**Exhibit10.2**

 

**NATURE’SSUNSHINE PRODUCTS, INC.**

**SUPPLEMENTAL ELECTIVE DEFERRAL PLAN**

(restated January 1, 2008)

 

This is theSupplemental Elective Deferral Plan of Nature’s Sunshine Products, Inc. asrestated effective January 1. 2008. It is effective as of January 1, 2008 except as otherwise providedin this Plan.

 

This Plan asherein restated shall govern the benefits of any Member whose employmentterminates on or after January 1, 2008 and the terms of this Plan as itexisted prior to its restatement effective January 1, 2008 shall bedisregarded.

 

This Plan isintended to comply with the provisions of Code Section 409A.  For the period from January 1, 2005through December 31, 2007, the Plan shall be administered and interpretedin accordance with a good faith interpretation of Code Section 409A andthe guidance issued by the government relating thereto so as to avoid adversetax consequences to participants in the Plan, including any transitionalprovisions of such guidance, notwithstanding the provisions of the Plan as itexisted previous to this restatement. Subject to the foregoing sentences of this paragraph, the benefits of aMember whose employment terminates prior to January 1, 2008 shall begoverned by the Plan as it existed at the time the employment terminated.

 

**ARTICLE I**

 

**NAME**

 

**1.1          Name**.  The Plan shall be known as the “NATURE’SSUNSHINE PRODUCTS, INC. SUPPLEMENTAL ELECTIVE DEFERRAL PLAN” and is hereinaftersometimes referred to as the “Plan”.

 

**ARTICLE II**

 

**PURPOSE**

 

**2.1          Purpose**.  This Plan has been created for the primarypurpose of providing certain selected employees and non-employee directors ofthe Employer with the ability to defer the receipt of income, including amountsthat cannot be deferred under the Tax Deferred Retirement Plan of the Employerdue to limitations in the law.  The Planis intended to be an unfunded plan maintained primarily for the purpose ofproviding deferred compensation for a select group of management or highlycompensated employees for purposes of the Employee Retirement Income SecurityAct of 1974, as amended (“ERISA”) and shall be administered as such.

 

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**ARTICLE III**

 

**DEFINITIONS**

 

When used herein,the following words shall have the meanings indicated, unless the contextclearly indicates otherwise:

 

**3.1          Account**.  The words “ACCOUNT” shall mean the DeferralAccount described in Section 5.2 and the Employer Contribution Accountdescribed in Section 5.3.

 

**3.2          Beneficiary**.  The word “BENEFICIARY” shall mean the personor persons entitled to receive benefits upon the death of a Member under thisPlan.

 

**3.3          Code**.  The word “CODE” shall mean the InternalRevenue Code of 1986, as amended.

 

**3.4          Commencement Date.**  Thewords “Commencement Date” with respect to benefits payable on account of theTermination Date of the Member shall mean the Termination Date of the Member,provided, however, if the Member is a Specified Employee as of the TerminationDate, then the Commencement Date shall be the date that is six months after theTermination Date.

 

(a)           “Specified Employee” means a Member who as of theTermination Date of the Member is considered a Key Employee of the Employer ora Related Employer, any stock of which is publicly traded (whether on anestablished securities market or otherwise) as of the Termination Date.

 

(b)           A Member isconsidered a “Key Employee”******for the entire 12 month period beginning on a January 1(this January 1 is referred to herein as the applicable effective date) ifthe Member meets the requirements of Code Section 416(i)(1)(A)(i), (ii),or (iii) (applying the applicable regulations thereunder but disregardingCode Section 416(i)(5)) at anytime during the 12-month period ending onthe September 30 immediately preceding the applicable effective date.  For example, if the Member met the applicablerequirements of Code Section 416(i) listed above at anytime duringthe 12 month period from October 1, 2006 to September 30, 2007, thenfor the entire 2008 calendar year the Member will be considered a Key Employee.

