREHOLDERS BY THE BOARD, WHICH DIRECTOR
NOMINEES SHALL BE

 

2

--------------------------------------------------------------------------------

 

the individuals listed in Exhibit B for the terms listed in Exhibit B (unless
they or any of them prior thereto shall have resigned or been removed as a
director or otherwise shall have refused to stand for election);

 

5.1.2                        APPEAR, OR CAUSE THE HOLDER OF RECORD OF ANY VOTING
SHARES ON ANY APPLICABLE RECORD DATE TO APPEAR AT SUCH MEETING OR OTHERWISE
CAUSE THE VOTING SHARES TO BE COUNTED AS PRESENT FOR PURPOSES OF ESTABLISHING A
QUORUM; AND

 

5.1.3                        NONE OF THE SHAREHOLDER OR THE HUGHES PARTIES SHALL
TAKE ANY POSITION, MAKE ANY STATEMENT OR TAKE ANY ACTION INCONSISTENT WITH THE
FOREGOING.

 

5.2                                 IN ORDER TO SECURE THE PERFORMANCE OF THE
SHAREHOLDER’S AND THE HUGHES PARTIES’ OBLIGATIONS UNDER THIS AGREEMENT, EACH
SUCH PARTY HEREBY IRREVOCABLY GRANTS A PROXY APPOINTING KRISTINE F. HUGHES AND
PAULINE HUGHES FRANCIS EACH AS SUCH PARTY’S ATTORNEY-IN-FACT AND PROXY, WITH
FULL POWER OF SUBSTITUTION, FOR AND IN ITS NAME, PLACE AND STEAD, TO VOTE,
EXPRESS CONSENT OR DISSENT, OR OTHERWISE TO UTILIZE SUCH PARTY’S VOTING SHARES
SOLELY TO VOTE FOR THE DIRECTORS OR NOMINEES LISTED ON EXHIBIT B AT THE NEXT
ANNUAL MEETING OR ANY OTHER MEETING OF SHAREHOLDERS OF THE COMPANY OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF PRIOR TO THE VOTING AGREEMENT TERMINATION
DATE, IN EACH CASE IN A MANNER CONSISTENT IN ALL MATERIAL RESPECTS WITH
SECTION 5.1.  EACH OF THE SHAREHOLDER AND THE HUGHES PARTIES HEREBY REPRESENTS
AND WARRANTS THAT ANY PROXIES HERETOFORE GIVEN IN RESPECT OF THE VOTING SHARES
ARE NOT IRREVOCABLE AND THAT ANY SUCH PROXIES ARE HEREBY REVOKED INCLUDING,
WITHOUT LIMITATION, ANY PROXY GRANTED BY THE SHAREHOLDER TO PRESCOTT GROUP
AGGRESSIVE SMALL CAP MASTER FUND, G.P., PHIL FROLICH OR DUMINDA DESILVA, OR ANY
OF THEIR AFFILIATES.  EACH SUCH PARTY HEREBY AFFIRMS THAT THE PROXY AND POWER OF
ATTORNEY SET FORTH IN THIS AGREEMENT IS IRREVOCABLE AND COUPLED WITH AN INTEREST
AND SHALL EXPIRE ON THE VOTING AGREEMENT TERMINATION DATE.

 

6.                                       STANDSTILL.  FROM AND AFTER THE
EFFECTIVE DATE UNTIL THE VOTING AGREEMENT TERMINATION DATE, THE SHAREHOLDER AND
THE HUGHES PARTIES AND THEIR RESPECTIVE AGENTS, EMPLOYEES, OFFICERS, DIRECTORS,
MANAGERS, CONTROL PERSONS, REPRESENTATIVES, SUCCESSORS, ASSIGNS, PARENT
CORPORATIONS, SUBSIDIARIES, AFFILIATES AND ALL OTHER PERSONS ACTING IN CONCERT
WITH OR UNDER THE CONTROL OR DIRECTION OF ANY OF THE SHAREHOLDER OR THE HUGHES
PARTIES SHALL NOT, DIRECTLY OR INDIRECTLY, IN ANY MANNER WITHOUT THE PRIOR
CONSENT OF THE COMPANY:

 

6.1                                 ADVISE, ENCOURAGE, SUPPORT OR INFLUENCE ANY
PERSON WITH RESPECT TO THE VOTING OR DISPOSITION OF ANY SHARES OF THE COMPANY
CONTRARY TO THE TERMS OF THIS AGREEMENT;

 

6.2                                 GRANT A PROXY WITH RESPECT TO THE VOTING OF
THE SHARES OF THE COMPANY TO ANY PERSON OTHER THAN AS TO MATTERS NOT
CONTEMPLATED IN THE PROXY SET FORTH IN SECTION 5.2;

 

6.3                                 DEPOSIT ANY SHARES OF THE COMPANY IN A
VOTING TRUST OR ENTER INTO ANY OTHER ARRANGEMENT OR AGREEMENT WITH RESPECT TO
THE VOTING THEREOF OTHER THAN AS TO MATTERS NOT CONTEMPLATED IN THE PROXY SET
FORTH IN SECTION 5.2;

 

6.4                                 TAKE ANY ACTION, ALONE OR IN CONCERT WITH
ANY OTHER PERSON, ADVISE, FINANCE, ASSIST OR PARTICIPATE IN OR ENCOURAGE ANY
PERSON TO TAKE ANY ACTION WHICH IS PROHIBITED TO BE TAKEN BY SUCH PARTY PURSUANT
TO THIS AGREEMENT, OR MAKE ANY INVESTMENT IN OR ENTER INTO ANY

 

3

--------------------------------------------------------------------------------

 

ARRANGEMENT WITH, ANY OTHER PERSON THAT ENGAGES, OR OFFERS OR PROPOSES TO ENGAGE
IN ANY OF THE FOREGOING;

 

6.5                                 PURSUANT TO THE URBCA, DIRECTLY OR
INDIRECTLY (OR ASSIST ANY OTHER PERSON OR ENTITY DIRECTLY OR INDIRECTLY), MAKE A
DEMAND OR SEEK A COURT ORDER THAT THE COMPANY HOLD A SPECIAL MEETING OF THE
SHAREHOLDERS, OR IN LIEU THEREOF AN ANNUAL MEETING OF THE SHAREHOLDERS, FOR ANY
PURPOSE INCLUDING WITHOUT LIMITATION THE PURPOSE OF ELECTING DIRECTORS;

 

6.6                                 MAKE OR CAUSE TO BE MADE, ANY PUBLIC
STATEMENT OR ANNOUNCEMENT THAT RELATES TO AND CONSTITUTES AN AD HOMINEM ATTACK
ON, OR RELATES TO OR OTHERWISE DISPARAGES, THE COMPANY, ITS OFFICERS, DIRECTORS,
EMPLOYEES, OR ANY PERSON WHO HAS SERVED AS AN OFFICER, DIRECTOR OR EMPLOYEE OF
THE COMPANY;

 

6.7                                 RECOMMEND OR REQUEST OR INDUCE OR ATTEMPT TO
INDUCE ANY OTHER PERSON TO TAKE ANY OF THE FOREGOING ACTIONS, OR SEEK TO ADVISE,
ENCOURAGE OR INFLUENCE ANY PERSON WITH RESPECT TO THE VOTING OF (OR THE
EXECUTION OF A WRITTEN CONSENT IN RESPECT OF) ANY SHARES OF THE COMPANY, EXCEPT
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT;

 

6.8                                 PROPOSE ANY OTHER SLATE OF DIRECTORS FOR
ELECTION AT THE NEXT ANNUAL MEETING OTHER THAN THE INDIVIDUALS LISTED ON
EXHIBIT B (UNLESS THEY OR ANY OF THEM PRIOR THERETO SHALL HAVE RESIGNED OR BEEN
REMOVED AS A DIRECTOR OR OTHERWISE SHALL HAVE REFUSED TO STAND FOR ELECTION);

 

