Document:

Exhibit 10.2

 

EXHIBIT B

 

CONSULTING AGREEMENT

 

This Consulting Agreement (“Consulting Agreement”) is made and entered into as of April 1, 2013 (“Effective Date”), by and between Nature’s Sunshine Products, Inc. (“Company”), and Michael Dean (“Consultant”) (together, the “Parties”).  Company desires to retain Consultant as an independent contractor to perform consulting services for Company and Consultant is willing to perform such services, on terms set forth more fully below.  This Consulting Agreement shall become effective on the date that the Release required under the Employment Agreement between the Parties dated on or about March 12, 2010, as amended March 4, 2013 (the “Employment Agreement”) becomes effective and enforceable following the expiration of any applicable revocation period (the “Effective Date”).  In consideration of the mutual promises contained herein, the parties agree as follows:

 

1.     SERVICES AND COMPENSATION

 

Services.  Consultant shall perform for the Company the services mutually agreed to between the Parties as and when reasonably requested by the Company’s new CEO (“Services”).

 

Fees.  Provided Consultant continues to comply with the Restrictive Covenants set forth in Section 6 of the Employment Agreement, as amended, the Company shall pay Consultant in the following fashion:

 

a.  For the period from the Effective Date until March 15, 2014, $470,000 payable on a monthly basis in 12 equal installments, with the first such installment to be paid on April 15, 2013, and the last such installment to be paid on March 15, 2014; provided, however, the Release required under the Employment Agreement must have become effective and enforceable in accordance with its terms following expiration of the applicable revocation period before any payments are made under this Consulting Agreement.  The Company and Executive agree that all payments required under this section 1.a. shall be made in full on or before March 15, 2014.  All payments hereunder shall be subject to withholding of all applicable taxes by the Company.

 

2.     CONFIDENTIALITY

 

Definition.  “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customers, customer lists, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information disclosed by Company either directly or indirectly in writing, orally or by drawings or inspection of parts or equipment.

 

Non-Use and Non-Disclosure.  Consultant shall not, during or subsequent to the term of this Consulting Agreement, use Company’s Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of Company or disclose Company’s Confidential Information to any third party.  It is understood that said Confidential Information

 

 

will remain the sole property of Company.  Consultant further shall take all reasonable precautions to prevent any unauthorized disclosure of such Confidential Information.

 

Third Party Confidential Information.  Consultant recognizes that Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Consultant agrees that Consultant owes Company and such third parties, during the term of this Consulting Agreement and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out the Services for Company consistent with Company’s agreement with such third party.

 

Return of Materials.  Upon the termination of this Consulting Agreement, or upon Company’s earlier request, Consultant shall deliver to Company all of Company’s property or Confidential Information that Consultant may have in Consultant’s possession or control.

 

3.     OWNERSHIP

 

Assignment.  Consultant agrees that all copyrightable material, notes, records, drawings, designs, inventions, improvements, developments, discoveries and trade secrets conceived, made or discovered by Consultant, solely or in collaboration with others, during the term of this Consulting Agreement which relate in any manner to the business of Company that Consultant may be directed to undertake, investigate or experiment with, or which Consultant may become associated with in work, investigation or experimentation in the line of business of Company in performing the Services hereunder (collectively, “Work Product”), are the sole property of Company.  Consultant further shall assign (or cause to be assigned) and does hereby assign fully to Company all Work Product and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.

 

Further Assurances.  Consultant shall assist Company, or its designee, at Company’s expense, in every proper way to secure Company’s rights in the Work Product and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments that Company deems necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns and nominees the sole and exclusive right, title and interest in and to such Work Product, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  Consultant further agrees that Consultant’s obligation to execute or cause to be executed, when it is in Consultant’s power to do so, any such instrument or papers will continue after the termination of this Consulting Agreement.

 

Pre-Existing Materials.  Consultant agrees that if in the course of performing the Services, Consultant incorporates into any invention developed hereunder any invention, improvement, development, concept, discovery or other proprietary information owned by Consultant or in which Consultant has an interest, (1) Consultant shall inform Company, in writing before incorporating such invention, improvement, development, concept, discovery or

 

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other proprietary information into any invention; and (2) Company is hereby granted and shall have a nonexclusive, royalty-free, perpetual, irrevocable, worldwide license to make, have made, modify, use and sell such item as part of or in connection with such invention.  Consultant shall not incorporate any invention, improvement, development, concept, discovery or other proprietary information owned by any third party into any Invention without Company’s prior written permission.