 

(c)           “Related Employer” means (i) a corporation which is a member of acontrolled group of corporations (within the meaning of Section 1563(a) ofthe Code determined without regard to Sections 1563(a)(4) and (e)(3)(C) thereof)which includes the Employer, and (ii) any trade or business (whether ornot incorporated) which is under common control (as defined in Section 414(c) ofthe Code and regulations thereunder) with the Employer.

 

The words “CommencementDate” with respect to benefits payable on account of the Disability of theMember shall mean the date as of which the Plan Administrator determines thatthe Member has suffered a Disability.  “Disability”for this purpose and for purposes of Article VII means an impairment which

 

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results in theMember being disabled within the meaning of Section 409A(a)(2)(C) ofthe Code as determined by the Plan Administrator.

 

**3.5          Compensation**.  The word “COMPENSATION” with respect toemployees of the Employer has the following meaning:

 

(a)           “Compensation”shall mean the total of all amounts paid by the Employer by reason of servicesperformed by the Member, including any bonus pay.

 

(b)           Notwithstandingthe foregoing, the Member’s Compensation shall be determined without takinginto account any of the following:

 

(1)                                  Contributionsor payments by the Employer for or on account of the Member under any employeebenefit plan, including but not limited to any qualified pension plan and anyhealth or welfare plan;

 

(2)                                  Compensationthat is not subject to employer income tax withholding under Code Section 3402(or any successor thereof);

 

(3)                                  Incomecaused by the exercise of stock options;

 

(4)                                  Incomeattributable to benefits received under any long term disability planmaintained by the Company; and

 

(5)                                  Automobile,moving or entertainment allowances; reimbursements for medical, professional ortransportation expenses; excess group term life insurance coverage or otherlife insurance coverage; tuition refunds; expense reimbursements and otherfringe benefits including such things as physical exams, Christmas gifts andservice awards.

 

(c)           Notwithstanding the foregoing, aMember’s Compensation shall include contributions made on behalf of the Memberunder a salary reduction agreement to any plan of the Employer qualifying underCode Sections 125, 401(k), or 408(k), and any amounts deferred at the electionof the Member pursuant to the terms of this Plan.

 

The word “COMPENSATION”with respect to members of the Board of Directors of the Employer who are notemployees of the Employer shall mean the total amount paid for services as amember of the Board of Directors of the Employer.

 

**3.6          Deferral Account**.  The words “DEFERRAL ACCOUNT” means theaccount maintained on the books of the Employer as described in Section 5.2.

 

**3.7          Effective Date**.  The original “EFFECTIVE DATE” of this Planwas May 15, 1998.  The effectivedate of this restatement is January 1, 2008.

 

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**3.8          Eligible Person. **The word “Eligible Person”means any member of the Board of Directors of the Employer who is not anemployee of the Employer, each employee who is an officer of the Employer, andeach employee who is in an employment position that has the title ofdirector.  In addition, Eligible Personincludes any other employee who is a member of a select group of management orhighly compensated employee for purposes of ERISA designated as eligible by thePlan Administrator; provided, however, such employee shall be an EligiblePerson only so long as so designated by the Plan Administrator whichdesignation can be changed by the Plan Administrator at anytime in its solediscretion.

 

If the PlanAdministrator determines that an employee who is a Member hereunder is nolonger a member of a select group of management or highly compensated employeesdescribed in Section 201(2) of ERISA, such Member shall cease to bean Eligible Person hereunder and any deferral elections of the Member hereundershall cease at the end of the year during which the determination is made.

 

**3.9          Employer**.  The word “EMPLOYER” shall mean Nature’sSunshine Products, Inc. or any successor thereof, if its successor shalladopt this Plan.

 

**3.10        Employer Contribution Account**.  The words “EMPLOYER CONTRIBUTION ACCOUNT”shall mean the account maintained on the books of the Employer as described in Section 5.3.

 

**3.11        Member**.  The word “MEMBER” means a person who hasbecome a participant in the Plan.

 

**3.12        Plan**.  The word “PLAN” shall mean the SupplementalElective Deferral Plan set forth in and by this document, as the same may beamended from time to time.