6.9                                 ASSIGN OR SELL, OR OFFER TO ASSIGN OR SELL,
ANY VOTING SHARES IN A PRIVATE RESALE TRANSACTION OR MAKE A GIFT OF ANY VOTING
SHARES UNLESS THE RECIPIENT OF SUCH SHARES AGREES TO BE BOUND BY THIS AGREEMENT
IN THE SAME MANNER THE SHAREHOLDER IS BOUND HERETO INCLUDING WITHOUT LIMITATION
THE PROVISIONS OF SECTIONS 5, 6 AND 9 OF THIS AGREEMENT;

 

6.10                           DISCLOSE PUBLICLY OR PRIVATELY, IN A MANNER THAT
COULD REASONABLY BE EXPECTED TO BECOME PUBLIC, ANY INTENTION, PLAN OR
ARRANGEMENT INCONSISTENT WITH THE FOREGOING; OR

 

6.11                           TAKE ANY ACTION CHALLENGING THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT.

 

7.                                       REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDER.  THE SHAREHOLDER REPRESENTS AND WARRANTS TO THE COMPANY THAT (A) IT
BENEFICIALLY OWNS THE NUMBER OF VOTING SHARES AS SET FORTH IN RECITAL A, AND
DOES NOT OWN, OR HAVE THE RIGHT TO ACQUIRE, ANY ECONOMIC OR VOTING RIGHTS WITH
RESPECT TO THE COMPANY’S SECURITIES EXCEPT WITH RESPECT TO THE VOTING SHARES OF
THE SHAREHOLDER; (B) IT HAS ALL REQUISITE POWER AND AUTHORITY TO EXECUTE,
DELIVER AND PERFORM THIS AGREEMENT; (C) THIS AGREEMENT CONSTITUTES A VALID AND
BINDING OBLIGATION OF THE SHAREHOLDER, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS;
AND (D) NO CONSENT, APPROVAL, WAIVER, AUTHORIZATION OR FILING, WHICH HAS NOT
ALREADY BEEN OBTAINED OR IS OTHERWISE CONTEMPLATED BY THIS AGREEMENT, IS
NECESSARY FOR THE EXECUTION, DELIVERY AND PERFORMANCE BY THE SHAREHOLDER OF THIS
AGREEMENT.

 

8.                                       REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND HUGHES PARTIES.  THE COMPANY AND THE HUGHES PARTIES SEVERALLY HEREBY
REPRESENT AND WARRANT TO THE SHAREHOLDER THAT (A) THE HUGHES PARTIES
BENEFICIALLY OWN AN AGGREGATE OF 3,187,623 VOTING SHARES, AND DO

 

4

--------------------------------------------------------------------------------

 

NOT OWN OR HAVE THE RIGHT TO ACQUIRE ANY ECONOMIC OR VOTING RIGHTS WITH RESPECT
TO THE COMPANY’S SECURITIES EXCEPT WITH RESPECT TO THE VOTING SHARES OF THE
HUGHES PARTIES; (B) THEY HAVE ALL REQUISITE POWER AND AUTHORITY TO EXECUTE,
DELIVER AND PERFORM THIS AGREEMENT; (C) THIS AGREEMENT CONSTITUTES A VALID AND
BINDING OBLIGATION OF THE COMPANY AND THE HUGHES PARTIES, ENFORCEABLE IN
ACCORDANCE WITH ITS TERMS; AND (D) NO CONSENT, APPROVAL, WAIVER, AUTHORIZATION
OR FILING, WHICH HAS NOT ALREADY BEEN OBTAINED OR IS OTHERWISE CONTEMPLATED BY
THIS AGREEMENT, IS NECESSARY FOR THE EXECUTION, DELIVERY AND PERFORMANCE BY THE
COMPANY OR THE HUGHES PARTIES OF THIS AGREEMENT.