 

Attorney in Fact.  Where Company is unable because of Consultant’s unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure Consultant’s signature to apply for or to pursue any application for any United States or foreign patents or mask work or copyright registrations covering the Work Product assigned to Company above, then Consultant hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Consultant’s agent and attorney in fact, to act for and in Consultant’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyright and mask work registrations thereon with the same legal force and effect as if executed by Consultant.

 

4.     CONFLICTING OBLIGATIONS

 

Conflicting Obligations/Restrictive Covenants.  Consultant certifies that Consultant has no outstanding agreement or obligation that is in conflict with any of the provisions of this Consulting Agreement, or that would preclude Consultant from complying with the provisions hereof, and further certifies that Consultant will not enter into any such conflicting agreement during the term of this Consulting Agreement.  Consultant explicitly agrees that during the Term of this Consulting Agreement (as defined under Section 5, below), Consultant shall not, other than on behalf of the Company or with the prior written consent of the Company, (i) serve as a partner, employee, independent contractor, consultant, advisor, officer, director, proprietor, manager, agent, associate, or (ii) directly or indirectly, own (except for passive ownership of two (2%) or less of any entity whose securities have been registered under the Securities Act of 1933 or Section 12 of the Securities Exchange Act of 1934), purchase, invest in, organize or take preparatory steps for the organization of, or (iii) directly or indirectly, build, design, finance, acquire, lease, control, operate, manage, invest in, work or consult for, or otherwise affiliate himself with, any firm, partnership, corporation, entity or business that is a Competing Business.  For purposes of this Consulting Agreement, a “Competing Business” is (i) any business enterprise that is primarily engaged in any activity that competes anywhere in the world with any activity in which the Company is then engaged, or for which it has then current plans to engage, including sales or distribution of herbs, vitamins or nutritional supplements, weight management products, or any product, which the Company sells, distributes or has developed at the time of Executive’s termination; or (ii) any business enterprise seeking to effectuate a transaction that would result in a Change of Control as defined in the Employment Agreement.  Moreover, Consultant agrees not to influence or attempt to influence any employee, sales leader, manager, coordinator, consultant, supplier, licensor, licensee, contractor, agent, strategic partner, distributor, customer or other person to terminate his or her employment with the Company or modify any written or oral agreement, relationship, arrangement or course of dealing the Company; nor will consultant solicit for employment or employ or retain (or arrange to have any other person or entity employ or retain) any person who has been employed or retained by any member of the Company within the preceding twelve (12) months.

 

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5.     TERM AND TERMINATION

 

Term.  This Consulting Agreement will commence on the Effective Date and will continue until the earlier of (1) March 15, 2014, or (2) termination as provided below.

 

Termination.  Consultant may terminate this Consulting Agreement without cause upon giving one (1) month’s prior written notice thereof to the Company in accordance with Section 6 of this Consulting Agreement.  If Consultant terminates this Consulting Agreement under the prior sentence, Company shall pay to Consultant any fees that became payable prior to the effective date of termination and the rights of Executive under Section 6 of the Amendment to Consultant’s Employment Agreement (other than Section 6b thereof) shall remain in full force and effect in accordance with their terms.  Either party may terminate this Consulting Agreement prior to the expiration of its term in the event of a material breach of the terms or conditions of this Consulting Agreement by the other party, which breach is not cured within thirty (30) days of written notice from the party not in breach.  In addition, the Company may terminate this Consulting Agreement prior to the expiration of its term in the event of a breach by the Consultant of the Restrictive Covenants set forth in Section 6 of his Employment Agreement, as amended and such termination shall be deemed to be a termination for cause.  In addition to these rights of termination, each party will have the right, in the event of an uncured breach by the other party, to avail itself of all remedies or causes of action, in law or equity, for damages as a result of such breach. A material provision of this Consulting Agreement shall include, but is not limited to, the provisions labeled Non-Use and Non-Disclosure, Conflicting Obligations, and Confidentiality of Consulting Agreement.  Company may terminate this Consulting Agreement without cause at any time, provided that upon such termination all payments owing to Consultant for the remainder of the Term shall be paid monthly to Consultant through the end of the term (March 15, 2014) as set forth in Section 1.