 

**3.13        Plan Administrator**.  The words “Plan Administrator” shall mean theperson or committee designated by the Employer to administer this Plan.  In the absence of an effective designation,it shall mean the Employer.

 

**3.14        Plan Year**.  The words “PLAN YEAR” shall mean the calendaryear.

 

**3.15        Tax Deferred Retirement Plan. **The words “TAX DEFERREDRETIREMENT PLAN” shall mean the Nature’s Sunshine Products, Inc. TaxDeferred Retirement Plan, and any successor to that Plan.

 

**3.16        Termination Date**.  The words “TERMINATION DATE” mean the date as of which the PlanAdministrator reasonably determines that no further personal services to theEmployer or any Affiliate, whether as an employee or otherwise, will be providedby the Member (or reasonably determines that the anticipated level of bona fideservices by the Member to be performed after such date is no more than 20percent of the average level of services provided during the immediatelypreceding 36-month period (or the full period during which services wererendered if less than 36 months)).  Forpurposes of this determination, the Member shall be treated as continuing toprovide personal services for purposes of this Plan during the period up to sixmonths that the Member is on military leave, sick leave or other bona fideleave of absence, or treated as continuing to provide personal service duringthe entire 

 

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period of such leave if the Member retains the right to reemploymentunder applicable law or by contract at the end of such leave.

 

“Affiliate” means (i) a corporation which is a member of acontrolled group of corporations (within the meaning of Section 1563(a) ofthe Code determined without regard to Sections 1563(a)(4) and (e)(3)(C) thereof)which includes the Employer, provided that the phrase “more than 50 percent”shall be substituted for the phrase “at least 80 percent” in Section 1563(a)(1) ofthe Code, and (ii) any trade or business (whether or not incorporated)which is under common control (as defined in Section 414(c) of theCode as modified by Section 415(h) of the Code and regulationsthereunder) with the Employer.

 

**3.16      Year of Employment**.  The words “Year of Employment” from a dateshall mean a period of service for the Employer of one full year from suchdate.  Periods of service will beaggregated, whether or not such periods were completed consecutively, using adecimal date chart selected by the Plan Administrator.

 

**3.17        Unforeseeable Emergency.**  The words “Unforeseeable Emergency” of aMember mean a severe financial hardshipto the Member resulting from an illness or accident of the Member, the spouseof the Member, the beneficiary of the Member or a dependent of the Member (asdefined in Code Section 152, without regard to Code Sections 152(b)(1),(b)(2) and (d)(1)(B)), loss of the Member’s property due to casualty, orother similar extraordinary and unforeseeable circumstances arising as a resultof events beyond the control of the Member that is determined by the PlanAdministrator to be an “unforeseeable emergency” within the meaning of Code Section 409A(a)(2)(B)(ii).

 

**ARTICLE IV**

 

**ELIGIBILITY**

 

**4.1          Participation**.  An Eligible Person shall be entitled to makeelective deferrals in accordance with the terms of this Plan.  A Member shall cease to be eligible to makefurther elective deferrals under this Plan as of the end of the year duringwhich the Member ceases to be an Eligible Person.

 

**ARTICLE V**

 

**ACCOUNTS**

 

**5.1          Deferral Election.**

 

(a)           To the extent permitted by (b) below,each Member may elect to defer the receipt of a portion of his or herCompensation.  The Plan Administrator may provide forseparate elections with respect to regular salary and bonus payments.  The election for a year must be madeprior to the beginning of that year during which the services are performed towhich the Compensation relates and it cannot be modified on or after thebeginning of such year 

 

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with respect to thatyear.  An election that is made or iseffective for the immediately preceding year shall remain effective for thenext year (and cannot be modified on or after the beginning of that next yearwith respect to that next year) if it is not affirmatively cancelled or amendedby the Member in writing under the applicable rules and proceduresestablished by the Plan Administrator prior to the first day of that next year.