 

9.                                       ADDITIONAL COVENANTS.  UNTIL THE VOTING
AGREEMENT TERMINATION DATE, THE COMPANY SHALL AND THE SHAREHOLDER AND THE HUGHES
PARTIES SHALL CAUSE THE COMPANY TO:

 

9.1                                 PROPOSE TO BE ELECTED AT THE NEXT ANNUAL
MEETING ALL DIRECTORS IDENTIFIED ON EXHIBIT B, EXCEPT TO THE EXTENT ANY SUCH
DIRECTOR PRIOR THERETO SHALL HAVE RESIGNED, BEEN REMOVED AS A DIRECTOR OR
OTHERWISE SHALL HAVE REFUSED TO STAND FOR ELECTION AT THE NEXT ANNUAL MEETING;

 

9.2                                 TAKE ALL REASONABLE ACTIONS NECESSARY TO
CAUSE THE TERMS OF THE DIRECTORS ASSIGNED TO CLASS I, CLASS II AND CLASS III AS
SPECIFIED ON EXHIBIT B TO TERMINATE ONLY AS ALSO SPECIFIED ON EXHIBIT B; AND

 

9.3                                 REFRAIN FROM INCREASING OR DECREASING THE
SIZE OF THE BOARD FROM EIGHT MEMBERS.

 

10.                                 MISCELLANEOUS PROVISIONS.  THE FOLLOWING
PROVISIONS ARE ALSO AN INTEGRAL PART OF THIS AGREEMENT:

 

10.1                           PUBLIC DISCLOSURES.  ON OR BEFORE THE DATE UPON
WHICH THE COMPANY SHALL BE REQUIRED TO FILE WITH THE SEC A CURRENT REPORT ON
FORM 8-K WITH RESPECT TO THIS AGREEMENT AND THE COMPANY ACTIONS CONTEMPLATED
HEREIN, THE COMPANY SHALL ISSUE A PRESS RELEASE IN A FORM PROVIDED TO THE HUGHES
PARTIES AND THE SHAREHOLDER PRIOR TO SUCH ISSUANCE.  EXCEPT AS SET FORTH IN THIS
AGREEMENT, NONE OF THE COMPANY, THE SHAREHOLDER OR THE HUGHES PARTIES SHALL MAKE
ANY PUBLIC ANNOUNCEMENT OR STATEMENT CONCERNING THIS AGREEMENT OR PUBLIC COMMENT
ON THIS AGREEMENT; PROVIDED, HOWEVER, THAT ANY PARTY MAY MAKE SUCH ANNOUNCEMENT,
STATEMENT OR COMMENT CONCERNING THIS AGREEMENT AS IS REQUIRED BY LAW, INCLUDING,
WITHOUT LIMITATION, ANY FILING REQUIRED BY APPLICABLE RULES OR REGULATIONS OF
THE SEC, OR THE RULES OF ANY STOCK EXCHANGE; PROVIDED, FURTHER, THAT THE COMPANY
MAY RESPOND TO SHAREHOLDER, ANALYST AND MEDIA INQUIRIES REGARDING THE TERMS OF
THE AGREEMENT.  THE COMPANY SHALL DISCLOSE THIS AGREEMENT IN A CURRENT REPORT ON
FORM 8-K FILED WITH THE SEC IN THE TIME PERIOD REQUIRED BY APPLICABLE LAW AND
FILE THIS AGREEMENT AS AN EXHIBIT TO SUCH FORM 8-K.

 

10.2                           SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL
BIND AND BENEFIT THE PARTIES’ RESPECTIVE HEIRS, SUCCESSORS, ASSIGNS, AFFILIATES,
OFFICERS, DIRECTORS, AGENTS, SERVANTS, EMPLOYEES AND ATTORNEYS.  NO PARTY SHALL
ASSIGN THIS AGREEMENT OR ANY RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT, WITH
RESPECT TO THE SHAREHOLDER, THE PRIOR WRITTEN CONSENT OF THE COMPANY, AND WITH
RESPECT TO THE COMPANY AND THE HUGHES PARTIES, THE PRIOR WRITTEN CONSENT OF THE
SHAREHOLDER.

 

5

--------------------------------------------------------------------------------

 

10.3                           No Assignment of Claims.  The parties represent
that they have not assigned or otherwise transferred any interests, rights,
causes of action, or claims they have, may have, or could have had against one
another.

 

10.4                           CAPTIONS; INTERPRETATION.  THE CAPTIONS USED IN
THIS AGREEMENT ARE INSERTED FOR REFERENCE PURPOSES ONLY AND SHALL NOT BE DEEMED
TO DEFINE, LIMIT, EXTEND, DESCRIBE, OR AFFECT IN ANY WAY THE MEANING, SCOPE OR
INTERPRETATION OF ANY OF THE TERMS OF THIS AGREEMENT OR ITS INTENT.  AS THE
CONTEXT REQUIRES, THE SINGULAR SHALL INCLUDE THE PLURAL, AND VICE VERSA; AND THE
MASCULINE SHALL INCLUDE THE FEMININE AND NEUTER, AND VICE VERSA.