 

Survival.  Upon such termination all rights and duties of the parties toward each other will cease except:

 

a.                                      Company shall pay amounts it is otherwise obligated to pay, including payments for the remainder of the term to the extent specified above; and

 

b.                                      Sections 2 (Confidentiality), 3 (Ownership), 4 (Conflicting Obligations), and 6 (Miscellaneous) will survive termination of this Consulting Agreement.

 

6.     MISCELLANEOUS

 

Services and Information Prior to Effective Date.  All Services performed by Consultant and all information and other materials disclosed between the parties prior to the Effective Date shall be governed by the terms of this Consulting Agreement, except where those Services are covered by a separate agreement between Consultant and Company.

 

Nonassignment/Binding Consulting Agreement.  The parties acknowledge that the unique nature of Consultant’s services is substantial consideration for the Parties’ entering into this Consulting Agreement.  Neither this Consulting Agreement nor any rights under this Consulting Agreement may be assigned or otherwise transferred by Consultant, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of Company.  Subject to the

 

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foregoing, this Consulting Agreement will be binding upon and will inure to the benefit of the Parties and their respective successors and assigns.  Any assignment in violation of the foregoing will be null and void.

 

Non-Solicitation.  Consultant agrees, during the term of this Consulting Agreement and for a period of twelve (12) months immediately following the termination of this Consulting Agreement, not to directly or indirectly solicit any of the Company’s employees to leave their employment at the Company.

 

Indemnity.  Consultant agrees to indemnify and hold harmless the Company and its directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys’ fees and other legal expenses, arising directly or indirectly from or in connection with (i) any grossly negligent, reckless or intentionally wrongful act of Consultant or Consultant’s assistants, employees or agents, (ii) any material breach by the Consultant or Consultant’s assistants, employees or agents of any of the covenants contained in this Consulting Agreement, (iii) any material failure of Consultant to perform the Services in accordance with all applicable laws, rules and regulations, or (iv) any material violation or claimed violation of a third party’s rights resulting in whole or in part from the Company’s use of the work product of Consultant under this Consulting Agreement.

 

Notices.  Any notice required or permitted under the terms of this Consulting Agreement or required by law must be in writing and must be (i) delivered in person, (ii) sent by first class registered mail, or air mail, as appropriate, or (iii) sent by overnight air courier, in each case properly posted and fully prepaid to the appropriate address as follows:

 

	
For the Company:
    	
Nature’s Sunshine Products, Inc.
    
	
 
    	
Attn:   General Counsel
    
	
 
    	
P.O. Box   19005
    
	
 
    	
75   East 1700 South
    
	
 
    	
Provo,   UT 84605-9005
    
	
 
    	
 
    
	
For   Consultant:
    	
Michael   Dean
    
	
 
    	
2188   East Tuscany Creek Way
    
	
 
    	
Draper,   UT 84020
    

 

Either Party may change its address for notices by notice to the other Party given in accordance with this Section.  Notices will be deemed given at the time of actual delivery in person, three (3) business days after deposit in the mail as set forth above, or one (1) day after delivery to an overnight air courier service.

 

Waiver.  Any waiver of the provisions of this Consulting Agreement or of a Party’s rights or remedies under this Consulting Agreement must be in writing to be effective.  Failure, neglect, or delay by a Party to enforce the provisions of this Consulting Agreement or its rights or remedies at any time, will not be construed as a waiver of such Party’s rights under this Consulting Agreement and will not in any way affect the validity of the whole or any part of this Consulting Agreement or prejudice such Party’s right to take subsequent action.  No exercise or enforcement by either Party of any right or remedy under this Consulting Agreement will

 

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preclude the enforcement by such Party of any other right or remedy under this Consulting Agreement or that such Party is entitled by law to enforce.

 

Severability.  If any term, condition, or provision in this Consulting Agreement is found to be invalid, unlawful or unenforceable to any extent, the Parties shall endeavor in good faith to agree to such amendments that will preserve, as far as possible, the intentions expressed in this Consulting Agreement.  If the Parties fail to agree on such an amendment, such invalid term, condition or provision will be severed from the remaining terms, conditions and provisions, which will continue to be valid and enforceable to the fullest extent permitted by law.