 

Notwithstandingthe forgoing, a Member who first becomes a Member during a year may make anelection within 30 days of the date he or she first becomes a Member whichelection shall apply to Compensation relating to services performed after theelection is made. For purposes of determining when a Member first becomes aMember of the Plan, any other plan of the Employer that must be aggregated withthis Plan for purposes of applying the requirements of Code Section 409Ashall be treated as part of this Plan.

 

An election shallbe in writing and shall conform to the applicable rules and proceduresestablished by the Plan Administrator.

 

(b)           A Member who is an employee of theEmployer may not elect to defer more than 75 percent of the regular salary ofthe Member which relates to the year to which the election relates and may notelect to defer more than 75 percent of the bonus payments which relate to theyear to which the election relates.

 

(c)           Notwithstanding therestrictions on the modification of elections of (a) above, the deferralelections of a Member who elects under Section 6.5 to receive adistribution upon an Unforeseeable Emergency shall be cancelled as of the dateof the distribution under Section 6.5. The cancellation shall be applicable to all payroll periods of the yearending after the cancellation.  Followinga cancellation, no further elections of deferral may be made with respect toCompensation for services rendered during that year.

 

**5.2          Establishment and Determination ofElective Account**.  TheEmployer shall establish an Elective Deferral Account on its books for eachMember. The Deferral Account balance of a Member shall be adjusted as follows:

 

(a)           Under rules established by thePlan Administrator, the Employer shall credit to the Deferral Account of theMember the amount specified in a proper election of the Member under Section 5.1at the time such amount is removed from the Compensation of the Member andinvested by the Employer. The Compensation actually paid to the Member for theperiod by the Employer shall be reduced by the amount credited to the DeferralAccount under this Section 5.2(a).

 

(b)           As of the end of each applicableperiod as established by the Plan Administrator (which may be daily or monthlyor some other period selected from time to time by the Plan Administrator), andas of the date the benefit is payable under Article VII, the Employershall adjust the Deferral Account of a Member under rules established bythe Plan Administrator to reflect the increase or decrease that would have beenincurred by the account during that applicable period if the account had beeninvested for the applicable period in the investments selected in advance bythe Member from those made available by the Plan Administrator, or to 

 

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the extent noselection has properly been made, by adjusting the account to reflect theincrease or decrease that would have been incurred by the account for theapplicable period if the account had been invested for the applicable period inthe fixed income fund selected in its sole discretion by the PlanAdministrator.

 

(c)           The Plan Administrator shallprescribe such rules as it deems necessary or appropriate regarding theadjustments to be made to the Deferral Accounts to reflect the timing ofinvestment elections made by the Member and the timing of amounts beingcredited or debited to the Deferral Accounts.

 

The DeferralAccount balance of a Member shall be debited with the amount paid to or onbehalf of the Member under this Plan related to that account.

 

**5.3          Establishment and Determination of EmployerContribution Account**. The Employer shall establish an Employer Contribution Account on itsbooks for each Member. The Employer Contribution Account of a Member shall beadjusted as follows:

 

(a)           At the end of each Plan Year (and atsuch other times, if any, during a Plan Year as the Employer in its discretionshall select), the Employer shall credit to the Employer Contribution Accountof a Member such amount, if any, as the Employer in its sole discretion maydetermine, which credit for a Plan Year for a Member may be zero and whichcredit for a Plan Year may vary among the Members as the Employer in its solediscretion may determine (including the possibility of no credit for someMembers and varying amounts for other Members).

 

(b)           As of the end of each applicableperiod as established by the Plan Administrator (which may be daily or monthlyor some other period selected from time to time by the Plan Administrator), andas of the date the benefit is payable under Article VII, the Employershall adjust the Employer Contribution Account of a Member under rules establishedby the Plan Administrator to reflect the increase or decrease that would havebeen incurred by the account for the applicable period if the account had beeninvested for the applicable period in the investments selected in advance bythe Member from those made available by the Plan Administrator, or to theextent no selection has properly been made, by adjusting the account to reflectthe increase or decrease that would have been incurred by the account for theapplicable period if the account had been invested for the applicable period inthe fixed income fund selected in its sole discretion by the PlanAdministrator.