 

10.5                           COUNTERPARTS.  THIS AGREEMENT MAY BE SIGNED IN
ANY NUMBER OF COUNTERPARTS WITH THE SAME EFFECT AS IF THE SIGNATURES UPON ANY
COUNTERPART WERE UPON THE SAME INSTRUMENT.  ALL SIGNED COUNTERPARTS SHALL BE
DEEMED TO BE ONE ORIGINAL.  A FACSIMILE TRANSMITTAL BEARING A PHOTOCOPIED
SIGNATURE SHALL BE DEEMED AN ORIGINAL.

 

10.6                           SEVERABILITY.  THE PROVISIONS OF THIS AGREEMENT
ARE SEVERABLE AND SHOULD ANY PROVISION BE VOID, VOIDABLE, UNENFORCEABLE OR
INVALID, SUCH PROVISION SHALL NOT AFFECT THE REMAINING PROVISIONS OF THIS
AGREEMENT.

 

10.7                           WAIVER OF BREACH.  ANY WAIVER BY ANY PARTY OF ANY
BREACH OF ANY KIND BY THE OTHER, WHETHER DIRECT OR IMPLIED, SHALL NOT BE
CONSTRUED AS A CONTINUING WAIVER OF, OR CONSENT TO, ANY SUBSEQUENT BREACH OF
THIS AGREEMENT.

 

10.8                           NO CONCESSION OF LIABILITY. THIS AGREEMENT SHALL
NOT IN ANY EVENT CONSTITUTE, BE CONSTRUED OR DEEMED A CONCESSION OR ADMISSION OF
ANY LIABILITY OR WRONGDOING OF ANY OF THE PARTIES.

 

10.9                           ENTIRE AGREEMENT; AMENDMENT.  WITH RESPECT TO THE
SUBJECT MATTER OF THIS AGREEMENT, THIS AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT AMONG THE PARTIES, AND IT MAY NOT BE ALTERED, MODIFIED OR AMENDED
EXCEPT BY WRITTEN AGREEMENT SIGNED BY THE COMPANY AND THE SHAREHOLDER.  WITH
RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, AND EXCEPT AS EXPRESSLY
PROVIDED IN THE AGREEMENT, ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS,
ARRANGEMENTS AND UNDERSTANDINGS AMONG THE PARTIES ARE HEREBY SUPERSEDED AND
RESCINDED.

 

10.10                     GOVERNING LAW; VENUE.  THIS AGREEMENT SHALL BE
INTERPRETED, CONSTRUED AND ENFORCED ACCORDING TO THE SUBSTANTIVE LAWS OF THE
STATE OF UTAH.  ANY DISPUTE ARISING OUT OF THIS AGREEMENT, OR THE BREACH
THEREOF, SHALL BE BROUGHT EXCLUSIVELY IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF UTAH, THE PARTIES EXPRESSLY CONSENTING TO
JURISDICTION AND VENUE IN SUCH COURTS.

 

10.11                     COSTS. EACH PARTY SHALL BEAR ITS OWN COSTS AND
EXPENSES IN CONNECTION WITH THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THIS
AGREEMENT OR THE EVENTS OR ACTIONS REFERRED TO HEREIN.

 

10.12                     ATTORNEY FEES.  IF ANY PARTY SHALL BREACH ITS
OBLIGATIONS UNDER THIS AGREEMENT, THE PARTY NOT IN BREACH SHALL BE ENTITLED TO
RECOVER ITS COSTS, EXPENSES AND REASONABLE ATTORNEY FEES FROM THE BREACHING
PARTY, WHETHER SUCH SUMS BE EXPENDED WITH OR WITHOUT SUIT AND

 

6

--------------------------------------------------------------------------------

 

regardless of the forum (including but not limited to recourse in connection
with any bankruptcy case, insolvency proceeding, or arbitration proceeding).