 

Integration.  This Consulting Agreement, contain the entire agreement of the Parties with respect to the subject matter of this Consulting Agreement and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the Parties with respect to said subject matter.  This Consulting Agreement may not be amended, except by a writing signed by both Parties.

 

Counterparts.  This Consulting Agreement may be executed in counterparts, each of which so executed will be deemed to be an original and such counterparts together will constitute one and the same agreement.

 

Governing Law.  This Consulting Agreement will be interpreted and construed in accordance with the laws of the State of Utah and the United States of America, without regard to conflict of law principles.

 

Independent Contractor.  It is the express intention of the parties that Consultant is an independent contractor.  Nothing in this Consulting Agreement, including the election of the rules in the arbitration provision, will in any way be construed to constitute Consultant as an agent, employee or representative of Company, but Consultant shall perform the Services hereunder as an independent contractor.  Without limiting the generality of the foregoing, Consultant is not authorized to bind the Company to any liability or obligation or to represent that Consultant has any such authority.  Consultant shall furnish all tools and materials necessary to accomplish this contract, and will incur all expenses associated with performance.  Consultant acknowledges and agrees that Consultant is obligated to report as income all compensation received by Consultant pursuant to this Consulting Agreement, and Consultant acknowledges its obligation to pay all self-employment and other taxes thereon.

 

Benefits.  Consultant acknowledges that Consultant will, except as set forth herein and with respect to those benefits in which Executive already has a vested interest, receive no Company-sponsored benefits from Company that are available to employees, including without limitation paid vacation, sick leave, medical insurance, and 401(k) participation.  If Consultant is reclassified by a state or federal agency or court as an employee, Consultant will become a reclassified employee and will receive no benefits except those mandated by state or federal law, even if by the terms of Company’s benefit plans in effect at the time of such reclassification Consultant would otherwise be eligible for such benefits.

 

Attorney’s Fees.  In any court action at law or equity which is brought by one of the Parties to enforce or interpret the provisions of this Consulting Agreement, the prevailing Party

 

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will be entitled to reasonable attorney’s fees, in addition to any other relief to which that Party may be entitled.

 

Voluntary Nature of Consulting Agreement.  The Parties hereto acknowledge and agree that they are executing this Consulting Agreement voluntarily and without any duress or undue influence.  The Parties further acknowledge and agree that they have carefully read this Consulting Agreement and that they have asked any questions needed to fully understand the terms, consequences and binding effect of this Consulting Agreement.  The Parties further agree that they have been provided an opportunity to seek the advice of an attorney of their choice before signing this Consulting Agreement.

 

The Parties have executed this Consulting Agreement below to indicate their acceptance of its terms.

 

	
MICHAEL   DEAN
    	
 
    	
NATURE’S   SUNSHINE PRODUCTS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Michael Dean
    	
 
    	
/s/ Stephen M. Bunker
    
	
Michael   Dean
    	
 
    	
Stephen   M. Bunker
    
	
 
    	
 
    	
Executive   Vice President, Chief Financial
    
	
 
    	
 
    	
Officer   and Treasurer
    

 

7Exhibit 10.3

 

FIRST AMENDMENT TO MICHAEL DEAN EMPLOYMENT AGREEMENT

 

This First Amendment to Employment Agreement (the “Amendment”) is entered into on this 4th day of March, 2013, by and between Nature’s Sunshine Products, Inc. (“the Company” or “NSP”) and Michael Dean (“Executive”).  NSP and Executive are collectively referred to herein as the “Parties.”

 

RECITALS

 

A.            The Parties entered into that Employment Agreement, dated on or about March 12, 2010 (the “Employment Agreement”).  Each capitalized term in this Amendment shall have the meaning ascribed to it in the Employment Agreement, except as otherwise defined herein.