 

(c)           The Plan Administrator shallprescribe such rules as it deems necessary or appropriate regarding theadjustments to be made to the Employer Contribution Account to reflect thetiming of investment elections made by the Member and the timing of amountsbeing credited or debited to the Employer Contribution Account.

 

The EmployerContribution Account balance of a Member shall be debited with the amount paidto or on behalf of the Member under this Plan related to that account.

 

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**5.4          Statement of Accounts**.  The Plan Administrator shall provide to eachMember within one hundred twenty (120) days after the close of each Plan Year,a statement in such form as the Plan Administrator selects setting forth thebalance, if any, in the Accounts of the Member as of the last day of the PlanYear just ended.

 

**5.5          Accounting Device Only**.  The Deferral Account and the EmployerContribution Account shall be utilized solely as a device for the measurementand determination of the amounts to be paid to the Member under this Plan.  The Accounts shall not constitute or betreated as a trust fund of any kind.

 

**ARTICLE VI**

 

**VESTING IN EMPLOYER CONTRIBUTIONS**

 

**6.1          Vesting in Employer Contributions**.  The Employer Contribution Account of a Memberwill be subject to a vesting schedule.  AMember shall be vested in his or her Employer Contribution Account inaccordance with the following schedule based upon Years of Employment from January 1,2008:

 

| **Years of  Employment** | ** ** | **Vesting  Percent** | ** ** |
|--------------------------|------------|----------------------|------------|
|                     |       |                 |       |
| Less than 1              |       | -0-                  |       |
| 1                        |       | 33                   | %          |
| 2                        |       | 67                   | %          |
| 3 or more                |       | 100                  | %          |

 

Notwithstandingthe foregoing, a Member shall be fully vested in all amounts credited to his orher Employer Contribution Account in the event of:

 

(a) Death ofthe Member; or

 

(b) Terminationof the employment of the Member on account of Disability or after attainment ofage 65.

 

The word “Disability”for purposes of this Article VI shall mean any medically determinablephysical or mental impairment which is considered a “disability” under theterms of the most recent long term disability plan or policy of the Employer.

 

**ARTICLE VII**

 

**PAYMENT OF ACCOUNTS**

 

**7.1          Benefit Payment**.  Upon the earlier of the Disability of theMember or the Termination Date of a Member, the Member shall be entitled to: (1) apayment equal to the amount 

 

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credited tohis/her Elective Deferral Account as of his or her Commencement Date, and (2) apayment equal to the vested portion of his/her Employer Contribution Account asof the Commencement Date.  The payment shall commence to be paid within60 days of the Commencement Date on a date selected by the Plan Administratorin its sole discretion.

 

**7.2          Form of Payment**.  The amount due the Member shall be paid inone of the following forms as selected by the Member in his or her initialelection form or in a subsequent election that is valid in accordance with theterms of the Plan as it existed at the time the election was made:

 

(a)  substantially equal monthly installmentsover three years; or

 

(b)  substantially equal monthly installments overfive years; or

 

(c)  a single lump sum payment.

 

In the eventpayment is made in installments, the Account used to measure the amount due theMember shall continue to be adjusted for interest under rules prescribedby the Plan Administrator in accordance with the provisions of Section 5.2(b) andSection 5.3(b).  In the event noform of payment is properly elected, the amount due the Member shall be paid inthe form of installment payments over five years.  Notwithstanding the foregoing, in the eventthe sum of the accounts of the Member at the Commencement Date does not exceedthe limit of Code Section 402(g)(1)(B), determined as of the CommencementDate, such benefits shall be paid in the form of a single lump sum payment tothe Member without regard to the form of payment elected by the Member.