 

10.13                     CUMULATIVE REMEDIES; SPECIFIC PERFORMANCE.  THE RIGHTS
AND REMEDIES OF THE PARTIES SHALL BE CONSTRUED CUMULATIVELY, AND NONE OF SUCH
RIGHTS AND REMEDIES SHALL BE EXCLUSIVE OF, OR IN LIEU OR LIMITATION OF, ANY
OTHER RIGHT, REMEDY OR PRIORITY ALLOWED BY LAW, UNLESS SPECIFICALLY SET FORTH
HEREIN.  THE PARTIES ACKNOWLEDGE THAT IRREPARABLE HARM WOULD OCCUR IN THE EVENT
THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE
WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED AND THAT LEGAL REMEDIES
ALONE FOR BREACH OF THIS AGREEMENT MAY BE INADEQUATE.  THE PARTIES FURTHER
ACKNOWLEDGE THAT ANY PARTY BY WHOM THIS AGREEMENT IS ENFORCEABLE SHALL BE
ENTITLED TO INSTITUTE AND PROSECUTE PROCEEDINGS, EITHER AT LAW OR IN EQUITY, TO
SEEK SPECIFIC PERFORMANCE OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, TO
OBTAIN INJUNCTIVE RELIEF, OR TO OBTAIN ANY OTHER APPROPRIATE RELIEF OR REMEDY. 
ANY REQUIREMENTS FOR SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH
REMEDIES ARE HEREBY WAIVED.

 

10.14                     NOTICE.  ANY NOTICE OR OTHER COMMUNICATION REQUIRED OR
PERMITTED BY THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN RECEIVED (A) UPON
PERSONAL DELIVERY OR ACTUAL RECEIPT THEREOF OR (B) TWO BUSINESS DAYS AFTER SUCH
NOTICE SHALL BE FAXED TO THE PARTY AT THE FAX NUMBER STATED BELOW (OR SUCH OTHER
NUMBER AS THE PARTY SHALL PROVIDE IN WRITING) OR DEPOSITED IN THE UNITED STATES
MAIL, POSTAGE PREPAID AND CERTIFIED (RETURN RECEIPT REQUESTED) AND ADDRESSED TO
THE PARTY AT THE ADDRESS SET FORTH BELOW (OR SUCH OTHER ADDRESS AS THE PARTY
SHALL PROVIDE IN WRITING):

 

If to the Company, at the following addresses:

 

Jamon A. Jarvis

General Counsel, Chief Compliance Officer

NATURE’S SUNSHINE PRODUCTS, INC.

75 East 1700 South

Provo, Utah  84606

Fax:  801.342.4555

 

Nolan S. Taylor

DORSEY & WHITNEY LLP

136 South Main Street, Suite 1000

Salt Lake City, Utah  84101

Fax:  801.933.7373

 

If to the Shareholder, at the following addresses:

 

Steven D. Durbin

RED MOUNTAIN CAPITAL PARTNERS II, L.P.

10100 Santa Monica Blvd., Suite 925

Los Angeles, CA 90067

Fax:  310.432.0201

 

7

--------------------------------------------------------------------------------

 

David C. Lee

MUNGER, TOLLES & OLSON LLP

355 South Grand Avenue, 35th Floor

Los Angeles, CA 90071

Fax:  213.593.2885

 

If to the Hughes Parties, at the following addresses:

 

Pauline Hughes Francis

P.O. Box 1007

Salem, UT 84653

Fax:  801.423.3130

 

Eugene L. Hughes

P.O. Box 51755

Provo, UT 84605

 

Kristine F. Hughes

P.O. Box 51755

Provo, UT 84605

 

10.15                     MUTUAL PARTICIPATION IN DOCUMENT PREPARATION.  EACH
PARTY HAS PARTICIPATED MATERIALLY IN THE NEGOTIATION AND PREPARATION OF THIS
AGREEMENT AND ANY RELATED ITEMS; IN THE EVENT OF A DISPUTE CONCERNING THE
INTERPRETATION OF ANY PROVISION OF THIS AGREEMENT OR ANY RELATED ITEM, THE
RULE OF CONSTRUCTION TO THE EFFECT THAT CERTAIN AMBIGUITIES ARE TO BE CONSTRUED
AGAINST THE PARTY DRAFTING A DOCUMENT WILL NOT APPLY.