 

B.            The Parties now desire to modify certain provisions of the Employment Agreement through this Amendment.

 

C.            The Company and Executive have previously entered into: (1) a stock option agreement entitled Nature’s Sunshine Products, Inc. 2009 Stock Incentive Plan Non-Incentive Stock Option Agreement, dated September 24, 2009, granting Executive the option to purchase 25,000 shares of the Company’s common stock; (2) a stock option agreement entitled Nature’s Sunshine Products, Inc. 2009 Stock Incentive Plan Non-Incentive Stock Option Agreement, dated March 12, 2010, granting Executive the option to purchase 200,000 shares of the Company’s common stock; (3) a stock option agreement entitled Nature’s Sunshine Products, Inc. 2009 Stock Incentive Plan Non-Incentive Stock Option Agreement, dated January 3, 2011, granting Executive the option to purchase 150,000 shares of the Company’s common stock; and, (4) a stock option agreement entitled Nature’s Sunshine Products, Inc. 2012 Stock Incentive Plan Non-Incentive Stock Option Agreement, dated March 1, 2012 (the “March 2012 Stock Option Agreement”), granting Executive the option to purchase 100,000 shares of the Company’s common stock (the “March 2012 Option”).  The stock option agreements described in this paragraph shall be collectively referred to herein as the “Stock Option Agreements,” and the stock options granted under the Stock Option Agreements shall be collectively referred to herein as the “Stock Options.”

 

D.            The Parties now desire to modify certain provisions of the Stock Option Agreements through this Amendment.

 

E.            The Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Executive may have against the Company, including, but not limited to, any and all claims arising out of or in any way related to Executive’s employment with or separation from the Company;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby amend the Employment Agreement and agree as follows:

 

 

1.     Resignation.  Executive agrees to resign from his regular full-time employment with the Company and to resign his seat on the Company’s Board of Directors effective March 31, 2013 (the “Resignation Date”).

 

2.     Restrictive Period.  Section 6.1 of the Employment Agreement is hereby amended to extend the Restricted Period from twelve (12) months to twenty-four (24) months from the Resignation Date and to revoke any right of the Company under subsection 6.1.5 of the Employment Agreement to extend the Restricted Period beyond the expiration of such twenty-four (24) month period.  In addition, the definition of “Competing Business” in Section 6.1.1 of the Employment Agreement shall be modified as follows:

 

“Competing Business” means (i) any business enterprise that is primarily engaged in any activity that competes anywhere in the world with any activity in which the Company is then engaged, or for which it has then current plans to engage, including sales or distribution of herbs, vitamins or nutritional supplements, weight management products, or any product, which the Company sells, distributes or has developed at the time of Executive’s termination; or (ii) any business enterprise seeking to effectuate a transaction that would result in a Change of Control as defined in Section 6b of the First Amendment to the Employment Agreement.

 

3.     Stock Options.  Except for the Performance-Based Portion of the Option (as defined in the March 2012 Stock Option Agreement) subject to the March 2012 Option, all Stock Options that are outstanding and unvested on the Resignation Date shall vest as of the Resignation Date; the Performance-Based Portion of the March 2012 Option shall terminate on the Resignation Date.  The post-termination exercise period of each outstanding Stock Option shall be extended so that each such Stock Option may be exercised during the twenty-four (24) month period following the Resignation Date but in no event later than the expiration of the term of the Stock Option.  All Stock Option Agreements shall be deemed amended to reflect the foregoing sentences.  The Company and Executive acknowledge and agree that upon fully accelerating all outstanding Stock Options, Executive will have vested in an aggregate of 450,000 Stock Options under the Stock Option Agreements.

 

4.     Life Insurance.  The Company will pay all premiums on Executive’s life insurance policy obtained through the Company and in effect on the Resignation Date for a period of eighteen (18) months following the Resignation Date.

 

5.     Release/Consulting Agreement. On the Resignation Date, Executive agrees to execute the release agreement attached hereto as Exhibit A (“Release”) in exchange for: (1) severance payments and benefits as set forth in Section 6 below, (2) an agreement for the Company to enter into a consulting agreement with Executive in the form attached hereto as Exhibit B (the “Consulting Agreement”); and, (3) reimbursement of the cost of Executive’s health insurance coverage under COBRA (and for his family members if the Company provided for their coverage during his employment) for up to eighteen (18) months from the Resignation Date, or as long as Executive is eligible for COBRA coverage, whichever is shorter.  COBRA reimbursements shall be made by the Company to Executive consistent with the Company’s

 

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normal expense reimbursement policy, provided that Executive submits documentation to the Company substantiating his payments for COBRA.  In order for Executive to receive any of the foregoing, the Release must become effective and enforceable in accordance with its terms following expiration of the applicable revocation period.