 

**7.3          Changesin Form of Payment**.  Prior to January 1, 2009, aMember may change his or her election of the form of payment for a CommencementDate to another form available under Section 7.2 by submitting a writtenelection form to the Plan Administrator; provided such election shall not beeffective for a Commencement Date that is less than 12 months from the date theelection form was received by the Plan Administrator unless it is received atleast 30 days before the Termination Date and the Plan Administrator, in itssole discretion, approves the form of payment selected.  Notwithstanding the forgoing, a Member maynot change a form of election on or after January 1, 2008 with respect topayments that would otherwise be received in 2008 or to cause payments to bemade in 2008.

 

On and after January 1,2009, a Member may changehis or her election of the form of payment to another form available under Section 7.2by submitting a written election form to the Plan Administrator; provided

 

(a)           such election shall not take effect for a CommencementDate that is less than 12 months from the date the election form was receivedby the Plan Administrator; and

 

(b)           if the Commencement Date is based upon a Termination Date,then notwithstanding any other provisions of this Plan the payment or paymentsto which the Member is entitled shall not commence to be paid to the Memberuntil 5 years from the date that the payment or payments would otherwise havecommenced if the election to change the form of payment had not been made.

 

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**7.4          Paymentto Beneficiary. **In the eventa Member dies before receiving his or her full benefit under this Plan, theEmployer shall pay any remaining amount due on behalf of the Member hereunderto the Beneficiary of the Member.  Suchpayment shall be in the form of a single cash payment.  The payment shall be paid within 60 days ofthe date of death on such date as the Plan Administrator in its sole discretionshall select.  A Member may designate aBeneficiary on the form prescribed by and delivered to the PlanAdministrator.  If no Beneficiary isproperly designated under this Plan, then the Beneficiary shall be the personentitled under the terms of the Tax Deferred Retirement Plan to receive anydeath benefits payable under the Tax Deferred Retirement Plan on account of thedeath of that Member.  If there is noBeneficiary after application of the foregoing provisions of this Section, thenthe payment shall be made to the estate of the Member.  If under these rules the benefits arepayable to the estate of the Member, and either the Plan Administrator cannotlocate a qualified representative of the deceased Member’s estate, or ifadministration of the estate is not otherwise required, the Plan Administratorin its discretion may make the distribution to the deceased Member’s heirs atlaw, determined in accordance with the law of the State of the Member’sdomicile in effect as of the date of the Member’s death.

 

**7.5          DistributionDuring Employment.  **Priorto the Commencement Date, a Member may request a distribution of the amountcredited to his or her Account in the event of an Unforeseeable Emergency.  The Plan Administrator shall determine, in anon-discriminatory manner, whether a Member has an UnforeseeableEmergency.  A distribution may be madeunder this Section only if such distribution does not exceed the amountrequired to meet the immediate financial need created by the UnforeseeableEmergency as determined by the PlanAdministrator applying the provisions of the applicable regulations under Code Section 409A(taking into account the tax costs of the distribution) and is notreasonably available from other resources of the Member as determined by the Plan Administrator applying the provisions of theapplicable regulations under Code Section 409A, includingreimbursement or compensation from insurance, liquidation of assets to theextent the liquidation does not cause severe financial hardship, and thecancellation of deferrals under this Plan and any other plan of the Employer.

 

**7.6          Discretionary Distribution for Taxes*.***The Plan is intended to comply with theprovisions of Code Section 409A.  In the event the Plan fails to meetthe requirements of Code Section 409A and the regulations promulgatedthereunder, the Plan Administrator may, in the Plan Administrator’s solediscretion, distribute to the affected Member(s) the amount(s) suchMember(s) are required to include in income as a result of such failure ofthe Plan to comply with Code Section 409A and such regulations.  In the event of such a distribution, theaffected Member(s)’s benefits hereunder shall be adjusted to reflect the valueof the amount so distributed.

