Exhibit 10.1


 


NATURE’S SUNSHINE PRODUCTS, INC.

INDEMNIFICATION AGREEMENT


 


This
Indemnification Agreement (this “Agreement”)
is made as of
                      ,
by and between Nature’s Sunshine Products, Inc., a Utah corporation (the “Corporation”), and                                   
(“Indemnitee”).


 


RECITALS


 


A.                                   The Corporation
recognizes that competent and experienced persons are increasingly reluctant to
serve or to continue to serve as directors or officers of corporations unless
they are protected by comprehensive liability insurance or indemnification, or
both, due to increased exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such
directors and officers;


 


B.                                     The statutes
and judicial decisions regarding the duties of directors and officers are often
difficult to apply, ambiguous, or conflicting, and therefore fail to provide
such directors and officers with adequate, reliable knowledge of legal risks to
which they are exposed or information regarding the proper course of action to
take;


 


C.                                     The Corporation
and Indemnitee recognize that plaintiffs often seek damages in such large
amounts and the costs of litigation may be so enormous (whether or not the case
is meritorious) that the defense and/or settlement of such litigation is often
beyond the personal resources of directors and officers;


 


D.                                    The Corporation
believes that it is unfair for its directors and officers to assume the risk of
huge judgments and other expenses which may occur in cases in which the
director or officer received no personal profit and in cases where the director
or officer was not culpable;


 


E.                                      The
Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in
certain circumstances to cover all possible exposure for which Indemnitee
should be protected.  The Corporation
believes that the interests of the Corporation and its shareholders would best
be served by a combination of such insurance and the indemnification by the
Corporation of the directors and officers of the Corporation;


 


F.                                      The Corporation’s
Articles of Incorporation and Bylaws, each as amended and in effect on the date
hereof, permit the Corporation to indemnify its directors and officers to the
maximum extent permitted under the Utah Revised Business Corporation Act (the “Utah Act”).


 


G.                                     The Board of
Directors has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but also promotes the best interests of the
Corporation and its shareholders;


 

















 


H.                                    The Corporation
desires and has requested Indemnitee to serve or continue to serve as a
director or officer of the Corporation free from undue concern for unwarranted
claims for damages arising out of or related to such services to the
Corporation; and


 


I.                                         Indemnitee is
willing to serve, continue to serve or to provide additional service for or on
behalf of the Corporation on the condition that he is furnished the indemnity
provided for herein.


 


AGREEMENT


 


NOW, THEREFORE, in consideration for
Indemnitee’s services as a director or officer of the Corporation and the
mutual covenants and agreements set forth herein, the Corporation and
Indemnitee hereby agree as follows:


 


1.                                       Indemnification.


 


(a)                                  Third Party
Proceedings.  The
Corporation shall indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
suit, or proceeding (including, but not limited to, any alternative dispute
resolution mechanism), whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation, as provided in
Section 1(b), below) and whether formal or informal by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, or any
subsidiary of the Corporation, or by reason of the fact that Indemnitee is or
was serving at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Corporation,
which approval shall not be unreasonably withheld) actually and reasonably
incurred by Indemnitee in defending such action, suit or proceeding (including,
but not limited to, any alternative dispute resolution mechanism) if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, Indemnitee had no reasonable cause to believe
Indemnitee’s conduct was unlawful.  The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that Indemnitee
did not act in good faith and in a manner which Indemnitee reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful.


 


(b)                                 Action or Suit by or in the Right of the Corporation.  The Corporation
shall indemnify Indemnitee if Indemnitee is or was a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation or any
subsidiary of the Corporation to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director or officer of the Corporation,
or any subsidiary of the Corporation, or by reason of the fact that Indemnitee
is or was serving at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees) and, to the fullest extent
permitted by law, amounts paid in settlement actually and reasonably incurred
by Indemnitee in connection 


 


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with
the defense or settlement of such action or suit if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Corporation, except that no indemnification shall be
made in respect of any claim, issue or matter as to which Indemnitee shall have
been adjudged to be liable to the Corporation unless and only to the extent
that the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the court shall deem proper.