 

6.     Company Covenants.  Provided Executive complies with the Restrictive Covenants set forth in Section 6 of the Employment Agreement as modified herein and the Release has become effective and enforceable in accordance with its terms following expiration of the applicable revocation period, the Company agrees as follows:

 

a.     Severance Payments following Resignation Date.  In addition to the payments owing pursuant to the Consulting Agreement, the Company shall pay Executive $470,000 representing severance pay pursuant to subsection 5.1.2. of the Employment Agreement, provided that such payment shall be payable in twelve (12) equal  monthly  installments  with  the first such installment to be made on April 15, 2014 and the last such installment to be made on March 15, 2015.

 

b.     Change of Control.  In the event of any “change of control” of NSP at any time during the twenty four (24) month period following the Resignation Date, (i) the Company shall immediately notify Executive of the change of control (the “Change of Control Notice”), and in no event later than thirty (30) days prior to the change of control taking effect, (ii) the Consulting Agreement” shall terminate upon Company’s approval of a change of control, which termination shall be deemed without cause notwithstanding anything in the Consulting Agreement to the contrary, and (iii) the Company will pay Executive the remaining balance under the Consulting Agreement and the payments required under section 6(a) above.  A “change in control” shall be deemed to have occurred:

 

i.              At such time as a third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the beneficial owner of shares of the Company having 50% or more of the total number of votes that may be cast for the election of Directors of the Company;

 

ii.             On the effective date of and immediately prior to:  (i) the closing of any agreement for a merger or consolidation of the Company with another entity, provided that there shall be no change of control if the persons and entities who were the stockholders of the Company immediately before such merger or consolidation continue to own, directly or indirectly, shares of the corporation resulting from such merger or consolidation (“Newco”) having more than 70% of the total number of votes that may be cast for the election of directors of Newco, in substantially the same proportion as their ownership of the voting securities of the Company outstanding immediately before such merger or consolidation; or (ii) the closing of any sale, exchange or other disposition of all or substantially all of the Company’s assets; or (iii) a dissolution or liquidation of the Company’s assets; or

 

iii.            On the effective date of any sale, exchange or other disposition of 50% or more in fair market value of the Company’s assets, other than in the ordinary course of business, whether in a single transaction or a series of related transactions.

 

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iv.            In determining whether clause (i) of the preceding provision has been satisfied, the third person owning shares must be someone other than a person or an affiliate of a person that, as of the effective date, was the beneficial owner of shares of the Company having 20% or more of the total number of votes that may be cast for the election of Directors of the Company.

 

c.     Executive’s Attorneys’ Fees.  The Company shall pay up to $10,000 of Executive’s attorney’s fees, for all legal expenses incurred in connection with the negotiation, drafting, review and analysis of this Amendment, the Employment Agreement, the Release and related documentation and issues, to the extent such expenses are incurred no later than the effective date of the Release. Executive must submit an invoice substantiating the services provided.

 

d.     Transition Services.  Company shall reimburse Executive for certain fees and costs incurred prior to March 15, 2014 related to, concerning or arising out of transition services for Executive up to an amount to be agreed upon by Company and Executive on or before the Resignation Date, but in no event to exceed a total of $50,000.  For the purposes of this Amendment, transition services shall mean an individual or entity whom Executive engages, with the consent of Company, which consent Company shall not unreasonably withhold, for the purposes of assisting Executive in obtaining new employment, including but not limited to individuals or entities that provide head-hunting services, career guidance, network development services, job search services, psychological support and coaching and similar services.  Reimbursements shall be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy, provided that Executive submits documentation to the Company substantiating his payments for such transition services.

 

e.     Relocation Cost Reimbursement. Company shall reimburse the reasonable costs directly related to Executive and his family members moving out of Utah incurred prior to March 15, 2014, up to a maximum allowable expense of $15,000.  For purposes of this Amendment, relocation costs shall include, but not be limited to, costs for packing, unpacking and moving household and personal property, automobiles and trucks and recreational equipment, along with travel costs for Executive and his family members, including but not limited to, air fare, room and board and mileage reimbursement at $.50 per mile for travel between Utah and the new location for purposes of relocation.