 

Atthe discretion of the Plan Administrator, the amount necessary to pay the:  (A) Federal Insurance Contributions Acttax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) (the “FICAAmount”), and/or (B) Railroad Retirement Act tax imposed under CodeSections 3201, 3211, 3231(e)(1) and 3231(e)(8) (the “RRTA Amount) oncompensation deferred under the Plan, may be distributed to the affected Memberand the benefits of such Member hereunder shall be adjusted to reflect thevalue of the amount so distributed.  Additionally, in its discretion, the Plan Administrator may provide forthe distribution to the affected Member of the amount necessary to pay theincome tax at source on wages imposed under Code Section 3401 or thecorresponding withholding provisions of applicable state, local, or foreign taxlaws as a result of the distribution of the FICA Amount or RRTA 

 

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Amount, and to pay the additional income taxat source on wages attributable to the pyramiding Code Section 3401 wagesand taxes.  In no event however, shallthe total amount distributed pursuant to this paragraph to a particular Memberwith respect to the Member’s deferrals under the Plan exceed the aggregate ofthe FICA Amount and the RRTA Amount with respect to such deferrals, and theincome tax withholding related to such FICA Amount or RRTA Amount.  The benefits of such Member hereunder shallbe adjusted to reflect the value of the amount so distributed.

 

**ARTICLE****VIII**

 

**ADMINISTRATION OF THE PLAN**

 

**8.1          Plan Administration**.  The Plan Administrator shall have theauthority to interpret the Plan and issue such administrative procedures as itdeems appropriate.  The PlanAdministrator shall have the duty and responsibility of maintaining records,making the requisite calculations and disbursing the payments hereunder.  The Plan Administrator’s interpretations,determinations, regulations and calculations shall be final and binding on allpersons and parties concerned.

 

**8.2          Claims Procedure.**  The Plan Administrator shall establishreasonable procedures for the submission and review of claims with respect tobenefits under the Plan.  A copy of theclaims procedures for the Plan shall be available from the Plan Administrator.  The failure of a claimant to follow theclaims procedures with respect to a claim, including the review procedures,shall result in the loss of the right to bring an action in court with respectto the claim.

 

**8.3          Amendment andTermination.**  The Employer may amend or terminate the Planat any time, provided, however, that (1) no such amendment or terminationshall adversely affect the benefit to which a Member is entitled under Article VIIprior to the date of such amendment or termination unless the change isnecessary to keep the Plan in compliance with the applicable provisions of thelaw, including Code Section 409A, and (2) no such amendment ortermination shall cancel or revoke an election made by the Member under Section 5.2for the year in which the amendment or termination occurs prior to the end ofthat year unless to do so is determined by the Employer in good faith not toviolate Code Section 409A.  In theevent of a termination, benefits shall be retained under the terms of the Planuntil the Member reaches his or her Commencement Date under the Plan (or theearlier death of the Member); provided, however, the Employer may elect to makedistribution earlier to the Member if the Employer determines in good faiththat such distribution does not constitute a violation of  Code Section 409A.  The liabilities of this Plan relating to aMember may in the discretion of the Employer be transferred to another plan orprogram of the Employer, provided that the Employer determines in good faiththat the transfer and the provisions of the plan or program receiving thetransfer applicable to the transfer do not result in any change to the benefitsbeing transferred that would cause such benefits to be subject to incometaxation under the Code prior to distribution to the Member.

 

Exceptas otherwise expressly provided in other sections of this Plan, the payment ofany benefits under the Plan may not be accelerated, including upon theamendment or termination of the Plan or a person ceasing to be an EligiblePerson, except in a manner that the Employer determines in good faith does notviolate Code Section 409A.

 

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**8.4          Payments**.  Subject to Section 8.9, the Employerwill pay all benefits arising under this Plan. There shall be deducted from each payment any federal, state or localwithholding or taxes or charges which may be required under applicable law asdetermined by the Employer.