 


(c)                                  Mandatory Payment of Expenses.  To the extent that Indemnitee has been
successful on the merits or otherwise (including, without limitation, a
dismissal with prejudice) in defense of any action, suit or proceeding referred
to in Subsections (a) and (b) of this Section 1, or in defense of any
claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including attorneys’ fees) actually and reasonably incurred by
Indemnitee in connection therewith.


 


(d)                                 Advancement of
Expenses.  The
Corporation shall pay all expenses incurred by Indemnitee in defending any
civil, criminal, administrative or investigative action, suit or proceeding
referenced in subsections (a) or (b) hereof (but not amounts actually paid in
settlement of any such action, suit or proceeding) in advance of the final
disposition of such action, suit or proceeding. 
Indemnitee hereby undertakes to repay such amounts advanced if, and to
the extent that, it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Corporation; provided,
however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified, any determination made
pursuant to Section 2(b) below that Indemnitee is not entitled to be
indemnified by the Corporation shall not be binding with respect to the
advancement of expenses by the Corporation and Indemnitee shall continue to be
eligible to have expenses advanced under this Section 1(d) and shall not be
required to reimburse the Corporation for any advance of expenses until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed).  The Corporation shall advance expenses
without regard to Indemnitee’s ability to repay such expenses.  Prior to the advancement of expenses pursuant
to this Section 1(d), Indemnitee shall provide the Corporation with a written
affirmation of Indemnitee’s good faith belief that Indemnitee has met the
applicable standard of conduct set forth in Sections 1(a) and 1(b) above.  The Corporation may require that Indemnitee
furnish an additional written statement(s) prior to each advancement of
expenses stating that Indemnitee undertakes to repay such amounts advanced if,
and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Corporation.


 


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2.                                       Procedure.


 


(a)                                  Notice/Cooperation
by Indemnitee.  Indemnitee
shall, as a condition precedent to Indemnitee’s right to be indemnified or have
expenses advanced under this Agreement, give the Corporation notice in writing
as soon as practicable of any action, suit or proceeding or the threat of any
action, suit or proceeding made against Indemnitee for which indemnification
will or could be sought under this Agreement, but in no event later than seven
(7) days after Indemnitee’s receipt of a summons, legal complaint or written
notice of any such action, suit or proceeding. 
Notice to the Corporation shall be given as provided in Section 9
below.  In addition, Indemnitee shall
give the Corporation such information and cooperation as the Corporation may
reasonably require and as shall be within Indemnitee’s power.


 


(b)                                 Authorization
and Reviewing Party.


 


(i)                                     Authorization.  Any
indemnification or advancement of expenses as set forth in Section 1 above
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of Indemnitee or
advancement of expenses is proper in the circumstances because Indemnitee has
met the applicable standard of conduct set forth in Sections 1(a) and 1(b)
above.


 


(ii)                                  Reviewing Party.  The
determination referenced in Section 2(b)(i) above shall be made, as selected by
the Board of Directors, by either: (1) a majority vote of the directors who are
not parties to such action, suit or proceeding, provided that such directors
constitute a quorum, or (2) a committee of two or more directors who are not
parties to such action, suit or proceeding, designated by majority vote of
directors (the directors who are parties to such action, suit or proceeding may
participate in the designation of the directors for the committee), even though
less than a quorum, or (3) if all of the directors are parties to such action,
suit or proceeding, an Independent Counsel (as defined in Section 8 below) in a
written opinion addressed to the Board of Directors and Indemnitee, or (4) the
vote of the shareholders owning at least a majority of the Corporation’s
outstanding Voting Securities (as defined in Section 8 below) on a
fully-diluted basis.