 

f.     Reimbursement of Realtor Fees.  Company shall reimburse Executive for realtor fees associated with the sale of Executive’s home in the Draper, Utah area, authorized at 6% of the selling price of the home, up to a maximum allowable expense of $40,000, provided the sale occurs prior to March 15, 2014.

 

g.     Joint Statement. In conjunction with its earnings release for the 2012 fiscal year, the Company agrees to issue a Press Release announcing the Executive’s resignation.  The portion of the Press Release regarding Executive’s resignation shall be subject to the approval of the Company and Executive.

 

7.     Successor and Assign.  In the event of the death or incapacity of Executive, this Amendment shall inure to the benefit of his estate, spouse, heirs, successor or assigns.

 

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8.     Interpretation.  The Employment Agreement shall be construed, to the extent possible, so as to be consistent with this Amendment.  In any conflict between the Employment Agreement, the Consulting Agreement, or any other agreements between the Company and Executive and this Amendment, the terms of this Amendment shall prevail.  In particular, the parties agree that the provisions of Section 6 of the Employment Agreement will remain in effect except as modified as set forth in Section 2 herein.

 

9.     Legal Counsel and Code Section 409A.  Executive acknowledges that he has consulted with an attorney regarding the terms of this Amendment, the Release and the Consulting Agreement, and any ancillary issues related to these agreements, including, but not limited, issues related to compliance with Internal Revenue Code Section 409A (“Code Section 409A”).   The parties intend that this Amendment comply with the requirements of Code Section 409A.  The payments under this Amendment and the Consulting Agreement are intended to be exempt from Code Section 409A.  To the extent there is any ambiguity as to whether any provision of the Amendment would otherwise contravene one or more requirements or limitations of Code Section 409A, such provision shall be interpreted and applied in a manner that does not result in a violation of the applicable requirements or limitations of Code Section 409A and the Treasury Regulations thereunder.  For purposes of Section 409A, the right to receive one or more payments or benefits under this Amendment shall be treated as a right to a series of separate payments. Any reimbursement hereunder shall be made during 2014 provided Executive has timely submitted all required documentation.  The in-kind benefits provided in any calendar year shall not affect the in-kind benefits to be provided in any other taxable year and Executive’s right to in-kind benefits cannot be liquidated or exchanged for any other benefit. Executive acknowledges that Executive shall be solely responsible for all taxes, interest, and penalties arising from the payments and benefits under the Employment Agreement, this Amendment, the Consulting Agreement and the Stock Option Agreements.

 

10.  Delayed Commencement Date.  Notwithstanding any provision to the contrary in the Employment Agreement, this Amendment, the Release, or the Consulting Agreement (together, the “Agreements”), no payments or benefits to which Executive becomes entitled in accordance with the Agreements shall be made or paid to Executive prior to the earlier of (i) the first day of the seventh (7th) month following the date of his separation from service, or (ii) the date of his death, if Executive is deemed, pursuant to the procedures established by the Company’s Compensation Committee in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, to be a “specified employee” within the meaning of Code Section 409A at the time of such separation from service and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable deferral period, all payments deferred pursuant to this Section 10 shall be paid to Executive in a lump sum, and any remaining payments due under the Agreements shall be paid in accordance with the normal payment dates specified in the Agreements.

 

11.  Withholding.  All payments and benefits under this Amendment shall be subject to withholding of all applicable taxes by the Company.

 

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12.  Authorization.  Each person executing this Amendment represents and warrants that they have been duly authorized and directed to execute, deliver, and perform the terms of this Amendment, and that they have the authority to bind the entity on whose behalf the Amendment is executed.

 

Except to the extent amended hereunder, the terms and conditions of the Employment Agreement shall remain in full force and effect.

 

[Signature Page Follows]

 

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NATURE’S SUNSHINE PRODUCTS, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Stephen M. Bunker
    	
 
    	
 
    
	
By:
    	
Stephen M. Bunker
    	
 
    	
 
    
	
Its:
    	
Executive Vice President, Chief
    	
 
    	
 
    
	
 
    	
Financial Officer and Treasurer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTIVE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Michael Dean
    	
 
    	
 
    
	
Michael Dean
    	
 
    	
 
    

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00214-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00214-of-00352.parquet"}]]