 

**8.5          Non-assignability of Benefits**.  The benefits payable hereunder or the rightto receive future benefits under the Plan may not be anticipated, alienated,pledged, encumbered, or subjected to any charge or legal process, and if anyattempt is made to do so, or a person eligible for any benefits becomesbankrupt, the interest under the Plan of the person affected may be terminatedby the Plan Administrator which, in its sole discretion, may cause the same tobe held or applied for the benefit of one or more of the dependents of suchperson or make any other disposition of such benefits that it deemsappropriate.

 

**8.6          Status of Plan**.  Nothing contained herein shall be construedas providing for assets to be held in trust or escrow or any other form ofasset segregation for the Member or for any other person or persons to whombenefits are to be paid pursuant to the terms of this plan, the Member’s onlyinterest hereunder being the right to receive the benefits set forthherein.  To the extent any personacquires a right to receive benefits under this Plan, such right shall be nogreater than the right of any unsecured general creditor of the Employer.

 

**8.7          Indemnification**.  To the extent permitted by law, the Employershall indemnify each member of the Board of Directors and any other employee ofthe Employer to whom duties are assigned with respect to this Plan, againstexpenses (including any amount paid in settlement) reasonably incurred byhim/her in connection with any claims against him/her by reason of his/herconduct in the performance of his/her duties under the Plan, except in relationto matters as to which he/she acted fraudulently or in bad faith in theperformance of such duties.  This rightof indemnification shall be in addition to any other right to which the Boardor other person may be entitled as a matter of law or otherwise, and shall passto the estate of a deceased person.

 

**8.8          Reports and Records**.  The Plan Administrator and those to whom thePlan Administrator has delegated duties under the Plan shall keep records ofall their proceedings and actions and shall maintain books of account, records,and other data as shall be necessary for the proper administration of the Planand for compliance with applicable law.

 

**8.9          Finances**.  The costs of the Plan shall be borne by theEmployer.  The rights of the Member (orof his Beneficiary) to benefits under the Plan shall be solely those of anunsecured general creditor of the Employer. Any assets acquired by or held by the Employer or set aside in a trustthat may be established by the Employer shall not be deemed to be held assecurity for the performance of the obligations of the Employer under thisPlan.  Notwithstanding the foregoing, tothe extent under the terms of any trust set up by an Employer payments are madeby the Trustee of said Trust to the Member with respect to benefits under thisPlan, such payments shall satisfy the obligations of the Employer hereunder tothe extent of the payments made.

 

**8.10        Nonguarantee of Employment**.  Nothing contained in this Plan shall beconstrued as a contract of employment between the Employer and any Member, oras a right of any 

 

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Member to becontinued in employment of the Employer, or as a limitation on the right of theEmployer to discharge any of its employees, with or without cause.

 

**8.11        Applicable Law**.  All questions pertaining to the construction,validity and effect of the Plan shall be determined in accordance with the lawsof the United States and to the extent not pre-empted by such laws, by the lawsof the State of Utah.

 

**8.12        Headings**.  The headings of Sections and Articles in thisPlan are for convenience purposes only and shall in no way control or be usedin the interpretation of the content of the Sections or Articles or this Planas a whole.

 

**8.13        Number and Gender**.  Where the context requires, the singularshall include the plural and the plural shall include the singular, and anygender shall include both other genders.

 

Dated this 4th dayof September, 2008.

 

 
|   |   |   |   |   |   | NATURE’S SUNSHINE  PRODUCTS, INC. |
|--------|--------|--------|--------|--------|--------|----------------------------------------|
|   |   |   |   |   |   |                                   |
|   |   |   |   |   |   | By:                                    |   | \s\ Stephen M. Bunker |
|   |   |   |   |   |   |                                   |   |
|   |   |   |   |   |   | Name:                                  |   | Stephen M. Bunker |
|   |   |   |   |   |   |                                   |   |
|   |   |   |   |   |   | Title:                                 |   | Chief  Financial Officer |
|        |        |        |        |        |        |                                        |  |  |  |  |

 

13

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