 


(iii)                               Reviewing Party following Change of Control.  Notwithstanding Section 2(b)(ii) above, upon
and following a Change of Control (as defined in Section 8 below) (other than a
Change of Control which has been approved by a majority of the Corporation’s
Board of Directors who were directors immediately prior to such Change of
Control) the rights of Indemnitee to indemnification or advancement of expenses
under this Agreement shall be determined by an Independent Counsel.  Such Independent Counsel, among other things,
shall render its written opinion to the Corporation’s Board of Directors and
Indemnitee as to whether and to what extent Indemnitee would be permitted to be
indemnified under applicable law and the Corporation agrees to abide by such
opinion.  The Corporation agrees to pay
the reasonable fees of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys’
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. 
Notwithstanding any other provision of this Agreement, the Corporation
shall not be required to pay the fees and expenses of more than one Independent
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Counsel shall be the Independent Counsel for any or all other 


 


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Indemnitees,
if any, unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Corporation in writing, or
(ii) an Indemnitee shall have provided to the Corporation a written statement
that such Indemnitee has reasonably concluded that there may be a conflict of
interest between such Indemnitee and the other Indemnitees with respect to the
matters arising under this Agreement.


 


(c)                                  Timing.  Subject to Section 2(b) above, any
indemnification and advances provided for in Section 1 shall be made no
later than thirty (30) days after receipt by the Corporation of a written
request from Indemnitee requesting such indemnification or advancement of
expenses pursuant to this Agreement.


 


(d)                                 No Presumptions.  In the event that any legal proceedings are
instituted by Indemnitee under this Agreement to secure a determination that Indemnitee
should be indemnified under this Agreement, it is the parties’ intention that
the question of Indemnitee’s right to indemnification shall be for the courts
to decide, and neither the failure of the Corporation (including its Board of
Directors, or any committee or subgroup of the Board of Directors, the
Independent Counsel or the Corporation’s shareholders) to have made a
determination pursuant to Section 2(b) above that indemnification of Indemnitee
is proper under the circumstances because Indemnitee has met the applicable
standard of conduct required by applicable law, nor an actual determination
pursuant to Section 2(b) above that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct. 
Absent such legal proceedings by Indemnitee, any determination made
pursuant to Section 2(b) above shall be conclusive and binding on the
Corporation and Indemnitee.


 


(e)                                  Notice to
Insurers.  If, at the
time of the receipt of a notice of an action, suit or proceeding pursuant to
Section 2(a) hereof, the Corporation has director and officer liability
insurance in effect, the Corporation shall give prompt notice of the
commencement of such action, suit or proceeding to its insurers in accordance
with the procedures set forth in the respective policies.  The Corporation shall thereafter make all
reasonable efforts to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such action, suit or proceeding in accordance
with the terms of such policies.


 


(f)                                    Selection of
Counsel.  In the event the Corporation
shall be obligated to indemnify or advance expenses as set forth in Section 1
above, the Corporation shall be entitled to assume the defense of such action,
suit or proceeding with counsel approved by Indemnitee (which approval shall
not be unreasonably withheld) upon the delivery to Indemnitee of written notice
of its election to do so.  After delivery
of such notice and approval of such counsel by Indemnitee, the Corporation will
not be liable to Indemnitee under this Agreement for any fees or expenses of
counsel subsequently incurred by Indemnitee with respect to the same action,
suit or proceeding; provided, however, that if either (i) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Corporation and Indemnitee in the conduct of any such defense, or
(ii) after the approval of the retention of such counsel by Indemnitee,
the Corporation shall not, in fact, have retained counsel to assume the defense
of such proceeding within a reasonable time after Indemnitee’s approval, then
Indemnitee shall notify the Corporation that it is again retaining its own
counsel and the Corporation shall again be obligated to pay the fees and
expenses of Indemnitee’s counsel to the extent not otherwise limited by any


 


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other
section of this Agreement. 
Notwithstanding this Section 2(f), Indemnitee may at any time retain its
own counsel at its sole expense.