 

10.16                     COUNSEL REVIEW. THE PARTIES SEVERALLY ACKNOWLEDGE THAT
PRIOR TO EXECUTING THIS AGREEMENT, THEY HAVE EITHER REVIEWED THIS AGREEMENT WITH
THEIR LEGAL COUNSEL, OR HAVE HAD THE OPPORTUNITY TO REVIEW THIS AGREEMENT WITH
LEGAL COUNSEL OF THEIR CHOICE AND HAVE ELECTED TO FOREGO COUNSEL REVIEW.

 

10.17                     NO THIRD-PARTY BENEFICIARY INTERESTS.  NOTHING
CONTAINED IN THIS AGREEMENT IS INTENDED TO BENEFIT ANY PERSON OR ENTITY OTHER
THAN THE PARTIES TO THIS AGREEMENT AND THE PERSONS OR ENTITIES WHO ARE REFERRED
TO HEREIN; AND NO REPRESENTATION OR WARRANTY IS INTENDED FOR THE BENEFIT OF, OR
TO BE RELIED UPON BY, ANY PERSON OR ENTITY WHICH IS NOT A PARTY TO THIS
AGREEMENT.

 

10.18                     WARRANTY OF AUTHORIZATION.  EACH INDIVIDUAL EXECUTING
THIS AGREEMENT IN A REPRESENTATIVE CAPACITY WARRANTS THAT HE/SHE HAS COMPLETE
AND UNRESTRICTED AUTHORITY TO EXECUTE THIS AGREEMENT AND TO BIND THE PARTY FOR
WHICH SUCH INDIVIDUAL PURPORTS TO ACT.

 

10.19                     FURTHER ACTS.  UPON REASONABLE REQUEST, THE RESPECTIVE
PARTIES SHALL PERFORM SUCH FURTHER ACTS AND SHALL EXECUTE AND DELIVER SUCH
ADDITIONAL DOCUMENTS AND INSTRUMENTS AS SHALL BE NECESSARY OR DESIRABLE TO CARRY
OUT THE INTENT OF THIS AGREEMENT OR TO INDUCE COMPLIANCE WITH THIS AGREEMENT.

 

8

--------------------------------------------------------------------------------

 

10.20                     SURVIVAL OF REPRESENTATIONS.  ALL OF THE
REPRESENTATIONS, WARRANTIES, COVENANTS, AND RELEASES OF THE PARTIES SET FORTH IN
THIS AGREEMENT SHALL SURVIVE THE EXECUTION AND DELIVERY OF THIS AGREEMENT.

 

[Signature pages follow.]

 

9

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

 

 

NATURE’S SUNSHINE PRODUCTS, INC.

 

 

 

 

 

By:

 

 

Its:

 

 

 

 

 

 

 

 

Kristine F. Hughes

 

 

 

 

 

 

 

Eugene L. Hughes

 

 

 

 

 

 

 

Pauline Hughes Francis

 

 

 

 

 

RED MOUNTAIN CAPITAL PARTNERS II, L.P.

 

 

 

 

 

By:

 

 

 

Willem T. Mesdag

 

Its:

Partner

 

--------------------------------------------------------------------------------

 

EXHIBITS A-1 to A-4

 

Director Resignations

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Board Members

 

Status

 

Name

 

Class

 

Term Expiry

Appointee

 

Jeffrey D. Watkins

 

Class I

 

2010

Appointee

 

Willem Mesdag

 

Class I

 

2010

Appointee

 

Michael D. Dean

 

Class II

 

2011

Appointee

 

Douglas Faggioli

 

Class II

 

2011

Appointee

 

Candace King Weir

 

Class II

 

2011

Incumbent

 

Kristine F. Hughes

 

Class III

 

2012

Appointee

 

Pauline Hughes Francis

 

Class III

 

2012

Appointee

 

Albert Ricker Dowden

 

Class III

 

2012

 

--------------------------------------------------------------------------------