 


3.                                       Additional
Indemnification Rights; Nonexclusivity.


 


(a)                                  Scope.  The Corporation hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by the
other provisions of this Agreement, the Corporation’s Articles of
Incorporation, the Corporation’s Bylaws or by statute.  In the event of any change, after the date of
this Agreement, in any applicable law, statute, or rule which expands the right
of a Utah corporation to indemnify a member of its board of directors, such
changes shall be, ipso facto, within the purview of
Indemnitee’s rights and Corporation’s obligations, under this Agreement.  In the event of any change in any applicable
law, statute or rule which narrows, eliminates or limits the right of a Utah
corporation to indemnify a member of its board of directors, such changes, to
the extent not otherwise required by such law, statute or rule to be applied to
this Agreement shall have no effect on this Agreement or the parties’ rights
and obligations hereunder.


 


(b)                                 Nonexclusivity.  The indemnification and
advancement of expenses provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the
Corporation’s Articles of Incorporation, its Bylaws, any agreement, any vote of
shareholders or disinterested directors, the Utah Act, or otherwise, both as to
action in Indemnitee’s official capacity and as to such action in another
capacity while holding such office.  The
indemnification and advancement of expenses provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though Indemnitee may have ceased to serve in such
capacity at the time of any action, suit or other covered proceeding.


 


4.                                       Partial
Indemnification.  If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Corporation for some or a portion of the expenses, judgments, fines or
settlements actually or reasonably incurred by Indemnitee in the investigation,
defense, appeal or settlement of any civil or criminal action, suit or
proceeding, but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or settlements to which Indemnitee is entitled.


 


5.                                       Mutual
Acknowledgement.  Both the
Corporation and Indemnitee acknowledge that in certain instances, the laws of
the United States or applicable public policy may prohibit the Corporation from
indemnifying its directors and officers under this Agreement or otherwise.  Indemnitee understands and acknowledges that
the Corporation has undertaken or may be required in the future to undertake
with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Corporation’s right under public policy to indemnify Indemnitee.


 


6.                                       Liability
Insurance.  To the
extent the Corporation maintains liability insurance applicable to directors or
officers, Indemnitee shall be covered by such policies in such a manner as to
provide Indemnitee the same rights and benefits as are accorded to the most
favorably


 


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insured
of the Corporation’s directors, if Indemnitee is a director, or of the
Corporation’s officers, if Indemnitee is not a director of the Corporation but
is an officer.  Notwithstanding the
foregoing, the Corporation shall have no obligation to obtain or maintain such
insurance.


 


7.                                       Exceptions.  Any other provision herein to
the contrary notwithstanding, the Corporation shall not be obligated pursuant
to the terms of this Agreement:


 


(a)                                  Excluded Acts
or Omissions.  (i) To
indemnify Indemnitee for Indemnitee’s acts, omissions or transactions from
which Indemnitee may not be indemnified under applicable law; or (ii) to
indemnify Indemnitee for Indemnitee’s intentional acts or transactions in
violation of the Corporation’s policies;


 


(b)                                 Claims
Initiated by Indemnitee.  To
indemnify or advance expenses to Indemnitee with respect to actions, suits or
proceedings initiated or brought voluntarily by Indemnitee and not by way of
defense, except (i) with respect to actions, suits or proceedings brought
to establish or enforce a right to indemnification under this Agreement or any
other agreement or insurance policy or under the Corporation’s Articles of
Incorporation or Bylaws now or hereafter in effect, (ii) in specific cases, if
the Board of Directors has approved the initiation or bringing of such action,
suit or proceeding, or (iii) as otherwise required under Part 9 of the Utah
Act, or successor statute, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be;


 


(c)                                  Lack of Good
Faith.  To indemnify Indemnitee for
any expenses incurred by Indemnitee with respect to any action, suit or
proceeding instituted by Indemnitee to enforce or interpret this Agreement, if
a court of competent jurisdiction determines that each of the material
assertions made by Indemnitee in such action, suit or proceeding was not made
in good faith or was frivolous;


 


(d)                                 Insured Claims;
No Duplicate Payments.  To
indemnify Indemnitee or advance expenses to the extent that Indemnitee has
otherwise already actually received payment of such amounts directly from any
third party, including, but not limited to, insurance companies under liability
insurance maintained by the Corporation; or


 


(e)                                  Claims Under
Section 16(b).  To
indemnify Indemnitee for expenses and the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any
successor statute.


 


8.                                       Construction
of Certain Phrases.


 


(a)                                  For purposes of
this Agreement, references to the “Corporation”
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors or officers, so that if
Indemnitee is or was a director or officer of such constituent corporation, or
is or was serving at the request of such constituent corporation as a director
or officer of another corporation, partnership, joint venture, trust or other
enterprise, Indemnitee shall stand in the same position under the


 


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provisions
of this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.


 


(b)                                 For purposes of
this Agreement, references to “other
enterprises” shall include employee benefit plans; references to “fines” shall include
any excise taxes assessed on Indemnitee with respect to an employee benefit
plan; and references to “serving
at the request of the Corporation” shall include any service as a
director or officer of the Corporation which imposes duties on, or involves services by,
such director or officer with respect to an employee benefit plan, its
participants, or beneficiaries; and if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to
have acted in a manner “not
opposed to the best interests of the Corporation” as referred to in
this Agreement.


 


(c)                                  For purposes of
this Agreement, a “Change
of Control” shall be deemed to have occurred if the shareholders of
the Corporation approve a merger or consolidation of the Corporation with or
into any other corporation or entity other than a merger or consolidation which
would result in the Voting Securities (as defined below) of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of the
Corporation approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of (in one transaction
or a series of transactions) all or substantially all of the Corporation’s
assets; provided, however, that following the
Corporation’s registration of the offering of any securities of the Corporation
under the Securities Act of 1933, as amended, and during such period as the
Corporation shall be subject to the reporting requirements of the Exchange Act,
a “Change of Control” shall also be deemed to have occurred if (i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Corporation or a corporation owned directly or indirectly by the
shareholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation, (A) who is or becomes the beneficial
owner, directly or indirectly, of securities of the Corporation representing
10% or more of the combined voting power of the Corporation’s then outstanding
Voting Securities (as defined below), increases his beneficial ownership of
such securities by 5% or more over the percentage so owned by such person, or
(B) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
more than 20% of the total voting power represented by the Corporation’s then
outstanding Voting Securities or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Corporation and any new director whose election by the Board
of Directors or nomination for election by the Corporation’s shareholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof.


 


(d)                                 For purposes of
this Agreement, “Independent Counsel”
shall mean an attorney or firm of attorneys who shall not have performed services
for the Corporation or Indemnitee within 


 


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the
last three (3) years and who shall be selected by Indemnitee and approved by
the Corporation (which approval shall not be unreasonably withheld).


 


(e)                                  For purposes of
this Agreement, “Voting Securities”
mean shall mean any securities of the Corporation that vote generally in the
election of directors.


 


9.                                       Certain
Settlement Provisions.  The
Corporation shall have no obligation to indemnify Indemnitee under this
Agreement for amounts paid in settlement of any action, suit or proceeding
without the Corporation’s prior written consent, which shall not be
unreasonably withheld.  The Corporation
shall not settle any action, suit or proceeding in any manner that would impose
any fine or other obligation on Indemnitee without Indemnitee’s prior written
consent, which shall not be unreasonably withheld.


 


10.                                 Notice.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
received (i) if delivered by hand, on the date of such delivery,
(ii) if mailed by United States certified or first-class mail, with
postage prepaid and addressed to the recipient, on the third business day after
the date postmarked and (iii) if sent overnight by any nationally-recognized
overnight delivery service, on the next business day after having been
deposited for delivery.  Addresses for
notice to either party are as shown on the signature page of this Agreement, or
such other address as a party to this Agreement shall have furnished to the
other party in writing.  All notices,
requests, demands or other communications under this Agreement addressed to the
Corporation shall be directed to the attention of the Corporation’s Chief Executive
Officer.


 


11.                                 Attorneys’ Fees.  In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including attorneys’ fees, actually and reasonably incurred by Indemnitee with
respect to such action, unless as a part of such action, the court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
as a basis for such action were not made in good faith or were frivolous.  In the event of an action instituted by or in
the name of the Corporation under this Agreement or to enforce or interpret any
of the terms of this Agreement, Indemnitee shall be entitled to be paid all
court costs and expenses, including attorneys’ fees, actually and reasonably
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee’s counterclaims and cross-claims made by Indemnitee in such action),
unless as a part of such action the court determines that each of Indemnitee’s
material defenses to such action were made in bad faith or were frivolous.


 


12.                                 Subrogation.  In the event of payment under this Agreement,
the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.


 


13.                                 Choice
of Law.  This Agreement shall be
governed by and its provisions construed in accordance with the laws of the
State of Utah, as applied to contracts between Utah residents entered into and
to be performed entirely within Utah, without regard to the conflict of law
principles thereof.


 


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14.                                 Consent
to Exclusive Jurisdiction.  The
parties to this Agreement expressly consent to the exclusive jurisdiction of,
and venue in, the state courts in Utah County in the State of Utah, or in the
event of exclusive federal jurisdiction, the courts of the District of Utah in
Salt Lake City in the State of Utah.


 


15.                                 Integration
and Entire Agreement.  This
Agreement sets forth the entire understanding between the parties hereto and
supersedes and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between the
parties hereto.


 


16.                                 Amendment
and Termination.  No
amendment, modification, termination or cancellation of this Agreement shall be
effective unless it is in writing signed by both the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.


 


17.                                 Successors
and Assigns.  This
Agreement shall be binding upon the Corporation and its successors and assigns,
and shall inure to the benefit of Indemnitee and Indemnitee’s estate, heirs,
legal representatives and assigns.


 


18.                                 Severability.  Nothing in this Agreement is intended to
require or shall be construed as requiring the Corporation to do or fail to do
any act in violation of applicable law. 
The Corporation’s inability, pursuant to court order or applicable law,
to perform its obligations under this Agreement shall not constitute a breach
of this Agreement.  Whenever possible,
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law or public policy, but if any provision
of this Agreement shall be held to be prohibited by or invalid under applicable
law or public policy, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.


 


19.                                 Titles
and Subtitles.  The titles
of the paragraphs and subparagraphs of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.


 


20.                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument.


 


21.                                 No
Construction as Employment Agreement.  Nothing contained in this Agreement shall be
construed as giving Indemnitee any right to continued employment by the
Corporation or any of its subsidiaries.


 


22.                                 Contribution.  In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for herein
is held by a court of competent jurisdiction to be unavailable to Indemnitee in
whole or in part, it is agreed that, in such event, the Corporation shall, to
the fullest extent permitted by law, contribute to the payment of Indemnitee’s
costs, charges and expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, in an amount that is
just and equitable in the circumstances, taking into account, 


 


10

















 


among
other things, contributions by other directors and officers of the Corporation
or others pursuant to indemnification agreements or otherwise; provided, that,
without limiting the generality of the foregoing, such contribution shall not
be required where such holding by the court is due to (i) the failure of
Indemnitee to meet the standard of conduct set forth in Section 1(a) and
Section 1(b), or (ii) any limitation on indemnification set forth in Section 7
hereof.


 


[Signature Page to Follow]


 


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IN WITNESS WHEREOF, the parties hereto have
executed this Indemnification Agreement as of the date first above written.


 


	
   

  	
   

  	
  NATURE’S
  SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  75
  East 1700 South

  
	
   

  	
   

  	
   

  	
  Provo,
  Utah 84606

  
	
   

  	
   

  	
   

  	
   

  
	
  AGREED
  TO AND ACCEPTED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  INDEMNITEE:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
						



 


[Signature Page to
Indemnification Agreement]